UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [] 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 ss.240.14a-12

HIRSCH INTERNATIONAL CORP.
(Name of Registrant as Specified In Its Charter)

Beverly Eichel, Secretary
(Name of Person(s) Filing Proxy Statement)

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:

HIRSCH INTERNATIONAL CORP.
(a Delaware corporation)

NOTICE OF 2003 ANNUAL
MEETING OF STOCKHOLDERS TO BE
HELD AT 10:00 A.M. ON JULY 9, 2003

To the Stockholders of HIRSCH INTERNATIONAL CORP.:

NOTICE IS HEREBY GIVEN that the 2003 Annual Meeting of Stockholders (the
"Meeting") of HIRSCH INTERNATIONAL CORP. (the "Company") will be held on July 9,
2003, at 10:00 A.M. at the offices of Ruskin Moscou Faltischek, P.C., 190 EAB
Plaza, East Tower, 15th Floor, Uniondale, New York 11556-0190 for the following
purposes:

1. to elect seven directors;

2. to approve the Company's 2003 Stock Option Plan;

3. to ratify the appointment of BDO Seidman LLP as the Company's
independent auditors for the fiscal year ending January 31, 2004; and

4. to transact such other business as may properly come before the
Meeting and any adjournment or postponement thereof.

The Board of Directors has fixed May 20, 2003 at the close of business, as
the record date for the determination of stockholders entitled to notice of and
to vote at the Meeting, and only holders of record of shares of the Company's
Common Stock at the close of business on that day will be entitled to vote. The
stock transfer books of the Company will not be closed.

A complete list of stockholders entitled to vote at the Meeting shall be
available at the offices of the Company during ordinary business hours from June
14, 2003 until the Meeting for examination by any stockholder for any purpose
germane to the Meeting. This list will also be available at the Meeting.

All stockholders are cordially invited to attend the Meeting in person.
However, whether or not you expect to be present at the Meeting, you are urged
to mark, sign, date and return the enclosed Proxy, which is solicited by the
Board of Directors, as promptly as possible in the postage-prepaid envelope
provided to ensure your representation and the presence of a quorum at the
Meeting. The shares represented by the Proxy will be voted according to your
specified response. The Proxy is revocable and will not affect your right to
vote in person in the event you attend the Meeting.

By Order of the Board of Directors

/s/ Beverly Eichel

Beverly Eichel, Secretary
Hauppauge, New York
May 30, 2003

HIRSCH INTERNATIONAL CORP.
200 Wireless Boulevard
Hauppauge, NY 11788
------------------------------
PROXY STATEMENT
------------------------------

2003 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AT 10:00 A.M. ON JULY 9, 2003

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of HIRSCH INTERNATIONAL CORP. (the "Company") of proxies
to be voted at the 2003 Annual Meeting of Stockholders and any adjournment or
postponement thereof (the "Meeting") to be held on the date, at the time and
place, and for the purposes set forth in the foregoing notice. The Board of
Directors has set May 20, 2003, at the close of business, as the record date
("Record Date") for the determination of stockholders entitled to notice of and
to vote at the Meeting. As of the record date, the Company had 6,120,611 shares
of Class A Common Stock and 2,668,139 shares of Class B Common Stock
outstanding. A stockholder executing and returning a proxy has the power to
revoke it at any time before it is exercised by filing a later proxy or other
written communication with the Secretary of the Company or by attending the
Meeting and voting in person. The proxy will be voted in accordance with your
directions as to:

(1) the election of the persons listed herein as directors of the Company;

(2) the approval of the Company's 2003 Stock Option Plan;

(3) the ratification of the appointment of BDO Seidman LLP as the
Company's independent auditors for the fiscal year ending January 31,
2004; and

(4) the transaction of such other business as may properly come before the
Meeting and any adjournment or postponement thereof.

In the absence of direction, the proxy will be voted in favor of these
proposals.

The entire cost of soliciting proxies will be borne by the Company. The
cost of solicitation, which represents an amount believed to be normally
expended for a solicitation relating to an uncontested election of directors,
will include the cost of supplying necessary additional copies of the
solicitation materials and the Company's 2003 Annual Report to Stockholders (the
"Annual Report") to beneficial owners of shares held of record by brokers,
dealers, banks, trustees, and their nominees, including the reasonable expenses
of such recordholders for completing the mailing of such materials and Annual
Report to such beneficial owners.

In voting at the Meeting, each stockholder of record on the Record Date of
either Class A or Class B Common Stock will be entitled to one vote on all
matters other than the election of directors. With respect to the election of
directors, the holders of the Class B Common Stock will elect four of the
directors ("Class B directors"), and the holders of Class A Common Stock will
elect three of the directors ("Class A directors"). Holders of a majority of the
outstanding shares of Common Stock must be represented in person or by proxy in
order to achieve a quorum to vote on all matters other than the election of
directors. To vote for the Class A directors, holders of a majority of the
outstanding shares of Class A Common Stock must be represented in person or by
proxy in order to achieve a quorum. To vote for the Class B directors, holders
of a majority of the outstanding shares of Class B Common Stock must be
represented in person or by proxy in order to achieve a quorum. The Proxy
Statement, the attached Notice of Meeting, the enclosed proxy card and the
Annual Report to Stockholders are being mailed to stockholders on or about June
14, 2003.

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT, AND, IF GIVEN
OR MADE, SUCH INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED AND
THE DELIVERY OF THIS PROXY STATEMENT SHALL, UNDER NO CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE OF THIS PROXY.

1. ELECTION OF DIRECTORS

Seven directors are to be elected by a plurality of the votes cast at the
Meeting, each to hold office until the next Annual Meeting of Stockholders and
until his respective successor is elected and qualified.

Of the persons named below, who currently constitute the entire Board of
Directors, Messrs. Broitman and Krasnitz and Ms. Domuracki have been nominated
for election as Class A directors and Messrs. Arnberg, Gardner, Levine and
Gallagher have been nominated for election as Class B directors. The persons
named in the accompanying Proxy have advised management that it is their
intention to vote for the election of Messrs. Broitman and Krasnitz and Ms.
Domuracki as Class A directors and for the election of Messrs. Arnberg, Gardner,
Levine and Gallagher as Class B directors unless authority is withheld.

o Henry Arnberg
o Marvin Broitman
o Mary Ann Domuracki
o Herbert M. Gardner
o Ronald Krasnitz
o Paul Levine
o Paul Gallagher

Management believes that each nominee will be able to serve as a director
of the Company. All of the nominees have consented to serve as directors if
elected. If any nominee becomes unable or unwilling to serve, proxies may be
voted for the election of such person or persons as the Board of Directors
determines.

Information Regarding Executive Officers and Directors

The following table sets forth the names and ages of the Company's
directors and executive officers and the positions they hold with the Company:

Name Age Position
---- --- --------

Henry Arnberg....................... 60 Chairman of the Board of Directors and Chief Executive Officer
Paul Levine......................... 50 Vice Chairman of the Board of Directors and Chief Executive
Officer of Hometown Threads, LLC
Paul Gallagher...................... 53 President, Chief Operating Officer and Director
Beverly Eichel...................... 45 Vice President - Finance and Administration, Chief Financial
Officer and Secretary
Ronald Krasnitz..................... 62 Executive Vice President and Director, President of Tajima
USA, Inc.
Marvin Broitman..................... 64 Director
Herbert M. Gardner.................. 63 Director
Mary Ann Domuracki ................. 47 Director
Howard Arnberg ..................... 33 President of Hometown Threads, LLC

Henry Arnberg has been employed by the Company since 1970, and held the
positions of Chief Executive Officer and Chairman of the Board of Directors of
the Company since 1980. Mr. Arnberg also served as President of the Company
until December 1998. Mr. Arnberg received a Bachelor of Science in Accounting
from the University of Bridgeport in 1965 and an MBA in Finance and Management
from Adelphi University in 1971.

Paul Levine has been employed by the Company since 1974 and has served as a
director since 1981. Mr. Levine currently serves as Vice Chairman of the Board
of Directors and Chief Executive Officer of Hometown Threads. From December 1998
until February 2003, Mr. Levine served as the Company's President. From 1981 to
December 1998, he served as the Company's Chief Operating Officer, Executive
Vice President and Secretary. Mr. Levine received a Bachelor of Science in
Business from New York University in 1974.

Paul Gallagher joined the Company as its Chief Operating Officer in
September 2001. In early 2003, Mr. Gallagher was also appointed the Company's
President as well as a director. Prior to joining the Company, Mr. Gallagher was
employed by Cornerstone Group Inc., a consulting firm focused on corporate
turnarounds and restructurings, as well as mergers and acquisitions. Mr.
Gallagher received a Bachelor of Science from the University of Cincinnati in
1976 and an MBA from Xavier University in 1978.

