<Page>
Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
I.C. Isaacs & Company, Inc.
..................................................................
(Name of Registrant as Specified In Its Charter)
..................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
............................................................
(2) Aggregate number of securities to which transaction applies:
............................................................
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
............................................................
(4) Proposed maximum aggregate value of transaction:
............................................................
(5) Total fee paid:
............................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
<Page>
I.C. ISAACS & COMPANY, INC.
3840 BANK STREET,
BALTIMORE, MARYLAND 21224-2522
(410) 342-8200
[MARITHE &
FRANCOIS
GIRBAUD LOGO]
May 29, 2003
Dear Stockholder:
Our 2003 Annual Stockholders' Meeting will be held at 10:00 A.M. on June 30,
2003 at the offices of Arent Fox Kintner Plotkin & Kahn, PLLC located on the
25th floor at 1675 Broadway, New York, New York 10019, and we look forward to
your attendance either in person or by proxy.
The notice of annual meeting, proxy statement and proxy card from the Board
of Directors are enclosed.
The agenda for this year's annual meeting includes the election of four
directors to our nine member Board, a proposal to declassify our Board of
Directors which will result in your electing our entire Board each year, instead
of electing just one of three classes of our Board each year, a proposal to
approve our Board's decision to increase the number of common shares issuable
pursuant to our Amended and Restated Omnibus Stock Plan from 1,600,000 shares to
2,200,000 shares, and a proposal to ratify the appointment of our independent
auditor. The Board of Directors recommends that you vote FOR election of the
slate of director nominees, FOR the declassification of our Board of Directors,
FOR adoption of the proposal to increase the number of shares issuable under our
Amended and Restated Omnibus Stock Plan and FOR ratification of appointment of
the independent auditor. Please refer to the proxy statement for detailed
information on each of the proposals. If you have any further questions
concerning the annual meeting or any of the proposals, please contact Isaacs
Investor Relations at (410) 342-8200. For questions regarding your stock
ownership, you may contact our transfer agent, American Stock Transfer and Trust
Company by phone at (877) 777-0800 (within the U.S. and Canada) or (718)
921-8200 (outside the U.S. and Canada).
Sincerely yours,
STAFFAN TH. AHRENBERG
STAFFAN TH. AHRENBERG,
Chairman
<Page>
[MARITHE &
FRANCOIS
GIRBAUD LOGO]
-------------------
NOTICE OF ANNUAL STOCKHOLDERS' MEETING
JUNE 30, 2003
10:00 A.M. EASTERN TIME
-------------------
Dear Stockholder,
You are cordially invited to attend the 2003 annual meeting of stockholders
of I.C. ISAACS & COMPANY, INC. which will be held at 10:00 AM local time on June
30, 2003 at the offices of Arent Fox Kintner Plotkin & Kahn, PLLC located on the
25th floor at 1675 Broadway, New York, New York 10019. At the meeting, you will
be asked to consider and vote on the following proposals:
1. If Proposal 2 is approved, to elect four directors, each to hold
office until the 2004 annual meeting of stockholders and until their
respective successors shall have been duly elected or appointed; OR if
Proposal 2 is NOT approved, to elect one Class I director to hold office
until the 2004 annual meeting of stockholders, and three Class III directors
to hold office until the 2006 annual meeting of stockholders and until their
respective successors shall have been duly elected or appointed;
2. To vote upon a proposal to amend our Amended and Restated Certificate
of Incorporation to declassify the organization of the Board of Directors;
3. To vote upon a proposal to amend our Amended and Restated Stock
Incentive Plan to increase from 1,600,000 to 2,200,000, the number of shares
that may be issued under the Plan;
4. To ratify the appointment of BDO Seidman, LLP as our independent
auditors for the year ending December 31, 2003; and
5. To transact such other business as may properly come before the
meeting.
These items are more fully described in the following pages, which are made
part of this notice. Only stockholders of record on the books of the company at
the close of business on May 26, 2003 will be entitled to vote at the annual
meeting.
To ensure that your vote is recorded promptly, please vote as soon as
possible, even if you plan to attend the annual meeting. You may submit your
vote by mail, using the proxy card and pre-addressed and stamped return envelope
enclosed with this notice, or you may vote your shares in person at the meeting.
Enclosed are copies of the Annual Report to our Stockholders consisting of a
letter from our President, our Form 10-K for the year ended December 31, 2002,
as amended, and our Form 10-Q for the period ended March 31, 2003.
The Board of Directors,
EUGENE WIELEPSKI
EUGENE WIELEPSKI,
Secretary
New York, New York
May 29, 2003
<Page>
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
Proxy Statement............................................. 1
Proposal 1 -- Election of Directors......................... 2
Board Committees and Meetings........................... 5
Directors' Compensation................................. 6
Security Ownership of Certain Beneficial Owners and
Management................................................ 7
Stock Price Performance Graph............................... 8
Report of the Compensation Committee on Executive
Compensation.............................................. 9
Employment Contracts, Termination of Employment and
Change in Control Arrangements......................... 11
Executive Compensation.................................. 14
Certain Relationships and Related Transactions.......... 17
Proposal 2 -- Declassification of the Board of Directors.... 19
Proposal 3 -- Increase in Shares Authorized for Issuance
Under the Amended and Restated Omnibus Stock Plan......... 20
Report of the Audit Committee............................... 24
Proposal 4 -- Ratification of Selection of Independent
Auditor................................................... 25
Stockholder Proposals....................................... 25
Annual and Quarterly Reports to Shareholders................ 25
Other Matters............................................... 25
</Table>
VOTING
To ensure that your vote is recorded promptly, please vote as soon as
possible, even if you plan to attend the annual meeting in person. Our
stockholders may submit their votes by mail, using the enclosed proxy card. We
encourage our stockholders to vote using that method whenever possible. If you
attend the annual meeting, you may also submit your vote in person, and any
previous votes that you submitted by mail will be superseded by the vote that
you cast at the annual meeting.
<Page>
[MARITHE &
FRANCOIS
GIRBAUD LOGO]
I.C. ISAACS & COMPANY, INC.
3840 BANK STREET
BALTIMORE, MARYLAND 21224-2522
-------------------
PROXY STATEMENT
-------------------
The enclosed proxy is solicited by the Board of Directors of I.C. Isaacs &
Company, Inc. for the Annual Stockholders' Meeting to be held at the offices of
Arent Fox Kintner Plotkin & Kahn, PLLC located on the 25th floor at 1675
Broadway, New York, New York 10019, on Monday, June 30, 2003, at 10:00 a.m.
Eastern Time, and at any postponement or adjournment of the meeting, for the
purposes set forth in 'Notice of Annual Stockholders' Meeting' on page 1.
RECORD DATE; QUORUM; SHARE OWNERSHIP AND VOTING REQUIREMENTS FOR ELECTION OF
DIRECTORS AND ADOPTION OF PROPOSALS
Only stockholders of record on the books of the company at the close of
business on May 26, 2003 will be entitled to vote at the annual meeting.
Presence in person or by proxy of a majority of the shares of common stock
outstanding on the record date is required for a quorum. If you held your shares
on that date, you may vote your shares at the meeting either in person or by
your duly authorized proxy. As of the close of business on May 26, 2003, the
company had 11,134,657 outstanding shares of common stock. Copies of this proxy
statement were first available to stockholders on May 29, 2003.
Our common stock is our only class of securities that will be entitled to
vote at the annual meeting. The presence, in person or represented by proxy, of
at least a majority of the total number of outstanding shares of our common
stock is necessary to constitute a quorum at the annual meeting. Shares of
common stock represented by a properly signed and returned proxy will be counted
as present at the annual meeting for purposes of determining a quorum, without
regard to whether the proxy is marked as casting a vote or abstaining. Shares of
common stock held by nominees that are voted on at least one matter coming
before the annual meeting will also be counted as present for purposes of
determining a quorum, even if the beneficial owner's discretion has been
withheld (a 'broker non-vote') for voting on some or all other matters.
Each share of common stock is entitled to one vote on all matters that may
properly come before the annual meeting other than the election of directors. In
the election of directors, each share is entitled to cast one vote for each
director to be elected. Directors shall be elected by a plurality of votes cast
at the annual meeting. You may not vote your shares of common stock cumulatively
for the election of directors. For purposes of the election of directors,
abstentions and broker non-votes are not considered to be votes cast and do not
affect the plurality vote required for the election of directors.
The Company's Amended and Restated Certificate of Incorporation provides
that a proposal to declassify the Board of Directors must be approved by the
affirmative vote of at least 66 2/3% of the outstanding shares of common stock.
All other matters to come before the annual meeting require the approval of a
majority of the shares of common stock present, in person or by proxy, at the
meeting and entitled to vote. Therefore, abstentions will have the same effect
as votes against the proposals on such matters. Broker non-votes, however, will
be deemed shares not present to vote on such matters, and therefore will not
count as votes for or against the proposals, and will not be included in
calculating the number of votes necessary for approval of such matters.
1
<Page>
SUBMITTING AND REVOKING YOUR PROXY
If you complete and submit your proxy (see 'Voting' on page 4), the shares
represented by your proxy will be voted at the annual meeting in accordance with
your instructions. If you submit a proxy by mail, but do not fill out the voting
instructions on the proxy card, the shares represented by your proxy will be
voted as follows:
FOR the election of the nominees for director set forth in 'Proposal 1:
Election of Directors' on page 6;
FOR the proposal to declassify our Board of Directors set forth in
'Proposal 2: Amendment of Amended and Restated Certificate of Incorporation
to Declassify the Board of Directors' on page 28;
FOR the proposal to increase from 1,600,000 to 2,200,000 the number of
shares issuable under our Amended and Restated Omnibus Stock Plan set forth
in 'Proposal 3: Amendment of the Amended and Restated Omnibus Stock
Incentive Plan' on page 30; and
FOR ratification of the appointment of BDO Seidman LLP as the company's
independent auditor for 2003 set forth in 'Proposal 4: Ratification of
Selection of Auditors' on page 36.
In addition, if other matters come before the annual meeting, the persons
named as proxies will vote on such matters in accordance with their best
judgment. The company has not received notice of other matters that may properly
be presented at the annual meeting. You may revoke your proxy at any time prior
to the start of the annual meeting by: (1) submitting a later-dated vote, in
person at the annual meeting or by mail (see 'Voting' on page 4), or (2)
delivering instructions to the Secretary of the company at 3840 Bank Street,
Baltimore, Maryland 21224-2522.
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board of Directors is currently composed of nine directors, divided into
three classes. Each class of directors is elected for a term of office to expire
at the third succeeding annual meeting of stockholders of the company after
their election and until their respective successors are elected and qualified.
The terms of three of our directors -- Messrs. Robert S. Stec, Neal J. Fox and
Olivier Bachellerie -- are expiring at the annual meeting. In addition, the
vacancy that resulted from the recent resignation from the Board by Robert
Arnot, our former Chairman and Chief Executive Officer, has created a fourth
position on the Board that will be filled at the annual meeting. The company has
nominated Messrs. Stec, Fox and Bachellerie for re-election to the Board. The
company has also nominated Robert J. Conologue, its new Chief Operating Officer
and Chief Financial Officer, for election to the Board.
If elected,
the term of the nominees to the Board will expire at the 2004 annual
meeting of stockholders and when their respective successors are duly
elected and shall have qualified, if our Certificate of Incorporation is
amended to declassify our Board as a result of your approval of Proposal 2,
or
the term of Mr. Conologue, as a Class I director, and the terms of Messrs.
Stec, Fox and Bachellerie, as Class III directors, will expire at the 2004
and 2006 annual meetings, respectively, and when their respective
successors are duly elected and shall have qualified, if Proposal 2 is NOT
approved.
Unless otherwise marked, all proxies received will be voted FOR the election
of each of the nominees. If any director nominee is unable or unwilling to serve
as a nominee at the time of the annual meeting, the proxies may be voted either
(i) for a substitute nominee designated by the present Board of Directors to
fill the vacancy or (ii) for the balance of the nominees, leaving a vacancy.
Alternatively, the Board of Directors may reduce the size of the Board. The
Board of Directors has no reason to believe that any of the nominees will be
unwilling or unable to serve if elected as a director. We have set forth
immediately following this paragraph the names and biographical information for
each of the nominees.
2
<Page>
The Board of Directors recommends that you vote 'FOR' the election of each
of the following nominees.
