<PAGE>
<PAGE>
Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
CHIC BY H.I.S, INC.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
<PAGE>
<PAGE>
CHIC BY H.I.S, INC.
January 29, 1997
Dear Stockholder:
On behalf of the Board of Directors, I wish to extend to you a cordial
invitation to attend the Annual Meeting of Stockholders of Chic by H.I.S, Inc.,
which will be held at 10:00 a.m., New York time, on February 28, 1997 at the
Doral Tuscany Hotel, 120 East 39th Street, New York, New York.
At the Annual Meeting, the stockholders will be asked to vote on the
election of ten directors and to ratify and approve the appointment by the Board
of Directors of the Company's independent auditors of the Company's consolidated
financial statements for the fiscal year ending November 1, 1997, and to
transact such other business as may properly come before such meeting or any
adjournment or adjournments thereof.
I hope you will use this opportunity to take an active part in the affairs
of your Company by voting on the business to come before the Annual Meeting
either by executing and returning the enclosed proxy or by casting your vote in
person at the Annual Meeting.
It is important that your shares be represented at the Annual Meeting,
whether or not you are able to attend. Accordingly, you are urged to sign, date
and mail the enclosed proxy promptly. If you later decide to attend the Annual
Meeting, you may revoke your proxy and vote in person.
Thank you.
Sincerely,
BURTON M. ROSENBERG
Chairman of the Board and
Chief Executive Officer
<PAGE>
<PAGE>
CHIC BY H.I.S, INC.
1372 BROADWAY
NEW YORK, NEW YORK 10018
------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 28, 1997
------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Chic by
H.I.S, Inc. (the 'Company') will be held on February 28, 1997 at 10:00 a.m. at
the Doral Tuscany Hotel, 120 East 39th Street, New York, New York (the 'Annual
Meeting'), for the following purposes:
1. To elect ten directors of the Company to serve until the Company's
next Annual Meeting of Stockholders or until their respective successors
have been duly elected and shall have qualified;
2. To ratify and approve the appointment of BDO Seidman, LLP by the
Board of Directors to be the independent auditors of the Company's
consolidated financial statements for the fiscal year ending November 1,
1997; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on January 17, 1997
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting and at any adjournment or adjournments
thereof.
For the ten-day period immediately prior to the Annual Meeting, a list of
stockholders entitled to vote at the Annual Meeting will be available for
inspection at the offices of the Company, located at 1372 Broadway, New York,
New York, for such purposes as are set forth in the General Corporation Law of
the State of Delaware.
By Order of the Board of Directors
STUART JAEGER
Secretary
January 29, 1997
- --------------------------------------------------------------------------------
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, TO ASSURE THAT
YOUR SHARES WILL BE REPRESENTED, PLEASE COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY WITHOUT DELAY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES. YOUR PROXY WILL BE REVOCABLE,
EITHER IN WRITING OR BY VOTING IN PERSON AT THE ANNUAL MEETING, AT ANY TIME
BEFORE ITS EXERCISE.
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
CHIC BY H.I.S, INC.
1372 BROADWAY
NEW YORK, NEW YORK 10018
---------------------------------
PROXY STATEMENT
---------------------------------
INTRODUCTION
This Proxy Statement is furnished by the Board of Directors of Chic by
H.I.S, Inc. (the 'Company') in connection with the solicitation by the Board of
Directors of proxies to be voted at the Company's Annual Meeting of Stockholders
to be held on February 28, 1997 and at any adjournment or adjournments thereof
(the 'Annual Meeting'), for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. This Proxy Statement and the accompanying form
of proxy are first being mailed to stockholders on or about January 29, 1997.
VOTING AT ANNUAL MEETING
GENERAL
The Board of Directors has fixed the close of business on January 17, 1997
as the record date (the 'Record Date') for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
there were issued and outstanding 9,753,868 shares of the Company's Common
Stock, par value $.01 per share (the 'Common Stock'). The holders of record on
the Record Date of shares of Common Stock entitled to be voted at the Annual
Meeting are entitled to cast one vote per share on each matter submitted to a
vote at the Annual Meeting. Accordingly, a total of 9,753,868 votes are entitled
to be cast on each matter submitted to a vote at the Annual Meeting. A majority
of such votes, present in person or represented by proxy at the Annual Meeting,
will constitute a quorum for the transaction of business at the Annual Meeting.
PROXIES
Shares of Common Stock which are entitled to be voted at the Annual Meeting
and which are represented by properly executed proxies and received in time for
the Annual Meeting will be voted in accordance with the instructions indicated
on such proxies. If no instructions are indicated, such shares will be voted FOR
the election of each of the nominees for election as directors, FOR the
ratification and approval of the appointment by the Board of Directors of BDO
Seidman, LLP as independent auditors of the Company's consolidated financial
statements for the fiscal year ending November 1, 1997, and in the discretion of
the proxy holder as to any other matters which may properly come before the
Annual Meeting. A stockholder who has executed and returned a proxy may revoke
it at any time before it is voted at the Annual Meeting by executing and
returning a proxy bearing a later date, by giving written notice of revocation
to the Secretary of the Company bearing a date later than the proxy or by
attending the Annual Meeting and voting in person. Shares as to which a broker
indicates it has no discretion to vote, and which are not voted, will be
considered not present at the Annual Meeting for the purpose of determining the
presence of a quorum and as unvoted for approving the election of directors and
for approving the appointment of BDO Seidman, LLP as independent auditors.
Proxies marked as abstaining on any matter to be acted on by the stockholders
will be treated as present at the Annual Meeting for the purpose of determining
the presence of a quorum but will not be counted as votes cast on such matters.
The votes of stockholders present in person or represented by proxy at the
Annual Meeting will be tabulated by an inspector of elections appointed by the
Company. The inspector's duties include determining the number of shares
represented at the Annual Meeting, counting all votes and ballots and certifying
the determination of the number of shares represented and the outcome of the
balloting.
<PAGE>
<PAGE>
The Company will bear all the costs and expenses relating to the
solicitation of proxies, including the costs of preparing, printing and mailing
to stockholders this Proxy Statement and accompanying materials. In addition to
the solicitation of proxies by use of the mails, the directors, officers and
employees of the Company, without additional compensation, may solicit proxies
personally or by telephone or telegram. Arrangements will be made with brokerage
firms, banks or other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of the shares of Common Stock
held by such persons, and the Company will reimburse such brokerage firms,
banks, custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred by them in connection therewith.
