SCHEDULE 14A
(RULE 14A-101)
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
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
SUPREME INTERNATIONAL CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on the 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:
[ ] 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>
SUPREME INTERNATIONAL CORPORATION
7495 N.W. 48th Street
Miami, Florida 33166
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 25, 1997
----------------
To the Shareholders of Supreme International Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Supreme International Corporation, a Florida corporation
(the "Company"), will be held at the Omni Colonnade Hotel, 180 Aragon Avenue,
Coral Gables, Florida 33134 at 3:00 P.M. on July 25, 1997 for the following
purposes:
1. To elect seven directors of the Company for the ensuing year;
2. To consider and vote upon a proposal to ratify the appointment of
Deloitte & Touche LLP as the Company's independent public accountants for
the fiscal year ending January 31, 1998; and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponements thereof.
The Board of Directors has fixed the close of business on June 20, 1997 as
the record date for determining those shareholders entitled to notice of, and
to vote at, the Annual Meeting and any adjournments or postponements thereof.
Whether or not you expect to be present, please sign, date and return the
enclosed proxy card in the pre-addressed envelope provided for that purpose as
promptly as possible. No postage is required if mailed in the United States.
By Order of the Board of Directors,
FANNY HANONO,
Secretary
Miami, Florida
June 27, 1997
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. THOSE
SHAREHOLDERS WHO ARE UNABLE TO ATTEND ARE RESPECTFULLY URGED TO EXECUTE AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO
EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE ANNUAL MEETING, REVOKE THEIR
PROXY AND VOTE THEIR SHARES IN PERSON.
<PAGE>
SUPREME INTERNATIONAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 25, 1997
----------------------
PROXY STATEMENT
----------------------
TIME, DATE AND PLACE OF ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Supreme International Corporation, a Florida
corporation (the "Company"), of proxies from the holders of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), for use at the
Annual Meeting of Shareholders of the Company to be held at 3:00 P.M. on July
25, 1997, at the Omni Colonnade Hotel, 180 Aragon Avenue, Coral Gables, Florida
33134, and at any adjournments or postponements thereof (the "Annual Meeting")
pursuant to the enclosed Notice of Annual Meeting.
The approximate date this Proxy Statement and the enclosed form of proxy
are first being sent to shareholders is June 27, 1997. Shareholders should
review the information provided herein in conjunction with the Company's Annual
Report to Shareholders which accompanies this Proxy Statement. The Company's
principal executive offices are located at 7495 N.W. 48th Street, Miami,
Florida 33166, and its telephone number is (305) 592-2830.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting and the enclosed proxy is to be borne by the Company.
In addition to the use of mail, employees of the Company may solicit proxies
personally and by telephone. The Company's employees will receive no
compensation for soliciting proxies other than their regular salaries. The
Company may request banks, brokers and other custodians, nominees and
fiduciaries to forward copies of the proxy material to their principals and to
request authority for the execution of proxies. The Company may reimburse such
persons for their expenses in so doing.
<PAGE>
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, the Company's shareholders will consider and vote
upon the following matters:
1. To elect seven directors of the Company for the ensuing year;
2. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent public accountants for the fiscal year ending January 31,
1998; and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth herein)
will be voted (a) for the election of the respective nominees for director
named below and (b) in favor of all other proposals described in the Notice of
Annual Meeting. In the event a shareholder specifies a different choice by
means of the enclosed proxy, his shares will be voted in accordance with the
specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on June 20, 1997 as
the record date (the "Record Date") for determining shareholders of the Company
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
there were 4,356,287 shares of Common Stock issued and outstanding, all of
which are entitled to be voted at the Annual Meeting. Each share of Common
Stock is entitled to one vote on each matter submitted to shareholders for
approval at the Annual Meeting.
