FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended October 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________
Commission File Number 0-18183
G-III APPAREL GROUP, LTD.
(Exact name of registrant as specified in its charter)
Delaware 41-1590959
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
345 West 37th Street, New York, New York 10018
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(Address of Executive Office) (Zip Code)
(212) 629-8830
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(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of December 1, 1998.
Common Stock, $.01 par value per share: 6,526,386 shares.
Part I FINANCIAL INFORMATION Page No.
Item 1. Financial Statements *
Condensed Consolidated Balance Sheets -
October 31, 1998 and January 31, 1998............3
Condensed Consolidated Statements of Operations -
For the Three Months Ended
October 31, 1998 and 1997........................4
Condensed Consolidated Statements of Operations -
For the Nine Months Ended
October 31, 1998 and 1997........................5
Condensed Consolidated Statements of Cash Flows -
For the Nine Months Ended
October 31, 1998 and 1997........................6
Notes to Condensed Consolidated Financial Statements..7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations...........................................9
* The Balance Sheet at January 31, 1998 has been taken from the audited
financial statements at that date. All other financial statements are
unaudited.
Part II OTHER INFORMATION
Exhibit 10 Letter Agreement dated October 31, 1998 between the Registrant
and Alan Feller
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G-III Apparel Group, Ltd. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
ASSETS OCTOBER 31, JANUARY 31,
------ 1998 1998
---- ----
(unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 575 $ 5,842
Accounts receivable 45,093 12,664
Allowance for doubtful accounts and (2,571) (1,247)
sales discounts
Inventories - net 27,068 20,232
Prepaid expenses and other current assets 1,311 1,758
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Total current assets 71,476 39,249
PROPERTY, PLANT AND EQUIPMENT, NET 3,938 3,431
DEFERRED INCOME TAXES 3,125 3,125
OTHER ASSETS 1,209 941
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$79,748 $46,746
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--------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 30,023 $ 3,478
Current maturities of obligations under 221 256
capital leases
Income taxes payable 1,010 973
Accounts payable 4,077 2,570
Accrued expenses 5,589 2,138
Accrued nonrecurring charges 645 538
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Total current liabilities 41,565 9,953
OTHER LONG-TERM LIABILITIES 551 806
MINORITY INTEREST - 301
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, 1,000,000 shares
authorized; no shares issued and
outstanding in all periods
Common stock - $.01 par value;
authorized, 20,000,000
shares; issued and outstanding,
6,526,386 and 6,506,276
shares on October 31, 1998 and January
31, 1998, respectively 65 65
Additional paid-in capital 23,740 23,700
Retained earnings 13,827 11,921
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37,632 35,686
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$79,748 $46,746
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--------- --------
The accompanying notes are an integral part of these statements.
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G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
THREE MONTHS ENDED OCTOBER 31,
(Unaudited)
1998 1997
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Net sales $61,210 $61,125
Cost of goods sold 45,952 45,189
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Gross profit 15,258 15,936
Selling, general and administrative
expenses 7,196 6,366
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Operating income 8,062 9,570
Interest and financing charges, net 1,127 679
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Income before minority interest
and income taxes 6,935 8,891
Minority interest in loss of joint venture 419 136
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Income before income taxes 7,354 9,027
Income taxes 2,928 3,371
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Net income $ 4,426 $ 5,656
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------- -------
INCOME PER COMMON SHARE:
Basic:
Net income per common share $ .68 $ .87
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------ ------
Weighted average number of shares
outstanding 6,526,386 6,488,206
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--------- ---------
Diluted:
Net income per common share $ .66 $ .80
------ ------
------ ------
Weighted average number of shares
outstanding 6,751,744 7,094,305
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--------- ---------
The accompanying notes are an integral part of these statements.
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G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
NINE MONTHS ENDED OCTOBER 31,
(Unaudited)
1998 1997
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Net sales $101,902 $100,765
Cost of goods sold 77,543 73,401
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Gross profit 24,359 27,364
Selling, general and administrative
expenses 20,268 18,677
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Operating income 4,091 8,687
Interest and financing charges, net 1,949 1,245
-------- --------
Income before minority interest
and income taxes 2,142 7,442
Minority interest in loss of joint
venture 1,012 249
-------- --------
Income before income taxes 3,154 7,691
Income taxes 1,248 2,839
-------- --------
Net income $ 1,906 $ 4,852
-------- --------
-------- --------
INCOME PER COMMON SHARE:
Basic:
Net income per common share $ .29 $ .75
------- -------
------- -------
Weighted average number of shares
outstanding 6,520,676 6,482,704
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--------- ---------
Diluted:
Net income per common share $ .27 $ .69
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------- -------
Weighted average number of shares
outstanding 6,989,565 7,043,090
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--------- ---------
The accompanying notes are an integral part of these statements.