VOTE REQUIRED
The affirmative vote of a plurality of the shares of Common Stock present
in person or represented by proxy at the Annual Meeting is required to elect the
nominees for election as directors of the Company at the Annual Meeting. The
affirmative vote of a majority of the shares of Common Stock present in person
or represented by proxy at the Annual Meeting is required to ratify and approve
the appointment of BDO Seidman, LLP as independent auditors of the Company's
consolidated financial statements for the fiscal year ending November 1, 1997.
2
<PAGE>
<PAGE>
PRINCIPAL STOCKHOLDERS OF THE COMPANY
The following table sets forth information regarding each person known by
the Company to own beneficially (as such term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the 'Exchange Act')) more than 5%
of the outstanding Common Stock as of the Record Date. In accordance with the
rules promulgated by the Securities and Exchange Commission, such ownership
includes shares currently owned as well as shares which the named person has the
right to acquire within 60 days, including, but not limited to, shares which the
named person has the right to acquire through the exercise of any option,
warrant or right, or through the conversion of a security.
<TABLE>
<CAPTION>
PERCENTAGE
NUMBER OF SHARES OF
NAME AND ADDRESS OF COMMON STOCK COMMON
OF BENEFICIAL OWNER BENEFICIALLY OWNED STOCK
- ----------------------------------------------------------------- ------------------- ------------
<S> <C> <C>
Burton M. Rosenberg.............................................. 679,479(1) 6.94%
c/o Chic by H.I.S, Inc.
1372 Broadway
New York, NY 10018
Jesse S. Siegel.................................................. 848,043(2) 8.69
2504 Laguna Terrace
Ft. Lauderdale, FL 33316
Pioneering Management............................................ 970,000 9.94
Corporation(3)
60 State Street
Boston, MA 02109
Dimensional Fund Advisors Inc.(3)................................ 490,400 5.03
1299 Ocean Avenue
Santa Monica, CA 90401
Franklin Balance Sheet Investment Fund(3)........................ 750,000 7.69
c/o Franklin Resources, Inc.
777 Mariners Island Blvd.
San Mateo, CA 94404
Franklin Resources, Inc.(3)(4)................................... 768,500 7.88
777 Mariners Island Blvd.
San Mateo, CA 94404
Charles B. Johnson(3)(5)......................................... 768,500 7.88
c/o Franklin Resources, Inc.
777 Mariners Island Blvd.
San Mateo, CA 94404
Rupert H. Johnson, Jr.(3)(5)..................................... 768,500 7.88
c/o Franklin Resources, Inc.
777 Mariners Island Blvd.
San Mateo, CA 94404
</TABLE>
- ------------
(1) See footnote (a) to the table below.
(2) See footnote (d) to the table below.
(3) Based solely on information obtained from a report on Schedule 13G filed
with the Securities and Exchange Commission.
(4) Includes 750,000 shares that may be deemed to be beneficially owned as the
parent holding company of Franklin Balance Sheet Investment Fund.
(5) Represents shares that may be deemed to be beneficially owned as a principal
stockholder of Franklin Resources, Inc.
3
<PAGE>
<PAGE>
To the knowledge of the Company, except as set forth above, no person
beneficially owns more than 5% of the Common Stock.
The following table sets forth beneficial ownership of the Company's Common
Stock as of the Record Date with respect to (i) each director of the Company,
(ii) each executive officer named in the Summary Compensation Table under
'Executive Compensation,' and (iii) all directors and executive officers as a
group.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
OF COMMON STOCK OF
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK
- ----------------------------------------------------------------- ------------------- ------------
<S> <C> <C>
Burton M. Rosenberg.............................................. 679,479(a) 6.94%
Milan Danek...................................................... 75,306(b) (c)
Richard K. Howe.................................................. 11,000(d) (c)
Hirsh Jacobson................................................... 10,000(e) (c)
Roland L. Kimberlin.............................................. 41,000(f) (c)
Robert F. Luehrs................................................. 64,000(f) (c)
Jesse S. Siegel.................................................. 848,043(d) 8.69
Harvey Silverman................................................. 10,500(g) (c)
Rica Spector..................................................... 10,000(e) (c)
Edward J. Walsh, Jr.............................................. 12,000(g) (c)
Stephen Weiner................................................... 61,877(h) (c)
All directors and executive officers as a group (12 persons) 1,754,652 17.61
</TABLE>
- ------------
(a) Includes 30,000 shares of Common Stock that Mr. Rosenberg has the right to
acquire pursuant to outstanding stock options. Also includes 4,000 shares
of Common Stock that Mr. Rosenberg's spouse has the right to acquire
pursuant to outstanding stock options, as to which shares Mr. Rosenberg
disclaims beneficial ownership. Pursuant to (i) a Voting Trust Agreement,
dated as of June 27, 1990, among Nancy Siegel Jaffee, Hillary Siegel Levin
and Burton M. Rosenberg, (ii) a Voting Trust Agreement, dated as of January
11, 1989, as amended by Amendment No. 1 thereto dated as of November 24,
1992, among Milan Danek, Stephen Weiner and Burton M. Rosenberg and (iii) a
Voting Trust Agreement, dated as of February 2, 1993, among certain
officers of the Company and Burton M. Rosenberg (each, a 'Voting Trust
Agreement'), Mr. Rosenberg is the voting trustee with respect to 203,066
shares of Common Stock beneficially owned by Ms. Levin, 42,206 of the
shares of Common Stock shown in the table above as beneficially owned by
Mr. Danek, 33,447 of the shares of Common Stock shown in the table above as
beneficially owned by Mr. Weiner, and will be the voting trustee with
respect to any shares of Common Stock acquired by Mr. Roland L. Kimberlin,
Mr. Robert F. Luehrs and Mr. Harvey Schulman, all of whom are employees of
the Company and stockholders of Kenbarb Corp. ('Kenbarb'), upon their
exercise of any options issued to them under any stock option or similar
plan administered by the Company. Each Voting Trust Agreement has a term of
ten years from the date of the agreement and gives the stockholders the
right to sell, transfer or dispose of the shares held by the voting trustee
after giving notice to the voting trustee. Under each Voting Trust
Agreement, Mr. Rosenberg has the right and power to vote the shares of
Common Stock held by him thereunder for any purpose, including all matters
as to which a vote or consent of stockholders may be required by statute or
otherwise, including the amendment of the Restated Certificate of
Incorporation or By-laws of the Company, any recapitalization,
reorganization, increase or reduction of capital shares, merger,
consolidation, partial or total liquidation, dissolution or any sale or
mortgage of assets, in whole or in part, of the Company. In addition, by
virtue of a voting trust agreement with the stockholders of Kenbarb, which
owns 356,760 (approximately 3.7%) of the outstanding shares of Common Stock
of the Company, Mr. Rosenberg controls Kenbarb and is deemed to be the
beneficial owner of all of the shares of Common Stock held by Kenbarb.
