<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
Nautica Enterprises, 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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
------------------------------------------------------------------------
/X/ 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> 2
NAUTICA ENTERPRISES, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
New York, New York
June 3, 1996
To the Stockholders of
NAUTICA ENTERPRISES, INC.
The Annual Meeting of Stockholders of Nautica Enterprises, Inc. will be
held on July 1, 1996 at the offices of the Company, 40 West 57th Street, New
York, New York, at 9:30 A.M. for the following purposes:
(1) To elect directors to serve until the next annual meeting of
stockholders or until their successors are duly elected and qualified;
(2) To consider and vote on a proposal to amend the Certificate of
Incorporation of the Company to increase the number of authorized
shares of Common Stock from 50,000,000 to 100,000,000;
(3) To consider and vote on a proposal to adopt the Nautica Enterprises,
Inc. 1996 Stock Incentive Plan; and
(4) To transact such other business as may properly come before the meeting
and any adjournment or adjournments thereof.
Only stockholders of record at the close of business on May 24, 1996 are
entitled to notice of and to vote at the meeting and any adjournment or
adjournments thereof.
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, BUT WISH
THEIR STOCK TO BE VOTED ON MATTERS TO BE PRESENTED TO THE MEETING, ARE URGED TO
SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE TO WHICH
NO POSTAGE NEED BE AFFIXED IF MAILED WITHIN THE UNITED STATES.
By Order of the Board of Directors,
HARVEY SANDERS,
Chairman
<PAGE> 3
NAUTICA ENTERPRISES, INC.
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019
------------------------
PROXY STATEMENT
------------------------
This proxy statement is furnished with respect to the solicitation of
proxies by the Board of Directors of Nautica Enterprises, Inc. (the "Company")
for the Annual Meeting of Stockholders of the Company to be held at 9:30 A.M. on
July 1, 1996 and at any adjournment or adjournments thereof, at 40 West 57th
Street, 7th floor, New York, New York. The approximate date on which the proxy
statement and form of proxy was first sent or given to stockholders was June 3,
1996.
Proxies in the accompanying form which are properly executed and duly
returned to the Board of Directors will be voted at the meeting. Any proxy may
be revoked by the stockholder at any time prior to its being voted. Such
revocation shall be effective upon receipt of a written notice by the Secretary
of the Company at the address specified above.
The expense of the solicitation of proxies for the meeting, including the
cost of mailing, will be borne by the Company. In addition to mailing copies of
the enclosed proxy materials to stockholders, the Company may request persons,
and reimburse them for their expenses with respect thereto, who hold stock in
their names or custody or in the names of nominees for others to forward copies
of such materials to those persons for whom they hold stock of the Company and
to request authority for the execution of the proxies. In addition to the
solicitation of proxies by mail, it is expected that some of the officers,
directors, and regular employees of the Company, without additional
compensation, may solicit proxies on behalf of the Board of Directors by
telephone, telefax, and personal interview.
As of the close of business on May 24, 1996, the date for determining the
stockholders of record entitled to notice of and to vote at the Annual Meeting
and any adjournment or adjournments thereof, there were issued and outstanding
39,895,312 shares of the Company's Common Stock, the holders thereof being
entitled to one vote per share. The presence at the Annual Meeting of a majority
of such shares, in person or by proxy, are required for a quorum. All share data
included in this Proxy Statement has been adjusted to reflect a 2 for 1 stock
split effected in the form of a stock dividend paid on May 28, 1996 (the "Stock
Split").
The form of proxy solicited by the Board of Directors affords stockholders
the ability to specify a choice among approval of, disapproval of, or abstention
with respect to, each matter to be acted upon at the Annual Meeting. Shares
represented by the proxy will be voted and, where the solicited stockholder
indicates a choice on the form of proxy with respect to any matter to be acted
upon, the shares will be voted as specified.
ELECTION OF DIRECTORS
The persons named in the accompanying proxy intend to vote for the election
as directors the seven nominees listed herein. All of the nominees have
consented to serve if elected. All directors will be elected to hold office
until the next annual meeting of stockholders, and, in each case, each director
will serve until his successor is elected and qualified or until his earlier
resignation or removal. If a nominee should be unable to act as a director,
which is not anticipated, the persons named in the proxy will vote for any
nominee who shall
<PAGE> 4
be designated by the present Board of Directors to fill the vacancy. Each of the
nominees presently serves as a director.
Set forth below is biographical information for each of the nominees.
Unless otherwise indicated, each has served in his stated capacity for the last
five years:
Robert B. Bank, age 49, has been a Director of the Company since 1989. He
is President of Robert B. Bank Advisory Services, a venture capital firm, and a
Director of Jos. A. Bank Clothiers, Inc., a manufacturer and retailer of men's
tailored clothing.
David Chu, age 41, joined the Company in 1984 and became a Director in
1987. He has served as Executive Vice President of the Company since 1989 and
President of Nautica International, Inc. and Nautica Apparel, Inc., each wholly
owned subsidiaries of the Company, since 1984.
George Greenberg, age 74, has been a Director of the Company since 1988. He
is Vice Chairman and a Director of Guilford Mills, Inc., a textile manufacturer.
Mr. Greenberg is the father-in-law of Harvey Sanders, Chairman of the Board and
President of the Company.
Israel Rosenzweig, age 48, has been a Director of the Company since 1990.
He is Vice Chairman and a Trustee of BRT Realty Trust, a real estate investment
trust. He has been a Director of Bankers Federal Savings FSB, a savings and loan
association, since 1993 and its Executive Vice President and Chief Lending
Officer since 1994.
Harvey Sanders, age 46, has been President, Chief Executive Officer and a
Director of the Company since 1977 and Chairman of the Board since October 1993.
Charles H. Scherer, age 52, has been a Director of the Company since May
1994. He is managing partner of Hughes Hubbard & Reed, a New York City law firm
that provides legal services to the Company.
Ronald G. Weiner, 50, has been a Director of the Company since October
1995. He is President of Perelson Weiner, a certified public accounting firm
based in New York City.