<Table>
Robert Stephen Stec Mr. Stec was a Division President of VF
Age: 48 Corporation and had sole responsibility for
Director since 2002 VF's Girbaud division in the United States
Chairman and Chief Executive Officer of from 1989 through 1993. From 1996 to 1998, he
Lexington Home Brands served as President of London Fog Industries,
Inc., a leading manufacturer and marketer of
branded outerwear. During 1997 and 1998,
Mr. Stec served as a part-time consultant to
Girbaud Design, Inc. and certain of its
affiliates. In 1999, Mr. Stec served as a
consultant to London Fog for several months.
Mr. Stec has been employed as President and
Chief Executive Officer of Lexington Home
Brands, a leading branded marketer of home
furnishings, since 1999.
Neal J. Fox Mr. Fox has held senior management positions
Age: 68 at Neiman Marcus, Bergdorf Goodman and I.
Director since 1998 Magnin. From 1983 to 1988, he was employed by
Director and consultant Garfinkel's, Raleigh & Co., or its
predecessor, most recently as Chairman and
Chief Executive Officer, and was also a
principal shareholder of that company. From
1989 through March 1999, Mr. Fox served as
the President and Chief Executive Officer of
Sulka, an international menswear retailer. In
1999, Mr. Fox founded NJF Associates,
Incorporated, a consulting firm specializing
in brand management and business development
for the apparel, accessories and luxury goods
industries. Since May 2000, Mr. Fox has
served as a director and consultant for
Today's Man, a 30 unit menswear retailer. In
March, 2003, Today's Man filed a petition
under Chapter 11 of the US Bankruptcy Code.
Olivier Bachellerie Mr. Bachellerie has served since 1997 as
Age: 41 President and Director General of GI
Director since 2002 Promotion and Cravatatakiller S.A., and as
President and Director General of GI President of Fashion Services of America,
Promotion and Cravatatakiller S.A. Inc., each of which is beneficially owned by
Marithe Bachellerie and Francois Girbaud.
Mr. Bachellerie is the son of Marithe
Bachellerie, who together with Mr. Girbaud,
indirectly own and possess the right to vote
approximately 42% of the company's
outstanding shares of common stock.
</Table>
3
<Page>
<Table>
Robert J. Conologue Mr. Conologue joined us as our Chief
Age: 54 Operating Officer and Chief Financial Officer
Chief Operating Officer and Chief in February 2003. Between 2000 and 2002, he
Financial Officer of the Company served as Executive Vice President and Chief
Financial Officer of Interiors, Inc., a $250
million manufacturer, marketer and retailer
of decorative accessories for the home.
Between 1997 and 2000, Mr. Conologue worked
for The Warnaco Group, Inc., a $2.1 billion
global apparel company, starting as Chief
Financial Officer of Calvin Klein Jeanswear
(1997 - 1998), and then serving as Senior
Vice President - Finance of the parent
company and as Chief Operating Officer of the
Calvin Klein Divisions (1998 - 2000).
</Table>
As a Delaware corporation, we are subject to the Delaware General
Corporation Law ('DGCL') with regard to matters of internal governance. Under
the DGCL, the terms of incumbents who sit on a classified board of directors do
not change as a result of a decision by the stockholders to declassify the
board. Accordingly, if Proposal 2 is adopted, the terms of the four nominees
identified above and our two other Class I directors will expire next year.
However, our Class II directors will remain in office until our 2005 annual
meeting. We have set forth immediately below the names and biographical
information for each of our incumbent directors.
CLASS I INCUMBENTS WHOSE TERMS WILL EXPIRE AT THE 2004 ANNUAL MEETING
<Table>
Staffan Th. Ahrenberg Mr. Ahrenberg has been a consultant to
Age: 45 Societe de Finance et D'Investissement S.A.
Director since 2002 ('SFI'), which provides multinational
Chairman of the Board and consultant companies engaged in the food processing,
to the Company media and fashion industries with investment
opportunities and investment advisory
services, and Saga Enterprises Holding Corp.,
which provides the motion picture industry
with services regarding the development,
production, acquisition, sale and financing
of motion pictures and other intellectual
property. We have a written agreement with
SFI through which we receive consulting
services from Mr. Ahrenberg. See 'Certain
Relationships and Related Transactions.'
Rene Faltz Mr. Faltz has practiced law in the Grand
Age: 49 Duchy of Luxembourg since 1976. He has been
Director with Cabinet D'Avocats Rene Faltz since March
Senior Partner, Cabinet 2000 after leaving the firm of Faltz &
D'Avocats Rene Faltz Kremer. Mr. Faltz is one of the Managing
Directors of, and serves as counsel to,
several companies that are since 2002
beneficially owned by Marithe Bachellerie and
Francois Girbaud in connection with the
conduct of their business activities as
designers and marketers of clothing and other
items bearing the various Girbaud trademarks.
</Table>
4
<Page>
CLASS II INCUMBENTS WHOSE TERMS WILL EXPIRE AT THE 2005 ANNUAL MEETING
<Table>
Jon Hechler Mr. Hechler was employed by Ira J. Hechler
Age: 50 and Associates, an investment company, from
Director since 1984 1980 to 1999. He is President of T. Eliot,
President, T. Eliot, Inc. Inc., a manufacturer of bathroom equipment.
Daniel J. Gladstone Mr. Gladstone was President of the Company's
Age: 46 Girbaud Division from January 1999 - February
Director since 1999 2003, and was appointed President of the
President of the Company Company in March 2003. He served as President
of Calvin Klein Jeans at Warnaco, Inc. from
1997 to 1998 and as President of Calvin Klein
Jeans at Designer Holding Ltd. from 1994 to
1997.
Roland Loubet Mr. Loubet has been employed as the Chief
Age: 61 Executive Officer and sole owner of Cedrico,
Director since 2002 S.A., a manufacturer and marketer of women's
Chief Executive Officer of Cedrico, S.A. clothing, since 1997.
</Table>
Except as noted above, each nominee for election as a director and each
incumbent director has been engaged in the principal occupation described during
the past five years. There are no family relationships among any directors or
executive officers of the company. Stock ownership information is shown under
the heading 'Security Ownership of Certain Beneficial Owners and Management' on
page 11 and is based upon information furnished by the respective individuals.
BOARD COMMITTEES AND MEETINGS
The Board of Directors currently has standing Audit and Compensation
Committees. The Audit Committee has a written charter approved by the Board.
During 2002, as a result of our stockholders' approval of the Framework
Agreement and the Stockholders Agreement, the composition of our Board changed,
and that change also resulted in changes in the composition of both committees.
From January 1, 2002 until mid-May, 2002, the Audit Committee was comprised
of Ronald S. Schmidt, Chairman, Neal J. Fox and Anthony J. Marterie. In mid-May,
2002, Mr. Marterie resigned and was replaced by Jon Hechler. After the 2002
Annual Meeting of Stockholders, the new Board appointed a new Audit Committee
consisting of Mr. Fox, as Chairman, and Jon Hechler, Roland Loubet and Robert
Stec.
From January 1, 2002 until the 2002 Annual Meeting, the Compensation
Committee consisted of Messrs. Hechler (Chairman), Schmidt and Fox. After the
2002 Annual Meeting, the new Board appointed a new Compensation Committee
consisting of Messrs. Hechler, as Chairman, Fox, Loubet and Stec.
The Audit Committee assists the Board of Directors in its general oversight
of the company's financial reporting, internal controls and audit functions.
During 2002, the Audit Committee held four meetings. For further information,
see 'Report of the Audit Committee' on page 35.
The Compensation Committee administers our Amended and Restated Omnibus
Stock Plan (the 'Plan'), including the review and grant of stock options to
officers and other employees under the Plan. The Compensation Committee also
reviews and approves various other company compensation policies and matters,
and reviews and approves salaries and other matters relating to compensation of
the executive officers of the company. The Compensation Committee held two
meetings during 2002. For further information, see 'Report of the Compensation
Committee on Executive Compensation' on page 14.
The Board of Directors held 12 meetings during 2002. Each director is
expected to attend each meeting of the Board and the committees on which he
serves. In addition to meetings, the Board and its committees review and act
upon matters through written consent procedures. No
5
<Page>
director attended less than 75% of all the meetings of the Board and the
committees on which he served in 2002.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
None of the directors serving on the Compensation Committee is an employee
of the Company, and neither the Chief Executive Officer nor any of the Named
Executive Officers has served on the Compensation Committee. No director or
executive officer of the Company is a director or executive officer of any other
corporation that has a director or executive officer who is also a director or
board committee member of the Company.
DIRECTORS' COMPENSATION
Directors who are employed by us or any of our subsidiaries receive no
compensation for serving on the Board of Directors. Directors who are not so
employed (the 'Outside Directors') receive an annual retainer fee of $10,000 for
their services and attendance fees of $750 per Board or committee meeting
attended. The Chairman of the Audit Committee receives an additional $10,000 for
the services he renders in that capacity. All directors are reimbursed for
expenses incurred in connection with attendance at Board or committee meetings.
In addition, members of the Board of Directors are eligible to participate in
our Plan. In 2002, Outside Directors were awarded non-qualified stock options to
purchase an aggregate of 210,000 shares of common stock at an exercise price of
$0.58 per share. Those options shall not vest, and therefore, shall not be
exercisable, until December 2004.
6
<Page>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is information concerning the common stock ownership as of
May 26, 2003 by (i) each person who we know owns beneficially 5% or more of our
outstanding common stock, (ii) our President and each of our other 'Named
Executive Officers,' (iii) each director and nominee for election as a director,
and (iv) all of our directors, nominees for election as a director and officers
as a group:
<Table>
<Caption>
SHARES BENEFICIALLY OWNED
---------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER(1) NUMBER PERCENT(2)
- --------------------------------------- ------ ----------
Wurzburg, S.A.(3)........................................... 4,966,667(4) 40.6%
Robert J. Arnot(5).......................................... 544,871(6) 4.5
Daniel J. Gladstone......................................... 477,000(7) 3.9
Robert J. Conologue......................................... --(8) --
Sandra Finkelstein.......................................... --(9) --
Eugene Wielepski............................................ 221,742(10) 1.8
Danielle Lambert............................................ 20,000(11) *
Staffan Ahrenberg(12)....................................... --(13) --
Olivier Bachellerie(14)..................................... --(13) --
Rene Faltz(15).............................................. --(13) --
Neal J. Fox................................................. 25,000(16) *
Jon Hechler................................................. 362,791(13) 3.0
Roland Loubet(17)........................................... 100,000(13) --
Robert Stephen Stec(18)..................................... --(13) --
All Officers, Directors and Nominees for Director as a Group
(of 12)................................................... 1,206,533 9.9
</Table>
- ---------
* Less than one percent
(1) All shares are owned beneficially and of record unless indicated
otherwise. Unless otherwise noted, the address of each stockholder is c/o
the company, 350 Fifth Avenue, Suite 1029, New York, New York 10118.
(2) Based upon 12,239,157 shares assumed to be issued and outstanding which
includes 11,134,657 shares actually issued and outstanding on the date of
this proxy statement plus an aggregate of 1,104,500 shares that the
persons listed in the table may acquire pursuant to options that they may
exercise within 60 days of the date of this proxy statement.
(3) The address of this stockholder is 134 Boulevard de la Petrusse, L-2330
Luxembourg.
(4) Includes 3,966,667 shares owned beneficially and of record by this
stockholder's wholly owned subsidiary, Textile Investment International,
S.A. ('Textile') and 500,000 shares that Textile may acquire pursuant to
warrants that it may exercise within 60 days of the date of this proxy
statement.
(5) Mr. Arnot served as a director and as our chief executive officer during
the year 2002 and until his resignation which became effective on February
6, 2003.
(6) Includes 55,000 shares that Mr. Arnot may acquire pursuant to options
exercisable by him within 60 days of the date of this proxy statement.
Unless exercised on or before June 1, 2003, those options will expire on
that date.
(7) Includes 477,000 shares that Mr. Gladstone may acquire pursuant to options
exercisable by him within 60 days of the date of this proxy statement.
(8) Does not include (i) 225,000 shares issuable pursuant to an option granted
to Mr. Conologue under the Plan that will vest ratably on February 18,
2004, 2005 and 2006; or (ii) 150,000 shares that shall be issuable
pursuant to a fully vested option to be granted to Mr. Conologue under the
Plan if Proposal 3 is adopted by the stockholders at the annual meeting.