(b) Includes 30,000 shares of Common Stock that Mr. Danek has the right to
acquire pursuant to outstanding stock options. In addition, 42,206 of the
issued and outstanding shares of Common Stock beneficially owned by Mr.
Danek are subject to a Voting Trust Agreement, dated as of
(footnotes continued on next page)
4
<PAGE>
<PAGE>
(footnotes continued from previous page)
January 11, 1989, as amended by Amendment No. 1 thereto, under which Burton
M. Rosenberg is the voting trustee.
(c) Represents less than one percent of the issued and outstanding shares of
Common Stock.
(d) Includes 10,000 shares of Common Stock that each of Messrs. Howe and Siegel
has the right to acquire pursuant to outstanding stock options.
(e) Represents 10,000 shares of Common Stock that each of Mr. Jacobson and Ms.
Spector has the right to acquire pursuant to outstanding stock options.
(f) For each of Mr. Kimberlin and Mr. Luehrs, includes 30,000 shares of Common
Stock that each has the right to acquire pursuant to outstanding stock
options. With respect to Mr. Kimberlin, also includes 4,000 shares of
Common Stock that his spouse has the right to acquire pursuant to
outstanding stock options, as to which shares Mr. Kimberlin disclaims
beneficial ownership. In addition, Mr. Kimberlin and Mr. Luehrs each
beneficially owns 30.1% of the issued and outstanding shares of common
stock of Kenbarb (which owns approximately 3.7% of the outstanding Common
Stock), the stock of which is deemed to be beneficially owned by Burton M.
Rosenberg.
(g) Includes 10,000 shares of Common Stock that each of Messrs. Silverman and
Walsh has the right to acquire pursuant to outstanding stock options.
(h) Includes 18,000 shares of Common Stock that Mr. Weiner has the right to
acquire pursuant to outstanding stock options and 1,930 shares of Common
Stock held by Mr. Weiner's spouse. Excludes 1,250 shares of Common Stock
held by Mr. Weiner as custodian for his son under the Uniform Gifts to
Minors Act, as to which shares Mr. Weiner disclaims beneficial ownership.
ELECTION OF DIRECTORS
(ITEM 1)
NOMINEES FOR ELECTION AS DIRECTORS
Directors generally are elected by the affirmative vote of a plurality in
voting power present in person or represented by proxy and entitled to vote, and
hold office until the next annual meeting of stockholders and until their
successors are duly elected and qualified or until their earlier death,
resignation, removal or disqualification.
The following table sets forth certain information with respect to the
persons nominated by the Board of Directors for election as directors of the
Company at the Annual Meeting. The Company's Board of Directors currently
consists of ten members. Each of the nominees set forth below currently serves
as a director of the Company.
The Board of Directors knows of no reason why any of its nominees will be
unable or will refuse to accept election. If any nominee becomes unable or
refuses to accept election, the Board of Directors either will reduce the number
of directors to be elected or select a substitute nominee. If a substitute
nominee is selected, proxies will be voted in favor of such nominee.
5
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
- -------------------------------------------------------- --- ---------------------------- --------
<S> <C> <C> <C>
Burton M. Rosenberg..................................... 65 Chief Executive Officer; 1988
Chairman of the Board;
Director
Milan Danek............................................. 67 Managing Director, European 1993
Operations; Director
Richard K. Howe......................................... 53 Director 1993
Hirsh Jacobson.......................................... 75 Director 1988
Roland L. Kimberlin..................................... 61 President -- Manufacturing 1993
Operations; Director
Robert F. Luehrs........................................ 66 President; Director 1993
Jesse S. Siegel......................................... 68 Director 1993
Rica Spector............................................ 63 Director 1994
Harvey Silverman........................................ 62 Director 1993
Edward J. Walsh, Jr..................................... 63 Director 1993
</TABLE>
------------------------
Set forth below is a summary of the business experience of each person
listed in the table above.
Burton M. Rosenberg is the Chief Executive Officer of the Company and has
been a director of the Company since December 1988. Mr. Rosenberg served as the
Company's Chief Financial Officer from 1969 to 1986 and then as President and
Chief Executive Officer. Mr. Rosenberg has worked over 27 years at the Company.
He holds a B.A. and an M.A. from Brooklyn College, an M.B.A. from Columbia
University, and a Ph.D. in Economics from New York University.
Milan Danek is the Managing Director, European Operations of the Company
and became a director of the Company in 1993. Mr. Danek has worked over 23 years
at the Company (during which time he has served as Managing Director of the
Company's wholly owned German subsidiary) and has approximately 30 years of
industry experience. His previous industry experience includes three years at
Levi Strauss in Germany, where he was the Marketing Director at the time of his
departure, and seven years with the exclusive distributor of Levi Strauss for
southern Germany and Austria.
Richard K. Howe has been a director of the Company since May 1993. Since
June 1992, Mr. Howe has been co-owner of Penobscot Bay Provisions Co., a bakery
and specialty food store. Mr. Howe is also a director of Back Bay Restaurant
Group Inc., which is a publicly held company. Prior to June 1992, Mr. Howe was
an executive vice president and a director of Tucker Anthony Incorporated and an
officer or director, or both, of its parent companies and affiliates and
thereafter, until March 1996, served as a consultant to those companies. In
addition, from 1980 to 1987, Mr. Howe was a general partner (1980-82), an
executive vice president and a director of Prescott, Ball & Turben, a
Cleveland-based investment banking firm, and previously was a partner of Squire,
Sanders & Dempsey, a Cleveland-based law firm.