-5-
G-III Apparel Group, Ltd. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
NINE MONTHS ENDED OCTOBER 31,
(Unaudited)
1998 1997
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Cash flows from operating activities
Net income $ 1,906 $ 4,852
Adjustments to reconcile net loss
to net cash used in operating
activities
Depreciation and amortization 1,040 916
Minority Interest (1,012) (249)
Changes in operating assets and liabilities:
Accounts receivable (31,105) (25,307)
Inventories (6,836) (9,438)
Income taxes 37 2,371
Prepaid expenses and other current assets 447 30
Other assets (268) (47)
Accounts payable and accrued expenses 5,419 4,490
Accrued nonrecurring charge (55) (51)
Other long-term liabilities 47 50
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Net cash used in operating activities (30,380) (22,383)
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Cash flows from investing activities
Capital expenditures (1,547) (913)
Capital dispositions - 254
Investment in joint venture by Minority Partner 250 550
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Net cash used in investing activities (1,297) (109)
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Cash flows from financing activities
Increase in notes payable, net 26,545 12,095
Payments for capital lease obligations (175) (318)
Proceeds from exercise of stock options 40 28
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Net cash provided by financing activities 26,410 11,805
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Net decrease in cash and cash equivalents (5,267) (10,687)
Cash and cash equivalents at beginning of period 5,842 13,067
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Cash and cash equivalents at end of period $ 575 $ 2,380
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-------- -------
Supplemental disclosures of cash flow information:
Cash paid during the period for
Interest $ 1,864 $ 1,220
Income taxes 1,337 494
The accompanying notes are an integral part of these statements.
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G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - General Discussion
The results for the nine month period ended October 31, 1998 are not necessarily
indicative of the results expected for the entire fiscal year. The accompanying
financial statements included herein are unaudited. In the opinion of
management, all adjustments (consisting of only normal recurring adjustments)
necessary for a fair presentation of the financial position, results of
operations and cash flows for the interim periods presented have been reflected.
Certain reclassifications have been made to conform to the 1998 presentation.
During the quarter ended July 31, 1997, a newly formed subsidiary, BET Design
Studio, LLC commenced operations. The Company owns 50.1% of the subsidiary, and
accordingly consolidates its results from its startup date in May 1997.
The accompanying financial statements should be read in conjunction with the
financial statements and notes included in the Company's Form 10K filed with the
Securities and Exchange Commission for the year ended January 31, 1998.
Note 2 - Inventories
October 31, January 31,
1998 1998
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Inventories consist of: (in thousands)
Finished products $ 23,940 $ 14,137
Work-in-process 120 1
Raw materials 3,008 6,094
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$ 27,068 $ 20,232
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Note 3 - Income Per Common Share
As of January 31, 1998, the Company adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share." This
statement establishes new standards for computing and presenting earnings per
share ("EPS") and applies to entities with publicly held common stock or
potential common stock. This statement replaces the presentation of primary EPS
with a presentation of basic EPS. It requires dual presentation of basic and
diluted EPS on the face of the statement of operations for all entities with
complex capital structures and requires a reconciliation of the numerators and
denominators of the basic and diluted EPS computations. This statement also
requires a restatement of all prior period EPS data presented.
Basic earnings per share amounts have been computed using the weighted average
number of common shares outstanding during each year. Diluted earnings per share
amounts have been computed using the weighted average number of common shares
and the dilutive potential common shares outstanding during the year. All prior
year amounts have been restated to conform to the new presentation.
-7-
Note 4 - Notes Payable
The Company's loan agreement, which expires on May 31, 1999, was amended during
the quarter ended July 31, 1998. The original agreement provided for a maximum
line of credit that ranged from $40 million to $56 million at specific dates
during the term. The amendments increased the maximum line of credit to amounts
that range from $40 million to $63.5 million during the same loan term.
The amended line of credit increased maximum direct borrowings from a range of
$30 million to $44 million to a range of $30 million to $50 million. The balance
of the credit line may be used for letters of credit. All amounts available for
borrowing are subject to borrowing base formulas and overadvances specified in
the agreement.