See 'Employment Contracts, Termination Of Employment And Change In Control
Arrangements.'
(footnotes continued on next page)
7
<Page>
(footnotes continued from previous page)
(9) Does not include 25,000 shares issuable pursuant to an option granted to
Ms. Finkelstein under the Plan that will vest ratably on February 15,
2004, 2005 and 2006. See 'Employment Contracts, Termination Of Employment
And Change In Control Arrangements.'
(10) Includes 27,500 shares that Mr. Wielepski may acquire pursuant to an
option exercisable by him within 60 days of the date of this proxy
statement.
(11) Includes 20,000 shares that Ms. Lambert may acquire pursuant to an option
exercisable by her within 60 days of the date of this proxy statement.
(12) Mr. Ahrenberg's address is 16 Rue Voltaire, 1211 Geneva 13, Switzerland.
(13) Does not include 30,000 shares issuable pursuant to an option granted to
this director in December 2002 that has not vested.
(14) Mr. Bachellerie's address is 15 Rue Louis Blanc, 75010 Paris, France.
(15) Mr. Faltz's address is 41 Avenue de la Gare, Luxembourg, L-1611, Grand
Duchy of Luxembourg.
(16) Includes 25,000 shares that this director may acquire pursuant to options
exercisable by him within 60 days of the date of this proxy statement.
Does not include 37,000 shares issuable pursuant to options granted to
this director that have not vested.
(17) Mr. Loubet's address is Avenue du Leman 20, 1025 St-Sulpice,
Ch-Switzerland.
(18) Mr. Stec's address is c/o Lexington Home Brands, 411 South Salisbury
Street, Lexington, NC 27292.
STOCK PRICE PERFORMANCE GRAPH
The performance graph which follows compares the cumulative total
stockholder returns on Mikron common stock for the five-year period ended
December 31, 2002 with the S&P 500 Index and a peer group comprising of the
Apparel, Accessories and Luxury Goods industry segment of the S&P 600. The graph
assumes that the value of our common stock and the value of each Index was $100
on December 31, 1997. This data was furnished by Standard & Poor's Compustat
Services, Inc.
[Performance Graph]
INDEXED RETURNS
Base Years Ending
Period
Company/Index Dec97 Dec98 Dec99 Dec00 Dec01 Dec02
-------------------------------------------------------------------------------------------------------------------
I.C. ISAACS & COMPANY, INC. 100 16.05 14.20 6.48 3.16 6.81
S&P 500 INDEX 100 128.58 155.63 141.46 124.65 97.10
S&P 600 APPAREL, ACCESSORIES & LUXURY GOODS 100 79.14 62.74 65.05 73.22 82.12
8
<Page>
REPORT OF THE COMPENSATION
COMMITTEE ON EXECUTIVE COMPENSATION
OBJECTIVES
The Company's compensation policies and procedures have historically been
aligned with its entrepreneurial traditions. The Company seeks to compensate its
officers (including the Named Executive Officers) in a manner which is:
consistent with the Company's conservative traditions and cost structure;
sufficient to attract and retain key executives critical to the success of
the Company;
reflective of current performance of both the individual officer and the
Company; and
remuneration of successful long-term strategic management and enhancement
of shareholder values.
COMPONENTS OF COMPENSATION
The Compensation Committee (the 'Committee') approves the design of,
assesses the effectiveness of, and administers the executive compensation
programs of the Company in support of stockholder interests. The key elements of
the Company's executive compensation program are base salary, annual incentives
and long-term incentive compensation. These key elements are addressed
separately below. In determining each component of compensation, the Committee
considers all elements of an executive's total compensation package.
BASE SALARY
The Committee regularly reviews each executive's base salary. Base salaries
are not necessarily compared to other institutions, although market rates for
comparable executives with comparable responsibilities are considered in some
cases. Base salaries are adjusted by the Committee to recognize varying levels
of responsibility, experience, breadth of knowledge, internal equity issues, as
well as external pay practices. Increases to base salaries are driven primarily
by individual performance. Individual performance is evaluated based on
sustained levels of individual contribution to the Company.
Last year, the annual base salaries of Messrs. Arnot and Wielepski were
amended in connection with the negotiations that lead to the execution of the
Framework Agreement and the Stockholders Agreement. As amended, the terms of
those agreements were extended through May 15, 2006, the base compensation
payable to Mr. Arnot was fixed at $400,000 in 2002, $425,000 in 2003 and
$450,000 per year thereafter and the base compensation payable to Mr. Wielepski
was fixed at $200,000 per year.
During the first four and a half months of 2003, the Company substantially
reorganized the composition of, and compensation payable to, its management. As
mentioned at pp. 17 - 21 in the section entitled 'Employment Contracts,
Termination Of Employment And Change In Control Arrangements,' the Company
negotiated and executed a separation agreement and general release with Mr.
Arnot,
engaged the services of Robert J. Conologue as the Company's new COO and
CFO at an annual base salary of $315,000 during an initial term ending on
December 31, 2005,
engaged the services of Sandra Finkelstein as Senior Vice President of
Merchandising -- Girbaud Division at a base salary of $310,000 during an
initial term ending on December 31, 2005,
negotiated and executed an amendment to Daniel J. Gladstone's employment
agreement which reduced the initial term of his agreement to coincide with
Mr. Conologue's and Ms. Finkelstein's initial employment terms and pursuant
to which he became the Company's President,
9
<Page>
negotiated and executed an amendment to Mr. Wielepski's employment
agreement which resulted in his re-assignment as the Company's Vice
President -- Finance and the reduction of his base salary to $180,000 per
year and
negotiated and executed a separation agreement with Danielle Lambert.
ANNUAL INCENTIVES
Prior to 2003, the annual incentive program that the Company employed with
regard to the some of our Named Executive Officers involved direct financial
incentives in the form of annual cash bonuses to achieve performance goals that
were usually based upon the Company's 'top line,' i.e., its gross revenues. The
Company paid Mr. Gladstone and Ms. Lambert bonuses of $207,895 and $107,895,
respectively, for fiscal; 2002 pursuant to the incentive compensation formulas
contained in their employment agreements.
During the first quarter of 2003, the Company adopted for its executives
whose activities are directly related to profitability a different annual
incentive compensation philosophy that is 'bottom line' oriented. Thus, the new
employment agreements that the Company entered into with Mr. Conologue and Ms.
Finkelstein contain significant cash bonus incentives that are tied to three
predetermined annual performance goals
earnings before interest and taxes (the 'EBIT Target'),
cash provided by operating activities (the 'Cash Flow Target') and
inventory turns -- which is a measure of the level of efficiency employed
by the Company in matching its annual purchases of inventory to the annual
sales of merchandise to its customers (the 'Inventory Turns Target').
In keeping with that newly adopted philosophy, the amendment to Mr.
Gladstone's employment agreement replaced 'top line' oriented bonus provisions
with the same categories of 'bottom line' oriented bonus provisions contained in
Ms. Finkelstein's and Mr. Conologue's agreements. In order to qualify for
payment of any bonus, the Company's financial performance must result in the
achievement of the targeted goal. In the case of each of Messrs. Gladstone and
Conologue, achievement of more than 100% of a targeted goal will result in the
payment of even higher bonuses. In the case of Ms. Finkelstein, the range of
potential bonuses that she can earn during any year varies from a low of $7,750
to a maximum of $77,500 depending on whether one, two or all of the targets are
achieved. In Mr. Conologue's case, the range of potential bonuses that he can
earn during any year varies from a low of $12,600 to a maximum of $267,750
depending on whether one, two or all of the targets are achieved, and also
depending on whether the results achieved are at least 95% of the target or as
much as or more than 130% of the target. The range of bonuses that Mr. Gladstone
can receive is also subject to the same two categories of criteria as Mr.
Conologue, and varies from a minimum of $17,500 to a maximum of $350,000.
LONG-TERM INCENTIVES
In keeping with the Company's commitment to provide a total compensation
package which includes at-risk components of pay, long-term incentive
compensation comprises a significant portion of the value of an executive's
total compensation package. When awarding long-term grants, the Committee
considers an executive's level of responsibility, prior compensation experience,
historical award data, and individual performance criteria. Long-term incentives
are in the form of stock options awards under the Company's Plan.
Stock options are granted at an option price equal to the fair market value
of the Common Stock on the date of grant. Accordingly, stock options have value
only if the stock price appreciates. This design focuses executives on the
creation of stockholder value over the long term. The size of stock option
grants is based on competitive practice, individual performance factors and
historical award data. The Company granted options to purchase an aggregate of
10,000 shares of common stock to the Named Executive Officers in 2002. The
Company granted options to purchase an aggregate of 250,000 shares of common
stock in connection with the execution of Ms. Finkelstein's and Mr. Conologue's
employment agreements, and it also agreed to
10
<Page>
grant another option to purchase an additional 150,000 shares to Mr. Conologue,
subject to the stockholders' approval of Proposal 3.
CONCLUSION
The Committee believes these executive compensation policies and programs
serve the interests of the Company and its stockholders effectively. The various
compensation vehicles offered are appropriately balanced to provide increased
motivation for executives to contribute to the Company's overall future success,
thereby enhancing the value of the Company for the stockholders' benefit.
We will continue to monitor the effectiveness of the Company's total
compensation program to meet the current and future needs of the Company.
Members of the Compensation Committee:
Jon Hechler (Chairman) Roland Loubet
Neal J. Fox Robert S. Stec
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND
CHANGE IN CONTROL ARRANGEMENTS
ROBERT J. ARNOT
In April 2002, our wholly owned subsidiary, I.C. Isaacs & Company, L.P. (the
'LP') entered into an amended and restated employment agreement with Robert J.
Arnot, who was then our Chairman of the Board, President and Chief Executive
Officer. Pursuant to that agreement, Mr. Arnot was entitled to receive, among
other things, base salaries of $400,000 in 2002, $425,000 in 2003 and $450,000
per year during the balance of an initial term that was to expire on May 15,
2006.
In January 2003, we and the LP entered into a separation agreement and
general release with Mr. Arnot. Pursuant to that agreement, Mr. Arnot resigned
as a director and as our President and Chief Executive Officer. In consideration
for Mr. Arnot's execution of that agreement, the termination of his employment
agreement and his release and waiver of claims against us, the LP and other
parties and persons related to us, we agreed:
to engage Mr. Arnot as a paid consultant between the February 6, 2003
effective date of the separation agreement and May 2, 2003, and to make
severance payments to him from that latter date through December 15, 2003,
in an aggregate amount equal to that portion of the $425,000 base salary
that Mr. Arnot would have been entitled to receive during those two periods
of time, but for the termination of his employment agreement;
to continue Mr. Arnot's coverage under all of our benefit plans through
December 31, 2003;
to provide Mr. Arnot with office space and telecommunications facilities
through May 2, 2003; and
to release Mr. Arnot from any claims that we, the LP and other parties and
persons related to us had or might have against him.
DANIEL J. GLADSTONE
In June 2002, the LP entered into an amended and restated employment
agreement with Daniel J. Gladstone, who was then President of the Girbaud
Division, that provided for an annual base salary of $350,000 and incentive
compensation based upon percentages of our annual sales of Girbaud sportswear
and Girbaud women's products. That agreement contains the following termination
provisions:
if Mr. Gladstone's employment is terminated without cause or he is
constructively discharged
after January 21, 2005, the LP must pay him an amount equal to one year
of his base salary plus a severance payment in a lump sum equal to his
incentive compensation for the last full year prior to his termination
(the 'Severance Payment'); or
11
<Page>
prior to January 21, 2005, the LP must pay him the aggregate amount of
his base salary through December 31, 2005, plus a Severance Payment
within 90 days after each year remaining during the term of the
agreement; and
if the LP decides not to renew the agreement, it must pay Mr. Gladstone an
amount equal to one year of his current base salary plus a Severance
Payment.
In May 2003, the LP entered into an amendment of Mr. Gladstone's agreement which
provided that he would serve as President;
changed the initial term of the agreement so that it will end on December
31, 2005, and provided for automatic one year renewals of the agreement
unless either party gives notice of its non-renewal not later than
September 30, 2005 or September 30 of the then current renewal year; and
deleted Mr. Gladstone's entitlement to receive incentive compensation based
upon percentages of our sales, and added new incentive compensation
provisions that are based upon our achievement of pre-determined earnings,
cash flow and inventory turns targets, subject to guaranteed minimum annual
bonuses of $100,000 in 2003 and $125,000 thereafter.