Shares represented by proxies solicited by the Board of Directors, will,
unless contrary instructions are given, be voted in favor of the election as
Directors of the nominees named above. If a stockholder wishes to withhold
authority to vote for any nominee, such stockholder can do so by following the
directions set forth on the form of proxy solicited by the Board of Directors or
on the ballot distributed at the Annual Meeting if such stockholder wishes to
vote in person. Directors shall be elected by a plurality vote of the shares of
Common Stock present in person or represented by proxy at the meeting.
Abstentions and broker non-votes will not have the effect of votes in opposition
to a person nominated as a Director.
During fiscal year 1996, the Board of Directors held five meetings. The
Compensation Committee of the Board of Directors is comprised of Messrs. Bank,
Rosenzweig and Weiner. The Compensation Committee sets the compensation to be
paid to the Company's principal executive officers. The Audit Committee of the
Board of Directors is comprised of Messrs. Bank, Scherer, Rosenzweig and Weiner.
The Audit Committee reviews the audit plan with the Company's independent
accountants, the scope and results of their audit and other related audit and
accounting issues. During fiscal year 1996, the Compensation Committee held two
meetings and Audit Committee held one meeting. The Board of Directors as a whole
proposes nominees for election to the Board of Directors.
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of
the Company's Common Stock as of May 10, 1996 by all stockholders known to the
Company to have been beneficial owners of more than five percent of its Common
Stock, by each nominee for Director, by each of the executive officers of the
Company included in the Summary Compensation Table below, and all directors and
executive officers as a group. All share data set forth below has been adjusted
to reflect the Stock Split.
<TABLE>
<CAPTION>
NAME OF AMOUNT BENEFICIALLY PERCENT OF
BENEFICIAL OWNER(1) OWNED(2)(3) CLASS(%)
-------------------------------------------------- ------------------- ----------
<S> <C> <C>
Robert B. Bank.................................... 39,650 *
David Chu......................................... 1,668,984 4.1
George Greenberg.................................. 39,314 *
Donald Pennington................................. 1,800 *
Israel Rosenzweig................................. 29,400 *
Harvey Sanders.................................... 4,534,740 11.2
Charles H. Scherer................................ 5,800 *
Ronald G. Weiner.................................. 4,500 *
John Wetzler...................................... 96,242 *
Charles Zona...................................... 212,252 *
All Directors and Executive
Officers as a group............................. 6,632,682 15.9
</TABLE>
- ---------------
* Indicates holdings of less than 1%.
(1) The ages of the executive officers of the Company included above are as
follows: David Chu -- 41; Harvey Sanders -- 46; Donald Pennington -- 51;
John Wetzler -- 50; and Charles Zona -- 46.
(2) Directly and indirectly. The inclusion of securities owned by others as
beneficially owned by the respective nominees and officers does not
constitute an admission that such securities are beneficially owned by them.
All of the named individuals have, except as set forth in Note 3 below, sole
voting and investment powers with respect to the aforesaid shares.
(3) Includes the following shares which may be acquired pursuant to existing
stock options which are exercisable on or before July 24, 1996: Robert B.
Bank -- 29,400; David Chu -- 1,049,764; George Greenberg -- 29,400; Donald
Pennington -- 1,800; Israel Rosenzweig -- 23,400; Harvey Sanders -- 498,300;
Charles H. Scherer -- 1,800; John Wetzler -- 92,756; and Charles
Zona -- 74,250. With respect to Mr. Sanders, includes 1,350,000 shares owned
by the Harvey Sanders Grantor Retained Income Trust. Such trust has sole
voting and investment power with respect to such shares.
For the fiscal year ended February 29, 1996, each of Messrs. Bank, Chu,
Greenberg, Rosenzweig, Sanders, Scherer and Wetzler filed one late report under
Section 16(a) of the Securities and Exchange Act of 1934, reflecting one
transaction.
3
<PAGE> 6
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the fiscal years ended February 28, 1994 and
1995 and February 29, 1996, the cash compensation paid by the Company and its
subsidiaries, to the Company's Chief Executive Officer and each of the four most
highly compensated executive officers of the Company other than the Company's
Chief Executive Officer as of February 29, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ------------ ALL OTHER
SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#)(1) ($)(2)
- ----------------------------------------------- ---- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Harvey Sanders................................. 1996 750,140 742,863 180,000 2,461
Chairman of the Board, 1995 699,000 589,680 177,000 2,424
Chief Executive Officer and President 1994 575,000 397,000 202,500 2,248
David Chu...................................... 1996 657,927 657,208 180,000 5,383
Executive Vice President and President -- 1995 627,000 491,400 177,000 2,250
Nautica International, Inc. and 1994 522,000 335,000 135,000 2,248
Nautica Apparel, Inc., wholly owned
subsidiaries of the Company
Donald Pennington(3)........................... 1996 201,538 51,000 -- --
Chief Administrative Officer 1995 30,800 -- 9,000 --
John Wetzler................................... 1996 231,218 161,000 45,000 2,262
President -- Nautica Retail USA, Inc., 1995 219,000 100,000 9,000 2,250
a wholly owned subsidiary of the Company 1994 199,300 40,000 22,500 2,248
Charles Zona................................... 1996 310,221 -- -- 2,262
President -- State-O-Maine, Inc., 1995 308,000 -- -- 2,250
a wholly owned subsidiary of the Company 1994 279,000 37,000 -- 2,248
</TABLE>
- ---------------
(1) Adjusted to reflect the Stock Split.
(2) "All Other Compensation" is comprised of contributions made by the Company
to the named executives pursuant to the Company's 401(k) Plan and, with
respect to Messrs. Sanders and Chu, an additional amount of $199 and $3,121,
respectively, representing the economic value attributable to each of them
for split-dollar life insurance.
(3) Mr. Pennington joined the Company on January 1, 1995.
4
<PAGE> 7
STOCK OPTIONS
The following table contains information concerning the grant of stock
options during fiscal year 1996 under the Company's Executive Incentive Stock
Option Plan and 1989 Employee Incentive Stock Plan to each of the Company's
executives listed in the Summary Compensation Table above receiving stock
options during such period. The number of options granted, the exercise price
and grant date present value reported in said table have been adjusted to
reflect the Stock Split.
The table also illustrates the Grant Date Present Value of those stock
options based upon the Black-Scholes Model of Valuation, without giving effect
to the non-transferability or vesting requirements of the options.