Beverly Eichel joined the Company as its Vice President of Finance and
Administration and its Chief Financial Officer on February 1, 2002. Ms. Eichel
has also served as the Company's Secretary since October 2002. Ms. Eichel was
Executive Vice President and Chief Financial Officer of Donnkenny, Inc. from
October 1998 to June 2001. Prior thereto, she was Executive Vice President and
Chief Financial Officer of Danskin, Inc. from June 1992 to September 1998 and
had been its Corporate Controller from October 1987 to June 1992. Ms. Eichel is
a Certified Public Accountant in the State of New York. Ms. Eichel received a
Bachelor of Science in Accounting from the University of Maryland in 1980.

Ronald Krasnitz was elected Director of the Company in June 1996. Mr.
Krasnitz also served as the Company's Executive Vice President and Chief
Operating Officer from December 1998 until September 2001 and Secretary from
December 1998 until October 2002. Prior to joining the Company, Mr. Krasnitz was
employed by Sewing Machine Exchange, Inc. since 1971. In addition to his
positions with the Company, Mr. Krasnitz presently serves as President of Tajima
USA, Inc. Mr. Krasnitz received a Bachelor of Science in Mechanical Engineering
from the University of Illinois in 1963 and an MBA from the University of
Chicago in 1966. Mr. Krasnitz is a Registered Professional Engineer in the State
of Illinois.

Marvin Broitman was elected a Director of the Company in April 1994. Since
1968, he has been Vice President of Uniwave, Inc., a company engaged in the
engineering and manufacturing of automation accessory equipment for textile
machinery. Mr. Broitman received a Bachelor of Electrical Engineering degree
from City College in 1961 and an MBA from the Harvard Business School in 1968.
Mr. Broitman serves on the Audit, Stock Option and Compensation Committees of
the Board of Directors.

Herbert M. Gardner was elected a Director of the Company in April 1994. Mr.
Gardner is currently Executive Vice President of Barrett-Gardner Associates,
Inc., a merchant and investment banking firm. Between 1978 and 2002, Mr. Gardner
had been a Senior Vice President of Janney Montgomery Scott LLC, an investment
banking firm. Mr. Gardner is Chairman of the Board of Directors of Supreme
Industries, Inc. a manufacturer of specialized truck bodies and shuttle buses.
Mr. Gardner is also a Director of Nu Horizons Electronics Corp., an electronic
component distributor; idine Rewards Network Inc., a specialized transaction
based dining and consumer rewards program marketer; TGC Industries, Inc., a
seismic services company; and Co-Active Marketing Group, Inc., a marketing and
sales promotion company. Mr. Gardner is also a Director of Rumson-Fair Haven
Bank and Trust Company, a New Jersey state independent, commercial bank and
trust company and Chase Packaging Corp. Mr. Gardner serves on the Audit, Stock
Option and Compensation Committees of the Company's Board of Directors.

Mary Ann Domuracki was elected a Director of the Company in September 2001.
Ms. Domuracki has been Managing Director of Restructuring at Financo Inc. since
September 2001. Ms. Domuracki brings over 25 years experience combining
accounting, advisory and operating management services. Ms. Domuracki's industry
experience includes senior management positions as President of Danskin, Inc.,
Executive Vice President of Administration and Finance of Kasper A.S.L., Ltd.
and, most recently, Executive Vice President and Chief Financial Officer of
Pegasus Apparel Group, Inc. Ms. Domuracki is a CPA and a member of the AICPAs.
Ms. Domuracki has a Bachelor of Business Administration from the Pennsylvania
State University with a concentration in Accounting. Ms. Domuracki serves on the
Audit, Stock Option and Compensation Committees of the Board of Directors.

Howard Arnberg has been employed by the Company since 1995, serving in
various operational roles. Mr. Arnberg served as the Company's Vice President -
New Business Development and currently serves as the President of Hometown
Threads, LLC. Mr. Arnberg earned a Bachelor of Science in Business
Administration from the University of Florida at Gainesville in 1991 and a Juris
Doctor from Brooklyn Law School in 1994. He is a member of the New York State
Bar Association and the American Bar Association.

All Directors hold office until the next annual meeting of stockholders
and until their successors have been duly elected and qualified. The Company's
executive officers are elected annually by the Board of Directors and serve at
the discretion of the Board.

The Company's By-Laws provide that the Company shall indemnify each
Director and such of the Company's officers, employees and agents as the Board
of Directors shall determine from time to time to the fullest extent provided by
the laws of the State of Delaware.

The Company carries insurance providing indemnification, under certain
circumstances, to all of its directors and officers for claims against them by
reason of, among other things, any act or failure to act in their capacities as
directors or officers. The current annual premium for such insurance is
approximately $200,000, all of which is paid by the Company. To date, no sums
have been paid to any past or present director or officer of the Company under
this or any prior indemnification insurance policy.

The Company has also entered into Indemnity Agreements with all of its
directors and executive officers. The Indemnity Agreements provide for
indemnification of the Company's directors and officers to the fullest extent
permitted by the provisions of the General Corporation Law of the State of
Delaware.

The Indemnity Agreements provide that the Company will pay any costs which
an indemnitee actually and reasonably incurs because of any claims made against
him by reason of the fact that he is or was a director or officer of the
Company, except that the Company is not obligated to make any payment which the
Company is prohibited by law from paying as indemnity, or where (a) a final
determination is rendered on a claim based upon the indemnitee's obtaining a
personal profit or advantage to which he was not legally entitled; (b) a final
determination is rendered on a claim for an accounting of profits made in
connection with a violation of Section 16(b) of the Securities Exchange Act of
1934, or similar state or common law provisions; (c) a claim where the
indemnitee was adjudged to be deliberately dishonest; or (d) a final
determination is rendered that indemnification is not lawful.

Relationships Among Directors or Executive Officers

Howard Arnberg, the President of Hometown Threads, LLC, is the son of Henry
Arnberg, the Company's Chairman of the Board and Chief Executive Officer.

Meetings and Committees of the Board of Directors

The Board of Directors has an Audit Committee, a Compensation Committee and
a Stock Option Committee. Each member of the Audit Committee is an "independent
director" as defined in Rule 4200(a)(15) of the National Association of
Securities Dealers listing standards, as applicable and as may be modified or
supplemented. The Board of Directors does not have a nominating committee or a
committee performing the functions of a nominating committee.

Messrs. Broitman and Gardner and Ms. Domuracki serve on the Compensation
Committee and the Audit Committee, while Messrs. Broitman and Gardner and Ms.
Domuracki serve on the Stock Option Committee. The Compensation Committee and
the Stock Option Committee each held two (2) and one (1) meetings, respectively,
and did not act by unanimous written consent during the fiscal year ended
January 31, 2003. The function of the Compensation Committee is to determine the
compensation of the Company's executives. The Stock Option Committee administers
the Company's stock option plans and awards stock options.

The Board of Directors met on seven (7) occasions and acted three (3) times
by unanimous written consent during the last fiscal year.

Audit Committee Report

The members of the Audit Committee are Herbert M. Gardner, Marvin Broitman
and Mary Ann Domuracki. The Audit Committee held five (5) meetings and did not
act by unanimous written consent during the fiscal year ended January 31, 2003.
The function of the Audit Committee is to recommend annually to the Board of
Directors the appointment of the independent public accountants of the Company,
discuss and review the scope and the fees of the prospective annual audit and
review the results thereof with the independent public accountants, review and
approve non-audit services of the independent public accountants, review
compliance with existing major accounting and financial policies of the Company,
review the adequacy of the financial organization of the Company and review
management's procedures and policies relative to the adequacy of the Company's
internal accounting controls. The Audit Committee meets with the outside
auditors on a quarterly basis to review the quarterly filings with the SEC on
Form 10-Q and Form 10-K, in accordance with current regulatory requirements. The
Audit Committee has adopted and has complied with its charter in accordance with
current regulatory requirements.

In fulfilling its responsibilities for the year ended January 31, 2003, the
Audit Committee:

o Reviewed and discussed the audited financial statements for the year
ended January 31, 2003 with management and BDO Seidman, LLP, the
Company's independent accountants; as appropriate, the Audit Committee
reviews, evaluates and discusses with the Company's management,
internal financial and accounting personnel and the independent
accountants, the following:

o The plan for, and the independent accountants' report on the
Company's financial statements;

o The Company's financial disclosure documents, including all
financial statements and reports filed with the SEC or sent to
stockholders;

o Management's selection, application and disclosure of critical
accounting policies;

o Changes in the Company's accounting practices, principles,
controls or methodologies;

o Significant developments or changes in accounting rules
applicable to the Company; and

o The adequacy of the Company's internal controls and accounting
and financial personnel.

o Discussed with BDO Seidman, LLP the matters required to be discussed
by Statement on Auditing Standards No. 61 (Communication with Audit
Committee). SAS 61 requires the Company's independent auditors discuss
with the Audit Committee, among other things, the following:

o Methods to account for significant unusual transactions;

o The effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative
guidance or consensus;

o The process used by management in formulating particularly
sensitive accounting estimates and basis for the auditor's
conclusions regarding the reasonableness of those estimates; and

o Disagreements, of which there were none, with management over the
application of accounting principles, the basis for management's
accounting estimates and the disclosures in the financial
statements.