The maximum amount of incentive compensation that Mr. Gladstone may earn in
2003 is $297,500. The maximum amount of such compensation that he may earn in
2004, 2005 and any renewal year is $350,000.
ROBERT J. CONOLOGUE
In March 2003, the LP entered into an employment agreement (with effect from
February 18, 2003) with Robert J. Conologue, our Chief Operating Officer and
Chief Financial Officer, that provides:
for an initial term that will end on December 31, 2005, and for automatic
one year renewals of the agreement unless either party gives notice of its
non-renewal not later than September 30, 2005 or September 30 of the then
current renewal year;
for payment of an annual base salary of $315,000 per year, a minimum bonus
of $40,000 in 2003 and incentive compensation provisions that are based
upon our achievement of pre-determined earnings, cash flow and inventory
turns targets;
for the issuance under the Plan of a five year option to purchase 225,000
shares of common stock at an exercise price of $.68 per share which shall
vest ratably on March 31, 2004, 2005 and 2006;
in the event that Proposal 3 is adopted by the stockholders at the annual
meeting, for the issuance under the Plan of a five year fully vested option
to purchase 150,000 shares of common stock at the exercise price applicable
to option grants made under the Plan on the date of the annual meeting;
in the event that Mr. Conologue's employment is terminated without cause at
any time prior to December 31, 2005, for the payment of a severance payment
equal to his base salary for a period of six months; and
in the event that Mr. Conologue's employment is terminated without cause at
any time after December 31, 2005 or as a result of a change of control of
the company, for the payment of a severance payment equal to his base
salary for a period of 12 months.
The maximum amount of incentive compensation that Mr. Conologue may earn in
2003 is $236,250. The maximum amount of such compensation that he may earn in
2004, 2005 and any renewal year is $267,750.
SANDRA FINKELSTEIN
In February 2003, the LP entered into an employment agreement with Sandra
Finkelstein, our Senior Vice President of Merchandising -- Girbaud Division,
that provides:
12
<Page>
for an initial term that will end on December 31, 2005, and for automatic
one year renewals of the agreement unless either party gives notice of its
non-renewal not later than September 30, 2005 or September 30 of the then
current renewal year;
for payment of a base salary of $310,000 per year, and up to $77,500 of
incentive compensation based upon our achievement of pre-determined
earnings, cash flow and inventory turns targets;
for the issuance under the Plan of a five year option to purchase 25,000
shares of common stock at an exercise price of $.60 per share which shall
vest ratably on March 31, 2004, 2005 and 2006; and
in the event that Ms. Finkelstein's employment is terminated without cause,
for the payment of a severance payment equal to his base salary for a
period of six months.
EUGENE WIELEPSKI
In April 2002, the LP entered into an amended and restated employment
agreement with Eugene Wielepski who was then our Vice President and Chief
Financial Officer. In March 2003, the LP and Mr. Wielepski entered into an
amendment of that agreement. As so amended, the agreement provides:
that Mr. Wielepski shall serve as Vice President -- Finance;
for an initial term that will end on May 15, 2006, and for automatic one
year renewals of the agreement unless either party gives notice of its
non-renewal not later than March 16, 2006 or March 16 of the then current
renewal year;
for payment of a base salary of $180,000 per year;
for the issuance under the Plan of a fully vested ten year option to
purchase 10,000 shares of common stock at an exercise price of $1.71 per
share;
if Mr. Wielepski's employment is terminated without cause
after May 15, 2005, the LP must pay him an amount equal to one year of
his base salary; or
prior to May 15, 2005, the LP must pay him the aggregate amount of his
base salary through May 15, 2006; and
if the LP decides not to renew the agreement, it must pay Mr. Wielepski
an amount equal to one year of his current base salary.
DANIELLE LAMBERT
In June 2002, the LP entered into an agreement with Danielle Lambert, who
was our Vice President for Merchandising for the Girbaud Division. That
agreement provided:
for payment of a base salary of $180,000 per year and annual incentive
compensation equal to 1/2 of 1% of our net full price sales of Girbaud
products in excess of $40 million in each of the 2002, 2003 and 2004; and
if Ms. Lambert's employment was terminated
with or without cause, the LP must pay severance payment to her in an
amount equal to six months of his base salary; and
without cause, the LP also must pay any incentive compensation that may
be due for the year in which she is terminated, pro-rated with regard
to the portion of the year that elapses prior to her termination.
In May 2003, we and the LP entered into a separation agreement with Ms.
Lambert. Pursuant to that agreement, Ms. Lambert will receive the severance and
incentive compensation payments. She will also receive, in consideration for her
release of all claims that she might have against us, reimbursement of six
months of COBRA payments in the event that she elects to receive COBRA coverage.
13
<Page>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the
compensation paid during each of our last three fiscal years to our Chief
Executive Officer and to each of our executive officers other than our Chief
Executive Officer whose total annual salary and bonus amounted to more than
$100,000 and who were serving as executive officers at the end of 2002
(collectively, the 'Named Executives'). No compensation that would qualify as
payouts pursuant to long-term incentive plans ('LTIP Payouts') or 'All Other
Compensation' was paid to any of the Named Executive Officers during the three
year period ended on December 31, 2002, and we did not issue any SARs during
that period of time.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG TERM COMPENSATION
ANNUAL COMPENSATION(1) AWARDS
--------------------------------------------- ----------------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARDS($) OPTIONS(#)
- --------------------------- ---- --------- -------- --------------- --------- ----------
Robert J. Arnot,
CEO ...................... 2002 $395,973 -- -- -- --
2001 346,659 -- -- -- 7,000
2000 344,960 -- -- -- --
Daniel J. Gladstone,
President -- Girbaud
Division ................. 2002 345,781 221,199 -- -- --
2001 341,538 207,865 -- -- 7,000
2000 344,960 18,022 -- -- --
Eugene C. Wielepski,
Vice President and CFO ... 2002 196,764 -- -- -- 10,000
2001 172,531 -- -- -- 7,000
2000 171,500 -- -- -- --
Danielle Lambert,
Vice
President -- Design ...... 2002 166,393 81,199 -- -- --
2001 150,115 62,865 -- -- --
2000 148,681 43,022 -- -- 10,000
</Table>
- ---------
(1) We also provided various perquisites and other benefits that did not exceed
the lesser of $50,000 or 10% of the aggregate amounts reflected in the
salary and bonus columns for each of the Named Executive Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The Company did not grant any options or SARs to any of the Named Executive
Officers during the year ended December 31, 2002 except Eugene C. Wielepski. The
following table sets forth information regarding that grant.
<Table>
<Caption>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL EXERCISE STOCK APPRECIATION
UNDERLYING OPTIONS PRICE FOR OPTION TERM(1)
OPTIONS GRANTED TO PER EXPIRATION --------------------
NAME GRANTED EMPLOYEES SHARE DATE 5% 10%
---- ------- --------- ----- ---- -- ---
Eugene C. Wielepski.............. 10,000 5% $1.71 9/19/12 $10,754 $27,253
</Table>
- ---------
(1) In accordance with U.S. Securities and Exchange Commission rules, these
columns show gains that could accrue for the Named Executive's option,
assuming that the market price of our common stock appreciates from the
date of grant over a period of 10 years at an annualized rate of 5% and
10%, respectively. If the stock price does not increase above the exercise
price at the time of exercise, realized value to the named executives from
this option will be zero.
14
<Page>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
The following table sets forth information concerning the number and value
of unexercised options to purchase our common stock held on December 31, 2002 by
the Named Executive Officers. None of the Named Executive Officers exercised any
options during 2002.
<Table>
<Caption>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE FISCAL YEAR-END FISCAL YEAR-END
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- -------- -------- ------------------------- -------------------------
Robert C. Arnot............... 0 0 55,000/0 0
Daniel J. Gladstone........... 0 0 477,000/7,000 0
Eugene Wielepski.............. 0 0 27,500/17,000 0
Danielle Lambert.............. 0 0 20,000/0 0
</Table>
DEFINED BENEFIT PENSION PLAN
We maintain a defined benefit pension plan (the 'Pension Plan') for our
employees. The normal retirement benefit, payable at age 65, is 20.0% of base
compensation up to $10,000 plus 39.5% of base compensation over $10,000 and up
to a maximum of $75,000, prorated for service less than 30 years. A reduced
benefit is also payable on early retirement, after attainment of age 55 and
completion of 15 years of service. The Pension Plan also provides disability
retirement and death benefits. We pay the full cost of the benefits under the
Pension Plan through our contributions to a trust. Our cash contributions to the
Pension Plan during the year ended December 31, 2002 aggregated approximately
$1,375,000.
The Pension Plan Table below provides the estimated annual benefits payable
under the Pension Plan upon retirement in specified compensation and years of
service classifications:
<Table>
<Caption>
YEARS OF SERVICE
-----------------------------------------------
REMUNERATION 15 20 25 30 35
------------ -- -- -- -- --
$100,000............................... $13,838 $18,451 $23,063 $27,676 $27,676
125,000............................... 13,838 18,451 23,063 27,676 27,676
150,000............................... 13,838 18,451 23,063 27,676 27,676
175,000............................... 13,838 18,451 23,063 27,676 27,676
200,000............................... 13,838 18,451 23,063 27,676 27,676
225,000............................... 13,838 18,451 23,063 27,676 27,676
250,000............................... 13,838 18,451 23,063 27,676 27,676
300,000............................... 13,838 18,451 23,063 27,676 27,676
400,000............................... 13,838 18,451 23,063 27,676 27,676
450,000............................... 13,838 18,451 23,063 27,676 27,676
500,000............................... 13,838 18,451 23,063 27,676 27,676
</Table>
The compensation considered in determining benefits under the Pension Plan
(as provided in the column titled 'Remuneration') is the annual average
compensation for the five consecutive calendar years producing the highest
average. The compensation considered is limited to $75,000. All amounts of
salary, bonus and other compensation as reported in the Summary Compensation
Table, up to $75,000, are included in compensation considered under the Pension
Plan. The amounts provided in the Pension Plan Table are the benefits payable
per year in equal monthly installments for the life expectancy of the
participants (i.e., straight life annuity amounts). The Pension Plan is
integrated with Social Security, and its benefit formula is as follows:
(i) 0.6667% of compensation, multiplied by years of service up to 30 years; plus
(ii) 0.65% of compensation in excess of $10,000 multiplied by years of service
up to 30 years.
The estimated credited years of service for each of the Named Executive
Officers as of January 1, 2003 were as follows:
15
<Page>
<Table>
<Caption>
ESTIMATED CREDITED
NAME YEARS OF SERVICE
---- ----------------
Robert C. Arnot............................ 11
Daniel J. Gladstone........................ 4
Eugene Wielepski........................... 29
Danielle Lambert........................... 4
</Table>
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
<Table>
<Caption>
NUMBER OF SECURITIES WEIGHTED AVERAGE
TO BE ISSUED UPON EXERCISE PRICE OF
EXERCISE OF OUTSTANDING NUMBER OF SECURITIES
OUTSTANDING OPTIONS, OPTIONS, WARRANTS REMAINING AVAILABLE
PLAN CATEGORY WARRANTS AND RIGHTS AND RIGHTS FOR FUTURE ISSUANCE
------------- ------------------- ---------- -------------------
Equity compensation plans approved by
security holders........................ 1,306,250 $1.249 293,750(1)
Equity compensation plans not approved by
security holders........................ 0 N/A N/A
Totals.................................... 1,306,250 $1.249 293,750(1)
</Table>
- ---------
(1) In the event that Proposal No. 3 regarding the Amended and Restated Omnibus
Stock Plan is adopted, the number of securities remaining available for
future issuance under the Plan, after issuance of the option to purchase
150,000 shares that Mr. Conologue is entitled to receive pursuant to his
employment agreement, will increase to 743,750 shares.
