DEF 14A 1 t1400783-proxy.htm DEFINITIVE PROXY STATEMENT
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   
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  • Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  • Definitive Proxy Statement
  • Definitive Additional Materials
  • Soliciting Material Pursuant to § 240.14a-12
G-III APPAREL GROUP, LTD.
 
(Name of Registrant as Specified In Its Charter)
   
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of G-III Apparel Group, Ltd. to be held on Tuesday, June 10, 2014 at 10:00 a.m., New York time, at the offices of Norton Rose Fulbright, 666 Fifth Avenue, 33rd Floor, New York, New York 10103.
The formal Notice of Meeting and the accompanying Proxy Statement set forth proposals for your consideration this year. You are being asked (i) to elect eleven directors to serve on our Board of Directors for the ensuing year, (ii) to approve the proposed amendments to the performance-based bonus provision in the Employment Agreement with Morris Goldfarb, (iii) to approve the proposed amendments to the performance-based bonus provision in the Employment Agreement with Sammy Aaron, (iv) for an advisory and non-binding vote on the compensation of our named executive officers and (v) to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2015. At the meeting, we will also report on the affairs of G-III, and a discussion period will be provided for questions and comments of general interest to stockholders.
We look forward to greeting personally those of you who are able to be present at the meeting. However, whether or not you are able to be with us at the meeting, it is important that your shares be represented. Accordingly, you are requested to sign, date and mail, at your earliest convenience, the enclosed proxy in the envelope provided for your use.
Thank you for your cooperation.
Very truly yours,
[MISSING IMAGE: sg_morris-goldfarb.jpg]
MORRIS GOLDFARB
Chief Executive Officer
May 5, 2014 

G-III APPAREL GROUP, LTD.
512 Seventh Avenue
New York, New York 10018
 
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
and
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS
 
June 10, 2014
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of G-III Apparel Group, Ltd. will be held on Tuesday, June 10, 2014 at 10:00 a.m., New York time, at the offices of Norton Rose Fulbright, 666 Fifth Avenue, 33rd Floor, New York, New York 10103, for the following purposes:
1.
  • To elect eleven directors to serve on our Board of Directors for the ensuing year.
2.
  • To approve the proposed amendments to the performance-based bonus provision in the Employment Agreement with Morris Goldfarb.
3.
  • To approve the proposed amendments to the performance-based bonus provision in the Employment Agreement with Sammy Aaron.
4.
  • To hold an advisory and non-binding vote on the compensation of our named executive officers.
5.
  • To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2015.
6.
  • To transact such other business as may properly come before the Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 28, 2014 will be entitled to notice of and to vote at the Annual Meeting or any adjournment thereof.
All stockholders are cordially invited to attend the Annual Meeting in person. However, whether or not you plan to attend the Annual Meeting in person, each stockholder is urged to complete, date and sign the enclosed form of proxy and return it promptly in the envelope provided. No postage is required if the proxy is mailed in the United States. Stockholders who attend the Annual Meeting may revoke their proxies and vote their shares in person.
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to be Held on June 10, 2014
The Proxy Statement and our 2014 Annual Report to Stockholders are available in the “Investor Relations” section of our website at http:/​/​www.g-iii.com.
By Order of the Board of Directors
[MISSING IMAGE: sg_wayne-miller.jpg]
WAYNE S. MILLER
Secretary
New York, New York
May 5, 2014

G-III APPAREL GROUP, LTD.
512 Seventh Avenue
New York, New York 10018
 
PROXY STATEMENT
GENERAL INFORMATION
General
This Proxy Statement (first mailed to stockholders on or about May 5, 2014) is furnished to the holders of common stock, par value $.01 per share (the “Common Stock”), of G-III Apparel Group, Ltd. (“G-III”) in connection with the solicitation by our Board of Directors of proxies for use at the Annual Meeting of Stockholders (the “Annual Meeting”), or at any adjournment thereof, pursuant to the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will be held on Tuesday, June 10, 2014, at 10:00 a.m., New York time, at the offices of Norton Rose Fulbright, 666 Fifth Avenue, 33rd Floor, New York, New York 10103.
It is proposed that at the Annual Meeting: we (i) elect eleven directors to serve on our Board of Directors for the ensuing year, (ii) to approve the proposed amendments to the performance-based bonus provision in the Employment Agreement with Morris Goldfarb, (iii) to approve the proposed amendments to the performance-based bonus provision in the Employment Agreement with Sammy Aaron, (iv) hold an advisory and non-binding vote on the compensation of our named executive officers and (v) ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2015.
Management currently is not aware of any other matters that will come before the Annual Meeting. If any other matters properly come before the Annual Meeting, the persons designated as proxies intend to vote in accordance with their best judgment on such matters. Proxies for use at the Annual Meeting are being solicited by our Board of Directors. Proxies will be solicited chiefly by mail; however, certain of our officers, directors, employees and agents, none of whom will receive additional compensation therefor, may solicit proxies by telephone or other personal contact. We will bear the cost of the solicitation of the proxies, including postage, printing and handling, and will reimburse the reasonable expenses of brokerage firms and others for forwarding material to beneficial owners of shares of Common Stock.
Revocability and Voting of Proxy
A form of proxy for use at the Annual Meeting and a return envelope for the proxy are enclosed. Stockholders may revoke the authority granted by their execution of a proxy at any time prior to the effective exercise of the powers conferred by that proxy, by filing with the Secretary of G-III a written notice of revocation or a duly executed proxy bearing a later date, or by voting in person at the Annual Meeting.
Shares of Common Stock represented by executed and unrevoked proxies will be voted in accordance with the instructions specified in such proxies. If no specifications are given, the proxies intend to vote the shares represented thereby “for” the election of each of the eleven nominees for director as shown on the form of proxy, “for” approval of the proposed amendments to the performance-based bonus provision in the employment agreement with Morris Goldfarb, “for” approval of the proposed amendments to the performance-based bonus provision in the amended employment agreement with Sammy Aaron, “for” approval of the compensation of our named executive officers, and “for” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2015 and in accordance with their best judgment on any other matters which may properly come before the meeting.
Record Date and Voting Rights
On April 28, 2014, there were 20,541,266 shares of Common Stock outstanding (excluding shares held in treasury). Each of these shares is entitled to one vote upon each of the matters to be presented at the Annual Meeting. Only stockholders of record at the close of business on April 28, 2014 are entitled to

notice of and to vote at the Annual Meeting or any adjournment thereof. The holders of a majority of the outstanding shares of Common Stock, present in person or by proxy and entitled to vote, will constitute a quorum at the Annual Meeting. Abstentions and broker non-votes will be counted for purposes of determining the presence or absence of a quorum, but will not be counted with respect to the specific matter being voted upon.
“Broker non-votes” are shares held by brokers or nominees which are present in person or represented by proxy, but which are not voted on a particular matter because instructions have not been received from the beneficial owner. Under the applicable Delaware law, the effect of broker non-votes on a particular matter depends on whether the matter is one as to which the broker or nominee has discretionary voting authority under the applicable rules of the New York Stock Exchange. Under current New York Stock Exchange rules, brokers have discretionary authority to vote on the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2015, but are prohibited from voting on the election of the eleven nominees for director, the approval of the proposed amendments to the performance-based bonus provision in the employment agreement with Morris Goldfarb, the approval of the proposed amendments to the performance-based bonus provision in the employment agreement with Sammy Aaron or the approval of the compensation of our named executive officers, unless you provide instructions to that firm by voting your proxy.
The affirmative vote of the holders of a plurality of the shares of Common Stock present in person or represented by proxy and entitled to vote at the Annual Meeting is required for the election of directors. The other matters to be voted on will be decided by the affirmative vote of the holders of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote at the Annual Meeting.

PROXY SUMMARY
About G-III
Since our IPO in 1989, G-III has transformed from a small, exclusively leather apparel manufacturer with net sales of $98.8 million and net income of $5.9 million into the large diversified apparel and retail company we are today, with net sales of $1.72 billion and net income of $77.4 million. This transformation is due to the strategic vision, flexibility, ingenuity, management skills and strong personal relationships maintained by our entire leadership team, under the guidance of Morris Goldfarb, our Chairman, Chief Executive Officer and President. We view our management team as critical to our development and essential to our continued success in the future. The apparel business is a challenging one, and many of our early competitors did not survive, underscoring the importance of the long-term vision and execution of Mr. Goldfarb. In light of the growth in stockholder returns attributable to Mr. Goldfarb’s vision and the execution by our management team, we have included a brief description of our business and financial and stock market performance below.
G-III today capitalizes on the following competitive strengths to achieve our goal of creating an all-season diversified apparel company:
  • Broad portfolio of recognized brands.   We have built a broad and deep portfolio of over 40 licensed and proprietary brands. We believe we are a licensee of choice for well-known brands, as demonstrated by our partnerships with such brands as Calvin Klein, Guess, Kenneth Cole, Tommy Hilfiger, Cole Haan, Dockers and Levi’s, that have built a loyal following of both fashion-conscious consumers and retailers who desire high quality, well designed products. In addition to our licensed brands, we own several successful proprietary brands, including Vilebrequin, Bass, G.H. Bass, Andrew Marc, Marc New York and Eliza J;
  • Diversified distribution base.   We market our products across multiple channels of distribution, including a cross section of retailers such as Macy’s, Bloomingdale’s, Nordstrom, Saks Fifth Avenue, Lord & Taylor, The Bon-Ton Stores, Dillards, JC Penney, TJX and Ross and membership clubs such as Costco and Sam’s Club. Our Wilsons and Andrew Marc outlet stores provide an additional distribution network for our products. We distribute our Vilebrequin products through a network of company owned and franchised specialty retail stores and shops, as well as through select wholesale distribution, and distribute our Bass and G.H. Bass products through our outlet stores and through licensees;
  • Superior design,   sourcing and quality control. Our in-house design and merchandising team designs substantially all of our licensed, proprietary and private label products. We have developed a network of worldwide suppliers that allows us to negotiate competitive terms without relying on any single vendor. In addition, we employ a quality control team and a sourcing group in China to ensure the quality of our products. Our acquisition of Vilebrequin added experienced design capability and additional sourcing resources in Europe; and
  • Significant growth.   Our annual net sales have grown from $215 million in our fiscal year ended January 31, 2005 to $1.72 billion in our fiscal year ended January 31, 2014, a record for us. Our growth is the result of execution by our management team, strategic acquisitions such as the acquisition of the G.H. Bass & Co. business in November 2013, the addition of numerous new license agreements such as license agreements for Tommy Hilfiger women’s outerwear and Calvin Klein men’s and women’s swimwear in fiscal 2014 and the expansion and diversification of our product categories and channels of distribution.
We believe that our current position of leadership within the industry is in large part due to the involvement of Mr. Goldfarb and the rest of our management team in our business. G-III has continuously evolved over the years.
  • We were one of the first companies in the industry to identify the importance of overseas production and were instrumental in the technological developments which further reduced