The Company's independent auditors also provided the Audit Committee with
the written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees). Independence
Standards Board Standard No. 1 requires auditors to disclose annually in writing
all relationships that, in the auditor's professional opinion, may reasonably be
thought to bear on independence, confirm their perceived independence and engage
in a discussion of their independence. The Audit Committee also considered
whether the independent auditor's provision of the other, non-audit related
services to the Company, which are referred to in "Independent Auditor's Fees"
below, is compatible with maintaining such auditor's independence.

During the year, the Audit Committee also considered several other matters
in conjunction with management and with the Company's auditors. These included:

o Implications of the Sarbanes-Oxley legislation and the adequacy
of the Company's control and disclosure policies and procedures
in light of this legislation;

o Implications of new accounting standards for the Company's
financial statements. This included, but was not limited to new
guidelines around the use of pro forma or non-GAAP financial
measures;

o The issue of impairment of tangible assets and the need to
perform periodic impairment tests to determine whether any
intangible assets being carried on the balance sheet are
impaired.

Based on the Audit Committee's review of the audited financial statements,
the representations and information provided by management and the independent
auditors and discussions with management and BDO Seidman, LLP, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the year
ended January 31, 2003 for filing with the Securities and Exchange Commission.

AUDIT COMMITTEE:

Herbert M. Gardner (Chairman)
Marvin Broitman
Mary Ann Domuracki

Director's Compensation

Directors who are employees of the Company or its subsidiaries receive no
compensation, as such, for service as members of the Board other than
reimbursement of expenses incurred in attending meetings. Directors who are not
employees of the Company or its subsidiaries receive an annual directors' fee of
$6,000 plus $1,000 for each board or stockholder's meeting attended and $500 for
each meeting of an executive committee of the Board attended, and are reimbursed
for expenses incurred in attending such meetings. In addition, all non-employee
directors participate in the Company's 1994 Non-Employee Director Stock Option
Plan. In fiscal 2002, the Board approved the issuance of 50,000 warrants to each
of two independent directors for services rendered to the Company. The warrants
had an exercise price of $.50 per share, which was the fair market value on the
date of grant. In fiscal 2003, the Board approved the issuance of 2,500 options
under the Company's 1993 Plan to each of two independent directors. The options
have an exercise price of $.27 per share, which was the fair market value as of
the date of the grant. The directors were also granted certain registration
rights associated with the warrants.

Executive Compensation

The following table sets forth the compensation earned during the three
fiscal years ended January 31, 2003, 2002, and 2001 by the Company's Chief
Executive Officer and by the four most highly paid Company's Executive Officers
whose total compensation for such periods exceeded $100,000 (the "Named
Executives"):

SUMMARY COMPENSATION TABLE

Long-Term
Annual Compensation Compensation Awards
------------------- -------------------

Other All
Name and Annual Other
Principal Position Fiscal Year Salary Bonus Compensation Options Compensation
- ------------------ ----------- ------ ----- ------------ ------- ------------

Henry Arnberg 2003 $279,166 - $ 2,060 - -
Chairman of the Board 2002 $278,462 - $ 2,031 - -
of Directors and Chief 2001 $100,000 - $ 3,460 - $500
Executive Officer

Paul Levine 2003 $279,166 - $ 3,532 - -
Vice-Chairman of the 2002 $278,462 - $ 3,427 - -
Board of Directors and 2001 $100,000 - $ 3,460 - -
Chief Executive Officer
of Hometown Threads, LLC

Paul Gallagher 2003 $300,000 $75,000 $ 3,675 300,000 -
President, Chief 2002 $125,000 - - 100,000 -
Operating Officer and 2001 - - - - -
Director

Beverly Eichel 2003 $235,000 $35,250 $ 9,000 218,000 -
Vice President - Finance, 2002 - - - - -
Chief Financial Officer 2001 - - - - -
and Secretary

Howard Arnberg 2003 $169,438 $19,125 1 $7,200 72,900 -
President of Hometown 2002 $153,635 - $7,200 - -
Threads, LLC 2001 $132,412 - $7,200 - -

Tas Tsonis 2003 2 $256,833 $129,568 $7,200 - -
Former Vice President, Chief 2002 $360,132 $123,158 $9,600 - -
Executive Officer of 2001 $350,664 $211,945 $9,600 - -
Pulse Microsystems Ltd.
and Director

Brian Goldberg 2003 2 $256,833 $129,568 $7,200 - -
Former Vice President and 2002 $360,132 $123,158 $9,600 - -
President of Pulse 2001 $350,664 $211,945 $9,600 - -
Microsystems Ltd.

1 Bonuses are earned in fiscal 2003 but paid in fiscal 2004.

2 Through November, 2002, when employment relationship ended due to sale of
Pulse Microsystems Ltd.

Stock Options

The following table summarizes option grants to the Named Executives
during the fiscal year ended January 31, 2003:

% of Total Potential realizable
Number of Common Stock value at assumed annual
Securities Options Exercise rates of stock price
Underlying Granted To Price per appreciation for option
Options/SARS Employees in share Expiration term
Name Granted (1) Fiscal Year Date
5% 10%
- --------------------- ----------------- ---------------- ------------- -------------- ------------ -------------

Henry Arnberg - - - - - -
Paul Levine - - - - - -
Paul Gallagher 300,000 35% $.27 7/07 $103,350 $118,584
Beverly Eichel 50,000/168,000 5.9%/26% $.52/$.27 2/07 7/07 $33,000/ $38,000/
$57,892 $73,053
Howard Arnberg 30,000/20,000/22,900 3.5%/2.4%/ $1.00/$.52/$.27 9/06 2/07 $38,280/ $43,920/
2.8% 7/07 $13,270/ $15,266/
$7,890 $9,052
Tas Tsonis - - - - - -
Brian Goldberg - - - - - -

(1) The Company has not issued SAR's. All figures represent stock option grants.

Option Exercises and Holdings

The following table sets forth information concerning the exercise of stock
options by the Named Executives during the Company's fiscal year ended January
31, 2003 the number of options owned by the Named Executives and the value of
any in-the-money unexercised stock options as of January 31, 2003.

Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
---------------------------------
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options at
At Fiscal Year End (#) Fiscal Year End ($)

Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise (#) $ Unexercisable Unexercisable
---- --------------- -------------- ------------- -------------

Henry Arnberg 0 $0 0/0 $ 0/0
Paul Levine 0 $0 0/0 $ 0/0
Paul Gallagher 0 $0 100,000/300,000 $ 0/51,000
Beverly Eichel 0 $0 50,000/168,000 $ 0/28,560
Howard Arnberg 0 $0 10,000/62,900 $ 0/3,893
Tas Tsonis 0 $0 0/0 $ 0/0
Brian Goldberg 0 $0 0/0 $ 0/0

Stock Option Plans

The Company maintains two stock option plans pursuant to which options to
purchase an aggregate of 1,984,375 shares of Class A Common Stock may be
granted.

1993 Stock Option Plan. The 1993 Stock Option Plan was adopted by the Board
of Directors in December 1993 and was approved by the stockholders of the
Company in July 1994 (the "1993 Plan"). The 1993 Plan, as amended, currently has
1,750,000 shares of Class A Common Stock reserved for issuance upon exercise of
options designated as either (i) incentive stock options ("ISOs") under the
Internal Revenue Code of 1986, as amended (the "Code"), or (ii) non-qualified
options. ISOs may be granted under the 1993 Plan to employees and officers of
the Company. Non-qualified options may be granted to consultants, directors
(whether or not they are employees), employees or officers of the Company.

The purpose of the 1993 Plan is to encourage stock ownership by certain
directors, officers and employees of the Company and certain other persons
instrumental to the success of the Company and to give them a greater personal
interest in the success of the Company. The 1993 Plan is administered by the
Stock Option Committee. The Committee, within the limitations of the 1993 Plan,
determines the persons to whom options will be granted, the number of shares to
be covered by each option, whether the options granted are intended to be ISOs,
the duration and rate of exercise of each option, the option purchase price per
share and the manner of exercise, the time, manner and form of payment upon
exercise of an option, and whether restrictions such as repurchase rights in the
Company are to be imposed on shares subject to options. Options granted under
the 1993 Plan may not be granted at a price less than the fair market value of
the Class A Common Stock on the date of grant (or 110% of fair market value in
the case of persons holding 10% or more of the voting stock of the Company). The
aggregate fair market value of shares for which ISOs granted to any person are
exercisable for the first time by such person during any calendar year (under
all stock option plans of the Company and any related corporation) may not
exceed $100,000. The 1993 Plan will terminate in December 2003; however, options
granted under the 1993 Plan will expire not more than five years from the date
of grant. Options granted under the 1993 Plan are not transferable during an
optionee's lifetime but are transferable at death by will or by the laws of
descent and distribution.