The attendance, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. Directors will be elected by plurality of the
votes cast by the shares of Common Stock represented in person or by proxy at
the Annual Meeting. The affirmative votes of the holders of a majority of the
shares of Common Stock represented in person or by proxy at the Annual Meeting
will be required for approval of the proposal to ratify the appointment of
Deloitte & Touche LLP as the Company's independent public accountants for the
year ending January 31, 1998 and any other matter that may be submitted to a
vote of the shareholders. If less than a majority of the outstanding shares
entitled to vote are represented at the Annual Meeting, a majority of the
shares so represented may adjourn the Annual Meeting to another date, time or
place, and notice need not be given of the new date, time or place if the new
date, time or place is announced at the meeting before an adjournment is taken.
Prior to the Annual Meeting, the Company will select one or more
inspectors of election for the meeting. Such inspector(s) shall determine the
number of shares of Common Stock represented at the meeting, the existence of a
quorum and the validity and effect of proxies, and shall receive, count and
tabulate ballots and votes and determine the results thereof. Abstentions will
be considered as shares present and entitled to vote at the Annual Meeting and
will be counted as votes cast at the Annual Meeting, but will not be counted as
votes cast for or against any given matter.
2
<PAGE>
A broker or nominee holding shares registered in its name, or in the name
of its nominee, which are beneficially owned by another person and for which it
has not received instructions as to voting from the beneficial owner, may have
discretion to vote the beneficial owner's shares with respect to the election
of directors and other matters addressed at the Annual Meeting. Any such shares
which are not represented at the Annual Meeting either in person or by proxy
will not be considered to have cast votes on any matters addressed at the
Annual Meeting.
BENEFICIAL SECURITY OWNERSHIP
The following table sets forth, as of the Record Date, information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person who is known by the Company to beneficially own 5% or more of the
Company's outstanding Common Stock, (ii) the Company's Chief Executive Officer
and each of the other "Named Executive Officers" (as defined below in
"Executive Compensation--Summary Compensation Table"), (iii) each director of
the Company, and (iv) all directors and executive officers of the Company as a
group. The Company is not aware of any beneficial owner of more than 5% of the
outstanding Common Stock other than as set forth in the following table.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES % OF CLASS
OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED(2) OUTSTANDING
- --------------------------------------------- --------------------- ------------
<S> <C> <C>
DIRECTORS AND NAMED EXECUTIVE OFFICERS:
George Feldenkreis(3)........................ 1,075,169 24.7%
Oscar Feldenkreis(4)......................... 853,192 19.5
Fanny Hanono(5).............................. 284,972 6.5
Salomon Hanono(5)(6)......................... 292,472 6.7
Carfel, Inc(7) .............................. 241,017 5.5
Richard L. Dunn(8) .......................... 25,000 *
Joseph Roisman(9)............................ 8,500 *
Ronald Buch.................................. 500 *
Gary Dix(10)................................. 11,000 *
Richard W. McEwen(11) ....................... 6,500 *
Leonard Miller(12)........................... 32,500 *
All directors and executive officers
as a group (ten persons)(13)................ 2,154,833 48.6%
OTHER 5% OR GREATER HOLDERS
Kennedy Capital Management, Inc.(14)......... 231,578 5.3
10829 Olive Boulevard
St. Louis, Missouri 63141
FMR Corporation(15).......................... 220,000 5.1
82 Devonshire Street
Boston, Massachusetts 02109
The Kaufman Funds, Inc.(16).................. 300,000 6.9
140 East 45th Street, 43rd Floor
New York, New York 10017
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
3
<PAGE>
- ----------------
* Less than 1%.
(1) Except as otherwise indicated, the address of each beneficial owner is c/o
the Company 7495 N.W. 48th Street, Miami, Florida 33166.
(2) Except as otherwise indicated, the Company believes that all beneficial
owners named in the table have sole voting and investment power with
respect to all shares of Common Stock beneficially owned by them.