manufacturing costs. We were also among the first to license nationally recognized brands for a variety of classifications. G-III has been transformed from an exclusively leather, mostly private label manufacturer of outerwear, to a diversified provider of differentiated apparel products.
  • Under Mr. Goldfarb’s leadership, we were also quick to recognize the importance of licensing major names as a way to better serve the markets in which we compete. Towards this end, we have built a strong portfolio of licensed brands including:
  • Licenses with Calvin Klein, Guess, Kenneth Cole, Tommy Hilfiger, Cole Haan, Dockers and Levi’s, among others;
  • Team logo wear for the NFL, MLB, NHL, NBA and college teams, including both coats and knits, which is an expanding portion of our business; and
  • Our recent launch of Ivanka Trump apparel, a brand we believe has strong growth potential.
  • Our management team also recognized the importance of owning our own proprietary brands, which led to acquisitions such as Andrew Marc in 2008, Vilebrequin in 2012 and G.H. Bass & Co. in 2013. These acquisitions have given us greater control over the design, manufacture and distribution of our products.
  • To diversify our revenue stream and mitigate the seasonality of the outerwear business, we have continuously expanded our product line:
  • Since the creation of our dress business in 2006, we have evolved into one of the largest dress manufacturers in the United States.
  • From our outerwear base, we began producing sportswear, women’s suits, women’s performancewear and swimwear, in addition to dresses.
  • As a result of our acquisition of the G.H. Bass & Co. business in 2013, we now produce footwear, including the iconic original penny loafer, known as “Weejuns.”
  • Beyond apparel, we also produce luggage, women’s handbags, small leather goods and cold weather accessories.
  • Our management recognized the growing importance of the status goods market, which culminated in our purchase of Vilebrequin in 2012. Our acquisition of Vilebrequin gave us a foothold in the high-margin, status market, and we are executing a strategic plan to grow the brand into a men’s and women’s lifestyle brand with an expanded retail presence and a revamped web site.
  • Following our identification of the importance of leveraging retail distribution as a way to mitigate risks associated with design and product decisions, move excess inventory and serve as a testing ground for new product designs, we acquired and successfully integrated the Wilson’s Leather retail outlets. We subsequently expanded our retail operations to include stores operated under our own Andrew Marc and Vilebrequin brands and our licensed Calvin Klein Performance brand. In November 2013, we acquired G.H. Bass & Co. and added their chain of outlet stores to our portfolio. As of January 31, 2014, we operated 426 retail stores, of which 165 are operated under the Wilsons Leather name, 156 are operated under the G.H. Bass name, 5 are operated under our Andrew Marc brand and 70 are Vilebrequin retail stores.
Furthermore, we believe the leadership provided by Mr. Goldfarb and the rest of our management team has been instrumental in ensuring that G-III is well-managed and well-positioned for the long-term, which has contributed to our ability to deliver strong results to our stockholders.
  • We have successfully recruited and retained a strong team of seasoned managers. Our ability to minimize turnover, particularly within our senior ranks, has provided our company with continuity and a long-term perspective.
  • We have built an in-house design and merchandising team which designs substantially all of our licensed, proprietary and private label products. We believe that this creative design team, coupled with our sourcing expertise, gives us an advantage in product development. These factors are

important differentiators from our competition, and we believe we have developed a significant customer following and positive reputation in the industry as a result of our design capabilities, sourcing expertise, on-time delivery and high standards of quality control.
  • Our broad distribution platform and ability to adapt quickly to changes in the retail environment through our internal design, sourcing and manufacturing capabilities, have made us an important resource for our retail partners, which we believe has enhanced our standing as a licensee and supplier of choice.
  • We are prudently financed. In August 2012, concurrent with our acquisition of Vilebrequin, we entered into a secured credit agreement with a group of lenders led by JPMorgan Chase Bank. The credit agreement is a five year senior secured credit facility providing for borrowings in the aggregate principal amount of up to $450,000,000. We believe that cash on hand and from operations, together with funds available from our credit agreement, are sufficient to meet our expected operating and capital expenditure requirements. This credit agreement and cash generated from operations allowed us to finance the acquisitions of Vilebrequin and G.H. Bass & Co.
Revisions to Compensation and Corporate Governance Programs
Our Compensation Committee, with the assistance of Steven Hall & Partners, a nationally recognized independent compensation consultancy, has worked hard to ensure that our compensation and corporate governance programs support our short- and long-term strategic objectives, are responsive to concerns raised by our stockholders and are reflective of best practices. We were pleased that 79% of our stockholders voted in favor of our most recent Say on Pay proposal at our most recent annual meeting of stockholders.
During our fiscal year ended January 31, 2014 (“fiscal 2014”), our Compensation Committee, with the assistance of Steven Hall & Partners, completed a review of the G-III executive compensation and corporate governance programs and discussed these matters with our stockholders and stockholder advisory firms. During our meetings, stockholders indicated that they were very pleased with our financial performance, as well as with Morris Goldfarb’s leadership of our company. They also provided feedback on our executive compensation and governance programs.
We value this dialogue and modified our executive compensation and corporate governance programs in response to concerns raised by stockholders. To facilitate this process, and demonstrate their commitment to incorporating the views of stockholders into the compensation and corporate governance programs of G-III, in fiscal 2014, Morris Goldfarb and Sammy Aaron voluntarily agreed to modify the incentive compensation provisions in their respective employment agreements to impose higher performance thresholds as an annual incentive award condition and add a cap on incentive compensation.
As further demonstration of their commitment to this initiative, in fiscal 2015, Morris Goldfarb and Sammy Aaron have agreed to further modifications to their annual incentive compensation arrangements. It is important to note that these modifications to their contractual rights were made voluntarily, and that neither executive was obligated to make these changes. The proposed modifications are described in “Compensation Discussion and Analysis” under “Revised Incentive Arrangements for Mr. Goldfarb” and “Revised Incentive Arrangements for Mr. Aaron” and are subject to approval by our stockholders as described in Proposal No. 2-Approval of Proposed Amendments to the Performance-Based Bonus Provision in the Employment Agreement with Morris Goldfarb and Proposal No. 3- Approval of Proposed Amendments to the Performance-Based Bonus Provision in the Employment Agreement with Sammy Aaron.
Our actions are summarized below and a more complete description of the various compensation and corporate governance programs we have in place is included in the “Corporate Governance” and “Compensation Discussion and Analysis” sections of this Proxy Statement.
We examined the design of our executive compensation program and took the following actions:
  • Increased the pre-tax income performance thresholds which must be met prior to payment of an annual cash incentive award to Morris Goldfarb and Sammy Aaron and instituted an annual cap on the amounts which they can earn pursuant to their annual incentive awards in fiscal 2014. As discussed in greater detail below, each of Mr. Goldfarb and Mr. Aaron have agreed to further modifications to their annual incentive compensation arrangements beginning with fiscal 2015.

  • Incorporated a second performance metric into the performance conditions required for earning our performance-based long-term equity incentive awards, beginning with the awards made in October 2012 and continuing with the awards made in October 2013.
Additional actions taken last year to address stockholder concerns included implementation of:
  • An Executive Incentive Compensation Recoupment Policy, or “clawback policy,” for executive officers;
  • An Anti-Hedging and Anti-Pledging Policy;
  • Stock Ownership Guidelines for executive officers and directors; and
  • An explicit prohibition of repricing and recycling of options and SARs.
Other actions taken to address corporate governance concerns included:
  • Our Board created a Lead Independent Director position and elected Richard White to serve as Lead Independent Director of the Board;
  • Morris Goldfarb agreed to limit his service to no more than two other public company boards, in addition to his service on G-III’s Board; and
  • We nominated Allen Sirkin to serve as a member of our Board and our stockholders elected him as a director at last year’s Annual Meeting. Mr. Sirkin is an experienced executive in the apparel industry and an additional independent director.
How Pay is Tied to Performance
Our compensation program is designed to ensure that the interests of our executive officers are aligned with those of our stockholders and, accordingly, the majority of compensation paid to our executive officers each year is based solely on the achievement of performance which we believe enhances the value of our stock. Our compensation program is designed to enhance stockholder value in the following ways:
  • The majority of compensation paid to our executives is variable and aligned with the short- and long-term performance of G-III;
  • Our annual incentive compensation structure is oriented towards bottom-line results, fosters an entrepreneurial environment and empowers management with the flexibility to quickly make decisions which are responsive to ever-changing market conditions, a hallmark of our business;
  • Our long-term incentive program aligns the interests of executive officers with those of our stockholders through the use of performance-vested restricted shares which are earned only upon the achievement of two performance metrics based on stock price appreciation and earnings after taxes or net income per share; and
  • We offer a competitive compensation program which enables us to attract and retain highly qualified managerial and executive talent necessary to achieve our objectives.

Over the last 15 years, we have delivered significant returns to our stockholders.
We have delivered exceptional returns to our stockholders over the past fifteen years. During this period from February 1, 1999 through January 31, 2014, our stock price has increased 3,473%, significantly out-performing the 39% increase in the S&P 500 and the 314% increase in the S&P Textile (Apparel) Index over the same period.
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Under the leadership of Morris Goldfarb, our Chairman, Chief Executive Officer and President, and a dedicated team of other executive officers, G-III has delivered top quartile performance in total stockholder return and growth in revenues, net income and market capitalization, demonstrating both our long-term orientation as well as our commitment to delivering top quartile results to stockholders, particularly with respect to total stockholder return.
TSR & Select Growth Measures — 1, 5, 10 & 15 Years
G-III vs. Pay & Practice Peers*
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*
  • Pay Peers include: Carter’s Inc.; Columbia Sportswear Co.; Crocs, Inc.; Deckers Outdoor Corp.; Kate Spade & Co. (formerly Fifth & Pacific Companies, Inc.); Lululemon Athletica, Inc.; Oxford Industries, Inc.; Perry Ellis International, Inc; Quiksilver, Inc.; Skechers USA, Inc.; Steven Madden, Ltd.; Under Armour, Inc.; and Wolverine World Wide, Inc. Practice Peers include: Guess?, Inc.; Jones Group, Inc. (The); PVH Corp.; Ralph Lauren Corp.; and VF Corp.
Note: All financial numbers sourced from Bloomberg to ensure comparability with peers. In instances where historical data is not available, company is excluded from the comparison. In instances where a growth calculation is not valid, the data point has been omitted from the analysis for that period only.
During Fiscal 2014, we delivered strong operational results and significant returns to our stockholders.
Business highlights include:
  • We grew sales by 23% to $1.72 billion, a record for us, with across-the-board strength in our business.
  • We increased net income per diluted share to $3.71, also a record for us, surpassing our plan and up 32% over last year.
  • In November 2013, we acquired G.H. Bass & Co., a powerful heritage footwear, apparel and accessories brand.
  • We added license agreements for Tommy Hilfiger women’s outerwear and Calvin Klein men’s and women’s swimwear.
  • We launched Ivanka Trump apparel, a brand we believe has strong growth potential.
  • We extended the terms of all of our Calvin Klein licenses through the end of 2023.
How Fiscal 2014 Performance Impacted Chief Executive Officer Compensation
Granted Versus Realized Pay in Fiscal 2014 — Our Pay For Performance Philosophy in Action
Because our long-term incentive compensation is based on a combination of earnings and stock price performance, the awards made in fiscal 2014 have not been earned. Our executives will receive these amounts only upon the satisfaction of the applicable performance goals and time vesting periods.
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Based on the information in this “Proxy Summary,“ as well as the more detailed information contained in “Compensation Discussion and Analysis,” our Board and our Compensation Committee strongly believe that our shareholders should vote “FOR” Proposal No. 4 — Advisory Vote on Compensation of our Named Executive Officers, commonly known as the “say on pay” proposal.

BENEFICIAL OWNERSHIP OF COMMON STOCK BY
CERTAIN STOCKHOLDERS AND MANAGEMENT
The following table sets forth information as of March 1, 2014 (except as otherwise noted in the footnotes) regarding the beneficial ownership of our Common Stock of: (i) each director; (ii) each person known by us to own beneficially more than five percent of our outstanding Common Stock; (iii) each executive officer named in the Summary Compensation Table; and (iv) all directors and executive officers as a group. Except as otherwise specified, the named beneficial owner has the sole voting and investment power over the shares listed. The percentage of ownership is based on 20,443,579 (excludes treasury shares) shares of Common Stock outstanding as of March 1, 2014 (except as otherwise noted in the footnotes). Unless otherwise indicated in the table below, each beneficial owner has an address in care of our principal executive offices at 512 Seventh Avenue, New York, New York 10018.
 