1994 Non-Employee Director Stock Option Plan. The 1994 Non-Employee
Director Stock Option Plan, as amended, (the "Directors Plan") was adopted by
the Board of Directors in September 1994 and was approved by the stockholders of
the Company in June 1995. The Directors Plan has 234,375 shares of Class A
Common Stock reserved for issuance. Pursuant to the current terms of the
Directors Plan, each independent unaffiliated Director shall automatically be
granted, subject to availability, without any further action by the Board of
Directors or the Stock Option Committee: (i) a non-qualified option to purchase
10,000 shares of Class A Common Stock upon their election to the Board of
Directors; and (ii) a non-qualified option to purchase 10,000 shares of Class A
Common Stock on the date of each annual meeting of stockholders following their
election to the Board of Directors. The exercise price of each option is the
fair market value of the Company's Class A Common Stock on the date of grant.
Each option expires five years from the date of grant and vests in three annual
installments of 33 1/3% each on the first, second and third anniversary of the
date of grant. Options granted under the Directors Plan are generally not
transferable during an optionee's lifetime but are transferable at death by will
or by the laws of descent and distribution. In the event an optionee ceases to
be a member of the Board of Directors (other than by reason of death or
disability), then the non-vested portion of the option immediately terminates
and becomes void and any vested but unexercised portion of the option may be
exercised for a period of 180 days from the date the optionee ceased to be a
member of the Board of Directors. In the event of death or permanent disability
of an optionee, all options accelerate and become immediately exercisable until
the scheduled expiration date of the option.

Voluntary Stock Option Cancellation Program. The price of the Company's
Class A Common Stock has been depressed for some time. As compared to the
exercise price on most incentive stock options, the market price of the
Company's Common Stock is and has been for some time significantly lower than
the exercise price of most incentive stock options issued to employees of the
Company. To restore the incentive value for which the Company's stock option
plans were established, the Board of Directors during fiscal 2002 approved a
limited stock option voluntary cancellation program (the "Program"). The Program
afforded the opportunity for employees, officers and directors holding options
to turn them into the Company for cancellation. At the time the program was
implemented, no new options were issued to employees who turned their options in
for cancellation. The Company intends to evaluate the option holdings by its
employees as a whole on an on-going basis and decide whether new options to its
employees who have turned in their current options at the then fair market value
of the Company's Class A common stock are warranted (or 110% of fair market
value in the case of persons holding 10% or more of the voting stock of the
Company).

Stock Performance Graph/Table

The Company believes that it is the only publicly-held firm in the
embroidery equipment industry, and therefore does not believe that it can
reasonably identify an embroidery industry-based peer group. The Company has
elected to define a peer group based on a group of six industrial distributors,
trading in similar SIC Codes, with relatively low market capitalization for a
benchmark. The following graph and table compares the change in the cumulative
total stockholder return for the five-year period beginning on January 31, 1998,
and ending on January 31, 2003, based upon the market price of the Company's
Class A Common Stock, with the cumulative total return of the NASDAQ Composite
Index and the defined Peer Group. The Peer Group includes the following
companies: Lancer Corp.; Quipp Inc.; Speizman Industries, Inc.; Paul Mueller
Company; Oilgear Company; and Key Technology Inc. The graph assumes a $100
investment on January 31, 1998 in each of the indices and the reinvestment of
any and all dividends.

[GRAPHIC OMITTED]

Comparison of Five-Year Cumulative Total Return Among Hirsch International Corp.,
NASDAQ Composite Index and an Industry-based Market Capitalization-Based Peer Group

1/31/98 1/31/99 1/31/00 1/31/01 1/31/02 1/31/03
------- ------- ------- ------- ------- -------

Hirsch International Corp. $100 $19 $7 $5 $3 $2

NASDAQ Composite Index 100 154 243 171 119 56

Peer Group 100 99 62 55 41 43

Employment Agreements

Paul Gallagher, the Company's President, Chief Operating Officer and a
director entered into a three-year employment agreement, as amended, commencing
September 11, 2001. Mr. Gallagher's employment agreement provides for the
payment of an annual base salary of $300,000. In December, 2002, the
Compensation Committee approved an amendment to the employment agreement to
provide for annual bonus payments as follows: $75,000 for fiscal year 2003, and
for each of fiscal 2004 and fiscal 2005, a minimum bonus payment of 50% of Mr.
Gallagher's annual base salary, provided the Company achieves a pre-tax profit
of between $400,000 and $2,999,999. Additional incremental increases in the
bonus payment can be earned based upon the achievement of a pre-tax profit in
excess of $3,000,000 up to a maximum additional bonus payment of 50% of annual
base salary. In addition, the employment agreement provides for the
reimbursement of certain business expenses, the provision of health insurance
and the use of a Company automobile. The employment agreement requires Mr.
Gallagher to devote his entire business time and attention to the Company and
provides for termination upon his death or disability (defined as the inability
to perform duties for three (3) consecutive months or six (6) months in any
twelve (12) month period), or for cause (as defined in the Gallagher Agreement).
In the event the Company terminates the employment agreement other than for
cause or materially breaches its obligations thereunder, Mr. Gallagher is
entitled to receive payment of his salary for up to six months plus a pro-rata
of his bonus payment that would have become due. The employment agreement also
provides that Mr. Gallagher shall not compete with the Company during the term
of the agreement and for a period of two (2) years thereafter. There is no
change of control provision contained in the employment agreement. Mr. Gallagher
also received options to purchase 100,000 shares of the Company's Class A Common
Stock.

Beverly Eichel, the Company's Vice President-Finance, Chief Executive
Officer and Secretary, entered into a two-year employment agreement with the
Company, as amended, commencing February 1, 2002, which provides for the payment
of an annual base salary of $235,000 for the first year and $250,000 for the
second year of the term. In December 2002, the Compensation Committee approved
an amendment to the employment agreement to provide for annual bonus payments as
follows: $35,250 for fiscal year 2003, and for fiscal 2004 a minimum bonus
payment equal to 35% of Ms. Eichel's annual base salary provided the Company
achieves a pre-tax profit of between $400,000 and $2,999,999. Additional
incremental increases in the bonus payment can be earned upon the achievement of
a pre-tax profit in excess of $3,000,000 up to a maximum additional bonus
payment of 65% of Ms. Eichel's base annual salary. In addition, Ms. Eichel's
employment agreement provides the reimbursement of business expenses including
an automobile and cellular phone allowance, the provision of health insurance
and related benefits. The employment agreement requires Ms. Eichel to devote her
entire business time and attention to the Company and provides for termination
upon her death or disability (defined as the inability to perform duties for
three (3) consecutive months or six (6) months in any nine (9) month period), or
for cause (as defined in the employment agreement). The employment agreement
also provides that Ms. Eichel shall not compete with the Company during the term
of the agreement and for a period of two (2) years thereafter. There is no
change of control provision contained in the employment agreement. Ms. Eichel
also received options to purchase 50,000 shares of Class A Common Stock.

Howard Arnberg, the President of Hometown Threads, LLC ("Hometown Threads")
and the son of Henry Arnberg, the Company's Chairman of the Board and Chief
Executive Officer entered into a two-year employment agreement, as amended, with
the Company and Hometown Threads, commencing February 1, 2002. The employment
agreement provides for the payment to Mr. Arnberg of an annual base salary of
$170,000. In addition, Mr. Arnberg is entitled to receive certain quarterly and
annual performance based bonus and incentive payments. Mr. Arnberg's employment
agreement provides for the reimbursement of business expenses (including up to
$25,000 in relocation expenses), an automobile and cellular phone allowance, the
provision of health insurance and related benefits and a relocation package. The
employment agreement requires Mr. Arnberg to devote his entire business time and
attention to the Company and provides for termination upon his death or
disability (defined as the inability to perform duties for three (3) consecutive
months or six (6) months in any nine (9) month period), or for cause (as defined
in the employment agreement). The employment agreement also provides that Mr.
Arnberg shall not compete with the Company during the term of the agreement and
for a period of one (1) year thereafter. The employment agreement contains a
change of control provision which is triggered upon the sale or change in
control of Hometown Threads, as well as a severance provision which entitles Mr.
Arnberg to the payment of an amount equal to six (6) months base annual salary
plus a pro-rata portion of his bonus if his employment is terminated other than
for cause or if the Company materially breaches the terms of the employment
agreement provided that if such termination or material breach occurs within two
(2) years following Mr. Arnberg's relocation to the State of Florida, he shall
be entitled to his base annual salary for a twelve (12) month period. Mr.
Arnberg also received options to purchase 20,000 shares of the Company's Class A
Common Stock.

Mr. Ronald Krasnitz, a director of the Company and President of Tajima USA,
Inc. entered into a five-year employment agreement commencing June 7, 1996, with
SMX, guaranteed by the Company, providing for an annual base salary of $300,000.
In addition, Mr. Krasnitz's employment agreement provided for the reimbursement
of business expenses, the provision of health insurance and an automobile at
Company expense and related benefits. The employment agreement required Mr.
Krasnitz to devote his entire business time and attention to the Company and
provides for termination upon his death or disability (defined as the inability
to perform duties for six (6) consecutive months or nine (9) months in any
twelve (12) month period), or for cause (as defined in the employment
agreement). The employment agreement also provided that Mr. Krasnitz would not
compete with the Company during the term of the agreement and for a period of
five (5) years thereafter. There was no change of control provision contained in
the employment agreement. The employment agreement expired by its terms.
Currently Mr. Krasnitz is not under contract with the Company or its
subsidiaries and is earning a base salary of $100,000.