(3) Represents (a) 759,152 shares of Common Stock held by George Feldenkreis,
(b) 241,017 shares of Common Stock held by Carfel, Inc. ("Carfel"), of
which corporation Mr. Feldenkreis is a director, executive officer and
principal shareholder and (c) 75,000 shares of Common Stock held by a
charitable foundation of which George Feldenkreis, Oscar Feldenkreis and
Fanny Hanono are each directors and officers (the "Foundation").
(4) Represents (a) 748,192 shares of Common Stock held by a limited
partnership of which Oscar Feldenkreis is the sole shareholder of the
general partner and the sole limited partner, (b) 30,000 shares of Common
Stock issuable upon the exercise of stock options held by Oscar
Feldenkreis and (c) 75,000 shares held by the Foundation.
(5) Represents (a) 209,972 shares of Common Stock held by a limited
partnership of which Fanny Hanono, the Company's Secretary-Treasurer, is
the sole shareholder of the general partner and the sole limited partner
and (b) 75,000 shares held by the Foundation. Fanny Hanono and Salomon
Hanono are husband and wife.
(6) Also includes 7,500 shares of Common Stock issuable upon the exercise of
stock options held by Mr. Hanono.
(7) The shares of Common Stock held by Carfel are pledged to a bank to secure
Carfel's credit facility.
(8) Represents 25,000 shares of Common Stock issuable upon the exercise of
stock options held by Mr. Dunn, the Company's Vice President, Finance and
Chief Financial Officer.
(9) Represents (a) 1,000 shares of Common Stock held by Mr. Roisman and (b)
7,500 shares of Common Stock issuable upon the exercise of stock options
held by Mr. Roisman, the Company's Executive Vice President.
(10) Represents (a) 2,000 shares of Common Stock held by Mr. Dix, (b) 1,000
shares of Common Stock held in trust for his children, (c) 500 shares held
in an individual retirement account and (d) 7,500 shares of Common Stock
issuable upon the exercise of stock options held by Mr. Dix.
(11) Represents (a) 1,500 shares of Common Stock held by Mr. McEwen and (b)
5,000 shares of Common Stock issuable upon the exercise of stock options
held by Mr. McEwen.
(12) Represents (a) 25,000 shares of Common Stock held by Mr. Miller and (b)
7,500 shares of Common Stock issuable upon the exercise of stock options
held by Mr. Miller.
(13) Includes the shares of Common Stock and options to purchase shares of
Common Stock described in Notes (3) through (6) and (8) through (12).
(14) Based solely on information contained in an amendment to Schedule 13G
dated February 10, 1997, filed with the Securities and Exchange Commission
(the "Commission").
(15) Based solely on information contained in Schedule 13G dated February 14,
1997, filed with the Commission. The shares are owned by Fidelity Capital
Appreciation Fund, a wholly owned subsidiary of FMR Corporation.
(16) Based solely on information contained in Schedule 13G dated December 31,
1996, filed with the Commission.
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<PAGE>
ELECTION OF DIRECTORS
At the Annual Meeting, seven directors will be elected by the shareholders
to serve until the next annual meeting of shareholders or until their
successors are elected and qualified. The accompanying form of proxy when
properly executed and returned to the Company, will be voted FOR the election
as directors of the seven persons named below, unless the proxy contains
contrary instructions. Proxies cannot be voted for a greater number of persons
than the number of nominees named in the Proxy Statement. Management has no
reason to believe that any of the nominees is unable or unwilling to serve if
elected. However, in the event that any of the nominees should become unable or
unwilling to serve as a director, the proxy will be voted for the election of
such person or persons as shall be designated by the Board of Directors.