No matter what theoretical value is placed on a stock option on the date of
grant, its ultimate value will be dependent on the market value of the Company's
Common Stock at a future date. If the price of the Company's Common Stock
increases, all stockholders will benefit commensurably with the optionees.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR GRANT DATE
OPTIONS GRANTED TO EMPLOYEES BASE PRICE EXPIRATION PRESENT
NAME (#)(1) IN FISCAL YEAR ($/SH) DATE VALUE($)(2)
- --------------------------- --------------- --------------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Harvey Sanders............. 180,000 21.58 10.38 3/1/05 1,090,800
David Chu.................. 180,000 21.58 10.38 3/1/05 1,090,800
John Wetzler............... 45,000 5.40 10.38 3/1/05 272,700
</TABLE>
- ---------------
(1) All options were granted at market value at the date of grant, March 1,
1995, for a term of ten years, subject to earlier termination in certain
instances related to termination of employment. All option grants are
exercisable cumulatively in five equal annual installments commencing one
year following the date of grant. The required tax withholding obligations
related to exercise of certain options may be paid by delivery of already
owned shares or by offset of the underlying shares, subject to certain
conditions.
(2) The amounts shown assume a value based on the Black-Scholes Model of
Valuation. The assumptions used were as follows: volatility -- 39%;
risk-free rate of return -- 7.22%; and, assumed time of exercise -- 10
years. No adjustments were made for non-transferability or
risk-of-forfeiture. There can be no assurance that the rate of appreciation
assumed for purposes of this table will be achieved. The stock options will
have no value to the executives named above or other optionees if the price
of the Company's Common Stock does not increase above the exercise price of
the option.
5
<PAGE> 8
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the Company's
executives listed in the Summary Compensation Table above, concerning the
exercise of options during the last fiscal year and unexercised options held as
of the end of the 1996 fiscal year, as adjusted for the Stock Split:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END (#) AT FY-END ($)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------ ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Harvey Sanders.......... -- -- 318,900/578,100 5,250,134/7,945,022
David Chu............... -- -- 906,364/492,600 17,040,914/6,519,669
Donald Pennington....... -- -- 1,800/ 7,200 19,053/ 76,212
John Wetzler............ -- -- 73,406/ 69,750 1,399,873/ 856,024
Charles Zona............ 182,344 2,616,470 27,000/ 60,750 465,075/1,106,831
</TABLE>
DIRECTOR COMPENSATION
Each nonemployee Director receives compensation of $3,500 for each Board
meeting attended, and $2,000 for each Committee meeting attended. No fees are
payable to officers and employees of the Company who serve as Directors. During
fiscal year 1996, Messrs. Bank, Greenberg, Rosenzweig and Scherer each were
granted 6,000 options at an exercise price of $10.38 per share. The options are
exercisable cumulatively in five equal annual installments commencing one year
from the date of grant.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and Messrs. Sanders and Chu have entered into an agreement
which provides that upon the death of either of them, the Company will purchase
a portion of the shares of Common Stock of such stockholder. The Company has
obtained policies of life insurance on the lives of such stockholders for the
purpose of utilizing the proceeds from such insurance for the purchase of the
shares. The agreement provides for the Company to purchase the shares of the
deceased stockholder at a value which is equal to the average of the last sale
price as reported on the National Market List of the NASDAQ (or the closing
price if the shares are listed on a national securities exchange) for the thirty
trading days prior to the date of death of the deceased stockholder. The
Company's obligation to purchase the Common Stock of the deceased stockholder is
limited to the life insurance proceeds received by the Company on the death of
such stockholder. The agreement also provides, as soon after the death of the
stockholder as is practicable, for the filing of a registration statement with
the Securities and Exchange Commission for a secondary offering to provide for
the sale of the balance of the shares owned by the deceased stockholder.
Messrs. Sanders and Chu have agreed to vote through July 1, 1997 all of
their respective shares owned of record or beneficially to ensure that each of
Mr. Sanders and Mr. Chu, or their respective nominees, will be elected to the
Board of Directors of the Company.
Mr. David Chu, Executive Vice President of the Company and President of
Nautica Apparel, Inc. and Nautica International, Inc., both wholly owned
subsidiaries of the Company, is entitled to receive 50% of the net
6
<PAGE> 9
income Nautica Apparel, Inc. receives from all royalty income earned with
respect to the Nautica name and trademarks. For the fiscal year ended February
29, 1996, Mr. Chu earned net royalty income of $2,247,961.
During fiscal year 1996, the Company paid $554,506 to the law firm of
Hughes Hubbard & Reed for professional services rendered to the Company. Samuel
Sultanik, Esq., the brother-in-law of Harvey Sanders, Chairman of the Board,
Chief Executive Officer and President of the Company, is counsel to Hughes
Hubbard & Reed and Charles H. Scherer, Esq., a director of the Company, is
managing partner of Hughes Hubbard & Reed.
During fiscal year 1996, the Company paid $106,634 to the firm of
Chu/Peterson Interior Design, Inc. for interior design and related services
provided to the Company. Mr. Peter Chu, the brother of David Chu, Executive Vice
President of the Company, is a stockholder and Vice President in such firm.
EMPLOYEE CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
The Company has entered into agreements with Messrs. Sanders, Chu, Wetzler
and Zona providing that in the event of a change in control of the Company, as
defined in the agreements, each has the right to receive a lump sum payment upon
termination of employment other than for cause or permanent disability or
resignation for good reason within three years after the change in control. At
February 29, 1996, the maximum amount payable to Mr. Sanders, Mr. Chu, Mr.
Wetzler and Mr. Zona under such agreements was $4,444,000, $3,980,000,
$1,271,000 and $715,000, respectively.
The Company has entered into split-dollar agreements with trusts
established by each of Mr. Sanders and Mr. Chu. Pursuant to each of the
agreements, the Company pays the annual premium on specified life insurance
policies owned by each of the trusts, net of the amount of the "economic
benefit" attributable to each of the employees. The amount of the premiums paid
by the Company constitutes indebtedness from each of the trusts to the Company
and is secured by collateral assignments of each of the insurance policies to
the Company. The annual premium payable by the Company for the benefit of Mr.
