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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

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

ý
 
Preliminary Proxy Statement

o
 
Confidential, for Use of the Commission Only (as permitted by Rule 14a6(e)(2))

o
 
Definitive Proxy Statement

o
 
Definitive Additional Materials

o
 
Soliciting Material under §240.14a-12

 

PERRY ELLIS INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)

 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o
 
No fee required.

ý
 
Fee computed on table below per Exchange Act Rules 14(a)-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        Common stock, par value $0.01 per share, of Perry Ellis International, Inc. ("Company Common Stock") 
    (2)   Aggregate number of securities to which transaction applies:
        15,892,593 shares of Company Common Stock (including 635,975 shares of Company Common Stock issuable pursuant to a corresponding number of restricted stock awards), 5,001 options to acquire a corresponding number of shares of Company Common Stock under the 2005 Long-Term Incentive Compensation Plan and the 2015 Long Term Incentive Compensation Plan (together, the "Company Equity Plan"), 27,973 stock appreciation rights with respect to a corresponding number of shares of Company Common Stock granted under the Company Equity Plan, and 7,301 restricted stock units which shall be cancelled immediately prior to the effective time of the merger. 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        The proposed maximum aggregate value of transaction for purposes of calculating the filing fee is $437,342,760.89. The maximum aggregate value of the transaction was calculated based upon the sum of (i) (A) 15,892,593 shares of Company Common Stock (including 635,975 shares of Company Common Stock issuable pursuant to a corresponding number of restricted stock awards) issued and outstanding, multiplied by (B) $27.50 (the "per share merger consideration"), (ii) (A) 5,001 options to acquire a corresponding number of shares of Company Common Stock under the Company Equity Plan, converted into the right to receive (B) the excess, if any, of the per share merger consideration over the per share exercise or purchase price of the applicable Company option at the time of calculation, and (iii) (A) 27,973 stock appreciation rights with respect to a corresponding number of shares of Company Common Stock granted under the Company Equity Plan, converted into the right to receive (B) the excess, if any, of the per share merger consideration over the exercise price per share of Company Common Stock subject to such Company stock appreciation right at the time of calculation. The filing fee equals the product of 0.0001245 multiplied by the maximum aggregate value of the transaction. 
    (4)   Proposed maximum aggregate value of transaction:
        $437,342,760.89 
    (5)   Total fee paid:
        $54,450.00 

o
 
Fee paid previously with preliminary materials.

o
 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 
 
(1)
 
Amount Previously Paid:
         
    (2)   Form, Schedule or Registration Statement No.:
         
    (3)   Filing Party:
         
    (4)   Date Filed:
         

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PRELIMINARY PROXY MATERIAL SUBJECT TO COMPLETION
PERRY ELLIS INTERNATIONAL, INC.
3000 N.W. 107th Avenue
Miami, Florida 33172

[                        ], 2018

Dear Shareholder:

        You are cordially invited to attend a Special Meeting of the shareholders (the "Special Meeting") of Perry Ellis International, Inc. ("Perry Ellis" or the "Company"), which will be held at [        ] [a.m.][p.m.], Eastern Time, on [                        ], 2018 at [        ]. The Special Meeting is being held for the following purposes, as more fully described in the accompanying Proxy Statement:

        If the merger is completed, each share of common stock, par value $0.01 per share, of the Company ("Company Common Stock") that you own immediately prior to the effective time of the merger, other than as provided below, will be converted into the right to receive $27.50 in cash (the "per share merger consideration"), without interest and less applicable withholding taxes. The following shares of Company Common Stock will not be converted into the right to receive the per share merger consideration in connection with the merger: (i) shares of Company Common Stock held by the Company or any of its wholly-owned subsidiaries or Parent or its subsidiaries, (ii) shares of Company Common Stock held by George Feldenkreis, Oscar Feldenkreis and certain other related investors (the "Rollover Investors"), and (iii) shares of Company Common Stock whose holders have not voted in favor of adopting the merger agreement and have demanded and perfected their appraisal rights in accordance with, and have complied in all respects with, the Florida Business Corporation Act. Following the completion of the merger, Parent will own all of the Company's issued and outstanding capital stock and the Company will continue its operations as a wholly-owned subsidiary of Parent. As a result, the Company will no longer have Company Common Stock listed on the Nasdaq Global Market and will no longer be required to file periodic and other reports with the Securities and Exchange Commission with respect to Company Common Stock. After the merger, you will no longer have an equity interest in the Company and will not participate in any potential future earnings of the Company.

        The Rollover Investors have also entered into a voting agreement with Parent and the Company that covers an aggregate of approximately 19.8% of the outstanding shares of Company Common Stock, pursuant to which, unless the voting agreement is terminated in accordance with its terms (including upon a termination of the merger agreement in accordance with its terms), the Rollover Investors have agreed to, among other things, vote, or cause to be voted, their shares of Company Common Stock in favor of the adoption of the merger agreement and approval of any related proposal in furtherance of the merger and the transactions contemplated by the merger agreement. Moreover, adoption of the merger agreement and the transactions contemplated by the merger agreement will

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require the affirmative vote of the holders of (i) a majority of the outstanding shares of the Company Common Stock entitled to vote thereon as of the record date for the Special Meeting; and (ii) a majority of the outstanding shares of the Company Common Stock entitled to vote thereon as of the record date for the Special Meeting that are not owned by: (x) officers or directors of the Company, (y) the Rollover Investors, or (z) any person having any equity interest in Parent or Merger Sub.

        The Rollover Investors have committed to contribute, in the aggregate, approximately 19.8% of Company Common Stock immediately prior to the effective time of the merger to Parent in exchange for a pro rata share of the equity of Parent based on a value of each share of Company Common Stock so contributed of $27.50.

        The board of directors formed a special committee comprised entirely of independent and disinterested directors (the "Special Committee") to consider and negotiate the terms and conditions of the merger and to recommend to the board of directors whether to pursue the merger and, if so, on what terms and conditions.

        The Special Committee, after careful consideration, voted unanimously to recommend to the board of directors that it, and thereafter the board of directors, after careful consideration and acknowledging the interest of George Feldenkreis and Oscar Feldenkreis in the merger, voted unanimously to (i) approve and declare advisable the merger agreement, the merger and the transactions contemplated by the merger agreement, (ii) declare that it is fair to and in the best interests of the Company and our unaffiliated shareholders that the Company enter into the merger agreement and consummate the merger on the terms and subject to the conditions set forth in the merger agreement, (iii) direct that the adoption of the merger agreement be submitted to a vote at a meeting of the shareholders of the Company and (iv) recommend to the shareholders of the Company that they vote FOR the adoption of the merger agreement. In arriving at its recommendations, the board of directors and Special Committee carefully considered a number of factors described in the accompanying Proxy Statement.

        The Special Committee and the board of directors also recommend that you vote FOR the advisory (non-binding) approval of the "golden parachute compensation" and FOR the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the merger agreement. Adoption of the merger agreement and approval of the "golden parachute compensation" are subject to separate votes by the Company's shareholders, and approval of the "golden parachute compensation" is not a condition to the completion of the merger.

        In considering the recommendation of the board of directors, you should be aware that certain of the Company's directors and executive officers have interests in the merger that are different from, or in addition to, the interests of our shareholders generally as further described in the accompanying Proxy Statement. You should also be aware that the Rollover Investors have interests in the merger that are different from, or in addition to, the interests of the Company's other shareholders, as further described in the accompanying Proxy Statement.

        Any holder of Company Common Stock who does not vote in favor of the adoption of the merger agreement will have the right to seek appraisal of the fair value of such holder's shares of Company Common Stock if the merger is completed in lieu of receiving the per share merger consideration, but only if such holder does not vote in favor of adopting the merger agreement and otherwise complies with the procedures of Sections 607.1301 through 607.1333 of the Florida Business Corporations Act (the "FBCA"), which is the appraisal rights statute applicable to Florida corporations. These appraisal rights are summarized in the accompanying Proxy Statement. The accompanying Proxy Statement constitutes notice to you from the Company of the availability of appraisal rights under the FBCA.

        Your vote is important. Whether or not you plan to attend the Special Meeting in person, to ensure the presence of a quorum and that your shares are represented at the Special Meeting, please vote via the Internet or by telephone as instructed in the accompanying proxy materials or complete, date and sign and return a proxy card as promptly as possible. Even if you plan to attend the Special

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Meeting, please take advantage of one of the advance voting options to ensure that your shares are represented at the Special Meeting. You may revoke your proxy at any time before it is voted by following the procedures described in the accompanying Proxy Statement. The merger cannot be completed unless the merger is adopted by an affirmative vote of: (i) holders of a majority of the outstanding shares of the Company Common Stock entitled to vote thereon as of the record date for the Special Meeting; and (ii) holders of a majority of the outstanding shares of the Company Common Stock entitled to vote thereon as of the record date for the Special Meeting that are not owned by: (x) officers or directors of the Company, (y) the Rollover Investors, or (z) any person having any equity interest in Parent or Merger Sub.

        Thank you for your continued support.

    Sincerely,

 
 
Oscar Feldenkreis
 Chief Executive Officer and Director

        Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved the merger, passed upon the merits or fairness of the merger agreement or the transactions contemplated thereby, including the proposed merger, or passed upon the adequacy or accuracy of the information contained in this document or the accompanying Proxy Statement. Any representation to the contrary is a criminal offense.

        The accompanying Proxy Statement is dated [                        ], 2018 and is first being mailed to the Company's shareholders on or about [                        ], 2018.

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON [    ], 2018

PERRY ELLIS INTERNATIONAL, INC.

Dear Shareholder:

        You are cordially invited to attend a Special Meeting of the shareholders (the "Special Meeting") of Perry Ellis International, Inc. ("Perry Ellis" or the "Company") which will be held at [    ] [a.m.][p.m.], Eastern Time, on [    ], 2018 at [    ]. The Special Meeting is being held for the following purposes, as more fully described in the accompanying Proxy Statement:

        In addition, shareholders will be asked to consider and vote upon any other matters that properly come before the Special Meeting or any adjournment, postponement or recess thereof.

        The merger agreement and the merger, the "golden parachute compensation" arrangements and adjournment proposal are more fully described in the accompanying Proxy Statement, which the Company urges you to read carefully and in its entirety. A copy of the merger agreement is attached as Appendix A to the accompanying Proxy Statement, which the Company also urges you to read carefully and in its entirety.

        The board of directors, based in part on the unanimous recommendation of a special committee comprised entirely of independent and disinterested directors, has approved and authorized the merger agreement and recommends a vote FOR Proposal 1, FOR Proposal 2 and FOR Proposal 3. The Company does not expect a vote to be taken on any other matters at the Special Meeting or any adjournment, postponement or recess thereof. If any other matters are properly presented at the Special Meeting or any adjournment, postponement or recess thereof for consideration, however, the holders of the proxies will have discretion to vote on these matters in accordance with their best judgment.

        Only shareholders that owned shares of common stock, par value $0.01 per share, of the Company ("Company Common Stock"), at the close of business on [    ], 2018 are entitled to notice of and to vote at the Special Meeting and any adjournment, postponement or recess thereof.

        George Feldenkreis, Oscar Feldenkreis and certain other related shareholders (the "Rollover Investors") have entered into a voting agreement with Parent and the Company that covers an aggregate of approximately 19.8% of the outstanding shares of Company Common Stock, pursuant to which, unless the voting agreement is terminated in accordance with its terms (including upon a termination of the merger agreement in accordance with its terms), such shareholders have agreed to, among other things, vote, or cause to be voted, their shares of Company Common Stock in favor of the adoption of the merger agreement and any related proposal in furtherance of the merger and the transactions contemplated by the merger agreement. Moreover, adoption of the merger agreement and the transactions contemplated by the merger agreement will require the affirmative vote of the holders

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of (i) a majority of the outstanding shares of the Company Common Stock entitled to vote thereon as of the record date for the Special Meeting; and (ii) a majority of the outstanding shares of the Company Common Stock entitled to vote thereon as of the record date for the Special Meeting that are not owned by: (x) officers or directors of the Company, (y) the Rollover Investors, or (z) any person having any equity interest in Parent or Merger Sub.

        The Rollover Investors have committed to contribute, in the aggregate, approximately 19.8% of Company Common Stock immediately prior to the effective time of the merger to Parent in exchange for a pro rata share of the equity of Parent based on a value of each share of Company Common Stock so contributed of $27.50.

        In considering the recommendations of the board of directors, you should be aware that certain of the Company's directors and executive officers have interests in the merger that are different from, or in addition to, the interests of our shareholders generally, as further described in the accompanying Proxy Statement. You should also be aware that the Rollover Investors have interests in the merger that are different from, or in addition to, the interests of the Company's other shareholders, as further described in the accompanying Proxy Statement.

        Any holder of Company Common Stock who does not vote in favor of the adoption of the merger agreement will have the right to seek appraisal of the fair value of such holder's shares of Company Common Stock if the merger is completed in lieu of receiving the per share merger consideration, but only if such holder does not vote in favor of adopting the merger agreement and otherwise complies with the procedures of Sections 607.1301 through 607.1333 of the Florida Business Corporation Act (the "FBCA"), which is the appraisal rights statute applicable to Florida corporations. These appraisal rights are summarized in the accompanying Proxy Statement. The accompanying Proxy Statement constitutes notice to you from the Company of the availability of appraisal rights under the FBCA.

        Your vote is important. Whether or not you plan to attend the Special Meeting in person, to ensure the presence of a quorum and that your shares are represented at the Special Meeting, please vote via the Internet or by telephone as instructed in the accompanying proxy materials or complete, date and sign and return a proxy card as promptly as possible. Even if you plan to attend the Special Meeting, please take advantage of one of the advance voting options to ensure that your shares are represented at the Special Meeting. You may revoke your proxy at any time before it is voted by following the procedures described in the accompanying Proxy Statement. The merger cannot be completed unless the merger is adopted by an affirmative vote of: (i) holders of a majority of the outstanding shares of the Company Common Stock entitled to vote thereon as of the record date for the Special Meeting; and (ii) holders of a majority of the outstanding shares of the Company Common Stock entitled to vote thereon as of the record date for the Special Meeting that are not owned by: (x) officers or directors of the Company, (y) the Rollover Investors, or (z) any person having any equity interest in Parent or Merger Sub. The approval of the "golden parachute compensation" is advisory (non-binding) and is not a condition to the completion of the merger.

        The Company urges you to read the Proxy Statement and merger agreement carefully and in their entirety.

    By order of the board of directors,

 
 
Tricia Thompkins
 General Counsel and Secretary

[    ], 2018

        Please do not send your Company Common Stock certificates to the Company at this time. If the merger is completed, you will be sent instructions regarding the surrender of your Company Common Stock certificates.

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Important Notice Regarding the Availability of Proxy Materials
for the Special Meeting of Shareholders to be Held On [    ], 2018

This Proxy Statement is Available at [            ]

        If you have questions about the merger agreement or the merger, including the procedures for voting your shares, you should contact Innisfree M&A Incorporated, our proxy solicitor, by calling toll-free at 1 (888) 750-5834 (banks and brokers may call collect at (212) 750-5833).

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Proxy Statement

 
   Page  

SUMMARY TERM SHEET

     1  

QUESTIONS AND ANSWERS ABOUT THE MERGER, THE "GOLDEN PARACHUTE COMPENSATION" AND THE SPECIAL MEETING

    
12		  

FORWARD-LOOKING STATEMENTS

    
23		  

SPECIAL FACTORS

    
25		  

The Parties Involved in the Merger

     25  

Business and Background of Natural Persons Related to the Company

     27  

Business and Background of Natural Persons Related to the GF Group Filing Persons

     30  

Overview of the Transaction

     31  

Background of the Merger

     32  

Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger

     53  

Opinion of PJS

     59  

Purposes and Reasons of the Company for the Merger

     68  

Purposes and Reasons of the GF Group Filing Persons for the Merger

     68  

Positions of the GF Group Filing Persons Regarding the Fairness of the Merger

     69  

Certain Effects of the Merger; Plans for the Company

     72  

Alternatives to the Merger

     73  

Effects on the Company if the Merger is not Completed

     74  

Projected Financial Information

     74  

Financing of the Merger

     77  

Limited Guarantee

     81  

Pledge and Security Agreement

     82  

Interests of the Company's Directors and Executive Officers in the Merger

     83  

Voting Agreement

     89  

Dividends

     90  

Appraisal Rights

     90  

Material U.S. Federal Income Tax Consequences

     93  

Regulatory Approvals

     96  

Delisting and Deregistration of Company Common Stock

     97  

Effective Time of Merger

     97  

Payment of Merger Consideration and Surrender of Stock Certificates

     97  

Fees and Expenses

     98  

THE SPECIAL MEETING

    
99		  

Time, Place and Purpose of the Special Meeting

     99  

Special Committee and Board Recommendation

     99  

Who is Entitled to Vote at the Special Meeting?

     99  

How Do I Vote?

     100  

How Many Votes Do I Have?

     100  

What If I Request and Return a Proxy Card But Do Not Make Specific Choices?

     101  

Can I Change My Vote After I Return My Proxy Card?

     101  

How Are Votes Counted?

     101  

How Many Votes Are Needed to Approve Each Proposal?

     102  

What Should I Do With My Stock Certificates at this Time?

     102  

How Many Shares Must Be Present to Constitute a Quorum for the Special Meeting?

     103  

Stock Ownership and Interests of Certain Persons

     103  

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   Page  

Expenses of Proxy Solicitation

     103  

Adjournments, Postponements and Recesses

     104  

Rights of Shareholders Who Object to the Merger

     104  

Other Matters

     104  

Questions and Additional Information

     104  

THE MERGER AGREEMENT

    
105		  

General; The Merger

     105  

Closing and Effective Time of the Merger

     106  

Certificate of Incorporation; Bylaws

     106  

Conversion of Securities

     106  

Payment Procedures

     107  

Representations and Warranties

     109  

Covenants of the Company

     112  

Covenants of Parent and/or Merger Sub

     119  

Certain Covenants of Each Party

     121  

Conditions to the Completion of the Merger

     125  

Termination

     126  

Effect of Termination; Fees and Expenses

     128  

Amendment; Extension; Waiver

     131  

Special Committee Approval

     131  

Breach of Rollover Investors Disregarded

     131  

ADVISORY VOTE ON "GOLDEN PARACHUTE COMPENSATION"

    
132		  

Golden Parachute Payments

     132  

Vote Required and Board of Directors Recommendation

     134  

ADJOURNMENT OF THE SPECIAL MEETING

    
135		  

Adjournment of the Special Meeting

     135  

Vote Required and Board of Directors Recommendation

     135  

MARKETS AND MARKET PRICE

    
135		  

SELECTED FINANCIAL INFORMATION

    
137		  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    
139		  

COMMON STOCK TRANSACTION INFORMATION

    
144		  

Transactions by the GF Group Filing Persons

     144  

Transactions by the Company

     145  

Transactions by the Company's Directors and Executive Officers

     146  

SHAREHOLDER PROPOSALS AND NOMINATIONS

    
147		  

HOUSEHOLDING

    
148		  

WHERE SHAREHOLDERS CAN FIND MORE INFORMATION

    
149		  

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PERRY ELLIS INTERNATIONAL, INC.
3000 N.W. 107th Avenue
Miami, Florida 33172

PROXY STATEMENT

        This Proxy Statement contains information related to a Special Meeting of shareholders (the "Special Meeting") of Perry Ellis International, Inc. to be held on [                    ], 2018, at [            ] at [            ] [a.m.] [p.m.], Eastern Time, and at any adjournments, postponements or recesses thereof. We are furnishing this Proxy Statement to our shareholders as part of the solicitation of proxies by our board of directors for use at the Special Meeting. At the Special Meeting you will be asked to, among other things, consider and vote on the adoption of the merger agreement (as defined immediately below). This Proxy Statement is first being mailed to shareholders on or about [                    ], 2018.


SUMMARY TERM SHEET

        This following summary term sheet highlights selected information contained in this Proxy Statement and may not contain all of the information that is important to you. We urge you to read this entire Proxy Statement carefully, including the appendices, before voting. We have included section references to direct you to a more complete description of the topics described in this summary term sheet. You may obtain the information incorporated by reference into this Proxy Statement without charge by following the instructions in "Where Shareholders Can Find More Information" beginning on page 149. Unless the context requires otherwise, references in this Proxy Statement to "we," "us," "our," the "Company" or "Perry Ellis" refer to Perry Ellis International, Inc., a Florida corporation, and its subsidiaries. We refer to Feldenkreis Holdings LLC, a Delaware limited liability company, as "Parent," and GF Merger Sub, Inc., a Florida corporation, as "Merger Sub." We refer to George Feldenkreis, in his individual capacity and as trustee for the George Feldenkreis Revocable Trust UAD 12/23/13, Fanny Hanono, in her individual capacity and as trustee for the Fanny Hanono Revocable Trust UAD 07/06/11, Oscar Feldenkreis, in his individual capacity and as trustee for the Oscar Feldenkreis Revocable Trust UAD 05/06/11, and Elena Feldenkreis, as trustee for each of the Erica Feldenkreis 2012 Irrevocable Trust UAD 10/17/12, Jennifer Feldenkreis 2012 Irrevocable Trust UAD 10/17/12 and Stephanie Feldenkreis 2012 Irrevocable Trust UAD 10/17/12, collectively, as the "Rollover Investors." We refer to the Rollover Investors, Parent and Merger Sub, collectively, as the "GF Group" or the "GF Group Filing Persons." We refer to the special committee of the board of directors comprised entirely of independent and disinterested directors as the "Special Committee."

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QUESTIONS AND ANSWERS ABOUT THE MERGER,
THE "GOLDEN PARACHUTE COMPENSATION" AND THE SPECIAL MEETING

        The following questions and answers, which are for your convenience only, briefly address some commonly asked questions about the merger, the "golden parachute compensation" and the Special Meeting and are qualified in their entirety by the more detailed information contained elsewhere in this Proxy Statement. These questions and answers may not address all questions that may be important to you as a shareholder of Perry Ellis. You should still carefully read this entire Proxy Statement, including the attached appendices.

Q:    Why am I receiving these materials?

A:
You are receiving this Proxy Statement and proxy card because you owned shares of Company Common Stock as of [      ], 2018, the record date for the Special Meeting. The board of directors is providing these proxy materials in connection with its solicitation of proxies in favor of (i) the adoption of the merger agreement, (ii) advisory (non-binding) approval of the "golden parachute compensation" that may become payable to the Company's named executive officers under existing agreements with the Company in connection with the merger and (iii) approval of the proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the merger agreement.

Q:    When and where is the Special Meeting?

A:
The Special Meeting will be held at [    ] [a.m.][p.m.], Eastern Time, on [    ], 2018. The Special Meeting will be held at [    ].

Q:    What items will be voted upon at the Special Meeting?

A:
There are three matters scheduled for a vote at the Special Meeting:

1.
A vote on the adoption of the merger agreement, pursuant to which Merger Sub will merge with and into the Company and the Company will continue as the surviving corporation and become a wholly-owned subsidiary of Parent;

2.
An advisory (non-binding) vote to approve the "golden parachute compensation" that may become payable to the Company's named executive officers in connection with the merger; and

3.
A vote on a proposal to approve the adjournment, postponement or recess of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the merger agreement.

Q:    Why is the merger being proposed?

A:
The Company's purpose in proposing the merger is to enable our unaffiliated shareholders to receive, upon completion of the merger, $27.50 per share in cash, without interest and less applicable withholding taxes, for each share of Company Common Stock held by them as of the effective time of the merger. The Special Committee, after careful consideration, voted unanimously to recommend to the board of directors that it, and thereafter the board of directors, after careful consideration and acknowledging the interest of George Feldenkreis and Oscar Feldenkreis in the merger, voted unanimously to (i) approve and declare advisable the merger agreement, the merger and the transactions contemplated by the merger agreement, (ii) declare

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Q:    What will happen in the merger?

A:
In the merger, Merger Sub will be merged with and into the Company and the Company will continue as the surviving corporation and become a wholly-owned subsidiary of Parent. As a result of the merger, Company Common Stock will no longer be publicly traded, and you will no longer have any interest in the Company's future earnings or growth. In addition, Company Common Stock will be delisted from the Nasdaq Global Market and deregistered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Company will no longer be required to file periodic reports with the SEC with respect to Company Common Stock.

Q:    What will I receive in the merger?

A:
If the merger is completed, you will be entitled to receive $27.50 in cash, without interest and less any applicable withholding taxes, for each share of Company Common Stock that you own immediately prior to the effective time of the merger. For example, if you own 100 shares of Company Common Stock, you will receive $2,750.00 in cash in exchange for your shares of Company Common Stock, without giving effect to any applicable withholding taxes. This does not apply to (i) shares of Company Common Stock held by the Company or any of its wholly-owned subsidiaries or Parent or its subsidiaries, (ii) shares of Company Common Stock held by the Rollover Investors, and (iii) shares of Company Common Stock whose holders have not voted in favor of adopting the merger agreement and have demanded and perfected their appraisal rights in accordance with, and have complied in all respects with, the FBCA. You will not own, directly or indirectly, any shares of the capital stock in the surviving corporation.

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Q:    How does the per share merger consideration compare to the market price of Company Common Stock prior to announcement of the merger?

A:
The $27.50 per share to be paid in respect of each share of Company Common Stock represents (i) a premium of 21.6% based on the closing price per share of Company Common Stock on February 5, 2018 (the "Undisturbed Date"), the last trading day before the announcement by George Feldenkreis of a proposal to acquire the Company, of $22.62; (ii) a premium of 26.22% based on the volume weighted average price per share of Company Common Stock for the 1-year period ending on the Undisturbed Date, of $21.79; (iii) a premium of 25.6% based on the volume weighted average price per share of Company Common Stock for the 180-day period ending on the Undisturbed Date, of $21.90; (iv) a premium of 14.0% based on the volume weighted average price per share of Company Common Stock for the 90-day period ending on the Undisturbed Date, of $24.13; (v) a premium of 11.1% based on the volume weighted average price per share of Company Common Stock for the 60-day period ending on the Undisturbed Date, of $24.75; (vi) a premium of 9.4% based on the volume weighted average price per share of Company Common Stock for the 30-day period ending on the Undisturbed Date, of $25.14; (vii) a premium of 5.8% based on the highest closing price per share of Company Common Stock for the 52-week period ending on the Undisturbed Date, of $25.99; and (viii) a discount of 4.5% based on the highest closing price per share of Company Common Stock for the 5-year period ending on the Undisturbed Date, of $28.80.

Q:    What is the recommendation of our board of directors?

A:
Based on the factors described in "Special Factors—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger," the board of directors, based in part on the unanimous recommendation of the Special Committee, has unanimously approved the merger agreement and recommends that you vote FOR the adoption of the merger agreement. In the opinion of our board of directors, the merger agreement and the terms and conditions of the merger are fair to and in the best interests of the Company and the unaffiliated shareholders of the Company. The board of directors also recommends that you vote FOR approval of the "golden parachute compensation" and FOR approval of the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the merger agreement. See "Special Factors—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger" beginning on page 53 and "Advisory Vote on "Golden Parachute Compensation" " beginning on page 132 and "The Special Meeting—Adjournments, Postponements and Recesses" beginning on page 104.

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Q:    How will our directors and executive officers vote on the proposal to adopt the merger agreement?

A:
Our directors and executive officers have informed us that, as of the date of this Proxy Statement, they intend to vote all of the shares of Company Common Stock owned directly by them, in favor of the adoption of the merger agreement. As of [            ], 2018, the record date for the Special Meeting, our directors and executive officers (including George Feldenkreis and Oscar Feldenkreis) directly owned, in the aggregate, [    ] shares of Company Common Stock entitled to vote at the Special Meeting, or collectively approximately [    ] of the outstanding shares of Company Common Stock entitled to vote at the Special Meeting. As of [            ], 2018, the record date for the Special Meeting, our directors and executive officers that are not party to the voting agreement (as described in "Special Factors—Voting Agreement" beginning on page 89) directly owned, in the aggregate, [    ] shares of Company Common Stock entitled to vote at the Special Meeting, or collectively approximately [    ] of the outstanding shares of Company Common Stock entitled to vote at the Special Meeting. See "Special Factors—Interests of the Company's Directors and Executive Officers in the Merger" beginning on page 83.

Q:    Have any shareholders already agreed to approve the merger?

A:
Yes. In connection with the merger agreement, the Rollover Investors have entered into a voting agreement with Parent and the Company, dated as of June 15, 2018, that covers an aggregate of approximately 19.8% of the outstanding shares of Company Common Stock, pursuant to which such shareholders have agreed to vote their shares of Company Common Stock in favor of the adoption of the merger agreement. For more information, please see "Special Factors—Voting Agreement" beginning on page 89.

Q:    Who will own the Company after the merger?

A:
After the merger, the Company will be a wholly-owned subsidiary of Parent. Immediately following the merger, George Feldenkreis, Oscar Feldenkreis and the other Rollover Investors will own 100% of the equity securities of Parent.

Q:    What are the consequences of the merger to present members of management of the Company and the Company's Board of Directors?

A:
Shares of Company Common Stock owned by members of management of the Company and the board of directors (in their individual capacity), in each case other than George Feldenkreis and Oscar Feldenkreis, will be treated the same as shares held by the Company's unaffiliated shareholders. Except as noted below, stock options and restricted stock awards owned by members of management of the Company and the board of directors will be treated the same as options and restricted stock awards held by the Company's employees that are outstanding immediately prior to the effective time of the merger. Each restricted stock award subject to any performance-based vesting condition held by Mr. Jorge Narino or Ms. Tricia McDermott Thompkins will be converted into a right to receive at the closing a cash payment equal to the product of: (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award that would have vested based on target level achievement. Each restricted stock award not subject to any performance-based vesting condition held by a non-employee member of the board of directors will vest on a prorated basis based on the number of days that have elapsed since the grant date of such award and be converted into the right to receive at the closing cash equal to the product of (a) the per share merger consideration and (b) such pro-rated number of shares. All outstanding restricted stock units held by George Feldenkreis will be cancelled. All remaining outstanding equity interests of the Company held by George Feldenkreis and Oscar Feldenkreis will be contributed to Parent pursuant to the Rollover Letters in exchange for a pro rata share of the equity of Parent. See "The Merger Agreement—Conversion of Securities—Common Stock" beginning on page 106. For additional information relating to

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Q:    Is the merger subject to the satisfaction of any conditions?

A:
Yes. The completion of the merger is subject to the satisfaction or waiver of the conditions described in "The Merger Agreement—Conditions to the Completion of the Merger" beginning on page 125. These conditions include, among others:

•
the adoption of the merger agreement by the affirmative vote of the holders of (i) a majority of the outstanding shares of Company Common Stock entitled to vote thereon as of the record date for the Special Meeting and (ii) a majority of the outstanding shares of Company Common Stock entitled to vote thereon as of the record date for the Special Meeting that are not owned directly or indirectly by the Rollover Investors, any other officers or directors of the Company or any other person having any equity interest in, or right to acquire any equity interest in, Merger Sub or any person of which Merger Sub is a direct or indirect subsidiary;

•
the expiration or termination of the regulatory waiting period applicable to the consummation of the merger under the HSR Act, which occurred on July 10, 2018 when the FTC notified Paul, Weiss that the request for early termination of the waiting period under the HSR Act had been granted effective as of the date of such notification;

•
the absence of certain governmental injunctions or orders that enjoin or otherwise prohibit the consummation of the merger;

•
the absence of a material adverse effect on the Company;

•
the Company's, Parent's and Merger Sub's performance in all material respects of their respective agreements and covenants in the merger agreement; and

•
the accuracy of the representations and warranties of the Company, Parent and Merger Sub (subject to certain qualifications).

Q:    Who can attend and vote at the Special Meeting?

A:
All holders of Company Common Stock at the close of business on [      ], 2018, the record date for the Special Meeting, will be entitled to vote (in person or by proxy) on the adoption of the merger agreement, the approval of the "golden parachute compensation" and the adjournment, postponement or recess of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the merger agreement.

Q:    What vote is required to adopt the merger agreement?

A:
The merger agreement must be adopted by the affirmative vote of the holders of (i) a majority of the outstanding shares of Company Common Stock entitled to vote thereon as of the record date for the Special Meeting, and (ii) a majority of the outstanding shares of Company Common Stock entitled to vote thereon as of the record date for the Special Meeting that are not owned directly or indirectly by the Rollover Investors, any other officers or directors of the Company or any other person having any equity interest in, or right to acquire any equity interest in, Merger Sub or any person of which merger Sub is a direct or indirect subsidiary. Because the required vote is based on the number of shares of Company Common Stock outstanding rather than on the number of votes cast, failure to vote your shares (including as a result of broker non-votes) and abstentions will have the same effect as voting against the adoption of the merger agreement. A "broker non-vote" occurs when a broker does not have discretion to vote on the matter and has not received instructions from the beneficial holder as to how such holder's shares are to be voted on

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Q:    Why am I being asked to cast an advisory (non-binding) vote to approve "golden parachute compensation" that may become payable to the Company's named executive officers under existing agreements with the Company in connection with the merger?

A:
The SEC has adopted rules that require the Company to seek an advisory (non-binding) vote with respect to certain compensation that will or may be payable to the Company's named executive officers in connection with the merger.

Q:    What is the "golden parachute compensation"?

A:
The "golden parachute compensation" is certain compensation that is tied to or based on the consummation of the merger and may become payable to the Company's named executive officers under existing agreements with the Company. See "Advisory Vote on "Golden Parachute Compensation" " beginning on page 132.

Q:    What vote is required to approve on an advisory basis the "golden parachute compensation" that may become payable to the Company's named executive officers under existing agreements with the Company in connection with the merger?

A:
The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the proposal is required for approval of the advisory (non-binding) proposal on "golden parachute compensation."

Q:    What will happen if shareholders do not approve the "golden parachute compensation" at the Special Meeting?

A:
Approval of the "golden parachute compensation" is not a condition to the completion of the merger. The vote with respect to the "golden parachute compensation" is merely an advisory vote and will not be binding on the Company or Parent. Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to shareholder approval. Accordingly, regardless of the outcome of the non-binding, advisory vote, if the merger agreement is adopted by the shareholders and completed, our named executive officers will be eligible to receive the various "golden parachute" payments.

Q:    What is a quorum?

A:
A quorum will be present if holders of a majority in voting power of all outstanding shares of Company Common Stock entitled to vote on a matter at the Special Meeting are present in person or represented by proxy at the Special Meeting. The quorum for the Special Meeting is not broken by the subsequent withdrawal of any shareholder. If a quorum is not present at the Special Meeting, the Special Meeting may be adjourned to another time and place.

Q:    How many votes do I have?

A:
You have one vote for each share of Company Common Stock that you own as of the close of business on the record date.

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Q:    How are votes counted and what happens if I do not vote?

A:
Votes will be counted separately in respect of each proposal by the inspector of election appointed for the Special Meeting, who will separately count FOR and AGAINST votes, abstentions and broker non-votes. A "broker non-vote" occurs when a nominee holding shares for a beneficial owner does not receive instructions from the beneficial owner with respect to the merger proposal, the proposal for "golden parachute compensation" or the adjournment proposal, counted separately.

Q:    How do I vote my Company Common Stock?

A:
Before you vote, you should read this Proxy Statement carefully and in its entirety, including the appendices, and carefully consider how the merger and the "golden parachute compensation" affect you. Then, mail your completed, dated and signed proxy card in the enclosed return envelope or vote via Internet or by telephone as soon as possible so that your shares can be voted at the Special Meeting. For more information on how to vote your shares, see "The Special Meeting—How Do I Vote?" beginning on page 100.

Q:    If my shares are held in "street name" by my broker, bank or other nominee, will my broker, bank or other nominee vote my shares for me?

A:
Your broker will not vote your shares on your behalf unless you provide instructions to your broker on how to vote. You should follow the directions provided by your broker regarding how to instruct it to vote your shares. Without those instructions, your shares will not be voted, which will have the same effect as voting AGAINST the adoption of the merger agreement for purposes of

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Q:    Will my shares held in "street name" or another form of record ownership be combined for voting purposes with shares I hold of record?

A:
No. Because any shares you may hold in "street name" will be deemed to be held by a different shareholder than any shares you hold of record, any shares so held will not be combined for voting purposes with shares you hold of record. Similarly, if you own shares in various registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and will need to sign and return, a separate proxy card for those shares because they are held in a different form of record ownership. Shares held by a corporation or business entity may be voted by the officer, agent or proxy designated by the bylaws of such corporate shareholder or, in the absence of any applicable bylaw, by such person or persons as the board of directors of the corporate shareholder may designate. In the absence of any such designation, or, in case of conflicting designation by the corporate shareholder, the chairman of the board, the president, any vice president, the secretary and the treasurer of the corporate shareholder, in that order, shall be presumed to be fully authorized to vote such shares. Shares held by an administrator, executor, guardian, personal representative, or conservator may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote shares held by him without a transfer of such shares into his name or the name of his nominee. Shares held by or under the control of a receiver, a trustee in bankruptcy proceedings, or an assignee for the benefit of creditors may be voted by such person without the transfer thereof into his name. If shares stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary of the Company is given notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, then acts with respect to voting shall have the following effect: (a) if only one votes, in person or by proxy, his act binds all; (b) if more than one votes, in person or by proxy, the act of the majority so voting binds all; (c) if more than one votes, in person or by proxy, but the vote is evenly split on any particular matter, each faction is entitled to vote the share or shares in question proportionally; or (d) if the instrument or order so filed shows that any such tenancy is held in unequal interest, a majority or a vote evenly split for purposes hereof shall be a majority or a vote evenly split in interest.

Q:    May I vote in person?

A:
Yes. You may attend the Special Meeting and vote your shares in person whether or not you sign and return your proxy card. If your shares are held of record by a broker, bank or other nominee and you wish to vote at the Special Meeting, you must obtain a proxy from such record holder.

Q:    May I change my vote after I have mailed my signed proxy card?

A:
Yes. If you are the shareholder of record of your shares, you may revoke your proxy in any one of three ways:

•
You may submit another properly completed proxy bearing a later date which is received by Continental Stock Transfer & Trust Company, our proxy tabulator, by the close of business on [      ], 2018;

•
You may send a written notice which is received by the close of business on [      ], 2018 that you are revoking your proxy to 3000 N.W. 107th Avenue Miami, Florida 33172, Attention: Tricia Thompkins, General Counsel and Secretary; or

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Q:    What does it mean if I receive more than one set of proxy materials?

A:
This means you own shares of Company Common Stock that are registered under different names or are in more than one account. For example, you may own some shares directly as a shareholder of record and other shares through a broker or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. You must vote, sign and return all of the proxy cards or follow the instructions for any alternative voting procedure on each of the proxy cards that you receive in order to vote all of the shares you own. Each proxy card you receive comes with its own prepaid return envelope. If you submit your proxy by mail, make sure you return each proxy card in the return envelope that accompanies that proxy card.

Q:    If the merger is completed, how will I receive cash for my shares?

A:
If the merger agreement is adopted and the merger is consummated, and if you are the record holder of your shares of Company Common Stock (i.e., you have a stock certificate (or affidavit of loss in lieu thereof) or you hold shares in book-entry), as soon as reasonably practicable, and in any event within three business days, after the effective time of the merger, you will be sent a letter of transmittal to complete and return to a paying agent to be designated by Parent, referred to herein as the "paying agent." In order to receive the $27.50 per share merger consideration, you must send the paying agent, according to the instructions provided, your validly completed and signed letter of transmittal together with your Company stock certificates (or affidavit of loss in lieu thereof) or book-entry shares, as applicable, and other required documents as instructed in the separate mailing. Once you have properly submitted these materials, you will receive cash for your shares. If your shares of Company Common Stock are held in "street name" by your broker, bank or other nominee, you will receive instructions after the effective time of the merger from your broker, bank or other nominee as to how to effect the surrender of your "street name" shares and receive cash for those shares.

Q:    What happens to my stock options, stock appreciation rights and restricted stock awards if the merger is completed?

A:
In connection with the consummation of the merger, (i) each stock option and stock appreciation right, whether or not then exercisable or vested, will be converted into the right to receive at the closing cash equal to the product of (a) the excess, if any, of the per share merger consideration over the per share exercise price of the applicable option or stock appreciation right and (b) the number of shares of Company Common Stock underlying such option or stock appreciation right; (ii) each restricted stock award not subject to any performance-based vesting condition held by an employee will be automatically vested and converted into the right to receive at the closing cash equal to the product of (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award; (iii) each restricted stock award not subject to any performance-based vesting condition held by a non-employee member of the board of directors will vest on a prorated basis based on the number of days that have elapsed since the grant date of such award and be converted into the right to receive at the closing cash equal to the product of (a) the per share merger consideration and (b) such pro-rated number of shares; and (iv) with the exception of certain management members described below, each restricted stock award subject to any performance-based vesting condition will be converted into a right to receive a restricted cash award from the surviving corporation that will vest and be payable (without regard to any performance goals but subject to applicable service vesting conditions in the

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Q:    What happens if the merger is not completed?

A:
If the merger agreement is not adopted by the shareholders of the Company or if the merger is not completed for any other reason, the shareholders of the Company will not receive any payment for their shares of Company Common Stock in connection with the merger. Instead, the Company will remain a stand-alone company, Company Common Stock will continue to be listed and traded on the Nasdaq Global Market and registered under the Exchange Act, and the Company will continue to file periodic reports with the SEC with respect to Company Common Stock. Under specified circumstances, the Company may be required to pay to Parent, or may be entitled to receive from Parent, a fee with respect to the termination of the merger agreement, as described under "The Merger Agreement—Effect of Termination; Fees and Expenses" beginning on page 128.

Q:    When should I send in my stock certificates?

A:
If the merger agreement is adopted you will receive the letter of transmittal following the consummation of the merger. You should send your stock certificates (or affidavit of loss in lieu thereof) together with the letter of transmittal in accordance with the instructions provided after the merger is consummated and not now.

Q:    I do not know where my stock certificate is—how will I get my cash?

A:
The materials you are sent after the completion of the merger will include the procedures that you must follow if you cannot locate your stock certificate. This will include an affidavit that you will need to sign attesting to the loss of your stock certificate. The Company may also require that you provide a customary indemnity agreement to the Company in order to cover any potential loss.

Q:    What happens if I sell my shares of Company Common Stock before the Special Meeting?

A:
The record date for shareholders entitled to vote at the Special Meeting is earlier than the consummation of the merger. If you transfer your shares of Company Common Stock after the record date but before the Special Meeting you will, unless special arrangements are made, retain your right to vote at the Special Meeting, but will transfer the right to receive the merger consideration to the person to whom you transfer your shares.

Q:    When do you expect the merger to be completed?

A:
The parties to the merger agreement are working to complete the merger as quickly as possible. In order to complete the merger, the Company must obtain the shareholder approval described in this Proxy Statement and the other closing conditions under the merger agreement must be satisfied or waived. The parties to the merger agreement currently expect to complete the merger in the second half of 2018, although the Company cannot assure completion by any particular date, if at all. Because the merger is subject to a number of conditions, the exact timing of the merger cannot be determined at this time.

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Q:    What are the U.S. federal income tax consequences of the merger?

A:
The exchange of shares of Company Common Stock for cash pursuant to the merger generally will be a taxable event for U.S. federal income tax purposes. Each U.S. holder (as defined in the section entitled "Special Factors—Material U.S. Federal Income Tax Consequences" beginning on page 93) whose shares of Company Common Stock are converted into the right to receive cash in the merger will generally recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of the cash received with respect to such shares and the U.S. holder's adjusted tax basis in such shares. Gain or loss will be determined separately for each block of shares of Company Common Stock (i.e., shares of Company Common Stock acquired at the same cost in a single transaction). See "Special Factors—Material U.S. Federal Income Tax Consequences" beginning on page 93 for a discussion of the material U.S. federal income tax consequences of the merger to certain U.S. holders and certain non-U.S. holders. The determination of the actual tax consequences of the merger to you will depend on your specific situation. You are urged to also consult your tax advisors regarding the U.S. federal income tax consequences of the merger to you based on your particular circumstance, as well as tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

Q:    What rights do I have to seek a valuation of my shares?