The following table sets forth certain information concerning each
nominee.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ----------------------------- ----- --------------------------------------------------
<S> <C> <C>
George Feldenkreis(1)........ 62 Chairman of the Board and Chief Executive Officer
Oscar Feldenkreis ........... 37 President, Chief Operating Officer and Director
Ronald L. Buch............... 62 Director
Gary Dix(1).................. 49 Director
Salomon Hanono............... 47 Director
Richard W. McEwen(2)......... 76 Director
Leonard Miller(1)(2)......... 67 Director
</TABLE>
- ----------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
GEORGE FELDENKREIS founded the Company in 1967, has been involved in all
aspects of its operations since that time and served as the Company's President
and a Director until February 1993, when he was elected Chairman of the Board
and Chief Executive Officer. Mr. Feldenkreis is also a director, executive
officer and principal shareholder of Carfel, an importer and distributor of
automotive parts which he founded in 1961, serves as Chairman of the Board of
Universal National Bank in Miami, Florida and is Vice President of the Greater
Miami Jewish Federation. Mr. Feldenkreis devotes a majority of his working time
to the affairs of the Company and devotes the balance of his working time to
the affairs of Carfel.
OSCAR FELDENKREIS was elected Vice President and a Director in 1979 and
joined the Company on a full-time basis in 1980. Mr. Feldenkreis has been
involved in all aspects of the Company's operations since that time and was
elected President and Chief Operating Officer in February 1993. Oscar
Feldenkreis also serves as a director of Carfel, but does not devote any of his
working time to its affairs.
RONALD L. BUCH was elected to the Company's Board of Directors in January
1996. Prior to his retirement in 1995, Mr. Buch was employed by K-Mart
Corporation for over 39 years, most recently as Vice President and General
Merchandise Manager.
GARY DIX was elected to the Company's Board of Directors in May 1993.
Since February 1994, Mr. Dix, a certified public accountant, has been a partner
at Mallah Furman & Company, P.A., an accounting firm in Miami, Florida. From
1979 to January 1994, Mr. Dix was a partner of Silver Dix &
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<PAGE>
Hammer, P.A., another Miami accounting firm. Mr. Dix also is a member of the
Board of Directors of Universal National Bank in Miami, Florida.
SALOMON HANONO was elected to the Company's Board of Directors in February
1993. Mr. Hanono has been employed by Carfel in various sales capacities since
1987 and currently is Export Director, with overall responsibilities for
Carfel's export sales. Mr. Hanono devotes substantially all of his working time
to the affairs of Carfel.
RICHARD W. MCEWEN was elected to the Company's Board of Directors in
September 1994. Mr. McEwen serves as a director of Lennar Corporation, Sound
Advice, Inc. and Wometco Enterprises, Inc. Prior to his retirement in 1985, Mr.
McEwen was Chairman of the Board and Chief Executive Officer of Burdines, a
division of Federated Department Stores, Inc.
LEONARD MILLER was elected to the Company's Board of Directors in May
1993. Mr. Miller has been Vice President and Secretary of Pasadena Homes, Inc.,
a home construction firm in Miami, Florida, since 1959.
George Feldenkreis is the father of Oscar Feldenkreis and Fanny Hanono,
the Company's Secretary-Treasurer, and the father-in-law of Salomon Hanono.
The Company's executive officers are elected annually by the Board of
Directors and serve at the discretion of the Board. The Company's directors
hold office until the next annual meeting of shareholders and until their
successors have been duly elected and qualified.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and holders of more than ten
percent of the Company's Common Stock, to file reports of ownership and changes
in ownership with the Commission. Such persons are required to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
oral or written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that, with respect to the
fiscal year ended January 31, 1997 ("Fiscal 1997"), all filing requirements
applicable to its executive officers, directors and greater than ten percent
beneficial owners were complied with.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During Fiscal 1997, the Board of Directors held three formal meetings.
During Fiscal 1997, no director attended fewer than 75% of the number of
meetings of the Board of Directors and each Committee of the Board of Directors
held during the period he served on the Board.
The only committees of the Board of Directors are the Audit Committee, the
Compensation Committee and the Directors' Stock Option Plan Committee. The
Board does not have a nominating or similar committee.
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<PAGE>
The Audit Committee is presently comprised of George Feldenkreis, Gary Dix
and Leonard Miller. The duties and responsibilities of the Audit Committee
include (a) recommending to the Board of Directors the appointment of the
Company's independent public accountants and any termination of engagement, (b)
reviewing the plan and scope of independent audits, (c) reviewing the Company's
significant accounting policies and internal controls, (d) having general
responsibility for all related auditing matters, and (e) reporting its
recommendations and findings to the full Board of Directors. The Audit
Committee met once during Fiscal 1997.