Sanders' trust is $57,230 and for Mr. Chu's trust, $47,000. Upon termination of
each of the agreements, the Company is entitled to receive from each of the
trusts the amount equal to the aggregate premiums which it has paid. The face
value of the policy for Mr. Sanders' trust is $5,000,000 and for Mr. Chu's
trust, $4,850,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Robert B. Bank, Israel Rosenzweig and Ronald G. Weiner served as members of
the compensation committee (the "Compensation Committee") of the Board of
Directors during fiscal year 1996.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors is comprised of Robert
B. Bank, Israel Rosenzweig and Ronald G. Weiner. The Compensation Committee is
charged with setting the compensation of the Company's senior executives. The
Company's executive compensation program consists of three main components: base
salary, potential for annual bonus or incentive awards based on performance, and
the opportunity to earn stock-based incentives designed to encourage the
achievement of superior results over time and ownership of Common Stock of the
Company. The Stock Option Committee (the "Stock Option Committee") of the Board
of Directors is charged with the responsibility of granting stock options to
executive employees. Messrs. Bank, Rosenzweig and Weiner also comprise the Stock
Option Committee. In setting compensation, the Compensation Committee and the
Stock Option Committee review, with the assistance of
7
<PAGE> 10
independent compensation consultants, available information for similar
positions or levels at comparable companies. Such companies include a diverse
range of apparel manufacturers with sales within, below and above the range of
sales of the Company. The Compensation Committee has adopted a policy to seek to
maintain executive compensation within the deduction cap of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code").
In the Compensation Committee's determination of salary for all senior
executives and bonus for executive officers whose compensation is below Code
Section 162(m) limits, it subjectively reviews certain factors, including
earnings before income taxes, earnings per share, sales, net income and gross
profit margin. The Compensation Committee places its greatest emphasis on
earnings before income taxes and weighs equally the remaining factors. It also
reviews performance at the subsidiary or divisional level, taking into account
earnings, sales growth and other criteria specifically relating to such
subsidiary or division, and reviews individual performance and contributions to
the Company.
With respect to certain senior executives, including Harvey Sanders, the
Chairman of the Board, President and Chief Executive Officer of the Company, and
David Chu, the Executive Vice President of the Company, annual incentive award
opportunities are set in accordance with the Company's Incentive Compensation
Plan (the "Plan"). At the start of each fiscal year, the Compensation
Committee -- in consultation with management -- establishes target levels of
either earnings before income taxes, net earnings and/or return on equity for
the Company or a business unit. In fiscal year 1996, threshold levels of
earnings before income taxes were established. If the designated minimum level
of earnings before income taxes was not achieved, the participants would have
received no incentive award for fiscal year 1996 performance under the Plan
(although in its discretion, the Compensation Committee could have authorized an
award outside of the Plan). During such year, the threshold level was exceeded
and the participants received an incremental proportionately greater payment
than the minimum. The Compensation Committee has established target levels for
fiscal year 1997 based on earnings before income taxes and has granted incentive
award opportunities for such year to Messrs. Sanders and Chu.
The Company's senior executives are eligible to receive stock options
and/or restricted stock in accordance with the Company's stock plans. The
objectives of such participation are to align executive and stockholder long
term interests and to enable executives to develop a stock ownership position in
the Company. The Company's Stock Option Committee has the responsibility of
granting stock options and restricted stock awards to executive and management
employees. In granting stock options, the Stock Option Committee takes into
account Company performance, subsidiary performance and individual performance,
utilizing the same factors as those used in the determination of compensation.
The Stock Option Committee also takes into account the number of options held by
an individual and the total number of stock options outstanding. All of the
stock options granted to senior executives in fiscal year 1996 were exempt from
the deduction cap of Section 162(m) of the Code in accordance with the
regulations promulgated thereunder.
The Chairman of the Board, President and Chief Executive Officer of the
Company is Harvey Sanders. The criteria by which the Compensation Committee and
the Stock Option Committee determines salary and annual incentive awards and the
grant of stock options for senior executives, as set forth above, is also
utilized
8
<PAGE> 11
by the Compensation Committee and Stock Option Committee in determining
compensation and stock option awards, respectively, for Mr. Sanders.
Compensation Committee
and Stock Option Committee
Robert B. Bank
Israel Rosenzweig
Ronald G. Weiner
PERFORMANCE GRAPH
The following performance graph assumes $100 invested in Nautica
Enterprises, Inc. Common Stock, the NASDAQ Stock Market (U.S.) and S&P Textiles
Index on March 1, 1991. Where applicable, it assumes reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
NAUTICA ENTERPRISES, INC., NASDAQ STOCK MARKET (U.S.) AND
S&P TEXTILES INDEX
FOR THE FIVE YEARS ENDED FEBRUARY 29, 1996
<TABLE>
<CAPTION>
NAUTICA EN- NASDAQ STOCK
MEASUREMENT PERIOD TERPRISES, MARKET (U.S.) S&P TEXTILES
(FISCAL YEAR COVERED) INC. COMPOSITE INDEX
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 337.76 142.72 112.01
1993 309.87 151.92 109.46
1994 737.80 179.79 94.75
1995 918.55 182.30 91.22
1996 1814.96 254.17 105.59
</TABLE>
9
<PAGE> 12
APPROVAL OF AN AMENDMENT TO ARTICLE FIFTH OF THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
On April 29, 1996, the Board of Directors voted to propose and declare
advisable an amendment to Article Fifth of the Certificate of Incorporation
which would increase the total authorized shares of Common Stock of the Company
from 50,000,000 to 100,000,000. No change would be made in the par value, voting
rights, preferences, qualifications, limitations or restrictions applicable to
the Common Stock of the Company, nor in any other provision of the Certificate
of Incorporation of the Company. Under the Certificate of Incorporation,
stockholders do not have pre-emptive rights. The additional shares of Common
Stock would be available for issuance without further action or authorization by
the stockholders, unless such action is required by applicable law or the rules
of any stock exchange on which the Company's securities may then be listed.
As of May 24, 1996, there were issued and outstanding 39,895,312 shares of
Common Stock, as adjusted to reflect the Stock Split. An additional 4,628,816
unissued shares were reserved for issuance upon exercise of option grants under
the Company's Executive Incentive Stock Option Plan and the 1989 Employee
Incentive Stock Plan, and certain grants of nonqualified stock options.