A:
Shareholders who do not vote in favor of the adoption of the merger agreement may exercise their right to seek appraisal of the fair value of their shares of Company Common Stock if the merger is completed in lieu of receiving the per share merger consideration, but only if they do not vote in favor of adopting the merger agreement and otherwise comply with the procedures of Sections 607.1301 through 607.1333 of the FBCA, which is the appraisal rights statute applicable to Florida corporations. A copy of Sections 607.1301 through 607.1333 of the FBCA is included as Appendix C to this Proxy Statement and the procedures are summarized in this Proxy Statement. See "Special Factors—Appraisal Rights" beginning on page 90 and Appendix C to this Proxy Statement.

Q:    What do I need to do now?

A:
You should carefully read this Proxy Statement, including the appendices, in their entirety, and consider how the merger and the "golden parachute compensation" would affect you. Whether or not you plan to attend the Special Meeting in person, to ensure the presence of a quorum and that your shares are represented at the Special Meeting, please vote via the Internet or by telephone as instructed in the accompanying proxy materials or complete, date, sign and return a proxy card as promptly as possible.

Q:    Who can help answer my questions?

A:
If you have questions about the merger agreement or the merger, including the procedures for voting your shares, you should contact Innisfree M&A Incorporated, our proxy solicitor, by calling toll-free at 1 (888) 750-5834 (banks and brokers may call collect at (212) 750-5833).

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FORWARD-LOOKING STATEMENTS

        This Proxy Statement contains, and oral statements made by our representatives from time to time may contain, forward-looking statements (statements which are not historical facts). Forward-looking statements are based on current expectations rather than historical facts and they are indicated by words or phrases such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "proforma," "project," "seek," "should," "target," or "will" or the negative thereof or other variations thereon and similar words or phrases or comparable terminology.

        Such forward-looking statements include, but are not limited to, statements regarding Perry Ellis' strategic operating review, growth initiatives and internal operating improvements intended to drive revenues and enhance profitability, the implementation of Perry Ellis' profitability improvement plan and Perry Ellis' plans to exit underperforming, low growth brands and businesses. We have based such forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, many of which are beyond our control.

        These factors include: general economic conditions, a significant decrease in business from or loss of any of our major customers or programs, anticipated and unanticipated trends and conditions in our industry, including the impact of recent or future retail and wholesale consolidation, recent and future economic conditions, including turmoil in the financial and credit markets, the effectiveness of our planned advertising, marketing and promotional campaigns, our ability to contain costs, disruptions in the supply chain, including, but not limited to these caused by port disruptions, disruptions due to weather patterns, our future capital needs and our ability to obtain financing, our ability to protect our trademarks, our ability to integrate acquired businesses, trademarks, trade names and licenses, our ability to predict consumer preferences and changes in fashion trends and consumer acceptance of both new designs and newly introduced products, the termination or non-renewal of any material license agreements to which we are a party, changes in the costs of raw materials, labor and advertising, our ability to carry out growth strategies including expansion in international and direct-to-consumer retail markets, the effectiveness of our plans, strategies, objectives, expectations and intentions which are subject to change at any time at our discretion, potential cyber risk and technology failures which could disrupt operations or result in a data breach, the level of consumer spending for apparel and other merchandise, our ability to compete, exposure to foreign currency risk and interest rate risk, the impact to our business resulting from the United Kingdom's referendum vote to exit the European Union and the uncertainty surrounding the terms and conditions of such a withdrawal, as well as the related impact to global stock markets and currency exchange rates; possible disruption in commercial activities due to terrorist activity and armed conflict, actions of activist investors and the cost and disruption of responding to those actions, and other factors set forth in Perry Ellis' filings with the SEC.

        Forward-looking statements also may include information concerning the proposed merger transaction, including unexpected costs or liabilities, delays due to regulatory review, failure to timely satisfy or have waived certain closing conditions, failure to obtain the financing for the merger, the commencement of litigation relating to the merger, whether or when the proposed merger will close and changes in general and business conditions. Investors are cautioned that all forward-looking statements involve risks and uncertainties and factors relating to the proposed transaction, including those risks and uncertainties detailed in Perry Ellis' filings with the SEC, all of which are difficult to predict and many of which are beyond Perry Ellis' control. You are cautioned not to place undue reliance on these forward-looking statements, which are valid only as of the date they were made. We

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undertake no obligation to update or revise any forward-looking statements to reflect new information or the occurrence of unanticipated events or otherwise.

        Additionally, important factors concerning the merger could cause the Company's actual results, performance and achievements to differ materially from such forward-looking statements. Such risks, uncertainties and other important factors include, among others:

        All information contained in this Proxy Statement concerning Parent and Merger Sub has been supplied by Parent and Merger Sub and has not been independently verified by the Company.

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 SPECIAL FACTORS

        The following, together with the summary of the merger agreement set forth under "The Merger Agreement," is a description of the material aspects of the merger. While we believe that the following description covers the material aspects of the merger, the description may not contain all of the information that is important to you. We encourage you to read carefully this entire document, including the Agreement and Plan of Merger attached to this Proxy Statement as Appendix A, for a more complete understanding of the merger. The following description is subject to, and is qualified in its entirety by reference to, the merger agreement. You may obtain additional information without charge by following the instructions in "Where Shareholders Can Find More Information" beginning on page 149 of this Proxy Statement.

The Parties Involved in the Merger

Perry Ellis International, Inc.

        Perry Ellis International, Inc., founded in 1967, is a global leader in the design, manufacturing, marketing and distribution of branded lifestyle apparel and accessories. We are one of the largest apparel companies in the world with a portfolio consisting of nationally and internationally recognized lifestyle brand names, some of which have a heritage dating back over 100 years.

        We sell our products under our owned global brands, licensed brands and private retailer labels. Our owned brands include legacy brands Perry Ellis® and Original Penguin ® by Munsingwear ® as well as Ben Hogan ®, Cubavera ®, Farah ®, Grand Slam ®, Jantzen ®, Laundry by Shelli Segal ®, Rafaella ® and Savane ®. We license the Callaway Golf® brand, PGA TOUR® brand, and Jack Nicklaus® brand for golf apparel and the Nike® brand for swimwear and accessories. In 2017, we announced that we will introduce Guy Harvey branded apparel and accessories, under a license, beginning in 2019.

        We have four reportable segments—Men's Sportswear and Swim, Women's Sportswear, Direct-to-Consumer, and Licensing—and we have a strategically diversified global distribution network focused on leading department stores, company-operated retail stores, specialty stores and select licensing partners. We distribute our products primarily to wholesale customers that represent all major levels of retail distribution including department stores, national and regional chain stores, mass merchants, specialty stores, sporting goods stores, the corporate wear market, e-commerce, as well as clubs and independent retailers, in North America and Europe. Our largest customers include Walmart Stores Inc., which includes Sam's Wholesale Club, The Marmaxx Group, Macy's, Inc. ("Macy's"), Dillard's, Inc. and Kohl's Corporation.

        The principal business address and phone number of the Company are:

Feldenkreis Holdings LLC

        Feldenkreis Holdings LLC, which we refer to as "Parent," is a newly formed Delaware limited liability company that was formed by George Feldenkreis. Parent has not carried on any activities to date, except for activities incidental to its formation, in connection with the financing of the merger and as otherwise contemplated by the merger agreement. Upon completion of the merger, the Company will be a wholly-owned subsidiary of Parent.

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        The principal business address and phone number of Parent are:

GF Merger Sub, Inc.

        GF Merger Sub, Inc., which we refer to as "Merger Sub," is a newly formed Florida corporation. Merger Sub is a wholly owned subsidiary of Parent and has not conducted any business operations except for activities incidental to its formation and as contemplated by the merger agreement. Upon consummation of the merger, Merger Sub will merge with and into the Company, Merger Sub will cease to exist and the Company will continue as the surviving corporation and a wholly owned subsidiary of Parent.

        The principal business address and phone number of Merger Sub are:

George Feldenkreis and the George Feldenkreis Revocable Trust UAD 12/23/13

        George Feldenkreis is the founder of the Company, which started designing and importing apparel in 1967, eventually went public in 1993 and changed its name from Supreme International to Perry Ellis International, Inc. upon completing the acquisition of the brand in 2000. George Feldenkreis has been an owner of the Company for over 50 years and served in various capacities, including as President and CEO. He has been a member of the board of directors since 1967 and until September 2017, was Chairman of the board of directors. George Feldenkreis serves as the sole trustee of the George Feldenkreis Revocable Trust UAD 12/23/13.

        The principal business address and phone number of George Feldenkreis and the George Feldenkreis Revocable Trust UAD 12/23/13 are:

Oscar Feldenkreis and the Oscar Feldenkreis Revocable Trust UAD 05/06/11

        Oscar Feldenkreis is the Chief Executive Officer, President and a director of the Company and the son of George Feldenkreis. Oscar Feldenkreis serves as the sole trustee of the Oscar Feldenkreis Revocable Trust UAD 05/06/11.

        The principal business address and phone number of Oscar Feldenkreis and the Oscar Feldenkreis Revocable Trust UAD 05/06/11 are:

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Fanny Hanono and the Fanny Hanono Revocable Trust UAD 07/06/11

        Fanny Hanono is the daughter of George Feldenkreis and previously worked for the Company from 1988 until November 2017, serving in a variety of managerial capacities, most recently as Executive Vice President—Administration. Fanny Hanono serves as the sole trustee of the Fanny Hanono Revocable Trust UAD 07/06/11.

        The principal business address and phone number of Fanny Hanono and the Fanny Hanono Revocable Trust UAD 07/06/11 are:

The Erica Feldenkreis 2012 Irrevocable Trust UAD 10/17/12; the Jennifer Feldenkreis 2012 Irrevocable Trust UAD 10/17/12; and the Stephanie Feldenkreis 2012 Irrevocable Trust UAD 10/17/12

        Elena Feldenkreis is the wife of Oscar Feldenkreis and serves as the sole trustee of each of the Erica Feldenkreis 2012 Irrevocable Trust UAD 10/17/12, the Jennifer Feldenkreis 2012 Irrevocable Trust UAD 10/17/12, and the Stephanie Feldenkreis 2012 Irrevocable Trust UAD 10/17/12.

        The principal business address and phone number of the Erica Feldenkreis 2012 Irrevocable Trust UAD 10/17/12, Jennifer Feldenkreis 2012 Irrevocable Trust UAD 10/17/12 and Stephanie Feldenkreis 2012 Irrevocable Trust UAD 10/17/12 are:

        We refer to George Feldenkreis, Parent, Merger Sub and each of the other Rollover Investors, collectively, as the "GF Group" or the "GF Group Filing Persons."

Business and Background of Natural Persons Related to the Company

        A biography for each of our current directors and executive officers is set forth below. None of the Company nor any of the Company's directors or executive officers has, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). Each of the Company's directors and executive officers listed below is a United States citizen. None of the Company nor any of the Company's directors or executive officers listed below has, during the past five years, been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

Directors

        Oscar Feldenkreis has served as our Chief Executive Officer and President since April 2016. Mr. Feldenkreis was elected our Vice President and a director in 1979 and joined us on a full-time basis in 1980. Mr. Feldenkreis has been involved in all aspects of our operations since that time and was elected President/COO in February 1993, and Vice Chairman of the board of directors in March 2005. He is on the board of the American Apparel & Footwear Association, President of the Friends of the Israel Defense Forces (FIDF), Greater Miami Chapter, member of the Leadership Council of the Greater Miami Jewish Federation, an advisory board member of the Miami Fashion Institute for

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Miami-Dade College, an advisory board member of My Mela and an advisory board member for the University of Pennsylvania's Wharton School of Business Retail.

        Bruce J. Klatsky was elected to our board of directors in 2015 and is Chairman of our Audit Committee. Mr. Klatsky retired as Chief Executive Officer of PVH Corporation ("PVH") in June 2005, and later as Chairman on December 31, 2007, having served the company for 36 years, 13 as CEO, and a further six as President. During his tenure as CEO of PVH, Mr. Klatsky oversaw the operations and strategic development of the company and led the transformation of a 120-year-old domestic shirt manufacturer into one of the largest apparel and footwear companies in the world, growing its market capitalization from approximately $300 million to over $3.5 billion. During his tenure at PVH, he was instrumental in growing the business organically and through strategic acquisitions since he joined PVH in 1971 as a merchandising trainee. In 2002, Mr. Klatsky pursued and executed PVH's acquisition of Calvin Klein. In addition, he led numerous other successful acquisitions at PVH, including acquiring such brands as IZOD, Gant, Bass, Arrow, and the worldwide rights to Van Heusen. Following his retirement as CEO of PVH, Mr. Klatsky co-founded a private equity company, LNK Partners, to identify and support strong management teams in building outstanding consumer and retail businesses. Mr. Klatsky serves on the board of directors of Gazal Corporation Ltd., a leading Australian branded clothing company, and is currently that board's lead independent director. Mr. Klatsky currently joined and serves on the board and Executive Committee of IAVA, Iran and Afghan Veterans of America, one of the largest Veterans Associations in the United States. Previously, Mr. Klatsky served on President Clinton's White House Apparel Task Force and as an Advisor on U.S. trade policy to the Bush and Reagan administrations.

        Michael W. Rayden was elected to our board of directors in 2015 and chairs our Corporate Governance and Nominating Committee. In January 2015, Mr. Rayden retired as President and Chief Executive Officer of Tween Brands, Inc., currently a subsidiary of Ascena Retail Group, Inc. Mr. Rayden led Tween Brands as CEO since 1996, when it was known as Too, Inc. In 1999, he took the company public, adopting the Tween Brands name in 2006. In 2008, Mr. Rayden consolidated the entire business under the Justice brand, and in 2009, the company was acquired by Dress Barn, now Ascena Retail Group. From 1999 to 2009, Mr. Rayden also served as the Chairman of the board of directors of Tween Brands. Prior to joining Tween Brands, Mr. Rayden served as President, CEO and Chairman of Pacific Sunwear of California, Inc. from 1990-1996. Mr. Rayden has held chief executive positions at The Stride Rite Corporation and Eddie Bauer Inc. Mr. Rayden has served as a director at David's Bridal, Inc., Dress Barn, Inc., Pacific Sunwear of California, Inc., Strottman International, Inc., The Stride Rite Corporation and Tween Brands, Inc.

        J. David Scheiner was elected to our board of directors in 2014. Mr. Scheiner currently serves as our Non-Executive Chairman of the board of directors and was appointed to that position on September 20, 2017. Mr. Scheiner also currently serves as the Chairman of the Special Committee. In addition, Mr. Scheiner serves as the Chairman of our Compensation Committee. Mr. Scheiner is a consultant with J. David Scheiner, LLC, a company he founded in 2009, which provides consulting services internationally to companies in the retail and wholesale fields, investment banks and private equity funds, as well as helps businesses connect to large retailers. Since April 2016, he has served as a consultant to and sits on the advisory board of SIB, a fixed cost reduction company. From 2007 until his retirement in 2009, he served as the President and Chief Operating Officer of Macy's Florida/Puerto Rico, a division of Macy's Inc., a department store. From 1991 to 2007, Mr. Scheiner served as Vice Chairman, Director of Stores for Macy's Florida/Burdines. He was President of Federated Department Stores and Allied Stores Corp., which operated Maas Brothers/Jordan Marsh department stores, from 1988 to 1991. From 1972 through 1988, he served in various management capacities at Burdines, Inc., a department store. Mr. Scheiner was a director of Cache, Inc., a women's specialty retailer, from August 2013 until May 2015. He was also Chairman of the board of Metro Bank of Dade County and its holding company, Metrobank Financial Services, Inc., between 2007 and 2010. He is a

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member of the board of The Strategic Forum and the Florida chapter of the National Association of Corporate Directors. Additionally, he is a lifetime trustee of the Miami Children's Hospital Foundation and was a member of the Board of Directors of United Way of Miami-Dade County.

        George Feldenkreis founded the Company in 1967, has been involved in all aspects of our operations since that time and served as our President and a director until February 1993, at which time he was elected Chairman of the board of directors and Chief Executive Officer. From April 2016 until September 2017, Mr. Feldenkreis served as Executive Chairman of the board of directors. Mr. Feldenkreis also served as our Chief Executive Officer from February 1993 until April 2016. He is a trustee of the University of Miami, a member of the Board of Directors of the Greater Miami Jewish Federation, a trustee of the Simon Wiesenthal Board, and a member of the Board of Directors of the American Apparel and Footwear Association. He served as a director of Federal-Mogul Corporation until the company went private in 2016.

        Joe Arriola was appointed to our board of directors in December 2015. Mr. Arriola previously served as a director from 2006 until July 2015 and was not nominated for re-election at the Company's 2015 Annual Meeting of Shareholders because of his desire to focus more of his time and attention on his responsibilities as Chairman of the Public Health Trust, the independent governing body for Jackson Memorial Hospital, Miami, Florida, and a proposed $1 billion expansion of the hospital. After the Public Health Trust achieved significant progress in connection with the hospital's expansion plans, Mr. Arriola rejoined the board of directors after advising the board of directors that he believed he could once again dedicate the requisite time and attention to serving on the board of directors. Mr. Arriola has significant management experience in both private and public enterprises. In 1972, Mr. Arriola founded Avanti-Case Hoyt, a commercial printing company, and served as its President until 2001. From January 2002 to August 2002, he was Chief Business Officer of the Miami-Dade School Board. From 2003 to 2006, he was City Manager of the City of Miami. Between August 2006 and December 2006, he was the Managing Partner of MBF Healthcare Partners, a private equity firm. Mr. Arriola served as the President and Chief Executive Officer of Pullmantur Cruises, the largest cruise line in Spain, from September 2007 to September 2008, from which he retired. Since 2010, he has been Chairman of the Public Health Trust for Jackson Memorial Hospital.

        Jane E. DeFlorio has been a member of our board of directors since December 2014 and was appointed our lead independent director on May 20, 2015 and served in that capacity until September 2017. From 2007 to 2013, Ms. DeFlorio served as a Managing Director at Deutsche Bank, AG, global banking and financial services company, in the U.S. Retail and Consumer Group. While at Deutsche Bank, Ms. DeFlorio covered a range of mid-to-large cap retail clients, including The TJX Companies, Home Depot and Nike. Prior to her role at Deutsche Bank, from 2002 to 2007, Ms. DeFlorio held the title of Executive Director in the Investment Banking Consumer and Retail Group at UBS Investment Bank, a business unit of UBS Group AG, and advised on high-profile consumer transactions for clients such as Kraft Foods and Maidenform Brands. Ms. DeFlorio serves on the board of directors of DDR Corp. (NYSE:DDR), a real estate investment trust that owns and manages a high-quality portfolio of value-oriented shopping centers located in top markets across the United States. Ms. DeFlorio currently serves as the Vice Chair of the Board of Trustees and Chair of the Audit and Risk Committee at The New School University, a leading progressive university in New York City with more than 10,000 graduate and undergraduate students. She also serves on the Board of Governors for The Parsons School of Design.

Executive Officers (other than Oscar Feldenkreis)

        David Enright was appointed Chief Operating Officer in June 2016. He served in various roles at Coach, Inc. ("Coach"), a premium bags and accessories company, from 2007 through July 2015, and from August 2015 until May 2016 was a consultant. Mr. Enright was Coach's Senior Vice President of Global Distribution, Planning & Logistics from 2009 through July 2015 and prior to that, he was Vice

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President, Planning and Logistics. Before joining Coach, Mr. Enright held several operational roles with Lenox Group and Brown Foreman Corporation, Lenox Division, a tabletop, giftware and collectibles company, from 1995 to 2007, and with Unilever US, Lever Brothers Division, a consumer products company, from 1993 to 1995.

        Luis Paez was appointed Chief Information Officer in 2000. From December 1994 to 2000, he served as our MIS Director. From 1989 to 1994, he held various positions including that of Systems Director for Suave Shoe Corporation, a public company engaged in shoe manufacturing.

        Jorge Narino was appointed Chief Financial Officer in July 2018, after serving as our Interim Chief Financial Officer beginning in November 2017. Mr. Narino is a certified public accountant and was elevated to the CFO role on an interim basis after serving the Company for 13 years in positions of increasing responsibility, including as Vice President, Assistant Controller between May 2007 and July 2016 and as Senior Vice President of SEC Financial Reporting since July 2016. Prior to joining the Company, Mr. Narino spent 12 years in public accounting at KPMG, LLP and BDO USA, LLP.

        Stanley P. Silverstein was appointed President, International Development and Global Licensing in September 2013. From 2006 to 2013, Mr. Silverstein served as Executive Vice President-International Strategy and Business Development of The Warnaco Group, Inc., which merged into PVH Corp., both apparel companies. From 1984 to 2006, Mr. Silverstein served in various management capacities for Warnaco, including EVP Corporate Development, Chief Administrative Officer, General Counsel and Secretary.

        John F. Voith, Jr. was appointed President, Golf Division in April 2014. From April 2012 to April 2014, he served as Group President of our Golf and Sportswear Divisions. From September 2009 to April 2012, he served as President of Golf and Sportswear Divisions, and from 2001 to 2009, he served as Executive Vice President of the Sportswear Division. Prior to 2001, Mr. Voith held various positions, including as an Executive Vice President, at each of PVH Corp. and The Arrow Co., both apparel companies.

        Tricia McDermott Thompkins was appointed Executive Vice President, General Counsel and Secretary in November 2017, after serving as our Interim General Counsel beginning in August 2017. Ms. Thompkins served as Global Intellectual Property & Licensing Counsel from 2011 to 2015 and as Vice President of Intellectual Property and Licensing Counsel from 2015 to 2017. Between 2008 and 2011, she was Senior Director and Intellectual Property Counsel at Spectrum Brands, Inc., which acquired Applica Consumer Products, Inc. in 2010. From 2007 to 2008, Ms. Thompkins served as Corporate Attorney, Intellectual Property with Office Depot, Inc. From 2006 to 2007, Ms. Thompkins practiced in the Washington, D.C. office of Ballard Spahr LLP, and from 2000 to 2006, she worked as an Attorney-Advisor and then Senior Supervisory Attorney with the United States Patent and Trademark Office.

Business and Background of Natural Persons Related to the GF Group Filing Persons

        George Feldenkreis founded the Company in 1967, has been involved in all aspects of our operations since that time and served as our President and a director until February 1993, at which time he was elected Chairman of the board of directors and Chief Executive Officer. From April 2016 until September 2017, George Feldenkreis served as Executive Chairman of the board of directors. George Feldenkreis also served as our Chief Executive Officer from February 1993 until April 2016. George Feldenkreis is a trustee of the University of Miami, a member of the Board of Directors of the Greater Miami Jewish Federation, a trustee of the Simon Wiesenthal Board, and a member of the Board of Directors of the American Apparel and Footwear Association. George Feldenkreis served as a director of Federal-Mogul Corporation until the company went private in 2016.

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        Oscar Feldenkreis has served as our Chief Executive Officer and President since April 2016. Oscar Feldenkreis was elected our Vice President and a director in 1979 and joined us on a full-time basis in 1980. Oscar Feldenkreis has been involved in all aspects of our operations since that time and was elected President/COO in February 1993, and Vice Chairman of the board of directors in March 2005. Oscar Feldenkreis is on the board of the American Apparel & Footwear Association, President of the Friends of the Israel Defense Forces (FIDF), Greater Miami Chapter, member of the Leadership Council of the Greater Miami Jewish Federation, an advisory board member of the Miami Fashion Institute for Miami-Dade College, an advisory board member of My Mela and an advisory board member for the University of Pennsylvania's Wharton School of Business Retail.

        Fanny Hanono previously served as Secretary/Treasurer of the Company from 1994 to November 2017 and then as EVP of Administration from June 2015 until November 2017. During such time, Fanny Hanono oversaw the management of the Company's foreign offices, both in Asia and in Europe, and was in charge of the Company's risk management and real estate facilities throughout the world. Fanny Hanono was also responsible for the Company's Logistics, Procurement and Customs Compliant programs and had all human resources report to her. Simultaneously, Fanny Hanono has served as Vice President and a founder of GFX, Corp., a company that distributes automotive transmission parts, since 2001 and became President in 2013. Fanny Hanono serves on the board of directors of the Greater Miami Jewish Federation and is the President of the Michael Ann Russell Jewish Community Center.

Overview of the Transaction

        The Company, Parent and Merger Sub entered into the merger agreement on June 15, 2018. Under the terms of the merger agreement, Merger Sub will be merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub were initially formed by, and are currently wholly-owned by, George Feldenkreis.

        If the merger is completed, the Company will continue as the surviving corporation and become a wholly-owned subsidiary of Parent, and each share of Company Common Stock owned by the Company's shareholders immediately prior to the effective time of the merger, other than as provided below, will be converted into the right to receive $27.50 per share in cash, without interest and less any applicable withholding taxes. The following shares of Company Common Stock will not be converted into the right to receive the per share merger consideration in connection with the merger: (i) shares of Company Common Stock held by the Company or any of its wholly-owned subsidiaries or Parent or its subsidiaries, (ii) shares of Company Common Stock held the Rollover Investors, and (iii) shares of Company Common Stock whose holders have not voted in favor of adopting the merger agreement and have demanded and perfected their appraisal rights in accordance with, and have complied in all respects with, the FBCA.

        In connection with the consummation of the merger, (i) each stock option and stock appreciation right, whether or not then exercisable or vested, will be converted into the right to receive at the closing cash equal to the product of (a) the excess, if any, of the merger consideration over the per share exercise price of the applicable option or stock appreciation right and (b) the number of shares of Company Common Stock underlying such option or stock appreciation right; (ii) each restricted stock award not subject to any performance-based vesting condition held by an employee will be automatically vested and converted into the right to receive at the closing cash equal to the product of (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award; (iii) each restricted stock award not subject to any performance-based vesting condition held by a non-employee member of the board of directors will vest on a prorated basis based on the number of days that have elapsed since the grant date of such award and be converted into the right to receive at the closing cash equal to the product of (a) the per share merger consideration and (b) such pro-rated number of shares; and (iv) with the exception of certain

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management members described below, each restricted stock award subject to any performance-based vesting condition will be converted into a right to receive a restricted cash award from the surviving corporation that will vest and be payable (without regard to any performance goals but subject to applicable service vesting conditions in the prior award) at the end of its currently applicable vesting period, with the cash payment therefor equal to the product of: (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award that would have vested based on target level achievement. Such restricted cash award will accelerate upon a termination without cause or for good reason prior to the scheduled vesting date. Each restricted stock award subject to any performance-based vesting condition held by Mr. Jorge Narino or Ms. Tricia McDermott Thompkins will be converted into a right to receive at the closing a cash payment equal to the product of: (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award that would have vested based on target level achievement. All outstanding restricted stock units held by George Feldenkreis will be cancelled.

        If the merger is completed, current holders of Company Common Stock (other than the Rollover Investors) will no longer have any interest in, and will no longer be shareholders of, the Company, and will not participate in any of the Company's future earnings or growth. Furthermore, the registration of shares of Company Common Stock under the Exchange Act will be terminated, shares of Company Common Stock will no longer be listed on the Nasdaq Global Market, and price quotations with respect to shares of Company Common Stock in the public market will no longer be available.

Background of the Merger

        From time to time, the board of directors ("Board") and the Company's senior management have evaluated potential strategic alternatives relating to the Company's businesses, including business combinations, strategic partnerships, acquisitions and other potential strategic transactions, all with a view towards enhancing shareholder value. No firm offer to acquire the Company has been made during the past two years, except as described below.

        In August, 2017, the independent directors of the Company, Joe Arriola, Jane DeFlorio, Bruce J. Klatsky, Michael W. Rayden and J. David Scheiner, began to evaluate the role of Mr. George Feldenkreis as Executive Chairman of the Company. On September 20, 2017, the Board removed Mr. George Feldenkreis as Executive Chairman of the Company, simultaneously terminating his operational role in the Company, and elected Mr. Scheiner as Non-Executive Chairman of the Board.

        On October 24, 2017, the Board formed a special committee comprised of the five independent directors of the Company (the "Special Committee") to review certain matters, including the role of Mr. Oscar Feldenkreis as Chief Executive Officer of the Company, his employment arrangement with the Company and strategic planning for the Company.

        On February 6, 2018, the Company received an unsolicited letter from Mr. George Feldenkreis (the former Executive Chairman of the Company, and a member of the Board) and Fortress Credit Advisors LLC ("Fortress"). Mr. George Feldenkreis proposed to acquire the Company in an all cash transaction for $27.50 per share (the "Feldenkreis Proposal"). Therein, Mr. George Feldenkreis stated that he would anticipate discussing with Mr. Oscar Feldenkreis (the Company's Chief Executive Officer and a member of the Board) whether Mr. Oscar Feldenkreis would contribute his existing equity ownership of the Company as part of a negotiated transaction. The Feldenkreis Proposal noted that Mr. George Feldenkreis had engaged SCOPE Advisors, LLC ("Scope") as financial advisors, and Olshan Frome Wolosky LLP ("Olshan") and Stearns Weaver Miller Weissler Alhadeff & Sitterson as legal counsel, and that Fortress had engaged Kirkland & Ellis LLP as legal counsel. Mr. George Feldenkreis noted that if he did not receive a favorable response from the Board to the Feldenkreis Proposal by March 10, 2018, he intended to evaluate all of his options as a shareholder of the Company and take appropriate action with respect to his investment.

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        On February 7, 2018, Mr. George Feldenkreis filed a statement on Schedule 13D disclosing his interest in acquiring the Company at $27.50 per share and certain understandings in place between Mr. George Feldenkreis and Fortress. Mr. George Feldenkreis explicitly reserved his right to propose a slate of directors for election to the Board at the 2018 annual meeting of shareholders (the "2018 Annual Meeting"). The Schedule 13D disclosure also noted that Mr. George Feldenkreis and Fortress had entered into a non-binding letter of intent in which Fortress "confirmed it would consider committing $300 million of debt and/or equity financing toward the proposed acquisition". Further, the Schedule 13D disclosed that Mr. George Feldenkreis had entered into a letter agreement with Fortress pursuant to which he agreed to pay Fortress a profit sharing fee if Mr. George Feldenkreis sold his shares (or entered into an agreement to sell such shares) to a third party within six months of the date of such agreement, in an amount equal to $1 million for each $1.00 of share price in excess of $23.50 per share, up to a maximum of $5 million.

        Also on February 7, 2018, the Special Committee delivered a letter to Mr. Oscar Feldenkreis, noting that the Feldenkreis Proposal explicitly anticipated discussions between Mr. George Feldenkreis and Mr. Oscar Feldenkreis in respect of Mr. Oscar Feldenkreis contributing his existing equity, and directing Mr. Oscar Feldenkreis to refrain, absent prior written consent of the Special Committee, from making any public or private statements or engaging in any public or private communications with any customers, suppliers, employees, consultants, officers or other business relations of the Company, including George Feldenkreis, Fortress Credit Advisors LLC or any of their respective affiliates, advisors or other representatives, in each case regarding the Feldenkreis Proposal or any alternative transaction that may be considered by the Board or its committees in connection with the evaluation of such proposal.

        On February 9, 2018, the Special Committee sent a letter to Mr. George Feldenkreis reminding Mr. George Feldenkreis of his fiduciary duties to protect the confidentiality of the Company's non-public or proprietary information and to refrain from using such information for any reason other than his service to the Company as a director. The letter explicitly indicated that fiduciary duties under Florida law would prohibit Mr. George Feldenkreis from using any non-public, proprietary or confidential information concerning the Company for the purpose of facilitating the transaction contemplated by the Feldenkreis Proposal.

        Also on February 9, 2018, Mr. George Feldenkreis responded to the Special Committee with a letter confirming his knowledge of his fiduciary duties and reminding the Special Committee of its fiduciary duties to act in the best interest of the Company's shareholders.

        On February 13, 2018, the Board held a meeting, at which all directors were present, during which it expanded the powers of the Special Committee, giving it exclusive power to (i) evaluate the terms and conditions of the Feldenkreis Proposal or any alternative thereto, and determine whether the Feldenkreis Proposal or any alternative thereto is advisable, fair, and in the best interest of the Company and its shareholders, (ii) negotiate with any party regarding the Feldenkreis Proposal or any alternative thereto, and if the Special Committee deems appropriate and permissive under applicable law, approve the execution and delivery of documents in connection therewith on behalf of the Company, (iii) determine whether the Feldenkreis Proposal or any alternative thereto is beneficial to the Company and its shareholders and (iv) recommend to the full Board what action, if any, should be taken with respect to the Feldenkreis Proposal or any alternative thereto, including the rejection of the Feldenkreis Proposal or any alternative thereto. The resolutions explicitly empowered the Special Committee to retain, at the Company's expense, independent legal counsel and financial advisors in connection with such duties, and to act on behalf of the Company in connection with any matters ancillary or related to the Special Committee's purpose, including entering into contracts of any nature, commencing litigation and authorizing defensive measures on behalf of the Company. The resolutions authorized and directed the Company to pay all fees, expenses and disbursements, and to honor all other obligations of the Company under such contracts, in connection with such matters. The

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resolutions explicitly indicated the Special Committee was not required to furnish to the Board any work product or communications between the members of the Special Committee and its counsel and advisors.

        Also on February 13, 2018, the Special Committee met and discussed with Paul, Weiss, Rifkind, Wharton & Garrison LLP ("Paul, Weiss") and Akerman LLP ("Akerman") (each of whom had been retained by the independent directors in August 2017, in connection with the review of Mr. George Feldenkreis' role with the Company) the Special Committee's fiduciary duties in connection with the Company's process for evaluating strategic alternatives, including a potential sale of the Company. The Special Committee discussed the role of Mr. Oscar Feldenkreis and his role in the process of the Feldenkreis Proposal. At this meeting, settlement negotiations between the Company and Ms. Fanny Hanono, a former Company employee and Mr. George Feldenkreis' daughter, were also discussed.

        Between February 6 and February 17, 2018, members of the Special Committee met with several financial advisors about potentially representing the Special Committee in connection with evaluating the Feldenkreis Proposal and any strategic alternatives thereto. On February 22, 2018, the Special Committee approved the Company's engagement of PJ Solomon as the Special Committee's financial advisor, following discussion (including regarding the Special Committee's fiduciary duties), and in connection therewith, the Company entered into an Engagement Letter with PJ Solomon, and a Non-Disclosure Agreement with PJ Solomon. The Special Committee selected PJ Solomon as its financial advisor because PJ Solomon is a recognized financial advisory firm that has substantial experience in transactions similar to the merger and after taking into account the conclusion of PJ Solomon, at the time of such selection (which was subsequently reconfirmed in connection with delivery of the fairness opinion on June 15, 2018), that there were no relationships or interests in connection with the proposed merger that would limit the ability of PJ Solomon to perform its obligations as financial advisor to the Special Committee. Also on February 22, 2018, representatives of PJ Solomon met with senior members of management, including the Chief Executive Officer, Mr. Oscar Feldenkreis, Chief Financial Officer, Mr. Jorge Narino, and General Counsel, Ms. Tricia Thompkins. At the meeting the parties discussed the Company's initial 2019 budget projections, a "3-year plan" and the Company's non-core brand analysis. PJ Solomon would later report to the Special Committee that management of the Company had informed PJ Solomon that (i) the Company had not yet completed the preparation of financial statements for the fiscal year ended February 3, 2018 as the closing was not yet complete following the fiscal year end, (ii) the fiscal year 2019 budget would be reviewed to consider recent and potential bankruptcy filings by customers of the Company, and (iii) the "3-year plan" was preliminary and not yet complete, consisting solely of 2019 projections with revenue "rollups" and no expense projections.

        On February 22, 2018, representatives of PJ Solomon spoke with Mr. George Feldenkreis' financial advisor, Scope, to discuss process and the proposed capital structure for an acquisition of the Company by Mr. George Feldenkreis. During that conversation, Scope relayed that there would be sufficient capital between the rollover of shares held by Mr. George Feldenkreis and his family, on the one hand, and Fortress' commitment to provide $300 million of debt and/or equity financing on the other hand, to finance the Feldenkreis Proposal.

        On February 23, 2018, the Special Committee met with its advisors and discussed Mr. George Feldenkreis' ongoing interest in acquiring the Company, including whether the Feldenkreis Proposal would materialize into an actionable opportunity for shareholders, the potential timing of the Feldenkreis Proposal or any alternative transaction, and the desirability of bringing in an independent third-party management consultant to review the Company's projections.

        On February 26, 2018, the Company issued a press release announcing that the Board authorized the Special Committee to review the Feldenkreis Proposal and that the Special Committee retained

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Paul, Weiss and Akerman as its legal counsel and PJ Solomon as its financial advisor to assist with its review.

        On February 27, 2018, Olshan sent a letter to Paul, Weiss requesting that the Company move quickly to engage with Mr. George Feldenkreis. Olshan also requested that the Company send a draft non-disclosure agreement in order to permit Fortress to conduct due diligence in connection with the Feldenkreis Proposal.

        On March 3, 2018, the Special Committee met with its advisors to receive an update on the process. The Special Committee reviewed with PJ Solomon, among other things, growth rates reflected in the management projections, the risks associated with management projections, the sensitivities of the valuations if actual results vary from those projections, the headwinds facing retailers in the Company's customer base, the private equity market's views regarding the retail and apparel sector, discussions with representatives of Mr. George Feldenkreis regarding financing plans, views on potential market checks, the Company's stock price before and after the Feldenkreis Proposal, preliminary financial analyses of the Company based on Wall Street research analyst consensus estimates, potential strategic alternatives and next steps. Paul, Weiss and Akerman then provided the Special Committee with a review of the Special Committee's fiduciary duties in the context of evaluating the Feldenkreis Proposal. After discussion, the Special Committee directed its advisors to propose that Mr. George Feldenkreis and Fortress sign a confidentiality agreement, including a standstill, during which Mr. George Feldenkreis and Fortress would conduct their respective diligence. The Special Committee also directed its advisors to raise the prospect of bringing in an independent third-party consultant to review the management projections independently during negotiations of the confidentiality agreement and to advise Mr. George Feldenkreis that a market check would be conducted.

        On March 4, 2018, Paul, Weiss circulated an initial draft of a proposed form of confidentiality agreement to Olshan, and over the following ten days, Olshan and Paul, Weiss negotiated the terms of the confidentiality agreement.

        On March 9, 2018, Mr. George Feldenkreis submitted a letter to the Board which reaffirmed the Feldenkreis Proposal in all respects. The letter stated that the Special Committee had not responded to the Feldenkreis Proposal and instead the Special Committee sent a non-disclosure agreement with "unreasonable and onerous terms." In the interest of moving forward, Mr. George Feldenkreis proposed that Fortress begin its due diligence review under its own non-disclosure agreement with the Company and that the Board extend the director nomination window by 30 days to avoid an unnecessary contested election at the 2018 Annual Meeting. Mr. George Feldenkreis indicated that if the Board would not extend the nomination deadline for the 2018 Annual Meeting, he would need to preserve his rights as a shareholder and nominate a slate of directors for election to the Board at the 2018 Annual Meeting.

        On March 10, 2018, representatives from Paul, Weiss spoke with Olshan regarding the proposed confidentiality agreement between the Company and Mr. George Feldenkreis and whether Mr. Oscar Feldenkreis would be permitted to speak with Mr. George Feldenkreis regarding the Feldenkreis Proposal or any alternative transaction. Olshan advised that Mr. George Feldenkreis wanted to discuss Mr. Oscar Feldenkreis' potential involvement. Olshan suggested it would revert regarding this issue and also suggested that Mr. George Feldenkreis would consider a limited standstill.

        On March 11, 2018, the Special Committee met with its advisors to receive an update on the process. The Special Committee discussed Mr. Oscar Feldenkreis' potential participation in the Feldenkreis Proposal and his potentially conflicting interest with his role as CEO of the Company. The Special Committee also discussed whether it would be advisable for the Special Committee to hire an independent third-party management consultant to assist its review of strategic alternatives.

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        On March 12, 2018, Mr. George Feldenkreis filed a statement on Schedule 13D, publicly disclosing the letter he submitted to the Board on March 9, 2018, noting that he reaffirmed his offer to acquire all of the shares of the Company for $27.50 per share and that he requested that the shareholder nomination deadline be extended for 30 days. Mr. George Feldenkreis also noted his intention, if the nomination deadline was not extended, to nominate a slate of directors at the 2018 Annual Meeting.

        Also on March 12, 2018, the Special Committee met with its advisors and discussed Mr. Oscar Feldenkreis and his potential participation in the Feldenkreis Proposal. Following this discussion, the Special Committee decided that it would direct its advisors to attempt to negotiate a process agreement with each of Mr. George Feldenkreis, Mr. Oscar Feldenkreis, and Fortress regarding what information cannot be shared and, in the case of Mr. Oscar Feldenkreis, permitting the Company to bring in an independent third-party consultant and setting cooperation efforts obligations for Mr. Oscar Feldenkreis in connection therewith.

        On March 13, 2018, the Special Committee met with its advisors and reviewed with Paul, Weiss the key terms of the confidentiality agreement negotiated with Mr. George Feldenkreis. The Special Committee also discussed the treatment of Mr. Oscar Feldenkreis and his potential participation in the Feldenkreis Proposal. The Special Committee noted that it would continue to explore strategic alternatives, including stand-alone strategies and proposals from other bidders, and that it would assess those alternatives based in part on advice of PJ Solomon and an independent third-party consultant. The Special Committee then discussed the proposed process letter between the Company and Mr. Oscar Feldenkreis, which permitted the Special Committee to engage an independent third-party consultant without triggering any rights of Mr. Oscar Feldenkreis under his employment agreement, and a list of potential equity financing sources that Mr. George Feldenkreis requested to be pre-approved for permitted disclosure under the terms of his confidentiality agreement.

        On March 14, 2018, the Special Committee approved entry into confidentiality agreements with Mr. George Feldenkreis and Fortress, and a letter agreement with Mr. Oscar Feldenkreis regarding the Special Committee engaging a consultant and Mr. Oscar Feldenkreis' potential participation in the Feldenkreis Proposal. The Special Committee also decided to move forward with the process of engaging AlixPartners, LLP ("AlixPartners"), as the independent third-party consultant, to assist the Special Committee in the strategic review process. The Special Committee further authorized PJ Solomon to conduct a market check (consistent with the market check process, including the identification of potential strategic and financial bidders to be contacted therein, as reviewed by PJ Solomon with the Special Committee on March 3, 2018) using a form of confidentiality agreement substantially similar to the form used for Fortress.

        Later on March 14, 2018, at a Board meeting at which all members were present, the Board unanimously adopted resolutions that, upon execution of the confidentiality agreements with Mr. George Feldenkreis and Fortress, and the letter agreement with Mr. Oscar Feldenkreis, the Company's Bylaws would be amended to extend the director nomination deadline to April 12, 2018. Following the meeting the Company entered into a confidentiality agreement with Mr. George Feldenkreis, a confidentiality agreement with Fortress, and a letter agreement with Mr. Oscar Feldenkreis, the effectiveness of which triggered the effectiveness of the Bylaw amendment extending the director nomination deadline to April 12, 2018.

        On March 15, 2018, Mr. George Feldenkreis filed a statement on Schedule 13D, publicly disclosing his entry into a confidentiality agreement with the Company (the "Feldenkreis Confidentiality Agreement"). Mr. George Feldenkreis stated that he agreed to customary standstill provisions through the later of (i) the conclusion of the Company's annual meeting and (ii) the date that is six months following the date of the Feldenkreis Confidentiality Agreement, except that after April 10, 2018, Mr. George Feldenkreis may nominate candidates for election to the Board.

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        Also on March 15, 2018, the Company entered into a confidentiality agreement with AlixPartners to serve as an independent third-party consultant to the Special Committee. On March 16, 2018, the Company entered into an engagement agreement with AlixPartners pursuant to which AlixPartners agreed to (i) evaluate the Company's business plans and scenarios, (ii) evaluate the Company's strategies and provide benchmarking and analyses to refine projections built by the Company's management team, (iii) assist the Special Committee in its consideration of alternative strategies to maximize enterprise and shareholder value, and (iv) assist the Special Committee's other professionals in compiling information that is needed to present the Company to prospective purchasers or investors.

        On March 16, 2018, Mr. George Feldenkreis, Fortress, Scope, PJ Solomon and members of the Company's management had an initial in-person meeting to discuss Fortress' plans for financing the Feldenkreis Proposal.

        Also on March 16, 2018, PJ Solomon contacted Randa Accessories Leather Goods, LLC ("Randa") in connection with PJ Solomon's market check. Randa then requested that the Company enter into a confidentiality agreement with Randa, which confidentiality agreement was entered into the following day.

        On March 19, 2018, the Company received a heavily marked confidentiality agreement from Party B (which included the rejection of the standstill). PJ Solomon informed Party B that its markup was unacceptable, and Party B never responded.