16
<Page>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In November 1997, we entered into an exclusive license agreement (the
'Girbaud Men's Agreement') with Girbaud Design, Inc. and its affiliate, Wurzburg
Holding S.A. ('Wurzburg'), both of which are companies wholly owned, directly or
indirectly, by Francois Girbaud and Marithe Bachellerie. The Girbaud Men's
Agreement granted to us the right to manufacture and market men's jeanswear,
casualwear and outwear under the Girbaud brand and certain related trademarks
(the 'Girbaud Marks') in all channels of distribution in the United States,
including Puerto Rico and the U.S. Virgin Islands. In January and March 1998,
the Girbaud Men's Agreement was amended and restated to name Latitude Licensing
Corp. ('Latitude') another member of the Girbaud Group(1) of companies, as the
licensor and to include active influenced sportswear as a licensed product
category. Also in March 1998, we entered into an exclusive license agreement
(the 'Girbaud Women's Agreement' and together with the Girbaud Men's Agreement,
the 'Girbaud Agreements') with Latitude to manufacture and market women's
jeanswear, casualwear and outerwear, including active influenced sportswear,
under the Girbaud Marks in all channels of distribution in the United States
including Puerto Rico and the U.S. Virgin Islands.
Under the Girbaud Men's Agreement, we are required to make payments to
Latitude in an amount equal to 6.25% of our net sales of regular license
merchandise and 3.0% in the case of certain irregular and closeout licensed
merchandise. Except as noted below, we are subject to guaranteed minimum annual
royalty payments of $3.0 million each year from 2002 through 2007. We are
required to spend the greater of an amount equal to 3% of Girbaud men's net
sales or $500,000 in advertising and related expenses promoting the men's
Girbaud brand products in each year through the term of the Girbaud men's
agreement. During 2002, we made royalty payments to under the Girbaud Men's
Agreement aggregating approximately $3,233,000.
Under the Girbaud Women's Agreement we are required to make payments to
Latitude in an amount equal to 6.25% of our net sales of regular licensed
merchandise and 3.0% in the case of certain irregular and closeout licensed
merchandise. Except as noted below, we are subject to guaranteed minimum annual
royalty payments of $1.5 million each year from 2002 through 2007. We are
required to spend the greater of an amount equal to 3% of Girbaud women's net
sales of $400,000 in advertising and related expenses promoting the women's
Girbaud brand products in each year through the term of the Girbaud Women's
Agreement. In addition, over the term of the Girbaud Women's Agreement we are
required to contribute $190,000 per year to Latitude's advertising and
promotional expenditures for the Girbaud brand. During 2002, we made royalty
payments to under the Girbaud Women's Agreement aggregating $1,375,000.
In August 1999, we issued 500,000 shares of restricted common stock to
Latitude in connection with an amendment of the Girbaud's Women's Agreement to
defer the obligation to open a Girbaud retail store. Under the Girbaud Women's
Agreement, because we did not sign a lease agreement for a Girbaud retail store
by July 31, 2002, we became obligated to pay Latitude an additional $500,000 in
royalties. We paid $175,000 of that royalty in 2001 and the balance in 2002.
Immediately upon the issuance of the 500,000 shares of restricted Common Stock
to Latitude, Latitude transferred them to Wurzburg.
In January 2000, we entered into a global sourcing agreement with G.I.
Promotions, an affiliate of Wurzburg, to act as a non-exclusive sourcing agent
to licensees of the Marithe & Francois Girbaud trademark for the manufacture of
Girbaud jeanswear and sportswear (the 'Global Sourcing Agreement'). The Global
Sourcing Agreement extends until December 31, 2003 and provides that we shall
net a facilitation fee of 5.0% of the total FOB pricing for each order shipped
to licensees under the agreement. Also in January 2000, we entered into a
license agreement with Wurzburg. The license has a term of three years and
provides that we shall pay Wurzburg a royalty of 1.0% of the total FOB pricing
for each order shipped to a licensee under the Global Sourcing Agreement.
- ---------
(1) Mr. Girbaud, Ms. Bachellerie, together with Wurzburg, Latitude and the
various companies that they directly and indirectly control, are
collectively referred to as the 'Girbaud Group.'
17
<Page>
In 2002, Wurzburg and its wholly owned subsidiary, Textile Investment
International, S.A. ('Textile'), acquired from Ambra, Inc. 666,667 shares of our
common stock, 3,300,000 shares of our Series A convertible preferred stock and a
promissory note payable by us in the principal amount of approximately
$6,558,000, the payment of which is collateralized by a security interest in all
of our assets that is subordinate to a lien we granted to Congress Financial
Corporation in those same assets. Pursuant to the terms of a Framework Agreement
(the 'Framework Agreement') that we entered into in May 2002 with Textile,
Latitude and Wurzburg, we
amended the terms of the Series A preferred stock so that it became
immediately convertible, but only into our common stock,
granted Textile warrants to purchase 500,000 shares of our common stock for
$0.75 per share,
entered into a Stockholders' Agreement with Textile establishing certain
terms and conditions regarding the acquisition and disposition of our
securities as well as certain corporate governance matters (the
'Stockholders Agreement'), and
amended the Girbaud Agreements to
add an additional option permitting us to extend the term of each of
those agreements by four additional years through 2011 and
provide for the payment to Latitude of consulting fees of $125,000 per
agreement for calendar year 2002, and $150,000 per agreement for each
remaining calendar year under the term of each agreement (the
'Consultants' Fees').
Pursuant to the Stockholders Agreement, the Girbaud Group took control of
our Board via the election of five of their nominees for director at our 2002
annual meeting of stockholders. The Girbaud Group then converted their Series A
preferred stock into 3,300,000 shares of our common stock.
In March 2003, in connection with our negotiations with Congress Financial
Corporation ('Congress') to waive certain covenant violations under, and to
renegotiate various amendments to, our credit facility with Congress, we also
requested and obtained Latitude's agreement to the following changes to the
Girbaud Agreements:
deferral of the December 2002 and January 2003 royalty payments of $250,000
each under the Girbaud Men's Agreement to October and November 2003
respectively;
deferral of the December 2002 royalty payment of $125,000 under the Girbaud
Women's Agreement to October 2003;
reduction of the 2003 minimum guaranteed annual royalty payments due under
the Girbaud Women's Agreement by $450,000 to $1,050,000 by paying $25,000
in each of the months of April and May, 2003; $125,000 in each of the
months of June, July, August, September, October and December, 2003; and
$250,000 in November, 2003;
deferral of payment of approximately $94,000 of Consultants' Fees which
became due in December 2002 under the Girbaud Men's and Women's Agreements
and payment of $30,000 of that amount in February 2003 and the balance in
August 2003; and
reduction of the Consultants' Fees payable in 2003 from $300,000 to
$100,000 and waiver of payment of approximately $97,000 that we owed for
samples provided by the Girbaud Group.
Messrs. Robert J. Arnot, our former Chairman and Chief Executive Officer,
and Daniel J. Gladstone, our President and a director, entered into consulting
agreements with Latitude in 2002 that were supposed to terminate on December 31,
2005. Mr. Arnot's consulting agreement terminated in connection with his
resignation as our Chairman and Chief Executive. Mr. Gladstone agreed to
terminate his consulting agreement in February 2003 in connection with the
above-described restructuring of the payment obligations owed by us under the
Girbaud Agreements. During 2002, each of Messrs. Arnot and Gladstone received
$44,000 under those consulting agreements.
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In March 2003, we entered into a consulting agreement with Societe de
Finance et d'Investissement, SA ('SFI'), pursuant to which we engaged SFI to
provide the services of Staffan Ahrenberg, the Chairman of our Board, to assist
us in our dealings with the senior managements of the Girbaud Group of
companies, support our efforts to comply with our obligations under the Girbaud
Agreements, expand the scope of our licenses under those agreements, promote the
sale of our products in Canada and assist us with regard to the manufacture of
our products in Asia, Europe and Mexico. The term of that agreement will end on
December 31, 2003. We have agreed to pay SFI $200,000 during that term in
consideration for the provision of such services by Mr. Ahrenberg.
PROPOSAL 2 -- DECLASSIFICATION OF THE BOARD OF DIRECTORS
Article Sixth, Paragraph b, subparagraph (ii) of our amended and restated
certificate of incorporation provides that the Board of Directors be divided
into three classes with the number of Directors in each class being as nearly
equal as possible. This means that approximately one-third of the Directors are
elected annually and serve a three-year term. Proposal 2 seeks our stockholders'
approval of a proposed amendment to the amended and restated certificate of
incorporation to declassify the Board of Directors and provide for annual
election of all directors. If Proposal 2 is adopted, our amended and restated
certificate of incorporation will be further amended by deleting subparagraph
(ii) of paragraph (b) of Article Sixth thereof in its entirety, and replacing it
with the following:
'(ii) The number of directors constituting the entire Board of Directors
shall be fixed by, or in the manner provided in, the Corporation's By-Laws.
Except in the case of a director elected to fill a newly created
directorship or other vacancy, the directors shall be elected by a plurality
vote of the shares represented in person or by proxy, at the stockholders
annual meeting in each year and entitled to vote on the election of
directors. Elected directors shall hold office until the next annual meeting
and until their successors shall be duly elected and qualified.
Vacancies and newly created directorships resulting from any increase in
the authorized number of directors may be filled by a majority of the
directors then in office, although less than a quorum, or by a sole
remaining director, and each director so elected shall hold office for the
unexpired portion of the term of the director whose place shall be vacant
or, in the case of a newly created directorship, until the next annual
meeting and until his successor shall have been duly elected and qualified.
Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock issued by the Corporation shall have
the right, voting separately by class or series, to elect directors at an
annual or special meeting of stockholders, the election, term of office,
filling of vacancies and other attributes of such directorships shall be
governed by the terms of this Certificate or the resolution or resolutions
adopted by the Board of Directors pursuant to Article FOURTH applicable
thereto.'
The adoption by I.C. Isaacs -- and by many other publicly held
corporations -- of a classified board was undertaken as a defensive response to
hostile and non-negotiated attempts to acquire control of corporations to the
disadvantage of their stockholders which often occurred in the recent past. A
classified board has been widely viewed as discouraging proxy contests for the
election of directors, or acquisitions of substantial blocks of stock, by a
person or group seeking to acquire control of a company, because the extended
and staggered terms of directors could operate to prevent changing the
composition of, or the acquisition of control of, the board in a relatively
short period of time. In a hostile takeover attempt, for example, a classified
board may encourage a person seeking control of the company to initiate arm's
length discussions with our Board, which may be in a position to negotiate a
higher price or more favorable terms for stockholders or to try and prevent a
takeover that the Board believes is not in the best interest of the
stockholders.
A classified board has also been viewed as promoting stability and may help
to maintain a greater continuity of experience because the majority of directors
at any given time will have at
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least one year of experience with the company. This continuity may assist a
company in long-term strategic planning.
However, the diminution of hostile takeover activity that has marked the
past several years of public corporate history has prompted various commentators
and investors to articulate a different view regarding the need for, and
advisability of having, classified boards. Thus, a classified board is also
viewed as having the effect of insulating directors from being accountable to a
corporation's stockholders in that, it has the effect of limiting the ability of
stockholders to elect all directors on an annual basis and exercise influence
over that corporation, and may discourage proxy contests in which stockholders
have an opportunity to vote for a competing slate of nominees.
Last year, in connection with the Girbaud Group's acquisition of its
controlling position in the company, our management and the Girbaud Group
engaged in lengthy negotiations regarding various corporate governance issues.
Included among the issues discussed were the composition of the Board and limits
on the members of the Board nominated by the Girbaud Group to determine the
outcome of various governance matters. Inasmuch as the election of directors is
the primary means for stockholders to influence corporate governance policies
and to hold management accountable for its implementation of those policies, the
Girbaud Group obtained our management's agreement, pursuant to the Framework
Agreement, to include in this year's proxy statement a proposal to declassify
the Board.
Under the DGCL, the terms of incumbents who sit on a classified board of
directors do not change as a result of a decision by the stockholders to
declassify the board. Accordingly, if Proposal 2 is adopted, the terms of the
four nominees identified in Proposal 1 and our two other Class I directors will
expire next year. However, our Class II directors will remain in office until
our 2005 annual meeting. Thus, the first annual meeting at which all of our
directors will be required to stand for reelection annually will be our 2005
meeting.
In accordance with the our amended and restated certificate of
incorporation, Proposal 2 requires the affirmative vote of at least 66-2/3% of
the outstanding shares of our common stock. Under Delaware law, in determining
whether such proposal has received the requisite number of affirmative votes,
abstentions and broker nonvotes will be counted and will have the same effect as
a vote against the proposal.