Tas Tsonis and Brian Goldberg each had entered into a five-year employment
agreement commencing in 1994 with the Company's former Pulse subsidiary which
was guaranteed by the Company. Upon the achievement of certain performance
standards, each employment agreement had provided for an additional three-year
extension of the initial term, at the option of the employee, upon the same
terms with the exception of the bonus payment which will be equal to 12.5% of
Pulse's annual pre-tax profits as defined therein. Effective February 24, 1999,
each employment agreement was renewed for an additional three (3) year period at
the election of each of Messrs. Tsonis and Goldberg. Upon expiration of the
first renewal period, each employment agreement could be extended at the option
of the employee for a final two-year term upon the same terms and conditions as
during the first renewal term other than any further right of renewal provided
that certain profitability targets were satisfied. In October, 2002, the Company
notified Messrs. Tsonis and Goldberg of its intention not to renew the
employment agreements. In addition, each employment agreement provided for cost
of living increases, reimbursement of business expenses, health insurance and
related benefits and an automobile allowance. Each employment agreement required
that all of such executive's business time be devoted to the Company. Each
Employment Agreement also contained a provision for termination if the employee
dies or becomes disabled (defined in the employment agreement as the inability
to perform duties for six consecutive months or nine months in any twelve-month
period) or if the Company discontinues operating its business or for cause (as
defined in the employment agreement). In connection with each employment
agreement, Messrs. Tsonis and Goldberg entered into a non-competition
undertaking with the Company pursuant to which Messrs. Tsonis and Goldberg have
agreed not to compete with the Company during their term of employment and for a
period of two years thereafter. The employment agreements did not contain change
of control provisions. Each of Messrs. Tsonis and Goldberg resigned their
positions with the Company upon the sale of Pulse in November 2002 to a company
controlled by them.

401(k) Plan

The Company sponsors a voluntary contribution plan qualified under Section
401(k) of the Code (the "401(k) Plan"). Employees of the Company who have
attained the age of 21 and who complete one year of continuous service are
eligible to participate in the 401(k) Plan. Under the 401(k) Plan, an employee
may elect to contribute annually on a pre-tax basis to a retirement account a
specified percentage of his or her compensation. Each employee is fully vested
at all times with respect to his or her contributions. Within certain limits
prescribed by the 401(k) Plan and applicable law, the Board of Directors may
authorize discretionary matching contributions by the Company up to a maximum of
two percent of an eligible employee's annual compensation. The Company elected
not to make a matching contribution for the fiscal years ended January 31, 2003,
2002 and 2001, respectively.

Compensation Committee Interlocks and Insider Participation in Compensation
Decisions

The Company's Compensation Committee of the Board of Directors consists of
Herbert M. Gardner, Marvin Broitman and Mary Ann Domuracki, all of who are
independent outside directors of the Company. The Compensation Committee's
primary responsibility is for reviewing the Company's compensation practices for
executive officers and key employees.

The Compensation Committee has furnished the following report on executive
compensation.

Compensation Committee Report

The Compensation Committee of the Board of Directors (the "Committee") is
composed of three independent outside directors of the Company.

The Committee focuses on compensating Company executives on a competitive
basis with other comparably sized and managed companies in a manner consistent
and supportive of overall Company objectives and through a compensation plan
which balances the long-term and short-term strategic initiatives of the
Company. The Committee intends that the Company's executive compensation program
will:

(1) reward executives for strategic management, the achievement of
key business objectives and enhancement of stockholder value;

(2) reflect each executive's success at resolving key operational
issues;

(3) facilitate both the short-term and long-term planning process;
and

(4) attract and retain key executives believed to be critical to the
long-term success of the Company.

The Company's compensation program for executive officers generally
consists of (i) a fixed base salary, (ii) performance-related annual bonus
awards and (iii) long-term incentive compensation in the form of stock options.
In addition, Company executives are able to participate in various benefit plans
generally available to other full-time employees of the Company. Each executive
officer's compensation package is designed to provide an appropriately weighted
mix of these elements, which in the aggregate provide a level of compensation
the committee believes is approximately equal to those provided by comparatively
sized and managed companies.

In reviewing the Company and executives' performance, the Committee takes
into consideration, among other things, the following performance factors in
making its compensation recommendations: revenues, net income and cash flow. The
Committee has received outside guidance from compensation consultants in its
efforts to have comparability and fairness in their determinations.

Base Salary

Base salary for the Company's executives is intended to provide competitive
remuneration for services provided to the Company over a one-year period. Base
salaries are set at levels designed to attract and retain the most appropriately
qualified individuals for each of the key management level positions within the
Company.

Short-Term Incentives

Short-term incentives are paid primarily to recognize specific operating
performance achieved within the last fiscal year. Since such incentive payments
are related to a specific year's performance, the Committee understands and
accepts that such payments may vary considerably from one year to the next. The
Company's bonus program generally ties executive compensation directly back to
the annual performance of both the individual executive and the Company overall.
Those executives not signatory to an employment agreement are able to earn a
percentage of their base salary as a performance-related bonus. Where there is
an employment agreement, an executive may earn a percentage of the entity's
pre-tax profits as a performance-related bonus. The bonuses paid during fiscal
2003 relate to such employment agreements, as amended, with Paul Gallagher the
Company's President and Chief Operating Officer and Beverly Eichel, its Vice
President - Finance, Chief Financial Officer and Secretary.

Long-Term Incentives

In order to align long-term executive compensation with long-term
stockholder value improvements, the Committee has from time to time awarded
stock option grants to executives of the Company in recognition of the value of
these grants in motivating long-term strategic decision making.

Chief Executive Officer

Mr. Arnberg's base salary and long-term incentive compensation are
determined by the Compensation Committee without Mr. Arnberg's participation,
based upon the same factors as those used by the Compensation Committee for
executives in general. Effective September 1, 2002, Mr. Arnberg agreed to a
voluntary reduction of his annual base salary from $300,000 to $250,000, where
it currently remains.

In addition to his base salary, Mr. Arnberg is eligible to participate in
the short-term and long-term incentive programs outlined above for the other
Named Executives. Mr. Arnberg did not receive a short-term incentive bonus
payment or any long-term incentive stock options from the Company for fiscal
2003.

COMPENSATION COMMITTEE:

Mary Ann Domuracki (Chairperson)
Marvin Broitman
Herbert M. Gardner

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth the beneficial ownership of shares of Class
A Common Stock and Class B Common Stock as of May 29, 2003, by (i) each person
who owns more than 5% of the outstanding shares of Class A and Class B Common
Stock; (ii) each executive officer and director of the Company; and (iii) all
officers and directors of the Company as a group:

Name and Address of Amount and Nature of Percent
Beneficial Owner(1) Title of Class(2) Beneficial Ownership of Class
------------------- ----------------- -------------------- --------

Henry Arnberg...................... Class A 13,158 *
Class B 1,368,578 51.3%

Paul Levine........................ Class A - -
Class B 1,099,621 (3) 41.2%

Ronald Krasnitz ................... Class A 33,777 (4) *
Class B - -

Marvin Broitman.................... Class A 69,271 (5) 1.1%
Class B - -

Herbert M. Gardner................. Class A 69,475 (6) 1.1%
Class B - -

Mary Ann Domuracki................. Class A 13,332 (7) *
Class B - -

Paul Gallagher..................... Class A 486,666 (8) 6.4%
Class B - -

Beverly Eichel..................... Class A 131,333 (9) 1.3%
Class B - -

Howard Arnberg..................... Class A 26,900 (10) *
Class B 25,000 *

All Officers and Directors as a Class A 847,614 12.8%
group Class B 2,493,199 93.4%
(nine persons)...................

* less than one percent

(1) All addresses are c/o Hirsch International Corp., 200 Wireless Boulevard,
Hauppauge, New York 11788.

(2) The Company's outstanding Common Stock consists of two classes. Class A
Common Stock and Class B Common Stock. The Class A Common Stock and the
Class B Common Stock are substantially identical except that two-thirds of
the directors of the Company will be elected by Messrs. Arnberg and Levine,
the holders of most of the Class B Common Stock, as long as the number of
outstanding Shares of Class B Common Stock equals or exceeds 400,000
shares.

(3) Includes 100,000 shares of Class B Common Stock owned by his wife and
100,000 shares of Class B Common Stock owned by trusts created for the
benefit of his minor children as to which he disclaims beneficial
ownership.

(4) Includes options to purchase 9,533 shares of Class A Common Stock at $.27
per share. Does not include options to purchase 19,067 shares of Class A
Common Stock at $.27 per share.