        Also on March 19, 2018, PJ Solomon launched the online data room, which had been compiled by management of the Company, and Fortress received access to conduct due diligence.

        On March 23, 2018, PJ Solomon provided Randa with a copy of the Company's confidential information memorandum.

        On March 26, 2018, the Special Committee met with its advisors to receive an update on the process. PJ Solomon gave a summary of the strategic alternative review process, noting that PJ Solomon had contacted 18 parties (9 private equity and 9 strategic), but aside from Mr. George Feldenkreis and Fortress, only Randa had executed a confidentiality agreement. The Special Committee determined that it needed a bona fide proposal from Randa (a strategic competitor) before granting due diligence and that further consideration would be required to ensure Randa was serious before sharing commercially sensitive information. Representatives of AlixPartners provided the Special Committee with their initial impressions of the Company. At this same meeting, the Chairman of the Special Committee reported that Mr. Oscar Feldenkreis, in light of the process being undertaken by the Special Committee, had requested that the Special Committee adopt a retention plan for certain key employees in view of their knowledge and roles in the process. The Special Committee agreed to consider this matter.

        Also on March 26, 2018, Ms. Fanny Hanono entered into a severance agreement and general release with the Company, pursuant to which she would receive 18 months of her base salary, her bonus, COBRA health benefits and long-term incentive performance-based compensation pursuant to the terms of such agreement.

        Between March 26, 2018 and June 15, 2018, four potential debt financing sources (in addition to Wells Fargo Bank, National Association ("Wells Fargo") and Fortress) executed joinder agreements with Mr. George Feldenkreis or non-disclosure agreements directly with the Company, in each case permitting such potential debt financing sources to receive confidential information in connection with their respective evaluations of debt financing for the Feldenkreis Proposal.

        On March 28, 2018, PJ Solomon provided Randa with a process letter inviting Randa to submit an initial indication of interest by April 5, 2018.

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        On March 30, 2018, Paul, Weiss circulated an initial draft of the agreement and plan of merger to Olshan. Also on March 30, 2018, Fortress had a diligence call with the Company's management.

        On April 2, 2018, the Special Committee met with its advisors to receive an update on the process. PJ Solomon advised that of the 18 parties it had reached out to in March, only Mr. George Feldenkreis and Randa were conducting diligence. PJ Solomon noted Randa was expected to submit a non-binding indication of interest no later than April 5th. PJ Solomon noted that Fortress had indicated it was nearing completion of its business due diligence, and that Fortress had the capacity to backstop the debt financing needed for the Feldenkreis Proposal if an ABL financing could not be achieved. PJ Solomon also advised the Special Committee that Mr. George Feldenkreis' financial advisor believed the director nomination window for the 2018 Annual Meeting, scheduled to expire on April 12th, would likely need to be extended to provide more time for Mr. George Feldenkreis' financing sources to conduct their due diligence.

        On April 5, 2018, Randa submitted a non-binding indication of interest (the "Randa Proposal") indicating a potential purchase price of $27.75 per share in an all cash transaction with no financing contingency and suggesting that it would take about two weeks to complete diligence and submit a letter of intent.

        On April 6, 2018, Mr. George Feldenkreis' financial advisor circulated a list of eight outstanding diligence requests from Fortress.

        Also on April 6, 2018, the Special Committee met with its advisors to receive an update on the process. AlixPartners presented its findings to the Special Committee. The Special Committee determined, after considering, among other things, the oral briefing and written presentation of AlixPartners, that the projections prepared by the Company's management team in March 2018 (which had been adjusted to reflect contraction in the Company's retail customer base, including the bankruptcy of Bon-Ton), based on the interviews, documents and data analyzed by AlixPartners (the truth, accuracy, or completeness of which were not independently verified by AlixPartners) were reasonably prepared and reflected the best estimates available at that time of the Company's management of the Company's future financial performance and that PJ Solomon should utilize the projections prepared by the Company's management team in March 2018 for its financial analysis. The Special Committee then discussed a proposal from Mr. George Feldenkreis' counsel to extend the director nomination window from April 12th to April 30th (with a standstill for Mr. George Feldenkreis to nominate director candidates to expire on April 26th) in exchange for a public reaffirmation of the Feldenkreis Proposal, including the $27.50 price. The Special Committee unanimously approved moving forward with this extension, in part because it would give Randa time to catch up to Mr. George Feldenkreis and submit a further progressed proposal. The Special Committee also reviewed the Randa Proposal with PJ Solomon and concluded, based in part on advice from PJ Solomon, that it was in the best interest of the Company's shareholders to allow Randa to enter the strategic process and conduct due diligence. PJ Solomon noted that Randa was a brand operator, and the Special Committee determined that due diligence would be provided taking into account appropriate staging of competitively sensitive information. Representatives from PJ Solomon also noted that another strategic party had expressed interest in working with Mr. George Feldenkreis and his proposal. Given that such other strategic party ("Party C") previously indicated it would not be adverse to Mr. George Feldenkreis, and given its strategic objectives would not lend itself to bid for the whole Company in any event, the Special Committee concluded it was in the best interest of shareholders to allow Party C to potentially work with Mr. George Feldenkreis. PJ Solomon noted that Party C was a licensor, but was not a competitive brand operator.

        Between April 6, 2018 and April 10, 2018, PJ Solomon worked with Company management and general counsel to classify data room files that contained competitively sensitive information so that staged access could be given to those files when and if the Special Committee determined that

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potential competitors of the Company, including Randa, were sufficiently progressed in bidding to justify providing access.

        On April 9, 2018, at a Board meeting at which all members were present, the Board unanimously adopted resolutions that, upon execution of an amendment to the Feldenkreis Confidentiality Agreement and a letter reaffirming the Feldenkreis Proposal, amended the Company's Bylaws to extend the director nomination deadline for the 2018 Annual Meeting to April 30, 2018. Following the meeting, the Company and Mr. George Feldenkreis executed an amendment to the Feldenkreis Confidentiality Agreement extending the director nomination standstill to April 26, 2018 and Fortress and Mr. George Feldenkreis executed a letter reaffirming the Feldenkreis Proposal.

        Also on April 9, 2018, Mr. George Feldenkreis filed a statement on Schedule 13D, publicly disclosing this letter and noting that he reaffirmed his offer to acquire all of the shares of the Company for $27.50 per share and that Mr. George Feldenkreis and the Company amended the Feldenkreis Confidentiality Agreement to extend the director nomination standstill to April 26, 2018.

        On April 10, 2018, Randa received access to the data room. On April 11, 2018, representatives from Randa met with representatives of PJ Solomon, Mr. Oscar Feldenkreis and certain other members of senior management of the Company at the Company's headquarters in Miami, Florida.

        On April 12, 2018, the Company entered into a confidentiality agreement with Party C in connection with the Feldenkreis Proposal.

        Also on April 12, 2018, after discussions involving the Special Committee and members of senior management, representatives from Paul, Weiss spoke with FWCook ("Cook"), the Company's regular compensation consultant, and outlined a potential change in control severance plan ("CIC Severance Plan"), so that Cook could begin to benchmark such a plan for the Company's Compensation Committee.

        On April 13, 2018, in respect of the Feldenkreis Proposal, Party C received data room access to conduct due diligence.

        On April 16, 2018, the Company's general counsel presented the Special Committee with the initial list of Company employees proposed to be included in a retention plan.

        Also on April 16, 2018, the Special Committee met with its advisors to receive an update on the process. The Special Committee reviewed the list of proposed participants in the CIC Severance Plan with its financial and legal advisors. Representatives from Paul, Weiss outlined the proposed CIC Severance Plan and reported Cook's views and benchmarking of the proposed CIC Severance Plan. The Special Committee instructed representatives from PJ Solomon to approach Randa regarding the potential implementation of the CIC Severance Plan and get an understanding of how Randa would perceive such a plan. At this same meeting, representatives from PJ Solomon reviewed with the Special Committee the Company's performance relative to competitors and PJ Solomon's preliminary views of the Company's valuation based on a variety of approaches, relying on management's projections as previously directed by the Special Committee, after the Special Committee considered the findings of AlixPartners.

        Also on April 16, 2018, PJ Solomon, at the instruction of the Special Committee, approached representatives of Randa to discuss the retention of Company employees, including the likelihood that the proposed CIC Severance Plan would be implemented in the near future. Randa indicated that it understood it was customary to have such a plan in the context of a public strategic review process where risk of a change in control transaction becomes known to employees and indicated its interest in minimizing employee disruption during the process. Additionally, PJ Solomon and Randa discussed (i) Mr. Oscar Feldenkreis' employment arrangements, including his rights upon a change in control of the Company, (ii) the need for Randa's legal counsel to speak with Paul, Weiss regarding specific

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questions surrounding the Feldenkreis Proposal, (iii) the possibility of receiving expense reimbursement in connection with the Randa Proposal, (iv) access to the Company's senior management to hold meetings and (v) potential third-party financing sources with whom Randa would seek to sign joinder agreements.

        On April 17, 2018, Randa requested meetings with seven of the Company's senior managers. Also on April 17, 2018, Paul, Weiss circulated an initial draft of the agreement and plan of merger to legal counsel for Randa.

        On April 19, 2018, Wells Fargo and Mr. George Feldenkreis executed a joinder agreement, permitting Wells Fargo to receive confidential information in connection with its evaluation of debt financing for the Feldenkreis Proposal.

        On April 20, 2018, Cook delivered a draft report to the Special Committee regarding its review of the proposed CIC Severance Plan. In this draft Cook concluded that the proposed CIC Severance Plan was reasonable and fell within the range of market practice. Specifically, the cash severance benefits were at the lower end of market practice while the number of covered employees was at the higher end of market practice.

        Also on April 20, 2018, Paul, Weiss circulated draft disclosure schedules to Randa's legal counsel and Mr. George Feldenkreis' counsel.

        On April 22, 2018, at a Compensation Committee meeting at which all members were present, the Compensation Committee of the Board reviewed the proposed CIC Severance Plan with representatives of Paul, Weiss. After deliberation, the Compensation Committee unanimously voted to approve the CIC Severance Plan.

        Between April 22, 2018 and June 15, 2018, 15 potential debt financing sources executed joinder agreements with Randa, permitting such potential debt financing sources to receive confidential information in connection with their respective evaluations of debt financing for the Randa Proposal.

        On April 25, 2018, PJ Solomon spoke with Scope, who advised that Mr. George Feldenkreis would not increase the price of his offer of $27.50 per share to acquire all of the shares of the Company.

        On April 26, 2018, the Special Committee met with its advisors to receive an update on the process. The Special Committee discussed with its financial and legal advisors a proposal from Mr. George Feldenkreis' counsel to extend the director nomination window from April 30th to May 18th in exchange for (i) an amendment to the Feldenkreis Confidentiality Agreement extending Mr. George Feldenkreis' standstill period to May 16th and (ii) a public reaffirmation of the $27.50 price from Mr. George Feldenkreis. The Special Committee unanimously approved moving forward with this extension. Representatives from PJ Solomon reported that Party C was still interested, but added that Party C's proposed acquisition structure remained unclear. The Special Committee then discussed Randa's progress, and PJ Solomon noted that Randa's senior executives spent 16 hours over the prior three days in meetings with Company management (including 10 senior executives) and consultants from AlixPartners. Following this discussion, the Special Committee also unanimously approved providing Randa with un-redacted versions of all licensing agreements in business lines where Randa was not considered a direct competitor of the Company. During this meeting, the Special Committee also discussed Randa's request for expense reimbursement but declined to make a decision regarding the request at that time.

        Also on April 26, 2018, the Board adopted resolutions by unanimous written consent that, upon execution of an amendment to the Feldenkreis Confidentiality Agreement and a letter reaffirming the Feldenkreis Proposal, amended the Company's Bylaws to extend the director nomination deadline to May 18, 2018. Following adoption of the resolutions, the Company and Mr. George Feldenkreis executed an amendment to the Feldenkreis Confidentiality Agreement extending the director

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nomination standstill to May 16, 2018 and Fortress and Mr. George Feldenkreis executed a letter reaffirming the Feldenkreis Proposal.

        Also on April 26, 2018, the Company filed a Form 8-K, publicly disclosing adoption of the CIC Severance Plan.

        On April 27, 2018 Mr. George Feldenkreis filed a statement on Schedule 13D, publicly disclosing the letter executed by Mr. George Feldenkreis and Fortress, and noting that Mr. George Feldenkreis reaffirmed his offer to acquire all of the shares of the Company for $27.50 per share and that Mr. George Feldenkreis and the Company amended the Feldenkreis Confidentiality Agreement to extend the director nomination standstill to May 16, 2018.

        Also on April 27, 2018, PJ Solomon received an extensive supplemental diligence request list from Randa. Additionally, representatives from PJ Solomon and Randa corresponded, and Randa identified two key items of outstanding diligence: (i) the competitive licenses, and (ii) discussions with the four inbound licensees and 10 outbound licensees who accounted for a majority of the Company's cash flow. Randa also delivered a draft Expense Reimbursement Agreement.

        Also on April 27, 2018, in respect of the Feldenkreis Proposal, Scope informed PJ Solomon that another potential strategic partner ("Party D"), a brand licensor (though not an operating competitor), was interested in partnering with Mr. George Feldenkreis in his bid to acquire the Company. Accordingly, PJ Solomon provided a draft of the non-disclosure agreement to Party D. Party D confirmed receipt of the non-disclosure agreement, but never commented on, or executed, a non-disclosure agreement in respect of the Feldenkreis Proposal. Accordingly, Party D was not provided access to the data room at that time.

        On April 28, 2018, in respect of the Feldenkreis Proposal, Scope informed PJ Solomon that Mr. George Feldenkreis had retained a team from Proskauer Rose LLP ("Proskauer") to serve as additional legal counsel, along with Olshan, for Mr. George Feldenkreis.

        On May 2, 2018, Randa called PJ Solomon and stated that Randa would go "pencils down" if the Special Committee refused to grant expense reimbursement. Later that day, Paul, Weiss sent the Special Committee members a revised draft of Randa's proposed Expense Reimbursement Agreement.

        Also on May 2, 2018, Mr. George Feldenkreis sent a letter to the Special Committee expressing concerns he had regarding the CIC Severance Plan.

        Also on May 2, 2018, PJ Solomon spoke with Scope and requested an increase in per share merger consideration, Scope reiterated that Mr. George Feldenkreis would not increase the price of his offer of $27.50 per share to acquire all of the shares of the Company.

        On May 3, 2018, the Special Committee met with its advisors to receive an update on the process. The Special Committee discussed Randa's position and the importance of keeping Randa in the process and commencing good faith negotiations of definitive terms as quickly as possible. Following this discussion, the Special Committee voted unanimously to approve entry into the Expense Reimbursement Agreement subject to a cap. The Special Committee then discussed whether to share the remaining license agreements with Randa, and after deliberation, the Special Committee approved providing unredacted versions of the remaining license agreements to Randa.

        Also on May 3, 2018, the Special Committee sent a response letter to Mr. George Feldenkreis disagreeing with Mr. George Feldenkreis' assertions in his May 2, 2018 letter regarding the CIC Severance Plan.

        Also on May 3, 2018, in respect of the Feldenkreis Proposal, Olshan sent Paul, Weiss a revised draft of the merger agreement. From May 3, 2018 to June 15, 2018, Olshan and Paul, Weiss engaged in negotiations of the merger agreement and ancillary documents related thereto.

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        On May 4, 2018, the Special Committee unanimously approved revisions to, and the Company entered into, the Expense Reimbursement Agreement with Randa pursuant to which the Company would reimburse Randa, subject to the terms and conditions thereof, for its reasonable and documented out-of-pocket expenses up to a cap if the Company enters into a definitive acquisition agreement with someone other than Randa, on or before July 31, 2018. Following execution of the Expense Reimbursement Agreement, legal counsel for Randa circulated a revised draft of the merger agreement to Paul, Weiss. Randa also circulated a list of its highest priority diligence requests, which included direct contact with the Company's four most material inbound licensors.

        On May 9, 2018, in respect of the Feldenkreis Proposal, Olshan sent Paul, Weiss a further revised draft of the merger agreement. The draft proposed that (i) the reverse termination fee be increased from 1% (proposed by Olshan's first revised draft of the merger agreement) to 2% of the equity transaction value and that the Company's recourse for any breach under the merger agreement would be limited to this 2% amount, (ii) the Company undergo a pre-closing restructuring (the specific steps of which were not provided) to facilitate Mr. George Feldenkreis' IPCo/OPCo financing structure, (iii) no limited guarantee would be provided, and in lieu thereof, Mr. George Feldenkreis would pledge certain of the shares of the Company owned directly by him to pay the reverse termination fee and other obligations of Parent under the merger agreement, (iv) obtaining the consent of two licensors would be required as a condition to closing, and (v) a closing condition would be included that not more than 5% of shares have exercised appraisal rights. Olshan also provided an overview of the proposed debt and equity financing structure and noted that significant progress had been made in the negotiation of the debt commitment letter with Fortress.

        On May 10, 2018, the Special Committee met with its advisors to receive an update on the process. PJ Solomon advised that with respect to the Feldenkreis Proposal, the financing package proposed would have a leverage ratio higher than in any recent apparel deals, and would use an IPCo/OPCo structure. PJ Solomon advised the Special Committee that it did not expect there would be any excess availability to increase the proposed offer of $27.50 per share in light of the financing structure. Paul, Weiss also gave a detailed presentation on the terms of the merger agreement it had proposed for both bidders, and an overview of the open issues presented by each bidder. Of note, both bidders had deleted the "go-shop" provisions in their respective bids and the Feldenkreis Proposal had a 2% termination fee and reverse termination fee, while the Randa Proposal had a 3.75% termination fee and reverse termination fee, in each case of equity transaction value.

        Also on May 10, 2018, PJ Solomon spoke with Scope and requested an increase in per share merger consideration, Scope again noted that Mr. George Feldenkreis would not increase the price of his offer of $27.50 per share to acquire all of the shares of the Company.

        On May 11, 2018, in respect of the Feldenkreis Proposal, representatives of Scope informed PJ Solomon that Mr. George Feldenkreis was hoping to sign in advance of the May 18th nomination deadline for the 2018 Annual Meeting, and requested that Paul, Weiss deliver a revised version of the merger agreement. Scope advised that Mr. George Feldenkreis expected to firm up his financing commitments shortly. Later that day, Paul, Weiss circulated a revised draft of the merger agreement to Olshan in respect of the Feldenkreis Proposal. This draft removed conditions to closing related to dissenting shares and consent of third parties and reinstated a 7% reverse termination fee and recourse above this amount for willful and material breaches.

        On May 12, 2018, in respect of the Feldenkreis Proposal, representatives of Scope updated PJ Solomon on the status of the merger agreement review and delivery of the financing commitments. Representatives of Scope also suggested that the director nomination deadline be extended to May 28, 2018 as Mr. George Feldenkreis was otherwise going to nominate a slate of directors.

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        On May 13, 2018, in respect of the Feldenkreis Proposal, Olshan sent Paul, Weiss a revised draft of the merger agreement, which proposed a reverse termination fee of 2.5% of equity transaction value, and limited the Company's recourse for any breach under the merger agreement to a pledge of shares of Company Common Stock having a value at the time of signing (based on $27.50 per share) of such fee amount. The revised draft also accepted the removal of the conditions to closing related to dissenting shares and consent of third parties.

        On May 14, 2018, in respect of the Randa Proposal, Paul, Weiss sent a revised draft of the merger agreement to legal counsel for Randa including a proposed 2% termination fee and 7% reverse termination fee, in each case of equity transaction value.

        On May 16, 2018, in respect of the Feldenkreis Proposal, Olshan delivered debt commitment letters from each of Fortress and Wells Fargo to Paul, Weiss, which Olshan indicated were expected to be finalized shortly. These debt commitment papers (i) required the lenders' satisfaction with the pre-closing restructuring, the specific steps of which were to be provided, (ii) did not contain a guarantee on the minimum borrowing base or availability under the ABL, and (iii) did not include a detailed sources and uses.

        Also on May 16, 2018, Mr. George Feldenkreis sent a letter to the Special Committee reporting that his counsel delivered substantially complete drafts of debt financing commitments, stating these provided "firm financing," and noting that his counsel had submitted a merger agreement and requesting a response. Mr. George Feldenkreis proposed that, if the merger agreement could not be negotiated in full before Friday, May 18, 2018 when the window for submission of shareholder nominees to the Board would end, he be granted exclusivity through May 25, 2018.

        Also on May 16, 2018 the Special Committee met with its advisors to receive an update on the process. Paul, Weiss and PJ Solomon provided a process update. Following discussion, the Special Committee unanimously authorized PJ Solomon to begin coordinating Randa's conversations with the Company's top-three inbound licensors once the expected debt financing commitment papers from Randa had been received. The Special Committee then discussed Mr. George Feldenkreis' proposal for exclusivity, and determined that it needed to provide Randa an opportunity to complete its diligence before any exclusivity requests would be considered.

        Following the Special Committee call, also on May 16, 2018, Paul, Weiss responded to Olshan and Proskauer with a list of follow up questions on Mr. George Feldenkreis' debt commitment letters, as well as delivering a revised version of the merger agreement. The Special Committee also delivered (i) a letter responding to Mr. George Feldenkreis' request for exclusivity, denying the same and noting it was not believed to be in the best interest of shareholders, but noting its willingness to grant an extension of the nomination window, and (ii) draft materials to extend the nomination window to Mr. George Feldenkreis' counsel.

        On May 17, 2018, in respect of the Feldenkreis Proposal, Proskauer delivered to Paul, Weiss a sources and uses table, a description of the pre-closing restructuring and related structure chart. Thereafter, Paul, Weiss and Proskauer had a call regarding the financing of the Feldenkreis Proposal. Paul, Weiss noted its concerns including (i) the pre-closing restructuring being required of the Company, (ii) the liquidity requirements and the concern that there would not be a guaranteed sufficient borrowing base at closing to fund the transactions—noting that Paul, Weiss would expect minimum guaranteed availability at closing, (iii) the intercompany license arrangements that would be required in an IPCo/OPCo financing, and (iv) the current status of the coordination of the credit silos and synchronization of the different commitments. Proskauer informed Paul, Weiss that revised papers were in process and would be available shortly.

        Also on May 17, 2018, in respect of the Feldenkreis Proposal, following the call between Paul, Weiss and Proskauer, Scope emailed PJ Solomon and noted that the concerns expressed on the

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financing package would be addressed the following day. In connection therewith, Scope offered to consider a limited "go-shop" for any competing bidder, and noted the desire of its client to sign over the weekend. PJ Solomon informed Scope that it did not believe a signing over the weekend was possible and the Special Committee would need at least two more weeks to complete its process.

        On May 18, 2018, Mr. George Feldenkreis notified the Company of his intent to nominate individuals for election as directors at the 2018 Annual Meeting including Mr. Oscar Feldenkreis, Mary Ellen Kanoff, Scott A. LaPorta and Matthew McEvoy. In addition, Mr. George Feldenkreis filed an amended Schedule 13D, disclosing his nomination of Mr. Oscar Feldenkreis, Mary Ellen Kanoff, Scott A. LaPorta and Matthew McEvoy for election to the Board at the 2018 Annual Meeting. In the amended Schedule 13D, Mr. George Feldenkreis expressed his desire to have signed a definitive merger agreement prior to the May 18th deadline for shareholder nominations. Mr. George Feldenkreis also expressed his belief that any remaining issues could be resolved in a limited amount of time. Mr. George Feldenkreis noted that given the amount of time that had passed since submitting his original bid to acquire the Company in February, he had determined to nominate directors for election at the 2018 Annual Meeting in order to preserve his rights as a shareholder. Mr. George Feldenkreis acknowledged that Mr. Oscar Feldenkreis was likely to be nominated by the Company for election to the Board at the 2018 Annual Meeting under his employment agreement. However, Mr. George Feldenkreis determined to also nominate Mr. Oscar Feldenkreis for election to the Board to ensure his re-election because of Mr. George Feldenkreis' belief that Mr. Oscar Feldenkreis' continued role as an executive and presence on the Board was essential and in the best interest of all shareholders. Mr. George Feldenkreis noted that Oscar Feldenkreis' participation in Mr. George Feldenkreis' proxy solicitation would be limited to being named as a person nominated by Mr. George Feldenkreis and as a result, Mr. Oscar Feldenkreis would be filing a Schedule 13D separately.

        Later on May 18, 2018, the Special Committee responded to Mr. George Feldenkreis' May 18, 2018 letter and Schedule 13D filing with a press release that it was continuing its strategic review process to maximize shareholder value rather than contesting mischaracterizations of negotiations in the press by Mr. George Feldenkreis.

        On May 20, 2018, in respect of the Feldenkreis Proposal, Olshan delivered a revised merger agreement to Paul, Weiss. As had been noted on the May 17, 2018 call between Proskauer and Paul, Weiss, the Company's obligation to consummate a pre-closing restructuring had been removed. Olshan proposed that any recourse under the agreement be limited to 400,000 shares to be pledged by Mr. George Feldenkreis, which amounted to, approximately, a 2.5% reverse termination fee that had been previously proposed. The draft also contained a footnote indicating that Olshan did not believe there was a need for a go shop, but that a limited go shop for a single bidder would be considered.

        On May 21, 2018, Mr. Oscar Feldenkreis filed a Schedule 13D stating while that he was not affirming his membership in a group, that he may be deemed a "group" within the meaning of Section 13(d)(3) of the Exchange Act due to his consent to serve as a nominee of Mr. George Feldenkreis for election at the 2018 Annual Meeting. He stated that apart from such disclosure, he had no plans or proposals that would result in any of the occurrences enumerated in (a) through (j) of Item 4 of Schedule 13D.

        Also on May 21, 2018, the Special Committee met with its advisors to receive an update on the process. Paul, Weiss and PJ Solomon provided process updates. Following discussion, the Special Committee unanimously approved the delivery of a letter to Mr. Oscar Feldenkreis which was sent shortly after the meeting. The letter, sent in light of Mr. Oscar Feldenkreis' Schedule 13D disclosures, reminded him of his March 14, 2018 agreement not to share with Mr. George Feldenkreis or Fortress any confidential information, material non-public information, information provided by the Company to the Special Committee or information about the process and other strategic alternatives. The Special Committee instructed Mr. Oscar Feldenkreis to not communicate with Mr. George Feldenkreis or

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Fortress regarding the Company or its subsidiaries in the absence of the presence and participation of a member of the Special Committee or its legal or financial advisors.

        Also on May 21, 2018, in respect of the Randa Proposal, legal counsel for Randa delivered to Paul, Weiss a bid package including a draft debt commitment letter from an ABL lender financing source, a debt long form term sheet from an alternative debt financing source, and a revised merger agreement. The debt papers were materially insufficient in both amount and certainty. PJ Solomon advised Randa's financial advisor of the same promptly and was advised that Randa was aware of the issues and had been frustrated with one of its financing sources but assured PJ Solomon that Randa was working to fill the gaps expeditiously.

        On May 22, 2018, in respect of the Feldenkreis Proposal, the advisors for the Special Committee and Mr. George Feldenkreis discussed open issues and the status of various transaction documents and the debt commitment letters. Paul, Weiss and PJ Solomon communicated the view that the Special Committee process was making good progress but that there were still items to be negotiated, especially with respect to financing terms and risks, before an actionable offer with definitive documents was ready to be put before the Special Committee, and communicated their sense that it was unlikely to happen in the next few days with respect to any offer and that Mr. George Feldenkreis' advisory team had been pressing for same.

        On May 23, 2018, Mr. George Feldenkreis sent a letter to the Special Committee, which was made public by press release, urging the Special Committee to immediately commit to an expedited timeline to conclude negotiations and enter into a definitive agreement to acquire the Company. Therein, Mr. George Feldenkreis stated he was backed by full financing, and was prepared to finalize and execute documents immediately. He stated that if the Company would not enter into a definitive acquisition agreement by May 29, 2018, he would withdraw his proposal and pursue all other rights as a shareholder.

        Also on May 23, 2018, in respect of the Feldenkreis Proposal, Olshan circulated the first versions of the pledge agreement, limited guarantee, and rollover letter to Paul, Weiss. As the last version of the merger agreement from Olshan had indicated, the limited guarantee and pledge agreement collectively provided the Company limited recourse to 400,000 of Mr. George Feldenkreis' shares. Proskauer also delivered to Paul, Weiss a revised term sheet and fee letter in respect of the Wells Fargo facility.

        Also on May 23, 2018, in respect of the Randa Proposal, Paul, Weiss and legal counsel for Randa had a call regarding open issues. Legal counsel for Randa acknowledged the insufficiencies in the draft debt commitments and noted their understanding that Randa would not be permitted to contact the major inbound licensors of the business until it proved to the Special Committee that it had the requisite financing.

        Also on May 23, 2018, the Special Committee met twice with its advisors and received updates regarding the process, documents and the open issues. Following discussion, the Special Committee authorized its advisors to issue a press release in response to the public statement by Mr. George Feldenkreis and to continue to negotiate and try to progress the process.

        On May 24, 2018, the Special Committee issued a press release responding to Mr. George Feldenkreis' statement that he would withdraw the Feldenkreis Proposal if the Special Committee would not commit to an expedited timeline to conclude negotiations, noting that it was committed to conducting a bona fide process that would maximize shareholder value and its willingness to negotiate towards a definitive agreement on customary and appropriate terms, although no decision had been made with respect to the Company's response to the latest proposal from Mr. George Feldenkreis.

        Also on May 24, 2018, in respect of the Feldenkreis Proposal, Paul, Weiss delivered revised versions of the merger agreement and ancillary documents, as well as comments to the debt commitments, to Olshan and Proskauer. The revised drafts maintained the Special Committee's

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position on the 7% reverse termination fee and the circumstances in which it would become payable and removed certain proposed limitations on damages for a breach under the merger agreement. The revised drafts also contemplated that Mr. George Feldenkreis would withdraw his nomination of directors effective as of the signing of the definitive agreements.

        On May 25, 2018, in respect of the Randa Proposal, Paul, Weiss delivered a revised merger agreement and Company disclosure letter to legal counsel for Randa. Additionally, Party D, in connection with the Randa Proposal, executed a non-disclosure agreement, permitting it to receive confidential information in connection with its evaluation of equity financing for the Randa Proposal. Paul, Weiss had conversations with legal counsel for Randa regarding the merger agreement draft and Randa's counsel acknowledged that Randa was unlikely to have fully committed financing by the May 29th deadline announced by Mr. George Feldenkreis and indicated that Randa's interest remained strong.

        Later on May 25, 2018, in respect of the Feldenkreis Proposal, Olshan delivered a revised merger agreement and certain ancillary agreements, which it indicated was Mr. George Feldenkreis' best and final offer. The merger agreement proposed did not include a limited go-shop, which Olshan had previously indicated was under consideration, due to the Special Committee's stance on the reverse termination fee. The merger agreement included a reverse termination fee equal to 3% of the equity transaction value (and modified the situations under which it would be payable to circumstances resulting in the failure to obtain financing to fund the transaction), which 3% would be the maximum recourse, including in the event of willful breach, secured by a pledge of a portion of Mr. George Feldenkreis' shares. The merger agreement also proposed a reduced Company termination fee of 1.5% of the equity transaction value. In addition, the merger agreement provided for the cancellation of unvested employee performance-based equity awards as to which the performance targets had not been achieved. The extent of the proposed cancellation was subsequently quantified by Scope on June 1, 2018. Olshan further proposed that Mr. George Feldenkreis would not withdraw his nomination letter but would agree to not seek to compel the 2018 Annual Meeting if the Company would agree to delay the 2018 Annual Meeting during the pendency of the merger agreement.

        On May 26, 2018, the Special Committee met with its advisors to receive an update on the process. The Special Committee discussed the main open issues in respect of the Feldenkreis Proposal. PJ Solomon also updated the Special Committee on Randa's progress, which included the addition of Party D who was being considered as a source of considerable equity to help the Randa owner minimize risk. PJ Solomon advised the Special Committee that it had become clearer that Randa was not willing to match the equity risk being taken by Mr. George Feldenkreis and Mr. Oscar Feldenkreis, who seemed to be uniquely willing and able to do so. The Special Committee, in respect of the Feldenkreis Proposal, discussed the debt financing commitments and the execution risks and limited recourse for the failure of financing. Following discussion, the Special Committee authorized its advisors to reject the best and final offer submitted by Mr. George Feldenkreis and to counter with an offer to continue to negotiate the other open issues if a 5% reverse termination fee were acceptable.

        Also on May 26, 2018, in respect of the Feldenkreis Proposal, Paul, Weiss responded to Olshan regarding the various open issues and expressed a willingness to work toward the deadline imposed by Mr. George Feldenkreis of May 29th, if a reverse termination fee of 5% was accepted by Mr. George Feldenkreis.

        Also on May 26, 2018, in respect of the Randa Proposal, legal counsel for Randa delivered revised versions of certain ancillary documents to Paul, Weiss.

        On May 27, 2018, the Special Committee met with its advisors to receive an update on the process. The Special Committee discussed the primary open issues on the Feldenkreis Proposal, and provided guidance to the advisors on the various draft documents.

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        Also on May 27, 2018, in respect of the Feldenkreis Proposal, Paul, Weiss delivered the revised merger agreement and ancillary documents to Olshan and inquired about the timing of revised drafts of the debt commitments. The revised merger agreement reflected the proposed 5% reverse termination fee (with a corresponding pledge of shares by Mr. George Feldenkreis) and held firm on the Special Committee's position on when that would become payable. Paul, Weiss' revised drafts also permitted the Company to solicit for the election of its incumbent directors if a shareholder sought to compel the 2018 Annual Meeting prior to the special meeting called to adopt the merger agreement with Mr. George Feldenkreis, while Mr. George Feldenkreis would be restricted from soliciting for the election of his nominees.

        On May 28, 2018, PJ Solomon hosted representatives of Randa for a meeting. During the meeting, Randa's CEO said that he was still interested in owning the Company, but did not want to bet the Randa business to accomplish this without an equity partner. Randa believed it could work with Party C or Party D to achieve a deal, but acknowledged that it (i) had not found a workable structure due to anticipated tax consequences, (ii) did not have any financing and attributed such failure to be the result of no quality of earnings having been timely commissioned on Randa's business, (iii) had not made significant progress toward items (i) or (ii) in the last two months and (iv) still required conversations with the Company's key inbound licensors and wholesale customers.

        On May 29, 2018, in respect of the Randa Proposal, legal counsel for Randa delivered a revised merger agreement.

        Also on May 29, 2018, the Special Committee met with its advisors to receive updates on the process. The Special Committee discussed the contingencies and risks in the financing package being arranged for the Feldenkreis Proposal and encouraged its advisors to continue to work to try to ensure that the financing was sufficient in terms of both amount and certainty in the interests of shareholders.

        From May 29, 2018 through June 15, 2018, in respect of the Feldenkreis Proposal, Proskauer and Paul, Weiss negotiated the terms of the Fortress and Wells Fargo debt commitments.

        On May 31, 2018, in respect of the Feldenkreis Proposal, Scope advised PJ Solomon that Mr. George Feldenkreis would withdraw the Feldenkreis Proposal if he could not enter into a definitive agreement with the Company by the end of the day due to the passage of almost four months since the submission of his original proposal to acquire the Company and the substantial costs and expenses incurred by the Company or otherwise related to the proposed transaction. PJ Solomon then advised Scope that the Special Committee believed the Feldenkreis Proposal lacked sufficient funds and executable financing commitments from the lenders.

        On June 1, 2018, in respect of the Feldenkreis Proposal, Olshan delivered a revised merger agreement and revised financing commitments. Olshan also stated that the documents circulated were a final and best offer, and that its client looked to sign a deal over that weekend, with an announcement on the morning of June 4, 2018. Olshan noted further that Mr. George Feldenkreis would withdraw his offer on the morning of June 4, 2018 to the extent that Paul, Weiss was unwilling to have an in-person discussion to achieve a signing over the weekend. The revised Feldenkreis Proposal included a 4% reverse termination fee (with a corresponding pledge of shares by Mr. George Feldenkreis) and a 2% Company termination fee, and the debt commitments continued to have no guaranteed minimum borrowing base to assure the Company of sufficient availability under the debt commitments. Separately, Scope sent PJ Solomon a sources and uses table showing that the proposed cancellation of unvested performance-based equity awards amounted to approximately $7.4 million.

        On June 2, 2018, the Special Committee met with its advisors to receive an update on the process. The Special Committee reviewed with Paul, Weiss and PJ Solomon the current status of the Feldenkreis Proposal. Following this review, the Special Committee directed its advisors to (i) inform Mr. George Feldenkreis' advisors that the canceling of employee performance-based equity awards

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(other than Mr. Oscar Feldenkreis') was unacceptable and (ii) propose a reverse termination fee of $20 million, which represented approximately 4.7% of the equity transaction value. Following the Special Committee meeting, PJ Solomon informed Scope of the Special Committee's positions. A few hours later Scope informed PJ Solomon that, in light of the significant costs and expenses incurred by the Company or otherwise related to the proposed transaction, if unvested performance awards for employees were to be paid at closing, Mr. George Feldenkreis would consider reducing his offer to $27.00. Scope also informed PJ Solomon that Mr. George Feldenkreis would not increase his reverse termination fee above 4%. The Special Committee then held a second meeting during which it unanimously approved rejecting the latest version of the Feldenkreis Proposal, but telling Mr. George Feldenkreis that it would reopen discussions when he was prepared to negotiate in good faith.

        On June 3, 2018, in respect of the Feldenkreis Proposal, Paul, Weiss, PJ Solomon, Olshan and Proskauer discussed the treatment of employee equity awards and Proskauer circulated alternative proposals, including a proposal in which all time-based restricted stock awards would accelerate and be paid out in cash at the closing, and all performance-based restricted stock awards would be converted into performance-based retention awards, vesting and payable subject to achievement of performance-based vesting conditions.

        On June 4, 2018, the Special Committee met with its advisors to receive an update on the process, including the proposals on employee equity awards. Following discussion, the Special Committee voted unanimously to reject the proposals offered and offer an alternative proposal in which all time-based stock awards would accelerate and be paid at the closing and all performance-based stock awards would convert into time-based cash retention awards that would be paid in cash at the time of vesting, provided that Parent would need to get express availability for this payment in its debt commitments.

        Also on June 4, 2018, Olshan informed Paul, Weiss of two successive deadlines to reach an agreement that day, the failure of which would result in the Feldenkreis Proposal being withdrawn the following morning. Ultimately, the advisors organized an in-person meeting the following day with Mr. George Feldenkreis.

        On June 5, 2018, in respect of the Feldenkreis Proposal, Paul, Weiss, PJ Solomon, Mr. George Feldenkreis, Olshan, Proskauer and Scope met at the offices of Olshan to negotiate the remaining open issues. The parties did not discuss the reverse termination fee amount, but did discuss reverse termination fee triggers and other provisions affecting certainty of closing, including that Mr. George Feldenkreis would agree to contribute up to $5 million in cash as necessary for any financing shortfall and that the debt commitment letter in respect of the ABL financing would reflect revised market-flex provisions that would not have the potential to reduce availability at closing. Following the negotiations and a meeting of the Special Committee, Paul, Weiss circulated to Olshan revised drafts of the merger agreement and various ancillary documents.

        On June 7, 2018, Party C, in connection with the Randa Proposal, executed a non-disclosure agreement, permitting it to receive confidential information in connection with its evaluation of equity financing for the Randa Proposal. The Special Committee approved of this in writing and, because Party C had previously executed a non-disclosure agreement in respect of the Feldenkreis Proposal, Party C represented that it had not and agreed that it would not communicate with Mr. George Feldenkreis or Fortress regarding a transaction after a specified date.

        On June 11, 2018, the Special Committee met with its advisors to receive an update on the process. Following discussion, the Special Committee directed its advisors to offer a compromise package on all remaining open issues in respect of the Feldenkreis Proposal which included provisions improving the probability of collecting a reverse termination fee upon certain termination events in exchange for agreeing to accept a reduced size of 4% of equity value for the fee itself.

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        On June 12, 2018, in respect of the Feldenkreis Proposal, Mr. Oscar Feldenkreis advised that Mr. George Feldenkreis would issue a withdrawal press release at 4:30 p.m. (Eastern Time) on June 13, 2018 if a deal was not done by then. The Special Committee, through Mr. Scheiner, responded that Paul, Weiss was awaiting a response on the package of documents circulated on June 11, 2018.

        Also on June 12, 2018, in respect of the Feldenkreis Proposal, Olshan provided a counter proposal that addressed the remaining open points, including the allocation of financing failure risk with regard to Company management financing covenants and the resolution of matters related to the 2018 Annual Meeting.

        Also on June 12, 2018, the Special Committee met with its advisors to receive an update on the process. Following this review, the Special Committee agreed to begin scheduling meetings to review and obtain advisory presentations on the definitive documents representing the Feldenkreis Proposal.

        On June 13, 2018, PJ Solomon spoke with Scope and requested an increase in per share merger consideration, Scope again noted that Mr. George Feldenkreis would not increase the price of his offer of $27.50 per share to acquire all of the shares of the Company.

        Also on June 13, 2018, after the Board and each standing committee held their annually scheduled meeting, the Special Committee met with its advisors to receive an update on the process. Following discussion, the Special Committee authorized its advisors to invite AlixPartners to review materials submitted by management to the Board in connection with quarterly reporting and seek reconfirmation that the March projections had not changed. PJ Solomon advised the Special Committee that it had once more raised the prospect of a price increase with Scope, addressing with Scope the recent trading of the Company's stock. PJ Solomon relayed that Scope had firmly responded that Mr. George Feldenkreis would not increase his price.

        Also on June 13, 2018, PJ Solomon spoke with Mr. Oscar Feldenkreis and Mr. George Feldenkreis and Mr. George Feldenkreis stated that he would withdraw his offer if a deal was not agreed to by 5:00 p.m. (Eastern Time) on June 15, 2018.

        On June 14, 2018, the Special Committee met with Paul, Weiss and Akerman who provided the Special Committee with a review of the Special Committee's fiduciary duties in the context of evaluating the proposed transaction with Mr. George Feldenkreis. Paul, Weiss then summarized in detail the key terms of the latest drafts of the merger agreement, the related ancillary agreements and the financing commitments under the Feldenkreis Proposal.

        On June 15, 2018, the Special Committee met with its advisors to receive an update on the process. AlixPartners attended the meeting to confirm that, on information and belief, they had no reason to adjust their earlier findings, the receipt of which had preceded the Special Committee's direction to PJ Solomon to use the March 2018 projections for its valuation and fairness analysis. PJ Solomon then provided the Special Committee with an update of Randa's progress, including Randa's stated intention to deliver financing commitments and an offer in short order. PJ Solomon then reviewed with the Special Committee its analysis of Mr. George Feldenkreis' sources and uses and the adequacy of the Company's borrowing base for purposes of the Feldenkreis Proposal's financing. PJ Solomon then reviewed with the Special Committee the analyses underlying the fairness opinion that PJ Solomon was then prepared to issue later that day, if requested by the Special Committee.

        On the evening of June 15, 2018, the Special Committee met with its advisors to consider the proposed transaction, including the merger agreement and related ancillary agreements. Paul, Weiss provided a summary of the process that the Special Committee had undertaken since it was formed, and reviewed the fiduciary duties and responsibilities of the Special Committee. The Special Committee again discussed the terms of the proposed transaction, the risks and consequences of rejecting it, and the fact that the Company's shareholders would be able to accept or reject the proposed transaction pursuant to the requisite shareholder vote provisions of the merger agreement. After further discussion,

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at the request of the Special Committee, PJ Solomon issued an oral opinion, which was subsequently confirmed by delivery of a written opinion dated June 15, 2018, that, as of such date, and based upon the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by PJ Solomon in preparing its opinion, the merger consideration of $27.50 in cash per share of common stock of the Company to be paid to the shareholders (other than Parent and its affiliates) was fair, from a financial point of view, to such shareholders. After further discussion, the Special Committee unanimously determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement and the ancillary agreements were fair, advisable, and in the best interests of the unaffiliated shareholders and recommended that the Board approve the merger, the merger agreement and the related ancillary documents and the transactions contemplated thereby.