The Board of Directors recommends that you vote 'FOR' this proposal.
PROPOSAL 3 -- INCREASE IN SHARES AUTHORIZED FOR ISSUANCE UNDER THE AMENDED AND
RESTATED OMNIBUS STOCK PLAN
The Board has adopted, subject to the approval of the stockholders, one
amendment to our Amended and Restated Omnibus Stock Plan (the 'Plan'). That sole
amendment would increase the number of shares of common stock issuable under the
Plan from 1,600,000 shares to 2,200,000 shares.
The last time our stockholders approved an amendment to the Plan was at the
2002 Annual Meeting when they authorized a 500,000 share increase in the number
of shares issuable under the Plan to a total of 1,600,000 shares. At the time
when we asked our stockholders to approve that amendment, the composition of our
Board and our management team were very different than they are today. In
keeping with our historical practices, we issued options to purchase 30,000
shares of common stock to each of the five new directors who joined our Board
last year. Also, in order to entice the new members of our management to join
the Company, we needed to issue options to purchase a total of 400,000 shares of
common stock to Mr. Conologue and to Ms. Finkelstein. If all of those options
were to be issued, the total number of shares issuable under the Plan would
exceed the total number of shares authorized for issuance by 106,250 shares.
Accordingly, Mr. Conologue's employment agreement provides for the issuance of
one option to purchase 225,000 shares which he has already received, and for the
issuance of a second option of purchase 150,000 shares which will only be issued
if our stockholders approve this proposal.
This proposed increase in the number of shares reserved for issuance under
the Plan is the only change to be made to the Plan since it was last approved by
our stockholders. The Board of
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Directors believes that approval of this increase is essential to the Company's
ability to continue to attract, retain and reward personnel key to the Company's
growth and financial success.
The discussion that follows summarizes the salient features of the Plan as
it is proposed to be amended. However, it is qualified in its entirety by
reference to the full text of the Plan (which includes the proposed amendment)
which appears as Exhibit A to this Proxy Statement.
GENERAL
Purpose. The purpose of the Plan is to promote our long-term growth and
profitability by providing key people with incentives to improve stockholder
value and contribute to our growth and financial success, and by enabling us to
attract, retain and reward the best-available persons.
Shares Available Under The Plan. At the present time, a maximum of 1,600,000
shares of common stock may be issued with respect to awards granted under the
Plan. If this proposal is approved by our stockholders, the maximum will
increase to 2,200,000 shares. A maximum of 500,000 shares of common stock
subject to awards of any combination may be granted during any year to any
individual. Both the maximum number of shares issuable under the Plan, and the
maximum number of shares that may be granted to any individual pursuant to
awards made under the Plan in any year are subject to adjustment to reflect any
stock dividends, spin-offs, split-ups, recapitalizations, mergers,
consolidations, business combinations or exchanges of shares and the like. If
any award, or portion of an award, under the Plan expires or terminates
unexercised, becomes unexercisable or is forfeited or otherwise terminated,
surrendered or canceled as to any shares, or if any shares of common stock are
surrendered to the Company in connection with any award (whether or not such
surrendered shares were acquired pursuant to any award), the shares subject to
such award and the surrendered shares shall thereafter be available for further
awards under the Plan. As of May 15, 2003, the fair market value of a share of
our common stock, determined by the last reported sale price per share on that
date as quoted in the OTC Bulletin Board, was $0.45.
Administration. The Plan is administered by the Compensation Committee of
the Board of Directors (the 'Administrator'). The Administrator has full power
and authority to take all actions necessary to carry out the purpose and intent
of the Plan, including, but not limited to, the authority to: (i) determine the
eligible persons to whom, and the time or times at which awards are granted;
(ii) determine the types of awards to be granted; (iii) determine the number of
shares to be covered by or used for reference purposes for each award; (iv)
impose such terms, limitations, restrictions and conditions upon any such award
as the Administrator deems appropriate; (v) modify, amend, extend or renew
outstanding awards, or accept the surrender of outstanding awards and substitute
new awards (provided however, that, except as noted below, any modification that
would materially adversely affect any outstanding award may not be made without
the consent of the holder); (vi) accelerate or otherwise change the time in
which an award may be exercised or becomes payable and to waive or accelerate
the lapse, in whole or in part, of any restriction or condition with respect to
such award, including, but not limited to, any restriction or condition with
respect to the vesting or exercisability of an award following termination of
any grantee's employment or consulting relationship; and (vii) establish
objectives and conditions, if any, for earning awards and determining whether
awards will be paid after the end of a performance period.
In the event of changes in our common stock by reason of any stock dividend,
spin-off, split-up, recapitalization, merger, consolidation, business
combination or exchange of shares and the like, the Administrator shall, in its
discretion, make appropriate adjustments to the maximum number and kind of
shares reserved for issuance or with respect to which awards may be granted
under the Plan and to the number, kind and price of shares covered by
outstanding awards, and shall, in its discretion and without the consent of
holders of awards, make any other adjustments in outstanding awards, including
but not limited to reducing the number of shares subject to awards or providing
or mandating alternative settlement methods such as settlement of the awards in
cash or in shares of common stock or other securities of the Company or of any
other entity, or in any
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other matters which relate to awards as the Administrator, in its sole
discretion, determines to be necessary or appropriate.
Without the consent of holders of awards, the Administrator in its
discretion is authorized to make adjustments in the terms and conditions of, and
the criteria included in, awards in recognition of unusual or nonrecurring
events affecting the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Administrator determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
Participation. Participation in the Plan is open to all employees, officers,
directors and consultants of the Company or any of its affiliates, as may be
selected by the Administrator from time to time. As of May 26, 2003, our seven
non-employee directors, and approximately 100 employees and consultants were
eligible to participate in the Plan.
TYPE OF AWARDS
The Plan allows stock options, stock appreciation rights, stock awards,
phantom stock awards and performance awards to be granted. These awards may be
granted separately or in tandem with other awards. The Administrator determines
the prices, expiration dates and other material conditions of all such awards.
We or our affiliate may make or guarantee loans to assist grantees in exercising
awards and satisfying any withholding tax obligations arising from awards.
Stock Options. The Plan allows the Administrator to grant either awards of
incentive stock options as that term is defined in section 422 of the Internal
Revenue Code of 1986, as amended (the 'Code') or nonqualified stock options;
provided, however, that awards of incentive stock options shall be limited to
our employees and employees of any of our subsidiaries. Options intended to
qualify as incentive stock options under Code section 422 must have an exercise
price at least equal to fair market value on the date of grant, but nonqualified
stock options may be granted with an exercise price less than fair market value.
The option exercise price may be paid in cash, by a broker-assisted cashless
exercise in accordance with Regulation T of the Board of Governors of the
Federal Reserve System, or by any other means the Administrator approves.
To date, all options granted under the Plan have been nonqualified stock
options, each having an exercise price equal to the fair market value of the
underlying shares when granted. Mr. Conologue's employment agreement provides
that, if this proposal is approved by our stockholders, he will be granted a
nonqualified stock option for the purchase of 150,000 shares of common stock at
the fair market value of such shares on the date granted.
Stock Appreciation Rights. The Plan allows the Administrator to grant awards
of stock appreciation rights ('SAR'). An SAR entitles the holder to receive a
payment in cash, in shares of common stock, or in a combination of both, having
an aggregate value equal to the product of (i) the excess of (A) the fair market
value on the exercise date of one share of common stock over (B) the base price
per share specified in the grant agreement, times (ii) the number of shares
specified by the SAR, or portion thereof, which is exercised.
Stock And Phantom Stock Awards. The Plan allows the Administrator to grant
restricted or unrestricted stock awards, or awards denominated in
stock-equivalent units ('phantom stock') to eligible participants with or
without payment of consideration by the grantee. Stock awards and phantom stock
awards may be paid in cash, in shares of common stock, or in a combination of
both.
Performance Awards. The proposed Plan allows the Administrator to grant
performance awards which become payable in cash, in shares of common stock, or
in a combination of both, on account of attainment of one or more performance
goals established by the Administrator. Performance goals established by the
Administrator may be based on the Company's or an affiliate's operating income
or one or more other business criteria selected by the Administrator that apply
to an individual or group of individuals, a business unit, or the Company or an
affiliate as a whole, over such performance period as the Administrator may
designate.
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AMENDMENT AND TERMINATION
The Board of Directors may terminate, amend or modify the Plan or any
portion thereof at any time.
AWARDS UNDER THE PLAN
Because participation and the types of awards granted under the Plan are
subject to the discretion of the Administrator, the benefits or amounts that
will be received by any participant or groups of participants if the Plan is
approved are not currently determinable except as provided in the table below.
The following table provides information regarding awards to be granted under
the Plan that are contingent upon the stockholders approval of this proposal:
<Table>
<Caption>
NUMBER OF SHARES OF
COMMON STOCK UNDER
NAME VALUE (1) CONTINGENT AWARDS
- ---- --------- -----------------
Robert J. Conologue..................................... -- 150,000
Executive Group......................................... -- 150,000
Non-Executive Director Group............................ -- --
Non-Executive Officer-Employee Group.................... -- --
</Table>
- ---------
(1) The value of each award is zero because the exercise price of the award
will be equal to the fair market value of a share of common stock on the
date of the grant (determined by the last reported sale price per share of
common stock on such date as reported on the OTC Bulletin Board).
FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the current federal income tax
treatment of stock options, which are authorized to be granted under the Plan,
based upon the current provisions of the Code and regulations promulgated
thereunder.
Incentive Stock Options. Incentive stock options under the Plan are intended
to meet the requirements of Code Section 422. No tax consequences result from
the grant of an incentive stock option. If an option holder acquires stock upon
the exercise, no income will be recognized by the option holder for ordinary
income tax purposes (although the difference between the option exercise price
and the fair market value of the stock subject to the option may result in
alternative minimum tax liability to the option holder) and we will be allowed
no deduction as a result of such exercise, provided that the following
conditions are met: (a) at all times during the period beginning with the date
of the granting of the option and ending on the day three months before the date
of such exercise, the option holder is an employee of the Company or of a
subsidiary; and (b) the option holder makes no disposition of the stock within
two years from the date the option is granted nor within one year after the
stock is transferred to the option holder. The three-month period is extended to
one year in the event of disability and is waived in the event of death of the
employee. In the event of a sale of such stock by the option holder after
compliance with these conditions, any gain realized over the price paid for the
stock ordinarily will be treated as capital gain, and any loss will be treated
as capital loss, in the year of the sale.
If the option holder fails to comply with the employment requirement
discussed above, the tax consequences will be the same as for a nonqualified
option, discussed below. If the option holder fails to comply with the holding
period requirements discussed above, the option holder will recognize ordinary
income in an amount equal to the lesser of (i) the excess of the fair market
value of the stock on the date the option was exercised over the exercise price
or (ii) the excess of the amount realized upon such disposition over the
adjusted tax basis of the stock. Any additional gain ordinarily will be
recognized by the option holder as capital gain, either long-term or short-term,
depending on the holding period of the shares. If the option holder is treated
as having received ordinary income because of his or her failure to comply with
either condition above, an equivalent deduction will be allowed to the Company
in the same year.
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Nonqualified Stock Options. No tax consequences result from the grant of a
nonqualified stock option. An option holder who exercises a nonqualified stock
option with cash generally will realize compensation taxable as ordinary income
in an amount equal to the difference between the exercise price and the fair
market value of the shares on the date of exercise, and we will be entitled to a
deduction from income in the same amount in the fiscal year in which the
exercise occurred. The option holder's basis in such shares will be the fair
market value on the date income is realized, and when the holder disposes of the
shares he or she will recognize capital gain or loss, either long-term or
short-term, depending on the holding period of the shares.
Disallowance Of Deductions. The Code disallows deductions for publicly held
corporations with respect to compensation in excess of $1,000,000 paid to the
corporation's chief executive officer and its four other most highly compensated
officers. However, compensation payable solely on account of attainment of one
or more performance goals is not subject to this deduction limitation if the
performance goals are objective, pre-established and determined by a
compensation committee comprised solely of two or more outside directors, the
material terms under which the compensation is to be paid are disclosed to the
stockholders and approved by a majority vote, and the compensation committee
certifies that the performance goals and other material terms were in fact
satisfied before the compensation is paid. Under this exception, the deduction
limitation does not apply with respect to compensation otherwise deductible on
account of stock options and stock appreciation rights granted at fair market
value under a plan which limits the number of shares that may be issued to any
individual and which is approved by the corporation's stockholders.