The Board of Directors deems it desirable to have additional shares of
Common Stock available for general corporate purposes, including possible future
acquisitions, financings and stock dividends. Assuming approval of this proposal
and the proposal below to approve the Company's 1996 Stock Incentive Plan, the
number of shares of Common Stock which will be authorized but not issued or
reserved for issuance will be 55,455,872 shares.
An increase in the number of authorized shares of Common Stock could enable
the Company's Board of Directors to take certain actions making it more
difficult to acquire control of the Company, even though stockholders of the
Company may deem such an acquisition to be desirable. Issuance of shares of
Common Stock could dilute the ownership interest and voting power of
stockholders of the Company who are seeking control of the Company. Shares of
Common Stock could be issued in a private placement to one or more persons or
organizations sympathetic to management and opposed to any unsolicited takeover
bid, or under other circumstances that could make more difficult, and thereby
discourage, unsolicited attempts to acquire control of the Company. Such
consequences could serve to perpetuate the Company's existing management. The
Board is not presently aware of any such unsolicited interest in acquiring the
Company.
A copy of the proposed amendment to Article Fifth of the Company's
Certificate of Incorporation will be available at the Annual Meeting or may be
obtained prior to the meeting upon request to the Secretary of the Company at
the address set forth above. If the proposed amendment is approved by the
stockholders, a Certificate of Amendment of the Company's Certificate of
Incorporation will be filed as promptly as practicable with the Secretary of
State of the State of Delaware.
The Board of Directors recommends that all stockholders vote FOR the
proposed increase in the number of authorized shares of Common Stock to
100,000,000 shares.
An affirmative vote of the holders of at least a majority of all
outstanding shares of Common Stock of the Company is required to approve the
amendment. Abstention and broker non-voter will have the same effect as a vote
against the proposal.
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<PAGE> 13
APPROVAL OF THE NAUTICA ENTERPRISES, INC.
1996 STOCK INCENTIVE PLAN
The Board of Directors has adopted, subject to approval at the 1996 Annual
Meeting of Stockholders, the 1996 Stock Incentive Plan (the "Plan"). The
purposes of the Plan are to enable the Company to attract, retain and reward
employees by offering employees an equity interest in the Company, to enable the
Company to offer equity incentives to employees of entities which the Company
may acquire, and to enable the Company to pay part of the compensation of its
outside directors in Common Stock.
PRINCIPAL PROVISIONS OF THE PLAN
The following summary of the Plan, as adopted January 4, 1996 (subject to
shareholder approval) and adjusted effective May 28, 1996 to reflect the
Company's two-for-one stock split effective as of such date, is qualified by
reference to the full text of the Plan, which will be available at the Annual
Meeting and may also be obtained by written request to the Company's
Vice-President Finance.
GENERAL PROVISIONS
The Plan authorizes the granting of awards to employees (including
officers) of the Company and certain related companies in the form of any
combination of (1) options to purchase shares of Common Stock, (2) stock
appreciation rights ("SARs"), (3) shares of restricted Common Stock ("restricted
stock"), (4) shares of deferred Common Stock ("deferred stock"), (5) bonus
stock, (6) cash bonuses, (7) loans, and (8) tax-offset payments with respect to
any of such awards. The Plan also provides for the automatic grant to directors
who are not employees or officers of the Company ("Outside Directors") of
options to purchase shares of the Common Stock and related limited SARs and
tax-offset payments.
Administration. The Plan is administered by a committee of the Company's
Board of Directors, which consists of at least two Outside Directors. The
Committee has authority to interpret the Plan, adopt administrative regulations,
and determine and amend the terms of awards to employees; however, the Committee
has no authority to vary the amount or terms of awards to Outside Directors from
those set forth in the Plan.
Eligibility. The Committee may make awards under the Plan to employees
(including officers) of the Company or of any entity in which the Company owns
at least a 20% interest. Outside Directors of the Company are automatically
granted stock options and related limited SARs and tax-offset payments having
the terms specified in the Plan, but are not eligible to receive any other
awards under the Plan. All employees (currently numbering approximately 400) and
Outside Directors (currently numbering 5) are eligible to receive awards under
the Plan.
Limitations on Awards. The aggregate number of shares of Common Stock
which may be issued under the Plan (as adjusted to reflect the 1996 stock split)
is 6,000,000. Such shares may consist of authorized but unissued shares or
treasury shares. The exercise of a SAR for cash or the settlement of any other
award in cash will not count against this share limit. Shares subject to lapsed,
forfeited or canceled awards, including options canceled upon the exercise of
tandem SARs for cash, will not count against this limit and can be regranted
under the Plan. If the exercise price of an option is paid in Common Stock or if
shares are withheld from payment of an award to satisfy tax obligations with
respect to the award, such shares also will not count against the above limit.
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<PAGE> 14
No employee may be granted stock options, SARs, restricted stock, deferred
stock, or bonus stock under the Plan with respect to more than 600,000 shares of
Common Stock in any fiscal year. No employee may be granted tax-offset payments
with respect to more than the number of shares of Common Stock covered by awards
held by such employee. No employee may be paid a cash bonus in any fiscal year
of the Company in excess of (i) 5% of the Company's operating profit, if the
bonus relates to a single fiscal year, or (ii) 2% of the Company's cumulative
operating profit for each fiscal year to which the cash bonus relates, if the
bonus relates to more than one fiscal year. Tax-offset payments and cash
settlements of other awards will not count against this cash bonus limit. The
Plan does not limit awards which may be made under other plans of the Company.
AWARDS TO EMPLOYEES
The Plan authorizes the Committee to grant the following types of awards to
eligible employees, including officers:
1. Stock Options. The Committee is authorized to grant incentive
stock options ("ISOs") and non-qualified stock options to purchase such
number of shares of Common Stock as the Committee determines. An option
will be exercisable at such times, over such term and subject to such terms
and conditions as the Committee determines, and at an exercise price
determined by the Committee, which may be less than the fair market value
of the Common Stock at the date of grant of the option.
2. Stock Appreciation Rights. Upon exercise of a SAR the holder is
entitled to receive, for each share with respect to which the SAR is
exercised, an amount (the "appreciation") equal to the excess of the fair
market value of a share of Common Stock on the exercise date over the "base
amount" determined by the Committee. The appreciation is payable in cash,
Common Stock, or a combination of both, as determined by the Committee.