        Following the Special Committee meeting, the full Board met on June 15, 2018, and, based in part on the recommendation of the Special Committee, as well as on the basis of the other factors described in this Proxy Statement (including, among other factors, the financial analyses reviewed and discussed with the Special Committee by PJ Solomon), which the Board adopted as its own, after acknowledging Mr. George Feldenkreis' and Mr. Oscar Feldenkreis' interest in the transaction, unanimously resolved on behalf of the Company that the merger agreement, the merger, and the other transactions contemplated by the merger agreement were fair, advisable and in the best interests of the Company and the unaffiliated shareholders and that the merger agreement, the merger and the other transactions contemplated thereby be recommended to the shareholders for adoption. Thereafter the Board approved the merger, the merger agreement and the related ancillary agreements and the transactions contemplated thereby.

        Following the meeting, the Company, Parent and Merger Sub executed and delivered the merger agreement, and the ancillary agreements were fully executed and delivered by the parties thereto. The following morning, the Company issued a press release announcing entry into the merger agreement.

Subsequent Events

        On June 20, 2018, Randa delivered a letter to Paul, Weiss reconfirming its earlier non-binding indication of interest without including financing commitments but noting that draft debt commitment letters would be delivered later that week. The letter reflected the same $27.75 per share merger consideration as had been previously offered by Randa in its April 5, 2018 non-binding indication of interest, and noted that Randa expected, prior to the execution of definitive documents, to "have the opportunity to converse with certain principal business relationships (including the inbound licensors and certain key customers) of the Company to confirm their intent to continue such relationships." Paul, Weiss delivered a copy of the letter to Olshan on June 21, 2018, in accordance with the terms of the merger agreement.

        On June 21, 2018, the Special Committee met with its advisors to discuss the letter received from Randa. Paul, Weiss provided the Special Committee with a review of the Special Committee's fiduciary duties in the context of receipt of such materials. Following discussion with, and advice from, its legal and financial advisors, including a review with the Special Committee of their obligations under the non-solicitation provisions of the Feldenkreis merger agreement, the Special Committee directed its advisors not to respond to Randa's communications at that time. Consistent with the Special Committee's instructions, the Company, the Special Committee and its advisors did not respond to the letter.

        Also on June 21, 2018, Olshan delivered a letter to Paul, Weiss in which it requested the "prior proposals" referenced in the June 20, 2018 Randa letter (which Paul, Weiss subsequently delivered to Olshan) and expressed the view, on behalf of Mr. George Feldenkreis, that Randa's reconfirmation was not reasonably expected to lead to a superior proposal.

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        On June 22, 2018, Randa delivered to PJ Solomon revised debt commitment letters. On June 23, 2018, Paul, Weiss delivered the debt commitment letters to Olshan in accordance with the merger agreement.

        On June 24, 2018, the Special Committee met with its advisors to discuss the documents received from Randa. Paul, Weiss provided the Special Committee with a review of the Special Committee's fiduciary duties in the context of receipt of such materials. PJ Solomon noted that the revised debt commitment letters still appeared insufficient in terms of amount and noted that similar issues raised by the advisors as to the drafts received on May 21, 2018 remained unresolved. In addition, the debt commitment letters remained subject to investment committee approval of one of the lenders and each remained subject to due diligence. Moreover, the structures outlined in the commitments appeared to be preliminary and conflicting between the debt commitments letters and at least one debt commitment letter, by its terms, terminated prior to termination of the merger agreement. Following discussion with, and advice from, its legal and financial advisors, the Special Committee directed its advisors not to respond to Randa's communications at that time. Consistent with the Special Committee's instructions, the Company, the Special Committee and its advisors did not respond to Randa's communications.

        On June 26, 2018, Olshan delivered a letter to Paul, Weiss and reiterated its view, on behalf of Mr. George Feldenkreis, that the communications from Randa were not reasonably expected to lead to a superior proposal. Olshan requested confirmation from the Special Committee that Randa was not granted permission to access the Company's confidential information, and would not be, unless the Special Committee determined that such proposal was reasonably expected to lead to a superior proposal and that failure to provide such access would be inconsistent with the Special Committee's fiduciary duties. Paul, Weiss confirmed in writing the next day that the Special Committee was aware of and was in full compliance with its duties.

        On June 27, 2018, Randa delivered a letter to Paul, Weiss reconfirming its earlier non-binding indication of interest including a proposed draft of a merger agreement. The letter reflected the same $27.75 per share merger consideration as had been previously offered by Randa in its April 5, 2018 non-binding indication of interest, but stated that "[a]ssuming no material change in the terms of the agreements with [the Company's key] inbound licensors, we expect to be in a position to increase our $27.75 per share offer." Paul, Weiss delivered a copy of the letter to Olshan on June 27, 2018, in accordance with the terms of the merger agreement.

        On June 28, 2018, the Special Committee met with its advisors to discuss the letter and proposed draft of a merger agreement received from Randa. Paul, Weiss provided the Special Committee with a review of the Special Committee's fiduciary duties in the context of receipt of such materials. Following discussion with, and advice from, its legal and financial advisors, including a review with the Special Committee of their obligations under the non-solicitation provisions of the Feldenkreis merger agreement, the Special Committee directed its advisors not to respond to Randa's communications at that time. Consistent with the Special Committee's instructions, the Company, the Special Committee and its advisors did not respond to the letter.

        On June 30, 2018, Parent entered into an amended and restated commitment letter with Wells Fargo, PNC Capital Market LLC and PNC Bank National Association ("PNC Bank") pursuant to which PNC Bank was added as a lender under the ABL facility. Olshan delivered notice of this amendment to the Company on July 3, 2018, in accordance with the terms of the merger agreement.

        On July 1, 2018, Randa delivered a letter to Paul, Weiss reconfirming its earlier non-binding indication of interest, but increasing the per share price to $28.00. Unlike the June 27, 2018 letter, Randa did not indicate that additional consideration would be offered if its desired conversations with the Company's inbound licensors were favorable to Randa, but retained its position that as a pre-condition to execution of definitive agreements, Randa would expect to meet with the Company's

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inbound licensors. Paul, Weiss delivered a copy of the letter to Olshan on July 1, 2018, in accordance with the terms of the merger agreement.

        On July 2, 2018, Randa issued a press release announcing its proposal to acquire the Company in an all cash transaction for $28.00 per share.

        Also on July 2, 2018, the Special Committee met with its advisors to discuss the letter received from Randa and the press release issued from Randa. Paul, Weiss provided the Special Committee with a review of the Special Committee's fiduciary duties in the context of receipt of such materials. Following discussion with, and advice from, its legal and financial advisors, the Special Committee issued a "stop, look and listen" statement in response to the press release issued by Randa in accordance with the terms of the merger agreement.

        Later on July 2, 2018, the Company's controller notified the Company of his resignation and the Company's CEO informed the Special Committee of his desire to revise the interim CFO title to permanent CFO and to increase his salary commensurate with the permanent appointment to the CFO role.

        On July 3, 2018, the Special Committee met with its advisors to discuss employee matters and to again discuss the letter received from Randa and the press release issued by Randa. The Chairman of the Special Committee reported his discussions with the Company's CEO concerning certain employee issues, and Paul, Weiss reported Olshan's confirmation of consent from Parent under the merger agreement for the title change and salary increase of Mr. Jorge Narino. After discussion, the Special Committee unanimously approved the same and directed certain Special Committee members to contact the Company's CEO to discuss employee relations measures. Additionally, Paul, Weiss provided the Special Committee with a review of the Special Committee's fiduciary duties in the context of receipt of materials from Randa. Following discussion with, and advice from, its legal and financial advisors, the Special Committee determined that the Randa proposal did not satisfy the requirements in the Feldenkreis merger agreement for granting due diligence access or commencing discussions or negotiations with respect to a competing takeover proposal. In arriving at its determination, the Special Committee considered, in relation to a 1.8% potential price increase, among other things, (1) that the proposal was highly-conditional, non-binding and insufficient in terms of value and certainty of the provided debt financing commitments, as well as the lack of evidence of sufficient cash equity on hand; (2) the additional timing to enter into and complete a potential transaction with Randa; (3) the history of dealing with Randa over the prior few months (including as to credibility with respect to timing); (4) the inclusion of an unprecedented 3% fee payable by the Company to Randa if shareholders vote down the transaction, compared to no such penalty if shareholders vote down the Feldenkreis merger; and (5) a number of other terms affecting shareholder value or certainty were inferior, including termination fees, additional risks to closing, and the lack of appraisal rights for shareholders. Based on the totality of the circumstances considered in comparison to the potential for a slight price improvement, the Special Committee concluded that re-engaging with Randa at the price offered was not in the best interest of shareholders. Upon such determination, the Special Committee approved the issuance of a press release announcing such determination.

        On July 9, 2018, Randa delivered a letter to the Special Committee, which it later made public by press release, noting its disappointment with the lack of direct communication by the Special Committee to Randa in respect of the Randa proposal, and outlining its positions with respect to its debt commitment papers, the conditionality of its proposal, the potential timing of completion of such transaction, and its contemplated merger agreement.

        Also on July 9, 2018, the Special Committee met with its advisors to discuss the update on filing the Proxy Statement and related regulatory filings with respect to the Feldenkreis Proposal and to discuss the July 9, 2018 letter from Randa. The advisors carefully reviewed with the Special Committee each of the points made in the letter. After careful consideration, including of the requirements in the

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Feldenkreis merger agreement for granting due diligence access or commencing discussions or negotiations with respect to a competing takeover proposal, the Special Committee unanimously directed its advisors not to engage further with Randa at that time. In coming to this determination, the Special Committee noted that: (a) nothing new in terms of value or certainty was provided in the letter; (b) the letter further confirmed the Special Committee's view that substantial improvement in price and certainty was not reasonably expected to be offered by Randa; (c) the characterizations of the conditionality in Randa's non-binding proposal were misleading and incomplete, failing to note, among other things: (i) the highly conditional terms of the debt commitments provided to the Company, (ii) no cash equity was committed or indicated as likely to be committed (beyond the amount noted in the PJ Solomon meeting with Randa on May 28, 2018 as being insufficient to complete the transaction), (iii) the third-party change-of-control consent waivers that were to be sought as a pre-condition to signing (as clarified by Randa in its private June 20, 2018 letter), (iv) the added risks and delays in delivering shareholder value that were built into the Randa proposal, through a "marketing period" delay of almost a month to allow for debt syndication (not provided in Feldenkreis merger agreement) on top of the delay in timing to execution needed to negotiate third-party consents, financing terms and a form of merger agreement provided by Randa that was materially different and adverse from the Company's point of view (in both form and substance) as compared to the Feldenkreis merger agreement, and (v) the merger agreement attached to the non-binding proposal remained less favorable in material respects to the Company's shareholders in terms of value protection and certainty, including but not limited to extraordinary termination fees potentially payable by the Company, especially when viewed in comparison to the Feldenkreis merger agreement termination fees, an antitrust condition that does not apply in the Feldenkreis merger agreement (burdensome condition), and the lack of appraisal rights for shareholders (which are available to shareholders pursuant to the Feldenkreis merger agreement); and (d) the letter ignored the risks under the Feldenkreis merger agreement in engaging with Randa when it was clearly consistent with Florida law for the Special Committee to discount such an unusually slight (1.8%) topping premium by the added uncertainties and risks of delays and termination in the Randa proposal.

        On July 10, 2018, the FTC notified Paul, Weiss that the request for early termination of the waiting period under the HSR Act in respect of the proposed acquisition of the Company by Mr. George Feldenkreis had been granted effective as of the date of such notification.

Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger

        On June 15, 2018, the Special Committee, after careful consideration, voted unanimously to recommend to the board of directors that it, and thereafter the board of directors, after careful consideration and acknowledging the interest of George Feldenkreis and Oscar Feldenkreis in the merger, voted unanimously to (i) approve and declare advisable the merger agreement, the merger and the transactions contemplated by the merger agreement, (ii) declare that it is fair to and in the best interests of the Company and the unaffiliated shareholders of the Company that the Company enter into the merger agreement and consummate the merger on the terms and subject to the conditions set forth in the merger agreement, (iii) direct that the adoption of the merger agreement be submitted to a vote at a meeting of the shareholders of the Company and (iv) recommend to the shareholders of the Company that they vote FOR the adoption of the merger agreement.

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        In evaluating the merger, the Special Committee and the board of directors consulted with the Company's senior management and outside legal and financial advisors and, in reaching their respective determinations, the Special Committee and the board of directors considered a number of factors that they believed supported their decision to approve and recommend the merger agreement and the merger, including, but not limited to, the following:

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        The Special Committee and board of directors also believed that sufficient procedural safeguards were and are present to ensure the fairness of the merger and to permit the Special Committee and board of directors to represent effectively the interests of the Company's unaffiliated shareholders. These procedural safeguards include, but are not limited to, the following:

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        In the course of its deliberations, the Special Committee and board of directors also considered a variety of risks and other countervailing factors related to the merger agreement and the merger, including, but not limited to, the following:

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        In evaluating the merger and in reaching its determination as to the fairness of the transactions contemplated by the merger agreement, the Special Committee and the board of directors considered the factors set forth above, including an evaluation of the going concern value of the Company. The Special Committee and the board of directors did not consider liquidation value as a factor because they consider the Company to be a viable going concern business and the trading history of the Company Common Stock to generally be an indication of its value as such. In addition, due to the fact that the Company is being sold as a going concern, the Special Committee and the board of directors did not consider the liquidation value of the Company relevant to a determination as to whether the proposed merger is fair to the Company's unaffiliated shareholders as the Special Committee and the board of directors believed the value of the Company's assets that might be realized in a liquidation would be significantly less than its going concern value.

        The foregoing discussion of the factors considered by the Special Committee and the board of directors is not intended to be exhaustive, but rather includes the principal factors considered by the Special Committee and the board of directors. The Special Committee reached the conclusion to unanimously recommend that the board of directors approve, and thereafter the board of directors reached the conclusion to unanimously approve, the merger agreement, the merger and the other transactions contemplated by the merger agreement in light of the various factors described above and other factors that the members of the Special Committee and board of directors believed were

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appropriate. In view of the wide variety of factors considered by the Special Committee and board of directors in connection with their evaluation of the proposed merger and the complexity of these matters, the Special Committee and board of directors did not consider it practical, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors they considered in reaching their decision and did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of the Special Committee and the board of directors. Rather, the Special Committee made its recommendation, and the board of directors made its decision to approve, based on the totality of information that they reviewed and the investigation that they conducted. In considering the factors discussed above, individual members of the Special Committee and the individual members of the board of directors may have given different weights to different factors. In light of the procedural protections described above, and given the independent directors' majority status and the engagement of PJS, Paul, Weiss, Rifkind, Wharton & Garrison LLP and Akerman LLP by the Special Committee, the Special Committee and the board of directors did not consider it necessary to make any provision to grant unaffiliated shareholders access to the Company's corporate files or to obtain counsel or appraisal services for unaffiliated shareholders.

        In connection with the consummation of the merger, certain of the Company's directors may receive benefits and compensation that may differ from the per share merger consideration you would receive. See "Special Factors—Interests of the Company's Directors and Executive Officers in the Merger" beginning on page 83.

        Our Board of Directors recommends that the shareholders of the Company vote "FOR" the adoption of the merger agreement.

Opinion of PJS

        PJS delivered its opinion to the Special Committee that, as of June 15, 2018 and based upon and subject to the factors and assumptions set forth therein, the $27.50 in cash per share of Company Common Stock to be paid to the shareholders (other than Parent and its affiliates) pursuant to the merger agreement was fair from a financial point of view to such shareholders.

        The full text of the written opinion of PJS, dated June 15, 2018, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Appendix B. PJS provided its opinion for the information and assistance of the Special Committee in connection with its consideration of the merger. The PJS opinion does not constitute a recommendation to any shareholder of the Company as to how any such shareholder should vote on the merger or act on any matter relating to the merger.

        For purposes of its opinion, PJS:

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        PJS assumed and relied upon the accuracy and completeness of the information reviewed by PJS for the purposes of its opinion and PJS did not assume any responsibility for independent verification of such information and relied on such information being complete and correct. PJS relied on assurances of the management of the Company that they are not aware of any facts or circumstances that would make such information inaccurate or misleading in any respect material to PJS's opinion. With respect to the Projections, PJS assumed that the Projections were reasonably prepared on bases reflecting the best currently available estimates and judgments of the future financial performance of the Company. PJS did not conduct a physical inspection of the facilities or property of the Company. PJS did not assume any responsibility for or perform any independent valuation or appraisal of the assets or liabilities of the Company, nor was PJS furnished with any such valuation or appraisal. Furthermore, PJS did not consider any tax, accounting or legal effects of the merger or transaction structure on any person or entity.

        PJS assumed that the final form of the merger agreement will be substantially the same as the last draft reviewed by PJS and will not vary in any respect material to PJS's analysis. PJS also assumed that the merger will be consummated in accordance with the terms of the merger agreement, without waiver, modification or amendment of any material term, condition or agreement (including, without limitation, the per share merger consideration to be paid to the shareholders of the Company (other than Parent and its affiliates) in the merger) and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases for the merger, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on the Company or the contemplated benefits of the merger. PJS further assumed that all representations and warranties set forth in the merger agreement were and will be true and correct as of all the dates made or deemed made and that all parties to the merger agreement will comply with all covenants of such parties thereunder.

        PJS's opinion is necessarily based on economic, market and other conditions as in effect on, and the information made available to PJS as of, June 14, 2018. In particular, PJS does not express any opinion as to the prices at which the Company Common Stock may trade at any future time or as to the impact of the merger on the solvency or viability of the Company, Parent or Merger Sub or the ability of the Company, Parent or Merger Sub to pay their respective obligations when they come due. Furthermore, PJS's opinion does not address the Company's underlying business decision to undertake the merger, and the opinion does not address the relative merits of the merger as compared to any alternative transactions or business strategies that might be available to the Company. PJS's opinion does not address any other aspect or implication of the merger or any other agreement, arrangement or understanding entered into in connection with the merger or otherwise except as expressly identified therein. PJS expresses no view as to, and PJS's opinion does not address, the fairness (financial or otherwise) of the amount or nature or any other aspect of any compensation to any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the per share

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merger consideration to be paid to the shareholders (other than Parent and its affiliates) pursuant to the merger agreement. The issuance by PJS of its opinion was authorized by PJS's fairness opinion committee.

        The following summarizes the significant financial analyses performed by PJS and provided to, and reviewed with, the Special Committee in connection with the delivery of PJS's opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand PJS's financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of PJS's financial analyses. The following summary, however, does not purport to be a complete description of the financial analyses performed by PJS, nor does the order of analyses described represent relative importance or weight given to those analyses by PJS. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before June 14, 2018, and is not necessarily indicative of current market conditions.

Historical Company Share Trading Analysis

        PJS reviewed the historical trading prices and volumes for the Company Common Stock for the 52-week period ending June 14, 2018. In addition, PJS analyzed the per share merger consideration to be paid to shareholders of the Company pursuant to the merger agreement in relation to, among other things, (i) the closing price per share of Company Common Stock on the Undisturbed Date, the last trading day before the announcement by George Feldenkreis of a proposal to acquire the Company, (ii) the volume weighted average price per share of Company Common Stock for the 90-day period ending on the Undisturbed Date, (iii) the volume weighted average price per share of Company Common Stock for the 60-day period ending on the Undisturbed Date, (iv) the volume weighted average price per share of Company Common Stock for the 30-day period ending on the Undisturbed Date, (v) the highest closing price per share of Company Common Stock for the 52-week period ending on the Undisturbed Date, and (vi) the highest closing price per share of Company Common Stock for the 5-year period ending on the Undisturbed Date.

        This analysis indicated that the per share merger consideration of $27.50 to be paid to shareholders of the Company pursuant to the merger agreement represented:

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Equity Research Analyst Price Targets

        PJS reviewed selected public market trading price targets for the Company Common Stock prepared and published by four Wall Street research analysts that published or confirmed price targets as of June 14, 2018. PJS reviewed the most recent 12-month price target published by each analyst as of such date. These targets reflect each analyst's estimate of the public market trading price of the Company Common Stock within 12 months from the time the price target was published. As of June 14, 2018, the range of selected equity analyst price targets for the Company Common Stock was from $27.50 to $29.00 per share of Company Common Stock.

        The public market trading price targets published by securities research analysts do not necessarily reflect current market trading prices for the Company Common Stock, and these estimates are subject to uncertainties, including the future financial performance of the Company and future financial market conditions.

Selected Publicly Traded Companies Analysis

        PJS reviewed and compared certain financial information for the Company to corresponding financial information for the following publicly traded corporations in the apparel industry (collectively, the "selected companies"):

        Although none of the selected companies is directly comparable to the Company, the companies included were chosen because they are publicly traded companies with operations that, for purposes of analysis, may be considered similar to certain operations of the Company.

        PJS also calculated and compared various financial multiples for the selected companies and the Company based on historical financial data from publicly available sources, forecasts from Wall Street research available as of June 14, 2018 for the selected companies, and the Projections.

        With respect to the selected companies and the Company, PJS calculated:

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        The table below summarizes the results of these calculations:

 
    
   Selected Companies  

Enterprise Value as a Multiple of:

            

LTM Adjusted EBITDA

   Range:     10.0x - 12.5x  

CY2018E Adjusted EBITDA

   Range:     8.6x - 11.7x  

Price Per Share as a Multiple of:

  

 

    
 		  

CY2018E EPS

   Range:     11.4x - 21.9x  

CY2019E EPS

   Range:     10.5x - 20.2x  

        PJS then used an illustrative range of multiples to calculate a range of implied values for the Company Common Stock based on the Projections, as summarized below. The ranges of multiples used by PJS were chosen by PJS utilizing its professional judgment and experience, taking into account PJS's review of the multiples of the selected companies.

 
   Valuation Multiples   Implied Value Per Share of
Company Common Stock

Enterprise Value as a Multiple of:

          

LTM Adjusted EBITDA

     10.0x - 12.5x   $32.35 - $41.73

Fiscal Year 2019E Adjusted EBITDA

     8.6x - 11.7x   $28.15 - $40.44

Price as a Multiple of:

    
 		  

 

Fiscal Year 2019E EPS

     11.4x - 21.9x   $22.84 - $43.76

Fiscal Year 2020E EPS

     10.5x - 20.2x   $23.74 - $45.66

Selected Precedent Transactions Analyses

        PJS analyzed certain publicly available information relating to the following selected transactions in the apparel industry since December 2013 (collectively, the "selected transactions"):

Target
  Acquiror   Announcement Date
Billabong   Boardriders   January 2018
Williamson-Dickie Mfg.    VF Corp   August 2017
Haggar   Grand Wealth   April 2017
Kellwood Company   1worldstar   December 2016
Donna Karan   G-III   July 2016
VF Corp (Contemporary Brands)   Delta Galil   June 2016
Knights Apparel   Hanesbrands   February 2015
DBApparel   Hanesbrands   June 2014
Doris   Gildan Activewear   June 2014
Jones Group   Sycamore Partners   December 2013

        Although none of the selected transactions is directly comparable to the merger, the target companies in the selected transactions were companies with operations that, for the purposes of analysis, may be considered similar to certain of the Company's operations and product candidate profile, and as such, for purposes of analysis, the selected transactions may be considered similar to the merger.

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        For each of the selected transactions, PJS calculated and compared the enterprise value implied by the transaction as a multiple of the LTM Adjusted EBITDA of the target. The following table presents the results of this analysis:

 
   Selected Transactions
Range* 		 

Transaction Enterprise Value as a Multiple of:

        

LTM Adjusted EBITDA

     6.2x - 11.0x  
*
Excludes the acquisitions of Haggar, Kellwood Company and Donna Karan, because the Transaction Enterprise Value as a Multiple of LTM Adjusted EBITDA was not publicly disclosed.

        PJS calculated an illustrative range of implied values per share of Company Common Stock by applying a range of valuation multiples of 6.2x to 11.0x to, respectively, the LTM Adjusted EBITDA of the Company, as provided by management of the Company, and the Adjusted EBITDA for fiscal year 2019 of the Company, as contained in the Projections.

        The following table presents the results of this analysis:

Adjusted EBITDA
  Valuation Multiple   Implied Value per share of
Company Common Stock

LTM

     6.2x - 11.0x   $17.81 - $35.95

FY2019E

     6.2x - 11.0x   $18.69 - $37.51

Illustrative Discounted Cash Flow Analysis

        PJS performed an illustrative discounted cash flow analysis on the Company using the Projections. Using discount rates ranging from 10.1% to 13.1%, reflecting estimates of the Company's weighted average cost of capital, PJS discounted to present value as of June 14, 2018, (i) estimates of unlevered free cash flow for the Company through year-end 2021 as reflected in the Projections, and (ii) a range of illustrative terminal values for the Company, which were calculated by applying an illustrative range of exit terminal year EBITDA multiples of 9.0x to 11.0x to projected terminal year EBITDA for the Company as reflected in the Projections (which analysis implied perpetuity growth rates ranging from 4.50% to 8.40% for the terminal year estimate of the free cash flow to be generated by the Company per the Projections). PJS then added the ranges of present values it derived above to derive a range of illustrative EVs for the Company. PJS then subtracted the amount of the Company's adjusted net debt, as provided by the management of the Company, from the range of illustrative EVs it derived for the Company to derive a range of illustrative equity values for the Company. PJS then divided the range of illustrative equity values it derived by the number of fully diluted shares of Company Common Stock, as provided by the management of the Company, to derive a range of illustrative present values per share of Company Common Stock of $23.88 to $32.99.

Illustrative Present Value of Future Company Share Price Analysis

        PJS performed an illustrative analysis of the implied present values per share of Company Common Stock, as of June 14, 2018, based on theoretical future values of the Company Common Stock, as of June 14, 2018 and as of the first day of each fiscal year from 2019 through 2021, derived by PJS based on the Projections.

        Using the Projections, PJS derived a range of theoretical values per share of Company Common Stock as of June 14, 2018 and as of the first day of each fiscal year from 2019 through 2021 by applying, with respect to each such date, illustrative one year forward price to earnings per share of Company Common Stock multiples ranging from 10.8x to 18.1x to the estimate of the earnings per

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share of Company Common Stock for the current year, as reflected in the Projections, to derive ranges of implied equity values per share of Company Common Stock as of such dates. As noted above, PJS assumed that the Projections were reasonably prepared on bases reflecting the best currently available estimates and judgments of the future financial performance of the Company.

        By applying a discount rate of 12.8%, reflecting an estimate of the Company's cost of equity, PJS discounted to present value, as of June 14, 2018, the ranges of theoretical values of the Company Common Stock, as of June 14, 2018 and as of the first day of each fiscal year from 2019 through 2021. This analysis resulted in a range of implied present values of $21.60 to $35.06 per share of Company Common Stock.

Premia Analysis

        PJS reviewed and analyzed, using publicly available information, the acquisition premia for all-cash acquisition transactions announced during the time period from June 14, 2013 through June 14, 2018 involving a public company based in the United States (excluding the biotechnology, brokerage, finance, insurance, pharmaceutical and real estate industries) as the target where both (x) the disclosed enterprise values for the transaction were between $400 million and $600 million and (y) at least a 50% stake was acquired. This analysis excluded transactions where the total consideration was below $1.00 per share. For the entire period, using publicly available information, PJS calculated the median, 25th percentile and 75th percentile premiums of the price paid in the five-year period ending June 14, 2018 and the three-year period ending June 14, 2018, relative to the target's last undisturbed closing stock price prior to announcement of the transaction. This analysis indicated a median premium of 28.0% across the five-year period and 28.0% across the three-year period, respectively. This analysis also indicated a 25th percentile premium of 18.1% across the five-year period and 17.7% across the three-year period, respectively, and a 75th percentile premium of 42.6% across the five-year period and 34.4% across the three-year period, respectively. Using this analysis, PJS applied a reference range of illustrative premiums of 17.7% to 42.6% to the closing price per share of Company Common Stock of $22.62 as of the Undisturbed Date and calculated a range of implied equity values per share of Company Common Stock of $26.62 to $32.87.

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        The following table lists the announced all-cash acquisition offers and transactions reviewed and analyzed by PJS in this analysis:

Target
  Acquiror   Announcement
Date

Babcock & Wilcox Enterprises, Inc. 

   Steel Partners Holdings LP   May 2018

The Finish Line, Inc. 

   JD Sports Fashion Plc; Pentland Group Plc   March 2018

Fogo de Chão, Inc. 

   Rhône Capital LLC   February 2018

Bazaarvoice, Inc. 

   Marlin Equity Partners LLC   November 2017

Omega Protein Corp. 

   Cooke, Inc.   October 2017

ShoreTel, Inc. 

   Mitel Networks Corp.   July 2017

Xactly Corp. 

   Vista Equity Partners Management LLC   May 2017

PennTex Midstream Partners LP

   Energy Transfer Partners LP   May 2017

Exar Corp. 

   MaxLinear, Inc.   March 2017

LMI Aerospace, Inc. 

   Sonaca USA, Inc.   February 2017

Lionbridge Technologies, Inc. (Delaware)

   H.I.G. Capital LLC (Private Equity)   December 2016

Universal American Corp. 

   WellCare Health Plans, Inc.   November 2016

TubeMogul, Inc. 

   Tiger Acquisition Corp.   November 2016

Blue Nile, Inc. 

   Bain Capital   November 2016

Everyday Health, Inc. 

   Ziff Davis LLC   October 2016

Apigee Corp. 

   Google, Inc.   September 2016

Accuride Corp. 

   Crestview LLC   September 2016

Imprivata, Inc. 

   Thoma Bravo LLC   July 2016

Opower, Inc. 

   Oracle Corp.   May 2016

PowerSecure International, Inc. 

   The Southern Co.   February 2016

TeleCommunication Systems, Inc. 

   Comtech Telecommunications Corp.   November 2015

RealD, Inc. 

   Rizvi Traverse Management LLC   November 2015

Dot Hill Systems Corp. 

   Seagate Technology Plc   August 2015

NTELOS Holdings Corp. 

   Shenandoah Telecommunications Co.   August 2015

Rally Software Development Corp. 

   CA, Inc.   May 2015

Norcraft Cos., Inc. 

   Fortune Brands Home & Security, Inc.   March 2015

Emulex Corp. 

   Avago Technologies Ltd.   February 2015

Silicon Image, Inc. 

   Lattice Semiconductor Corp.   January 2015

Apco Oil & Gas International, Inc. 

   Pluspetrol Resources Corp   October 2014

Einstein Noah Restaurant Group, Inc. 

   JAB Holding Co.   September 2014

Pike Corp. 

   Court Square Capital Partners; Pike Corp.   August 2014

Vocus, Inc. 

   GTCR LLC   April 2014

Chindex International, Inc. 

   TPG Capital LLC; Fosun   February 2014

Mac-Gray Corp. 

   CSC ServiceWorks, Inc.   October 2013

Zoltek Cos., Inc. 

   Toray Industries, Inc.   September 2013

Greenway Medical Technologies, Inc. 

   Vista Equity; Vitera Healthcare Solutions   September 2013

Volterra Semiconductor Corp. 

   Maxim Integrated Products, Inc.   August 2013

Steinway Musical Instruments, Inc. 

   Paulson & Co., Inc.   August 2013

Maidenform Brands, Inc. 

   Hanesbrands, Inc.   July 2013

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Miscellaneous

        In arriving at PJS's opinion, PJS performed a variety of financial analyses, the material portions of which are summarized above. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying PJS's opinion. In arriving at its fairness determination, PJS considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, PJS made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to the Company or the merger.

        PJS prepared these analyses for purposes of PJS's providing its opinion to the Special Committee as to the fairness from a financial point of view to the shareholders of the Company (other than Parent and its affiliates) of the $27.50 in cash per share of Company Common Stock to be paid to such shareholders of the Company pursuant to the merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of the Company, Parent, PJS or any other person assumes responsibility if future results are materially different from those forecast.

        The $27.50 in cash per share of Company Common Stock was determined through arm's-length negotiations between the Special Committee and Parent and was approved by the board of directors. PJS provided advice to the Special Committee during these negotiations. PJS did not, however, recommend any specific amount of consideration to the Special Committee, the Company or the board of directors or that any specific amount of consideration constituted the only appropriate consideration for the merger.

        As described above, PJS's opinion to the Special Committee was one of many factors taken into consideration by the board of directors in making its determination to approve the merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by PJS in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of PJS attached as Appendix B.

        Natixis, S.A. ("Natixis"), which became the holder of a majority of PJS's outstanding equity on June 8, 2016, is, together with its affiliates, engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management, insurance and other financial and non-financial activities and services for various persons and entities. Natixis and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Company, Parent, any of their respective affiliates and third parties, including affiliates of George Feldenkreis, an affiliate of Parent, or any currency or commodity that may be involved in the merger.

        The Special Committee selected PJS as its financial advisor because it is a recognized financial advisory firm that has substantial experience in transactions similar to the merger. Pursuant to a letter agreement dated February 22, 2018, the Special Committee engaged PJS to act as its financial advisor in connection with the merger. The engagement letter between the Special Committee and PJS provides for a transaction fee that is estimated, based on the information available as of the date of announcement of the merger agreement, at approximately $6.6 million to $6.8 million, a substantial

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portion of which is contingent upon the closing of the merger and a portion of which was payable upon the delivery by PJS of its opinion. In addition, the Company has agreed to reimburse PJS for its expenses and to indemnify PJS against certain liabilities arising out of its engagement by the Special Committee. PJS has not, during the two years prior to the date of its opinion, provided any financial advisory services to the Company, Parent, George Feldenkreis or their respective affiliates for which PJS received payment other than fees in connection with the engagement relating to the merger, which fees will be credited against the aforementioned transaction fee relating to the merger. In the future, PJS, Natixis and their respective affiliates may provide financial advisory services to the Company, Parent, George Feldenkreis and their respective affiliates, and in the future may receive compensation for rendering these services. Natixis has advised PJS that, in the past two years, it has not provided any corporate or investment banking services to the Company, Parent, Merger Sub, George Feldenkreis or any of their respective affiliates.

Purposes and Reasons of the Company for the Merger

        The Company's purpose for engaging in the merger is to enable its shareholders to receive $27.50 per share of Company Common Stock, which represents (i) a premium of 21.6%, based on the closing price per share of Company Common Stock on the Undisturbed Date of $22.62; (ii) a premium of 14.0% based on the volume weighted average price per share of Company Common Stock for the 90-day period ending on the Undisturbed Date of $24.13; (iii) a premium of 11.1% based on the volume weighted average price per share of Company Common Stock for the 60-day period ending on the Undisturbed Date of $24.75; (iv) a premium of 9.4% based on the volume weighted average price per share of Company Common Stock for the 30-day period ending on the Undisturbed Date of $25.14; (v) a premium of 5.8% based on the highest closing price per share of Company Common Stock for the 52-week period ending on the Undisturbed Date of $25.99; and (vi) a discount of 4.5% based on the highest closing price per share of Company Common Stock for the 5-year period ending on the Undisturbed Date of $28.80. The Company has determined to undertake the merger at this time based on the conclusions, determinations and reasons of the Special Committee and the board of directors described in detail above under "Special Factors—Background of the Merger" beginning on page 32 and "Special Factors—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger" beginning on page 53.

Purposes and Reasons of the GF Group Filing Persons for the Merger

        Under a possible interpretation of the SEC rules governing "going-private" transactions, the GF Group Filing Persons may be deemed to be affiliates of the Company and, therefore, may be required to express their purposes and reasons for the merger to the Company's unaffiliated shareholders, as defined in Rule 13e-3 under the Exchange Act. The GF Group Filing Persons are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

        For the GF Group Filing Persons, the purpose of the merger is to enable Parent to acquire control of the Company, in a transaction in which the unaffiliated shareholders of the Company will be cashed out for $27.50 per share of Company Common Stock, so that the Rollover Investors, through their ownership of Parent, will bear the rewards and risks of the ownership of the Company after shares of Company Common Stock cease to be publicly traded.

        The GF Group Filing Persons intend that, following completion of the merger, Oscar Feldenkreis will continue to lead the Company as Chief Executive Officer and George Feldenkreis will return to an active role in the management of the Company. As stated in his proposal letter for the merger, George Feldenkreis decided to pursue the merger because he believes that the Company would benefit greatly from being a privately-owned company, which would enable the Company to execute a long-term

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growth strategy. The GF Group Filing Persons believe that the branded apparel and retail sector is in the midst of unprecedented disruption and competition that necessitate long-term orientation toward investment in the Company's brands, technology and people. The GF Group Filing Persons believe that the Company's ability to invest and innovate is constrained under the current public company paradigm, where the public markets are increasingly focused on short-term results. As a privately-owned company, the Company would have increased flexibility to make decisions that may negatively affect quarterly results but that may, over the long-term, increase the Company's value. In contrast, as a publicly-traded company, the Company currently faces public shareholder and investment analyst pressure to make decisions that may produce better short-term results, but which may over the long-term lead to a reduction in the per share price of its publicly-traded equity securities. As a privately-owned company, the Company would also be relieved of many of the other significant burdens, constraints and expenses imposed on public companies.

Positions of the GF Group Filing Persons Regarding the Fairness of the Merger

        Under a possible interpretation of the SEC rules governing "going-private" transactions, the GF Group Filing Persons may be deemed to be affiliates of the Company and, therefore, may be required to express their beliefs as to the fairness of the merger to the unaffiliated shareholders of the Company. The GF Group Filing Persons are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

        As described below, the GF Group Filing Persons believe that the merger is fair to the unaffiliated shareholders of the Company on the basis of (i) the factors as described in "Special Factors—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger" beginning on page 53, which factors the GF Group Filing Persons agree with and adopt, and (ii) the additional factors described below.

        The GF Group Filing Persons believe that the interests of the Company's unaffiliated shareholders were represented by the Special Committee, which negotiated the terms and conditions of the merger agreement on behalf of the Company's unaffiliated shareholders with the assistance of its independent legal and financial advisors. None of the GF Group Filing Persons believes that it has or had any fiduciary duty to the Company or its shareholders, including with respect to the merger and its terms (other than in George Feldenkreis' capacity as a member of the board of directors of the Company and in Oscar Feldenkreis' capacity as an officer and member of the board of directors of the Company).

        None of the GF Group Filing Persons participated in the deliberations of the Special Committee regarding, or received advice from the Special Committee's independent legal or financial advisors as to, the substantive or procedural fairness of the merger. The Rollover Investors have interests in the merger different from those of the unaffiliated shareholders of the Company by virtue of the Rollover Investors' continuing equity interest in Parent following the merger. The GF Group Filing Persons have not performed, or engaged a financial advisor to perform, any valuation or other analysis for the purpose of assessing the fairness of the merger to the unaffiliated shareholders of the Company. George Feldenkreis engaged SCOPE Capital Partners as a financial advisor in connection with negotiating the terms of the merger agreement and the financing for the merger. However, SCOPE Capital Partners did not provide an opinion with respect to the fairness of the merger consideration to the unaffiliated shareholders of the Company or the GF Group Filing Persons.

        Based on the GF Group Filing Persons' knowledge and analysis of available information regarding the Company, as well as discussions with members of the Company's senior management regarding the Company and its business and the factors considered by, and findings of, the board of directors and the Special Committee described in "Special Factors—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of

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the Merger" beginning on page 53 (which findings the GF Group Filing Persons agree with and adopt), the GF Group Filing Persons believe that the merger is substantively fair to the unaffiliated shareholders of the Company. In particular, the GF Group Filing Persons considered the following:

        The GF Group Filing Persons did not consider liquidation value as a factor because they consider the Company to be a viable going concern business and the trading history of the Company Common Stock to generally be an indication of its value as such. In addition, due to the fact that the Company is being sold as a going concern, the GF Group Filing Persons did not consider the liquidation value of the Company relevant to a determination as to whether the merger is fair to the Company's unaffiliated shareholders as the GF Group Filing Persons believed the value of the Company's assets that might be realized in a liquidation would be significantly less than its going concern value. Further, the GF Group Filing Persons did not consider net book value a material indicator of the value of the Company because they believed that net book value, which is an accounting concept, reflects historical costs and not the value of the Company as a going concern. The GF Group Filing Persons calculated the Company's net book value per diluted share at $24.96 as of May 5, 2018, which is significantly below the per share merger consideration.

        The GF Group Filing Persons believe that the merger is procedurally fair to the unaffiliated shareholders of the Company based upon the following:

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        The foregoing discussion of the information and factors considered and given weight by the GF Group Filing Persons in connection with the fairness of the merger agreement and the merger is not intended to be exhaustive but is believed to include all material factors considered by them. The GF Group Filing Persons did not find it practicable to, and did not, quantify or otherwise attach relative weights to the foregoing factors in reaching their position as to the fairness of the merger agreement and the merger. Rather, the GF Group Filing Persons made the fairness determinations after considering all of the foregoing as a whole. The GF Group Filing Persons believe these factors provide a reasonable basis upon which to form their belief that the merger is fair to the unaffiliated shareholders of the Company. This belief should not, however, be construed as a recommendation to any Company shareholder to approve the merger or adopt the merger agreement. The GF Group Filing Persons do not make any recommendation as to how shareholders of the Company should vote their shares of Company Common Stock relating to the merger (other than in each of George Feldenkreis' and Oscar Feldenkreis' capacity as a member of the board of directors of the Company).

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Certain Effects of the Merger; Plans for the Company

        If the merger is completed, all of the equity interests in the Company will be owned by Parent. No current Company shareholder (other than the Rollover Investors) will have any ownership interest in, or be a shareholder of, the Company. As a result, the Company's shareholders (other than the Rollover Investors) will no longer benefit from any increases in the Company's value, nor will they bear the risk of any decreases in the Company's value. Following the merger, Parent (and the Rollover Investors through their ownership of Parent) will benefit from any increases in the value of the Company and also will bear the risk of any decreases in the value of the Company.

        If the merger is completed, each share of Company Common Stock owned immediately prior to the effective time of the merger, other than as provided below, will be converted into the right to receive $27.50 in cash, without interest and less any applicable withholding taxes. The following shares of Company Common Stock will not be converted into the right to receive the per share merger consideration in connection with the merger: (i) shares of Company Common Stock held by the Company or any of its wholly-owned subsidiaries or Parent or its subsidiaries, (ii) shares of Company Common Stock held by the Rollover Investors, and (iii) shares of Company Common Stock whose holders have not voted in favor of adopting the merger agreement and have demanded and perfected their appraisal rights in accordance with, and have complied in all respects with, the FBCA.

        In connection with the consummation of the merger, (i) each stock option and stock appreciation right, whether or not then exercisable or vested, will be converted into the right to receive at the closing cash equal to the product of (a) the excess, if any, of the merger consideration over the per share exercise price of the applicable option or stock appreciation right and (b) the number of shares of Company Common Stock underlying such option or stock appreciation right; (ii) each restricted stock award not subject to any performance-based vesting condition held by an employee will be automatically vested and converted into the right to receive at the closing cash equal to the product of (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award; (iii) each restricted stock award not subject to any performance-based vesting condition held by a non-employee member of the board of directors will vest on a prorated basis based on the number of days that have elapsed since the grant date of such award and be converted into the right to receive at the closing cash equal to the product of (a) the per share merger consideration and (b) such pro-rated number of shares; and (iv) with the exception of certain management members described below, each restricted stock award subject to any performance-based vesting condition will be converted into a right to receive a restricted cash award from the surviving corporation that will vest and be payable (without regard to any performance goals but subject to applicable service vesting conditions in the prior award) at the end of its currently applicable vesting period, with the cash payment therefor equal to the product of: (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award that would have vested based on target level achievement. Such restricted cash award will accelerate upon a termination without cause or for good reason prior to the scheduled vesting date. Each restricted stock award subject to any performance-based vesting condition held by Mr. Jorge Narino or Ms. Tricia McDermott Thompkins will be converted into a right to receive at the closing a cash payment equal to the product of: (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award that would have vested based on target level achievement. All outstanding restricted stock units held by George Feldenkreis will be cancelled. If the merger is completed, the Company Common Stock will be delisted from the Nasdaq Global Market (and no longer publicly traded) and deregistered under the Exchange Act, and the Company will no longer file periodic reports with the SEC with respect to the Company Common Stock.

        Parent expects that following completion of the merger, our operations will be conducted substantially as they are currently being conducted. However, following completion of the merger, the Company will have significantly more debt than it currently has. There are no current plans to repay

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the debt incurred in connection with the merger, and there are restrictions on the repayment of such debt as described under "Special Factors—Financing of the Merger" beginning on page 77. Parent has evaluated and reviewed the Company's business and operations, including exploring the possibility of pursuing future acquisitions, new license opportunities and an organic growth strategy. However, Parent has no current plans, proposals or negotiations which relate to or would result in an extraordinary corporate transaction involving the Company's corporate structure, business or management, such as a merger, reorganization, liquidation, relocation of any operations, or sale or transfer of a material amount of assets, or the incurrence of any indebtedness, in each case except as described in this Proxy Statement, including under "Special Factors—Purposes and Reasons of the GF Group Filing Persons for the Merger" beginning on page 68.