Name and Address of Beneficial Owner
Amount and Nature of
Beneficial Ownership of
Common Stock
Percentage of
Common Stock
Morris Goldfarb
2,459,614
(1)
12.00
%
Sammy Aaron
90,452
(2)
*
Thomas J. Brosig
P.O. Box 7096
Gulfport, MS 39503
400
(3)
*
Alan Feller
4,512
(4)
*
Jeffrey Goldfarb
127,608
(5)
*
Jeanette Nostra
10,768
(6)
*
Laura Pomerantz
12,000
(7)
*
Allen Sirkin
(8)
*
Willem van Bokhorst
Johan van Walbeeckplein 11
Curaçao
36,400
(9)
*
Cheryl Vitali
2,900
(10)
*
Richard White
29,310
(11)
*
FMR LLC(12)
82 Devonshire Street
Boston, MA 02109
2,987,550
14.65
%
Royce & Associates, LLC(13)
745 Fifth Avenue
New York, NY 10151
1,856,443
9.1
%
BlackRock, Inc.(14)
40 East 52nd Street
New York, NY 10022
1,542,554
7.6
%
Wayne S. Miller
12,500
(15)
*
Neal S. Nackman
12,209
(16)
*
All directors and executive officers as a group (13 persons)
2,798,673
(17)
13.60
%
 
*
  • Less than one percent
(1)
  • Includes (i) 108,375 shares of Common Stock held by Goldfarb Family Partners, L.L.C., of which Mr. Goldfarb is the sole Manager; (ii) 46,401 shares of Common Stock owned by The Morris and Arlene Goldfarb Family Foundation, Inc., of which Mr. Goldfarb is the President and Treasurer; (iii) 441,300 shares of Common Stock held by Morris and Arlene Goldfarb, as joint tenants; (iv) 14,833 shares of Common Stock owned by Arlene Goldfarb, Mr. Goldfarb’s wife; (v) 100,000 Common Shares held by The Morris Goldfarb 2012 Delaware Trust (Mr. Goldfarb serves as a member

of the Trust Committee of the Trust which directs the Trustee’s decisions as to voting and disposition of the Common Shares held in the Trust); (vi) 100,000 shares held by The Arlene Goldfarb 2012 Delaware Trust (Arlene Goldfarb, Mr. Goldfarb’s wife, serves as a member of the Trust Committee of the Trust, which directs the Trustee’s decisions as to voting and disposition of the shares held in the Trust); and (vii) 45,000 shares of Common Stock issuable upon vesting of restricted stock units within 60 days of March 1, 2014. In addition to the shares listed in the table, Mr. Goldfarb has the right to receive an aggregate of 212,500 shares pursuant to restricted stock unit awards for which performance conditions have been satisfied, subject to the satisfaction of required time vesting periods.
(2)
  • Includes 30,000 of shares of Common Stock issuable upon vesting of restricted stock units within 60 days of March 1, 2014. In addition to the shares listed in the table, Mr. Aaron has the right to receive an aggregate of 141,000 shares pursuant to restricted stock unit awards for which performance conditions have been satisfied, subject to the satisfaction of required time vesting periods.
(3)
  • In addition to the shares listed in the table, Mr. Brosig has the right to receive an aggregate of 4,800 shares pursuant to restricted stock unit awards, subject to the satisfaction of required time vesting periods.
(4)
  • Includes 500 shares of Common Stock issuable upon vesting of restricted stock units within 60 days of March 1, 2014. In addition to the shares listed in the table, Mr. Feller has the right to receive an aggregate of 4,800 shares pursuant to restricted stock unit awards, subject to the satisfaction of required time vesting periods.
(5)
  • Includes (i) 10,000 shares of Common Stock held by Jeffrey and Stacey Goldfarb, Mr. Goldfarb’s wife, as joint tenants; (ii) 12,448 shares of Common Stock owned by the Amanda Julie Goldfarb Trust 2007 of which Mr. Goldfarb and his wife are co-trustees; (iii) 1,100 shares of Common Stock owned by the Ryan Gabriel Goldfarb Trust 2009 of which Mr. Goldfarb and his wife are co-trustees; and (iv) 2,500 shares of Common Stock issuable upon vesting of restricted stock units within 60 days of March 1, 2014. In addition to the shares listed in the table, Mr. Goldfarb has the right to receive an aggregate of 37,500 shares pursuant to restricted stock unit awards for which performance conditions have been satisfied, subject to the satisfaction of required time vesting periods.
(6)
  • Includes of 5,000 shares of Common Stock issuable upon vesting of restricted stock units within 60 days of March 1, 2014. In addition to the shares listed in the table, Ms. Nostra has the right to receive an aggregate of 10,250 shares pursuant to restricted stock unit awards for which performance conditions have been satisfied, subject to the satisfaction of required time vesting periods.
(7)
  • Include 10,800 shares of common stock which may be acquired within 60 days of March 1, 2014 upon the exercise of options. In addition to the shares listed in the table, Ms. Pomerantz has the right to receive an aggregate of 4,800 shares pursuant to restricted stock unit awards, subject to the satisfaction of required time vesting periods.
(8)
  • Mr. Sirkin has the right to receive an aggregate of 4,000 shares pursuant to restricted stock unit awards, subject to the satisfaction of required time vesting periods.
(9)
  • Includes 16,200 shares of common stock which may be acquired within 60 days of March 1, 2014 upon the exercise of options. In addition to the shares listed in the table, Mr. van Bokhorst has the right to receive an aggregate of 4,800 shares pursuant to restricted stock unit awards, subject to the satisfaction of required time vesting periods.
(10)
  • In addition to the shares listed in the table, Ms. Vitali has the right to receive an aggregate of 5,400 shares pursuant to restricted stock unit awards, subject to the satisfaction of required time vesting periods.
(11)
  • Includes 6,000 shares of common stock which may be acquired within 60 days of March 1, 2014 upon the exercise of options and 500 shares of Common Stock issuable upon vesting of restricted stock units within 60 days of March 1, 2014. In addition to the shares listed in the table, Mr. White has the right to receive an aggregate of 5,800 shares pursuant to restricted stock unit awards, subject to the satisfaction of required time vesting periods.

(12)
  • Information is derived from the Schedule 13G filed by FMR LLC (“FMR”), Edward C. Johnson 3rd, Fidelity Management & Research Company (“Fidelity”) and Fidelity Variable Insurance Products Mid Cap Portfolio with the Securities and Exchange Commission on February 14, 2014. Fidelity is a registered investment adviser and subsidiary of FMR, and is the beneficial owner of 2,310,246 shares of Common Stock or 11.33% of the outstanding Common Stock. Edward C. Johnson 3rd and FMR, through its control of Fidelity, each has sole dispositive power with respect to 2,310,246 shares of Common Stock or 11.33% of the outstanding Common Stock as a result of acting as investment advisor to certain funds. Fidelity SelectCo, LLC (“SelectCo”), a wholly owned subsidiary of FMR and registered investment adviser, beneficially owns 573,344 shares of Common Stock or 2.81% of the outstanding Common Stock as a result of acting as investment advisor to certain funds. Edward C. Johnson 3d and FMR, through its control of SelectCo, and the SelectCo funds each has solepower to dispose of the 573,344 shares of Common Stock or 2.81% of the outstanding Common Stock owned by the SelectCo funds. The ownership of Fidelity Variable Insurance Products Mid Cap Portfolio amounted to1,142,722 shares or 5.6% of the Common Stock outstanding.
(13)
  • Information is derived from the Schedule 13G/A filed by Royce and Associates, LLC (“Royce”) with the Securities and Exchange Commission on January 9, 2014. Royce is a registered investment adviser and has sole voting power and sole dispositive power with respect to such shares.
(14)
  • Information is derived from the Schedule 13G/A filed by BlackRock, Inc. (“BlackRock”) with the Securities and Exchange Commission on January 29, 2014. BlackRock is a parent holding company or control person in accordance with Exchange Act Rule 13d-1(b)(1)(ii)(G) and has sole voting power and sole dispositive power with respect to such shares.
(15)
  • Consists of shares of Common Stock issuable upon vesting of restricted stock units within 60 days of March 1, 2014. In addition to the shares listed in the table, Mr. Miller has the right to receive an aggregate of 98,750 shares pursuant to restricted stock unit awards for which performance conditions have been satisfied, subject to the satisfaction of required time vesting periods.
(16)
  • Includes 2,500 shares of Common Stock issuable upon vesting of restricted stock units within 60 days of March 1, 2014. In addition to the shares listed in the table, Mr. Nackman has the right to receive an aggregate of 17,500 shares pursuant to restricted stock unit awards for which performance conditions have been satisfied, subject to the satisfaction of required time vesting periods.
(17)
  • Includes 33,000 shares of common stock which may be acquired within 60 days of March 1, 2014 upon the exercise of options and 98,500 shares of Common Stock issuable upon vesting of restricted stock units within 60 days of March 1, 2014. In addition to the shares listed in the table, all directors and officers as a group have the right to receive an aggregate of 551,900 shares pursuant to restricted stock unit awards for which any performance conditions have been satisfied, subject to the satisfaction of required time vesting periods.
Section 16(a) Beneficial Ownership Reporting Compliance
To our knowledge, our directors, officers and beneficial owners of more than ten percent of our Common Stock were in compliance with the reporting requirements of Section 16(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), during fiscal 2014, except that Cheryl Vitali, a member of our Board of Directors failed to timely file a Form 4 to report the purchase of 1,300 shares of our Common Stock on April 8, 2013. Ms. Vitali subsequently filed a Form 4 on May 16, 2013 to report this transaction In addition, Richard White, also a member of our Board of Directors, timely reported the issuance of 2,000 restricted stock units on June 5, 2013 for his service as a non-employee director in a Form 4 filed on June 7, 2013, but neglected to report in this Form 4 the additional issuance of 1,000 restricted stock units on the same date for his role as lead independent director. Mr. White subsequently amended the Form 4 on April 25, 2014 to include such additional issuance of 1,000 restricted stock units on June 5, 2013.