3. Restricted Stock. The Committee is authorized to award restricted
stock subject to such terms and conditions as the Committee may determine
in its sole discretion. The Committee has authority to determine the number
of shares of restricted stock to be awarded, the price, if any, to be paid
by the recipient of the restricted stock, and the date or dates on which
the restricted stock will vest. The Committee also has authority to
determine whether the employee will have the right to vote and/or receive
dividends on shares of restricted stock, and whether the certificates for
such shares will be held by the Company or delivered to the employee
bearing legends to restrict their transfer.
4. Deferred Stock. In making an award of deferred stock the Committee
will determine the periods, if any, during which and/or the conditions on
which the award is subject to forfeiture, and may provide for the issuance
of stock pursuant to the award without payment therefor. Upon vesting, the
award will be settled in shares of Common Stock, cash equal to the fair
market value of such stock, or a combination thereof, as provided by the
Committee. During the deferral period set by the Committee, the employee
may not sell, transfer, pledge or assign the deferred stock award.
5. Bonus Stock and Cash Bonuses. The Committee may award bonus stock
and/or cash bonuses subject to such terms and conditions as it may
determine. Such awards may be conditioned upon attainment of specific
performance goals or such other criteria as the Committee may determine,
and the Committee may waive such conditions in its discretion.
6. Loans. The Committee may provide that the Company will make, or
arrange for, a loan to an employee with respect to the exercise of any
stock option granted under the Plan, with respect to the
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<PAGE> 15
payment of the purchase price, if any, of any restricted stock awarded
under the Plan, and/or with respect to any taxes arising from an award
under the Plan, provided that the Company will not loan to an employee more
than the sum of (i) the excess of the purchase or exercise price of an
award over the par value of any shares awarded, plus (ii) the amount of any
taxes arising from such award. The Committee will determine the terms of
any such loan.
7. Tax-Offset Payments. The Committee is authorized to provide for a
tax-offset payment by the Company to an employee not in excess of the
amount necessary to pay the federal, state, local, and other taxes payable
with respect to any award and the receipt of the tax-offset payment,
assuming the employee is taxed at the maximum tax rate applicable to such
income.
8. Performance Awards. The Committee can designate any awards under
the Plan as "Performance Awards," and the Plan provides that awards so
designated are to be granted and administered so as to qualify as
"performance-based compensation" under Section 162(m) of the Code. The
grant or vesting of a Performance Award will be subject to the achievement
of performance objectives (the "Performance Objectives") established by the
Committee based on one or more of the following criteria, which the
Committee may apply to the Company on a consolidated basis and/or to a
business unit, and which the Committee may use either as an absolute
measure or as a measure of comparative performance relative to a peer group
of companies: sales, operating profits, operating profits before interest
expense and taxes, net earnings, earnings per share, return on equity,
return on assets, return on invested capital, cash flow, debt to equity
ratio, market share, stock price, economic value added, and market value
added.
9. Deferral of Awards. The Committee may permit an employee to defer
receipt of any award for a specified period or until a specified event.
AWARDS TO OUTSIDE DIRECTORS
The Plan provides for the automatic grant of stock options to Outside
Directors on the following terms. Each person who first becomes an Outside
Director on or after April 1, 1996 will be granted, on the date of his or her
initial election (or the first trading day thereafter), an option to purchase
2,000 shares of Common Stock. On the first trading day of April of each year
commencing in April 1996, each Outside Director then serving on the Board of
Directors and who has served for the preceding three months will be granted an
option to purchase 4,000 shares of Common Stock.
The option price will be equal to the fair market value of a share of
Common Stock on the date of option grant, and may be paid using cash, Common
Stock owned for at least six months, "cashless exercise" or a combination
thereof, in the discretion of the option holder. Each option has a ten-year
term, and becomes exercisable in two equal installments on the first and second
anniversaries of the date of grant, assuming continued service on the Board of
Directors. Following an Outside Director's termination of service, the options
which have previously become exercisable will remain exercisable for the
remainder of their 10-year term (or, in the event of the optionee's termination
of service as a result of death, for the longer of one year from the date of
death or the remainder of the 10-year term).
Each option to Outside Directors is granted in tandem with a limited SAR
which may be exercised only within the 60-day period following a Change of
Control, as defined below. Upon exercise of the limited SAR, the appreciation
will be paid in cash based on the Change of Control Price, as defined below.
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<PAGE> 16
Upon the exercise of an option or limited SAR, an Outside Director will
receive a tax-offset payment in cash in the amount necessary to pay the federal
income tax payable with respect to both the option (or SAR) exercise and receipt
of the tax-offset payment, assuming the Outside Director is taxed at the maximum
effective federal income tax rate.
PROVISIONS RELATING TO A CHANGE OF CONTROL
As a general matter, upon the occurrence of a Change of Control, (1) all
outstanding stock options, SARs, and limited SARs, including those held by
Outside Directors, will become fully exercisable and vested, (2) all
restrictions and deferral limitations applicable to outstanding restricted stock
and deferred stock awards under the Plan will lapse, and such shares and awards
will be deemed fully vested, and (3) to the extent the cash payment of any award
is based on the fair market value of stock, such fair market value will be the
Change of Control Price. The Committee may provide exceptions from the above
rule with respect to grants to employees, but not Outside Directors.
A "Change of Control" is deemed to occur on the date (1) any person or
group (with certain exceptions) acquires beneficial ownership of securities
representing 20% or more of the Company's total voting power, (2) individuals
who constitute the "Incumbent Directors" (as defined in the Plan) fail to
constitute at least a majority of the Board of Directors, (3) the shareholders
approve a merger or consolidation unless following such transaction (a) the
beneficial owners of the Company's Common Stock before the transaction own
securities representing more than 50% of the total voting power of the company
resulting from the transaction, and (b) at least a majority of members of the
board of directors of the company resulting from the transaction were members of
the Company's Board of Directors at the time the Board approved the transaction,
or (4) the shareholders of the Company approve a liquidation of the Company or a
sale of substantially all of its assets.