        Parent does not currently own any interest in the Company. Following consummation of the merger, Parent will directly own 100% of the outstanding Company Common Stock and will have a corresponding interest in our net book value and net earnings. Each Rollover Investor, as an equityholder of Parent, will have an interest in our net book value and net earnings in proportion to such shareholder's ownership interest in Parent.

        From and after the effective time of the merger, (i) the directors of Merger Sub immediately prior to the effective time of the merger shall be the directors of the surviving corporation until their successors are duly elected and qualified or until their earlier death, resignation or removal in accordance with the surviving corporation's certificate of incorporation, bylaws and applicable law, and (ii) the officers of the Company immediately prior to the effective time of the merger shall continue to be the officers of the surviving corporation until their successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the surviving corporation's certificate of incorporation, bylaws and applicable law.

Alternatives to the Merger

        As noted above, in response to the indication of interest from George Feldenkreis, the Special Committee evaluated potential strategic alternatives, including a potential sale of the Company, with the assistance of the Company's senior management and advisors. The indication of interest by George Feldenkreis had been made independently and not in response to any process initiated by the Special Committee, the board of directors or the Company to sell the Company. As noted above, while the Special Committee was responding to the indications of interest for, and the inquiries about, the sale of the Company that the Company received from George Feldenkreis and other potential acquirors during the course of 2018, the Special Committee also considered the potential benefits to the Company (and the Company's shareholders) of certain strategic alternatives, including, but not limited to, continuing as a stand-alone company, effecting a leveraged recapitalization and/or pursuing other potential mergers and acquisitions and other potential strategic transactions. In considering those alternatives, the Special Committee took into account all information that was available to the Special Committee, including the information contained in management's projections summarized under "Special Factors—Projected Financial Information" beginning on page 74, as well as the Special Committee's knowledge and understanding of the business, operations, management, financial condition, earnings and prospects of the Company, including the prospects of the Company as a stand-alone company. For more information on the process behind the Special Committee's determination, see "Special Factors—Background of the Merger" beginning on page 32, "Special Factors—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger" beginning on page 53 and "Special Factors—Purpose and Reasons of the Company for the Merger" beginning on page 68. As discussed above under "Special Factors—Background of the Merger" beginning on page 32, while the Company had received, prior to the date of the merger agreement, certain expressions of interest for, and certain inquiries about, the sale of the Company to a potential acquiror (including from George Feldenkreis and Randa), George Feldenkreis

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has made the only firm offer to acquire the Company that the Company had ever received during the past two years.

Effects on the Company if the Merger is not Completed

        If the Company's shareholders do not adopt the merger agreement or if the merger is not completed for any other reason, the Company's shareholders will not receive any payment for their shares of Company Common Stock unless the Company is sold to a third party. Instead, unless the Company is sold to a third party, we will remain a public company, Company Common Stock will continue to be listed and traded on the Nasdaq Global Market, and our shareholders will continue to be subject to similar risks and opportunities as they currently are with respect to their ownership of Company Common Stock. If the merger is not completed, there is no assurance as to the effect of these risks and opportunities on the future value of your shares of Company Common Stock, including the risk that the market price of Company Common Stock may decline to the extent that the current market price of Company Common Stock reflects a market assumption that the merger will be completed. From time to time, the board of directors will evaluate and review the business operations, properties, dividend policy and capitalization of the Company and, among other things, make such changes as are deemed appropriate and continue to seek to maximize shareholder value. If the Company's shareholders do not adopt the merger agreement or if the merger is not completed for any other reason, there is no assurance that any other transaction acceptable to the Company will be offered or that the business, prospects or results of operations of the Company will not be adversely impacted, including as a result of the significant costs and expenses incurred by the Company in connection with the merger. Pursuant to the merger agreement, under certain circumstances, the Company is permitted to terminate the merger agreement and recommend an alternative transaction. See "The Merger Agreement—Termination" beginning on page 126.

        Under certain circumstances, if the merger is not completed, the Company may be obligated to pay to Parent a termination fee. See "The Merger Agreement—Effect of Termination; Fees and Expenses" beginning on page 128.

Projected Financial Information

        The Company provided the GF Group certain prospective financial information concerning the Company, including projected revenues, gross margins, net income and earnings before interest, taxes, depreciation and amortization ("EBITDA"). The GF Group also received other financial information related to its due diligence of the Company. The GF Group also had access to publicly available analysts' projections for years subsequent to 2019. The GF Group received the following prospective financial information:

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        The March 2018 Management Projections are the projections used by PJS in connection with its fairness analysis as described in "Special Factors—Opinion of PJS" beginning on page 59. The summary of the prospective financial information set forth below is included solely to give shareholders access to the information that was made available to the GF Group and the Special Committee's financial advisor, and reviewed by the Special Committee and board of directors. It is not included in this Proxy Statement in order to influence any shareholder to make any investment decision with respect to the merger or any other purpose, including whether or not to seek appraisal rights with respect to the shares of Company Common Stock.

        The prospective financial information was not prepared with a view toward public disclosure, or with a view toward compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts, or U.S. generally accepted accounting principles ("GAAP"). Neither the Company's independent registered public accounting firm, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the prospective financial information included below, or expressed any opinion or any other form of assurance on such information or its achievability. The January 2018 Budget for FY 2019 was prepared as part of the Company's annual planning process for fiscal year 2019. The FY2019E Budget was prepared by management as a routine part of the Compensation Committee's equity award approval process but did not make risk-adjustments to reflect the decline in sales related to the bankruptcy of Bon-Ton. The March 2018 Management Projections were prepared by the Company's management at the direction of the Compensation Committee to reflect such risk-adjustments.

        The prospective financial information reflects numerous estimates and assumptions made by the Company with respect to industry performance, general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to the Company's business, all of which are difficult to predict and many of which are beyond the Company's control. The prospective financial information reflects subjective judgment in many respects and thus is susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. As such, the prospective financial information constitutes forward-looking information and is subject to risks and uncertainties that could cause actual results to differ materially from the results forecasted in such prospective information, including, but not limited to, the Company's performance, industry performance, general business, economic, regulatory, market and financial conditions, and the various risks set forth in this Proxy Statement and the Company's reports filed with the SEC, which are available without charge at www.sec.gov (see also "Where Shareholders Can Find More Information" beginning on page 149). There can be no assurance that the prospective financial information will be realized or that actual results will not be significantly higher or lower than as set forth in the prospective financial information.

        The prospective financial information covers multiple years and such information by its nature becomes less predictive with each successive year. In addition, the prospective financial information will be affected by the Company's ability to achieve strategic goals, objectives and targets over the applicable periods. The assumptions upon which the prospective financial information is based necessarily involve judgments as of the time of their preparation with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company's control. The prospective financial information also reflects assumptions as of the time of their preparation as to certain business decisions that are subject to change. Such prospective information cannot, therefore, be considered a guaranty of future operating results, and this information should not be relied on as such. The inclusion of this information should not be regarded as an indication that the Company, the GF Group, any of their respective financial advisors or anyone who received this information then considered, or now considers, it as necessarily predictive of actual or future events, and this information

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should not be relied upon as such. None of the Company, the GF Group or any of their affiliates or representatives intends to, and each of them disclaims any obligation to, update, revise or correct the prospective financial information if any of it is or becomes inaccurate (even in the short term).

        The prospective financial information does not take into account any circumstances or events occurring after the date it was prepared, including the transactions contemplated by the merger agreement. Further, the prospective financial information does not take into account the effect of any failure of the merger to occur and should not be viewed as accurate or continuing in that context.

        The inclusion of the prospective financial information herein should not be deemed an admission or representation by the Company, the GF Group, the Special Committee or the board of directors that it is viewed by the Company, the GF Group, the Special Committee or the board of directors as material information of the Company, and in fact the Company, the GF Group, the Special Committee and the board of directors view the prospective financial information as non-material because of the inherent risks and uncertainties associated with such long-range forecasts. The prospective financial information should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding the Company contained herein and in the Company's public filings with the SEC, which are available without charge at www.sec.gov (see also "Where Shareholders Can Find More Information" beginning on page 149). Shareholders should be aware that the January 2018 Budget for FY 2019 and FY2019E Budget (collectively, the "Other Projections") were both prepared for purposes that are different from the March 2018 Management Projections provided to the Special Committee's financial advisor (the "Projections") and, as a result, may not utilize the same assumptions. Shareholders should also be aware that the Special Committee engaged an independent third-party consultant, AlixPartners, to review the Projections and the Other Projections and the Special Committee believes after considering, among other things, the oral briefing and written findings of AlixPartners that the Projections, based on the interviews, documents and data analyzed by AlixPartners (the truth, accuracy, or completeness of which were not independently verified by AlixPartners), were reasonably prepared and reflected the best estimates available at that time of the Company's management of the Company's future financial performance and that PJS should utilize the Projections for its financial analysis. In light of the foregoing factors and the uncertainties inherent in the Company's prospective financial information, shareholders are cautioned not to place undue, if any, reliance on the prospective financial information included in this Proxy Statement.

January 2018 Budget for FY 2019

        The January 2018 Budget for FY 2019 was a product of the Company's annual planning process for 2018 and was approved by the board of directors.

        The following is a summary of the fiscal year 2019 prospective financial information from the January 2018 Budget for FY 2019 provided to the GF Group and the Special Committee's financial advisor ($ in millions):

 
   January 2018
Budget for FY 2019 		 

Revenue

   $ 870.0  

Gross Margin

     330.5  

EBITDA

     59.6  

Net Income

     29.9  

EPS

   $ 1.95  

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FY2019E Budget

        In March 2018, as part of the Compensation Committee's annual equity award approvals, management of the Company prepared the FY2019E Budget, which was reviewed by the Special Committee and board of directors and provided to the Special Committee's financial advisor. None of the Compensation Committee, the Special Committee or the board of directors approved these projections as they did not reflect appropriate risk adjustments for the contraction in the retail customer base, including the bankruptcy filing of Bon-Ton.

        The following is a summary of the FY2019E Budget provided to the GF Group and the Special Committee's financial advisor ($ in millions):

 
   2019
(Budget) 		  2020
(Projection) 		  2021
(Projection) 		 

Revenue

   $ 873.3   $ 955.7   $ 1,057.5  

Gross Margin

     333.8     363.3     396.3  

EBITDA

     62.4     72.1     84.6  

Net Income

     30.8     37.6     43.2  

EPS

   $ 2.00   $ 2.44   $ 2.81  

March 2018 Management Projections

        In March 2018, management of the Company prepared the March 2018 Management Projections, which adjusted the FY2019E Budget to reflect the contraction in the retail customer base, including the bankruptcy filing of Bon-Ton. The March 2018 Management Projections were reviewed by the Special Committee and board of directors and provided to the Special Committee's financial advisor. The Special Committee, after considering the findings of AlixPartners, determined the March 2018 Management Projections to be in the range of reasonableness. On April 6, 2018 the board of directors approved the March 2018 Management Projections. The Special Committee directed its financial advisor to utilize the March 2018 Management Projections in its valuation and fairness analysis.

        The following is a summary of the March 2018 Management Projections provided to the GF Group and the Special Committee's financial advisor ($ in millions):

 
   2019
(Budget) 		  2020
(Projection) 		  2021
(Projection) 		 

Revenue

   $ 873.3   $ 892.3   $ 935.4  

Gross Margin

     333.8     341.0     352.0  

EBITDA

     62.4     66.1     70.1  

Net Income

     30.8     34.7     36.3  

EPS

   $ 2.00   $ 2.26   $ 2.36  

        The Company routinely asks its brand and divisional managers to establish full-year sales goals and to provide quarterly updates of those goals. Such goals are then "rolled up" each quarter and used by management to internally incentivize sales and are presented to the board of directors in connection with its quarterly meetings for informational purposes only. Such sales goals do not reflect management's view of future performance of the Company and the Special Committee determined, after considering the findings of AlixPartners, that any such sales goals should be disregarded by the Special Committee for valuation purposes.

Financing of the Merger

        The obligations of Parent and Merger Sub to consummate the merger under the merger agreement are not subject to a condition of Parent or Merger Sub obtaining funds to consummate the merger.

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Parent and Merger Sub have obtained debt financing commitments for the transactions contemplated by the merger agreement, the aggregate proceeds of which, including the Rollover Investment described below and cash on hand at the closing, are expected to be sufficient, assuming such financing commitments are funded in accordance with their terms, to consummate the merger and the other transactions contemplated by the merger agreement, including the payment by Parent of the per share merger consideration and all related fees and expenses, and to refinance (the "Refinancing") certain indebtedness of the Company, including indebtedness under (i) the Amended and Restated Loan and Security Agreement, dated as of December 2, 2011, by and among the Company, Wells Fargo Bank, National Association, Bank of America, N.A., the lenders from time to time party thereto, and the other borrowers and guarantors party thereto, as amended from time to time and (ii) (A) that certain Amended and Restated Mortgage, Assignment of Leases and Rents and Security Agreement, Notice of Future Advance and Extension Agreement, dated as of November 22, 2016, by Supreme Realty, LLC, in favor of Mercantil Commercebank, N.A., recorded November 29, 2016 in Miami-Dade County as CFN 20160682044 and (B) that certain Amended and Restated Mortgage and Security Agreement, Assignment of Rents and Leases, Notice of Future Advance and Extension Agreement, dated as of November 22, 2016, by Tampa DC, LLC, in favor of Mercantil Commercebank, N.A., recorded November 30, 2016 in Hillsborough County as Instrument No. 2016466596.

Debt Financing

        On June 15, 2018, the Parent received a (i) debt commitment letter from Fortress Credit Advisors LLC (the "Fortress Commitment Letter") on behalf of itself and/or as agent on behalf of one or more funds or accounts managed by affiliates of Fortress Credit Advisors LLC (collectively "Fortress") providing Parent with $282 million of credit facilities (the "Fortress Facilities") consisting of a (x) $140 million first lien credit facility ("First Lien Facility"), (y) $95 million second lien credit facility ("Second Lien Facility") and (z) $47 million real estate bridge loan facility ("Bridge Loan Facility") and (ii) debt commitment letter from Wells Fargo Bank, National Association ("Wells Fargo") (such debt commitment letter, the "Wells Commitment Letter" and together with the Fortress Commitment Letter, the "Debt Commitment Letters") providing Parent with a $275 million senior secured revolving credit facility (the "Wells Facility" and together with the Fortress Facilities, the "Facilities"). On June 30, 2018, the Wells Commitment Letter was amended and restated to add PNC Capital Markets LLC as a joint lead arranger and PNC Bank, N.A. as an initial lender ("PNC").

        The Debt Commitment Letters contemplate a reorganization of the Company into (i) an operating company which will be financed by Wells Fargo and PNC ("OpCo") and (ii)(x) an entity holding the intellectual property assets of the Company ("IPCo") which will be financed by Fortress and (y) an entity holding the real estate assets of the Company ("RealCo"), which will be financed by Fortress or other mortgage lenders in lieu of the Bridge Loan Facility.

        The Fortress Facilities will be available in a single drawing on the closing date. The letters of credit and the proceeds of loans under the Wells Facility (except as set forth below) will be available on the closing of the merger to refinance debt of the Company, pay fees and expenses and a portion of the merger consideration and for general corporate purposes after the consummation of the merger.

        Interest under the Fortress Facilities will be either (i) the "ABR Rate" (which is the highest of (a) the prime rate as announced in the Wall Street Journal, (b) the federal funds effective rate from time to time plus 0.50% per annum and (c) the 1-month Published LIBOR Rate plus 1.00% per annum) plus the "Applicable Margin" (which is (x) under the First Lien Facility, 6.00% in the case of ABR Loans and 7.00% in the case of Eurodollar Loans, (y) under the Second Lien Facility, 8.00% in the case of ABR Loans and 9.00% in the case of Eurodollar Loans and (z)(I) under the Bridge Loan Facility, 5.00% in the case of ABR Loans and 6.00% in the case of Eurodollar Loans from the closing date to the first anniversary of the closing date of the Fortress Facilities or (II) 7.00% or 8.00%, respectively, after the first anniversary of the closing date of the Fortress Facilities) or (ii) the

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Eurodollar Rate (which is the higher of (a) the rate for Eurodollar deposits for the relevant period or (b) 1.00% per annum) plus the "Applicable Margin" (as defined above).

        The obligations under the Fortress Facilities will be guaranteed by a new Delaware limited liability company formed by Merger Sub that is a passive holding company ("SuperHoldCo"), IPCo and RealCo and their holding companies and each of IPCo's and RealCo's domestic subsidiaries, and if SuperHoldCo holds directly less than 100% but more than 50% ownership of OpCo's parent or Super HoldCo owns and controls legally and beneficially directly less than 100% but more than 50% of the equity of OpCo's parent with ordinary voting power to elect the board memebersof such entity (either of such events, the "Springing OpCo Parent Guaranty"), then OpCo's parent will become a guarantor as well (subject to customary restrictions and provided, however, that if the Bridge Loan Facility is not utilized, RealCo's parent, RealCo and its subsidiaries will not be guarantors but 100% of the equity of RealCo's parent will be pledged under the applicable Fortress Facilities). The Fortress Facilities will be secured, subject to permitted liens and other agreed upon exceptions, by substantially all of the present and after-acquired assets of IPCo, RealCo and each guarantor (subject to exceptions for RealCo's parent and its subsidiaries if the Bridge Loan Facility is not utilized), including (i) a pledge of all of the capital stock of each of IPCo and RealCo, (ii) a pledge of all of the capital stock directly held by each of IPCo and RealCo or any guarantor in certain direct and indirect subsidiaries with certain exceptions, including limitations on the pledge of the capital stock of foreign subsidiaries (and RealCo's parent as described above), (iii) if the Springing OpCo Parent Guaranty occurs, a pledge of all the capital stock directly held by Super HoldCo in OpCo's parent, and (iv) security interests in, and mortgages on, substantially all other tangible and intangible assets of each of IPCo and RealCo and each guarantor (including accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, material fee-owned real property), intercompany notes and proceeds of the foregoing.

        Interest under the Wells Facility will be calculated based on whether the loan is considered to be a "US Loan", "Canadian Loan" or "UK Loan". The interest of each of those loans is computed by adding the LIBOR Rate or an alternative base rate to the "Applicable Margin". The Applicable Margin is based on a grid in the Wells Commitment Letter that lists interest margins based on the borrowing availability under the Wells Facility for the following types of loans: (i) LIBOR/UK base rate (1.25% - 1.75%), (ii) US base rate (0.25% - 0.75%) and (iii) Canadian base rate (1.25% - 1.75%). The Applicable Margin is increased by 0.25% for each level in the grid during the seasonal advance period. The definition of the "LIBOR Rate" is customary, includes a 0% floor and is available for an interest period of one, two, three or six months. The definition of each (Canadian, UK and US) "alternative base rates" is also customary for such currency and each includes a 0% floor as well.

        The obligations under the Wells Facility will be guaranteed by the Company, OpCo's parent and each of OpCo's existing directly held subsidiaries that are not borrowers ("Wells Loan Parties"), subject to customary exceptions (such as non-material subsidiaries and foreign subsidiaries exceptions). The Wells Facility will be secured by (subject to customary exceptions) all the current assets and certain other assets of the Wells Loan Parties, including accounts receivable, payment intangibles, deposit accounts and inventory.

        The Debt Commitment Letters expire on the earliest of (i) any valid termination of the merger agreement (including the termination date), (ii) 11:59 p.m. New York City time on December 15, 2018 and (iii) the date of the closing of the merger agreement without use of the Fortress Facilities or the Wells Fargo Facility, as applicable. There are no current plans to repay the debt to be incurred in connection with the merger.

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        Wells Fargo's and Fortress' commitments to provide the debt financing are subject to, among other things:

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        The parties to the Debt Commitment Letters may not assign all or any portion of their commitments thereunder (except to affiliates in accordance with the Debt Commitment Letters) until after the consummation of the merger and, unless agreed in writing by Parent and Merger Sub, each party to the Debt Commitment Letters shall retain exclusive control over all rights and obligations with respect to its commitments under its respective Facilities, including all rights with respect to consents, modifications, waivers and amendments, until the closing date of the applicable Facilities has occurred.

        The debt financing under the Debt Commitment Letters are not conditioned upon a successful syndication of any of the Facilities with other financial institutions.

        The foregoing summary of the Debt Commitment Letters does not purport to be complete and is qualified in its entirety by reference to the Debt Commitment Letters. A copy of the Debt Commitment Letters is attached as exhibit (b)(1) and (b)(2) to the statement on Schedule 13E-3 filed by the Company and the filing persons listed thereon with the SEC on July 11, 2018.

Rollover Commitment

        On June 15, 2018, pursuant to the Rollover Letters, the Rollover Investors committed to contribute, at the closing of the merger and immediately prior to the consummation of the merger, an aggregate amount of 3,143,949 shares of Company Common Stock to Parent. The Rollover Investors will receive in exchange for the Company Common Stock contributed to Parent a pro rata share of the equity of Parent, assuming that the value of each share of contributed stock is equal to the per share merger consideration of $27.50.

        In addition, the Rollover Letter between Parent and George Feldenkreis, in his individual capacity, provides that George Feldenkreis may be required to contribute up to $5 million in cash to Parent under certain circumstances.

        The foregoing summary of the Rollover Letters does not purport to be complete and is qualified in its entirety by reference to the Rollover Letters. Copies of the Rollover Letters are attached as exhibits (d)(2) through (d)(11) to the statement on Schedule 13E-3, filed by the Company and the filing persons listed thereon with the SEC on July 11, 2018.

Limited Guarantee

        In connection with the merger agreement, George Feldenkreis has executed a limited non-recourse guarantee in favor of the Company to guarantee, subject to the limitations described therein, certain obligations of Parent pursuant to the merger agreement. Under the limited guarantee, George Feldenkreis has guaranteed the payment of any reverse termination fee that may become payable by Parent following a termination of the merger agreement in specified circumstances, all accrued interest and costs of enforcement with respect thereto and certain expense reimbursement and indemnification obligations of Parent in connection with the Company's cooperation with the debt financing, subject to an overall cap of $17.472 million.

        Unless the merger agreement is terminated in accordance with specified provisions thereof, George Feldenkreis, on behalf of himself, the GF Group and financing sources of Parent, has agreed (a) not to request or seek to compel the Company to call the 2018 annual meeting of shareholders of the

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Company and (b) not to directly or indirectly solicit, and to cause his and their respective representatives not to directly or indirectly solicit, proxies or take any other similar action in opposition of the Company's nominations for directors of the Company at the 2018 annual meeting of the shareholders of the Company (including any adjournments or postponements thereof); provided, that the Company has agreed that while the merger agreement is still in effect not to hold the 2018 annual meeting unless compelled by a court of competent jurisdiction pursuant to applicable law, and in furtherance of the foregoing the Company shall, upon the request of a shareholder seeking to compel the 2018 annual meeting, use its commercially reasonable efforts to resist any such motion by a shareholder and also to use its commercially reasonable efforts to try and persuade a court from issuing an order compelling the Company to hold the 2018 annual meeting and George Feldenkreis has agreed to cooperate with the Company in good faith in connection with such commercially reasonable efforts; it being acknowledged and agreed that upon the issuance of any such order of a court of competent jurisdiction pursuant to applicable law compelling the 2018 annual meeting, the Company will comply therewith. Notwithstanding the generality of the foregoing, (i) if so compelled to hold the 2018 annual meeting by a court of competent jurisdiction pursuant to applicable law and (ii) at such time (x) George Feldenkreis, the GF Group and the financing sources of Parent have complied with their obligations set forth in the first sentence of this paragraph, (y) Parent has a right to terminate the merger agreement pursuant to specified provisions thereof and (z) any solicitation of proxies or similar action by George Feldenkreis, the financing sources of Parent or the GF Group in connection with the 2018 annual meeting is limited to the nominees for director identified by George Feldenkreis in his May 18, 2018 nomination notice submitted to the Company in connection with the 2018 annual meeting, then clause (b) of the first sentence of this paragraph shall immediately terminate upon the Company's receipt of a written notice of Parent notifying the Company of Parent's intent to solicit proxies in opposition of the Company's nominations for directors of the Company at the 2018 annual meeting; provided, that, in order for George Feldenkreis, the financing sources of Parent and the GF Group to exercise such rights, if Parent has a right to terminate the merger agreement pursuant to specified provisions thereof, George Feldenkreis shall continue to use his reasonable best efforts to consummate the merger in accordance with the terms of the merger agreement.

        The limited guarantee will terminate as of the earliest to occur of (i) the effective time of the merger and (ii) 75 days following the termination of the merger agreement in accordance with its terms, unless one or more claims with respect to one or more guaranteed obligations has been asserted by the Company in writing against George Feldenkreis prior to the end of such 75-day period, in which case the limited guarantee will continue in effect until the resolution of such claims and satisfaction, to the extent required, of such guaranteed obligations, whereupon the limited guarantee will terminate.

        The foregoing summary of the limited guarantee does not purport to be complete and is qualified in its entirety by reference to the limited guarantee. A copy of the limited guarantee is attached as exhibit (d)(12) to the statement on Schedule 13E-3, filed by the Company and the filing persons listed thereon with the SEC on July 11, 2018.

Pledge and Security Agreement

        In connection with the merger agreement and limited guarantee, George Feldenkreis has executed a pledge and security agreement in favor of the Company pledging an aggregate of 647,451 certificated shares of Company Common Stock owned by George Feldenkreis as the sole and exclusive recourse for George Feldenkreis's obligations under the limited guarantee. The pledged certificated shares of Company Common Stock are held in an escrow account maintained by Citibank, National Association and under the control of the Special Committee.

        The pledge and security agreement will terminate as of the latest to occur of (i) immediately prior to the effective time of the merger (but subject to the occurrence of the effective time of the merger) or (ii) the termination of the limited guarantee. Upon such termination, the 647,451 shares of Company

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Common Stock held by the Company as collateral for George Feldenkreis's obligations under the limited guarantee will be promptly returned to George Feldenkreis and, upon the closing of the merger, will be contributed to Parent pursuant to George Feldenkreis' Rollover Letter.

        The foregoing summary of the pledge and security agreement does not purport to be complete and is qualified in its entirety by reference to the pledge and security agreement. A copy of the pledge and security agreement is attached as exhibit (d)(13) to the statement on Schedule 13E-3, filed by the Company and the filing persons listed thereon with the SEC on July 11, 2018.

Interests of the Company's Directors and Executive Officers in the Merger

        In considering the recommendation of the board of directors, you should be aware that certain directors and executive officers of Perry Ellis have interests in the merger, including those described below and as described in "Advisory Vote on "Golden Parachute Compensation" " beginning on page 132, that are different from, or in addition to, their or your interests as a shareholder. George Feldenkreis, a member of the board of directors, and Oscar Feldenkreis, the chief executive officer and member of the board of directors, are members of the GF Group and are Rollover Investors and will have equity interests in Parent after the consummation of the merger. These interests may create conflicts of interest. The Special Committee and the board of directors were aware of these interests during their deliberations on the merits of the merger and in making their decision to recommend and approve, respectively, the merger agreement and the transactions contemplated by the merger agreement, including the merger.

        Certain of the directors and executive officers of the Company participated in the negotiation of the terms of the merger agreement, and the Special Committee, after careful consideration, voted unanimously to recommend to the board of directors that it, and thereafter the board of directors, after careful consideration and acknowledging the interest of George Feldenkreis and Oscar Feldenkreis in the merger, voted unanimously to, recommend that the Company shareholders vote in favor of (i) the merger agreement, the merger and the transactions contemplated by the merger agreement, (ii) the "golden parachute compensation" and (iii) the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the merger agreement. These directors and executive officers may have interests in the merger that are different from, or in addition to, those of the Company's shareholders. These interests include the continued employment of certain executive officers of the Company by the surviving corporation, the continued service of certain directors of the Company, the treatment of equity-based awards in the merger, severance and other benefits under the change in control severance plan and the employment agreements and other rights held by the board of directors and executive officers and the indemnification of members of the board of directors and officers by the surviving corporation. Company shareholders should be aware of these interests when they consider board of directors' recommendations that they vote in favor of (i) the merger agreement, the merger and the transactions contemplated by the merger agreement, (ii) the "golden parachute compensation" and (iii) the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the merger agreement.

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Indemnification of Directors and Officers; Directors' and Officers' Insurance

        Parent has agreed to maintain, and to cause the surviving corporation to maintain for at least six years following the effective time of the merger the current policies of directors' and officers' liability insurance or policies of at least the same coverage and amounts containing terms and conditions that are no less advantageous with respect to claims arising out of or relating to events which occurred before or at the effective time of the merger (including in connection with the negotiation and execution of the merger agreement and the consummation of the merger). Such policies shall not have an annual premium in excess of 250% of the renewal premium being paid by the Company in connection with its June 2018 renewal. In lieu of Parent purchasing such policy after the effective time of the merger, the Company may, prior to the effective time of the merger, purchase a "tail" directors' and officers' liability policy covering the aforementioned matters at a cost not to exceed 250% of the renewal premium paid by the Company in connection with its June 2018 renewal and if the Company purchases such a policy prior to the effective time of the merger, the surviving corporation shall maintain such policy for six years following the effective time.

        In addition, for a period of six years after the effective time of the merger, Parent and the surviving corporation have agreed to indemnify and hold harmless each present and former director, officer or employee of the Company or any of its subsidiaries against all costs or expenses (including reasonable legal fees and disbursements), judgments, fines, losses, claims, damages, liabilities, and amounts paid in settlement in connection with any action, arbitration, litigation, suit or other civil or criminal proceeding or governmental investigation, including liabilities with respect to all acts and omissions arising out of or relating to their services as directors, officers or employees of the Company or its subsidiaries occurring prior to the effective time, whether asserted or claimed before, at or after the effective time of the merger.

        For a period of six years following the effective time, Parent and the surviving corporation have also agreed to cause all rights to indemnification, advancement of expenses and exculpation now existing in favor of any present or former director, officer or employee of the Company or any of its subsidiaries as provided in (i) the Company's organizational and governing documents, or (ii) any indemnification agreement to survive the merger and to continue in full force and effect for a period of not less than six years after the effective time or, if longer, for such period as is set forth in any applicable indemnification agreement.

Merger Proceeds in Respect of Company Equity-Based Awards

Treatment of Stock Options, Stock Appreciation Rights and Restricted Stock Awards

        In connection with the consummation of the merger, (i) each stock option and stock appreciation right, whether or not then exercisable or vested, will be converted into the right to receive at the closing cash equal to the product of (a) the excess, if any, of the merger consideration over the per share exercise price of the applicable option or stock appreciation right and (b) the number of shares of Company Common Stock underlying such stock option or stock appreciation right; (ii) each restricted stock award not subject to any performance-based vesting condition held by an employee will be automatically vested and converted into the right to receive at the closing cash equal to the product of (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award; (iii) each restricted stock award not subject to any performance-based vesting condition held by a non-employee member of the board of directors will vest on a prorated basis based on the number of days that have elapsed since the grant date of such award and be converted into the right to receive at the closing cash equal to the product of (a) the per share merger consideration and (b) such pro-rated number of shares; and (iv) with the exception of certain management members described below, each restricted stock award subject to any performance-based vesting condition will be converted into a right to receive a restricted cash award from the surviving

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corporation that will vest and be payable (without regard to any performance goals but subject to applicable service vesting conditions in the prior award) at the end of its currently applicable vesting period, with the cash payment therefor equal to the product of: (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award that would have vested based on target level achievement. Such restricted cash award will accelerate upon a termination without cause or for good reason prior to the scheduled vesting date. Each restricted stock award subject to any performance-based vesting condition held by Mr. Jorge Narino or Ms. Tricia McDermott Thompkins will be converted into a right to receive at the closing a cash payment equal to the product of: (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award that would have vested based on target level achievement. All outstanding restricted stock units held by George Feldenkreis will be cancelled.

        The following table shows, for each member of the board of directors and for each executive officer of the Company, as applicable: (1) the number of shares of Company Common Stock underlying outstanding stock appreciation rights and the number of shares of Company Common Stock subject to unvested Company restricted stock awards (assuming target level performance for performance vesting shares) and (2) the value of such awards. The values in the table below have been determined using the per share merger consideration of $27.50, and are based on applicable holdings as of July 5, 2018 (and without regard to any grants that may be made after such date), which date is the assumed date of the consummation of the merger solely for purposes of this compensation-related disclosure.

Name
  Stock
Appreciation
Right (#) 		  Value ($)   Restricted
Stock (#)(1) 		  Value ($)   Performance
Restricted
Stock(2) (#) 		  Value ($)  

Directors

                                      

Joe Arriola

     —     —     240 (3) $ 6,600     —     —  

Jane E. DeFlorio

     3,816   $ 12,364     1,096 (3) $ 30,140     —     —  

George Feldenkreis

     —     —     240 (3)(4) $ 6,600     —     —  

Bruce J. Klatsky

     4,065   $ 16,748     1,096 (3) $ 30,140     —     —  

Michael W. Rayden

     4,065   $ 16,748     1,096 (3) $ 30,140     —     —  

J. David Scheiner

     5,157   $ 50,487     1,096 (3) $ 30,140     —     —  

Executive Officers

    
 		    
 		    
 		    
 		    
 		    
 		  

Oscar Feldenkreis

     —     —     36,380 (4) $ 1,000,450     115,451 (4) $ 3,174,903  

Jorge Narino

     —     —     9,571   $ 263,203     4,241   $ 116,628  

Stanley P. Silverstein

     —     —     31,270   $ 859,925     39,780   $ 1,093,950  

David Enright

     —     —     9,571   $ 263,203     15,294   $ 420,585  

John F. Voith, Jr. 

     —     —     6,270   $ 172,425     39,780   $ 1,093,950  

Luis Paez

     7,369   $ 68,605     5,615   $ 154,413     19,182   $ 527,505  

Tricia McDermott Thompkins

     —     —     6,892   $ 189,530     3,029   $ 83,298  
(1)
Amounts in this column include restricted shares of Company Common Stock that vest based on continued service.

(2)
Amounts in this column include restricted shares of Company Common Stock that vest based on the achievement of performance goals. With the exception of certain management members described above, each share of restricted common stock subject to any performance-based vesting condition will be converted into a right to receive a restricted cash award, and the cash awards will be subject to accelerated vesting upon a termination without cause or for good reason prior to the scheduled vesting date.

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(3)
Represents a pro-rated portion of each non-employee director's June 13, 2018 grant assuming a closing of the transactions contemplated by the merger agreement on July 5, 2018.

(4)
The equity awards held by George Feldenkreis and Oscar Feldenkreis are being rolled over in connection with the consummation of the merger. All restricted stock units held by George Feldenkreis will be cancelled.

Employee-Related Interests

Outstanding Shares Held by Directors and Executive Officers

        The members of the board of directors and the executive officers of the Company own Company Common Stock and, other than George Feldenkreis and Oscar Feldenkreis (whose shares are being rolled over in connection with the consummation of the merger), will receive the same per share merger consideration of $27.50 on the same terms and conditions as other Company shareholders.

        The following table shows, for each member of the board of directors and each executive officer, as applicable: (1) the number of shares of Company Common Stock held by such individual and (2) the value of such shares. The values in the table below have been determined assuming the per share merger consideration of $27.50, are based on applicable holdings as of July 5, 2018 (and without regard to any acquisitions or dispositions that may be made after such date), and exclude restricted shares of Company Common Stock and Company Common Stock subject to issuance pursuant to granted and outstanding stock options, stock appreciation rights and restricted stock units.

Name
  Shares of
Perry Ellis
Common Stock (#) 		  Value ($)  

Directors

              

Joe Arriola

     11,616 (1) $ 319,440  

Jane E. DeFlorio

     17,707   $ 486,943  

George Feldenkreis

     1,712,889 (2)(3) $ 47,104,448  

Bruce J. Klatsky

     12,828   $ 352,770  

Michael W. Rayden

     12,828   $ 352,770  

J. David Scheiner

     14,064   $ 386,760  

Executive Officers

    
 		    
 		  

Oscar Feldenkreis

     1,071,498 (3)(4) $ 29,466,195  

Jorge Narino

     893   $ 24,558  

Stanley P. Silverstein

     2,616   $ 71,940  

David Enright

     6,030   $ 165,825  

John F. Voith, Jr. 

     18,574   $ 510,785  

Luis Paez

     17,559   $ 482,873  

Tricia McDermott Thompkins

     —     —  
(1)
Represents (a) 11,116 shares of Company Common Stock held directly by Mr. Arriola and (b) 500 shares of Company Common Stock owned by a revocable trust of which Mr. Arriola and his spouse are the trustees.

(2)
Represents (a) 1,590,573 shares of Company Common Stock directly beneficially owned by George Feldenkreis, and (b) 122,316 shares of Company Common Stock beneficially owned by the Feldenkreis Family Foundation, Inc.

(3)
The shares of Company Common Stock held by George Feldenkreis and Oscar Feldenkreis are being rolled over in connection with the consummation of the merger.

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(4)
Represents (a) 921,498 shares of Company Common Stock held by a revocable trust of which Oscar Feldenkreis is the trustee and (b) 150,000 shares of Company Common Stock held by three irrevocable trusts, each of which holds 50,000 shares of Company Common Stock, of which Oscar Feldenkreis' spouse is the trustee.

Rollover Commitment

        On June 15, 2018, pursuant to the Rollover Letters, the Rollover Investors committed to contribute, at the closing of the merger and immediately prior to the consummation of the merger, an aggregate amount of 3,143,949 shares of Company Common Stock to Parent. The Rollover Investors will receive in exchange for the Company Common Stock contributed to Parent a pro rata share of the equity of Parent, assuming that the value of each share of contributed stock is equal to the per share merger consideration of $27.50.

Employment Arrangements with Company Executive Officers

        Each of our executive officers is entitled to certain severance benefits pursuant to either the Perry Ellis International, Inc. Change in Control Severance Plan (the "change in control severance plan") or, in the case of Messrs. Feldenkreis and Silverstein, an individual employment agreement, the terms of which are described below. The merger, if and when consummated, will constitute a change in control under the change in control severance plan and will provide for the severance as described in further detail below. For Messrs. Feldenkreis and Silverstein, the severance benefits are not enhanced by the merger because it does not constitute a change in control pursuant to the applicable employment agreement.

        Each of the Company's executive officers (other than Messrs. Feldenkreis and Silverstein) is covered by the change in control severance plan, which provides for the payment of severance benefits to certain senior executive officers of the Company or its affiliates that have been selected by the chief executive officer and confirmed by the compensation committee of the board of directors and the Company's management, if their employment is involuntarily terminated by the Company without "cause" or terminated by the applicable executive for "good reason" within twelve (12) months following a Change in Control (each, as defined in the change in control severance plan, and such termination, a "Qualifying Termination"). In addition to accrued but unpaid base salary, earned vacation time, unreimbursed business expenses incurred prior to termination and other vested compensation or benefits through the date of termination, the change in control severance plan provides for the following severance benefits upon a Qualifying Termination: (i) continued base salary during the applicable severance period, (ii) a prorated annual cash bonus for the year of termination, based on actual full-year performance, and (iii) COBRA premiums during the applicable severance period. The executive officers who participate in the change in control severance plan have a severance period of 18 months.

        The eligibility for severance benefits under the change in control severance plan is conditioned upon the participant's timely execution of a general release of all claims against the Company and its subsidiaries, affiliates and related persons. The change in control severance plan also contains restrictive covenants, including perpetual restrictions on the disclosure of confidential information and nondisparagment and post-employment restrictions on competition, solicitation or hire of employees and solicitation of customers during the severance period. If a participant violates the restrictive covenants, such participant will not be entitled to any further payments or benefits under the change in control severance plan.

        Under the change in control severance plan, if any payments and benefits (i) constitute "parachute payments" within the meaning of Section 280G ("280G Payments") of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) would otherwise be subject to the excise tax imposed by

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Section 4999 of the Code, then the 280G Payments will be either: (a) delivered in full or (b) delivered as to such lesser extent which would result in no portion of such benefits being subject to such excise tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by the participant on an after-tax basis of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.

        Oscar Feldenkreis Employment Agreement.    Mr. Oscar Feldenkreis entered into an employment agreement with the Company on April 20, 2016, which expires on February 4, 2019. The transactions contemplated by the merger agreement do not constitute a "Change in Control" within the meaning of this employment agreement. Upon termination of Mr. Oscar Feldenkreis' employment agreement without "cause" or for "good reason" (each as defined in the employment agreement), he will receive (a) his base salary earned but not paid prior to the date of termination, (b) all annual incentive compensation awards with respect to any year prior to the year in which his termination occurred, which have been earned but have not yet been paid, and (c) 100% of his annual incentive compensation award based on the achievement of any applicable performance goals with respect to the year in which the termination occurs. All restricted stock, restricted stock units, stock options, stock appreciation rights and all other equity-based long-term incentive compensation awards will immediately vest as of the termination date except in the case of performance shares, performance units and other performance-based equity awards, which will vest based on the achievement of the performance goals. All long-term performance-based compensation payable in cash and based on a performance metric other than stock price will be paid based on the achievement of the performance goals. Additionally, Mr. Oscar Feldenkreis will receive a lump-sum cash payment equal to 200% of the sum of (a) the greater of (i) his base salary at the time of termination or (ii) his base salary immediately prior to any reduction that would constitute good reason, plus (b) the greater of (i) the target bonus in effect at the time of termination or (ii) the target bonus immediately prior to any reduction that would constitute good reason. Finally all premiums for health insurance will be paid in full by the Company for as long as he is eligible for COBRA coverage.

        Stanley Silverstein Employment Agreement.    Stanley Silverstein entered into an employment agreement with the Company, effective September 9, 2013, and amended on May 29, 2018. The transactions contemplated by the merger agreement do not constitute a "Change in Control" within the meaning of the Mr. Silverstein's employment agreement. If Mr. Silverstein is terminated without "cause" (as defined in the employment agreement) prior to January 31, 2019, he will be entitled to receive a lump-sum amount equal to (a) any annual bonus in respect of the fiscal year preceding the fiscal year in which Mr. Silverstein's employment ends and which has not yet been paid and (b) 100% of his annual base salary. Mr. Silverstein's unvested restricted shares will also immediately vest.

        We estimate that the aggregate amount payable to the Company's executive officers pursuant to the terms of their respective severance arrangements (excluding the value of accelerating Perry Ellis equity awards) would equal approximately $13,377,915 assuming that the consummation of the merger was July 5, 2018, and that each executive officer incurred a severance-qualifying termination of employment immediately following the consummation of the merger.

Benefit Arrangements of the Surviving Corporation

        As described under "The Merger Agreement—Covenants of Parent and/or Merger Sub—Employee Matters" beginning on page 120, the merger agreement requires the surviving corporation to continue to provide certain compensation and benefits following the completion of the merger to all Perry Ellis employees, including Perry Ellis's executive officers, who remain employed by the Company following completion of the merger.

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New Management Arrangements

        As of the date of this Proxy Statement, Parent has not entered into any employment agreements with any of the Company's executive officers (or other employees of the Company) and, except for the accelerated vesting of stock options, stock appreciation rights and restricted stock awards, and conversion of performance awards into restricted cash awards, as provided in the merger agreement and described above, the Company has not amended or modified any existing employment agreements or other arrangements with its executive officers in connection with the merger. Parent or its affiliates may pursue agreements, arrangements or understandings with the Company's executive officers, which may include cash, stock and co-investment opportunities, and Parent or its affiliates may initiate negotiations of these arrangements, arrangements and understandings regarding employment with, or the right to participate in the equity of, the surviving corporation or Parent on a going-forward basis following the completion of the merger. However, in each case, there is no present contractual obligation to do so and neither Parent nor its affiliates has initiated any such negotiation as of the date of this Proxy Statement.