CORPORATE GOVERNANCE
The Board of Directors has determined that Thomas Brosig, Alan Feller, Laura Pomerantz, Allen Sirkin, Willem van Bokhorst, Cheryl Vitali and Richard White are independent directors. The independent directors constitute a majority of the Board of Directors. In making its determination regarding the independence of the directors, the Board relied upon information provided by each of the directors and noted that each independent director meets the standards for independence set out in Marketplace Rule 5605(a)(2) of The NASDAQ Stock Market and under the applicable rules and regulations of the Securities and Exchange Commission, and that there is no material business relationship between G-III and any independent director, including any business entity with which any independent director is affiliated.
The Board of Directors held four meetings and acted by Unanimous Consent three times during the fiscal year ended January 31, 2014. During the fiscal year ended January 31, 2014, each director in office attended not less than 75% of the aggregate number of meetings of the Board of Directors and of meetings of committees of the Board on which he or she served during the time period in which he or she served. We do not have a formal policy regarding attendance by members of the Board of Directors at annual stockholders meetings. Eight of our ten directors then serving on the Board of Directors, and Allen Sirkin, then a nominee to serve on the Board, attended the 2013 Annual Meeting of Stockholders.
Our Board of Directors has an Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. Each member of our Audit, Compensation and Nominating and Corporate Governance Committees has been determined by the Board of Directors to be “independent” within the meaning of Marketplace Rule 5605(a)(2) of The NASDAQ Stock Market. Each member of the Audit Committee is “independent” within the meaning of Marketplace Rule 5605(c)(2)(A) of The NASDAQ Stock Market and under the applicable rules and regulations of the Securities and Exchange Commission regarding the independence of audit committee members. Each member of the Compensation Committee is “independent” within the meaning of Marketplace Rule 5605(d)(2)(A) of The NASDAQ Stock Market.
Audit Committee
The Audit Committee, composed of Alan Feller, Willem van Bokhorst and Richard White, is responsible for, among other things, assisting the Board in monitoring (i) the integrity of our financial statements, (ii) the qualifications and independence of our independent auditors, (iii) the performance of our internal audit function and independent auditors, and (iv) the compliance by us with legal and regulatory requirements. Mr. Feller is the Chairman of the Audit Committee. The Board has determined that each of Messrs. Feller and White is an audit committee financial expert as such term is defined in the rules of the Securities and Exchange Commission. The Audit Committee met six times during the fiscal year ended January 31, 2014. A copy of the Audit Committee’s charter is available in the “Investor Relations” section of our website at http:/​/​www.g-iii.com.
Compensation Committee
The Compensation Committee discharges the responsibilities of the Board relating to compensation of G-III’s directors and executive officers. The Committee has overall responsibility for approving and evaluating director and executive officer compensation plans, policies and programs of G-III, including establishing and monitoring the basic philosophy and policies governing the compensation of G-III’s directors and officers. The Compensation Committee, composed of Laura Pomerantz, Allen Sirkin, Willem van Bokhorst and Richard White, is responsible for reviewing and discussing with management, and recommending to the Board the inclusion of, the Compensation Discussion and Analysis in our annual Proxy Statement. Mr. White is the Chairman of the Compensation Committee.
Specific duties and responsibilities of the Committee include, but are not limited to: (i) reviewing and approving the corporate goals and objectives relevant to the compensation of our executive officers and evaluating their performance in light of those corporate goals and objectives; (ii) recommending the compensation of our executive officers, giving consideration to the results of our most recent “say-on-pay” vote; (iii) reviewing and recommending adoption, amendment and termination of employment agreements and severance arrangements or plans for our executive officers; (iv) reviewing and recommending changes

to director compensation; (v) review and recommending adoption, amendment and termination of incentive compensation plans, equity-based plans and other compensation and benefit plans for directors or officers, giving consideration to the results of our most recent “say-on-pay” vote in considering plans for executive officers; (vi) administering G-III’s stock-based compensation, incentive and benefit plans, including our 2005 Amended and Restated Stock Incentive Plan (the “2005 Plan”); and (vii) administering, interpreting and carrying out our Stock Ownership Guidelines for directors and executive officers and Executive Incentive Compensation Recoupment Policy for executive officers.
The Compensation Committee also may form and delegate authority to any subcommittee comprised solely of its members who are independent so long as such formation and delegation are in compliance with applicable law and NASDAQ Stock Market rules.
The Compensation Committee met five times and acted by Unanimous Consent six times during the year ended January 31, 2014. A copy of the Compensation Committee’s charter is available in the “Investor Relations” section of our website at http:/​/​www.g-iii.com.
Compensation Committee Interlocks and Insider Participation
During the year ended January 31, 2014, Laura Pomerantz, Allen Sirkin, Willem van Bokhorst and Richard White served on our Compensation Committee. None of the members of the Compensation Committee (i) has ever been an officer or employee of ours or (ii) had any relationship requiring disclosure by us under Item 404 of Regulation S-K. None of our executive officers have served on the board or compensation committee (or other committee serving as equivalent function) of any other entity, where an executive officer of the other entity served on our Board of Directors or Compensation Committee.
Nominating and Corporate Governance Committee and Nominations Process
The Nominating and Corporate Governance Committee, composed of Thomas Brosig, Cheryl Vitali and Richard White, (a) assists the Board in its selection of individuals (i) as nominees for election to the Board at G-III’s next annual meeting of the stockholders or (ii) to fill any vacancies or newly created directorships on the Board and (b) developing and maintaining G-III’s corporate governance policies, and any related matters required by the federal securities laws. Mr. Brosig is the Chairman of the Nominating and Corporate Governance Committee. The Committee met three times and acted by Unanimous Consent once during the fiscal year ended January 31, 2014.
The Nominating and Corporate Governance Committee met to review the performance and the experience, qualifications, attributes and skills of the members of the Board and recommended to our Board the persons to be nominated for election as directors at the Annual Meeting. The Nominating and Corporate Governance Committee met with Jeanette Nostra, reviewed her qualifications, and subsequently recommended to the Board that she be elected as a director at a Board of Directors meeting held in September 2013. Ms.Nostra was recommended to the Nominating and Corporate Governance Committee by our Chief Executive Officer. A copy of the Nominating and Corporate Governance Committee’s charter is available in the “Investor Relations” section of our website at http:/​/​www.g-iii.com.
It is the policy of the Nominating and Corporate Governance Committee to consider candidates for Board membership suggested by Nominating and Corporate Governance Committee members and other Board members, management, our stockholders, third-party search firms and any other appropriate sources. As a stockholder, you may recommend any person for consideration as a nominee for director by writing to the Secretary of G-III, c/o G-III Apparel Group, Ltd., 512 Seventh Avenue, New York, New York 10018. Recommendations must be received by March 22, 2015 to be considered for the 2015 Annual Meeting of Stockholders. Recommendations must include the name and address of the stockholder making the recommendation, a representation setting forth the number of shares of our Common Stock beneficially owned by the recommending stockholder, a statement that the recommended nominee has expressed his or her intent to serve on the Board if elected, biographical information about the recommended nominee, any other information the stockholder believes would be helpful to the Nominating and Corporate Governance Committee in evaluating the individual recommended nominee and a description of all arrangements or understandings between the recommending stockholder and each nominee and any other person concerning the nomination.

In evaluating candidates, the Nominating and Corporate Governance Committee considers the following criteria: personal integrity, sound business judgment, business and professional skills and experience, independence (as that term is defined under the rules of the Securities and Exchange Commission and the NASDAQ Stock Market listing standards), the requirement to maintain a Board that is composed of a majority of independent directors, potential conflicts of interest, the extent to which a candidate would fill a present need, and concern for the long term interests of stockholders. In any particular situation, the Nominating and Corporate Governance Committee may focus on persons possessing a particular background, experience or qualifications which the Committee believes would be important to enhance the effectiveness of the Board.
The Nominating and Corporate Governance Committee does not have a formal policy with respect to considering diversity in identifying director nominees. The Board and the Nominating and Corporate Governance Committee believe it is important that the Board members represent diverse viewpoints and a variety of skills so that, as a group, the Board will possess the appropriate talent, skills and expertise to oversee our business. The evaluation process for stockholder recommendations is the same as for candidates recommended from any other source. The needs of the Board and the factors that the Nominating and Corporate Governance Committee consider in evaluating candidates are reassessed on an annual basis, when the committee’s charter is reviewed.
Stockholder Communications
The Board of Directors has provided a process for stockholders to send communications to the Board. Stockholders who wish to send communications to the Board of Directors, or any particular director, should address such communications to the Board or such director c/o G-III Apparel Group, Ltd., 512 Seventh Avenue, New York, New York 10018, Attn: Secretary. All such communications should include a representation from the submitting stockholder setting forth the stockholder’s address and the number of shares of our Common Stock beneficially owned by the stockholder. The Board will give appropriate attention to written communications on issues that are submitted by stockholders and will respond as appropriate. Absent unusual circumstances, the Secretary of G-III will (i) be primarily responsible for monitoring communications from stockholders and (ii) provide copies or summaries of such communications to the Board, the Lead Independent Director (who serves as a non-management resource for stockholders seeking to communicate with our Board) or the director to whom such communication is addressed, as the Secretary considers appropriate. Each stockholder communication will be forwarded to all directors, the Lead Independent Director or the director to whom it is addressed, if it relates to a substantive matter and includes suggestions or comments that the Secretary considers to be important for the directors, or director, to know. In general, stockholder communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than stockholder communications relating to personal grievances and matters as to which we may receive repetitive or duplicative communications.
Additionally, G-III’s by-laws set forth “advance notice” requirements for stockholders’ meetings consistent with the purpose of establishing an orderly process for stockholders seeking to nominate directors or propose business at stockholder meetings. The advance notice provisions in the by-laws require stockholders to deliver notice to G-III of their intention to make director nominations or bring other business before the meeting not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, in advance of the anniversary of the previous year’s annual meeting if the meeting is to be held on a day which is not more than 30 days in advance of the anniversary of the previous year’s annual meeting or not later than 70 days after the anniversary of the previous year’s annual meeting. The advance notice provisions of the by-laws prescribe information that the stockholder’s notice must contain, both as to itself and its proposed director nominee, if the stockholder wishes to nominate a candidate for the annual meeting director election, prescribe information that the stockholder’s notice must contain if the stockholder wishes to bring business other than a director nomination before the annual meeting, and set forth rules and procedures relating to special meetings of stockholders.
Risk Oversight
The risk oversight function of our Board of Directors is carried out by both the Board and the Audit Committee. The Audit Committee meets periodically with management and our internal audit team to discuss our major financial and operating risks and the steps, guidelines and policies management and our

internal audit team have taken to monitor and control exposures to risk, including G-III’s risk assessment and risk management policies. Matters of strategic risk are considered by the Board as a whole. In addition, our internal disclosure committee reviews with management the “risk factors” that appear in our Annual Report on Form 10-K prior to its filing with the SEC, as well as prior to the filing of our Quarterly Reports on Form 10-Q.
The Board encourages management to promote a corporate culture that incorporates risk management into our corporate strategy and day-to-day business operations. The Board continually works, with input from our executive officers, to assess and analyze the most likely areas of future risk for us and our business.
Leadership Structure of the Board
The Board of Directors believes that Morris Goldfarb’s service in the dual roles of Chairman of the Board and Chief Executive Officer and President is in our best interest, as well as the best interest of our stockholders. Mr. Goldfarb is the director most familiar with our business and industry and possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing us and our business. Thus, he is in the best position to develop agendas and plans that ensure that the Board’s time and attention are focused on the most critical matters. We believe that Mr. Goldfarb is viewed by our customers, suppliers, business partners, investors and other stakeholders as providing strong leadership for our company in the marketplace and in our industry. This approach is commonly utilized by other public companies in the United States and we believe it has been effective for our company as well.
Although the Board believes that the combination of the Chairman of the Board and Chief Executive Officer roles is appropriate for us in the current circumstances, our Board does not have a specific policy as to whether or not these roles should be combined or separated.
In order to promote independent leadership on our Board and help ensure that the Board operates in a cohesive manner, the Board has established the position of Lead Independent Director and elected Richard White as the Lead Independent Director. The responsibilities of the Lead Independent Director include: (i) advising the Chairman of the Board on Board meeting agendas and materials sent to the Board; (ii) serving as a liaison between non-management directors and the Chairman of the Board; (iii) calling and presiding over executive sessions of the non-management directors; (iv) presiding over Board meetings in the absence of the Chairman of the Board; (v) serving as a non-management resource for stockholders and other external constituencies seeking to communicate with our Board; (vi) oversight of the Board’s annual assessment of the performance of our Chairman, Chief Executive Officer and President; and (vii) oversight of the Board’s annual self-assessment of its own performance, along with the Chairman of the Nominating and Corporate Governance Committee.
Additional Corporate Governance Policies
We also maintain the following corporate governance policies:
Code of Ethics and Whistleblower Policy
All of the our employees, officers and directors must adhere to our Code of Ethics. It codifies those standards that we believe are reasonably designed to deter wrong-doing and to promote, among other things, adherence to the following principles: (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by G-III; (iii) compliance with applicable governmental laws, rules and regulations; (iv) the prompt internal reporting of violations of the Code of Ethics; and (v) accountability for adherence to the Code of Ethics. The Whistleblower Policy protects all of our employees, officers and directors if they raise concerns regarding G-III, such as concerns regarding incorrect financial reporting including questionable accounting, internal controls or auditing matters; unlawful activity; activities that are not in line with G-III policies, including the Code of Ethics; or activities which otherwise amount to serious improper conduct. A copy of the Code of Ethics and Whistleblower Policy is available in the “Investor Relations” section of our website at http:/​/​www.g-iii.com.