Note 5 - Nonrecurring Charges
Included in non-recurring charges recorded in December 1994 was approximately
$2.0 million to sell or liquidate a factory located in Indonesia. During the
year ended January 31, 1998, the Company applied approximately $1.6 million of
the reserve as a reduction of the Indonesian property, plant and equipment,
since the Company cannot assure any recoveries in connection with its
disposition. In December 1997, the factory contracted to manufacture luggage,
and as a result, the Company has since discontinued its plan to sell or
liquidate the factory. However, due to the political and economic instability
being experienced in Indonesia, management determined that the remaining
nonrecurring balance with respect to its Indonesian assets should be maintained.
The remaining nonrecurring balance of $418,000 relates to the reserve associated
with the closure of the Company's domestic factory that was completed by January
31, 1995. Based on current estimates, management believes that existing accruals
are adequate. Other long-term liabilities include $235,000 and $397,000 of
nonrecurring charges at October 31, 1998 and January 31, 1998, respectively.
The status of the provision at the end of the period was:
Balance 1998 Balance
January 31, 1998 Activity October 31, 1998
---------------- -------- ----------------
(in thousands)
Closure of Domestic Facility $ 473 $ ( 55) $ 418
Uncertainty of Indonesian Assets 462 - 462
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$ 935 $ ( 55) $ 880
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Note 6 - Comprehensive Income
As of February 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" (SFAS 130). The adoption of
this Statement had no impact on the Company's net income or stockholders'
equity. This pronouncement sets forth requirements for disclosure of the
Company's comprehensive income and accumulated other comprehensive items.
Comprehensive income is defined as the change in equity during a period from
transactions in other events and circumstances unrelated to net income (e.g.,
foreign currency translation gains and losses). For the three and nine month
periods ended October 31, 1998 and 1997, other comprehensive income was not
material.
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Statements in this Quarterly Report on Form 10-Q concerning the Company's
business outlook or future economic performance; anticipated revenues, expenses
or other financial items; product introductions and plans and objectives related
thereto; and statements concerning assumptions made or expectations as to any
future events, conditions, performance or other matter, are "forward-looking
statements" as that term is defined under the Federal securities laws.
Forward-looking statements are subject to risks, uncertainties and other factors
which could cause actual results to differ materially from those stated in such
statements. Such risks, uncertainties and factors include, but are not limited
to, reliance on foreign manufacturers, the nature of the apparel industry,
including changing consumer demand and tastes, seasonality, customer acceptance
of new products, the impact of competitive products and pricing, dependence on
existing management, general economic conditions, as well as other risks
detailed in the Company's filings with the Securities and Exchange Commission,
including this Quarterly Report on Form 10-Q.
Results of Operations
Net sales were adversely affected in the three and nine month periods ended
October 31, 1998 by the unseasonably warm weather conditions in the fall of 1998
in many sections of the United States. Net sales for the three months ended
October 31, 1998 were $61.2 million compared to $61.1 million in the same period
last year. An increase in sales of licensed apparel ($4.6 million) was offset by
a decrease in sales of non-licensed apparel ($3.8 million). For the nine months
ended October 31, 1998, net sales were $101.9 million compared to $100.8 million
for the same period in the prior year. During the nine month period an increase
in sales of licensed apparel ($12.8 million) was partially offset by a decrease
in sales of non-licensed apparel ($9.1 million). In addition, certain product
lines were discontinued at the end of the prior fiscal year. These product lines
accounted for net sales of $765,000 and $2.4 million in the three and nine
months ended October 31, 1997, respectively. It is the Company's strategy to
increase its sales of licensed apparel as a percentage of net sales. Sales of
licensed apparel accounted for 36.3% and 35.9%, respectively, of net sales in
the three and nine month periods ended October 31, 1998 compared to 28.8% and
23.6%, respectively, in the comparable periods in the prior year.
Gross profit was $15.3 million for the three months ended October 31, 1998,
compared to $15.9 million in the same period last year. Gross profit as a
percentage of net sales was 24.9% for the three months ended October 31, 1998
compared to 26.1% for the same period last year. For the nine month period ended
October 31, 1998, gross profit was $24.4 million, or 23.9% of net sales,
compared to $27.4 million, or 27.2% of net sales, for the same period last year.
The reduction in gross profit as a percentage of net sales in the three month
period primarily resulted from lower fee commission income with respect to
Women's non-licensed apparel and increased inventory markdowns, which were
partially offset by higher gross profit margins with respect to sales of
licensed apparel. The reduction in gross profit as a percentage of net sales in
the nine month period primarily resulted from lower fee commission income with
respect to Women's non-licensed apparel, partially offset by higher gross profit
margins with respect to sales of licensed apparel.