The Compensation Committee is presently comprised of Leonard Miller and
Richard W. McEwen. The Compensation Committee reviews and approves the
compensation of the Company's executive officers and administers the Company's
1993 Stock Option Plan (the "1993 Plan"). The Compensation Committee met once
during Fiscal 1997.
The Directors' Stock Option Plan Committee is presently comprised of
George Feldenkreis and Oscar Feldenkreis. The Directors' Stock Option Plan
Committee administers the Company's Directors' Stock Option Plan (the
"Directors' Plan"). The Directors' Stock Option Plan Committee did not meet
during Fiscal 1997.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following compensation table sets forth, for the fiscal years ended
January 31, 1995, 1996 and 1997, the cash and certain other compensation paid
by the Company to the Company's Chief Executive Officer ("CEO") and such other
executive officers whose annual salary and bonus exceed $100,000 during Fiscal
1997 (together with the CEO, collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------- -----------------------
SECURITIES UNDERLYING ALL OTHER
FISCAL SALARY BONUS OPTION/SARS COMPENSATION(1)
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
- ------------------------------ -------- --------- --------- ----------------------- ----------------
<S> <C> <C> <C> <C> <C>
George Feldenkreis 1997 120,000 50,000 -- 500
Chairman and CEO 1996 120,000 -- -- 1,970
1995 100,000 -- -- 3,000
Oscar Feldenkreis 1997 350,000 450,000 -- 500
President and 1996 350,000 200,000 -- 2,634
Chief Operating Officer 1995 200,000 309,000 -- 12,000
Richard L. Dunn 1997 145,000 10,000 -- 500
Vice President, Finance and 1996 132,692 10,000 -- 2,269
Chief Financial Officer 1995 100,968 1,000 25,000(2) --
Joseph Roisman 1997 140,000 10,000 -- 500
Executive Vice President 1996 116,000 10,000 -- 2,179
1995 101,462 18,000 -- 5,500
</TABLE>
- ----------------
(1) The dollar amount represents Company contributions for the Named Executive
Officer to the Company's Profit Sharing and/or 401(K) Plans.
(2) Represents options to purchase Common Stock granted to the Named Executive
Officer under the 1993 Plan.
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STOCK OPTIONS HELD AT END OF FISCAL 1997
The following table indicates the total number and value of exercisable
and unexercisable stock options held by each of the Named Executive Officers
listed as of January 31, 1997. No options to purchase stock were exercised by
any of the Named Executive Officers in Fiscal 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END(#) AT FISCAL YEAR-END
------------------------------- ---------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE
- -------------------------- ------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C>
Oscar Feldenkreis ...... 30,000 0 $ 48,000 $ 0
Richard L. Dunn ......... 18,750 6,250 89,063 29,685
Joseph Roisman ......... 7,500 0 20,625 0
</TABLE>
- ----------------
(1) Based on The Nasdaq National Market closing price for the Company's Common
Stock on January 31, 1997 of $14.25 per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None.