The Board of Directors recommends a vote 'FOR' the proposal to adopt the
Amended Plan. The affirmative vote of the holders of a majority of the shares of
common stock present, in person or by proxy, at the meeting and entitled to vote
is required for adoption of this proposal.
REPORT OF THE AUDIT COMMITTEE
The operations of this Committee are governed by a written charter. Only
independent directors, as that term is defined by the Marketplace Rules of The
Nasdaq Stock Market, may serve as members of this Committee.
The primary function of this Committee is to assist the Board in fulfilling
its oversight responsibilities by reviewing:
the Company's financial reports and other financial information that it
provides to any governmental body or the public,
the Company's systems of internal controls regarding finance, accounting,
legal compliance and ethics that management and the Board have established,
and
the Company's auditing, accounting and financial reporting processes
generally.
This Committee performs its oversight regarding our financial reporting
obligations by engaging in dialogs with management and with BDO Seidman LLP, our
independent auditing firm during the year ended December 31, 2002. The
discussions in which we engage pertain to issues germane to the preparation of
the Company's quarterly and annual financial statements, and the conduct and
completion of the audit of the company's annual financial statements.
This Committee has reviewed and discussed the Company's consolidated annual
financial statements with management and with representatives of BDO Seidman
LLP. We also discussed with representatives of that accounting firm the matters
required to be discussed with the Company's independent auditors pursuant to
Statement of Accounting Standards No. 61, as amended, 'Communication with Audit
Committees.'
BDO Seidman LLP also provided to this Committee the written disclosures
required by Independence Standards Board Standard No. 1, 'Independence
Discussions with Audit Committees,' and we discussed the question of BDO Seidman
LLP's independence with representatives of that firm.
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After we completed our discussions with management and with BDO Seidman LLP,
this Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Company's annual report of Form 10-K
for the year ended December 31, 2002.
Neal J. Fox (Chairman) Roland Loubet
John Hechler Robert S. Stec
PROPOSAL 4 -- RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
At the Annual Meeting, our stockholders will be asked to ratify the Board's
appointment of BDO Seidman LLP ('Seidman') as our independent auditors for the
year ending December 31, 2003. It is not expected that a representative of
Seidman will be present at the meeting.
FEES PAID TO BDO SEIDMAN LLP
<Table>
Audit Fees(1)............................................... $390,158
Financial Information Systems Design and Implementation
Fees...................................................... 0
All Other Fees(2)........................................... 137,214
--------
Total....................................................... $527,472
--------
--------
</Table>
- ---------
(1) Audit services of BDO Seidman LLP for 2002 consisted of the examination of
our consolidated financial statements and quarterly review of our financial
statements and filings on SEC form 10-Q.
(2) 'All Other Fees' includes consultation regarding accounting and reporting
matters, and an audit of our employee benefit plan ($102,290) and tax
services ($34,924).
----------------
Assuming a quorum consisting of a majority of all of the outstanding shares
of common stock is present, in person or by proxy, at the meeting, the
affirmative vote of the holders of a majority of the stock present, in person or
by proxy, at the meeting is required to ratify the Board's selection of our
independent auditors for the current fiscal year.
The Board of Directors unanimously recommends a vote FOR approval of
Proposal No. 4 and proxies solicited by the Board of Directors will be so voted
unless stockholders specify on their proxy card a contrary choice.
STOCKHOLDER PROPOSALS
Stockholders who wish to present proposals for action at the 2004 Annual
Meeting of Stockholders should submit their proposals in writing to our
Corporate Secretary at our address set forth on the first page of this proxy
statement. It is anticipated that the 2004 Annual Meeting will be held in or
about May, 2004. Accordingly, proposals must be received by the Secretary on or
before February 2, 2004 in order to be considered for inclusion in next year's
proxy materials.
ANNUAL AND QUARTERLY REPORTS TO SHAREHOLDERS
Our Annual Report to Stockholders consisting of a letter from our Chief
Executive Officer our Annual Report on Form 10-K for the year ended December 31,
2002, including audited financial statements and our quarterly report on Form
10-Q for the quarter ended March 31, 2003 have been mailed to the stockholders
concurrently herewith, but such reports are not incorporated in this Proxy
Statement and are not deemed to be part of the proxy solicitation material.
OTHER MATTERS
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires our executive
officers, directors and persons who beneficially own more than 10% of our common
stock to file initial reports of
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ownership and reports of changes in ownership with the Securities and Exchange
Commission ('SEC'). Such persons are required by SEC regulations to furnish us
with copies of all Section 16(a) forms filed by such persons. Based solely on
our review of the forms furnished to us and written representations from certain
reporting persons, we believe that all of those filing requirements were
complied with by our executive officers and directors during fiscal 2002, except
that Messrs. Ahrenberg and Bachellerie filed their initial statements of
beneficial ownership on SEC Form 3 five days and three days, respectively, after
the dates on which such forms should have been filed, Mr. Hechler filed a
Statement of Changes in Beneficial Ownership on SEC Form 4 14 days after the
date on which such form should have been filed and Messrs. Ahrenberg,
Bachellerie, Faltz, Loubet and Stec filed Statements of Changes in Beneficial
Ownership on SEC Form 4 39 days after the date on which such forms should have
been filed.
The Board of Directors does not know of any other matters that are to be
presented for action at the meeting. If any other matters are properly brought
before the meeting or any adjournments thereof, the persons named in the
enclosed proxy will have the discretionary authority to vote all proxies
received with respect to such matters in accordance with their best judgment.
By order of the Board of Directors
EUGENE WIELEPSKI,
EUGENE WIELEPSKI,
Secretary
May 29, 2003
Baltimore, Maryland
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EXHIBIT A
I.C. ISAACS & COMPANY, INC.
AMENDED AND RESTATED
OMNIBUS STOCK PLAN
1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS
I.C. Isaacs & Company, Inc., a Delaware corporation (the 'Company'),
established and maintains the I.C. Isaacs & Company, Inc. 1997 Omnibus Stock
Plan which is hereby amended and restated in its entirety to be known hereafter
as the I.C. Isaacs & Company, Inc. Amended and Restated Omnibus Stock Plan (the
'Plan'). The purpose of the Plan is to promote the long-term growth and
profitability of the Company by (i) providing key people with incentives to
improve stockholder value and to contribute to the growth and financial success
of the Company, and (ii) enabling the Company to attract, retain and reward the
best-available persons.
The Plan permits the granting of stock options (including incentive stock
options qualifying under Code section 422 and nonqualified stock options), stock
appreciation rights, restricted or unrestricted stock awards, phantom stock,
performance awards, or any combination of the foregoing.
2. DEFINITIONS
Under this Plan, except where the context otherwise indicates, the following
definitions apply:
(a) 'Affiliate' shall mean any entity, whether now or hereafter
existing, which controls, is controlled by, or is under common control with,
the Company (including, but not limited to, joint ventures, limited
liability companies, and partnerships). For this purpose, 'control' shall
mean ownership of 50% or more of the total combined voting power or value of
all classes of stock or interests of the entity.
(b) 'Award' shall mean any stock option, stock appreciation right, stock
award, phantom stock award, or performance award.
(c) 'Board' shall mean the Board of Directors of the Company.
(d) 'Code' shall mean the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder.
(e) 'Common Stock' shall mean shares of common stock of the Company, par
value of $0.0001 per share.
(f) 'Exchange Act' shall mean the Securities Exchange Act of 1934, as
amended.
(g) 'Fair Market Value' of a share of the Company's Common Stock for any
purpose on a particular date shall be determined in a manner such as the
Administrator shall in good faith determine to be appropriate; provided that
in the event the Common Stock shall become registered under Section 12(b) of
the Exchange Act, then thereafter the Fair Market Value of the Company's
Common Stock for any purpose on a particular date shall mean the last
reported sale price per share of Common Stock, regular way, on such date or,
in case no such sale takes place on such date, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on a national securities exchange
or included for quotation on the Nasdaq-National Market, or if the Common
Stock is not so listed or admitted to trading or included for quotation, the
last quoted price, or if the Common Stock is not so quoted, the average of
the high bid and low asked prices, regular way, in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or, if such system is no longer in use, the
principal other automated quotations system that may then be in use or, if
the Common Stock is not quoted by any such organization, the average of the
closing bid and asked prices, regular way, as
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furnished by a professional market maker making a market in the Common Stock
as selected in good faith by the Administrator or by such other source or
sources as shall be selected in good faith by the Administrator. If, as the
case may be, the relevant date is not a trading day, the determination shall
be made as of the next preceding trading day. As used herein, the term
'trading day' shall mean a day on which public trading of securities occurs
and is reported in the principal consolidated reporting system referred to
above, or if the Common Stock is not listed or admitted to trading on a
national securities exchange or included for quotation on the
Nasdaq-National Market, any business day.
(h) 'Grant Agreement' shall mean a written document memorializing the
terms and conditions of an Award granted pursuant to the Plan and shall
incorporate the terms of the Plan.
(i) 'Parent' shall mean a corporation, whether now or hereafter
existing, within the meaning of the definition of 'parent corporation'
provided in Code section 424(e), or any successor thereto.
(j) 'Subsidiary' and 'subsidiaries' shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of the
definition of 'subsidiary corporation' provided in Code section 424(f), or
any successor thereto.
3. ADMINISTRATION
(a) Administration of the Plan. The Plan shall be administered by the Board
or by such committee or committees as may be appointed by the Board from time to
time (the Board, committee or committees hereinafter referred to as the
'Administrator').
(b) Powers of the Administrator. The Administrator shall have all the powers
vested in it by the terms of the Plan, such powers to include authority, in its
sole and absolute discretion, to grant Awards under the Plan, prescribe Grant
Agreements evidencing such Awards and establish programs for granting Awards.
The Administrator shall have full power and authority to take all other
actions necessary to carry out the purpose and intent of the Plan, including,
but not limited to, the authority to: (i) determine the eligible persons to
whom, and the time or times at which Awards shall be granted; (ii) determine the
types of Awards to be granted; (iii) determine the number of shares to be
covered by or used for reference purposes for each Award; (iv) impose such
terms, limitations, restrictions and conditions upon any such Award as the
Administrator shall deem appropriate; (v) modify, amend, extend or renew
outstanding Awards, or accept the surrender of outstanding Awards and substitute
new Awards (provided however, that, except as provided in Section 7(d) of the
Plan, any modification that would materially adversely affect any outstanding
Award shall not be made without the consent of the holder); (vi) accelerate or
otherwise change the time in which an Award may be exercised or becomes payable
and to waive or accelerate the lapse, in whole or in part, of any restriction or
condition with respect to such Award, including, but not limited to, any
restriction or condition with respect to the vesting or exercisability of an
Award following termination of any grantee's employment or other relationship
with the Company; and (vii) establish objectives and conditions, if any, for
earning Awards and determining whether Awards will be paid after the end of a
performance period.
The Administrator shall have full power and authority, in its sole and
absolute discretion, to administer and interpret the Plan and to adopt and
interpret such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan and for the conduct of its business as the
Administrator deems necessary or advisable.
(c) Non-Uniform Determinations. The Administrator's determinations under the
Plan (including without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions of
such Awards and the Grant Agreements evidencing such Awards) need not be uniform
and may be made by the Administrator selectively among persons who receive, or
are eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated.
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(d) Limited Liability. To the maximum extent permitted by law, no member of
the Administrator shall be liable for any action taken or decision made in good
faith relating to the Plan or any Award thereunder.
(e) Indemnification. To the maximum extent permitted by law and by the
Company's charter and by-laws, the members of the Administrator shall be
indemnified by the Company in respect of all their activities under the Plan.
(f) Effect of Administrator's Decision. All actions taken and decisions and
determinations made by the Administrator on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Administrator's
sole and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Company, its stockholders, any participants in the Plan
and any other employee, consultant, or director of the Company, and their
respective successors in interest.