Selling, general and administrative expenses for the three months ended October
31, 1998 were $7.2 million compared to $6.4 million in the three months ended
October 31, 1997. BET Design Studio, which commenced operations in May 1997,
incurred expenses of $987,000, representing a $715,000 increase over the same
period in the prior year. Excluding BET Design Studio expenses, selling, general
and administrative expenses were 10.2% of net sales in the three months ended
October 31, 1998 compared to 10.0% in the same period last year.
-9-
For the nine month period ended October 31, 1998, selling, general and
administrative expenses were $20.3 million compared to $18.7 million for the
same period last year. BET Design Studio incurred expenses of $2.1 million in
the nine months ended October 31, 1998, an increase of $1.6 million over the
same period in the prior year. Excluding BET Design Studio expenses, selling,
general and administrative expenses were 17.9% of net sales in the nine months
ended October 31, 1998 compared to 18.0% in the same period in the prior year.
BET Design Studio expenses increased primarily in the areas of personnel and
advertising, as staffing levels increased and advertising programs began. The
BET Design Studio expenses allocable to the other shareholder (approximately
one-half of these expenses) are reflected in "Minority interest in loss of joint
venture".
Interest expense and finance charges for the three months ended October 31, 1998
were $1.1 million compared to $679,000 in the comparable period last year. For
the nine months ended October 31, 1998, interest expense was $1.9 million
compared to $1.2 million in the same period in the prior year. The higher
interest expense relates to increased borrowings as a result of purchasing
increased amounts of raw materials at favorable prices, and higher finished
goods inventory levels.
Income taxes of $2.9 million reflect an effective tax rate of 40% for the three
months ended October 31, 1998 compared to income taxes of $3.4 million
(effective tax rate of 37%) in the comparable period in the prior year. For the
nine months ended October 31, 1998, income taxes of $1.2 million also reflects
an effective tax rate of 40%, compared to income taxes of $2.8 million
(effective tax rate of 37%) in the comparable period last year.
As a result of the foregoing, for the three months ended October 31, 1998 the
Company had net income of $4.4 million, or $0.66 per diluted share, compared to
net income of $5.7 million, or $0.80 per diluted share, for the comparable
period in the prior year. For the nine months ended October 31, 1998, the
Company had net income of $1.9 million, or $0.27 per share, compared to net
income of $4.9 million, or $0.69 per share, for the same period in the prior
year.
Liquidity and Capital Resources
The Company's loan agreement, which expires on May 31, 1999, provides for a
maximum line of credit in amounts that range from $40 million to $63.5 million
at specific dates during the loan term. The line of credit provides for maximum
direct borrowings ranging from $30 million to $50 million. The balance of the
credit line may be used for letters of credit. All amounts available for
borrowing are subject to borrowing base formulas and overadvances specified in
the agreement.
Direct borrowings bear interest at the agent's prime rate (7.75% as of December
1, 1998) or LIBOR plus 250 basis points, at the election of the Company. All
borrowings are collateralized by the assets of the Company. The loan agreement
includes covenants that require the Company to maintain certain earnings and
tangible net worth levels, and prohibits the payment of cash dividends. As of
October 31, 1998, there were $11.9 million in direct borrowings and
approximately $2.3 million of contingent liability under open letters of credit.
The amount borrowed under the line of credit varies based upon the Company's
seasonal requirements.
-10-
In February 1997, the Company formed a joint venture with Black Entertainment
Television (BET) to provide a BET-branded clothing and accessory line. The joint
venture agreement provides for the Company and BET each to make an initial
capital contribution in the amount of $1.0 million. In addition, the agreement
provides for the Company and BET each to make an additional capital contribution
of up to $1.0 million. As of October 31, 1998, BET and the Company have each
contributed $1.0 million to this joint venture. During November 1998, BET and
the Company each contributed an additional $500,000 to this joint venture. The
joint venture has negotiated an asset-based credit facility with The CIT Group.
To support the requirement for overadvances which occur when the available
collateral is not sufficient to support the level of direct bank debt and
letters of credit opened to pay for product, both partners have opened stand-by
letters of credit in the amount of $750,000 under which The CIT Group is the
beneficiary. As of October 31, 1998, there was $1.5 million in direct debt
outstanding under this CIT Group credit facility.