COMPENSATION OF DIRECTORS
During Fiscal 1997, non-employee directors, with the exception of Salomon
Hanono, were compensated at the rate of $1,500 per quarter and $500 for each
meeting of the Board of Directors or any committee thereof attended, up to a
maximum of $8,000 per annum. Directors are reimbursed for travel and lodging
expenses in connection with their attendance at meetings. Mr. Hanono receives
no cash compensation for his services as a director. Directors are also
entitled to receive options under the Company's 1993 Plan and the Directors'
Plan. As of January 31, 1997, the following Options were outstanding:
<TABLE>
<CAPTION>
NUMBER OF EXERCISE EXPIRATION
NAME OF OPTIONEE SHARES PRICE DATE
- -------------------------- ----------- ---------- -------------
<S> <C> <C> <C>
Gary Dix ............... 7,500 $12.00 June 2, 2000
Richard W. McEwen ...... 5,000 $12.00 June 2, 2000
Leonard Miller ......... 7,500 $12.00 June 2, 2000
Salomon Hanono ......... 7,500 $12.00 June 2, 2000
</TABLE>
EMPLOYMENT AGREEMENTS
The Company is party to an employment agreement with Oscar Feldenkreis,
the Company's President and Chief Operating Officer, which currently expires in
May 1998, subject to annual renewal. The employment agreement, as amended,
provides for an annual salary of $350,000, subject to annual cost-of-living
increases, and an annual bonus as may be determined by the Compensation
Committee in its discretion, up to a maximum of $500,000. The employment
agreement requires Mr. Feldenkreis to devote his full-time to the affairs of
the Company. Upon termination of the employment agreement by reason of the
employee's death or disability, Mr. Feldenkreis or his estate will receive a
lump sum payment equal to one year's salary plus a bonus as may be determined
by the Compensation Committee
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<PAGE>
in its discretion. The employment agreement also prohibits Mr. Feldenkreis from
directly or indirectly competing with the Company for one year after
termination of his employment for any reason except the Company's termination
of Mr. Feldenkreis without Cause.
The Company is also party to an employment agreement with George
Feldenkreis, the Company's Chairman of the Board and Chief Executive Officer,
which currently expires in May 1998, subject to annual renewal. The employment
agreement, as amended, provides for an annual salary of $120,000, subject to
annual cost-of-living increases, and an annual bonus as may be determined by
the Compensation Committee in its discretion, up to a maximum of $250,000.
Pursuant to his employment agreement, Mr. Feldenkreis devotes a majority of his
working time to the affairs of the Company. George Feldenkreis' employment
agreement contains termination and non-competition provisions similar to those
set forth in Oscar Feldenkreis' agreement.
OPTION GRANTS IN LAST FISCAL YEAR
The Company did not grant stock options during Fiscal 1997 to any of the
Named Executive Officers.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Commission, the Company is required to
provide a report explaining the rationale and considerations that led to
fundamental compensation decisions affecting the Company's executive officers
(including the Named Executive Officers) during the past fiscal year. The
report of the Company's Compensation Committee is set forth below.
COMPENSATION PHILOSOPHY
The three principal components of the Company's executive compensation are
salary, bonus and stock options. These components are designed to facilitate
fulfillment of the compensation objectives of the Company's Board of Directors
and the Compensation Committee, which objectives include (i) attracting and
retaining competent management, (ii) recognizing individual initiative and
achievement, (iii) rewarding management for short and long term
accomplishments, and (iv) aligning management compensation with the achievement
of the Company's goals and performance.
The Compensation Committee endorses the position that equity ownership by
management is beneficial in aligning management's and shareholders' interests
in the enhancement of shareholder value. This alignment is amplified by the
extensive holdings by management of Company Common Stock and stock options.
Base salaries for new management employees are determined initially by
evaluating the responsibilities of the position held and the experience of the
individual, and by reference to the competitive marketplace for managerial
talent, including a comparison of base salaries for comparable positions at
similar companies of comparable sales and capitalization. Annual salary
adjustments are determined by evaluating the competitive marketplace, the
performance of the Company, the performance of the executive, and the
responsibilities assumed by the executive.
During the current fiscal year, the Compensation Committee intends to
review the Company's existing management compensation programs and plans (i) to
meet with the chief executive officer to
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consider and set mutually agreeable performance standards and goals for members
of senior management and/or the Company, as appropriate or as otherwise
required pursuant to any such officer's employment agreement and (ii) to
consider and, as appropriate, approve modifications to such programs to ensure
a proper fit with the philosophy of the Compensation Committee and the agreed-
upon standards and goals. Accordingly, the Compensation Committee has not yet
considered or approved the individual or corporate performance goals or
standards for the present fiscal year with respect to the Company's management
incentive programs.