4. SHARES AVAILABLE FOR THE PLAN; MAXIMUM AWARDS
Subject to adjustments as provided in Section 7(d) of the Plan, the shares
of Common Stock that may be issued with respect to Awards granted under the Plan
shall not exceed an aggregate of 2,200,000 shares of Common Stock. The Company
shall reserve such number of shares for Awards under the Plan, subject to
adjustments as provided in Section 7(d) of the Plan. If any Award, or portion of
an Award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares, or if any shares of Common Stock are surrendered to the
Company in connection with any Award (whether or not such surrendered shares
were acquired pursuant to any Award), the shares subject to such Award and the
surrendered shares shall thereafter be available for further Awards under the
Plan; provided, however, that any such shares that are surrendered to the
Company in connection with any Award or that are otherwise forfeited after
issuance shall not be available for purchase pursuant to incentive stock options
intended to qualify under Code section 422.
Subject to adjustments as provided in Section 7(d) of the Plan, the maximum
number of shares of Common Stock subject to Awards of any combination that may
be granted during any one fiscal year of the Company to any one individual under
this Plan shall be limited to 500,000 shares. Such per-individual limit shall
not be adjusted to effect a restoration of shares of Common Stock with respect
to which the related Award is terminated, surrendered or canceled.
5. PARTICIPATION
Participation in the Plan shall be open to all employees, officers,
directors, and consultants of the Company, or of any Affiliate of the Company,
as may be selected by the Administrator from time to time.
6. AWARDS
The Administrator, in its sole discretion, establishes the terms of all
Awards granted under the Plan. Awards may be granted individually or in tandem
with other types of Awards. All Awards are subject to the terms and conditions
provided in the Grant Agreement.
(a) Stock Options. The Administrator may from time to time grant to eligible
participants Awards of incentive stock options as that term is defined in Code
section 422 or nonqualified stock options; provided, however, that Awards of
incentive stock options shall be limited to employees of the Company or of any
Parent or Subsidiary of the Company. Options intended to qualify as incentive
stock options under Code section 422 must have an exercise price at least equal
to Fair Market Value on the date of grant, but nonqualified stock options may be
granted with an exercise price less than Fair Market Value. No stock option
shall be an incentive stock option unless so designated by the Administrator at
the time of grant or in the Grant Agreement evidencing such stock option.
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(b) Stock Appreciation Rights. The Administrator may from time to time grant
to eligible participants Awards of Stock Appreciation Rights ('SAR'). An SAR
entitles the grantee to receive, subject to the provisions of the Plan and the
Grant Agreement, a payment having an aggregate value equal to the product of (i)
the excess of (A) the Fair Market Value on the exercise date of one share of
Common Stock over (B) the base price per share specified in the Grant Agreement,
times (ii) the number of shares specified by the SAR, or portion thereof, which
is exercised. Payment by the Company of the amount receivable upon any exercise
of an SAR may be made by the delivery of Common Stock or cash, or any
combination of Common Stock and cash, as determined in the sole discretion of
the Administrator. If upon settlement of the exercise of an SAR a grantee is to
receive a portion of such payment in shares of Common Stock, the number of
shares shall be determined by dividing such portion by the Fair Market Value of
a share of Common Stock on the exercise date. No fractional shares shall be used
for such payment and the Administrator shall determine whether cash shall be
given in lieu of such fractional shares or whether such fractional shares shall
be eliminated.
(c) Stock Awards. The Administrator may from time to time grant restricted
or unrestricted stock Awards to eligible participants in such amounts, on such
terms and conditions, and for such consideration, including no consideration or
such minimum consideration as may be required by law, as it shall determine. A
stock Award may be paid in Common Stock, in cash, or in a combination of Common
Stock and cash, as determined in the sole discretion of the Administrator.
(d) Phantom Stock. The Administrator may from time to time grant Awards to
eligible participants denominated in stock-equivalent units ('phantom stock') in
such amounts and on such terms and conditions as it shall determine. Phantom
stock units granted to a participant shall be credited to a bookkeeping reserve
account solely for accounting purposes and shall not require a segregation of
any of the Company's assets. An Award of phantom stock may be settled in Common
Stock, in cash, or in a combination of Common Stock and cash, as determined in
the sole discretion of the Administrator. Except as otherwise provided in the
applicable Grant Agreement, the grantee shall not have the rights of a
stockholder with respect to any shares of Common Stock represented by a phantom
stock unit solely as a result of the grant of a phantom stock unit to the
grantee.
(e) Performance Awards. The Administrator may, in its discretion, grant
performance awards which become payable on account of attainment of one or more
performance goals established by the Administrator. Performance awards may be
paid by the delivery of Common Stock or cash, or any combination of Common Stock
and cash, as determined in the sole discretion of the Administrator. Performance
goals established by the Administrator may be based on the Company's or an
Affiliate's operating income or one or more other business criteria selected by
the Administrator that apply to an individual or group of individuals, a
business unit, or the Company or an Affiliate as a whole, over such performance
period as the Administrator may designate.
7. MISCELLANEOUS
(a) Withholding of Taxes. Grantees and holders of Awards shall pay to the
Company or its Affiliate, or make provision satisfactory to the Administrator
for payment of, any taxes required to be withheld in respect of Awards under the
Plan no later than the date of the event creating the tax liability. The Company
or its Affiliate may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to the grantee or holder
of an Award. In the event that payment to the Company or its Affiliate of such
tax obligations is made in shares of Common Stock, such shares shall be valued
at Fair Market Value on the applicable date for such purposes.
(b) Loans. The Company or its Affiliate may make or guarantee loans to
grantees to assist grantees in exercising Awards and satisfying any withholding
tax obligations.
(c) Transferability. Except as otherwise determined by the Administrator,
and in any event in the case of an incentive stock option or a stock
appreciation right granted with respect to an
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incentive stock option, no Award granted under the Plan shall be transferable by
a grantee otherwise than by will or the laws of descent and distribution. Unless
otherwise determined by the Administrator in accord with the provisions of the
immediately preceding sentence, an Award may be exercised during the lifetime of
the grantee, only by the grantee or, during the period the grantee is under a
legal disability, by the grantee's guardian or legal representative.
(d) Substitution of Awards in Mergers and Acquisitions. Awards may be
granted under the Plan from time to time in substitution for Awards held by
employees, officers, consultants or directors of entities who become or are
about to become employees, officers, consultants or directors of the Company or
an Affiliate as the result of a merger or consolidation of the employing entity
with the Company or an Affiliate, or the acquisition by the Company or an
Affiliate of the assets or stock of the employing entity. The terms and
conditions of any substitute Awards so granted may vary from the terms and
conditions set forth herein to the extent that the Administrator deems
appropriate at the time of grant to conform the substitute Awards to the
provisions of the awards for which they are substituted.
(e) Termination, Amendment and Modification of the Plan. The Board may
terminate, amend or modify the Plan or any portion thereof at any time.
(f) Non-Guarantee of Employment or Service. Nothing in the Plan or in any
Grant Agreement thereunder shall confer any right on an individual to continue
in the service of the Company or shall interfere in any way with the right of
the Company to terminate such service at any time with or without cause or
notice.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and a grantee or any other person. To the
extent that any grantee or other person acquires a right to receive payments
from the Company pursuant to an Award, such right shall be no greater than the
right of any unsecured general creditor of the Company.
(h) Governing Law. The validity, construction and effect of the Plan, of
Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Administrator relating to
the Plan or such Grant Agreements, and the rights of any and all persons having
or claiming to have any interest therein or thereunder, shall be determined
exclusively in accordance with applicable federal laws and the laws of the State
of Delaware, without regard to its conflict of laws principles.
(i) Effective Date; Termination Date. The Plan initially became effective
May 15, 1997, was first amended and restated on April 26, 1999, and shall
continue in effect as amended and restated herein, subject to approval of the
stockholders of the Company at the 2002 Annual Meeting of the Stockholders or a
special meeting of the stockholders at which the Plan, as amended and restated
herein, is presented for approval, provided that any such special meeting is
held within twelve months of the date this amended and restated Plan is adopted
by the Board. If the stockholders of the Company fail to approve the Plan as
amended and restated herein within the time frame described in the immediately
preceding sentence, then the Plan will continue in effect as last amended and
restated and approved by the stockholders on April 26, 1999. No Award shall be
granted under the Plan after the close of business on May 14, 2007. Subject to
other applicable provisions of the Plan, all Awards made under the Plan prior to
such termination of the Plan shall remain in effect until such Awards have been
satisfied or terminated in accordance with the Plan and the terms of such
Awards.
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Appendix 1
I.C. ISAACS & COMPANY, INC.
This Proxy is Solicited on Behalf of the Board of Directors of I.C. Isaacs
& Company, Inc.
The undersigned holder of the $.0001 par value common stock (the "Common
Shares") of I.C. Isaacs & Company, Inc. (the "Company"), hereby acknowledges
receipt of the Notice of Annual Meeting of the Company and Proxy Statement
attached thereto, all relating to the Company's Annual Meeting of Stockholders
(the "Annual Meeting"), and does appoint Staffan Ahrenberg and Daniel J.
Gladstone, and each of them, the true and lawful attorney or attorneys of the
undersigned, with power of substitution, for and in the name of the undersigned,
to vote as proxies for the undersigned according to the number of Common Shares
the undersigned would be entitled to vote if then personally present at the
Annual Meeting to be held at the offices of Arent Fox Kintner Plotkin & Kahn,
PLLC located on the 25th Floor at 1675 Broadway, New York, New York, on Monday,
June 30, 2003, at 10:00 A.M., or at any adjournment or adjournments thereof (the
"Meeting"), and thereat to vote all Common Shares of the Company held by the
undersigned and entitled to be voted thereat upon the following matters:
This Proxy confers authority to vote "FOR" each of propositions 1, 2, 3 and 4,
listed above unless otherwise indicated. If any other business is transacted at
said meeting, this proxy shall be voted in accordance with the best judgment of
the proxies. The Board of Directors recommends a vote of "FOR" for each of the
listed propositions. This proxy is solicited on behalf of the Board of Directors
of I.C. Isaacs & Company, Inc. and may be revoked prior to its exercise.
(Continued and to be signed on the reverse side)
Annual Meeting of Stockholders of
I.C. Isaacs & Company, INC.
June 30, 2003
Please date, sign and mail your proxy card in the
envelope provided as soon as possible
Please detach and mail in the envelope provided.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSALS 2 THROUGH 4. PLEASE SIGN, DATE
AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [ ]
- ----------------------------------------------------------------------------------------------------------------------------
1. If Proposal 2 is approved, to elect the four nominees 2. To approve the proposal to amend FOR AGAINST ABSTAIN
listed below, each to hold office until the 2004 annual the Company's Amended and Restated [ ] [ ] [ ]
meeting of stockholders and until their respective Certificate of Incorporation to
successors shall have been duly elected or appointed; OR if eliminate classification of the
Proposal 2 is NOT approved, to elect one Class I director Company's Board of Directors
(Mr. Conologue) to hold office until the 2004 annual meeting
of stockholders, and the three other nominees listed below 3. To amend the Company's Amended FOR AGAINST ABSTAIN
as Class III directors to hold office until the 2006 annual and Restated Stock Incentive Plan [ ] [ ] [ ]
meeting of stockholders and until their respective to increase from 1,600,000 to
successors shall have been duly elected or appointed: 2,200,000, the number of shares
that may be issued under the Plan
NOMINEES
[ ] For all nominees o Oliver Bachellerie 4. To ratify the appointment of BDO FOR AGAINST ABSTAIN
o Robert J. Conologue Seidman, LLP as the Company's [ ] [ ] [ ]
[ ] Withhold authority o Neal J. Fox independent auditors for the fiscal
for all nominees o Robert S. Stec year ending December 31, 2003.
[ ] For all except 5. To transact such other business FOR AGAINST ABSTAIN
(see instructions below) as may properly come before the [ ] [ ] [ ]
meeting.
INSTRUCTION: To withhold authority to vote for any
individual nominee(s), mark "FOR ALL EXCEPT" The cost of solicitation of proxies from our shareholders
and fill in the circle next to each nominee you will be borne by us. We may also agree to pay banks, brokers,
wish to withhold, as shown here: nominees and other fiduciaries their reasonable charges and
expenses incurred in forwarding the proxy material to their
To change the address on your account, please check the principals.
box at right and indicate your new address in the
address space above. Please note that changes to the
registered name(s) on the account may not be submitted [ ]
via this method.
Signature of Stockholder Date Signature of Stockholder Date
--------------------- -------- --------------------- --------
Note: This proxy must be signed exactly as the name appears hereon. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer
is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.