Hirsh Jacobson has been a director of the Company since 1988. From 1960
until his retirement in 1986, Mr. Jacobson was a partner in the accounting firm
of Brout & Company and its successor BDO Seidman.
Roland L. Kimberlin has served as an executive officer of the Company for
more than eight years, most recently as Vice President and
President -- Manufacturing Operations. Mr. Kimberlin became a director of the
Company in 1993. Prior to joining the Company in 1966, Mr. Kimberlin was
employed by Ashland Oil and Refining Company, where he held a number of
positions, including regional bulk plant manager.
Robert F. Luehrs has been an executive officer of the Company for over 22
years, and has most recently served as Vice President and President of the
Company. Mr. Luehrs became a director of the Company in 1993. Mr. Luehrs has
been employed by the Company for over 37 years and, prior to assuming his
current responsibilities, served in various capacities, including sales
representative and regional sales manager. Mr. Luehrs has had approximately 40
years experience in the apparel industry.
Jesse S. Siegel, a son of Henry I. Siegel, the founder of the Company,
became a director of the Company in 1993. Mr. Siegel has been a consultant of
the Company since 1986. From 1948 until 1986, Mr. Siegel served as the Chief
Executive Officer of a predecessor of the Company.
6
<PAGE>
<PAGE>
Harvey Silverman became a director of the Company in 1993. Since 1986, Mr.
Silverman has been the Chief Financial Officer and Treasurer of Objects of Art
Ltd., a manufacturer of ladies' sportswear, and Meltzer Industries Corporation,
a manufacturer of children's apparel. Since 1988, Mr. Silverman has been the
President of Judyanna Ltd., a sweater manufacturer. In addition, since 1991 Mr.
Silverman has been the Chairman of the Board of Quicksilver Development Corp., a
computer software developer. Mr. Silverman has been a certified public
accountant since 1962.
Rica Spector has been a director of the Company since February 1994 (she
also served as a director from August 1993 to November 1993). Since 1987, Ms.
Spector has been the Science Department Chairperson at Woodmere Middle School in
Hewlett, New York.
Edward J. Walsh, Jr. became a director of the Company in 1993. Since 1981,
Mr. Walsh has been of counsel to the law firm of Vedder, Price, Kaufman,
Kammholz & Day. Mr. Walsh is a member of the board of directors of several
closely held corporations, including Alfred Dunhill of London, Inc., Lane
Limited, Montblanc, Inc., Chloe, Inc. and McInnes Steel Company.
ADDITIONAL INFORMATION REGARDING THE COMPANY'S BOARD OF DIRECTORS
The Company's Board of Directors met seven times during the fiscal year
ended November 2, 1996. The Company's Board of Directors has standing
Compensation and Audit Committees, the members of each of which are elected by
the Board of Directors at its annual meeting. The Board of Directors does not
have standing executive or nominating committees.
During the fiscal year ended November 2, 1996, the Compensation Committee
consisted of Mr. Jacobson, Mr. Silverman, Ms. Spector and Mr. Walsh. The
Compensation Committee met three times during the past fiscal year. The
Compensation Committee establishes remuneration levels for officers of the
Company, reviews management organization and development, reviews significant
employee benefit programs and establishes, as it deems appropriate, and
administers executive compensation programs, including bonuses, stock option and
other equity based programs, deferred compensation plans and any other cash or
stock incentive programs.
The Audit Committee, the members of which were Messrs. Howe, Jacobson,
Silverman and Walsh, met once during the fiscal year ended November 2, 1996. The
Audit Committee recommends to the Board of Directors the independent public
accountants to be selected to audit the Company's annual financial statements
and approves any special assignments given to such accountants. The Audit
Committee also reviews the planned scope of the annual audit and the independent
accountants' letter of comments and management's responses thereto, any major
accounting changes made or contemplated and the effectiveness and efficiency of
the Company's internal accounting procedures. The Audit Committee consists
solely of independent directors.
During the fiscal year ended November 2, 1996, each of the directors
attended at least 75% of the aggregate number of the meetings of the Board of
Directors and the Committees of which such director was a member (held during
the period for which such director served).
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and beneficial owners of more than 10% of the Common Stock to
file reports of ownership and changes of ownership with the Securities and
Exchange Commission and the New York Stock Exchange. The Company believes that
during the fiscal year ended November 2, 1996, all filing requirements
applicable to its directors, executive officers and beneficial owners of more
than ten percent of the Common Stock were complied with, except that as a result
of an administrative oversight Mr. Stephen Weiner inadvertently filed one late
report on Form 5 to report the repricing of his stock options.
7
<PAGE>
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth certain information regarding the executive
officers of the Company:
<TABLE>
<CAPTION>
NAME OFFICE OR POSITIONS HELD
- ----------------------------- ------------------------------------------------------------------------
<S> <C>
Burton M. Rosenberg.......... Chairman of the Board; Chief Executive Officer
Milan Danek.................. Managing Director, European Operations
Stuart Jaeger................ Controller; Secretary; Acting Treasurer; Acting Chief Financial Officer
Roland L. Kimberlin.......... President -- Manufacturing Operations
Robert F. Luehrs............. President
Stephen Weiner............... Executive Vice President, National Sales Manager
</TABLE>
For biographical information on Messrs. Rosenberg, Danek, Kimberlin and
Luehrs, see 'Election of Directors.'
Stuart Jaeger, age 61, has been the Controller of the Company since 1975
and its Secretary since 1988. Since the death in December 1996 of John Chin, the
Company's Chief Financial Officer and Treasurer, Mr. Jaeger has also been the
Acting Chief Financial Officer and Acting Treasurer of the Company. Mr. Jaeger
has worked over 20 years with the Company. Prior to joining the Company, Mr.
Jaeger worked for 18 years as an accountant with Brout & Company.
Stephen Weiner, age 46, has been the Executive Vice President, National
Sales Manager of the Company since 1986. Prior responsibilities with the Company
included serving as a sales trainee, a salesman for the Northern New England
States, the Major New York Accounts Manager and the Sales Manager of Chains and
National Accounts. Mr. Weiner has been employed by the Company for over 23
years.