The Change of Control Price is the highest price per share of Common Stock
paid in any open market transaction, or paid or offered to be paid in any
transaction related to a Change of Control, during the 90-day period ending with
the Change of Control, except that for a SAR granted in tandem with an ISO, such
price is the highest price paid on the date the SAR is exercised.
OTHER PROVISIONS
Tax Withholding. The Plan permits employees to satisfy all or a portion of
their federal, state, local or other tax liability with respect to awards under
the Plan by delivering previously-owned shares or by having the Company withhold
from the shares otherwise deliverable to such employee shares having a value
equal to the tax liability to be so satisfied.
Adjustments. In the event of specified changes in the Company's capital
structure, the Committee will have the power to adjust the number and kind of
shares authorized by the Plan (including any limitations on individual awards),
the number of stock options to be granted to Outside Directors, and the number,
option price and kinds of shares covered by outstanding awards (including those
held by Outside Directors), and to make such other adjustments in awards under
the Plan as it deems appropriate, provided that no such adjustment may increase
the aggregate value of outstanding awards.
Amendments. The Board of Directors may amend the Plan without shareholder
approval, unless such approval is required by law or other regulatory
requirements. However, to the extent required under Rule 16b-3, Plan provisions
with respect to awards to Outside Directors cannot be amended more than once
every six
14
<PAGE> 17
months (except to reflect certain changes in the law). Amendment or
discontinuation of the Plan cannot adversely affect any award previously granted
without the holder's written consent.
The Committee is authorized to accelerate the exercisability of options or
the vesting of other awards, or extend the period in which an option may be
exercised, on a casee by case basis. The Committee may amend any grant under the
Plan (other than grants to Outside Directors) to include any provision which, at
the time of such amendment, is authorized under the terms of the Plan, except
that no award can be modified in a manner unfavorable to the holder without the
written consent of the holder. In addition, the Committee may, without
shareholder approval, cancel an option or other award granted to an employee and
grant a new option or award to the employee at a lower exercise price or
otherwise on more favorable terms and conditions than the canceled award. The
Plan shall continue in effect for an unlimited period, but may be terminated by
the Board of Directors in its discretion at any time. No ISOs may be granted
under the Plan after March 31, 2006.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain federal income tax aspects of awards
made under the Plan, based upon the laws in effect on the date hereof.
Non-Qualified Stock Options. Except as noted below with respect to
officers and directors subject to Section 16 of the Securities Exchange Act of
1934 ("Insiders"), with respect to non-qualified stock options: (a) no income is
recognized by the participant at the time the option is granted; (b) upon
exercise of the option, the participant recognizes ordinary income in an amount
equal to the difference between the option price and the fair market value of
the shares on the date of exercise; and (c) at disposition, any appreciation
after the date of exercise is treated either as long-term or short-term capital
gain, depending on whether the shares were held for more than one year by the
participant. If an Insider exercises a non-qualified stock option within six
months of its grant, different rules apply regarding the date as of which the
participant recognizes income upon option exercise.
Incentive Stock Options. Generally, no taxable income is recognized by the
participant upon the grant of an ISO or upon the exercise of an ISO during the
period of his or her employment with the Company or one of its subsidiaries or
within three months (12 months, in the event of permanent and total disability,
or the term of the option, in the event of death) after termination. However,
the exercise of an ISO may result in an alternative minimum tax liability to the
participant. If the participant continues to hold the shares acquired upon
exercise of an ISO for at least two years from the date of grant and one year
from the date of exercise, upon the sale of the shares, any amount realized in
excess of the option price will be taxed as long-term capital gain.
If Common Stock acquired upon the exercise of an ISO is disposed of prior
to the expiration of the one-year and two-year holding periods described above,
the participant will generally recognize ordinary income in an amount equal to
the excess, if any, of the fair market value of the shares on the date of
exercise (or, if less, the amount realized on the disposition of the shares)
over the option price. Any further gain recognized by the participant on such
disposition will be taxed as short-term or long-term capital gain, depending on
whether the shares were held for more than one year.
Stock Appreciation Rights. No income will be recognized by a participant
in connection with the grant of a SAR. When the SAR is exercised, the
participant will generally recognize as ordinary income in the year of exercise
an amount equal to the amount of cash received plus the fair market value on the
date of exercise of any shares received. If the participant receives Common
Stock upon exercise of an SAR, rules similar to
15
<PAGE> 18
those described above under "Non-Qualified Stock Options" will apply with
respect to (a) the post-exercise appreciation, and (b) Insider exercises within
six months of grant.
Restricted Stock. A participant receiving restricted stock generally will
recognize ordinary income in the amount of the fair market value of the
restricted stock at the time the stock vests, less the consideration paid for
the stock. However, a participant may elect, under Section 83(b) of the Code, to
recognize ordinary income on the date of grant in an amount equal to the excess
of the fair market value of the shares on such date (determined without regard
to the restrictions) over their purchase price. The holding period to determine
whether the participant has long-term or short-term capital gain on a subsequent
disposition of the shares generally begins when the restriction period expires,
and the tax basis for such shares will generally be the fair market value of
such shares on such date. However, if the participant has made an election under
Section 83(b), the holding period will commence on the date after the date of
grant, and the tax basis will be equal to the fair market value of the shares on
the date of grant (determined without regard to the restrictions).
Deferred Stock. A participant receiving deferred stock generally will
recognize ordinary income equal to the amount of cash received in settlement of
the award or the fair market value of the deferred stock on the date that the
stock is distributed to the participant, and the capital gain holding period for
such stock will also commence on that date.
Dividends and Dividend Equivalents. Dividends paid on restricted stock
prior to the date on which the forfeiture restrictions lapse generally will be
treated as compensation that is taxable as ordinary income to the participant.
If, however, the participant makes a Section 83(b) election with respect to the
restricted stock, the dividends will be taxable as ordinary dividend income to
the participant. If dividend equivalents are credited with respect to deferred
stock or other awards, the participant generally will recognize ordinary income
when the dividend equivalents are paid.
Bonus Stock. A participant receiving bonus stock generally will recognize
ordinary income on the date of grant equal to the fair market value of the bonus
stock on such date. However, unless he or she has made an election under Section
83(b), an Insider will not recognize income with respect to such grant until six
months after the date of grant, with the amount of such income based on the fair
market value of the bonus stock on the income recognition date.