Insider Trading, Hedging and Pledging Policy
The Insider Trading, Hedging and Pledging Policy applies to all of our directors and officers, our employees and employees of our subsidiaries (“Company Personnel”), and prohibits trading or causing trading of our securities while the applicable person is in possession of material non-public information. The Insider Trading, Hedging and Pledging Policy prohibits directors, executive officers and other Company Personnel specified by us from time to time from trading in G-III securities during our established blackout periods, except (i) pursuant to Board-approved written trading plans adopted in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, at least 30 days prior to any trade, (ii) stock option exercises for cash with no associated open market transaction and (iii) the surrender of shares to us or the retention and withholding of shares by us upon vesting of restricted stock in satisfaction of tax withholding obligations with no associated open market transaction. The Insider Trading, Hedging and Pledging Policy also prohibits Company Personnel from entering into hedging transactions with respect to our securities, pledging our securities as collateral for a loan or holding our securities in a margin account. The Board may, in limited circumstances, permit a share pledge by a director or executive officer after giving consideration to the number of shares to be pledged as a percentage of his or her total shares held and G-III’s total shares outstanding. No such exception was granted in fiscal 2014. A copy of the Insider Trading, Hedging and Pledging Policy is available in the “Investor Relations” section of our website at http:/​/​www.g-iii.com.
Stock Ownership Guidelines
The Stock Ownership Guidelines require that (i) our Chief Executive Officer retain G-III shares valued at six times his annual base salary; (ii) our Vice Chairman retain G-III shares valued at two times his annual base salary; (iii) our other executive officers and our directors who are also employed by us retain G-III shares valued at one time their respective annual base salaries and (iv) each of our non-employee directors retain G-III shares valued at five times his or her annual cash retainer. Until these share ownership levels are achieved, our executive officers and directors are required to retain 50% of any net, after-tax, shares received upon exercise or vesting of our equity grants. A copy of the Stock Ownership Guidelines is available in the “Investor Relations” section of our website at http:/​/​www.g-iii.com.
Executive Compensation Recoupment Policy
Pursuant to the Executive Compensation Recoupment Policy, or “Clawback Policy,” in the event that we are required to restate our financial statements for any financial year commencing with the fiscal year ended January 31, 2014, other than as a result of a change in generally accepted accounting principles or their interpretation, the Compensation Committee may, in its discretion, recoup incentive compensation paid to individuals who were executive officers within one year prior to the restatement. The incentive compensation subject to recoupment will consist of performance-based bonuses (including bonuses paid pursuant to employment agreements) and long-term incentive awards or equity grants, to the extent that such bonuses, awards or grants were predicated upon achievement of financial results that are subsequently restated. A copy of the Executive Compensation Recoupment Policy is available in the “Investor Relations” section of our website at http:/​/​www.g-iii.com.

COMPENSATION DISCUSSION AND ANALYSIS
The following discussion describes how we use different elements of compensation to achieve the objectives of our executive compensation program and how we determined the amounts of each component of compensation paid to our named executive officers for the fiscal year ended January 31, 2014. (Reference to fiscal years in this Proxy Statement refers to the year ended January 31 of that year.) This information should be reviewed in conjunction with the data and associated narrative provided in the Summary Compensation Table, Grants of Plan-Based Awards Table and other tables that follow. For fiscal 2014, the following individuals served as our Named Executive Officers:
  • Morris Goldfarb, Chairman of the Board and Chief Executive Officer; and President (from September 19, 2013);
  • Neal S. Nackman, Chief Financial Officer and Treasurer;
  • Sammy Aaron, Vice Chairman;
  • Wayne S. Miller, Chief Operating Officer and Secretary; and
  • Jeanette Nostra, President (through September 19, 2013); currently a senior advisor to G-III.
Throughout this Proxy Statement, when discussing our performance and performance metrics, we make reference to our pre-tax income. Unless otherwise defined, pre-tax income shall mean the net income of G-III and its subsidiaries, as reported in the consolidated financial statements of G-III audited by G-III’s independent registered public accounting firm, plus the sum of (i) the income taxes set forth in such financial statements and (ii) the amount of bonuses payable to our Named Executive Officers, provided that pre-tax income shall be determined without regard to any extraordinary item, as such term is used in generally accepted accounting principles.
Our Performance
Our Long-Term Performance
We have delivered exceptional return to our stockholders over the past fifteen years. During this period from February 1, 1999 through January 31, 2014, our stock price has increased 3,473%, significantly out-performing the 39% increase in the S&P 500 and the 314% increase in the S&P Textile (Apparel) Index over the same period.
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Over this same 15 year period, under the leadership of Morris Goldfarb, our Chairman, Chief Executive Officer and President, and a dedicated team of executive officers, G-III has delivered top quartile performance in total stockholder return and growth in revenues, net income, and market capitalization when compared to our competitors, demonstrating both our long-term orientation as well as our commitment to delivering top quartile results to stockholders, particularly with respect to total stockholder return.
TSR & Select Growth Measures — 1, 5, 10 & 15 Years
G-III vs. Pay & Practice Peers*
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*
  • Pay Peers include: Carter’s Inc.; Columbia Sportswear Co.; Crocs, Inc.; Deckers Outdoor Corp.; Kate Spade & Co. (formerly Fifth & Pacific Companies, Inc.); Lululemon Athletica, Inc.; Oxford Industries, Inc.; Perry Ellis International, Inc.; Quiksilver, Inc.; Skechers USA, Inc.; Steven Madden, Ltd.; Under Armour, Inc.; and Wolverine World Wide, Inc. Practice Peers include: Guess?, Inc.; Jones Group, Inc. (The); PVH Corp.; Ralph Lauren Corp.; and VF Corp.
Note: All financial numbers sourced from Bloomberg to ensure comparability with peers. In instances where historical data is not available, company is excluded from the comparison. In instances where a growth calculation is not valid, the data point has been omitted from the analysis for that period only.
Fiscal 2014 Business Highlights
In fiscal 2014, we again delivered strong operating results. Business highlights included:
  • We grew sales by 23% to $1.72 billion, a record for us, with across-the-board strength in our business.
  • We increased net income per diluted share to $3.71, also a record for us, surpassing our plan and up 32% over last year.
  • In November 2013, we acquired G.H. Bass & Co., a powerful heritage footwear, apparel, and accessories brand.
  • We added license agreements for Tommy Hilfiger women’s outerwear and Calvin Klein men’s and women’s swimwear.
  • We launched Ivanka Trump apparel, a brand we believe has strong growth potential.
  • We extended the terms of all of our Calvin Klein licenses through the end of 2023.

How Pay is Tied to Company Performance
Our Compensation Philosophy
Our compensation program is designed to enhance stockholder value in the following ways:
  • The majority of compensation paid to our executives is variable and aligned with the short- and long-term performance of G-III;
  • Our annual incentive compensation structure is oriented towards bottom-line results, fosters an entrepreneurial environment and empowers management with the flexibility to quickly make decisions that are responsive to ever-changing market conditions, a hallmark of our business;
  • Our long-term incentive program aligns the interests of executive officers with those of our stockholders through the use of performance shares which are earned only upon the achievement of two performance metrics, namely stock price appreciation and earnings after taxes or net income per share; and
  • We offer a competitive compensation program that enables us to attract and retain the highly qualified managerial and executive talent necessary to achieve our objectives.
How Our Business Impacts Our Compensation Program Design
We operate in a highly volatile and competitive industry, and our compensation program is designed to support and reward the behaviors that result in the best returns for our stockholders.
  • Our business is volatile and impacted by fashion trends and weather conditions that can be difficult to predict at the outset of a performance period.
  • We have a strong performance-oriented culture, designed to motivate executives to make strategic decisions and execute these objectives in a manner that drives performance.
  • Our annual incentive program is oriented towards bottom-line results, rather than interim performance metrics, so as to empower our executives with the flexibility to quickly make decisions which are responsive to ever-changing market conditions.
  • Our long-term incentive program is designed to pay out only upon the achievement of both earnings after taxes (or net income per share) and stock price hurdles, ensuring that our executives do not make short-term decisions that are detrimental to the long-term interests of our stockholders.
  • Strong relationships with our customers and suppliers are essential, since both can serve as competitors. The personal relationships maintained by our Chairman, Chief Executive Officer and President and our other executive officers are critical to the successful execution of our business.
  • We have an employment contract with our Chief Executive Officer and President which secures his services until January 31, 2017.
  • Preserving long-term relationships with customers can result in business decisions (such as accepting returns of unsold items) that may be detrimental to G-III in the short-term.
  • Our compensation program has a mix of short and long-term performance elements, and is focused on metrics such as pre-tax income, earnings after taxes (or net income per share) and stock price that allow our executives to balance short-term considerations with the long-term interests of our stockholders.
  • Our lack of significant pricing leverage due to labor and raw material constraints drive focus on execution to ensure profitability.
  • By focusing our short-term incentive program on pre-tax income, we empower our executives to make decisions over the course of the year which serve the best interests of our stockholders.

  • The competitive labor market in which we compete for executive talent is characterized by a significant number of private companies and many seasonal and short-term competitors, many of which provide compensation packages that are heavily skewed towards short-term, cash compensation.
  • While we provide meaningful annual compensation opportunities that are paid in cash, we also recognize the importance of long-term incentive compensation, particularly with respect to the benefits it provides in terms of alignment with stockholder interests and employee retention, and provide meaningful performance-vested long-term incentive compensation opportunities to our employees.
Our Compensation Program Is Reflective of Best Practices
Our compensation program incorporates the following compensation governance practices that we believe are beneficial to our stockholders:
  • We pay for performance.   The majority of the total compensation opportunity for our executive officers is incentive-based and can be earned only upon the achievement of corporate and, for certain of our Named Executive Officers, individual performance objectives.
  • We assess performance on a short- and long-term basis.   Our incentive compensation is earned over several different and overlapping short- and long-term performance periods, ensuring that performance during any one period is not maximized at the expense of other performance periods.
  • We utilize multiple long-term performance metrics.   Beginning with awards made in fiscal 2013, performance shares are earned only upon the achievement of two performance metrics: (i) stock price appreciation and (ii) earnings after taxes (for fiscal 2013) or net income per share (for fiscal 2014).
  • We have stock ownership guidelines for our executive officers and directors.   Until these guidelines are achieved, executive officers and directors are required to hold 50% of net, after tax, shares received upon exercise or vesting of our equity grants. An exception may be granted, in certain limited instances, at the discretion of our Compensation Committee; no such exception was granted in fiscal 2014.
  • We have a policy prohibiting our directors and all employees, including our executives, from hedging our shares.   None of our executives has hedged any of our shares.
  • We have a policy prohibiting our directors and all employees, including our executives, from pledging our shares.   An exception may be granted, in certain limited instances, at the discretion of our Board of Directors; no such exception was granted in fiscal 2014.
  • Our incentive compensation awards are subject to clawback.   For any fiscal year commencing after fiscal 2013, the Compensation Committee may recoup incentive compensation paid to executive officers predicated at least in part upon the achievement of financial results which are subsequently restated.
  • We do not provide tax gross-ups for any reason.
  • We do not provide aggressive change in control benefits.
  • Our compensation program mitigates undue risk.   Our Compensation Committee incorporates considerations of risk into its deliberations of our executive compensation program. The Committee believes that G-III’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on G-III.
What We Pay and Why — Elements of Our Compensation Program
Our Pay Mix is Heavily Weighted Towards Incentive-Based Compensation
Our compensation program is comprised of three elements: base salary, annual incentives and long-term incentives. We weight incentive compensation more heavily than fixed compensation to motivate our executives to achieve results that will enhance stockholder value over the long-term. We balance

short-term and long-term incentive pay so that our executives are rewarded for both operational and stock price performance, and to balance competitive pressures to deliver cash-based compensation with our belief that equity compensation is essential to align the interests of our executives with those of our stockholders and provides meaningful incentives for our executives to remain with G-III. The following charts illustrate the percentage of compensation for our Chief Executive Officer and our other Named Executive Officers with respect to fiscal 2014 represented by base salary, annual incentives and long-term incentives.
 