Officers are chosen by the Board of Directors annually or at such other
time or times as the Board determines.
8
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation awarded to, earned by or
paid to the Chief Executive Officer and the four other most highly compensated
executive officers during the fiscal years ended November 2, 1996, November 4,
1995 and November 5, 1994 for services rendered in all capacities to the Company
and its subsidiaries.
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
NUMBER OF
SECURITIES
ANNUAL COMPENSATION UNDERLYING
FISCAL YEAR ----------------------- OPTIONS
NAME AND PRINCIPAL POSITION ENDED SALARY ($) BONUS ($) GRANTED (#)
- ---------------------------------------------------- ----------- ---------- --------- ------------
<S> <C> <C> <C> <C>
Burton M. Rosenberg ................................ 11/2/96 416,467 25,000 0
Chairman of the Board and 11/4/95 403,846 0 10,000
Chief Executive Officer 11/5/94 374,892 195,000 0
Robert F. Luehrs ................................... 11/2/96 328,512 25,000 0
President 11/4/95 342,324 0 10,000
11/5/94 319,231 195,000 0
Roland L. Kimberlin ................................ 11/2/96 360,965 25,000 0
President-Manufacturing 11/4/95 362,833 0 10,000
Operations 11/5/94 331,247 195,000 0
Milan Danek ........................................ 11/2/96 428,112 25,000 0
Managing Director, European 11/4/95 397,906 0 10,000
Operations 11/5/94 335,579 195,000 0
Stephen Weiner ..................................... 11/2/96 293,336 0 0
Executive Vice President, 11/4/95 287,093 0 0
National Sales Manager 11/5/94 278,846 175,000 0
</TABLE>
- ------------
(1) The column designated 'Other Annual Compensation' by the Securities and
Exchange Commission (the 'SEC') for the reporting of perquisites and other
personal benefits has been eliminated because the amounts paid to each
executive officer do not exceed the disclosure threshold established by the
SEC pursuant to applicable rules, and no other compensation required to be
reported under that column was awarded to, earned by or paid to any of the
named executive officers during the period covered by the table. In
addition, the columns designated by the SEC for the reporting of certain
long-term compensation, including awards of restricted stock and long-term
incentive plan payouts, have been eliminated as no such awards have been
granted to date, nor have any such payouts been made during the period
covered by the table, and the column designated 'All Other Compensation' has
been omitted as no compensation required to be reported under such column
was received.
9
<PAGE>
<PAGE>
STOCK OPTION GRANTS
The following table sets forth certain information concerning stock option
grants to named executive officers during the last fiscal year under the
Company's 1993 Stock Option Plan. The Company thus far has not granted stock
appreciation rights ('SARs') under any plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES PERCENT OF AT ASSUMED ANNUAL RATES OF
UNDERLYING TOTAL OPTIONS STOCK PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM(2)
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION -------------------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ----------------------------- ---------- ------------- ----------- ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Burton M. Rosenberg.......... 34,000(3) 16.96% $ 5.875 12/9/00 $ 254,939 $ 321,698
Milan Danek.................. 30,000 15.59 5.875 12/9/00 224,940 287,100
Roland L. Kimberlin.......... 34,000(3) 16.96 5.875 12/9/00 254,939 321,698
Robert F. Luehrs............. 30,000 15.59 5.875 12/9/00 224,940 287,100
Stephen Weiner............... 18,000 9.35 5.875 12/9/00 134,964 172,260
</TABLE>
- ------------
(1) All of the options reported under this column were deemed to be granted
under the Company's 1993 Stock Option Plan during the last fiscal year as a
result of a repricing of previously outstanding options. All options became
exercisable six months after the date of grant.
(2) The assumed rates are compounded annually and applied to the estimated
market value of the Common Stock on December 9, 1995, the date of grant of
the options, of $5.875 through the full term of the options.
(3) Includes for each of Mr. Rosenberg and Mr. Kimberlin 4,000 shares of Common
Stock underlying options held by such person's spouse. Each of Mr. Rosenberg
and Mr. Kimberlin disclaims beneficial ownership of such options and shares.
OPTION EXERCISES/VALUE OF UNEXERCISED OPTIONS
The following table sets forth certain information concerning unexercised
options to purchase Common Stock of the Company held at the end of fiscal year
1996 by the named executive officers. None of the named executive officers
exercised any options during fiscal year 1996. No named executive officer has
been awarded stock appreciation rights.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES ACQUIRED VALUE UNDERLYING UNEXERCISED IN-THE-MONEY STOCK
ON EXERCISE (#) REALIZED ($) STOCK OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)(1)(2)
--------------- ------------ ---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Burton M. Rosenberg....... 0 $0 34,000(3) 0 $ 0 $ 0
Milan Danek............... 0 0 30,000 0 0 0
Roland L. Kimberlin....... 0 0 34,000(3) 0 0 0
Robert F. Luehrs.......... 0 0 30,000 0 0 0
Stephen Weiner............ 0 0 18,000 0 0 0
</TABLE>
- ------------
(1) Based upon the closing sale price of the Common Stock on November 2, 1996 on
the New York Stock Exchange minus the option exercise price.
(2) There were no in-the-money stock options held by any of the named executive
officers as of November 2, 1996 as the exercise price of the stock options
on such date exceeded the closing price of the Common Stock on the New York
Stock Exchange.
(3) Includes for each of Mr. Rosenberg and Mr. Kimberlin 4,000 shares of Common
Stock underlying options held by such person's spouse. Each of Mr. Rosenberg
and Mr. Kimberlin disclaims beneficial ownership of such options and shares.
10
<PAGE>
<PAGE>
REPRICING OF STOCK OPTIONS
The following table sets forth certain information concerning previously
outstanding stock options held by the named executive officers that were
repriced during the fiscal year ended November 2, 1996. All such options were
granted under the Company's 1993 Stock Option Plan. To date, no other options
granted to the named executives have been repriced.