The Company's wholly-owned Indonesian subsidiary has a line of credit with a
bank which was partially supported by a $2.0 million stand-by letter of credit
issued under the Company's loan agreement. On May 12, 1998, the Company paid
down the $2.0 million stand-by letter of credit, reducing the factory's credit
line to $1.5 million. As of October 31, 1998, the borrowing by the Indonesian
subsidiary under its line of credit approximated $1.5 million.
Year 2000 Compliance
The Company believes that advanced information processing is essential to
maintaining its competitive position. The Company participates in the electronic
data interchange program maintained by many of its larger customers, including
Federated Department Stores, Wal-Mart, and Daytons. This program allows the
Company to receive customer orders, provide advanced shipping notices, monitor
store inventory and track orders on-line from the time such orders are placed
through delivery. The Company is also able to notify certain of its customers'
warehouses in advance as to shipments.
The Company has a formal year 2000 compliance schedule that addresses the
Company's IT systems. The Company completed an upgrade of its accounting systems
in July 1998, to ensure proper processing of transactions relating to the year
2000 and beyond. In addition, the Company is currently evaluating its other
management information systems, such as manufacturing and distribution system,
microcomputers, telephones and fax machines, and have set forth plans to
upgrade, modify or replace such equipment. The Company continues to evaluate
appropriate courses of corrective actions, including replacement of certain
systems. The Company expects to complete this process and be year 2000 compliant
by mid 1999.
The Company does not expect the costs associated with ensuring year 2000
compliance to have a material effect on its financial position or results of
operations. All costs associated with year 2000 compliance are being funded with
working capital and are being expensed as incurred. The Company currently
estimates that it will expend approximately $200,000 to $300,000 to complete its
year 2000 compliance.
-11-
The Company has taken steps to determine if its major customers and suppliers
are year 2000 compliant and is in process of establishing a contingency plan in
the event that these suppliers and vendors are not year 2000 compliant. The
Company has requested written confirmation from its customers and suppliers as
to their year 2000 compliance status.
Although the Company believes that the information systems of its major
customers and vendors (insofar as they relate to the Company's business) comply
with year 2000 requirements, there can be no assurance that the year 2000 issue
will not affect the information systems of such customers and vendors as they
relate to the Company's business, or that any such impact on such customers' and
vendors/ information systems would not have a material adverse effect on the
Company's business, financial condition or results of operations.
Effect of Recently Issued Accounting Pronouncements
Segment Information
In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information," which will be effective with the Company's
financial statements for the fiscal year ending January 31, 1999. This statement
establishes standards for reporting information about segments in annual and
interim financial statements. This statement introduces a new model for segment
reporting, called the "management approach." The management approach is based on
the way the chief operating decision-maker organizes segments within a Company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure and management
structure. The Company does not believe that this statement will have a
significant impact on the consolidated financial statements.
Part II OTHER INFORMATION
Exhibit 10 Letter Agreement dated October 31, 1998 between the Registrant and
Alan Feller
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
G-III APPAREL GROUP, LTD.
(Registrant)
Date: December 15, 1998 By: /s/ Morris Goldfarb
---------------------------
Morris Goldfarb
Chief Executive Officer
Date: December 15, 1998 By: /s/ Wayne S. Miller
---------------------------
Wayne S. Miller
Chief Financial Officer
-13-
October 31, 1998
Mr. Alan Feller
50 Frost Avenue
East Brunswick, NJ 08816
Re: Letter Agreement and Release
Dear Alan:
This letter will confirm the agreement between you and G-III Apparel
Group, Ltd. (the "Company") regarding the ending of your employment at the
Company effective October 31,1998.
Effective October 31, 1998 you are resigning as an officer of the
Company and each of its subsidiaries and affiliates. In addition, your
employment will cease at that time. You will be paid salary through the
termination date, and will receive unused vacation pay.
In accordance with the terms of paragraph three of the letter
agreement, dated December 1,1989, between the Company and you and your
discussions with the Company, the Company will pay you at the rate of $230,000
per year, less required deductions, for a period of up to one year commencing
with your termination date. Payments will be made in equal amounts on the usual
pay days of the Company.
In return for your full and complete release of all claims, which
is set forth below, the Company agrees to retain you as a consultant for a
period (the "Consulting Period") of one year from your termination date. As
compensation for your consulting services, the Company agrees to continue your
medical coverage and participation in the Company's 401K Plan during the
Consulting Period on the same basis as if you were a full time employee. In your
role as a consultant, the Company may call you from time to time with respect to
various aspects of the Company's affairs with which you have had prior
involvement. During the Consulting Period you will be deemed to be providing
services for all purposes under your existing stock option agreements.