CHIEF EXECUTIVE OFFICER COMPENSATION
The principal factors considered by the Board of Directors in determining
Fiscal 1997 salary and bonus for George Feldenkreis, the Chairman of the Board
and Chief Executive Officer of the Company, included an analysis of the
compensation of chief executive officers of public companies within the
Company's industry and public companies similar in size and capitalization to
the Company and notwithstanding the fact that his employment agreement does not
require Mr. Feldenkreis to devote more than 50% of his working time to the
affairs of the Company, the fact that Mr. Feldenkreis has devoted a majority of
his working time to the affairs of the Company. The Compensation Committee also
considered the Company's Fiscal 1997 earnings, expectations for the fiscal year
ending January 31, 1998 and other performance measures in determining George
Feldenkreis' compensation, but there was no specific relationship or formula by
which such compensation was tied to Company performance. As a result of its
evaluation, the Compensation Committee also voted to renew George Feldenkreis'
employment agreement with the Company, which was to expire in May 1997, for a
one-year period.
OTHER EXECUTIVE OFFICERS' COMPENSATION
Fiscal 1997 base salary and bonus for the Company's other executive
officers were determined by the Compensation Committee. This determination was
made after a review and consideration of a number of factors, including each
executive's level of responsibility and commitment, level of performance (with
respect to specific areas of responsibility and on an overall basis), past and
present contribution to and achievement of Company goals and performance during
Fiscal 1997, compensation levels at competitive publicly held companies and the
Company's historical compensation levels. Although Company performance was one
of the factors considered, the approval of the Compensation Committee was based
upon an overall review of the relevant factors, and there was no specific
relationship or formula by which compensation was tied to Company performance.
As a result of its evaluation, the Compensation Committee also voted to renew
Oscar Feldenkreis' employment agreement with the Company, which was to expire
in May 1997, for a one-year period.
STOCK OPTIONS
The Company maintains stock option plans which are designed to attract and
retain executive officers, directors and other employees of the Company and to
reward them for delivering long-term value to the Company. The Compensation
Committee did not grant any options to Named Executive Officers during Fiscal
1997.
Richard W. McEwen
Leonard Miller
11
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
the Company's Common Stock with the cumulative total stockholder return on the
Nasdaq Stock Market-US Index and The S&P Textile-Apparel Manufacturer Index
commencing on May 21, 1993 (the first day the Common Stock began trading on The
Nasdaq National Market) and ending January 31, 1997.
COMPARISON OF 44 MONTH CUMULATIVE TOTAL RETURN*
AMONG SUPREME INTERNATIONAL CORPORATION,
THE NASDAQ STOCK MARKET--U.S. INDEX
AND THE S&P TEXTILE-APPAREL MANUFACTURER INDEX
[GRAPH TO COME]
<TABLE>
<CAPTION>
MAY 21, 1993 JANUARY 31,
-------------- --------------------------------
1994 1995 1996 1997
------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
Supreme ............ $100 $89 $84 $102 $121
Nasdaq US ......... 100 121 116 164 214
S&P Textiles ...... 100 81 81 91 109
</TABLE>
- ----------------
* Assumes that $100 was invested on May 21, 1993 in the Company's Common Stock
or on April 30, 1993 in the Nasdaq Stock Market Index or The S&P
Textile-Apparel Manufacturer Index, and that all dividends are reinvested.
12
<PAGE>
CERTAIN TRANSACTIONS
The Company's executive offices occupy a 19,000 square foot building in
Miami, Florida. The space is leased from George Feldenkreis, the Company's
Chairman of the Board, pursuant to a lease which expires in December 31, 2000.
The Company's current rental for the office facility is $128,000 per annum.
The Company also occupies an approximately 49,000 square foot warehouse
building adjacent to its executive offices with approximately 6,000 square feet
of office space. The warehouse is leased from George Feldenkreis pursuant to a
five-year lease expiring in April 1998, at a current annual rental of $299,000.