Intent to Vote in Favor of the Merger

        Our directors and executive officers have informed us that, as of the date of this Proxy Statement, they intend to vote all of the shares of Company Common Stock owned directly by them in favor of the adoption of the merger agreement. As of [                    ], 2018, the record date for the Special Meeting, our directors and executive officers directly owned, in the aggregate, [            ] shares of Company Common Stock entitled to vote at the Special Meeting, or collectively approximately [            ] of the outstanding shares of Company Common Stock entitled to vote at the Special Meeting. As of [                    ], 2018, the record date for the Special Meeting, our directors and executive officers that are not party to the voting agreement (as described in "Special Factors—Voting Agreement" beginning on page 89) directly owned, in the aggregate, [            ] shares of Company Common Stock entitled to vote at the Special Meeting, or collectively approximately [            ] of the outstanding shares of Company Common Stock entitled to vote at the Special Meeting.

Voting Agreement

        Concurrently with the execution and delivery of the merger agreement, the Rollover Investors have entered into a voting agreement with Parent and the Company that covers an aggregate of approximately 19.8% of the outstanding shares of Company Common Stock (the "Shares"). Under the terms of the voting agreement, the Rollover Investors have agreed to vote, or cause to be voted, the Shares (A) to approve and adopt the merger agreement and the transactions contemplated thereby, including the merger, at the Special Meeting, and at any adjournment, postponement or recess thereof, at which such merger agreement is submitted for the consideration and vote of the shareholders of the Company, (B) against (i) any takeover proposal and (ii) any other action, agreement or transaction that would reasonably be expected to materially impede, interfere with, delay or postpone the merger or the other transactions contemplated by the merger agreement, and (C) in favor of any other matter necessary to the consummation of the transactions contemplated by the merger agreement and considered and voted upon by the shareholders of the Company.

        The Rollover Investors further agreed in the voting agreement with Parent and the Company to irrevocably appoint the Company, each member of the Special Committee, and any other designee of Company or the Special Committee, as applicable, and each of them individually, as the sole and exclusive attorneys-in-fact and proxies of the Rollover Investors, for and in the name, place and stead of the Rollover Investors, with full power of substitution and resubstitution, to vote, grant a consent or approval in respect of, or execute and deliver a proxy to vote, solely to the extent the Rollover Investors fail to comply with the agreements discussed above, the Shares, in accordance with the obligations of the Rollover Investors discussed above.

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        The Rollover Investors have also agreed in the voting agreement with Parent and the Company not to, directly or indirectly, (i) grant any proxies or enter into any voting trust or other agreement or arrangement with respect to the voting of any Shares; (ii) other than pursuant to the pledge and security agreement by George Feldenkreis in favor of the Company, transfer, in any way, any interest in the Shares, unless such transfer is made in compliance with the voting agreement (including certain customary permitted transferee exceptions), or (iii) knowingly take any action that would have the effect of preventing or delaying the Rollover Investors from performing any of their obligations under the voting agreement.

        The voting agreement was entered into by the Rollover Investors solely in their capacity as shareholders of the Company, and the voting agreement does not limit or affect any actions taken by any officer or director of the Company solely in his or her capacity as a director or officer of the Company.

        The Rollover Investors' obligations under the voting agreement will automatically terminate without any further action required by any person upon the earliest to occur of (i) the mutual agreement of the parties thereto to terminate the voting agreement; (ii) the termination of the merger agreement in accordance with its terms, and (iii) the effective time of the merger.

        The foregoing summary of the voting agreement does not purport to be complete and is qualified in its entirety by reference to the voting agreement. A copy of the voting agreement is attached as exhibit (d)(11) to the statement on Schedule 13E-3 filed by the Company and the filing persons listed thereon with the SEC on July 11, 2018.

Dividends

        Pursuant to the merger agreement, we are prohibited from declaring or paying any dividends following execution of the merger agreement on June 15, 2018.

Appraisal Rights

        Holders of Company Common Stock as of the record date are entitled to appraisal rights under the FBCA. Pursuant to the FBCA, a Company shareholder who does not wish to accept the consideration to be received pursuant to the terms of the merger agreement may dissent from the merger and elect to receive the fair value of his or her shares of Company Common Stock immediately prior to the date of the Special Meeting to vote on the proposal to approve the merger agreement, excluding any appreciation or depreciation in anticipation of the merger unless exclusion would be inequitable.

        In order to exercise appraisal rights, a dissenting Company shareholder must strictly comply with the statutory procedures of Sections 607.1301 through 607.1333 of the FBCA, which are summarized below. A copy of the full text of those Sections is included as Appendix C to this Proxy Statement. Company shareholders are urged to read Appendix C in its entirety and to consult with their legal advisors. Each Company shareholder who desires to assert his or her appraisal rights is cautioned that failure on his or her part to adhere strictly to the requirements of Florida law in any regard will cause a forfeiture of any appraisal rights.

Procedures for Exercising Dissenters' Rights of Appraisal

        The following summary of Florida law is qualified in its entirety by reference to the full text of the applicable provisions of the FBCA, a copy of which are included as Appendix C to this Proxy Statement.

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        A dissenting shareholder, who desires to exercise his or her appraisal rights, must file with the Company, prior to the taking of the vote on the merger, a written notice of intent to demand payment for his or her shares if the merger is effectuated. A vote against the adoption and approval of the merger agreement will not alone be deemed to be the written notice of intent to demand payment and will not be deemed to satisfy the notice requirements under the FBCA. A dissenting shareholder need not vote against the merger agreement, but cannot vote, or allow any nominee who holds such shares for the dissenting shareholder to vote, any of his or her shares of Company Common Stock in favor of adoption and approval of the merger agreement. A vote in favor of adoption and approval of the merger agreement will constitute a waiver of the shareholder's appraisal rights. Such written notification should be delivered either in person or by mail (certified mail, return receipt requested, being the recommended form of transmittal) to:

Perry Ellis International, Inc.
3000 N.W. 107th Avenue
Miami, Florida 33172
Attention: Tricia Thompkins, General Counsel and Secretary

        All such notices must be signed in the same manner as the shares are registered on the books of the Company. If a Company shareholder has not provided written notice of intent to demand fair value before the vote on the proposal to adopt and approve the merger agreement is taken at the Special Meeting, then the Company shareholder will be deemed to have waived his or her appraisal rights.

        Within 10 days after the completion of the merger, the surviving corporation must provide to each Company shareholder who filed a notice of intent to demand payment for his or her shares a written appraisal notice and an appraisal election form that specifies, among other things:

        The form must also contain the surviving corporation's offer to pay to the Company shareholder the amount that it has estimated as the fair value of the shares of Company Common Stock, and request certain information from the Company shareholder, including:

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        A dissenting shareholder must submit the certificate(s) representing his or her shares with the appraisal election form. Any dissenting shareholder failing to return a properly completed appraisal election form and his or her stock certificates within the period stated in the form will lose his or her appraisal rights and be bound by the terms of the merger agreement.

        Upon returning the appraisal election form, a dissenting shareholder will be entitled only to payment pursuant to the procedure set forth in the applicable sections of the FBCA and will not be entitled to vote or to exercise any other rights of a shareholder, unless the dissenting shareholder withdraws his or her demand for appraisal within the time period specified in the appraisal election form.

        A dissenting shareholder who has delivered the appraisal election form and his or her Company Common Stock certificates may decline to exercise appraisal rights and withdraw from the appraisal process by giving written notice to the surviving corporation within the time period specified in the appraisal election form. Thereafter, a dissenting shareholder may not withdraw from the appraisal process without the written consent of the surviving corporation. Upon such withdrawal, the right of the dissenting shareholder to be paid the fair value of his or her shares will cease, and he or she will be reinstated as a shareholder and will be entitled to receive the merger consideration.

        If the dissenting shareholder accepts the offer of the surviving corporation in the appraisal election form to pay the surviving corporation's estimate of the fair value of the shares of Company Common Stock, payment for the shares of the dissenting shareholder is to be made within 90 days after the receipt of the appraisal election form by the surviving corporation or its agent. Upon payment of the agreed value, the dissenting shareholder will cease to have any interest in such shares.

        A shareholder must demand appraisal rights with respect to all of the shares registered in his or her name, except that a record shareholder may assert appraisal rights as to fewer than all of the shares registered in the record shareholder's name but which are owned by a beneficial shareholder, if the record shareholder objects with respect to all shares owned by the beneficial shareholder. A record shareholder must notify the Company in writing of the name and address of each beneficial shareholder on whose behalf appraisal rights are being asserted. A beneficial shareholder may assert appraisal rights as to any shares held on behalf of the beneficial shareholder only if the beneficial shareholder submits to the Company the record shareholder's written consent to the assertion of such rights before the date specified in the appraisal notice, and does so with respect to all shares that are beneficially owned by the beneficial shareholder.

        Section 607.1330 of the FBCA addresses what should occur if a dissenting shareholder fails to accept the offer of the surviving corporation to pay the value of the shares as estimated by the surviving corporation, and the surviving corporation fails to comply with the demand of the dissenting shareholder to pay the value of the shares as estimated by the dissenting shareholder, plus interest.

        If a dissenting shareholder refuses to accept the offer of the surviving corporation to pay the value of the shares as estimated by the surviving corporation, and the surviving corporation fails to comply with the demand of the dissenting shareholder to pay the value of the shares as estimated by the dissenting shareholder, plus interest, then within 60 days after receipt of a written demand from any dissenting shareholder given within 60 days after the date on which the merger was effected, the surviving corporation shall, or at its election at any time within such period of 60 days may, file an action in any court of competent jurisdiction in the county in Florida where the registered office of the surviving corporation, maintained pursuant to Florida law, is located requesting that the fair value of such shares be determined by the court.

        If the surviving corporation fails to institute a proceeding within the above-prescribed period, any dissenting shareholder may do so in the name of the surviving corporation. A copy of the initial pleading will be served on each dissenting shareholder. The surviving corporation is required to pay

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each dissenting shareholder the amount found to be due within 10 days after final determination of the proceedings, which amount may, in the discretion of the court, include a fair rate of interest, which will also be determined by the court. Upon payment of the judgment, the dissenting shareholder ceases to have any interest in such shares.

        Section 607.1331 of the FBCA provides that the costs of a court appraisal proceeding, including reasonable compensation for, and expenses of, appraisers appointed by the court, will be determined by the court and assessed against the surviving corporation, except that the court may assess costs against all or some of the dissenting shareholders, in amounts determined by the court, to the extent that the court finds such shareholders acted arbitrarily, vexatiously or not in good faith with respect to their appraisal rights. The court also may assess the fees and expenses of counsel and experts for the respective parties, in amounts determined by the court, against: (i) the surviving corporation and in favor of any or all dissenting shareholders if the court finds the surviving corporation did not substantially comply with the notification provisions set forth in Sections 607.1320 and 607.1322 of the FBCA; or (ii) either the surviving corporation or a dissenting shareholder, in favor of any other party, if the court finds that the party against whom the fees and expenses are assessed acted arbitrarily, vexatiously, or not in good faith with respect to the appraisal rights. If the court in an appraisal proceeding finds that the services of counsel for any dissenting shareholder were of substantial benefit to other dissenting shareholders, and that the fees for those services should not be assessed against the surviving corporation, the court may award to such counsel reasonable fees to be paid out of the amounts awarded the dissenting shareholders who were benefited. To the extent that the surviving corporation fails to make a required payment when a dissenting shareholder accepts the surviving corporation's offer to pay the value of the shares as estimated by the surviving corporation, the dissenting shareholder may sue directly for the amount owed and, to the extent successful, shall be entitled to recover from the surviving corporation all costs and expenses of the suit, including counsel fees.

        Based on Florida's appraisal rights statute as well as principles of waiver and estoppel, the Company intends to take the position with respect to any lawsuit seeking recovery outside of the appraisal rights process that appraisal rights represent the exclusive remedy to challenge the merger consideration and that any shareholder who either (i) votes for the adoption of the merger agreement, (ii) does not exercise appraisal rights or (iii) accepts merger consideration pursuant to the merger agreement, will have waived and relinquished all claims arising out of or relating to the consideration provided to the Company's shareholders under the merger agreement and be barred from seeking recovery of other consideration.

        BECAUSE OF THE COMPLEXITY OF THE PROVISIONS OF FLORIDA LAW RELATING TO DISSENTERS' APPRAISAL RIGHTS, SHAREHOLDERS WHO ARE CONSIDERING DISSENTING FROM THE MERGER ARE URGED TO CONSULT THEIR OWN LEGAL ADVISORS.

Material U.S. Federal Income Tax Consequences

        Except as specifically described below, the following is a discussion of the material U.S. federal income tax consequences of the merger to "U.S. holders" and "non-U.S. holders" (in each case, as defined below) of Company Common Stock whose shares of Company Common Stock are converted into the right to receive cash in the merger, that hold such shares as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment) and that will not own (actually or constructively) any equity interests in the surviving corporation or Parent after the merger. The following discussion is based upon the Code, judicial decisions, administrative rulings and existing and proposed Treasury regulations, all as in effect as of the date hereof. All of the preceding authorities are subject to change, possibly with retroactive effect, so as to result in U.S. federal income tax consequences different from those discussed below. The Company has not requested, and will not

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request, a ruling from the U.S. Internal Revenue Service (the "IRS") with respect to any of the U.S. federal income tax consequences described below, and as a result there can be no assurance that the IRS will not disagree with or challenge any of the conclusions the Company has reached and described herein.

        This discussion is not a complete analysis or listing of all of the possible tax consequences of the merger and does not address all tax considerations that might be relevant to particular holders in light of their personal circumstances or to persons that are subject to special tax rules. In addition, this discussion of the material U.S. federal income tax consequences does not address the tax treatment of special classes of holders, such as: banks, insurance companies or other financial institutions; mutual funds; real estate investment trusts or regulated investment companies; tax-exempt organizations or governmental organizations; an entity or arrangement treated for U.S. federal income tax purposes as a partnership, S-corporation or other pass-through entity (or an investor in such an entity or arrangement); controlled foreign corporations, passive foreign investment companies or corporations that accumulate earnings to avoid U.S. federal income tax (or shareholders of such corporations); retirement plans, pension funds or other tax-deferred accounts; persons holding shares of Company Common Stock as part of a hedging, straddle, synthetic security, conversion or other integrated transaction; persons deemed to have sold their shares of Company Common Stock under the constructive sale provisions of the Code; persons who acquired Company Common Stock through the exercise or cancellation of employee stock options, through a tax qualified retirement plan or otherwise as compensation for their services; U.S. expatriates or entities covered by the U.S. anti-inversion rules; persons subject to the alternative minimum tax; dealers, traders or brokers in stocks and securities or currencies; U.S. holders (as defined below) whose functional currency is not the U.S. dollar; traders in securities that elect mark-to-market treatment; U.S. holders (as defined below) who hold shares of Company Common Stock through a bank financial institution or other entity, or a branch or office thereof, that is located, organized or resident outside the United States; or persons that are required to report income no later than when such income is reported in an "applicable financial statement." This discussion also does not address the receipt of cash in connection with the cancellation of restricted stock units or options to purchase shares of Company Common Stock and does not address any other matters relating to equity compensation or benefit plans.

        This discussion does not address any tax consequences other than U.S. federal income tax consequences, including estate and gift tax consequences and consequences under any state, local or non-U.S. laws.

        For purposes of this section, the term "U.S. holder" means a beneficial owner of Company Common Stock that is: (i) an individual citizen of the United States or a resident of the United States as determined for U.S. federal income tax purposes, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust (a) if a court within the United States is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have authority to control all substantial decisions of the trust or (b) that has a valid election in effect under applicable Treasury regulations to be treated as a domestic trust.

        The term "non-U.S. holder" means a beneficial owner of Company Common Stock that is, for U.S. federal income tax purposes, an individual, corporation, trust or estate that is not a U.S. holder. The term "holder" means a U.S. holder or a non-U.S. holder.

        If an entity treated as a partnership (or other pass-through entity) for U.S. federal income tax purposes is a beneficial owner of Company Common Stock, the U.S. federal income tax treatment of a partner or other owner will generally depend upon the status of the partner (or other owner) and the activities of the partner (or other owner) and the entity. If you are a partner (or other owner) of a

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partnership or other pass-through entity for U.S. federal income tax purposes, you are urged to consult your tax advisor regarding the tax consequences of the merger.

        The following discussion is for general information only and is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of Company Common Stock and no opinion or representation with respect to the U.S. federal income tax consequences to any such holder or prospective holder is made. Each holder of Company Common Stock is urged to consult such holder's tax advisors as to the particular consequences to such holder of the merger under U.S. federal, state and local, and applicable non-U.S. tax laws.

U.S. Holders

        General.    The exchange of shares of Company Common Stock for cash in the merger will be a taxable transaction for U.S. federal income tax purposes. A U.S. holder of Company Common Stock whose shares are converted into the right to receive cash in the merger generally will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined prior to reduction for any applicable withholding taxes) and the U.S. holder's adjusted tax basis in such shares. A U.S. holder's adjusted tax basis generally will equal the price the U.S. holder paid for such shares. Such gain or loss will be capital gain or loss and will be treated as long-term capital gain or loss if the holding period for the shares of Company Common Stock exceeds one year at the effective time of the merger. If the holding period for such shares is one year or less at the effective time of the merger, any capital gain or loss generally will be treated as short-term capital gain or loss. Long-term capital gains of non-corporate U.S. holders (including individuals) are generally eligible for reduced rates of taxation. The deductibility of capital losses is subject to certain limitations. If a U.S. holder acquired different blocks of Company Common Stock at different times or different prices, such U.S. holder must determine its adjusted tax basis and holding period separately with respect to each block of Company Common Stock.

        Information Reporting and Backup Withholding.    Information reporting and backup withholding may apply to payments made in connection with the merger. Backup withholding will not apply, however, to a U.S. holder of Company Common Stock that (1) furnishes a correct taxpayer identification number ("TIN"), certifies that such U.S. holder is not subject to backup withholding on the IRS Form W-9 (or appropriate successor form) included in the transmittal materials that such U.S. holder will receive, and otherwise complies with all applicable requirements of the backup withholding rules; or (2) provides proof that such U.S. holder is otherwise exempt from backup withholding. Backup withholding is not an additional tax, and any amounts withheld under the backup withholding rules may be refunded or credited against a U.S. holder's U.S. federal income tax liability, if any; provided, that such U.S. holder furnishes the required information to the IRS in a timely manner. The IRS may impose a penalty upon any taxpayer that fails to provide the correct TIN.

Non-U.S. Holders

        General.    A non-U.S. holder's receipt of cash in exchange for shares of Company Common Stock pursuant to the merger generally will not be subject to U.S. federal income tax unless:

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        A non-U.S. holder described in the first bullet point immediately above will generally be subject to tax on any gain derived from the merger in the same manner as if it were a U.S. holder. In addition, such a non-U.S. holder that is a corporation may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits or such lower rate as may be specified by an applicable income tax treaty. A non-U.S. holder described in the second bullet point immediately above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty) on any gain realized as a result of the merger, which may be offset by certain U.S. source capital losses recognized in the same year.

        If the Company is or has been a USRPHC at any time within the shorter of the five-year period preceding the effective time of the merger or a non-U.S. holder's holding period with respect to the applicable shares of Company Common Stock, the exchange of Company Common Stock for cash in the merger by such non-U.S. holder will be subject to U.S. federal income tax at rates generally applicable to U.S. persons, except that the branch profits tax will not apply; provided, that, so long as Company Common Stock is regularly traded on an established securities market, the Company's treatment as a USRPHC would cause only a non-U.S. holder who holds or held, directly or indirectly under certain ownership rules of the Code, more than 5% of Company Common Stock (at any time during the shorter of the five-year period preceding the merger or the period that the non-U.S. holder held Company Common Stock), and is not eligible for a treaty exemption. The Company believes that it is not, and has not been, a USRPHC at any time during the five-year period preceding the offer.

        Information Reporting and Backup Withholding.    Information reporting and backup withholding will generally apply to payments made pursuant to the merger to a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder properly and correctly on an appropriate version of IRS Form W-8 and satisfies certain other requirements, or otherwise establishes an exemption. Copies of applicable information returns reporting such payments and any withholding may also be made available to the tax authorities in the non-U.S. holder's country in which such holder resides under the provisions of an applicable treaty or agreement. Payments of disposition proceeds to a non-U.S. holder where the transaction is effected through a non-U.S. office of a non-U.S. broker generally will not be subject to backup withholding or information reporting. However, if such broker is for U.S. federal income tax purposes: a U.S. person; a controlled foreign corporation; a non-U.S. person 50% or more of whose gross income is effectively connected with a U.S. trade or business for a specified three-year period; or a non-U.S. partnership with certain connections to the United States, then information reporting will be required unless the broker has in its records documentary evidence that the beneficial owner is not a U.S. person and certain other conditions are met or the beneficial owner otherwise establishes an exemption. Backup withholding may apply to any payment that such broker is required to report if the broker has actual knowledge or reason to know that the beneficial owner is a U.S. person. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a non-U.S. holder can be refunded or credited against the non-U.S. holder's U.S. federal income tax liability (if any) provided, that an appropriate claim is timely filed with the IRS.

Regulatory Approvals

        In connection with the merger, the Company is required to make certain filings with, and comply with certain laws of, various federal and state governmental agencies, including:

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        In addition, under the HSR Act, and the related rules and regulations that have been issued by the FTC, certain transactions having a value above specified thresholds may not be consummated until specified information and documentary material have been furnished to the applicable governmental authorities and certain waiting period requirements have been satisfied or specific merger approval obtained. The requirements of the HSR Act apply to the acquisition of shares of Company Common Stock in the merger. The filings required under the HSR Act were made on June 28, 2018, and on July 10, 2018, the FTC notified Paul, Weiss that the request for early termination of the waiting period under the HSR Act had been granted effective as of the date of such notification.

Delisting and Deregistration of Company Common Stock

        If the merger is completed, the shares of Company Common Stock will no longer be publicly traded. In addition, Company Common Stock will be delisted from the Nasdaq Global Market and deregistered under the Exchange Act, and the Company will no longer be required to file periodic reports with the SEC with respect to Company Common Stock.

Effective Time of Merger

        The merger will be completed and become effective at the time the articles of merger is filed with the Secretary of State of the State of Florida or any later time as the Company and Parent agree upon and specify in the articles of merger. The parties intend to complete the merger as soon as practicable following the adoption of the merger agreement by the Company's shareholders and satisfaction or waiver of the conditions to closing of the merger set forth in the merger agreement.

        The parties to the merger agreement currently expect to complete the merger in the second half of 2018. Because the merger is subject to a number of conditions, the exact timing of the merger cannot be determined, if it is completed at all.

Payment of Merger Consideration and Surrender of Stock Certificates

        At the effective time of the merger, the Company will become a wholly-owned subsidiary of Parent and each shareholder of record immediately prior to the effective time of the merger will be entitled to receive $27.50 in cash, without interest and less any applicable withholding taxes, for each share of Company Common Stock such shareholder holds immediately prior to the effective time of the merger. This does not apply to (i) shares of Company Common Stock held by the Company or any of its wholly-owned subsidiaries or Parent or its subsidiaries, (ii) shares of Company Common Stock held by the Rollover Investors, and (iii) shares of Company Common Stock whose holders have not voted in favor of adopting the merger agreement and have demanded and perfected their appraisal rights in accordance with, and have complied in all respects with, the FBCA. Parent will designate a paying agent, satisfactory to the Company in its reasonable discretion, to make the cash payments contemplated by the merger agreement. At the effective time of the merger, Parent will deposit with the paying agent, for the benefit of the holders of Company Common Stock, funds sufficient for payment of the aggregate merger consideration. The paying agent will deliver to you your merger consideration according to the procedure summarized below.

        As soon as reasonably practicable, and in any event within three business days after the effective time of the merger, Parent will cause the paying agent to send you a letter of transmittal and instructions advising you how to surrender your stock certificates (of affidavit of loss in lieu thereof) or book-entry shares in exchange for the merger consideration.

        The paying agent will promptly pay you your merger consideration after you have (i) surrendered your stock certificates (or affidavit of loss in lieu thereof) or book-entry shares to the paying agent,

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together with a properly completed and signed letter of transmittal and any other documents required by the paying agent, and (ii) provided to the paying agent any other items specified by the letter of transmittal.

        Interest will not be paid or accrue in respect of any cash payments of merger consideration. The surviving corporation will reduce the amount of any merger consideration paid to you by any applicable withholding taxes.

        If the paying agent is to pay some or all of your merger consideration to a person other than you, you must have your stock certificates properly endorsed or otherwise in proper form for transfer, and you must pay any transfer or other taxes payable by reason of the transfer or establish to the surviving corporation's reasonable satisfaction that the taxes have been paid or are not required to be paid.

        You should not forward your stock certificates to the paying agent without a letter of transmittal, and you should not return your stock certificates with the enclosed proxy.

        The transmittal instructions will tell you what to do if you have lost your stock certificate, or if it has been stolen or destroyed. You will have to provide an affidavit to that fact and, if required by the surviving corporation, post a bond in an amount that the surviving corporation reasonably directs as indemnity against any claim that may be made against it in respect of the stock certificate.

        After the completion of the merger, you will cease to have any rights as a Company shareholder, other than the right to receive the per share merger consideration.

        Upon demand, the paying agent will return to Parent all funds in its possession one year after the merger occurs, and the paying agent's duties will terminate. After that time, if you have not received payment of the merger consideration, you may look only to Parent and/or the surviving corporation for payment of the merger consideration, without interest, subject to applicable abandoned property, escheat and similar laws. If any certificate representing Company Common Stock has not been surrendered prior to one year after the completion of the merger (or such earlier date as shall be immediately prior to the date that such unclaimed funds would otherwise become subject to any abandoned property, escheat or similar law), the payment with respect to such certificate will, to the extent permitted by applicable law, become the property of the surviving corporation, free and clear of all claims or interest of any person previously entitled to any claims or interest.

Fees and Expenses

        Except as otherwise described in "The Merger Agreement—Effect of Termination; Fees and Expenses" beginning on page 128, all fees, expenses and costs incurred in connection with the merger agreement, including legal, accounting, investment banking and other fees, expenses and costs, will be paid by the party incurring such fees, expenses and costs, whether or not the merger is consummated.

        Estimated fees and expenses to be incurred by the Company and the GF Group in connection with the merger are as follows:

Description
  Amount
(in thousands) 		 

Financial advisors fee and expenses

   $ 11,800  

Legal fees and expenses

   $ 11,000  

Accounting fees and expenses

   $ 0  

SEC filing fee

   $ 55  

Printing, proxy solicitation, filing fees and mailing costs

   $ 150  

Randa Expense Reimbursement

   $ 750  

Miscellaneous

   $ 795  

Total fees and expenses

   $ 24,550  

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THE SPECIAL MEETING

Time, Place and Purpose of the Special Meeting

        The enclosed proxy is solicited on behalf of the board of directors for use at a Special Meeting to be held on [        ], 2018 at [        ] [a.m.][p.m.], Eastern Time, or at any adjournments, postponements or recesses thereof, for the purposes set forth in this Proxy Statement and in the accompanying notice of Special Meeting. The Special Meeting will be held at [        ].

        At the Special Meeting, the Company's shareholders are being asked to consider and vote upon a proposal to adopt the merger agreement. The Company's shareholders are also being asked to approve the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the merger agreement.

        Further, the Company's shareholders are being asked to cast an advisory (non-binding) vote to approve "golden parachute compensation" that may become payable under existing agreements to the Company's named executive officers in connection with the merger.

        The Company does not expect a vote to be taken on any other matters at the Special Meeting or any adjournment, postponement or recess thereof. If any other matters are properly presented at the Special Meeting or any adjournment, postponement or recess thereof for consideration, however, the holders of the proxies will have discretion to vote on these matters in accordance with their best judgment.

Special Committee and Board Recommendation

        The Special Committee, after careful consideration, voted unanimously to recommend to the board of directors that it, and thereafter the board of directors, after careful consideration and acknowledging the interest of George Feldenkreis and Oscar Feldenkreis in the merger, voted unanimously to (i) approve and declare advisable the merger agreement, the merger and the transactions contemplated by the merger agreement, (ii) declare that it is fair to and in the best interests of the Company and the unaffiliated shareholders of the Company that the Company enter into the merger agreement and consummate the merger on the terms and subject to the conditions set forth in the merger agreement, (iii) direct that the adoption of the merger agreement be submitted to a vote at a meeting of the shareholders of the Company and (iv) recommend to the shareholders of the Company that they vote FOR the adoption of the merger agreement. For a discussion of the material factors considered by the Special Committee and the board of directors in reaching its conclusions, see "Special Factors—Recommendation of the Special Committee and Our Board of Directors; Reasons for Recommending the Adoption of the Merger Agreement; Fairness of the Merger" beginning on page 53.

        The board of directors recommends that you vote FOR the proposal to adopt the merger agreement, FOR the proposal to approve the "golden parachute compensation" and FOR the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies.

Who is Entitled to Vote at the Special Meeting?

        Only shareholders of record at the close of business on the record date, [    ], 2018, are entitled to receive notice of and to vote at the Special Meeting or any adjournment, postponement or recess thereof. As of the close of business on [    ], 2018, there were outstanding [    ] shares of Company Common Stock.

        Shareholder of Record: Shares Registered in Your Name.    If, on [    ], 2018, your shares were registered directly in your name with the Company's transfer agent, Continental Stock Transfer and Trust, then you are a shareholder of record. As a shareholder of record, you may vote in person at the Special Meeting or vote by proxy.

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        Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Agent.    If, on [    ], 2018, your shares were held in an account at a broker, bank or other agent, then you are the beneficial owner of shares held in "street name". The organization holding your account is considered to be the shareholder of record for purposes of voting at the Special Meeting. As a beneficial owner, you have the right to direct your broker, bank or other agent how to vote the shares in your account. You are also invited to attend the Special Meeting. Because you are not the shareholder of record, however, you may not vote your shares in person at the Special Meeting unless you request and obtain a valid proxy from your broker, bank or other agent.

How Do I Vote?

        For Proposals 1, 2 and 3, you may vote FOR or AGAINST or abstain from voting. The procedures for voting are set forth below:

        Shareholder of Record: Shares Registered in Your Name.    If you are a shareholder of record, you may vote in person at the Special Meeting or by mailing your completed, dated and signed proxy card in the enclosed return envelope or by giving your proxy authorization via the Internet or by telephone. Whether or not you plan to attend the Special Meeting, we encourage you to vote by proxy or give your proxy authorization to ensure your vote is counted. You may still attend the Special Meeting and vote in person if you have already voted by proxy or given your proxy authorization.

        We provide Internet proxy authorization on-line with procedures designed to ensure the authenticity and correctness of your proxy authorization instructions. Please be aware, however, that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.

        Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Agent.    If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received the Proxy Statement and proxy card from that organization rather than from Perry Ellis. You should follow the instructions provided by your broker, bank or other agent as to how to vote your shares. To vote in person at the Special Meeting, you must obtain a valid proxy from your broker, bank or other agent. To do this, follow the instructions provided by your broker, bank or other agent or contact your broker, bank or other agent to request a proxy card.

How Many Votes Do I Have?

        For each matter to be voted upon, you have one vote for each share of Company Common Stock that you own as of the close of business on [    ], 2018. Shareholders that own shares of Company Common Stock will vote together as a single class on all matters hereby submitted to shareholders and such other matters as may properly come before the Special Meeting and any adjournment, postponement or recess thereof.

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What If I Request and Return a Proxy Card But Do Not Make Specific Choices?

        If you request a proxy card and return the proxy card signed and dated without marking any voting selections, all of your shares of Company Common Stock will be voted FOR the adoption of the merger agreement, FOR the approval of the "golden parachute compensation" and FOR the approval of the proposal to adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to approve the proposal to adopt the merger agreement. You should return a proxy even if you plan to attend the Special Meeting in person.

Can I Change My Vote After I Return My Proxy Card?

        Yes. If you are the shareholder of record of your shares, you may revoke your proxy in any one of three ways:

        If your shares are held by your broker, bank or other agent as your nominee, you should follow the instructions provided by your broker, bank or other agent.

How Are Votes Counted?

        Votes will be counted by the inspector of election appointed for the Special Meeting, who will separately count FOR and AGAINST votes, abstentions and broker non-votes and separately count votes in respect of each proposal. A "broker non-vote" occurs when a nominee holding shares for a beneficial owner does not receive instructions from the beneficial owner with respect to the merger proposal, or the proposal for "golden parachute compensation," or the adjournment proposal, counted separately.

        Because Florida law requires the affirmative vote of the holders of a majority of the outstanding shares of Company Common Stock to approve the adoption of the merger agreement, the failure to vote, broker non-votes and abstentions will have the same effect as a vote AGAINST the merger proposal.

        Because the advisory vote to approve the "golden parachute compensation" and approval of the adjournment proposal require the affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote thereon, abstentions will have the same effect as a vote AGAINST the "golden parachute compensation" and adjournment proposal. Broker non-votes will have no effect on the outcome of each of the "golden parachute compensation" proposal and the adjournment proposal. The vote with respect to the "golden parachute compensation" is merely an advisory vote and will not be binding on the Company or Parent. Accordingly, regardless of the outcome of the non-binding, advisory vote, if the merger agreement is adopted by the shareholders and completed, our named executive officers will be eligible to receive the various "golden parachute" payments.

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        If a shareholder's shares are held of record by a broker, bank or other nominee and the shareholder wishes to vote at the Special Meeting, the shareholder must obtain from the record holder a proxy issued in the shareholder's name. Brokers who hold shares in "street name" for clients typically have the authority to vote on "routine" proposals when they have not received instructions from beneficial owners. Absent specific instructions from the beneficial owner of the shares, however, brokers are not allowed to exercise their voting discretion with respect to the approval of non-routine matters, such as the merger agreement. Proxies submitted without a vote by brokers on these matters are referred to as "broker non-votes." Abstentions and broker non-votes are counted for purposes of determining whether a quorum exists at the special meeting.

How Many Votes Are Needed to Approve Each Proposal?

        The Rollover Investors have entered into a separate voting agreement with Parent and the Company that covers an aggregate of approximately 19.8% of the outstanding shares of Company Common Stock, pursuant to which such shareholders have agreed to vote their shares FOR the adoption of the merger agreement and the approval of the merger and any related proposal in furtherance of the merger and the transactions contemplated by the merger agreement.

What Should I Do With My Stock Certificates at this Time?

        Please do not send in stock certificates at this time.    If the merger is completed, you will be sent a letter of transmittal regarding the procedures for exchanging the existing Company's stock certificates for the payment of $27.50 per share in cash, without interest and less any applicable withholding taxes.

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How Many Shares Must Be Present to Constitute a Quorum for the Special Meeting?

        A quorum of shareholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if at least a majority of votes represented by the holders of our outstanding Company Common Stock is present in person or represented by proxy. Only shareholders of record at the close of business on the record date, [    ], 2018, are entitled to receive notice of and to vote at the Special Meeting or any adjournment, postponement or recess thereof. As of the close of business on [    ], 2018, there were outstanding [    ] shares of Company Common Stock.

        Your shares will be counted towards the quorum only if you vote in person at the Special Meeting or if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other agent). Abstentions and broker non-votes will also be counted towards the quorum requirement.

Stock Ownership and Interests of Certain Persons

        Our directors and executive officers have informed us that, as of the date of this Proxy Statement, they intend to vote all of the shares of Company Common Stock owned directly by them in favor of the adoption of the merger agreement. As of [        ], 2018, the record date for the Special Meeting, our directors and executive officers directly owned, in the aggregate, [    ] shares of Company Common Stock entitled to vote at the Special Meeting, or collectively approximately [    ] of the outstanding shares of Company Common Stock entitled to vote at the Special Meeting. Certain of our directors and executive officers have interests that may be different from, or in addition to, those of the Company's shareholders generally. As of [        ], 2018, the record date for the Special Meeting, our directors and executive officers that are not party to the voting agreement (as described in "Special Factors—Voting Agreement" beginning on page 89) directly owned, in the aggregate, [    ] shares of Company Common Stock entitled to vote at the Special Meeting, or collectively approximately [    ] of the outstanding shares of Company Common Stock entitled to vote at the Special Meeting. For more information, please see "Special Factors—Interests of the Company's Directors and Executive Officers in the Merger" beginning on page 83, "Special Factors—Financing of the Merger—Rollover Commitments" beginning on page 81.

        As of [        ], 2018, the record date for the Special Meeting, the Rollover Investors owned [    ] shares of Company Common Stock entitled to vote at the Special Meeting, or approximately [    ], of the outstanding shares of Company Common Stock entitled to vote at the Special Meeting. The Rollover Investors have entered into a voting agreement with Parent and the Company pursuant to which, unless the voting agreement is terminated in accordance with its terms (including upon a termination of the merger agreement in accordance with its terms), such shareholders have agreed to, among other things, vote, or cause to be voted, their shares of Company Common Stock in favor of the adoption of the merger agreement and any related proposal in furtherance of the merger and the transactions contemplated by the merger agreement. See "Special Factors—Voting Agreement" beginning on page 89. The Rollover Investors have interests in the merger that are different from, or in addition to, the interests of the Company's other shareholders. For more information, please see "Special Factors—Financing of the Merger—Rollover Commitments" beginning on page 81.

Expenses of Proxy Solicitation

        The Company will pay for the entire cost of soliciting proxies. In addition to the costs of mailing the proxy materials and posting the proxy materials on the Internet, the Company's directors and employees also may solicit proxies in person, by telephone or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. The Company also may reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. Innisfree M&A Incorporated has been retained by the Company to assist it in the solicitation of proxies, using the means referred to above, and will receive a fee of

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approximately $25,000. The Company will reimburse Innisfree M&A Incorporated for reasonable expenses and costs incurred by it in connection with its services and will indemnify Innisfree M&A Incorporated for certain losses.

Adjournments, Postponements and Recesses

        Although the Company does not expect to do so, if the Company has not received sufficient proxies to constitute a quorum or sufficient votes for the adoption of the merger agreement, the Special Meeting may be adjourned, postponed or recessed for the purpose of soliciting additional proxies. The proposal to approve the adjournment, postponement or recess of the Special Meeting, if necessary or appropriate, to solicit additional proxies requires the affirmative vote of the holders of a majority of the shares of Company Common Stock present or represented by proxy at the Special Meeting and entitled to vote on the matter. Any signed proxies received by the Company that approve the proposal to adjourn, postpone or recess the Special Meeting will be voted in favor of an adjournment or postponement in these circumstances. Any adjournment, postponement or recess of the Special Meeting for the purpose of soliciting additional proxies will allow shareholders who have already sent in their proxies to revoke them at any time prior to their use.

Rights of Shareholders Who Object to the Merger

        Shareholders are entitled to statutory appraisal rights under the FBCA in connection with the merger. This means that holders of Company Common Stock who do not vote in favor of the adoption of the merger agreement may be entitled to have the value of their shares determined by a court of competent jurisdiction in Miami-Dade County, Florida, and to receive payment based on that valuation instead of receiving the $27.50 per share merger consideration. The ultimate amount received in an appraisal proceeding may be more than, the same as or less than the amount that would have been received under the merger agreement.

        Shareholders who do not vote in favor of the adoption of the merger agreement may exercise their right to seek appraisal of the fair value of their shares of Company Common Stock as determined by a court of competent jurisdiction in Miami-Dade County, Florida if the merger is completed in lieu of receiving the per share merger consideration, but only if they do not vote in favor of adopting the merger agreement and otherwise comply with the procedures of Sections 607.1301 through 607.1333 of the FBCA, which is the appraisal rights statute applicable to Florida corporations. A copy of Sections 607.1301 through 607.1333 of the FBCA is included as Appendix C to this Proxy Statement and the procedures are summarized in this Proxy Statement. See "Special Factors—Appraisal Rights" beginning on page 90 and Appendix C to this Proxy Statement.

Other Matters

        The board of directors is not aware of any business to be brought before the Special Meeting other than that described in this Proxy Statement. If, however, other matters are properly presented at the Special Meeting, the persons named as proxies will vote in accordance with their best judgment with respect to those matters.

Questions and Additional Information

        If you have questions about the Special Meeting or the merger after reading this Proxy Statement, or if you would like additional copies of this Proxy Statement or the proxy card, you should contact Innisfree M&A Incorporated, our proxy solicitor, by calling toll-free at 1 (888) 750-5834 (banks and brokers may call collect at (212) 750-5833).

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 THE MERGER AGREEMENT

        This section of the Proxy Statement summarizes the material provisions of the merger agreement, but is not intended to be an exhaustive discussion of the merger agreement. We encourage you to read carefully this entire document, including the Agreement and Plan of Merger attached to this Proxy Statement as Appendix A, for a more complete understanding of the merger. The following description is subject to, and is qualified in its entirety by reference to, the merger agreement. The rights and obligations of the parties are governed by the express terms and conditions of the merger agreement and not the summary set forth in this section or any other information contained in this Proxy Statement.

        The summary of the merger agreement in this Proxy Statement is included to provide you with information regarding some of its material provisions. Factual disclosures about the Company contained in this Proxy Statement or in the Company's public reports filed with the SEC may supplement, update or modify the factual disclosures about the Company contained in the merger agreement and described in this summary. The merger agreement contains representations and warranties made by and to the parties thereto as of specific dates. The statements embodied in those representations and warranties were made for purposes of that contract between the parties and are subject to qualifications and limitations agreed by the parties in connection with negotiating the terms of that contract. In particular, in your review of the representations and warranties contained in the merger agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the merger agreement may have the right not to close the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the merger agreement, rather than establishing matters as facts. Furthermore, some of those representations and warranties may not be accurate or complete as of any particular date because they are subject to a contractual standard of materiality different from that generally applicable to public disclosures to shareholders and reports and documents filed with the SEC and in some cases were qualified by disclosures that were made by each party to the other, which disclosures are not reflected in the merger agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this Proxy Statement, may have changed since the date of the merger agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this Proxy Statement. The merger agreement is described in, and included as Appendix A to, this Proxy Statement only to provide you with information regarding its terms and conditions and not to provide any factual information regarding the Company, Parent or the Company's or Parent's respective businesses. The representations and warranties in the merger agreement and the description of them in this document should not be read alone, but instead should be read in conjunction with the other information contained in the reports, statements and filings the Company publicly files with the SEC.

General; The Merger

        The merger agreement provides for the merger of Merger Sub with and into the Company upon the terms, and subject to the conditions, set forth in the merger agreement and in accordance with the FBCA. After the completion of the merger, the separate corporate existence of Merger Sub will cease and the Company will continue its corporate existence under the FBCA as the surviving corporation in the merger and will become a wholly-owned subsidiary of Parent. If the merger is completed, the shares of Company Common Stock will be delisted from the Nasdaq Global Market, will be deregistered under the Exchange Act and will no longer be publicly traded, and the Company will no longer be required to file periodic reports with the SEC with respect to the Company Common Stock. The Company will be a privately held corporation and the Company's current shareholders (other than the Rollover Investors) will cease to have any ownership interest in the Company or rights as the

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Company's shareholders. Therefore, following the completion of the merger, the Company's current shareholders (other than the Rollover Investors) will not participate in any of the Company's future earnings or growth and will not benefit from any appreciation in the Company's value, if any.

Closing and Effective Time of the Merger

        Subject to the satisfaction or waiver of all of the conditions to closing contained in the merger agreement, the closing of the merger will take place (a) on the second business day after the day on which the conditions to closing set forth in the merger agreement (other than those conditions that by their terms are to be satisfied by actions taken at the closing, but subject to the satisfaction or waiver of those conditions) are satisfied or waived or (b) at such other time as Parent and the Company may agree in writing.

        If the merger is not consummated by December 14, 2018, the Company or Parent may terminate the merger agreement, except such right to terminate the merger agreement will not be available to such party if such party has breached any of its representations, warranties, covenants or agreements in the merger agreement, which breach has materially contributed to, or resulted in, the failure to consummate the merger by such date.

        The effective time of the merger will occur upon the filing of the articles of merger with the Secretary of State of the State of Florida (or at such later date as the Company and Parent may agree and specify in the articles of merger) in accordance with the FBCA.

Certificate of Incorporation; Bylaws

        At the effective time, the certificate of incorporation and bylaws of the Company will be amended and restated in their entirety in the form agreed to by the Company, Parent and Merger Sub, until amended in accordance with their terms or by applicable law.

Conversion of Securities

Common Stock

        Except for (i) shares of Company Common Stock held by the Company or any of its wholly-owned subsidiaries or Parent or its subsidiaries, (ii) shares of Company Common Stock held by the Rollover Investors, and (iii) shares of Company Common Stock whose holders have not voted in favor of adopting the merger agreement and have demanded and perfected their appraisal rights in accordance with, and have complied in all respects with, the FBCA ((i) through (iii) collectively, the "excluded shares"), each share of Company Common Stock issued and outstanding immediately prior to the effective time of the merger shall, without any action on the part of the holder thereof, be converted into the right to receive $27.50 in cash, without interest and less applicable withholding taxes. At the effective time of the merger, each share of Company Common Stock theretofore issued and outstanding will be cancelled automatically and cease to exist.