(5) Includes options to purchase 10,000 shares of Class A Common Stock at an
exercise price of $.96 and 7,499 shares of Class A Common Stock at an
exercise price of $.27. Also includes warrants to purchase 50,000 shares of
Class A Common Stock at $.50 per share. Does not include options to
purchase 5,001 shares of Class A Common Stock at an exercise price of $.27.

(6) Includes 8,002 shares held in retirement account. Also includes 640 shares
owned by his wife as to which he disclaims beneficial ownership. Includes
options to purchase 10,000 shares of Class A Common Stock at an exercise
price of $.96 and 7,499 shares of Class A Common Stock at an exercise price
of $.27. Also includes warrants to purchase 50,000 shares of Class A Common
Stock at $.50 per share. Does not include options to purchase 5,001 shares
of Class A Common Stock at an exercise price of $.27.

(7) Includes options to purchase 6,666 shares of Class A Common Stock at an
exercise price of $.89 and 6,666 shares of Class A Common Stock at an
exercise price of $.27. Does not include options to purchase 3,334 shares
of Class A Common Stock at an exercise price of $.89 and 3,334 shares of
Class A Common Stock as an exercise price of $.27.

(8) Includes options to purchase 100,000 and 91,666 shares of Class A Common
Stock at an exercise price of $.95 and $.27 per share respectively. Does
not include options to purchase 208,334 shares of Class A Common Stock at
an exercise price of $.27 per share.

(9) Includes options to purchase 50,000 and 51,333 shares of Class A Common
Stock at an exercise price of $.52 and $.27 per share respectively. Does
not include options to purchase 116,667 shares of Class A Common Stock at
an exercise price of $.27 per share.

(10) Includes options to purchase 10,000 shares of Class A Common Stock at an
exercise price of $1.00 per share, options to purchase 6,667 shares of
Class A Common Stock at $.52 per share and options to purchase 7,633 shares
of Class A Common Stock at an exercise price of $.27 per share. Does not
include options to purchase 20,000 shares of Class A Common Stock at an
exercise price of $1.00 per share, options to purchase 13,334 shares of
Class A Common Stock at an exercise price of $.52 per share and options to
purchase 15,267 shares of Class A Common Stock at an exercise price of $.27
per share.

The Company is unaware of any arrangements that may result in a change in
control of the Company.

Compliance with Section 16(a) of the Exchange Act.

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive, officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities (collectively, the
"Reporting Persons") to file reports of ownership and changes in ownership with
the Securities and Exchange Commission and to furnish the Company with copies of
these reports. Based solely on the Company's review of the copies of such forms
received by it during its fiscal year ended January 31, 2003, the Company
believes that the Reporting Persons complied with all filing requirements
applicable to them other than a late filing by Howard Arnberg disclosing the
granting of options to purchase an aggregate of 50,000 shares of Class A Common
Stock.

Certain Relationships and Related Transactions

The Company has advanced approximately $496,000 for premiums on split
dollar life insurance for Henry Arnberg, the Company's Chairman and Chief
Executive Officer and Paul Levine, the Vice-Chairman of the Board and Chief
Executive Officer of Hometown Threads, LLC. The spouse of each Messrs. Arnberg
and Levine are the beneficiaries of these respective policies. These advances
are collateralized by the cash surrender value of the policies, which totaled in
the aggregate approximately $757,540 at January 31, 2003 for both policies. The
premiums for these policies are currently being paid out of the accumulated
dividends for the policies.

Effective October 31, 2002, the Company completed the sale of all of the
outstanding equity interests in its wholly-owned subsidiary, Pulse Microsystems
Ltd. ("Pulse"), pursuant to the terms of the purchase agreement by and between
Hirsch and 2017146 Ontario Limited ("Purchaser") dated as of October 31, 2002
(the "Agreement"). The Purchaser is an entity owned and controlled by Tas
Tsonis, the former Chief Executive Officer of Pulse and a director of the
Company and Brian Goldberg, the former President of Pulse.

Pursuant to the Agreement, Hirsch sold all of its equity interests in Pulse
to the Purchaser for an aggregate consideration of $5.0 million to be paid as
follows: (a) $0.5 million cash, (b) a $0.5 million note payable in 11 quarterly
installments beginning April 30, 2003 and including interest accruing on the
principal balance at the rate of US Prime +1% per annum (the "Note"), and (c)
the assumption of $4.0 million of Hirsch obligations. The sale price was at
Pulse's book value so there was no gain or loss recorded on the sale. As of May
2003, the obligations under the Note were satisfied in full.

Marc Arnberg, the son of Henry Arnberg, the Company's Chairman of the Board
and Chief Executive Officer, is employed by the Company as the Director of
HirschCare, the Company's customer care division. Mr. Arnberg receives a base
salary as well as the opportunity to earn a performance based bonus based on
criteria established by management for employees of a similar level of
responsibility.

Henry Arnberg, the Company's Chairman of the Board and Chief Executive
Officer, together with his wife and Paul Levine, the Company's Vice Chairman of
the Board and President of Hometown Threads, LLC, own a travel agency located on
the premises of the Company's corporate headquarters in Hauppauge, New York. The
Company pays this entity customary fees for any travel and related services
provided to the Company. This entity had gross revenues last year of
approximately $162,000, of which less than ten (10%) percent resulted from
payments by the Company.

The Company's By-Laws provide that all transactions between the Company and
any of its officers, directors or affiliates must be approved by a majority of
the unaffiliated members of the Board of Directors, will be on terms no less
favorable to the Company than could be obtained from unaffiliated third parties
and will be in connection with bona fide business purposes.

Services Provided by the Company's Auditors

For the year ended January 31, 2003 the Company incurred professional fees
to its auditors in the amount of $231,152 of which $138,131 related to auditing
and $93,021 related to tax services and other services. The Company's Audit
Committee has considered whether the non-audit services provided by the
Company's auditors in connection with the year ended January 31, 2003 were
compatible with the auditors' independence.

2. APPROVAL OF 2003 STOCK OPTION PLAN

At the Meeting, the Company's stockholders will be asked to approve the
terms of the Company's 2003 Stock Option Plan (the "2003 Plan"). The 2003 Plan
was adopted by the Board of Directors of the Company in May, 2003.

The Company's 1993 Stock Option Plan, which has 1,750,000 reserved for
issuance, expires in December 2003. In the event a replacement plan is not
adopted by the Company, the Company will be unable to grant additional incentive
stock options to its employees. The Board believes that in light of the recent
restructuring of the Company's business and operations and in order to enable
the Company to continue to attract and retain personnel of the highest caliber,
provide incentives for certain directors, officers and employees of the Company
and certain other persons instrumental to the future success of the Company and
to continue to promote the well-being of the Company, it is in the best
interests of the Company and its stockholders to provide to such persons,
through the granting of stock options, the opportunity to participate in the
value and/or appreciation in value of the Company's Common Stock. The Board has
historically found that the grant of options has proven to be a valuable tool in
attracting and retaining key employees. It believes that such authority, in view
of the significant restructuring which the Company has recently effected the
need to incentivize the Company's employees and the impending expiration of the
1993 Plan, should be continued through the adoption of the 2003 Plan. The Board
believes that such authority (i) will provide the Company with significant means
to attract and retain talented personnel; (ii) will result in saving cash, which
otherwise would be required to maintain current key employees and adequately
attract and reward key personnel; and (iii) consequently will prove beneficial
to the Company's ability to be competitive.

If the 2003 Plan is approved by the stockholders, additional options may be
granted under the 2003 Plan, the timing, amounts and specific terms of which
cannot be determined at this time. Such options are separate and apart from
options granted pursuant to the 1993, which as of May 29, 2003 numbered
approximately 1,058,000 outstanding.

The following summary of the 2003 Plan does not purport to be complete, and
is subject to and qualified in its entirety by reference to the full text of the
2003 Plan, set forth as Exhibit "A" to this Proxy Statement.

Summary of the 2003 Plan

The 2003 Plan, as proposed would have 750,000 shares of Common Stock
reserved for issuance upon the exercise of options designated as either (i)
incentive stock options ("ISOs") under the Code or (ii) non-qualified stock
options. ISOs may be granted under the 2003 Plan to employees and officers of
the Company. Non-qualified options may be granted to consultants, directors
(whether or not they are employees), employees or officers of the Company. In
certain circumstances, the exercise of stock options may have an adverse effect
on the market price of the Company's Common Stock. If adopted, the Company will
not grant any options under the 2003 Plan until the expiration of the 1993 Plan.