The rent increases annually by an amount equal to the lesser of any increase in
the consumer price index or 5%. This lease provides for a five-year renewal
option. The Company leases a second adjacent 32,000 square foot warehouse
building from a partnership of which Mr. Feldenkreis is a general partner. This
warehouse is leased pursuant to a three-year lease expiring in June 1998, at a
current annual rental of approximately $136,000.
In January 1995, the Company entered into a license agreement (the
"License Agreement") with Isaco International, Inc. ("Isaco"), pursuant to
which Isaco was granted an exclusive license to use the Natural
Issue/trademark/ brand name in the United States, its territories and
possessions and Puerto Rico to market a line of mens' underwear and loungewear.
The License Agreement provides for a guaranteed minimum royalty of $112,500
through May 31, 1997 (with increasing amounts in succeeding years) and expires
on May 31, 1998. Royalty income earned from the License Agreement amounted to
approximately $243,000 for Fiscal 1997. The principal shareholder of Isaco is
Isaac Zelcer, who is Oscar Feldenkreis' father-in-law.
The Company believes that its arrangements with George Feldenkreis and the
License Agreement are on terms at least as favorable as the Company could
secure from a non-affiliated third party.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Deloitte & Touche LLP, independent public accountants, has
served as the Company's independent public accountants since 1993. The Board of
Directors has selected Deloitte & Touche LLP as the Company's independent
public accountants for the current fiscal year ending January 31, 1998. One or
more representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting, will have the opportunity to make a statement if they desire to
do so and are expected to be available to respond to appropriate questions from
shareholders.
OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the Annual
Meeting, the persons named in the accompanying proxy will vote proxies as in
their discretion they may deem appropriate, unless they are directed by a proxy
to do otherwise.
13
<PAGE>
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Securities and Exchange
Commission, a shareholder intending to present a proposal to be included in the
Company's proxy statement for the Company's 1998 Annual Meeting of Shareholders
must deliver a proposal in writing to the Company's principal executive offices
no later than February 28, 1998.
By Order Of The Board of Directors
FANNY HANONO,
Secretary
Miami, Florida
June 27, 1997
14
<PAGE>
SUPREME INTERNATIONAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS - JULY 25, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SUPREME INTERNATIONAL CORPORATION
The undersigned hereby appoints George Feldenkreis and Oscar Feldenkreis
as Proxies, each with full power to appoint a substitute, to represent and to
vote, with all the powers the undersigned would have if personally present, all
the shares of Common Stock $.01 par value per share of Supreme International
Corporation (the "Company") held of record by the undersigned on June 20, 1997
at the Annual Meeting of Shareholders to be held on July 25, 1997 or any
adjournment or adjournments thereof.
Proposal 1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ] FOR ALL THE NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below.
</TABLE>
(INSTRUCTIONS: To withhold authority for any individual nominee, write that
nominee's name in the space below.)
George Feldenkreis, Oscar Feldenkreis, Ronald L. Buch, Gary Dix, Salomon
Hanono, Richard W. McEwen, Leonard Miller
- --------------------------------------------------------------------------------
Proposal 2. Ratification of selection of Deloitte & Touche as independent
public accountants for the Company for the fiscal year ending
January 31, 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
In their discretion, the Proxies are authorized to vote upon other business as
may come before the meeting.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
<PAGE>
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, the Proxy will be
voted FOR Proposals 1 and 2.
Dated:______________________, 1997
___________________________
(Signature)
___________________________
(Signature)
PLEASE SIGN HERE
Please date this proxy and sign
your name exactly as it appears
hereon.
Where there is more than one
owner, each should sign. When
signing as an agent, attorney,
administrator, executor, guardian,
or trustee, please add your title
as such. If executed by a
corporation, the proxy should be
signed by a duly authorized
officer who should indicate his
office.
PLEASE DATE, SIGN, AND MAIL THIS PROXY CARD IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