Treatment of Outstanding Options, Stock Appreciation Rights and Restricted Stock Awards

        Unless otherwise agreed upon between Parent and any applicable stock option or stock appreciation right holder, at the effective time of the merger, each option to acquire shares of Company Common Stock and each stock appreciation right under the Company's equity plan, outstanding immediately prior to the effective time of the merger, whether or not then vested or exercisable, by virtue of the merger, will be canceled and each stock option and stock appreciation right will be converted into the right to receive an amount in cash, without interest, equal to the excess, if any, of the merger consideration over the per share exercise or purchase price of the applicable stock option or stock appreciation right at the time of calculation multiplied by the aggregate number of

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shares of Company Common Stock that may be acquired upon exercise of such stock option or stock appreciation right.

        Unless otherwise agreed upon between Parent and any restricted common stock holder, at the effective time of the merger, each share of restricted common stock that vests solely based on continued service outstanding immediately prior to the effective time, by virtue of the merger will be converted into the right to receive the merger consideration per share of restricted common stock, except that each share of restricted common stock that vests solely based on continued service held by a non-employee member of the board of directors will, prior to such conversion, be prorated based on the number of days since the date of grant.

        Unless otherwise agreed upon between Parent and restricted stock holder, each restricted stock award that vests based on the achievement of performance goals outstanding immediately prior to the effective time, by virtue of the merger, will be converted at the effective time into the right to receive a restricted cash award on the same terms and conditions (including applicable time and/or service vesting conditions but excluding performance goals) applicable to such restricted stock award under the applicable Company equity plan and award agreement in effect immediately prior to the effective time, with respect to an amount of cash determined by multiplying the per share merger consideration by the number of shares of Company Common Stock that would vest based on the achievement of any applicable performance goals at the target level. For the avoidance of doubt, any provisions relating to the forfeiture, acceleration of vesting or payment of any award contained in a restricted stock award that vests based on the achievement of performance goals will apply to the restricted cash award; provided that, in the event any such restricted stock award does not contain such an acceleration provision, such restricted cash award will vest and be paid upon the termination of the holder's employment by the Company without cause or by the holder for good reason (each, as defined in the most recent Company equity plan), in each case, subject to the execution and delivery (without revocation) of a release of claims in favor of the Company in the form provided by the Company. Moreover, each restricted stock award subject to any performance-based vesting condition held by Mr. Jorge Narino or Ms. Tricia McDermott Thompkins will be converted into a right to receive a cash payment equal to the product of: (a) the per share merger consideration and (b) the number of shares of Company Common Stock subject to such restricted stock award that would have vested based on target level achievement.

        All restricted stock units (including those held by George Feldenkreis) payable in shares of Company Common Stock or whose value is determined with reference to the value of shares of Company Common Stock will be cancelled at the effective time of the merger.

Payment Procedures

        No less than three business days before the effective time of the merger, Parent will select a bank or trust company, satisfactory to the Company in its reasonable discretion, to act as the paying agent in the merger and will enter into a paying agent agreement with the paying agent, the terms and conditions of which shall be satisfactory to the Company in its reasonable discretion. Parent will be responsible for all fees and expenses of the paying agent. Immediately prior to the effective time of the merger, Parent will deposit or cause to be deposited with the paying agent sufficient funds to pay the per share merger consideration for all issued and outstanding shares of Company Common Stock (other than the excluded shares) entitled to payment thereof and to pay the amounts described above to holders of stock options, certain restricted stock awards and restricted stock units. At the effective time of the merger, Parent will cause the paying agent to mail a letter of transmittal in the paying agent's standard form (and reasonably satisfactory to Parent and the Company) and instructions to each holder of record of Company Common Stock. The letter of transmittal and instructions will tell such holder: (i) that delivery shall be effected, and risk of loss and title to such holder's shares shall pass, only upon proper delivery of such holder's stock certificates (or affidavit of loss in lieu thereof) to the

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paying agent or, in the case of book-entry shares, upon adherence to the procedures set forth in the letter of transmittal and (ii) instructions for surrendering such certificates or book-entry shares (if the holder's shares are not certificated) in exchange for the merger consideration. Such instructions will provide that: (A) at the election of the holder, stock certificates may be surrendered by hand delivery or otherwise and (B) the merger consideration payable in exchange for the stock certificates and/or book-entry shares will be payable by wire transfer to the surrendering holder.

        You should not return your stock certificates with the enclosed proxy card, and you should not forward your stock certificates to the paying agent without a letter of transmittal.

        You will not be entitled to receive the merger consideration until you surrender your stock certificate or certificates (if your shares are certificated) (or affidavit of loss in lieu thereof) to the paying agent, together with a duly completed and executed letter of transmittal and any other documents reasonably required by the paying agent. The merger consideration may be paid to a person other than the person in whose name the corresponding stock certificate is registered if (i) the surrendered stock certificate is accompanied by all documents required by Parent to evidence and effect that transfer and (ii) the person requesting such payment pays any applicable transfer taxes or other taxes required by reason of payment of the merger consideration to a person other than the registered holder or establishes to the satisfaction of Parent and the paying agent that such tax has been paid or is not applicable.

        No interest will be paid or will accrue on the cash payable upon surrender of the stock certificates. Parent, Merger Sub, the surviving corporation and the paying agent will be entitled to deduct and withhold from any consideration otherwise payable under the merger agreement as may be required to deduct and withhold with respect to the payment of such consideration under the Code, or any applicable state, local or foreign tax law. To the extent that any amounts are so deducted and withheld and paid to the appropriate taxing authorities, those amounts will be treated as having been paid to the person in respect of whom such deduction or withholding was made for all purposes under the merger agreement.

        None of Parent, the surviving corporation or the paying agent will be liable to any holder of stock certificates or book-entry shares for any amount properly paid to a public official under any applicable abandoned property, escheat or similar law.

        The paying agent will invest the payment fund as directed by Parent, provided, that such investment shall be in obligations of, or guaranteed by, the United States, in commercial paper obligations of issuers organized under the law of a state of the United States, rated A-1 or P-1 or better by Moody's Investors Service, Inc. or Standard & Poor's Ratings Service, respectively, or in certificates of deposit, bank repurchase agreements or bankers' acceptances of commercial banks with capital exceeding $10.0 billion, or in mutual funds investing solely in such assets. Any such investment will be for the benefit, and at the risk, of Parent, and any interest or other income resulting from such investment will be for the benefit of Parent; provided, however, no such investment or losses thereon will affect the merger consideration payable to the holders of Company Common Stock immediately prior to the effective time of the merger and Parent will promptly provide, or will cause the surviving corporation to promptly provide, additional funds to the paying agent for the benefit of the holders of Company Common Stock, stock options, performance stock awards and restricted stock awards immediately prior to the effective time of the merger in the amount of any such losses to the extent necessary to satisfy the obligations of Parent and the surviving corporation in connection with the merger.

        Any portion of the payment fund which remains unclaimed by former shareholders of the Company one year after the effective time of the merger will be delivered by the paying agent to Parent upon demand, and any former shareholders who have not surrendered their shares in exchange for the merger consideration will thereafter look only to Parent and/or the surviving corporation for payment of the merger consideration.

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Representations and Warranties

        The representations and warranties of the Company contained in the merger agreement are the product of negotiations among the parties thereto and are solely for the benefit of Parent and Merger Sub. Any inaccuracies in such representations and warranties are subject to waiver by the parties to the merger agreement and are qualified by a confidential disclosure letter containing non-public information and made for the purposes of allocating contractual risk between the parties instead of establishing these matters as facts. Consequently, the Company's representations and warranties in the merger agreement may not be relied upon by persons other than the parties thereto as characterizations of actual facts or circumstances as of the date of the merger agreement or as of any other date, nor may you rely upon them in making the decision to approve and authorize the merger agreement and the transactions contemplated by the merger agreement. The merger agreement may only be enforced against the Company by Parent and Merger Sub. Moreover, information concerning the subject matter of the representations and warranties of the Company may change after the date of the merger agreement, which subsequent information may or may not be reflected fully in the Company's public disclosures.

        The Company's representations and warranties in the merger agreement relate to, among other things:

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        Many of the Company's representations and warranties are qualified by the absence of a "Company Material Adverse Effect," which means, for purposes of the merger agreement, any fact, circumstance, change, event, development, occurrence or effect that has, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, properties, assets or results of operations or financial condition of the Company and its subsidiaries, taken as a whole. Notwithstanding the foregoing, a "Company Material Adverse Effect" does not include such effects relating to or arising from:

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except in the cases of the first eight bullets above, to the extent that any such effect has a disproportionate adverse impact on the Company and its subsidiaries, taken as a whole, relative to other similarly situated companies in the principal industries in which the Company and its subsidiaries operate.

        The merger agreement also contains various representations and warranties made by Parent and Merger Sub to the Company that are subject, in some cases, to specified exceptions and qualifications. The representations and warranties relate to, among other things:

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        The representations and warranties in the merger agreement of each of the Company, Parent and Merger Sub will terminate upon the consummation of the merger or the termination of the merger agreement in accordance with its terms.

Covenants of the Company

        The Company has various obligations and responsibilities under the merger agreement from the date of the merger agreement until the effective time of the merger, including, but not limited to, the following:

Conduct of Business Pending the Merger

        During the period between the date of the merger agreement and the earlier of the effective time of the merger or the termination of the merger agreement, except as contemplated by the merger agreement, as set forth in the Company disclosure letter or as required by the applicable law, without the prior written consent of Parent (such consent not to be unreasonably withheld, delayed or conditioned), the Company has agreed to, and has agreed to cause each of its subsidiaries to, conduct its operations only in the ordinary course consistent with past practice, and to use its reasonable best efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and its subsidiaries, and to preserve, in all material respects, the current relationships of the Company and its subsidiaries with customers, licensees, suppliers and other persons with which the Company and its subsidiaries have material business relations.

        Subject to certain exceptions, the Company may not, pursuant to the merger agreement, take (and must cause its subsidiaries not to take) any of the following actions during the period between the date of the merger agreement until the earlier of the effective time of the merger or the termination of the merger agreement, without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned):

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        Any or all actions taken by, or omissions of, the Company, in an effort to satisfy or facilitate the Financing Contingencies will not constitute a breach of the Company's obligations under these provisions (including for purposes of the Parent's termination rights and the Company's financing cooperation covenants), and any or all action taken by, or omission of, the Company in breach of these provisions at the direction of or with the consent of Oscar Feldenkreis, in his capacity as Chief Executive Officer of the Company, or which Oscar Feldenkreis, in his capacity as Chief Executive Officer of the Company, had prior or contemporaneous knowledge of or reasonably should have had prior or contemporaneous knowledge of, shall in each case be disregarded and not deemed to be a breach of these provisions (including for purposes of the Parent's termination rights and the Company's financing cooperation covenants). In this context "Financing Contingencies" means (i) the "Excess Availability" requirement described in clause (d) of Exhibit C of the Wells Commitment Letter; (ii) (x) the "Reorganization" as defined in the Wells Commitment Letter, and (y) the "Reorganization" as defined in the Fortress Commitment Letter; and (iii) the approval of the "Agent" and initial "Lenders" (in each case as defined in the Wells Commitment Letter or Fortress Commitment Letter, as applicable) under each of the Wells Commitment Letter and the Fortress Commitment Letter of the form and substance of (x) the intercompany license agreement relating to the intellectual property, and (y) the intercompany lease agreement relating to the leasing of property of the Company.

Access to Information

        The Company will, and will cause its subsidiaries to, (i) provide to Parent and its representatives access at reasonable times upon prior notice to the officers, employees, properties, auditors, authorized representatives, books and records of the Company and its subsidiaries and (ii) furnish promptly such information concerning the Company and its subsidiaries as Parent or its representatives may reasonably request. Nothing in the merger agreement shall require the Company or any of its subsidiaries to grant such access if the Company determines that such access would reasonably be expected to disrupt or impair the business or operations of the Company or any of its subsidiaries or disclose information to the extent such disclosure would, in the Company's good faith opinion after consultation with legal counsel, (A) result in a waiver of attorney-client privilege, work product doctrine or similar privilege or (B) violate any applicable law or any confidentiality obligation of such party. In the event that the Company does not provide access or information in reliance on the preceding sentence, it must provide notice to Parent that it is withholding such access or information and the Company must use its reasonable best efforts to communicate, to the extent feasible, the applicable information in a way that would not violate the applicable law, contract or obligation or risk waiver of such privilege. Notwithstanding the foregoing, Parent and the Company must comply with and cause their respective representatives to comply with the obligations under the confidentiality agreements, dated March 15, 2018, between each of George Feldenkreis and Fortress Investment Group, LLC, on the one hand, and the Company, on the other hand with respect to the foregoing information, provided that Parent may provide such information to potential sources of capital and to rating agencies and prospective lenders and investors during syndication of the debt financing, subject to customary confidentiality agreements that have been approved in advance by the Company (such approval not to be unreasonably withheld, conditioned or delayed).

No Solicitation of Takeover Proposals; Fiduciary Out

        Except as described below, from the date of the merger agreement until the earlier of obtaining shareholder approval for the adoption of the merger agreement and the termination of the merger

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agreement, the Company must not, and must cause its subsidiaries and direct its representatives not to, directly or indirectly:

        Notwithstanding the foregoing, at any time prior to obtaining shareholder approval for the adoption of the merger agreement, following the Company's receipt of a takeover proposal, the Special Committee and the board of directors are permitted to participate in discussions regarding such takeover proposal solely to clarify the terms thereof, and, with respect to a written, bona fide takeover proposal that was not the result of a breach in any material respect of the "no-shop" provisions in the merger agreement, if the Special Committee or the board of directors determines in good faith (i) after consultation with outside legal and financial advisors that a takeover proposal constitutes or would reasonably be expected to lead to a superior proposal (as defined below) and (ii) after consultation with outside legal counsel that the failure to take the actions set forth in clauses (A) and (B) below with respect to such takeover proposal would reasonably be expected to be inconsistent with its fiduciary duties to shareholders under applicable law, then the Company may, in response to such takeover proposal, (A) furnish access and non-public information with respect to the Company and any of its subsidiaries to the person who has made such takeover proposal pursuant to an acceptable confidentiality agreement, which means on terms no less favorable (except with respect to standstill provisions to the extent required to permit submission of a takeover proposal) in the aggregate to the Company than the confidentiality agreements, dated March 15, 2018, between each of George Feldenkreis and Fortress Investment Group, LLC, on the one hand, and the Company, on the other hand, so long as any written non-public information provided under clause (A) has previously been provided to Parent or is provided to Parent promptly after being provided to such person, and (B) participate in discussions and negotiations regarding such takeover proposal. Notwithstanding anything to the contrary in the merger agreement, the Special Committee and the board of directors shall be permitted, to the extent it determines in good faith, after consultation with outside legal counsel, that failure to take such action would reasonably be expected to be inconsistent with its fiduciary duties, to modify, waive, amend or release any existing standstill obligations owed by any Person to the Company or any of its subsidiaries.

        A "takeover proposal" is defined in the merger agreement to mean any bona fide written proposal or offer relating to:

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        A "superior proposal" is defined in the merger agreement to mean any bona fide written takeover proposal (with the percentages in the definition of such term changed from 20% to 50%), not obtained in violation of the "no-shop" provisions of the merger agreement, which the Special Committee has determined in good faith, after consultation with the Company's outside legal counsel and financial advisors:

        The Company must advise Parent orally and in writing of any of the following within one business day of receipt thereof (but not including the date of the Company's receipt thereof): (i) any takeover proposal, specifying the material terms and conditions of such takeover proposal and the identity of the party making such takeover proposal and (ii) any material modifications to the financial or other material terms and conditions of such takeover proposal. The Company shall keep Parent reasonably informed on a current basis with respect to the status and material terms of any such takeover proposal.

        Except as described below, the Special Committee and the board of directors may not: (i) withdraw, modify or amend (or publicly propose to withdraw, modify or amend) its recommendation that the Company's shareholders adopt the merger agreement in any manner adverse to Parent, (ii) approve, endorse or recommend (or publicly propose to do so) a takeover proposal or (iii) approve, recommend or allow the Company to enter into a contract relating to a takeover proposal (other than acceptable confidentiality agreements).

        Notwithstanding the foregoing, at any time prior to the adoption of the merger agreement by the Company's shareholders, the Special Committee or the board of directors may, in response to a superior proposal received by the Special Committee or the board of directors after the date of the merger agreement, if the Special Committee or the board of directors concludes in good faith, following consultation with its outside legal counsel, that its failure to withdraw, modify or amend its recommendation would reasonably be expected to be inconsistent with its fiduciary duties, withdraw, modify or amend its recommendation or terminate the merger agreement, upon payment of a termination fee (described below), to enter into a contract with respect to such superior proposal, but only if:

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        Nothing contained in the merger agreement prohibits the Special Committee or the board of directors, at any time prior to the adoption of the merger agreement by the Company's shareholders, if any event, fact, development, circumstance or occurrence (but specifically excluding any takeover proposal or superior proposal) that improves the business, assets, operations or prospects of the Company or its subsidiaries (or that fundamentally impairs Parent's ability to consummate the merger on the terms set forth in the merger agreement) that was not known (and, other than with respect to Parent, should not reasonably have been known) to the Special Committee and the board of directors (other than George Feldenkreis and Oscar Feldenkreis) as of the date of the merger agreement (an "intervening event"), becomes known to the Special Committee and the board of directors (other than George Feldenkreis and Oscar Feldenkreis) after the date of the merger agreement, from withdrawing, modifying or amending its recommendation that the Company's shareholders adopt the merger agreement in a manner adverse to Parent if the board of directors has determined in good faith, following consultation with its outside legal counsel, that its failure to withdraw, modify or amend its recommendation that the Company's shareholders adopt the merger agreement would reasonably be expected to be inconsistent with its fiduciary duties to the Company's shareholders under applicable law, but only if:

        Nothing contained in the merger agreement prohibits the Company from issuing a "stop, look and listen" statement pending disclosure of its position thereunder or making required disclosure to the Company's shareholders if, in the good faith judgment of the Special Committee or the board of directors, after consultation with its outside legal counsel, the failure to do so would be inconsistent with its fiduciary duties under applicable law or disclosure is required under applicable law.

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Proxy Statement; Schedule 13E-3

        The merger agreement requires, as promptly as reasonably practicable following the date of the merger agreement, the Company to prepare and file with the SEC a preliminary Proxy Statement and the Company and Parent to jointly prepare and file with the SEC a transaction statement pursuant to Rule 13E-3 under the Exchange Act on Schedule 13E-3. The Company must use its reasonable best efforts as promptly as reasonably practicable (and after consultation with Parent) to respond to any comments or requests for additional information from the SEC with respect to the Proxy Statement and the Company and Parent must use reasonable best efforts as promptly as reasonably practicable to jointly respond to any comments or requests for additional information made by the SEC with respect to the Schedule 13E-3. The Company must use reasonable best efforts to cause this Proxy Statement to be mailed to the Company's shareholders as promptly as reasonably practicable after confirmation from the SEC that it has no further comments on this Proxy Statement and the Schedule 13E-3 (or that this Proxy Statement and the Schedule 13E-3 is otherwise not to be reviewed by the SEC). Parent and Merger Sub are obligated to cooperate with the Company in the preparation of this Proxy Statement and the Schedule 13E-3. Without limiting the generality of the foregoing, the merger agreement requires (i) each of Parent and Merger Sub to furnish to the Company the information relating to it and its affiliates required by the Exchange Act and the rules and regulations promulgated thereunder to be set forth in this Proxy Statement that is customarily included in proxy statements or Rule 13E-3 transaction statements on Schedule 13E-3 prepared in connection with transactions of the type contemplated by the merger agreement or that is reasonably requested by the Company, and (ii) prior to the filing with the SEC or the mailing to the Company's shareholders of this Proxy Statement or the filing with the SEC of the Schedule 13E-3, the Company to provide Parent with a reasonable opportunity to review and comment on, and the Company to reasonably consider all comments reasonably proposed by Parent with respect to, this Proxy Statement and the Schedule 13E-3. The Company must promptly (A) notify Parent upon the receipt of any such comments or requests and (B) provide Parent with copies of all correspondence between the Company and its representatives, on the one hand, and the SEC and its staff, on the other hand, to the extent such correspondence relates to this Proxy Statement or the Schedule 13E-3.

        The Company will establish a record date for purposes of determining the shareholders entitled to notice of and vote at the shareholders meeting. Following the clearance by the SEC of the Proxy Statement and the Schedule 13E-3, the Company will call and hold the Company shareholders meeting as promptly as reasonably practicable for the purpose of obtaining the shareholder's approval of the merger agreement.

Covenants of Parent and/or Merger Sub

Conduct of Business During Merger

        Parent must not, and must not permit any of its affiliates to, without the prior written consent of the Company (such consent not to be unreasonably withheld, delayed or conditioned) take or agree to take any action that would reasonably be expected to (i) delay or prevent the consummation of the transactions contemplated by the merger agreement, (ii) impose or cause any delay in the obtaining of, or increase the risk of not obtaining, any governmental authorization necessary to consummate the transactions contemplated by the merger agreement or the expiration or termination of any waiting period under applicable law, (iii) result in any governmental authority entering an order prohibiting the consummation of the transactions contemplated by the merger agreement or (iv) materially interfere with Parent's (or its affiliates') ability to make available to the paying agent at the effective time of the merger funds sufficient to satisfy all of Parent's and Merger Sub's obligations under the merger agreement including the payment by Parent and Merger Sub of the merger consideration, any fees and expenses of or payable by Parent, Merger Sub or the surviving corporation, and any related repayment or refinancing of any indebtedness of the Company or any of its subsidiaries, and any other amounts

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required to be paid in connection with the consummation of the transactions contemplated by the merger agreement.

Employee Matters

        The merger agreement requires Parent to, or to cause the surviving corporation to, for one year following the merger, provide to individuals who, immediately prior to the effective time of the merger, were employees of the Company or any of its subsidiaries (i) a salary or hourly wage rate and short-term (annual or more frequent) bonus or commission opportunity no less favorable than that provided to such employee immediately prior to the effective time of the merger and (ii) other compensation and benefits (but not including equity and equity-based awards) that for such individual are substantially comparable in the aggregate to such compensation and benefits being provided to Company employees immediately prior to the effective time of the merger. For any employee who is terminated within the later of one year after the merger or the remaining term of any individual employment, severance or separation agreement in effect immediately prior to the effective time of the merger under circumstances that would have given the employee a right to severance payments and benefits under the Company's severance arrangements in effect immediately prior to the merger, the Company will provide such employee with severance payments and benefits no less favorable than those that would have been provided to the employee under the Company's severance arrangements. Additionally, Parent will, or will cause the surviving corporation to recognize service with the Company prior to the effective time of the merger for purposes of vesting, eligibility to participate and for calculating severance and vacation entitlements (which will exclude benefit accruals under any qualified or non-qualified defined benefit pension plan). Parent will use reasonable best efforts to waive, or cause to be waived, any pre-existing condition or eligibility limitations to the extent waived or satisfied under the Company's existing plans and give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, employees under similar plans maintained by the Company immediately prior to the effective time of the merger. The merger agreement requires Parent to, or to cause the surviving corporation to (i) allow employees to use their accrued but unused vacation time pursuant to the terms of Parent's or the surviving corporation's vacation policy, as in effect from time to time and (ii) if any employee's employment terminates within one year following the merger under circumstances entitling the employee to severance pay under a severance policy or arrangement, pay the employee, in cash, an amount equal to the value of the accrued vacation time. However, the merger agreement does not create any right to any compensation or benefits, guarantee employment for any period of time or preclude Parent or surviving corporation from terminating any employee, require continuation of any employee benefit plan or otherwise constitute an amendment to any employee benefit plan. The agreements and obligations with respect to employee-related matters described in this paragraph do not give any employee or any other person who is not expressly a party to the merger agreement any rights as a third party beneficiary or otherwise under the merger agreement.

Indemnification of Directors and Officers; Directors' and Officers' Insurance

        Parent has agreed to maintain, and to cause the surviving corporation to maintain for at least six years following the effective time of the merger the current policies of directors' and officers' liability insurance maintained by the Company or policies of at least the same coverage and amounts containing terms and conditions that are no less advantageous with respect to claims arising out of or relating to events which occurred before or at the effective time of the merger (including in connection with the negotiation and execution of the merger agreement and the consummation of the transactions contemplated thereby). Such policies shall not have an annual premium in excess of 250% of the renewal premium being paid by the Company in connection with its June 2018 renewal. In lieu of Parent purchasing such policy after the effective time of the merger, the Company may, prior to the effective time of the merger, purchase a "tail" directors' and officers' liability insurance policy covering

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the aforementioned matters at a cost not to exceed 250% of the renewal premium paid by the Company in connection with its June 2018 renewal and if the Company purchases such a policy prior to the effective time of the merger, Parent and the surviving corporation shall maintain such policy for six years.

        In addition, for a period of six years after the effective time of the merger, Parent and the surviving corporation have agreed to indemnify and hold harmless each present and former director, officer or employee of the Company or any of its subsidiaries against all costs or expenses (including legal fees and disbursements), judgments, fines, losses, claims, damages, liabilities, and amounts paid in settlement in connection with any action, arbitration, litigation, suit or other civil or criminal proceeding or governmental investigation, including liabilities arising out of or relating to all acts and omissions arising out of or relating to their services as directors or officers and employees of the Company or its subsidiaries occurring prior to the effective time, whether asserted or claimed before or after the effective time of the merger.

Agreements with Principal Shareholders

        Parent and Merger Sub have agreed that following the date of the merger agreement and until the adoption of the merger agreement by the Company's shareholders, neither of them nor their respective affiliates will enter into any agreement with any of the Rollover Investors or any of their respective affiliates relating to the merger or the business, operations or other interests of the Company and its subsidiaries after the effective time of the merger unless the agreement shall terminate upon the termination of the merger agreement without payment or penalty or any further obligations. Parent and Merger Sub have also agreed that following the date of the merger agreement and until the adoption of the merger agreement by the Company's shareholders, Parent will not amend, or waive any requirement under, the voting agreement or the Rollover Letters without the prior written consent of the Company.

Certain Covenants of Each Party

Reasonable Best Efforts

        Under the Merger Agreement, each of the Company, Parent and Merger Sub is obligated to, and to cause its affiliates to, use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to ensure that the conditions to the parties' respective obligations to consummate the merger are satisfied and to consummate the transactions contemplated by merger agreement as promptly as reasonably practicable; provided that prior to the effective time, in no event will the Company or any of its subsidiaries be required to pay or otherwise incur any liability with respect to any fees (except for customary fees to governmental authorities), penalties or other consideration to obtain any consent or approval required for the consummation of the transactions contemplated by the merger agreement.

Approvals and Consents

        The parties have agreed to cooperate with each other and use their reasonable best efforts to obtain all required consents, approvals or other authorizations, including, without limitation, all consents of governmental entities and certain other consents required in connection with the consummation of the transactions contemplated by the merger agreement.

Filings and Authorizations

        The Company and Parent have agreed to cooperate and consult with each other in connection with making required filings and notifications pursuant to the Securities Act of 1933 and the Exchange Act, the HSR Act and any other applicable foreign competition law, the FBCA, the rules and regulations of

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the Nasdaq Global Market and any other applicable laws, including by providing copies of all relevant documents to the non-filing party and its advisors prior to filing. In addition, each of the Company and Parent have agreed to take or cause to be taken all other actions necessary, proper or advisable (consistent with their obligations to obtain the necessary governmental authorizations under the merger agreement) to cause the expiration of the applicable waiting periods, or receipt of required consents, approvals or authorizations, as applicable, under the laws described in the preceding sentence as soon as reasonably practicable, including by (i) selling, licensing, divesting or disposing of or holding separate any entities, assets, intellectual property or businesses (including, after the effective time, the surviving corporation or any of its subsidiaries), (ii) terminating, amending or assigning existing relationships or contractual rights and obligations, (iii) changing or modifying any course of conduct regarding future operations, (iv) otherwise taking actions that would limit its freedom of action with respect to, or its ability to retain, one or more of their respective businesses, assets or rights or interests therein and (v) committing to take any such actions in the foregoing clauses (i), (ii), (iii) or (iv) (all of the foregoing a "divestiture action"); provided that neither Parent nor its affiliates shall be required to, and the Company and its subsidiaries shall not, without the prior written consent of Parent, take or agree to take or commit to take any divestiture action with respect to any assets (whether tangible or intangible) that, individually or in the aggregate, would reasonably be expected to have a Company material adverse effect (with references to the Company in the definition thereof also being deemed to be references to Parent for purposes of such Section).

        None of Parent, Merger Sub or the Company may consent to any voluntary extension of any statutory deadline or waiting period or to any voluntary delay of the consummation of the transactions expressly contemplated by the merger agreement at the request of any governmental entity without the consent of the other parties, which consent shall not be unreasonably withheld, delayed or conditioned.

Transaction Litigation

        The merger agreement provides that, prior to the earlier of the effective time or the termination of the merger agreement, the Company shall control the defense of any legal action (including any class action or derivative litigation) relating directly or indirectly to the merger agreement or transactions contemplated by the merger agreement, including disclosures made under securities laws and regulations related thereto ("transaction litigation"); provided, however, that the Company shall, as promptly as reasonably practicable after obtaining knowledge thereof, notify Parent in writing of, and shall (i) give Parent the right to review and comment on all material filings or responses to be made by the Company in connection with any transaction litigation (and the Company shall in good faith take such comments into account), and the opportunity to participate in the defense and settlement of, any transaction litigation and (ii) if Parent does not exercise such right to participate (subject to the Company's control right), keep Parent reasonably and promptly informed with respect to the status of such transaction litigation. Except as permitted by the confidential Company disclosure letter, no compromise or settlement of any transaction litigation shall be agreed to by the Company without Parent's prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).

Public Announcements

        The merger agreement requires that the Company and Parent must consult with each other prior to issuing any press releases or otherwise making any public statements with respect to the merger agreement or the transactions contemplated thereby, except that no such consultation is necessary: (i) to the extent disclosure may be required by applicable law or any Nasdaq Global Market requirement, in which case that party must use its reasonable best efforts to consult with the other party before issuing any such release or making any such public statement, (ii) in response to questions from the press, analysts, investors or those attending industry conferences, and may make internal announcements to employees, to the extent that such statements are not inconsistent with previous

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press releases, public disclosures or public statements made jointly by the parties and otherwise in compliance with these provisions and do not reveal material non-public information regarding the merger agreement or the transactions contemplated by the merger agreement, or (iii) in connection with any press release or other public statement or comment to be issued or made with respect to any takeover proposal or certain other actions specified in the "no-shop" provisions of the merger agreement. Additionally, the Company may (i) communicate with customers, vendors, suppliers, financial analysts, investors and media representatives in a manner consistent with its past practice in compliance with applicable law, and (ii) make public statements consistent with prior public disclosures previously approved by Parent for external distribution.

Financing

        The merger agreement requires each of Parent and Merger Sub, and requires them to cause each of their respective affiliates, to use its reasonable best efforts to obtain the debt financing contemplated by the Debt Commitment Letters (reflecting the flex provisions to the extent necessary) on the date of the closing of the merger and to consummate the Rollover Investment in accordance with the terms of the Rollover Letters, including, among other things, complying with the terms of each such commitment letter and the Rollover Letters applicable to them, entering into definitive financing agreements that are no less favorable to Parent and Merger Sub than those contained in the Debt Commitment Letters (or on terms and conditions otherwise acceptable to Parent that would not (x) reduce the aggregate amount of the financing unless the Rollover Investment is increased by a corresponding amount or (y) impose new or additional conditions precedent to, or delay, the receipt of such financing), satisfying on a timely basis all applicable conditions under the Debt Commitment Letters and Rollover Letters and consummating the financing and the Rollover Investment at or prior to the closing of the merger. Further, Parent is required to keep the Company regularly informed with respect to the debt financing, including providing copies of all definitive documents related to such financing, as well as the Rollover Investment. Further, Parent and Merger Sub must provide the Company with prompt notice of any material breach or default by any party to any of the Debt Commitment Letters or Rollover Letters or definitive agreements related to the financing of which Parent or Merger Sub becomes aware. In the event that any portion of the financing becomes unavailable and such portion is not otherwise available under the debt financing or Rollover Investment (as applicable), Parent will notify the Company and use its reasonable best efforts to arrange alternative financing from the same or other sources of financing on terms and conditions (including the economic terms, covenants, flex provisions and funding conditions) no less favorable to Parent and Merger Sub, taken as a whole, than those contained in the Debt Commitment Letters (taking into account the flex provisions) as of the date of the merger agreement, and in an amount sufficient to enable Parent to consummate the merger on the alternative conditions.

        Prior to the closing of the merger, Parent may not, without the prior written consent of the Company, amend, modify, supplement or waive any of the conditions or contingencies to funding contained in the Debt Commitment Letters (or definitive agreements related thereto) or the Rollover Letters, the effect of which (i) reduces (or could have the effect of reducing) the amount of aggregate cash proceeds available from the financing (including by increasing the amount of fees to be paid or original issue discount other than as a result of the exercise of any related "market flex" provisions) unless there is a corresponding increase in the Rollover Investment, (ii) imposes, or could reasonably be expected to impose, new or additional conditions or contingencies to the receipt of the financing or otherwise expands, amends or modifies any other material provision of any financing commitment, (iii) would delay, prevent or adversely impact, or would reasonably be expected to have the effect of delaying, preventing or adversely impacting, in each case, in any material respect, the funding of the financing on the closing date of the merger agreement, or (iv) would prevent or adversely impact or delay, or, individually or in the aggregate, would reasonably be expected to have the effect of preventing, adversely impacting, or delaying, in each case, in any material respect the ability of Parent

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to timely consummate the transactions contemplated by the merger agreement; provided, that Parent may modify, supplement or amend the Debt Commitment Letters, to add lenders, lead arrangers, bookrunners, syndication agents, other agents or similar entities that have not executed the financing commitments as of the date of the merger agreement or to increase the amount of funds available thereunder.

        The Company has agreed to, and has agreed to cause its subsidiaries to, and will use reasonable best efforts to cause their respective representatives to, at Parent's sole expense, use reasonable best efforts to provide all reasonable cooperation requested by Parent, Merger Sub, any financing sources and their respective authorized representatives in connection with the financing or alternative financing, including using reasonable best efforts to:

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        See "Special Factors—Financing of the Merger" beginning on page 77 for descriptions of the debt financing.

        Parent will, upon demand by the Company, reimburse the Company for all reasonable out-of-pocket costs incurred by the Company or any of its subsidiaries in connection with the cooperation of the Company and its subsidiaries in Parent's arrangement of financing, except if arising from actual and intentional fraud, willful misconduct or intentional misrepresentation of the Company, any of its subsidiaries or any of their respective representatives, and Parent and Merger Sub, on a joint and several basis, will indemnify and hold harmless the Company, its affiliates and their respective representatives from and against any damages suffered or incurred by any of them in connection with the arrangement of financing or any information utilized in connection therewith, except to the extent such damages arose out of or resulted from the actual and intentional fraud, willful misconduct or intentional misrepresentation of the Company, any of its subsidiaries or any of their respective representatives.

Conditions to the Completion of the Merger

        Conditions to the obligations of each of the parties to complete the merger include:

        Conditions to the obligation of each of Parent and Merger Sub to complete the merger include the satisfaction or waiver of the following additional conditions:

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        Conditions to the Company's obligations to complete the merger include the satisfaction or waiver of the following conditions:

Termination

        The merger agreement may be terminated at any time prior to the completion of the merger:

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Effect of Termination; Fees and Expenses

Fees Payable to Parent

        If any of the following events occur, the Company will be obligated to pay to or as directed by Parent a termination fee of $8.736 million (the "Company Termination Fee"):

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        Except for an order of specific performance as and only to the extent expressly permitted in accordance with the terms of the merger agreement, payment of the termination fee under the circumstances described above, if payable, and interest payable thereon, if any, shall be the sole and exclusive remedy of Parent, Merger Sub and their respective affiliates for any damages resulting from the failure of the merger to be consummated and any other damages suffered as a result of the merger agreement and the transactions contemplated thereby.

Fees Payable to the Company

        If any of the following series of events occur, Parent will be obligated to pay the Company a reverse termination fee of $17.472 million:

        Except for an order of specific performance as and only to the extent expressly permitted in accordance with the terms of the merger agreement, payment of the reverse termination fee under the circumstances described above, if payable, and interest payable thereon, if any, shall be the sole and exclusive remedy of the Company and its affiliates for any damages resulting from the failure of the merger to be consummated and any other damages suffered as a result of the merger agreement and the transactions contemplated thereby. The merger agreement provides that under no circumstances may the Company be permitted or entitled to receive both payment of the reverse termination fee and

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payment of other monetary damages, and that the maximum aggregate liability of Parent and Merger Sub for monetary damages in connection with the merger agreement and the transactions contemplated thereby is limited to an amount equal to the reverse termination fee.

Effect of Termination; General Expense Provisions

        If the merger agreement is terminated for any reason, the merger agreement will become void and of no further force or effect with no liability on the part of any party or related-party thereto, except as described above under "The Merger Agreement—Effect of Termination; Fees and Expenses—Fees Payable to Parent" beginning on page 128 and "The Merger Agreement—Effect of Termination; Fees and Expenses—Fees Payable to the Company" beginning on page 129. Notwithstanding the foregoing, the provisions of the merger agreement relating to the confidentiality agreements, dated March 15, 2018, between each of George Feldenkreis and Fortress Investment Group, LLC, on the one hand, and the Company, on the other hand, public announcements, fees, expenses and conveyance taxes, Parent's obligations to reimburse the Company's expenses and indemnify the Company in connection with the Company's cooperation with respect to the debt financing, the manner and effect of termination of the merger agreement, fees and expenses following termination of the merger agreement and miscellaneous provisions, as well as the limited guarantee, pledge and security agreement, and the confidentiality agreements, dated March 15, 2018, between each of George Feldenkreis and Fortress Investment Group, LLC, on the one hand, and the Company, on the other hand, will survive any termination of the merger agreement.

        The merger agreement provides that each party is to pay all expenses incurred by it in connection the merger agreement and the transactions contemplated thereby except (i) described above under "The Merger Agreement—Effect of Termination; Fees and Expenses—Fees Payable to Parent" beginning on page 128 and "The Merger Agreement—Effect of Termination; Fees and Expenses—Fees Payable to the Company" beginning on page 129, (ii) Parent is obligated to reimburse the Company for its reasonable out-of-pocket expenses incurred in connection with cooperating with Parent in obtaining the requisite financing intended to satisfy the financing condition, (iii) the filing fees for any filings made under the HSR Act or any foreign competition law shall be paid by Parent, and (iv) all documentary, sales, use, real property transfer, real property gains, registration, value added, transfer, stamp, recording and similar taxes, fees, and costs together with any interest thereon, penalties, fines, costs, fees, additions to tax or additional amounts with respect thereto incurred in connection with the merger agreement and the transactions contemplated thereby, shall be paid by Parent.

Specific Performance

        The parties to the merger agreement are entitled to an injunction or injunctions to prevent breaches or threatened breaches of the merger agreement and to enforce specifically the terms and provisions thereof, this being in addition to any other remedy at law or in equity to which they are entitled. However, the right of the Company to seek specific performance to enforce Parent's and/or Merger Sub's obligation to effect the closing as provided by the merger agreement is subject to the requirements that (i) all of the conditions to the parties' respective obligations and to Parent's and Merger Sub's obligations to consummate the merger would have been satisfied if the closing were to have occurred at such time (other than those conditions that, by their terms, are to be satisfied at the closing, each of which shall be capable of being satisfied at the closing, or the failure of which to be satisfied is attributable primarily to a breach by Parent or Merger Sub of their respective representations, warranties, covenants or agreements contained in the merger agreement), (ii) the debt financing has been funded or will be funded at the date the closing is required to occur in accordance with the terms of the merger agreement upon delivery of a drawdown notice by Parent and/or notice from Parent that the Rollover Investment will be funded at such date, (iii) Parent and Merger Sub fail to complete the closing on the date the closing is required to have occurred as provided in the merger

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agreement, and (iv) the Company has irrevocably confirmed in writing to Parent that all of the conditions to the parties' respective obligations and to the Company's obligations to consummate the merger have been satisfied (or that the Company would be willing to waive any unsatisfied conditions for purposes of consummating the merger) and that if specific performance is granted and if the debt financing and Rollover Investment were funded, the closing would occur. The merger agreement provides that under no circumstances may the Company be permitted or entitled to receive both a grant of specific performance or other equitable relief pursuant to which the merger is consummated and the aggregate merger consideration is received, on the one hand, and payment of all or a portion of the reverse termination fee or other monetary damages, on the other hand.

Amendment; Extension; Waiver

        The merger agreement may be amended by the parties at any time before the effective time of the merger, whether before or after obtaining the requisite company vote so long as (i) no amendment that requires further shareholder approval under applicable law after shareholder adoption of the merger agreement shall be made without such required further approval and (ii) such amendment has been duly approved by the board of directors or manager, as applicable of each of Merger Sub, Parent and the Company (only pursuant to a resolution adopted by the Special Committee). The merger agreement may not be amended except by an instrument in writing signed by each of the parties to the merger agreement.

        At any time before the effective time, Parent and Merger Sub, on the one hand, and the Company (only pursuant to a resolution adopted by the Special Committee), on the other hand, may (i) extend the time for the performance of any of the obligations of the other party, (ii) waive any inaccuracies in the representations and warranties of the other party contained in the merger agreement or in any document delivered under the merger agreement, or (iii) subject to applicable law, waive compliance with any of the covenants or conditions contained in the merger agreement. Any agreement on the part of a party to any extension or waiver shall be valid only if set forth in an instrument in writing signed by such party. The failure of any party to assert any of its rights under the merger agreement or otherwise shall not constitute a waiver of such rights, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege under the merger agreement.

Special Committee Approval

        No amendment or waiver of any provision of the merger agreement and no decision or determination shall be made, or action taken, by or on behalf of the Company under or with respect to the merger agreement without first obtaining the approval of the Special Committee.

Breach of Rollover Investors Disregarded

        Any breach or assertion of any breach of the merger agreement by the Company or any of its representatives that is attributable to or caused by the actions of or failure to act by George Feldenkreis or Oscar Feldenkreis, including in connection with any representations or warranties made thereunder or any actions taken or failure to act, in each case in contravention thereof, shall be disregarded for all purposes under the merger agreement.

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ADVISORY VOTE ON "GOLDEN PARACHUTE COMPENSATION"

Golden Parachute Payments

        This section sets forth the information required by Item 402(t) of Regulation S-K, which requires disclosure of information regarding the compensation for each of the Company's named executive officers that is based on or otherwise relates to the merger agreement and the transactions contemplated thereby, including the merger. This compensation is referred to as "golden parachute" compensation by the applicable SEC disclosure rules, and in this section we use such term to describe the compensation that may become payable to the Company's named executive officers under existing agreements with the Company in connection with the merger agreement and the transactions contemplated thereby, including the merger (the "transaction-related compensation").

        The Company "named executive officers" for purposes of the disclosure in this Proxy Statement are: Oscar Feldenkreis (Chief Executive Officer and President); Jorge Narino (Interim Chief Financial Officer); Stanley Silverstein (President, International Development and Global Licensing); David Enright (Chief Operating Officer); John F. Voith, Jr. (President, Golf Division) and George Feldenkreis (Former Executive Chairman).

        To the extent that any of the Company's named executive officers' compensation arrangements are described in "Special Factors—Interests of the Company's Directors and Executive Officers in the Merger" beginning on page 83 of this Proxy Statement, they are incorporated herein by reference. The amounts set forth in the table below, which represent an estimate of each Company named executive officer's golden parachute compensation as of July 5, 2018 calculated in accordance with the SEC's rules on disclosing golden parachute compensation, assume the following:

        The amounts reported below are estimated based on multiple assumptions that may or may not actually occur, including the assumptions described above and elsewhere in this Proxy Statement. As a result, the transaction-related compensation, if any, to be received by a Company named executive officer may materially differ from the amounts set forth below. The amounts in the table below do not include any value received in respect of Company equity awards held by each Company named executive officer that are vested prior to the consummation of the merger.