The purpose of the 2003 Plan is to encourage stock ownership by certain
directors, officers and employees of the Company and certain other persons
instrumental to the success of the Company and give them a greater personal
interest in the success of the Company. If approved, the 2003 Plan would be
administered by the Stock Option Committee. The Committee, within the
limitations of the 2003 Plan, determines the persons to whom options will be
granted, the number of shares to be covered by each option, whether the options
granted are intended to be ISOs, the duration and rate of exercise of each
option, the option purchase price per share and the manner of exercise, the
time, manner and form of payment upon exercise of an option, and whether
restrictions such as repurchase rights in the Company are to be imposed on the
shares subject to options. Options granted under the 2003 Plan may not be
granted at a price less than the fair market value of the Common Stock on the
date of the grant (or 110% of fair market value in the case of persons holding
10% or more of the voting stock of the Company). The aggregate fair market value
of shares for which ISOs granted to any person are exercisable for the first
time by such person during any calendar year (under all stock option plans of
the Company and any related corporation) may not exceed $100,000. The 2003 Plan
will terminate in December, 2013 which means no options may be granted after
such date. Options granted under the 2003 Plan will expire not more than five
years from the date of grant; however, any options outstanding on the
termination date of the 2003 Plan will continue until they expire by their
terms. Options granted under the 2003 Plan are not transferable during an
optionee's lifetime but are transferable at death by will or by the laws of
descent and distribution.

Certain Federal Income Tax Consequences of the 2003 Plan

The following is a brief summary of the Federal income tax aspects of stock
options to be granted under the 2003 Plan based upon statutes, regulations and
interpretations in effect on the date hereof. This summary is not intended to be
exhaustive, and does not describe state or local tax consequences.

Incentive Stock Options. A participant will recognize no taxable income
upon the grant or exercise of an ISO. Upon a disposition of the shares after the
later of two years from the date of grant and one year after the transfer of the
shares to the participant, (i) the participant will recognize the difference, if
any, between the amount realized and the exercise price as long-term capital
gain or long-term capital loss (as the case may be) if the shares are capital
assets; and (ii) the Company will not qualify for any deduction in connection
with the grant or exercise of the options. The excess, if any, of the fair
market value of the shares on the date of exercise of an ISO over the exercise
price will be treated as an item of adjustment for a participant's taxable year
in which the exercise occurs and may result in an alternative minimum tax
liability for the participant. In the case of a disposition of shares in the
same taxable year as the exercise, where the amount realized on the disposition
is less than the fair market value of the shares on the date of exercise, there
will be no adjustment since the amount treated as an item of adjustment, for
alternative minimum tax purposes, is limited to the excess of the amount
realized on such disposition over the exercise price which is the same amount
included in the regular taxable income.

If Common Stock acquired upon the exercise of an ISO is disposed of prior
to the expiration of the holding periods described above, (i) the participant
will recognize ordinary compensation income in the taxable year of disposition
on an amount equal to the excess, if any, of the lesser of the fair market value
of the shares on the date of exercise or the amount realized on the disposition
of the shares, over the exercise price paid for such shares; and (ii) the
Company will qualify for a deduction equal to any such amount recognized,
subject to the limitation that the compensation be reasonable. The participant
will recognize the excess, if any, of the amount realized over the fair market
value of the shares on the date of exercise, if the shares are capital assets,
as short-term or long-term capital gain, depending on the length of time that
the participant held the shares, and the Company will not qualify for a
deduction with respect to such excess.

Subject to certain exceptions for disability or death, if an ISO is
exercised more than three months following the termination of the participant's
employment, the option will generally be taxed as a non-qualified stock option.
See "Non-Qualified Stock Options."

Non-Qualified Stock Options. Except as noted below, with respect to
non-qualified stock options in general (i) upon grant of the option, the
participant will recognize no income (and the Company will not be entitled to a
deduction); (ii) upon exercise of the option (if the shares of Common Stock are
not subject to a substantial risk of forfeiture), the participant will recognize
ordinary compensation income in an amount equal to the excess, if any, of the
fair market value of the shares on the date of exercise over the exercise price,
and the Company will qualify for a deduction in the same amount, subject to the
requirement that the compensation be reasonable; (iii) the Company will be
required to comply with applicable Federal income tax withholding requirements
with respect to the amount of ordinary compensation income recognized by the
participant; and (iv) on a sale of the shares, the participant will recognize
gain or loss equal to the difference, if any, between the amount realized and
the sum of the exercise price and the ordinary compensation income recognized.
Such gain or loss will be treated as capital gain or loss if the shares are
capital assets and as short-term or long-term capital gain or loss, depending
upon the length of time that the participant held the shares.

Recommendation and Vote Required

The Board of Directors recommends that the stockholders approve the
adoption of the 2003 Plan. The vote of the holders of a majority of the shares
of the Company's Common Stock present in person or represented by proxy at the
Meeting is required to adopt the foregoing proposal to amend the 2003 Plan.

3. SELECTION OF AUDITORS

The Board of Directors recommends that the stockholders ratify the
appointment of BDO Seidman LLP, independent auditors, which served as the
Company's independent auditors for the fiscal year ended January 31, 2003, as
independent auditors to audit the Company's Consolidated Financial Statements
for the fiscal year ending January 31, 2004. A representative of BDO Seidman LLP
is expected to be present at the Meeting and will be given the opportunity to
make a statement and to answer any questions any stockholder may have with
respect to the Consolidated Financial Statements of the Company for the year
ended January 31, 2003.

THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR"
THE ADOPTION OF PROPOSAL 3.

4. OTHER BUSINESS

The Board of Directors has no knowledge of any other business that may come
before the Meeting and does not intend to present any other business. However,
if any other business shall properly come before the Meeting or any adjournment
thereof, the persons named as proxies will have discretionary authority to vote
the shares of Class A Common Stock represented by the accompanying proxy in
accordance with their best judgment.

Stockholder's Proposals

Any stockholder of the Company who wishes to present a proposal to be
considered at the next annual meeting of stockholders of the Company and who
wishes to have such proposal presented in the Company's proxy statement for such
Meeting must deliver such proposal in writing to the Company at 200 Wireless
Boulevard, Hauppauge, New York 11788, on or before January 31, 2004. In order to
curtail controversy as to the date on which the proposal was received by the
Company, it is suggested that proponents submit their proposals by certified
mail, return receipt requested.

By Order of the Board of Directors

/s/ Beverly Eichel

Beverly Eichel, Secretary

The Company will furnish without charge to each person whose proxy is being
solicited by this proxy statement, on the written request of such person, a copy
of the Company's Annual Report on Form 10-K, for its fiscal year ended January
31, 2003. Such request should be addressed to Stockholder Relations, Hirsch
International Corp., 200 Wireless Boulevard, Hauppauge, New York 11788.

Dated: May 30, 2003

EXHIBIT "A"

HIRSCH INTERNATIONAL CORP.

2003 STOCK OPTION PLAN

1. Plan; Purpose; General. The purpose of this 2003 Stock Option Plan (the
"Plan") is to advance the interests of Hirsch International Corp. (the
"Company") by enhancing the ability of the Company to attract and retain
selected employees, consultants, advisors to the Board of Directors and
qualified directors (collectively the "Participants") by creating for such
Participants incentives and rewards for their contributions to the success of
the Company, and by encouraging such Participants to become owners of shares of
the Company's Class A Common Stock, par value $0.01 per share, as the title or
par value may be amended (the "Shares").

Options granted pursuant to the Plan may be incentive stock options
("Incentive Options") as defined in the Internal Revenue Code of 1986, as
amended (the "Code") or non-qualified options, or both. The proceeds received
from the sale of Shares pursuant to the Plan shall be used for general corporate
purposes.

2. Effective Date of Plan. The Plan will become effective upon approval by
the Board of Directors (the "Board"), and shall be subject to the approval by
the holders of at least a majority of all Shares present in person and by proxy
and entitled to vote thereon at a meeting of stockholders of the Company within
12 months after the Company has a class of equity securities registered under
the Securities Act of 1933, as amended (the "Act").

3. Administration of the Plan. The Plan will be administered by the Board
of the Company. The Board will have authority, not inconsistent with the express
provisions of the Plan, to take all action necessary or appropriate thereunder,
to interpret its provisions, and to decide all questions and resolve all
disputes which may arise in connection therewith. Such determinations of the
Board shall be conclusive and shall bind all parties.

The Board may, in its discretion, delegate its powers with respect to the
Plan to an employee benefit plan committee or any other committee (the
"Committee"), in which event all references to the Board hereunder, including
without limitation the references in Section 9, shall be deemed to refer to the
Committee. The Committee shall consist of not fewer than two members. Each of
the members must be a "non-employee director" as that term is defined in Rule
16b-3 adopted pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act"). A majority of the members of the Committee shall constitute a quorum, and
all determinations of the Committee shall be made by the majority of its members
present at a meeting. Any determination of the Committee under the Plan may be
made without notice or meeting of the Committee by a writing signed by all of
the Committee members.

The Board and the Committee, if any, shall have the authority to determine
eligibility, the number of options granted and the exercise price of options.

4. Eligibility. The Participants in the Plan shall be all employees,
consultants, advisors to the Board of Directors and qualified directors of the
Company or any of its present or future subsidiaries (as defined in Section 8)
whether or not they are also officers of the Company. Members of the Committee
are eligible only if they do not exercise any discretion in selecting
Participants who receive grants of options, in determining the number of shares
to be granted to any Participant or in determining the exercise price of any
options, or if counsel to the Company may otherwise advise the Committee that
the taking of any such action does not impair the status of such eligible
Committee members as "non-employee directors" within the meaning of Exchange Act
Rule 16b-3.