CEO Compensation
Average Other Named Executive Officer
Compensation
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Base Salary
Base salaries provide a competitive rate of fixed pay and help us to attract and retain executives needed to manage our business for the benefit of our stockholders. The Compensation Committee determines base salaries following a consideration of the following factors:
  • Breadth, scope and complexity of the role;
  • Skills and experience required for the role;
  • Tenure in position;
  • Individual performance; and
  • Competitive labor market for the position.
We make periodic adjustments to base salaries to reflect:
  • Merit increases in instances where individual performance, responsibilities and experience warrant such an adjustment;
  • Promotions or significant changes in the scope of the position; and
  • Market adjustments to reflect the competitive labor market.
With the exceptions of adjustments to the salary of our Chairman, Chief Executive Officer and President, salary adjustments are usually considered at the suggestion of our Chairman, Chief Executive Officer and President, and are subject to the discretion of the Compensation Committee.
In fiscal 2014, the Compensation Committee did not adjust the base salaries of our Named Executive Officers.
Annual Incentives
Our annual incentive program is designed to reward annual performance, which we believe contributes to the long-term performance of G-III and the enhancement of stockholder value.

Existing Annual Incentive Arrangements for Messrs. Goldfarb and Aaron
Annual incentive arrangements for Messrs. Goldfarb and Aaron are governed by their respective employment contracts. These annual incentive awards are structured to recognize the unique roles held by Messrs. Goldfarb and Aaron in the overall management of our business and the design and execution of our corporate strategy. Additionally, these awards are intended to foster an entrepreneurial environment in which these individuals are incentivized and rewarded to maximize pre-tax income, which the Compensation Committee believes is an important driver of stock price appreciation. The Compensation Committee believes that incentivizing Messrs. Goldfarb and Aaron in the same manner encourages them to operate as a team and promotes a shared focus in the successful operation of our business.
In fiscal 2014, Messrs. Goldfarb and Aaron voluntarily agreed to modifications to their annual incentives as a demonstration of their commitment to compensation and corporate governance programs reflective of and responsive to the views of stockholders. If G-III’s pre-tax income is $10,000,000 or less, neither executive is entitled to an annual incentive. If G-III’s pre-tax income exceeds $10,000,000, Mr. Goldfarb is entitled to 6% of pre-tax income in excess of $2,000,000 and Mr. Aaron is entitled to 4% of pre-tax income in excess of $2,000,000. These awards are also subject to a cap. The Compensation Committee establishes a target annual incentive bonus based on the budgeted pre-tax net income for the year. The total annual incentive opportunity is then capped at two times the target bonus.
For fiscal 2014, based upon our pre-tax income as defined in the respective employment agreements, an annual incentive payment of $7,735,677 was awarded to Mr. Goldfarb and $5,049,417 was awarded to Mr. Aaron.
Proposed Modifications to our Annual Incentive Arrangements for Messrs. Goldfarb and Aaron
As discussed elsewhere in this proxy, G-III values the views of its stockholders. We proactively seek their views, consider their input, and where appropriate, we modify our programs. As a demonstration of their commitment to stockholder engagement, Messrs. Goldfarb and Aaron volunteered to modify their annual incentive arrangements for fiscal 2014, as discussed in greater detail above. As part of a continuing dialogue between the Company and the Compensation Committee, and as a demonstration of their commitment to responsible and responsive leadership, Messrs. Goldfarb and Aaron have volunteered to make further material modifications to their annual incentive arrangements. We note that neither executive is under any obligation to make these modifications, as their annual incentive arrangements are codified in their respective employment agreements which do not expire until January 2017 in the case of Mr. Goldfarb and January 2015 in the case of Mr. Aaron.
To ensure the most favorable tax treatment for G-III with respect to the incentive arrangements, we will be asking stockholders to approve amendments to the performance-based incentive provisions in the employment agreements with each of Morris Goldfarb and Sammy Aaron at the Annual Meeting. (See Proposals No. 2 and 3 in this Proxy Statement.) If the stockholders do not approve the proposed amendments to the performance-based incentive provisions, the existing incentive arrangements described above under “Existing Incentive Arrangements for Messrs. Goldfarb and Aaron” will remain in effect.
Both the Board and our stockholders have expressed overwhelming confidence in the long-term accomplishments of Messrs. Goldfarb and Aaron. Under their leadership, G-III has delivered exceptional returns to stockholders. But we also heard stockholders express reservations about their annual incentive compensation arrangements. Issues included:
  • No upside cap on payouts under the program prior to the modifications made in fiscal 2014;
  • No penalty for performance that falls short of expectations;
  • Payout schedules based on business results that have not been adjusted to reflect the current size and scope of G-III’s business; and
  • Preference for a metric that incorporates dilution (such as earnings per share, or EPS).
The Compensation Committee believes that the modified annual incentive arrangements described below address the issues expressed by certain of our stockholders. However, because of existing contractual obligations, the extraordinary success of G-III under our current leadership and the long history of the

current employment arrangements, neither the Compensation Committee nor Mr. Goldfarb or Mr. Aaron began these negotiations with a blank slate. Instead, this program works within the construct of the historical program, and builds in elements designed to address specific concerns identified by stockholders.
Revised Annual Incentive Arrangement for Mr. Goldfarb
The annual incentive arrangement that is proposed beginning with respect to fiscal 2015 for Mr. Goldfarb includes the following features designed to address concerns raised by our stockholders:
  • Performance Targets.   Performance required to achieve the target payout amount will be established annually by the Compensation Committee based on the annual forecast communicated to the public. As proposed, the size of Mr. Goldfarb’s annual incentive would be determined based on a comparison of forecasted pre-tax income to the actual pre-tax income achieved.
We chose to use our forecast as the basis for the incentive arrangement because it is more transparent. The forecasted pre-tax income is approved by our Board and is part of the forecasted financial statements from which the forecast communicated to the public is derived. Our performance against this forecasted amount is also highly correlated to our stock price performance, providing another link between our performance and Mr. Goldfarb’s pay.
  • Performance Hurdle.   The proposed formula used to determine the size of the annual incentive also determines the threshold performance level required for a bonus payment. This approach ensures that the size of pre-tax income required to achieve a bonus varies in direct correlation to the size of the company, instead of fixing it at a set amount of pre-tax income as it does currently. Based on the proposed formula, we would need to achieve pre-tax income of at least $47.2 million for fiscal 2015 for any annual incentive to be earned compared to $10 million under the existing arrangement.
  • Payouts to Vary Based on Performance.   Under the previous annual incentive arrangement, Mr. Goldfarb was entitled to 6% of pre-tax income over $2 million, assuming that pre-tax income exceeds $10 million. This amount is referred to as the “Base Bonus Amount.” Under the modified arrangement, the Base Bonus Amount will be adjusted either up or down so that payouts vary depending upon how actual pre-tax income compares to our forecasted level of pre-tax income. If actual pre-tax income is within a range of +/-15% of forecasted pre-tax income, Mr. Goldfarb will continue to receive his Base Bonus Amount, consistent with what we would have received under the arrangement codified in his employment agreement.
However, in instances where actual performance falls above or below 15% of forecasted pre-tax income, Mr. Goldfarb’s Base Bonus Amount will be adjusted to reflect a reduction for performance significantly below the forecast, or an increase for exceptional performance. The size of the adjustment will depend upon the amount by which actual pre-tax income varies from the forecasted pre-tax income level. The adjustments will be symmetrical for both upside and downside variations in performance.
If actual pre-tax income for a fiscal year is less than the approved forecast, the annual incentive payment to Mr. Goldfarb will be determined by the Compensation Committee in accordance with the following table:
 
Actual Pre-Tax Income is Less
Than Approved Forecast by
Annual Incentive Amount
15% or less
6% of actual pre-tax income in excess of $2 million (the Base Bonus Amount)
15 – 30%
Base Bonus Amount minus 2% of the portion of actual pre-tax that is more than 15% and up to 30% lower than the approved forecast
More than 30%
The bonus amount determined pursuant to the preceding row, minus 4% of the portion of actual pre-tax income that is more than 30% lower than the approved forecast, but not less than zero

If actual pre-tax income for a fiscal year equals or exceeds the approved forecast, the annual incentive bonus payable to Mr. Goldfarb shall be determined by the Compensation Committee in accordance with the following table, subject to the payout cap described below:
 
Actual Pre-Tax Income Exceeds
Approved Forecast by
Annual Incentive Amount
0 – 15%
6% of actual pre-tax income in excess of $2 million (the Base Bonus Amount)
15 – 30%
Base Bonus Amount plus 2% of the portion of actual pre-tax income that is more than 15% and up to 30% in excess of the approved forecast
More than 30%
The annual incentive payable pursuant to the preceding row, plus 4% of the portion of actual pre-tax income that is more than 30% in excess of the approved forecast
  • Payouts May Be Adjusted to Reflect Dilutive Stock Issuances on an Ongoing Basis.   In the event of a dilutive stock issuance, excluding share changes caused by equity compensation awards approved by the Compensation Committee or structural changes that affect capitalization as a whole, such as a stock split, reverse stock split or stock dividend, the Compensation Committee may equitably adjust the percentages in the “Annual Incentive Amount” column downward, but not upward. This provision is intended to reflect stockholder concerns about the use of pre-tax income as the performance metric, rather than a metric such as net income per share.
  • Payout Cap.   The maximum annual incentive bonus will be capped at an amount equal to one and one-half times the targeted bonus based upon the budgeted level of pre-tax income contained in the approved forecast. This is a decrease from the cap of two times the targeted bonus contained in the existing incentive arrangement.
Revised Annual Incentive Arrangement for Mr. Aaron
The annual incentive arrangement that is proposed beginning with respect to fiscal 2015 for Mr. Aaron is the same as that proposed for Mr. Goldfarb above, except that the annual incentive payments will be calculated in accordance with the tables below.
If actual pre-tax income for a fiscal year is less than the approved forecast, the annual incentive payment to Mr. Aaron will be determined by the Compensation Committee in accordance with the following table:
 
Actual Pre-Tax Income is Less
Than Approved Forecast by
Annual Incentive Amount
15% or less
4% of actual pre-tax income in excess of $2 million (the Base Bonus Amount)
15 – 30%
Base Bonus Amount minus 1.33% of the portion of actual pre-tax that is more than 15% and up to 30% lower than the approved forecast
More than 30%
The bonus amount determined pursuant to the preceding row, minus 2.66% of the portion of actual pre-tax income that is more than 30% lower than the approved forecast, but not less than zero

If actual pre-tax income for a fiscal year equals or exceeds the approved forecast, the annual incentive bonus payable to Mr. Aaron shall be determined by the Compensation Committee in accordance with the following table, subject to the payout cap described above:
 