TEN YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF
SHARES MARKET PRICE ORIGINAL OPTION
UNDERLYING OF STOCK AT EXERCISE PRICE NEW TERM REMAINING
OPTIONS TIME OF AT TIME OF EXERCISE AT DATE OF
NAME DATE REPRICED(#) REPRICING ($) REPRICING ($) PRICE ($) REPRICING
- ------------------------------- -------- ------------ ------------- -------------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Burton M. Rosenberg............ 12/9/95 24,000(1) $ 5.875 $ 11.50 $ 5.875 26 months
12/9/95 10,000 5.875 9.875 5.875 26 months
Milan Danek.................... 12/9/95 20,000 5.875 11.50 5.875 26 months
12/9/95 10,000 5.875 9.875 5.875 26 months
Roland L. Kimberlin............ 12/9/95 24,000(2) 5.875 11.50 5.875 26 months
12/9/95 10,000 5.875 9.875 5.875 26 months
Robert F. Luehrs............... 12/9/95 20,000 5.875 11.50 5.875 26 months
12/9/95 10,000 5.875 9.875 5.875 26 months
Stephen Weiner................. 12/9/95 18,000 5.875 11.50 5.875 26 months
</TABLE>
- ------------
(1) Includes 4,000 shares of Common Stock underlying stock options held by Mr.
Rosenberg's spouse. Mr. Rosenberg disclaims beneficial ownership of such
options and shares.
(2) Includes 4,000 shares of Common Stock underlying stock options held by Mr.
Kimberlin's spouse. Mr. Kimberlin disclaims beneficial ownership of such
options and shares.
PENSION PLAN
The following table sets forth the approximate annual benefits payable upon
retirement at age 65 (and at least five years of service) under the Pension Plan
for Eligible Employees of Henry I. Siegel Co. (the 'Pension Plan') as a life
annuity, based on the average annual salaries and years of service indicated.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE ANNUAL ----------------------------------------------
COMPENSATION 15 20 25 30 35
-------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
$ 10,000 ......................... $1,407 $1,678 $1,770 $1,864 $1,956
50,000 ......................... 1,647 1,917 2,010 2,103 2,196
100,000 ......................... 1,647 1,917 2,010 2,103 2,196
200,000 ......................... 1,647 1,917 2,010 2,103 2,196
300,000 ......................... 1,647 1,917 2,010 2,103 2,196
</TABLE>
Compensation used to determine benefits generally includes a participant's
total earned income, wages, salaries and other amounts received for services
rendered to the Company or an affiliate, excluding certain specified items such
as Company contributions to a deferred compensation plan and amounts realized in
connection with stock options or restricted stock. Annual compensation taken
into account under the Pension Plan is limited to $14,000. Benefits are computed
on a single life annuity basis and are not subject to any offset for social
security. With respect to the following individuals named in the Summary
Compensation Table, the annual current covered compensation under the plan
11
<PAGE>
<PAGE>
is $14,000, which is substantially less than the amount set forth under 'Salary'
in the Summary Compensation Table, and the estimated current credited years of
service are as follows:
<TABLE>
<S> <C>
Mr. Rosenberg..................................................................... 27 years
Mr. Danek......................................................................... 23 years
Mr. Kimberlin..................................................................... 30 years
Mr. Luehrs........................................................................ 37 years
Mr. Weiner........................................................................ 22 years
</TABLE>
In addition, the Company may, at the sole discretion of the Compensation
Committee, award annual bonuses to retired executives on a year-by-year basis
pursuant to the Company's Annual Discretionary Bonus Plan for Retired
Executives; no such discretionary bonuses have been authorized by the
Compensation Committee.
CERTAIN DEATH BENEFITS
Upon recommendation of the Compensation Committee, in the first quarter of
fiscal 1994 the Board of Directors authorized the Company to pay $5 million to
the estate of Burton Rosenberg, $2 million to the estate of Robert Luehrs, $2
million to the estate of Roland Kimberlin, $2 million to the estate of Stephen
Weiner and $1 million to the estate of Milan Danek upon the death of Mr.
Rosenberg, Mr. Luehrs, Mr. Kimberlin, Mr. Weiner or Mr. Danek, respectively, if
(i) such executive is an employee of the Company at the time of his death or
(ii) retires in good standing from the Company no earlier than the date on which
such executive reaches the age of 65 and (iii) if the Company at the time of the
death of such executive is the owner and beneficiary of insurance on his life in
the principal amount to be paid. The Company is authorized, but not required, to
maintain life insurance policies on the lives of these executives naming the
Company as beneficiary to support this obligation, substantially all of which
policies the Company currently has in effect and the proceeds of which policies
the Company would intend to pay to the appropriate executive's estate upon his
death.
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with each of Burton M.
Rosenberg, Roland L. Kimberlin, Robert F. Luehrs and Stephen Weiner
(collectively, the 'Executive Employment Agreements') effective as of March 15,
1996. Each Executive Employment Agreement has an initial term of five years and
provides that upon the expiration of the initial term, the initial term will be
extended automatically for successive one-year periods unless either party gives
at least 90 days' written notice of his or its intent not to allow such
extension to become effective. The Executive Employment Agreements provide for
annual salaries to Messrs. Rosenberg, Kimberlin, Luehrs and Weiner of $393,750,
$341,276, $341,250 and $288,750, respectively, which may be increased on each
February 1 during the term of their Employment Agreements, at the discretion of
the Board of Directors of the Company. Each agreement permits the Company to
terminate the employee's employment for cause (as defined therein) or if the
employee becomes permanently and seriously disabled. Each agreement also
contains a covenant not to compete, whereby the employee agrees that during the
term of the agreement, and for up to one year following the employee's
termination of employment, the employee will not, under certain circumstances,
among other things, engage in a business that is materially competitive with any
material business operated by the Company on the effective date of the
agreement.
MANAGEMENT AGREEMENT
The Company's German subsidiary has entered into a management agreement
with Milan Danek effective as of January 13, 1997 (the 'Management Agreement').
The Management Agreement, which is subject to the laws of the Federal Republic
of Germany, has an initial term of five years and provides that upon the
expiration of the initial term, the initial term will be extended automatically
for successive one-year periods unless either party gives at least six months'
written notice of his or its intent not to allow such extension to become
effective. The Management Agreement provides for an annual salary to Mr. Danek
in the amount of DM 606,000 ($399,597 based on the exchange rate for the
deutsche mark
12
<PAGE>
<PAGE>
on November 2, 1996), which may be increased from time to time at the discretion
of Supervisory Board of the Company's wholly owned German subsidiary (the
'Supervisory Board'). In addition, Mr. Danek may receive an additional bonus at
the sole discretion of the Supervisory Board. The Management Agreement also
contains a covenant not to compete, whereby Mr. Danek agrees that during the
term of the Management Agreement, and for up to one year following the
expiration of the term, he will not compete with the Company.