5. Grant of Options.

(a) The Board shall grant options to Participants that it, in its sole
discretion, selects. Options shall be granted on such terms as the Board shall
determine except that Incentive Options shall be granted on terms that comply
with the Code and Regulations thereunder.

(b) No options shall be granted after December 1, 2013 but options
previously granted may extend beyond that date.

6. Terms and Conditions of Options.

(a) Exercise Price. The purchase price per Share for Shares issuable upon
exercise of options shall be determined by the Board except that Incentive
Options shall have an exercise price which is a minimum if 100% of fair market
value on the date of grant. For this purpose, "fair market value" will be
determined as set forth in Section 8. Notwithstanding the foregoing, if any
person to whom an option is to be granted owns in excess of ten percent of the
outstanding capital stock of the Company, then no option may be granted to such
person for less than 110% of the fair market value on the date of grant as
determined by the Board.

(b) Period of Options. Unless earlier terminated, options shall terminate
and no longer be exercisable five years from the date of grant.

(c) Payment for Delivery of Shares. Shares which are subject to options
shall be issued only upon receipt by the Company of full payment of the purchase
price for the Shares as to which the option is exercised. The purchase price
shall be payable by the Participant to the Company either (i) in cash or by
check, bank draft or money order payable to the order of the Company; or (ii)
for Incentive Options, through the delivery of Shares owned by the Participant
for a period of not less than six months and for which the Participant has good
title (free and clear of any liens and encumbrances) having a fair market value
equal to the purchase price; or (iii) for non-qualified options, by a
combination of cash and Shares as provided in (i) and (ii) above.

The Company shall not be obligated to deliver any Shares unless and until,
in the opinion of the Company's counsel, all applicable federal and state laws
and regulations have been complied with, nor, if the outstanding Class A Common
Stock is at the time listed on any securities exchange, unless and until the
Shares to be delivered have been listed (or authorized to be added to the list
upon official notice of issuance) upon such exchange, nor unless or until all
other legal matters in connection with the issuance and delivery of Shares have
been approved by the Company's counsel. Without limiting the generality of the
foregoing, the Company may require from the person exercising an option such
investment representation or such agreement, if any, as counsel for the Company
may consider necessary in order to comply with the Act and applicable state
securities laws.

A Participant shall have the rights of a shareholder only as to Shares
actually acquired by him under the Plan.

(d) Vesting. The Board may impose such vesting restrictions on options
granted hereunder as it sees fit at the time of grant.

(e) Non-Transferability of Options. Options may not be sold, assigned or
otherwise transferred or disposed of in any manner whatsoever except as provided
in Section 6(g).

(f) Forfeiture of Options upon Termination of Relationship. All previously
unexercised options including options which have not vested shall terminate and
be forfeited automatically upon the termination for any reasons whatsoever of a
Participant's status as an employee, consultant or advisor to the Board. Except
as provided in Section 6(g) below, unexercised options granted to directors
shall not terminate or be forfeited in the event such person is no longer a
director of the Company.

(g) Death. If a Participant dies at a time when he is entitled to exercise
an option, then at any time or times within one year after his death (or such
further period as the Board may allow) such options may be exercised, as to all
or any of the Shares which the Participant was entitled to purchase immediately
prior to his death, by his personal representative or the person or persons to
whom the options are transferred by the will or the applicable laws of descent
and distribution, and except as so exercised such options will expire at the end
of such period.

(h) Loans to Exercise Option. If requested by any Participant to whom a
grant of non-qualified options has been made, the Company or any subsidiary may
loan such person the amount of money necessary to pay the federal income taxes
incurred as a result of the exercise of any options (or guarantee a bank loan
for such purpose), assuming that the Participant is in the maximum federal
income tax bracket six months from the time of exercise and assuming that the
Participant has no deductions which would reduce the amount of such tax owed.
The loan shall be made on or after April 15th of the year following the year in
which the amount of tax is determined as may be requested by the Participant and
shall be made on such terms as the Company or lending bank determines.

(i) Withholding Taxes. To the extent that the Company is required to
withhold taxes for federal income tax purposes in connection with the exercise
of any options, the Company shall have the right to assist the Participant to
satisfy such withholding requirement by (i) the Participant paying the amount of
the required withholding tax to the Company, (ii) the Participant delivering to
the Company Shares of its Class A Common Stock previously owned by the
Participant or (iii) the Participant having the Company retain a portion of the
Shares covered by the option exercise. The number of Shares to be delivered to
or withheld by the Company times the fair market value as defined by Section 9
of this Plan shall equal the cash required to be withheld. To the extent that
the Company elects to allow the Participant either to deliver or have withheld
Shares of the Company's Class A Common Stock, the Board or the Committee may
require him to make such election only during certain periods of time as may be
necessary to comply with appropriate exemptive procedures regarding the
"short-swing" profit provisions of Section 16(b) of the Exchange Act or to meet
certain Code requirements.

7. Shares Subject to Plan.

(a) Number of Shares and Stock to be Delivered. Shares delivered pursuant
to this Plan shall in the discretion of the Board be authorized but unissued
Shares of Class A Common Stock or previously issued Shares acquired by the
Company. Subject to adjustments as described below, the aggregate number of
Shares which may be delivered under this Plan shall not exceed 750,000 Shares of
Class A Common Stock of the Company.

(b) Changes in Stock. In the event of a stock dividend, stock split or
combination of Shares, recapitalization, merger in which the Company is the
surviving corporation or other change in the Company's capital stock, the number
and kind of Shares of stock or securities of the Company to be subject to the
Plan and to options then outstanding or to be granted thereunder, the maximum
number of Shares or securities which may be delivered under the Plan, the option
price and other relevant provisions shall be appropriately adjusted by the
Board, whose determination shall be binding on all persons. In the event of a
consolidation or merger in which the Company is not the surviving corporation or
which results in the acquisition of substantially all the Company's outstanding
stock by a single person or entity, or in the event of the sale or transfer of
substantially all the Company's assets, all outstanding options shall thereupon
terminate.

The Board may also adjust the number of Shares subject to outstanding
options, the exercise price of outstanding options and the terms of outstanding
options to take into consideration material changes in accounting practices or
principles, consolidations or mergers (except those described in the immediately
preceding paragraph), acquisitions or dispositions of stock or property or any
other event if it is determined by the Board that such adjustment is appropriate
to avoid distortion in the operation of the Plan.

8. Definitions.

(a) For purposes of the Plan, a subsidiary is any corporation (i) in which
the Company owns, directly or indirectly, stock possessing 50 percent or more of
the total combined voting power of all classes of stock or (ii) over which the
Company has effective operating control.

(b) The fair market value of the Class A Common Stock shall be deemed to
be:

(i) the closing price of the Company's Class A Common Stock appearing
on a national securities exchange if the Company's common stock is listed
on such an exchange, or if not listed, the average closing bid price
appearing on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ");

(ii) if the Shares are not listed on NASDAQ, then the average bid
price for the Company's stock as listed in the National Quotation Bureau's
pink sheets;

(iii) if there are no listed bid prices published in the pink sheets,
then the market value shall be based upon the average closing bid price as
determined following a polling of all dealers making a market in the
Company's Shares.

9. Indemnification of Board. In addition to and without affecting such
other rights of indemnification as they may have as members of the Board or
otherwise, each member of the Board shall be indemnified by the Company to the
extent legally possible against reasonable expenses, including attorney's fees,
actually and reasonably incurred in connection with any appeal therein, to which
he may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any option granted thereunder, and against all
judgments, fines and amounts paid by him in settlement thereof; provided that
such payment of amounts so indemnified is first approved by a majority of the
members of the Board who are not parties to such action, suit or proceedings, or
by independent legal counsel selected by the Company, in either case on the
basis of a determination that such member acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company; and except that no indemnification shall be made in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
Board member is liable for a breach of the duty of loyalty, bad faith or
intentional misconduct in his duties; and provide, further that the Board member
shall in writing offer the Company the opportunity, at its own expense, to
handle and defend same.

10. Amendments. The Board may at any time discontinue granting options
under the Plan. The Board may at any time or times amend the Plan or amend any
outstanding option or options for the purpose of satisfying the requirements of
any changes in applicable laws or regulations or for any other purpose which may
at the time be permitted by law, provided that (except to the extent explicitly
required or permitted herein above) no such amendment will, without the approval
of the stockholders of the Company, (a) increase the maximum number of Shares
available under the Plan, (b) reduce the option price of outstanding options or
reduce the price at which options may be granted, (c) extend the time within
which options may be granted, (d) amend the provisions of this Section 10 of the
Plan, (e) extend the period of an outstanding option beyond five years from the
date of grant, (f) adversely affect the rights of any Participant (without his
consent) under any options theretofore granted or (g) be effective if
stockholder approval is required by applicable statute, rule or regulation.