Actual Pre-Tax Income Exceeds
Approved Forecast by
Annual Incentive Amount
0 – 15%
4% of actual pre-tax income in excess of $2 million (the Base Bonus Amount)
15 – 30%
Base Bonus Amount plus 1.33% of the portion of actual pre-tax income that is more than 15% and up to 30% in excess of the approved forecast
More than 30%
The annual incentive payable pursuant to the preceding row, plus 2.66% of the the portion of actual pre-tax income that is more than 30% in excess of the approved forecast
Arrangements for Our Other Named Executive Officers
As a general matter, annual incentive arrangements for our other named executive officers reflect Compensation Committee consideration of the following:
  • Recommendations of our Chairman, Chief Executive Officer and President;
  • Individual performance as measured by contributions to, among other things, our financial performance, including sales growth, margin improvement and cost reduction, performance of divisions or departments for which the executive is responsible and managing major corporate transactions such as raising capital or the successful completion of an acquisition; and
  • Excellent performance in unusual or difficult circumstances.
Incentive Arrangement for Mr. Miller
The annual incentive for Mr. Miller is based upon pre-tax income. To preserve beneficial tax treatment for G-III under Section 162(m) of the Internal Revenue Code of 1986, as amended, Mr. Miller was entitled to a maximum annual incentive of up to 2.5% of our pre-tax income, provided that our pre-tax income exceeded $10,000,000. The Compensation Committee has the discretion to reduce the amount otherwise payable under this formula based on such factors as it deems appropriate, and has exercised this discretion in every year. In fiscal 2014, based on pre-tax income as defined, Mr. Miller was entitled to a maximum annual incentives of $3,079,650. Subject to the maximum bonus permitted by the performance goals adopted with respect to Mr. Miller, the analysis by the Compensation Committee generally involved the use of qualitative/subjective individual performance goals. Following deliberations, the Compensation Committee determined to award an annual incentive of $2,000,000 to Mr. Miller.
In determining the bonus to be awarded, the Compensation Committee also considered overall company performance and Mr. Miller’s contribution to this performance, including the growth in revenues and net income, his role in the acquisition of G.H. Bass and the integration of Vilebrequin, his participation in formulating the strategic direction of G-III, the scope of his job responsibilities, his tenure with G-III, the performance of the divisions of G-III for which he was responsible, the relationship of his total compensation paid to the compensation paid to other G-III executives and the relationship of compensation paid to him in fiscal 2014 to compensation paid to him in prior years.
Incentive Arrangement for Mr. Nackman
In fiscal 2014, the Compensation Committee determined to award an annual incentive of $550,000 to Mr. Nackman. In making the determination regarding the annual incentive award for Mr. Nackman, the Compensation Committee also considered Mr. Nackman’s individual performance as measured by contributions to, among other things, management of our financial and accounting departments, our financial performance, including sales growth, margin improvement and cost reduction, his role in the acquisition of G.H. Bass, the relationship of total compensation paid Mr. Nackman to the compensation paid to other executives and the relationship of compensation paid to him in fiscal 2014 to compensation paid to him in prior years.

Incentive Arrangement for Ms. Nostra
In fiscal 2014, the Compensation Committee determined to award an annual incentive of $200,000 to Ms. Nostra. Ms. Nostra ceased to serve as one of our executive officers on September 19, 2013 and continues as an employee with G-III as a senior advisor. In making the determination regarding the annual incentive award for Ms. Nostra, the Compensation Committee also considered her reduced role at the company, the special projects she oversaw, her role in the expansion of our international business, including the business of Vilebrequin, and her long-term tenure with us.
Long-Term Incentives
We make long-term incentive awards to our Named Executive Officers so as to:
  • Align the interests of our executives with those of our stockholders;
  • Incentivize and reward our executives to achieve long-term performance objectives, including enhanced stockholder value and the achievement of an earnings after taxes hurdle;
  • Foster an entrepreneurial environment and instill an ownership culture;
  • Recognize accomplishments in the prior fiscal year; and
  • Provide meaningful incentives for the continued service of our executives.
Use of Performance-Vested Restricted Shares
The Compensation Committee makes awards of performance-vested restricted shares because they:
  • Align the interests of our executives with those of our stockholders;
  • Provide value only upon the achievement of pre-defined performance hurdles, including stock price and earnings after taxes levels; and
  • Minimize the dilutive impact to our stockholders.
Performance Metrics and Additional Vesting Requirements
In fiscal 2014, the Compensation Committee determined that performance-vested restricted shares awarded in fiscal 2014 will be earned only upon the achievement of the following two performance metrics:
  • Stock price performance — the average closing price per share of our Common Stock on the NASDAQ Global Select Market over a twenty consecutive trading day period (i) during the two-year period commencing on October 5, 2013 is at least $59.95 (which is 10% above the closing price of our Common Stock on the NASDAQ Global Select Market on the date of grant) or (ii) during the following three years after October 4, 2015 is at least $62.675 (which is 15% above the closing price of our Common Stock on the NASDAQ Global Select Market on the date of grant); and
  • Net income per share — (i) the amount of our net income per share on a fully diluted basis as reported in our audited financial statements (“Net Income Per Share”) for the fiscal year ending January 31, 2015 or January 31, 2016 is at least 10% greater than the amount of our Net Income Per Share for the fiscal year ending January 31, 2014 (the “2015/2016 Amount”), (ii) if the net income-based performance objective in clause (i) is not satisfied, our Net Income Per Share for the fiscal year ending January 31, 2017 is at least 5% greater than the 2015/2016 Amount (the “2017 Amount”), or (iii) if the net income-based performance objective in clause (i) or (ii) is not satisfied, our Net Income Per Share for the fiscal year ending January 31, 2018 is at least 5% greater than the 2017 Amount.
In addition to the successful achievement of the performance metrics described above, the right to receive these shares is also subject to a time vesting condition pursuant to which shares become vested at an annual rate of 25% on each of October 5, 2015, 2016, 2017 and 2018, subject to the satisfaction of the two performance conditions. The time vesting condition provides an additional retention element to these awards.

How We Determined Fiscal 2014 Awards
The size of the long-term incentive award made to each executive is a factor of the Compensation Committee’s (i) assessment of demonstrated company performance in the prior year, (ii) the recipient’s contribution to our overall corporate performance in the prior year and (iii) the recipient’s potential contribution to our future growth and financial results.
When compared to fiscal 2013 awards (which related to fiscal 2012 performance), the awards made in fiscal 2014 were generally lower in terms of number of shares granted but higher in value, reflecting the Committee’s assessment of our strong performance in fiscal 2013, including the increase in net income per share and the fact that we exceeded our business plan for the year.
Timing of Equity Awards
We do not have any plan to select option grant dates or restricted stock or restricted stock unit award dates for our Named Executive Officers in coordination with the release of material non-public information. The Compensation Committee has adopted a general policy that equity grants to existing employees should be made annually during the first half of our fiscal year. It is anticipated that equity grants to new hires or upon a promotion will generally be made on the first business day of the month after the commencement of employment or effectiveness of the promotion. The exercise price of all stock options awarded to our Named Executive Officers has been made at the market price on the date of the award. The Compensation Committee retains the discretion not to make equity grants at the times provided in the policy if the members determine it is not appropriate to make a grant at such time. Additionally, the Compensation Committee retains the discretion to make grants, including an annual equity grant, at times other than as provided in the policy if the members determine circumstances warrant making a grant at such other times. For example, during each of fiscal 2013 and 2014, the granting of equity awards was delayed due to the review undertaken of our compensation programs.
Other Compensation Elements
Benefits
Our executives are eligible to participate in Company benefit plans generally available to all of our employees, which include health, dental, life insurance, vision and disability plans. We also sponsor a voluntary 401(k) Employee Retirement Savings Plan for eligible employees. Employees must be at least 21 years of age and have one year with us to be eligible to participate in the plan. Fifty percent of the amount of employee contributions, including those of our Named Executive Officers, may be matched by us up to a maximum of six percent of eligible compensation.
Perquisites
Consistent with our philosophy of attracting and retaining key executives, we offer perquisites to our Named Executive Officers, which we believe are consistent in type and amount with those paid by our competitors. For additional information regarding perquisites paid to our executive officers, please see footnotes 1, 2, 3 and 4 to the “Summary Compensation Table” below.
We do not provide tax gross-ups on any benefits or perquisites provided to our Named Executive Officers.
Other Compensation and Governance Programs, Policies and Considerations
Stock Ownership Guidelines
We have adopted stock ownership guidelines for our directors and our Named Executive Officers. These guidelines are intended to foster an alignment of the interests of our executive officers with those of our stockholders, promote an ownership culture and long-term perspective among our executives, and act as a form of risk mitigation.

Named Executive Officers and our directors who are also our employees must retain shares with a value denominated as a multiple of base salary as follows:
 
Executive
Multiple of
Base Salary
Chief Executive Officer and President
6x
Vice Chairman
2x
All Other Named Executive Officers and Directors who are Employees
1x
Each non-employee director must retain shares valued at five times his or her annual cash retainer for service as a director of G-III. Until executive officers and directors achieve the required guideline, they are required to retain 50% of the net, after tax, shares received as the result of the satisfaction of time or performance vesting requirements. Shares owned outright and shares held in trust count towards satisfaction of these guidelines; unearned performance shares and unexercised options do not. The Compensation Committee may, in its sole discretion, and in limited instances, grant exceptions to these guidelines. No such exception was granted in fiscal 2014.
Clawback/Executive Incentive Compensation Recoupment Policy
Beginning with financial years commencing with the fiscal year ended January 31, 2014, in the event that G-III is required to prepare an accounting restatement, the Compensation Committee may, in its sole discretion, recoup from the affected officers all or part of any annual performance-based bonus or long-term incentive awards that were predicated upon the achievement of financial results that were subsequently restated.
The Compensation Committee intends to modify this policy to ensure compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, once regulations to be adopted under that Act are finalized.
Anti Hedging Policy
Our directors, executives and other employees are prohibited from engaging in transactions designed to limit or eliminate economic risks from owning G-III’s stock, such as transactions involving any form of margin arrangement, short sales and/or dealing in puts and calls of G-III’s stock.
Anti Pledging Policy
Our directors, executives and other employees are generally prohibited from pledging shares of our stock as collateral for any loan or margin account. None of our executives has pledged shares of our stock.
The Committee may, in its sole discretion and in limited instances, grant exemptions to this policy after giving consideration to the number of shares to be pledged as a percentage of the executive’s total shares held and G-III’s total shares outstanding.
Employment Agreements
We have employment agreements with Messrs. Goldfarb, Aaron and Miller.
Goldfarb Employment Agreement
Mr. Goldfarb has an employment agreement with us that is effective through January 31, 2017. This agreement is automatically extended each year for an additional year absent a notice of non-extension to the other party prior to January 31 of each year. The agreement provides for an annual base salary of $1,000,000 with increases at the discretion of the Board of Directors. Pursuant to this agreement, Mr. Goldfarb is not entitled to an annual incentive bonus unless Pre-Tax Income exceeds $10,000,000, at which point he is entitled to 6 percent of our Pre-Tax Income in excess of $2,000,000. Additionally, Mr. Goldfarb’s annual incentive payouts are capped annually at an amount equal to two times the targeted bonus based upon the budgeted level of Pre-Tax Income as determined by the Compensation Committee no later than April 30 of each fiscal year. For information with respect to proposed amendments to the