OCTOBER 31, 1998
Page 2
By entering into this Agreement, you waive any claim to reinstatement
and/or future employment with the Company or any present or future affiliate or
subsidiary.
In consideration of the benefits offered above, you hereby agree to
release and discharge the Company, its subsidiaries and affiliated entities, and
its or their officers, directors, employees, and agents (collectively, the
"Released Parties") from any and all claims, causes of action and demands of any
kind, arising at law or in equity, whether known or unknown, which you have,
ever have had, and ever in the future may have, against any of them, arising up
to and including the date you sign this Agreement, including, but not limited
to, claims arising out of your employment relationship with the Company or the
termination thereof under any contract, tort, federal, state or local fair
employment practices or civil rights law including, but not limited to, Title
VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities
Act, the Age Discrimination in Employment Act, the Employee Retirement Income
Security Act of 1974, the New York Human Rights Law, the New York City Human
Rights Law, or any claim for physical or emotional distress or injuries, or any
other duty or obligation of any kind or description. This release shall apply to
all known, unknown, unsuspected and unanticipated claims, liens, injuries and
damages including, but not limited to, claims of employment discrimination,
indemnity or discharge, or claims sounding in tort or in contract, express or
implied as of the date of the execution of this Agreement. Except to enforce the
provisions of this Letter Agreement and Release, you agree not to initiate any
legal action, charge or complaint against any of the Released Parties in any
forum whatsoever to the extent that such legal action, charge or complaint would
relate to the matters covered or contemplated by this Agreement or which is
based on events which took place prior to the date of execution hereof or claims
existing as of the date of execution hereof. In the event any such actions,
charges or complaints are asserted in the future by or on behalf of you, a
breach of this Agreement shall be deemed to have occurred, entitling the
Company, in addition to any other remedies available at law or in equity, to
return of all consideration paid pursuant to this Agreement, and the attorneys
fees incurred by the Released Parties in defending such action, charge or
complaint. This Release shall not affect your rights or obligations under the
terms of any pension plan in which you have an interest with the Company.
Except as set forth in this Agreement, you acknowledge that upon
signing this Agreement all past, present or future obligations of the Company,
with respect to your compensation, bonuses, vacation, leave and other benefits
have been totally satisfied and fulfilled, and that the benefits received under
this Agreement exceed all such obligations.
You agree that you will not disparage or criticize the Company, its
affiliates or its or their officers, directors, members and employees.
OCTOBER 31, 1998
Page 3
You hereby acknowledge that you have been provided an opportunity to
consult with an attorney or other advisor of your choice regarding the terms of
this Agreement, that you have been given 21 days in which to consider whether
you wish to enter into this Agreement, and that you have elected to enter into
this Agreement knowingly and voluntarily. You further acknowledge that you may
revoke your assent to this Agreement within seven (7) days of its execution by
you. If you wish to revoke your agreement, your written notice of revocation
must be received within the seven (7) day revocation period by the Company,
attention Mr. Wayne S. Miller, at its address. The payments to be provided
hereunder will not be made until after the expiration of the revocation period.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to its conflicts of law
provisions. This Agreement may not be changed except by a writing signed by the
parties hereto.
Notwithstanding any other provision contained herein, the obligation
assumed by the Company under this Agreement shall be conditioned upon its
receipt of an executed duplicate original of this Letter Agreement and complete
adherence to its terms by you.
If you agree to the foregoing terms, please sign and return to us the
enclosed copy of this letter, which will then be a binding Agreement between us.
Very truly yours,
G-III Apparel Group, Ltd.
By: /s/ Wayne S. Miller
-------------------
Chief Financial Officer
Agreed to November 7, 1998
/s/ Alan Feller
5
1,000
JAN-31-1999
FEB-1-1998
OCT-31-1998
9-MOS
575
0
45,093
(2,571)
27,068
71,476
13,102
(9,164)
79,748
41,565
0
65
0
0
37,567
79,748
101,902
101,902
77,543
77,543
0
0
1,949
3,154
1,248
1,906
0
0
0
1,906
0.29
0.27
5
1,000
JAN-31-1998
FEB-1-1997
OCT-31-1997
9-MOS
2,380
0
35,810
(3,327)
23,424
59,226
10,782
(7,611)
66,771
27,915
0
65
0
0
37,640
66,771
100,765
100,765
73,401
73,401
0
0
1,245
7,691
2,839
4,852
0
0
0
4,852
0.75
0.69