COMPENSATION OF DIRECTORS
Directors who are not officers of the Company receive an annual fee of
$12,000 for serving on the Board of Directors. No annual fee is paid to any
officer serving on the Board of Directors. In addition, all directors (including
officers serving as directors) receive a fee of $500 for each meeting of the
Board of Directors or committee meeting attended.
The Company is a party to an Amended and Restated Consulting Agreement,
dated September 23, 1988, with Mr. Jesse S. Siegel (the 'Consulting Agreement').
Mr. Siegel has been a director of the Company since February 1993 and is a
former chief executive officer of a predecessor to the Company. Under the
Consulting Agreement, Mr. Siegel agrees to render consulting services to the
Company in the area of manufacturing, marketing and selling women's apparel as
the Company may from time to time request. The Consulting Agreement has an
initial term of ten years and may be extended, at the option of Mr. Siegel, for
up to four additional five-year terms. Mr. Siegel receives an annual fee of
$500,000 pursuant to the Consulting Agreement. The Consulting Agreement contains
a covenant not to compete, whereby Mr. Siegel agrees that during the term of the
Consulting Agreement and for one year thereafter he will not, under certain
circumstances, among other things, engage in a business that is materially
competitive with any material business operated by the Company on the date of
the Consulting Agreement.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Compensation of executive officers of the Company is set at levels which
are intended to be sufficiently competitive to permit the Company to attract and
retain the best possible individuals. Each executive officer's compensation is
based upon both individual and Company performance. Compensation is structured
to provide incentives for executive officer performance that results in
improvements in the Company's financial results and in total return to
stockholders over both the short term and the long term. The overall
compensation plan is also designed to align the interests of the Company's
executives and its stockholders by providing for payment of a portion of the
incentive compensation in the form of stock options. Thus, the amount of value
generated for the Company's stockholders is a key factor in determining the full
compensation ultimately realized by the executive officers.
The compensation of the principal executive officers of the Company
consists of three principal parts: base salary, annual bonus and stock options.
Two of the three components are at risk because the ultimate value of an
officer's total compensation depends on factors, subjectively assessed by the
Committee, which include the Company's financial performance, individual
performance and stock price.
Salary. Base salaries for the Company's executive officers are fixed by
employment agreements with the Company (see 'Employment Agreements' and
'Management Agreement'). Pursuant to the terms of the Executive Employment
Agreements, salaries are reviewed in February of each year to determine whether
an increase is appropriate. Salaries were reviewed in February 1996 but were not
increased.
The Committee has not yet decided whether it will recommend salary
adjustments in 1997. In view of the disappointing financial results of the last
fiscal year the Committee would expect to consider prior to making its decision
the individual performance of each of the principal executives in light of all
the circumstances which had an impact on earnings.
Bonus. Although the Company continued to experience poor earnings in 1996,
Messrs. Rosenberg, Kimberlin, Leuhrs and Danek were each awarded a discretionary
bonus of $25,000. The Committee believes that the bonuses were appropriate
because of the extraordinary effort which each of such officers expended in
making organizational changes deemed necessary to restore profitability. The
13
<PAGE>
<PAGE>
Committee recognizes that some of the factors that resulted in the poor earnings
experienced by the Company were beyond the control of such officers, such as a
continuing poor retail climate and the financial difficulties of many of the
Company's largest customers which, among other things, have caused such
customers to emphasize private label over branded merchandise. The Committee
also took into account the fact that no bonuses were paid to these officers in
1995 and the consequent effect on morale.
Stock Options. Each executive officer of the Company participates in the
Company's 1993 Stock Option Plan. The Compensation Committee acts as the
committee authorized to administer the Stock Option Plan. In December 1995, the
committee reduced the exercise price of options theretofore granted under the
Stock Option Plan to all employees, including the Company's executive officers,
to $5.875 per share -- the market price of the Common Stock on the date the
options were repriced. The Committee felt that an exercise price that remained
substantially above the market price would defeat the Stock Option Plan's
purpose in providing incentives for greater productivity and efficiency.
The Chief Executive Officer's employment agreement provides for a fixed
salary, the most important ingredient of his compensation, which is not
dependent upon or variable with respect to either his or the Company's
performance (although it provides for salary increases, at the discretion of the
Board of Directors, in February of each year). The Chief Executive Officer's
salary was not increased in February 1996. With respect to the Chief Executive
Officer, the Committee took into account the same factors it considered in the
case of the other named executive officers in arriving at its decision to pay a
modest discretionary bonus for services rendered in fiscal 1996.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
'Code'), which was enacted in 1993, precludes a public company from taking a tax
deduction for compensation in excess of $1 million paid to its chief executive
officer or any of its other four highest-paid executive officers (with
exemptions for certain performance-based compensation). Based on current
compensation levels, it is not anticipated that any of the named executive
officers will receive compensation in excess of $1 million in fiscal 1997.
Therefore, the Committee currently has no policy with respect to Section 162(m).
None of the members of the Committee is or was employed by the Company. All
are independent 'outside' directors.
COMPENSATION COMMITTEE
Hirsh Jacobson
Harvey Silverman
Rica Spector
Edward J. Walsh, Jr.
14
<PAGE>
<PAGE>
PERFORMANCE GRAPH
The following graph sets forth the Company's total stockholder return as
compared to the Standard & Poor's 500 Index and the Standard and Poor's Textiles
(Apparel Manufacturers) Index for the period from February 18, 1993, when the
Company's Common Stock began trading on a when-issued basis on the New York
Stock Exchange, through November 2, 1996, the last day of the Company's last
completed fiscal year. The total stockholder return assumes $100 invested at the
beginning of the period in the Company's Common Stock, the Standard & Poor's 500
Index and the Standard and Poor's Textiles (Apparel Manufacturers) Index.