annual incentive bonus provision, see “Proposed Modifications to our Annual Incentive Arrangements for Messrs. Goldfarb and Aaron” and Proposal No. 2 — Approval of Proposed Amendments to the Performance-Based Bonus Provision in the Employment Agreement with Morris Goldfarb.
Mr. Goldfarb is entitled to an annual contribution of $100,000 per year to a supplemental pension trust for each year in which G-III’s Net After-Tax Income (as defined in his employment agreement) exceeds $1,500,000. Mr. Goldfarb is also entitled to a $5,000,000 life insurance policy which names his wife as beneficiary.
For additional information concerning Mr. Goldfarb’s post-termination and change in control benefits, see “Potential Payments Upon Termination or Change-in-Control — Severance and Change in Control Arrangements of Mr. Goldfarb” below.
Aaron Employment Agreement
Mr. Aaron has an employment agreement with us that is effective through January 31, 2015. The agreement provides for automatic one-year renewals unless either party gives written notice of non-extension to the other party at least six months prior to the expiration of the term. The agreement provides for an annual base salary of $750,000. Mr. Aaron is not entitled to an annual incentive bonus unless our Pre-Tax Income exceeds $10,000,000, at which point he is entitled to 4 percent of our Pre-Tax Income in excess of $2,000,000. Additionally, Mr. Aaron’s annual incentive payouts are capped annually at an amount equal to two times the targeted bonus based upon the budgeted level of Pre-Tax Income as determined by the Compensation Committee no later than April 30 of each fiscal year. For information with respect to proposed amendments to the annual incentive bonus provision, see “Proposed Modifications to our Annual Incentive Arrangements for Messrs. Goldfarb and Aaron” and Proposal No. 3 — Approval of Proposed Amendments to the Performance-Based Bonus Provision in the Employment Agreement with Sammy Aaron.
For additional information concerning Mr. Aaron’s post-termination and change in control benefits, see “Potential Payments Upon Termination or Change-in-Control — Severance and Change in Control Arrangements of Mr. Aaron” below.
Miller Employment Agreement
Mr. Miller has an employment agreement with us that is effective through January 31, 2016. On August 1, 2014 and on each subsequent August 1 prior to the end of the then term, the term of the agreement will automatically be extended for an additional year unless either party gives written notice of non-extension to the other no more than 60 days prior to such August 1. The agreement provides that Mr. Miller will receive an annual salary of $500,000, plus such bonus, if any, as shall be awarded by G-III’s Board of Directors or Compensation Committee, and will be entitled to participate in G-III’s benefit plans and arrangements for senior executive personnel.
For additional information concerning Mr. Miller’s post-termination and change in control benefits, see “Potential Payments Upon Termination or Change-in-Control — Severance and Change in Control Arrangements of Mr. Miller” below.
Effect of Section 162(m) of the Code
In general, under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), a publicly held corporation may not deduct as an expense for federal income tax purposes total compensation in excess of $1 million paid in any taxable year to each of its chief executive officer and other Named Executive Officers (other than the Chief Financial Officer). Section 162(m) of the Code provides an exemption for certain “performance-based” compensation. Annual bonus amounts payable to Messrs. Goldfarb and Aaron pursuant to stockholder-approved formulae contained in their employment agreements, as well as compensation to our Named Executive Officers attributable to performance-based restricted stock units and stock options, are intended to qualify for the “performance-based compensation” exemption. Our 2005 Plan also allows us to award annual and other cash incentive compensation to our other Named Executive Officers in a manner that will also qualify them for the “performance-based compensation” exemption.

The Compensation Committee is mindful of the limit on deductibility of certain non-performance-based compensation under Section 162(m) of the Code; however, the Committee is not constrained from authorizing the payment of compensation that is subject to the deduction limit and may do so, as and when it deems appropriate, and in our best interest, under the circumstances. Although the Compensation Committee considers the net cost to G-III in making all compensation decisions (including the potential limitation on deductibility of executive compensation), there is no assurance that we will be allowed to deduct all of the compensation paid to our executives.
How We Make Compensation Decisions
The Role of the Compensation Committee
Our Compensation Committee is responsible for determining the compensation of our executive officers and for evaluating and establishing the overall structure and design of our compensation program.
The Compensation Committee consults with our Chairman, Chief Executive Officer and President in connection with making its determinations regarding compensation of our other Named Executive Officers, and relies to a large extent on his evaluation of each executive officer’s performance and his recommendations regarding the amount and mix of the total compensation paid to these executives.
The Role of Management
Other than our Chairman, Chief Executive Officer and President, no other member of G-III’s management team is involved in determining compensation levels or policies at G-III with respect to our Named Executive Officers. Our Chairman, Chief Executive Officer and President is not involved in the determination of his own pay.
The Role of the Compensation Committee’s Independent Compensation Consultant
Steven Hall & Partners, a nationally recognized executive compensation consultancy, serves as the Compensation Committee’s independent advisor with respect to executive compensation and corporate governance matters. In carrying out these responsibilities, Steven Hall & Partners provides the Compensation Committee with insight and analysis of compensation programs and incentives used by G-III’s peers and other public companies, trends in executive compensation and corporate governance, and the evolving policies and procedures of proxy advisory services firms. Steven Hall & Partners also assists the Compensation Committee in its stockholder engagement efforts.
The Compensation Committee retains sole responsibility for engaging any compensation advisor and meets with its advisor, as needed, in the Compensation Committee’s sole discretion. Steven Hall & Partners has never performed any services other than executive and director compensation and related corporate governance consulting for G-III, and performed its services only on behalf of and at the direction of the Compensation Committee.
The Compensation Committee believes that no conflict of interest was raised as a result of the work performed by Steven Hall & Partners during the year ended January 31, 2014. In reaching this conclusion, the Compensation Committee considered the factors set forth in Exchange Act Rule 10C-1(b)(4). Specifically, the Compensation Committee has analyzed whether the work of Steven Hall & Partners as a compensation consultant has raised any conflict of interest, taking into consideration the following factors: (i) the provision of other services to G-III by Steven Hall & Partners; (ii) the amount of fees from G-III paid to Steven Hall & Partners as a percentage of Steven Hall & Partners’ total revenue; (iii) the policies and procedures of Steven Hall & Partners that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Steven Hall & Partners or the individual compensation advisors employed by Steven Hall & Partners with a member of the Compensation Committee; (v) any G-III stock owned by Steven Hall & Partners or the individual compensation advisors employed by Steven Hall & Partners; and (vi) any business or personal relationship of Steven Hall & Partners or the individual compensation advisors employed by Steven Hall & Partners with a G-III executive officer. Additionally, compensation payments made to Steven Hall & Partners and any affiliates for the year ended January 31, 2014 were less than $120,000 and Steven Hall & Partners or its affiliates did not provide additional services to G-III in excess of $120,000 during the year ended January 31, 2014.

The Role of Stockholder “Say-on-Pay” Votes
G-III values the opinions of its stockholders and has spent considerable time soliciting additional information regarding their views. We incorporate consideration of these views into our decisions regarding the design of our compensation and governance programs and have made numerous changes over the past several years to address specific concerns raised by stockholders.. G-III was pleased that it received a positive “say on pay” vote at last year’s Annual Meeting and believes that the improvements made to its executive compensation programs in fiscal 2014 will once again result in a positive “say on pay” vote at this Annual Meeting.
The Role of Competitive Marketplace Practice
The Compensation Committee periodically reviews the compensation design features and chief executive officer pay levels of companies that are similar to us to ensure that our programs are fair and reasonable. While the Compensation Committee reviews this information, this process serves as one reference point among others. In making determinations regarding our compensation and related governance programs and pay levels, the Compensation Committee also considers our short- and long-term strategic objectives, individual performance, scope of responsibilities, retention concerns, and previously negotiated contractual obligations.
As part of our periodic review of the G-III compensation program, Steven Hall & Partners provided an analysis of compensation design features and chief executive officer pay levels based upon market data from public filings of companies that were similar to us. These companies were selected based on the following parameters:
  • Appropriately sized companies (revenues ranged from approximately 0.5 to 2 times those of G-III);
  • Industries similar to G-III, specifically apparel and retail companies; and
  • Companies from the comparator groups used by stockholder advisory groups, excluding those which were clearly inappropriate based on industry classification.
The companies in the most recent pay level peer group included:
 
Carter’s, Inc.
Lululemon Athletica, Inc.
Skechers USA, Inc.
Columbia Sportswear Co.
Maidenform Brands, Inc. (subsequently acquired by Hanesbrands Inc.)
Steven Madden, Ltd.
Crocs, Inc.
Oxford Industries, Inc.
Under Armour, Inc.
Deckers Outdoor Corp.
Perry Ellis International, Inc.
Warnaco Group, Inc. (The) (subsequently acquired by PVH Corp.)
Kate Spade & Co. (formerly Fifth & Pacific Companies, Inc.)
Quiksilver, Inc.
Wolverine World Wide, Inc.
In addition to the companies, Steven Hall & Partners identified five additional companies which were too large to serve as pay comparators, but which were nonetheless viewed as possible sources for competitive intelligence regarding pay design and practices. The additional companies in the most recent practice peer group included:
 
Guess?, Inc.
Jones Group, Inc. (The)
PVH Corp.
Ralph Lauren Corp.
VF Corp.
The Compensation Committee expects that it will review competitive marketplace practice from time to time in the future. At that time, it expects that the comparator group will be reviewed to ensure continued appropriateness of these companies in light of changes in revenue size and business mix (for G-III and the respective comparator companies), as well as merger and acquisition activity. Additionally, other companies meeting the selection parameters may be included in the group if deemed appropriate by the Committee.

The Consideration of Risk
The Compensation Committee incorporates considerations of risk into its deliberations regarding pay levels and practices, and believes that G-III’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on G-III.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management, and based upon such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
Compensation Committee
Richard White, Chairman
Laura Pomerantz Allen Sirkin
Willem van Bokhorst

SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the total compensation paid to or earned by our Chief Executive Officer, Chief Financial Officer and each of the three other most highly compensated executive officers (including Ms. Nostra, who served as President through September 19, 2013) (collectively, “Named Executive Officers”, individually, a “Named Executive Officer”), based on total compensation (excluding changes in pension value and nonqualified deferred compensation earnings) for the last three completed fiscal years ended January 31 in each year for services in all capacities to us and our subsidiaries.
 
Name and
Principal Position
Fiscal
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive
Plan
Compensation
($)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
($)
All Other
Compensation
($)(1)
Total
($)
Morris Goldfarb
Chairman of the Board, Chief Executive Officer and President
2014
1,000,000
7,735,277
4,023,240
   
(2)
299,910
13,058,427
2013
1,000,000
5,744,992
3,479,000
240,766
(3)
299,768
10,764,526
2012
1,000,000
4,930,213
4,606,500
28,699
(4)
300,684
10,866,096
Neal S. Nackman
Chief Financial Officer and Treasurer
2014
375,000
550,000
412,600
11,370
1,348,970
2013
354,000
425,000
347,900
11,220
1,138,120
2012
325,000
350,000
307,100
14,790
996,890
Sammy Aaron
Vice Chairman
2014
750,000
5,049,417
3,094,800
33,459
8,927,676
2013
750,000
3,750,203
2,296,140
31,375
6,827,718
2012
750,000
3,218,333
3,071,000
29,994
7,069,327
Wayne S. Miller
Chief Operating Officer and Secretary
2014
500,000
2,000,000
2,063,200
78,486
4,641,686
2013
500,000
1,500,000
1,739,500
75,248
3,814,748
2012
500,000
1,200,000
1,966,150
68,979
3,735,129
Jeanette Nostra
President(5)
2014
416,666
200,000
13,434
630,100
2013
500,000
150,000
173,950
19,255
843,205
2012
500,000
300,000
214,970
28,806
1,043,776
 
(1)
  • All Other Compensation includes the following:
 
Name
Fiscal
Year
Life Insurance
Premiums(a)
Supplemental
Long-Term
Disability
Coverage
Insurance
Premiums(b)
Matching
Contribution to
401(k) Plan(c)
Perquisites
Total
Morris Goldfarb
2014
138,900
17,353
7,650
136,007
(d)
299,910
2013
138,900
17,353
7,500
136,015
(e)
299,768
2012
138,890
18,333
7,350
136,111
(f)
300,684
Neal S. Nackman
2014
3,720
7,650
11,370
2013
3,720