Cash Bonuses-Tax Offset Payments. A participant receiving a cash bonus or
a cash tax-offset payment will recognize ordinary income on the date of payment.
Company Deductions. As a general rule, the Company will be entitled to a
deduction for federal income tax purposes at the same time and in the same
amount that an employee or Outside Director recognizes ordinary income from
awards under the Plan, to the extent such income is considered reasonable
compensation under the Code. The Company will not, however, be entitled to a
deduction to the extent compensation in excess of $1 million is paid to an
executive officer named in the proxy statement who was employed by the Company
at year-end, unless the compensation qualifies as "performance-based" under
Section 162(m) of the Code or certain other exceptions apply. In addition, the
Company will not be entitled to a deduction with respect to payments to
employees which are contingent upon a change of control if such payments are
deemed to constitute "excess parachute payments" under Section 280G of the Code
and do not qualify as reasonable compensation pursuant to that Section; such
payments will subject the recipients to a 20% excise tax.
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<PAGE> 19
BENEFITS UNDER THE PLAN
The following table sets forth the number of stock options granted under
the Plan to the director group contingent on shareholder approval of the Plan.
No awards to employees have been granted under the Plan. The table does not
reflect future awards which might be granted under the Plan. The size of future
awards and the identity of employee recipients of such awards cannot be
determined at this time.
NEW PLAN BENEFITS
1996 STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
NUMBER OF
GROUP STOCK OPTIONS
---------------------------------------------------------------- -------------
<S> <C>
Non-Executive Director Group
(5 persons)................................................... 20,000
</TABLE>
ADDITIONAL INFORMATION
The last sale price of Common Stock on the Nasdaq national market system on
May 21, 1996 was $24.13 per share, as adjusted for the Stock Split.
The Board of Directors recommends a vote "FOR" approval of the 1996 Stock
Incentive Plan. An affirmative of the majority of shares present in person or
represented by proxy and entitled to vote with respect to the proposal is
required to approve the adoption of the Plan. Abstentions will have the effect
of votes against the proposal. Broker non-votes will not have the effect of
votes against the proposal.
APPOINTMENT OF ACCOUNTANTS
The Board of Directors has selected Grant Thornton LLP as the independent
public accountants who will make an examination of the accounts of the Company
for the year ending February 28, 1997. A representative from Grant Thornton LLP
is expected to be present at the annual meeting to respond to appropriate
questions and to make a statement if that representative so desires.
PROPOSALS BY STOCKHOLDERS -- 1997 ANNUAL MEETING
All proposals by stockholders intended to be presented at the next annual
meeting of stockholders (to be held in July 1997) must be received by the
Company at its office at 40 West 57th Street, New York, New York 10019, no later
than March 5, 1997 in order to be included in the proxy statement and form of
proxy relating to such meeting. All such proposals must comply with applicable
Securities and Exchange Commission rules and regulations.
OTHER BUSINESS
Management is not aware of any matters to be presented at the meeting other
than those set forth in this Proxy Statement. However, should any other business
properly come before the meeting, or any adjournment or adjournments thereof,
the enclosed Proxy confers upon the persons entitled to vote the shares
represented by such Proxies, discretionary authority to vote the same in respect
to any such other business in accordance with their best judgment in the
interest of the Company.
17
<PAGE> 20
MANAGEMENT UNDERTAKES TO PROVIDE ITS STOCKHOLDERS WITHOUT CHARGE, UPON
WRITTEN OR ORAL REQUEST BY ANY SUCH STOCKHOLDER BY FIRST CLASS MAIL WITHIN ONE
BUSINESS DAY OF RECEIPT OF SUCH REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT
ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES FILED THEREWITH.
WRITTEN REQUEST FOR SUCH REPORT SHOULD BE ADDRESSED TO NEAL S. NACKMAN, VICE
PRESIDENT FINANCE, NAUTICA ENTERPRISES, INC., 40 WEST 57TH STREET, NEW YORK, NEW
YORK 10019. ORAL REQUESTS SHALL BE MADE BY TELEPHONE TO SUCH PERSON AT (212)
541-5990.
Stockholders are urged to sign and date the enclosed proxy, solicited on
behalf of the Board of Directors, and return it at once in the envelope enclosed
for that purpose. Unless a contrary direction is indicated, Proxies will be
voted for the election as directors of the nominees listed in this Proxy
Statement and for the other proposals contained in this Proxy Statement. The
Proxy does not affect the right to vote in person at the meeting and may be
revoked by the stockholder who executed it any time prior to its being voted.
By Order of the Board of Directors
Harvey Sanders,
Chairman
June 3, 1996
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<PAGE> 21
PROXY PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
NAUTICA ENTERPRISES, INC.
PROXY -- Annual Meeting of Stockholders, July 1, 1996
The undersigned hereby appoints Harvey Sanders and David Chu, and each of them,
proxies and attorneys-in-fact of the undersigned, with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as designated
below, all the shares of Common Stock of Nautica Enterprises, Inc. held of
record by the undersigned on May 24, 1996 at the Annual Meeting of Stockholders
to be held on July 1, 1996 or any adjournment thereof.
(Continued and to be dated and signed on the reverse side)
<PAGE> 22
Nautica Enterprises, Inc.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
For all
Except as
1. ELECTION OF DIRECTORS: For Withheld Listed Below
Nominees: Robert B. Bank, David Chu, / / / / / /
George Greenberg, Israel Rosenzweig,
Harvey Sanders, Charles H. Scherer
and Ronald G. Weiner.
INSTRUCTION: To withhold authority to
vote for any individual nominee write
that nominee's name in the blank space
below.
--------------------------------------
2. Approval of a proposal to amend the
Certificate of Incorporation of the For Against Abstain
Company to increase the number of / / / / / /
authorized shares of Common Stock
from 50,000,000 to 100,000,000.
3. Approval of a proposal to adopt the
Nautica Enterprises, Inc. 1996 Stock
Incentive Plan. For Against Abstain
/ / / / / /
- ------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS "1", "2" AND "3".
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Dated:
------------------------------------------
------------------------------------------------
Signature of Stockholder(s)
Please sign exactly as your name or names appear
to the left hereof. When shares are held by
joint tenants, both should sign. When signing as
attorney, as executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in full corporate name
by President or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