COMPARISON OF CUMULATIVE TOTAL RETURN*
FOR PERIOD FROM 2/18/93 THROUGH 11/2/96
AMONG CHIC BY H.I.S, INC., THE S&P 500 INDEX
AND THE S&P TEXTILES (APPAREL MANUFACTURERS) INDEX
TOTAL STOCKHOLDER RETURNS
[GRAPH]
<TABLE>
<CAPTION>
2/18/93 11/6/93 11/5/94 11/4/95 11/2/96
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Chic Common Stock................................................ 100.00 84.78 95.65 53.26 39.13
S&P 500 Index.................................................... 100.00 108.65 112.43 147.05 179.19
S&P Textiles (Apparel Manufacturers) Index....................... 100.00 75.31 88.72 80.30 121.20
</TABLE>
- ------------
* Total Return Assumes Reinvestment of Dividends.
15
<PAGE>
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
KENBARB CORP.
Kenbarb Corp. currently owns approximately 3.7% of the issued and
outstanding Common Stock of the Company. All of Kenbarb's outstanding capital
stock is beneficially owned by four officers of the Company: each of Mr. Burton
M. Rosenberg, Mr. Robert F. Luehrs and Mr. Roland L. Kimberlin beneficially owns
30.1% of the issued and outstanding capital stock of Kenbarb, and Mr. Harvey
Schulman beneficially owns 9.7% of the issued and outstanding stock of Kenbarb.
TUCKER ANTHONY INCORPORATED
Prior to March 1996, Mr. Richard K. Howe, a director of the Company, was a
consultant to Tucker Anthony Incorporated ('Tucker Anthony'), an investment
banking firm, and prior to June 1992 was an executive vice president and a
director of Tucker Anthony. In February 1996, Tucker Anthony acted as financial
advisor for the Company in connection with the Company's negotiation of certain
waivers of defaults and amendments to the agreements with the holders of its
senior notes and its bank lenders.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 2)
The Board of Directors of the Company has appointed the firm of BDO
Seidman, LLP, independent auditors, to examine the consolidated financial
statements of the Company and its subsidiaries for the fiscal year ending
November 1, 1997, subject to ratification by the stockholders.
BDO Seidman, LLP has served as the Company's independent auditors since
1988.
A representative of BDO Seidman, LLP is expected to be present at the
Annual Meeting and to be provided with an opportunity to make a statement if
such person desires to do so and to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION
OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE INDEPENDENT AUDITORS OF THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING NOVEMBER
1, 1997.
16
<PAGE>
<PAGE>
ANNUAL REPORT ON FORM 10-K; INCORPORATION BY REFERENCE
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED NOVEMBER 2, 1996 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ARE
AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST ADDRESSED TO STOCKHOLDER
RELATIONS, CHIC BY H.I.S, INC. AT 1372 BROADWAY, NEW YORK, NY 10018.
To the extent this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of the Proxy Statement entitled 'Report of Compensation Committee on
Executive Compensation' and 'Performance Graph' shall not be deemed to be so
incorporated unless specifically otherwise provided in any such filing.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
Stockholders who wish to have their proposals considered for inclusion in
the proxy materials for the Company's Annual Meeting of Stockholders to be held
in 1998 must deliver such proposals in writing to the Secretary of the Company
at the Company's principal executive offices no later than October 1, 1997.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors of the
Company is not aware of any matters that will be presented for action at the
Annual Meeting other than those described above. Should other business properly
be brought before the Annual Meeting, it is intended that the accompanying proxy
will be voted thereon in the discretion of the persons named as proxies.
By Order of the Board of Directors
STUART JAEGER
Secretary
January 29, 1997
17
<PAGE>
<PAGE>
APPENDIX 1
PROXY CHIC BY H.I.S, INC. PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS, FEBRUARY 28, 1997 AT 10:00 A.M.
The undersigned shareholder of Chic by H.I.S, Inc. (the 'Company') hereby
appoints Burton M. Rosenberg and Stuart Jaeger and each of them as attorneys and
proxies, each with power of substitution and revocation, to represent the
undersigned at the Annual Meeting of Stockholders of Chic by H.I.S, Inc. to be
held at the Doral Tuscany Hotel, 120 East 39th Street, New York, New York on
February 28, 1997 at 10:00 A.M., and at any adjournment or postponement thereof,
with authority to vote all shares held or owned by the undersigned in accordance
with the directions indicated herein.
Receipt of the Notice of Annual Meeting of Stockholders dated January 29,
1997, the Proxy Statement furnished herewith, and a copy of the Annual Report to
Stockholders for the year ended November 2, 1996 is hereby acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ITEMS 1 AND 2 AND PURSUANT TO ITEM 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE 'FOR' ITEMS 1 AND 2.
ITEM 1. Election of Directors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE NOMINEES LISTED BELOW.
<TABLE>
<S> <C> <C>
FOR all nominees listed WITHHOLD AUTHORITY to NOMINEES: BURTON M. ROSENBERG, MILAN DANEK, RICHARD K. HOWE,
on the right (except as vote for all nominees HIRSH JACOBSON, ROLAND L. KIMBERLIN, ROBERT F. LUEHRS, JESSE
marked to the contrary listed to the right. S. SIEGEL, HARVEY SILVERMAN, RICA SPECTOR AND EDWARD J.
hereon). WALSH, JR. (Instructions: To withhold authority to vote for
[ ] [ ] any individual nominee write that nominee's name in the
space provided below.)
____________________________________________________________
</TABLE>
(continued on reverse side)
<PAGE>
<PAGE>
<TABLE>
<S> <C>
ITEM 2. Ratification of the selection of BDO Seidman, ITEM 3. In their discretion, the Proxies are authorized
LLP as independent auditors of Chic by H.I.S, Inc. for to vote upon such other business as may properly come
the fiscal year ending November 1, 1997. before the meeting or any adjournment thereof.
</TABLE>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
<TABLE>
<S> <C>
Dated: ____________________________ , 1997
__________________________________________
(Signature)
__________________________________________
(Signature if held jointly)
The signature should agree with the name
on your stock certificate. If acting as
attorney, executor, administrator,
trustee, guardian, etc., you should so
indicate when signing. If the signer is a
corporation, please sign the full
corporate name by duly authorized officer.
If shares are held jointly, each
shareholder should sign.
</TABLE>
<PAGE>