Name(1)
  Cash ($)(2)   Equity ($)(3)   Perquisites/
Benefits ($)(4) 		  Total ($)  

Named Executive Officers

                          

Oscar Feldenkreis

   $ 9,261,000   $ 4,175,353   $ 37,362   $ 10,962,715  

Jorge Narino

   $ 578,219   $ 379,830   $ 17,700   $ 975,749  

Stanley P. Silverstein

   $ 515,000   $ 1,953,875     —   $ 2,468,875  

David Enright

   $ 789,041   $ 683,788   $ 23,678   $ 1,496,507  

John F. Voith, Jr. 

   $ 876,911   $ 1,266,375   $ 19,458   $ 2,162,744  
(1)
Under relevant SEC rules, we are required to provide information in this table with respect to Perry Ellis's "named executive officers," who are generally the Chief Executive Officer, the Chief Financial Officer and the next three most highly compensated executive officers. George

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(2)
The amount listed in this column represents the pre-tax value of the cash amount payable to the Company's named executive officers, including severance payable pursuant to each named executive officer's employment agreement and the change in control severance plan.

The cash severance amount is calculated as follows: cash severance is equal to (a) for Mr. Feldenkreis, (i) 200% of the sum of base salary plus target bonus and (ii) 100% of his annual incentive compensation award based on the achievement of the performance goals with respect to the year in which the termination occurs (for purposes of this calculation, we assumed achievement of bonuses at the target level), (b) for Messrs. Narino, Enright and Voith, the sum of 18 months' base salary and a prorated portion of the annual bonus amount for the year of termination of employment based on the greater of actual or target performance (for purposes of this calculation, we assumed termination on July 5, 2018 and that the prorated bonuses would be paid assuming target performance achievement), and (c) for Mr. Silverstein, 100% of his base salary.

Cash severance benefits for the named executive officers are "double-trigger" (i.e., they are contingent upon a qualifying termination of employment that occurs (for Messrs. Narino, Enright and Voith, within 12 months) following the consummation of the merger). As noted above, for Messrs. Feldenkreis and Silverstein, the severance benefits are not enhanced by the consummation of the merger because it does not constitute a change in control pursuant to the applicable employment agreement. As a condition of receiving the severance benefits, each Company named executive officer must execute a release of claims and comply with restrictive covenants applicable to him.

Mr. Feldenkreis's performance-based awards payable in cash will vest based on the actual achievement of the performance goals established under such arrangement, payable when such performance-based compensation is paid to our other senior executives.

The estimated amount of each component of the cash payment is set forth in the table below, including the target annual bonus and prorated target annual bonus, as applicable.

Name
  Salary ($)   Bonus ($)   Pro-Rated
Bonus ($) 		  Long-Term
Incentive
Compensation 		 

Named Executive Officers

                          

Oscar Feldenkreis

   $ 5,400,000   $ 1,350,000     —     2,511,000  

Jorge Narino

   $ 525,000     —   $ 53,219     —  

Stanley P. Silverstein

   $ 515,000     —     —     —  

David Enright

   $ 675,000     —   $ 114,041     —  

John F. Voith, Jr. 

   $ 772,500     —   $ 104,410     —  
(3)
As described in more detail in "Interests of the Company's Directors and Executive Officers in the Merger—Treatment of Stock Options, Stock Appreciation Rights and Restricted Stock Awards" of this Proxy Statement, the amounts in this column represent the aggregate pre-tax amounts payable to each Company named executive officer in connection with the accelerated vesting of the shares of restricted common stock held by such named executive officers. Such unvested Company equity awards are valued based on the per share merger consideration of $27.50 in respect of each share of restricted common stock. Each unvested share of restricted common stock not subject to any performance-based vesting condition held by the named executive officers vests on a "single-

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(4)
Upon a qualifying termination of employment, Perry Ellis is required to provide continued health coverage for 18 months for the named executive officers other than Mr. Silverstein.

Vote Required and Board of Directors Recommendation

        Section 951 of the Dodd-Frank Act and Rule 14a-21(c) under the Exchange Act require that the Company seek an advisory (non-binding) vote from its shareholders to approve certain "golden parachute compensation" that its "named executive officers" will receive from the Company in connection with the merger. Approval requires the affirmative vote of the holders of a majority of shares present in person or represented by proxy and entitled to vote on the proposal. Accordingly, the Company is asking you to approve the following resolution:

        "RESOLVED, that the shareholders approve, on an advisory (non-binding) basis, the agreements or understandings with and items of compensation payable to the named executive officers of Perry Ellis International, Inc. that are based on or otherwise relate to the merger with Merger Sub, as disclosed in the section of the Proxy Statement entitled "Advisory Vote on "Golden Parachute Compensation.""

        The Company's board of directors recommends that shareholders approve the "golden parachute compensation" arrangements described in this Proxy Statement by voting FOR the above proposal.

        Approval of this proposal is not a condition to the completion of the merger, and the vote with respect to this proposal is advisory only and will not be binding on the Company or Parent. Accordingly, regardless of the outcome of the non-binding, advisory vote, if the merger agreement is adopted by the shareholders and completed, our named executive officers will be eligible to receive the various "golden parachute" payments.

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ADJOURNMENT OF THE SPECIAL MEETING

Adjournment of the Special Meeting

        In the event that the number of shares of Company Common Stock present in person and represented by proxy at the Special Meeting and voting FOR the merger is insufficient to approve the merger proposal, the Company may move to adjourn the Special Meeting in order to enable the board of directors to solicit additional proxies in favor of the approval of the merger proposal. In that event, the Company will ask its shareholders to vote only upon the adjournment proposal and not on the other proposals discussed in this Proxy Statement.

Vote Required and Board of Directors Recommendation

        The approval of the proposal to adjourn the Special Meeting, if there are not sufficient votes to adopt the merger proposal, requires the affirmative vote of shareholders holding a majority of the shares present in person or by proxy at the Special Meeting and entitled to vote thereon.

        The board of directors, based in part on the unanimous recommendation of the Special Committee, has unanimously approved and authorized the merger, and recommends that you vote FOR the adoption of the merger agreement and, if there are not sufficient votes to adopt the merger agreement, recommends that you vote FOR the proposal to adjourn the Special Meeting.


MARKETS AND MARKET PRICE

        Shares of Company Common Stock are listed and traded on the Nasdaq Global Market under the symbol "PERY." The following table shows, for the periods indicated, the reported high and low sale prices per share on the Nasdaq Global Market for Company Common Stock.

        Prices listed below are the high and low prices within any given day for the period, as opposed to the high opening or closing prices during the period.

 
   High   Low  

Fiscal Year Ended January 28, 2017

              

First Quarter

   $ 20.08   $ 15.73  

Second Quarter

     22.71     16.24  

Third Quarter

     21.73     18.06  

Fourth Quarter

     29.00     17.14  

Fiscal Year Ended February 3, 2018

    
 		    
 		  

First Quarter

   $ 24.10   $ 19.715  

Second Quarter

     21.24     17.50  

Third Quarter

     23.98     16.35  

Fourth Quarter

     26.09     22.24  

Fiscal Year 2019

    
 		    
 		  

First Quarter

   $ 27.99   $ 22.00  

Second Quarter (through July 6, 2018)

     29.59     23.82  

        On the Undisturbed Date, the high and low sale prices for Company Common Stock as reported on the Nasdaq Global Market were $23.82 and $22.50 per share, respectively, and the closing sale price on that date was $22.62. On Friday, June 15, 2018, the last trading day prior to the announcement of the merger agreement on Saturday, June 16, 2018, the high and low sale prices for Company Common Stock as reported on the Nasdaq Global Market were $28.23 and $27.46 per share, respectively, and the closing sale price on that date was $27.97. On July 10, 2018, the last trading day for which information was available prior to the date of the printing of this Proxy Statement, the high and low

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sale prices for Company Common Stock as reported on the Nasdaq Global Market were $29.23 and $28.46 per share, respectively, and the closing sale price on that date was $28.70.

        The Company's shareholders should obtain a current market quotation for Company Common Stock before making any decision with respect to the merger. On [        ], 2018 (the record date for shareholders entitled to vote at the Special Meeting), there were approximately [        ] holders of record of Company Common Stock.

        Since its organization, the Company has declared and paid one cash dividend on Company Common Stock, which occurred in December 2012. Accordingly, we do not expect to declare or pay dividends prior to the merger and, under the terms of the merger agreement, we are prohibited from doing so.

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 SELECTED FINANCIAL INFORMATION

Selected Historical Financial Information

 
   Perry Ellis International, Inc.  
 
   Year Ended
February 3,
2018 		  Year Ended
January 28,
2017 		  Three Months
Ended
May 5, 2018 		  Three Months
Ended
April 29, 2017 		 
 
   (In thousands, except share and per share data)
  

Income Statement Data:

                          

Net sales

   $ 840,280   $ 825,086   $ 245,435   $ 233,823  

Royalty income

     34,573     36,000     9,799     8,267  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total revenues

     874,853     861,086     255,234     242,090  

Cost of sales

     544,679     542,578     161,367     151,002  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Gross profit

     330,174     318,508     93,867     91,088  

Selling, general and administrative expenses

     274,665     280,019     75,549     71,199  

Depreciation and amortization

     14,272     14,542     3,227     3,468  

Impairment on assets

     372     1,451     —     —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Operating income

     40,865     22,496     15,091     16,421  

Costs on early extinguishment of debt

     —     195     —     —  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Interest expense

     7,148     7,395     2,009     1,956  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income before income taxes

     33,717     14,906     13,082     14,465  

Income tax (benefit) provision

     (22,933 )   389     2,835     1,694  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income

   $ 56,650   $ 14,517   $ 10,247   $ 12,771  
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income per share:

                          

Basic

   $ 3.76   $ 0.97   $ 0.68   $ 0.85  

Diluted

   $ 3.68   $ 0.95   $ 0.66   $ 0.83  

Balance Sheet Data:

                          

Current Assets

     389,781     341,216     417,976     372,506  

Noncurrent Assets

     244,381     251,489     243,552     250,249  

Current Liabilities

     140,323     117,864     104,338     92,948  

Noncurrent Liabilities

     116,289     161,154     169,880     201,940  

Redeemable Preferred Stock

     —     —     —     —  

Total stockholders' equity

     377,550     313,687     387,310     327,867  

Other Financial Data:

                          

Book value per share

                          

Basic

   $ 25.03   $ 21.00   $ 25.55   $ 21.84  

Diluted

   $ 24.54   $ 20.61   $ 24.96   $ 21.43  

Ratio of Earnings to Fixed Charges

 
   Year Ended
February 3,
2018 		  Year Ended
January 28,
2017 		  Three Months
Ended
May 5, 2018 		  Three Months
Ended
April 29, 2017 		 

Ratio of Earnings to Fixed Charges(1)

     3.6     2.1     4.9     5.4  
(1)
For purposes of computing the ratio of earnings to fixed charges, "earnings" consist of income before income taxes plus fixed charges. "Fixed charges" consist of interest expense, amortization of debt costs, cost of early extinguishment of debt and estimated operating lease interest. The

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        No separate financial information is provided for Parent because Parent is a newly formed entity formed in connection with the merger and has no independent operations. No pro forma data giving effect to the merger has been provided. The Company does not believe that such information is material to shareholders in evaluating the proposed merger and merger agreement because (i) the proposed per share merger consideration is all-cash, and (ii) if the merger is completed, Company Common Stock will cease to be publicly traded.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain information known to the Company regarding the beneficial ownership of Company Common Stock as of July 5, 2018 (unless otherwise indicated), the most recent practicable date by (i) each of the Company's "named executive officers" as determined pursuant to SEC rules, (ii) each director, (iii) all of the Company's directors and executive officers as a group and (iv) each person who is known by the Company to be the beneficial owner of more than 5% of any class or series of the Company's capital stock.

        The amounts and percentages of Company Common Stock beneficially owned are reported on the basis of the regulations of the SEC governing the determination of beneficial ownership of securities. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities. Except as otherwise indicated, the named persons below have sole voting and investment power, or share voting and investment power with their spouses, with respect to beneficially owned shares listed below.

        The percentages included in the table below are based on 15,892,593 outstanding shares of Company Common Stock, outstanding as of July 5, 2018:

Name and Address of Beneficial Owner(1)(2)(21)
  Number
of Shares 		  % of Class
Outstanding 		 

George Feldenkreis(3)(19)

     1,716,863     10.8 %

Oscar Feldenkreis(4)(17)

     1,223,329     7.7 %

Joe Arriola(5)(19)

     15,590     *  

J. David Scheiner(6)(19)

     26,205     *  

Jane E. DeFlorio(7)(19)

     22,710     *  

Bruce J. Klatsky(8)(19)

     21,723     *  

Michael W. Rayden(9)(19)

     21,723     *  

John Voith(10)(20)

     64,624     *  

Stanley Silverstein(11)(20)

     73,666     *  

Jorge Narino(12)(20)

     14,988     *  

David Enright(13)(18)

     31,706     *  

All directors and executive officers as a group(14)

     3,292,772     20.7 %

Dimensional Fund Advisors LP(15)

     1,272,616     8.0 %

Building One

              

6300 Bee Cave Road

              

Austin, Texas, 78746

              

BlackRock, Inc.(16)

     2,029,414     12.8 %

55 East 52nd Street

              

New York, NY 10055

              
*
Less than 1%.

(1)
Except as otherwise indicated, the address of each beneficial owner is c/o Perry Ellis International, Inc., 3000 N.W. 107th Avenue, Miami, Florida 33172.

(2)
Except as otherwise indicated, the persons named in this table have sole voting, investment and dispositive power with respect to all shares of Company Common Stock listed, which includes shares of Company Common Stock that such persons have the right to acquire within 60 days of May 30, 2018.

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(3)
Based solely on information contained in Amendment No. 7 to the Schedule 13D filed with the SEC on June 20, 2018. As of June 20, 2018, represents shares beneficially owned by certain members of the group identified in Amendment No. 7 to the Schedule 13D, which group consists of: George Feldenkreis, the Feldenkreis Family Foundation, Inc. (the "Foundation"), Parent, Merger Sub, Oscar Feldenkreis, Fanny Hanono Mary Ellen Kanoff, Scott A. LaPorta, and Matthew McEvoy (collectively, the "13D Reporting Persons"). The principal business address of each of George Feldenkreis, Parent, Merger Sub, Fanny Hanono and the Foundation is 4810 NW 74 Ave, Miami, FL 33166. Oscar Feldenkreis' principal business address is c/o Perry Ellis International, Inc., 3000 N.W. 107th Avenue, Miami, FL 33172. Ms. Kanoff's principal business address is 10250 Constellation Blvd., Suite 2230, Los Angeles, CA 90067. Mr. LaPorta's principal business address is 15303 Ventura Boulevard, Suite 675, Sherman Oaks, California 91403. Mr. McEvoy's principal business address is Suite 404, 22 Notting Hill Gate, W11 3JE, London. The 1,716,863 shares of Company Common Stock owned by George Feldenkreis described in Amendment No. 7 to the Schedule 13D (and in the table above) include: (1) 1,502,384 shares of Company Common Stock directly beneficially owned by George Feldenkreis, (2) 88,189 shares of Company Common Stock owned by the George Feldenkreis Revocable Trust UAD 12/23/13, of which George Feldenkreis serves as the trustee, (3) 3,974 shares of restricted stock that were granted under the 2015 Long-Term Incentive Compensation Plan, and (4) 122,316 shares of Company Common Stock beneficially owned by the Foundation. Certain other 13D Reporting Persons (Parent, Merger Sub, Mary Ellen Kanoff, Scott A. LaPorta and Matthew McEvoy) do not directly own any shares of the Company Common Stock. George Feldenkreis has the sole power to vote and dispose of the 1,594,547 shares beneficially owned by him and shares the power with the Foundation to vote and dispose of the 122,316 shares beneficially owned by the Foundation.

(4)
Represents (a) 921,498 shares of Company Common Stock held by a revocable trust of which Oscar Feldenkreis is the trustee, (b) 150,000 shares of Company Common Stock held by three irrevocable trusts, each of which holds 50,000 shares of Company Common Stock, of which Oscar Feldenkreis' spouse is the trustee, (c) 7,388 shares of restricted stock held directly by Oscar Feldenkreis which vest on April 20, 2019, (d) 13,143 shares of restricted stock held directly by Oscar Feldenkreis, which vest in two equal annual installments beginning on April 25, 2019, (e) 15,849 shares of restricted stock held directly by Oscar Feldenkreis, which vest in three equal annual installments beginning on April 9, 2019, (f) 44,333 shares of performance stock granted in April 2016, which vest up to 100%, provided that certain performance criteria have been achieved as of the last day of fiscal 2019 (and he may be entitled to additional performance shares if the Company exceeds the performance goals), (g) 39,425 shares of performance stock granted in April 2017, which vest up to 100%, provided that certain performance criteria have been achieved as of the last day of fiscal 2020 (and he may be entitled to additional performance shares if the Company exceeds the performance goals), and (h) 31,693 shares of performance stock granted in April 2018, which vest up to 100%, provided that certain performance criteria have been achieved as of the last day of fiscal 2021 (and he may be entitled to additional performance shares if the Company exceeds the performance goals). Oscar Feldenkreis has the power to vote but does not have the power to sell, transfer, pledge, or otherwise dispose of the restricted and performance shares until the shares have vested.

(5)
Represents (a) 11,116 shares of Company Common Stock held directly by Mr. Arriola, (b) 3,974 shares of restricted stock held directly by Mr. Arriola which vest on June 13, 2019, and (c) 500 shares owned by a revocable trust of which Mr. Arriola and his spouse are the trustees.

(6)
Represents (a) 16,218 shares of Company Common Stock held directly by Mr. Scheiner, (b) 3,974 shares of restricted stock held directly by Mr. Scheiner which vest on June 13, 2019, (c) 856 shares of restricted stock held directly by Mr. Scheiner, which vest on July 17, 2018, and (d) 5,157 shares of Company Common Stock issuable upon the exercise of stock appreciation rights held by

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(7)
Represents (a) 14,064 shares of Company Common Stock held directly by Ms. DeFlorio, (b) 3,974 shares of restricted stock held directly by Ms. DeFlorio which vest on June 13, 2019, (c) 856 shares of restricted stock held directly by Ms. DeFlorio, which vest on July 17, 2018, and (d) 3,816 shares of Company Common Stock issuable upon the exercise of stock appreciation rights held by Ms. DeFlorio that are exercisable within 60 days of May 30, 2018. Ms. DeFlorio has the power to vote but does not have the power to sell, transfer, pledge or otherwise dispose of the restricted shares until the shares have vested.

(8)
Represents (a) 12,828 shares of Company Common Stock held directly by Mr. Klatsky, (b) 856 shares of restricted stock held directly by Mr. Klatsky, which vest on July 17, 2018, (c) 3,974 shares of restricted stock held directly by Mr. Klatsky which vest on June 13, 2019, and (d) 4,065 shares of Company Common Stock issuable upon the exercise of stock appreciation rights held by Mr. Klatsky that are exercisable within 60 days of May 30, 2018. Mr. Klatsky has the power to vote but does not have the power to sell, transfer, pledge or otherwise dispose of the restricted shares until the shares have vested.

(9)
Represents (a) 12,828 shares of Company Common Stock held directly by Mr. Rayden, (b) 856 shares of restricted stock held directly by Mr. Rayden, which vest on July 17, 2018, (c) 3,974 shares of restricted stock held directly by Mr. Rayden which vest on June 13, 2019, and (d) 4,065 shares of Company Common Stock issuable upon the exercise of stock appreciation rights held by Mr. Rayden that are exercisable within 60 days of May 30, 2018. Mr. Rayden has the power to vote but does not have the power to sell, transfer, pledge or otherwise dispose of the restricted shares until the shares have vested.

(10)
Represents (a) 18,574 shares of Company Common Stock held directly by Mr. Voith, (b) 1,272 shares of restricted stock held directly by Mr. Voith, which vest on April 20, 2019, (c) 2,265 shares of restricted stock held directly by Mr. Voith, which vest in two equal annual installments beginning on April 25, 2019, (d) 2,733 shares of restricted stock held directly by Mr. Voith, which vest in three equal annual installments beginning on April 9, 2019, (e) 15,275 shares of performance stock granted in April 2016, which vest up to 100%, provided that certain performance criteria have been achieved as of the last day of fiscal 2019 (and he may be entitled to additional performance shares if the Company exceeds the performance goals), (f) 13,585 shares of performance stock granted in April 2017, which vest up to 100%, provided that certain performance criteria have been achieved as of the last day of fiscal 2020 (and he may be entitled to additional performance shares if the Company exceeds the performance goals), and (g) 10,920 shares of performance stock granted in April 2018, which vest up to 100%, provided that certain performance criteria have been achieved as of the last day of fiscal 2021 (and he may be entitled to additional performance shares if the Company exceeds the performance goals). Mr. Voith has the power to vote but does not have the power to sell, transfer, pledge or otherwise dispose of the restricted and performance shares until the shares have vested.

(11)
Represents (a) 2,616 shares of Company Common Stock held directly by Mr. Silverstein, (b) 25,000 shares of restricted stock, which vest on September 9, 2018, (c) 1,272 shares of restricted stock held directly by Mr. Silverstein, which vest on April 20, 2019, (d) 2,265 shares of restricted stock held directly by Mr. Silverstein, which vest in two equal annual installments beginning on April 25, 2019, (e) 2,733 shares of restricted stock held directly by Mr. Silverstein, which vest in three equal annual installments beginning on April 9, 2019, (f) 15,275 shares of performance stock granted in April 2016, which vest up to 100%, provided that certain performance criteria have been achieved as of the last day of fiscal 2019 (and he may be entitled to additional performance shares if the

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(12)
Represents (a) 893 shares of Company Common Stock held directly by Mr. Narino, (b) 400 shares of restricted stock, which vest in on July 14, 2018, (c) 2,121 shares of restricted stock held directly by Mr. Narino, which vest in three equal annual installments beginning on April 9, 2019, (d) 2,333 shares of restricted stock held directly by Mr. Narino, which vest in two equal annual installments beginning on April 11, 2019, (e) 5,000 shares of restricted stock held directly by Mr. Narino, which vest in three equal annual installments beginning on December 12, 2018, and (f) 4,241 shares of performance stock granted in April 2018, which vest up to 100%, provided that certain performance criteria have been achieved as of the last day of fiscal 2021 (and he may be entitled to additional performance shares if the Company exceeds the performance goals). Mr. Narino has the power to vote but does not have the power to sell, transfer, pledge, or otherwise dispose of the restricted and performance shares until the shares have vested.

(13)
Represents (a) 3,508 shares of Company Common Stock held directly by Mr. Enright, (b) 6,666 shares of restricted stock held directly by Mr. Enright, which vest in two equal annual installments beginning on June 2, 2019, (c) 2,827 shares of restricted stock held directly by Mr. Enright, which vest in two equal annual installments beginning on April 25, 2019, (d) 3,411 shares of restricted stock held directly by Mr. Enright, which vest in three equal annual installments beginning on April 9, 2019, (e) 8,479 shares of performance stock granted in April 2017, which vest up to 100%, provided that certain performance criteria have been achieved as of the last day of fiscal 2020 (and he may be entitled to additional performance shares if the Company exceeds the performance goals), and (f) 6,815 shares of performance stock granted in April 2018, which vest up to 100%, provided that certain performance criteria have been achieved as of the last day of fiscal 2021 (and he may be entitled to additional performance shares if the Company exceeds the performance goals). Mr. Enright has the power to vote but does not have the power to sell, transfer, pledge, or otherwise dispose of the restricted and performance shares until the shares have vested.

(14)
Includes (a) 1,704,110 shares of Company Common Stock directly held, (b) 1,194,314 shares of Company Common Stock indirectly held, (c) 24,472 shares of Company Common Stock issuable upon the exercise of stock appreciation rights that are currently exercisable or are exercisable within 60 days of May 30, 2018, (d) 133,119 shares of time-based restricted stock, and (e) 236,757 shares of performance-based restricted stock.

(15)
Based solely on information contained in a Schedule 13G filed with the SEC for the period ended December 31, 2017. Dimensional Fund Advisors LP ("Dimensional"), an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate accounts. These investment companies, trusts and accounts are the "Funds". In its role as investment advisor or manager, Dimensional possesses investment and/or voting power over the securities of the Company described in its Schedule 13G that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Company held by the Funds. However, all securities reported in the Schedule 13G are owned by the Funds. Dimensional disclaims beneficial ownership of such securities.

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(16)
Based solely on information contained in a Schedule 13G filed with the SEC for the period ended December 31, 2017. Represents shares of Company Common Stock held by BlackRock, Inc. and with respect to which BlackRock, Inc. has sole voting and dispositive power.

(17)
Includes restricted and Company Common Stock equal in value to five times base salary; executive is expected to retain 50% of the after-tax profit shares upon vesting or exercise of all equity grants until meeting the executive stock ownership guidelines.

(18)
Includes restricted and Company Common Stock equal in value to three times base salary; executive is expected to retain 50% of the after-tax profit shares upon vesting or exercise of all equity grants until meeting the executive stock ownership guidelines.

(19)
Includes restricted and Company Common Stock equal in value to three times the annual cash retainer; non-management director is expected to retain 100% of the after-tax profit shares acquired upon vesting or exercise of all equity grants until meeting the stock ownership guidelines.

(20)
Includes restricted and Company Common Stock equal in value to one times base salary, executive is expected to retain 50% of the after-tax profit shares upon vesting or exercise of all equity grants until meeting the executive stock ownership guidelines.

(21)
Anita Britt (one of the Company's named executive officers) retired as the Company's Chief Financial Officer effective March 31, 2017. As of May 30, 2018, Ms. Britt did not own any shares of Company Common Stock. David Rattner (one of the Company's named executive officers) resigned from his position as the Company's Chief Financial Officer on November 9, 2017. Based on the Company's records, as of November 9, 2017, Mr. Rattner did not own any shares of the Company's common stock.

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COMMON STOCK TRANSACTION INFORMATION

Transactions by the GF Group Filing Persons

        None of the GF Group Filing Persons have purchased or sold any securities of the Company during the past two years, except as provided below:

Quantity
  Price ($)   Transaction Date   Transaction Description
GEORGE FELDENKREIS
(20,000)   22.0471   07/14/2016   Sale of Company Common Stock
(16,407)   24.2038   11/21/2016   Sale of Company Common Stock(1)
(26,300)   0.00   11/22/2016   Gifted
(10,000)   0.00   11/30/2016   Gifted
(15,771)   26.6841   12/14/2016   Sale of Company Common Stock
(14,229)   26.6099   12/15/2016   Sale of Company Common Stock
(1,850)   0.00   12/15/2016   Gifted
10,953   0.00   04/25/2017   Award of Restricted Stock Units(2)
3,651   0.00   04/25/2018   Vesting of Restricted Stock Units
3,974   0.00   06/13/2018   Grant of Restricted Shares

OSCAR FELDENKREIS
70,674   24.93   12/08/2016   Purchase of Company Common Stock(3)
(65,764)   28.32   12/08/2016   Sale of Company Common Stock(4)
(2,021)   22.24   04/20/2017   Sale of Company Common Stock(5)
(1,352)   21.25   04/22/2017   Sale of Company Common Stock(5)
59,141   0.00   04/25/2017   Purchase of Company Common Stock(6)
(7,666)   20.52   04/28/2017   Sale of Company Common Stock(5)
47,542   0.00   04/09/2018   Purchase of Company Common Stock(7)

OSCAR FELDENKREIS REVOCABLE TRUST UAD 05/06/11
(25,000)   21.9703   07/14/2016   Sale of Company Common Stock
(8,000)   0.00   11/29/2016   Gifted
(25,000)   26.7862   12/06/2016   Sale of Company Common Stock
(50,000)   26.7921   12/07/2016   Sale of Company Common Stock

FANNY HANONO REVOCABLE TRUST UAD 07/06/11
(15,000)   23.0000   11/22/2016   Sale of Company Common Stock
(15,000)   24.0524   11/25/2016   Sale of Company Common Stock
(50,000)   21.8998   09/22/2017   Sale of Company Common Stock
(1)
Represents shares of Company Common Stock sold solely to pay income taxes associated with the deemed vesting of restricted stock previously granted to George Feldenkreis, resulting from provisions of George Feldenkreis' employment agreement.

(2)
Each Restricted Stock Unit represents the right to receive one share of Company Common Stock. The restricted stock units vest in three equal installments beginning April 25, 2018.

(3)
Represents the acquisition of shares of Company Common Stock underlying a Stock Appreciation Right.

(4)
Represents (i) the disposition of 62,215 shares of Company Common Stock underlying a Stock Appreciation Right as payment of the exercise price and (ii) the withholding of 3,549 shares of Company Common Stock to pay taxes resulting from exercise of a Stock Appreciation Right.

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(5)
Represents shares of Company Common Stock withheld to pay taxes resulting from vesting of restricted shares.

(6)
Represents (i) 19,716 restricted shares granted under the 2015 Long-Term Incentive Compensation Plan (the "Plan"), successor to the Second Amended and Restated 2005 Long-Term Incentive Compensation Plan, which vest over three years beginning April 25, 2018; and (ii) 39,425 performance shares granted under the Plan, which vest up to 100% if certain performance goals are met and Oscar Feldenkreis is employed by the Company on the last day of fiscal 2020 (and Oscar Feldenkreis may be entitled to additional performance shares if the Company exceeds the performance goals).

(7)
Represents (i) 15,849 restricted shares granted under the Plan which vest over three years beginning April 9, 2019; and (ii) 31,693 performance shares granted under the Plan, which vest up to 100% if certain performance goals are met and Oscar Feldenkreis is employed by the Company on the last day of fiscal 2021 (and Oscar Feldenkreis may be entitled to additional performance shares if the Company exceeds the performance goals).

Transactions by the Company

        There have been no transactions in shares of Company Common Stock by the Company during the past two years, except as provided below:

 
   Number of
Shares Purchased 		  Range of
Prices Paid 		  Average
Purchase Price

Fiscal Year Ended January 28, 2017

            

First Quarter

   46,000(1)   $18.54 to $19.38   $19.17

Second Quarter

   3,105(1)   $20.01 to $20.80   $20.11

Third Quarter

   113,935   $18.68 to $18.99   $18.88

Fourth Quarter

   282(1)   $24.24   $24.24

Fiscal Year Ended February 3, 2018

            

First Quarter

   25,241(1)   $20.50 to $22.24   $21.10

Second Quarter

   61,259(2)   $18.43 to $19.89   $18.96

Third Quarter

   9,691(1)   $17.64 to $22.24   $21.95

Fiscal Year 2019

            

First Quarter

   9,708(1)   $25.51 to $26.70   $25.72

Second Quarter (through July 6, 2018)

   1,055(1)   $26.76 to $27.17   $27.13
(1)
Represents shares withheld to pay statutory income taxes resulting from vesting of restricted shares.

(2)
Represents 11,259 shares withheld to pay statutory income taxes resulting from vesting of restricted shares.

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        There have been no transactions in shares of Company Common Stock by the Company within the 60 days prior to the date of this Proxy Statement, except as provided below:

Quantity
  Price ($)   Transaction Date   Transaction Description
THE COMPANY
812     27.17     06/01/2018   Withheld shares to pay statutory income taxes resulting from vesting of restricted shares.
212     27.06     06/06/2018   Withheld shares to pay statutory income taxes resulting from vesting of restricted shares.
31     26.76     06/06/2018   Withheld shares to pay statutory income taxes resulting from vesting of restricted shares.

Transactions by the Company's Directors and Executive Officers

        There have been no transactions in shares of Company Common Stock by our directors and executive officers within the 60 days prior to the date of this Proxy Statement, except as provided below:

Quantity
  Price ($)   Transaction Date   Transaction Description
JOE ARRIOLA
3,974   0.00   06/13/2018   Grant of Restricted Shares
5,799   0.00   06/13/2018   Vesting of Restricted Shares

JANE DEFLORIO
3,974   0.00   06/13/2018   Grant of Restricted Shares
5,799   0.00   06/13/2018   Vesting of Restricted Shares

BRUCE KLATSKY
3,974   0.00   06/13/2018   Grant of Restricted Shares
5,799   0.00   06/13/2018   Vesting of Restricted Shares

MICHAEL RAYDEN
3,974   0.00   06/13/2018   Grant of Restricted Shares
5,799   0.00   06/13/2018   Vesting of Restricted Shares

J. DAVID SCHEINER
3,974   0.00   06/13/2018   Grant of Restricted Shares
5,799   0.00   06/13/2018   Vesting of Restricted Shares

DAVID ENRIGHT
3,333   0.00   06/13/2018   Vesting of Restricted Shares
812   27.17   06/01/2018   Company withholding of shares to pay statutory income taxes resulting from vesting of restricted shares.

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 SHAREHOLDER PROPOSALS AND NOMINATIONS

        As of the date of this Proxy Statement, the board of directors is not aware of any business to be brought before the Special Meeting other than that described in this Proxy Statement. If, however, other matters are properly presented at the Special Meeting, the persons named as proxies will vote in accordance with their best judgment with respect to those matters.

        If the merger is consummated, we will not have public shareholders and there will be no public participation in any future meeting of shareholders. However, if the merger is not completed, we expect our annual meeting of shareholders to generally be held in June of each year. We will consider for inclusion in our proxy materials for the 2019 annual meeting of shareholders proposals that are received no later than [            ], 2018 and that comply with all applicable requirements of Rule 14a-8 promulgated under the Exchange Act, and our by-laws. Shareholders must submit their proposals to our corporate headquarters located at 3000 N.W. 107th Avenue, Miami, Florida 33172, Attention: Tricia Thompkins, General Counsel and Secretary.

        In addition, any shareholder who wishes to propose a nominee to our board of directors or propose any other business to be considered by the shareholders (other than a shareholder proposal to be included in our proxy materials pursuant to Rule 14a-8 of the Exchange Act) must comply with the advance notice provisions and other requirements of Article Two, Section 14 of our by-laws, a copy of which is on file with the SEC and may be obtained from Tricia Thompkins, our General Counsel and Secretary upon request. These notice provisions require that nominations of persons for election to our board of directors and proposals of business to be considered by the shareholders for the 2019 annual meeting of shareholders, to the extent such meeting is held, must be made in writing and submitted to our corporate headquarters located at 3000 N.W. 107th Avenue, Miami, Florida 33172, Attention: Tricia Thompkins, General Counsel and Secretary, no earlier than [            ], 2019 and no later than [            ], 2019.

        If the merger is completed, we do not expect to hold our 2018 annual meeting of shareholders.

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HOUSEHOLDING

        The SEC has adopted rules that permit companies and intermediaries (such as a broker, bank or other agent) to implement a delivery procedure called "householding." Under this procedure, multiple shareholders who reside at the same address may receive a single copy of our proxy materials, including this Proxy Statement and other proxy materials, unless the affected shareholder has provided us with contrary instructions. This procedure provides extra convenience for shareholders and cost savings for companies.

        Perry Ellis and some brokers, banks or other agents may be householding our proxy materials, including this Proxy Statement. A single set of this Proxy Statement and other proxy materials will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker, bank or other agent that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If you did not respond that you did not want to participate in householding, you were deemed to have consented to the process. Registered shareholders may revoke their consent at any time by contacting the Company's transfer agent Continental Stock Transfer & Trust Company, toll-free at 1 (800) 509-5586. Holders through banks or brokers or other agents must notify such agents.

        Upon written or oral request, Perry Ellis will promptly deliver a separate copy of the Proxy Statement and other proxy materials to any shareholder at a shared address to which a single copy of any of those documents was delivered. To receive a separate copy of the Proxy Statement and other proxy materials, you may send a written request to 3000 N.W. 107th Avenue, Miami, Florida 33172, Attention: Tricia Thompkins, General Counsel and Secretary or call (305) 592-2830. In addition, if you are receiving multiple copies of the Proxy Statement and other proxy material, you can request householding by contacting our General Counsel and Secretary in the same manner.

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 WHERE SHAREHOLDERS CAN FIND MORE INFORMATION

        The Company files certain reports and information with the SEC under the Exchange Act. You may obtain copies of this information in person or by mail from the public reference room of the SEC, 100 F Street, N.E., Room 1580, Washington, DC 20549, at prescribed rates. You may obtain information on the operation of the public reference room by calling the SEC at (800) SEC-0330 or (202) 942-8090. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers like the Company, which file electronically with the SEC. The address of that site is www.sec.gov.

        The Company files annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, proxy statements or other information that the Company files with the SEC at the following location of the SEC:

        Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. You may also obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. The Company's public filings are also available to the public from document retrieval services and the Internet website maintained by the SEC at www.sec.gov. The information provided on the Company's website is not part of this Proxy Statement, and therefore is not incorporated by reference herein.

        Because the merger is a "going private" transaction, the Company and the GF Group Filing Persons have filed with the SEC a Transaction Statement on Schedule 13E-3 with respect to the proposed merger. The Schedule 13E-3, including any amendments and exhibits filed or incorporated by reference as part of it, is available for inspection as set forth above. The reports, opinions or appraisals referenced in this Proxy Statement and filed as exhibits to the Schedule 13E-3 will also be made available for inspection and copying at the principal executive offices of the Company during regular business hours by any interested holder of Company Common Stock or any representative who has been so designated in writing.

        The information contained in this Proxy Statement speaks only as of the date indicated on the cover of this Proxy Statement unless the information specifically indicates that another date applies. The information that the Company later files with the SEC may update and supersede the information in this Proxy Statement.

        The SEC allows the Company to "incorporate by reference" information into this Proxy Statement. This means that the Company can disclose important information by referring to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this Proxy Statement. This Proxy Statement and the information that the Company later files with the SEC may update and supersede the information incorporated by reference. Similarly, the information that the Company later files with the SEC may update and supersede the information in this Proxy Statement.

        The following documents filed with the SEC are incorporated by reference in this Proxy Statement:

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        We also incorporate by reference each document we file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than Current Reports on Form 8-K filed under Items 2.02 and 7.01) after the date of this Proxy Statement and before the Special Meeting.

        Any person, including any beneficial owner, to whom this Proxy Statement is delivered may request copies of any of the documents incorporated by reference in this Proxy Statement. Requests for such copies should be directed to Perry Ellis International, Inc., 3000 N.W. 107th Avenue, Miami, Florida 33172, Attention: Tricia Thompkins, General Counsel and Secretary; Telephone: (305) 592-2830 and should be made at least five business days before the date of the Special Meeting. If you wish to receive a copy of any documents incorporated by reference in this Proxy Statement, will mail you these documents without charge excluding any exhibits to those documents (unless the exhibit is specifically incorporated by reference into this Proxy Statement).

        These documents are also available at the investor relations section of the Company's website, located at http://investor.pery.com/.

Questions

        If you have questions about the Special Meeting or the merger after reading this Proxy Statement, or if you would like additional copies of this Proxy Statement or the proxy card, you should contact Perry Ellis International, Inc., 3000 N.W. 107th Avenue, Miami, Florida 33172, Attention: Tricia Thompkins, General Counsel and Secretary. You may also contact the Company's proxy solicitor, Innisfree M&A Incorporated, by calling toll-free at 1 (888) 750-5834 (banks and brokers may call collect at (212) 750-5833).

*    *    *

        The Proxy Statement does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is not lawful to make any offer or solicitation in that jurisdiction. The delivery of this Proxy Statement should not create an implication that there has been no change in the affairs of the Company since the date of this Proxy Statement or that the information herein is correct as of any later date.

        No persons have been authorized to give any information or to make any representations other than those contained in this Proxy Statement and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or any other person. This Proxy Statement is dated [                ], 2018. You should not assume that the information contained in this Proxy Statement is accurate as of any date other than that date, and the mailing of this Proxy Statement to shareholders shall not create any implication to the contrary.

        No other matters are intended to be brought before the Special Meeting by the Company, and the Company does not know of any matters to be brought before the Special Meeting by others. If, however, any other matters properly come before the meeting, the persons named in this Proxy Statement will vote the shares represented thereby in accordance with the judgment of management on any such matter.

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APPENDIX A

EXECUTION VERSION

CONFIDENTIAL

AGREEMENT AND PLAN OF MERGER

by and among

FELDENKREIS HOLDINGS LLC,

GF MERGER SUB, INC.

and

PERRY ELLIS INTERNATIONAL, INC.


Dated as of June 15, 2018

Table of Contents


TABLE OF CONTENTS

 
    
   Page

ARTICLE I THE MERGER

   A-2

Section 1.1

  

The Merger

   A-2

Section 1.2

  

Closing

   A-2

Section 1.3

  

Effective Time

   A-2

Section 1.4

  

Effects of the Merger

   A-2

Section 1.5

  

Certificate of Incorporation

   A-2

Section 1.6

  

Bylaws

   A-2

Section 1.7

  

Directors

   A-2

Section 1.8

  

Officers

   A-3


ARTICLE II EFFECT OF THE MERGER ON CAPITAL STOCK
 
A-3

Section 2.1

  

Conversion of Capital Stock

   A-3

Section 2.2

  

Surrender of Certificates and Book-Entry Shares

   A-4

Section 2.3

  

Company Options, Company SARs and Company Stock Awards

   A-6

Section 2.4

  

Dissenting Shares

   A-8


ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
A-9

Section 3.1

  

Organization and Power

   A-9

Section 3.2

  

Foreign Qualifications

   A-9

Section 3.3

  

Corporate Authorization

   A-9

Section 3.4

  

Enforceability

   A-10

Section 3.5

  

Subsidiaries

   A-10

Section 3.6

  

Governmental Authorizations

   A-10

Section 3.7

  

Non-Contravention

   A-10

Section 3.8

  

Capitalization

   A-11

Section 3.9

  

Voting

   A-12

Section 3.10

  

SEC Reports; Company Proxy Statement; Schedule 13E-3

   A-12

Section 3.11

  

Financial Statements; Internal Controls

   A-13

Section 3.12

  

Liabilities

   A-14

Section 3.13

  

Absence of Certain Changes

   A-14

Section 3.14

  

Litigation

   A-14

Section 3.15

  

Material Contracts

   A-14

Section 3.16

  

Benefit Plans

   A-16

Section 3.17

  

Labor Relations

   A-18

Section 3.18

  

Taxes

   A-18

Section 3.19

  

Environmental Matters

   A-20

Section 3.20

  

Intellectual Property

   A-20

Section 3.21

  

Real Property

   A-21

Section 3.22

  

Permits; Compliance with Law

   A-21

Section 3.23

  

Insurance

   A-22

Section 3.24

  

Affiliated Transactions

   A-22

Section 3.25

  

Opinions of Financial Advisor

   A-22

Section 3.26

  

Brokers

   A-22

Section 3.27

  

State Takeover Laws

   A-22

Section 3.28

  

Certain Business Practices

   A-22

Section 3.29

  

No Other Representations or Warranties

   A-23

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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
 
A-23

Section 4.1

  

Organization and Power

   A-23

Section 4.2

  

Corporate Authorization

   A-23

Section 4.3

  

Governmental Authorizations

   A-24

Section 4.4

  

Non-Contravention

   A-24

Section 4.5

  

Capitalization; Interim Operations of Merger Sub; Ownership of Common Stock

   A-24

Section 4.6

  

Financing

   A-25

Section 4.7

  

Solvency

   A-27

Section 4.8

  

Litigation

   A-27

Section 4.9

  

No Regulatory Impediment

   A-27

Section 4.10

  

Absence of Certain Arrangements

   A-27

Section 4.11

  

Brokers

   A-27

Section 4.12

  

Limited Guarantee and Pledge and Security Agreement

   A-28

Section 4.13

  

Proxy Statement; Schedule 13E-3

   A-28

Section 4.14

  

Independent Investigation

   A-28


ARTICLE V COVENANTS
 
A-29

Section 5.1

  

Conduct of Business of the Company

   A-29

Section 5.2

  

Conduct of Business of Parent

   A-32

Section 5.3

  

Access to Information; Confidentiality

   A-32

Section 5.4

  

No Solicitation

   A-33

Section 5.5

  

Company Proxy Statement; Schedule 13E-3; Company Stockholders Meeting

   A-35

Section 5.6

  

Employees; Benefit Plans. 

   A-37

Section 5.7

  

Directors' and Officers' Indemnification and Insurance

   A-38

Section 5.8

  

Reasonable Best Efforts

   A-40

Section 5.9

  

Consents; Filings; Further Action; Notices

   A-40

Section 5.10

  

Public Announcements

   A-41

Section 5.11

  

Fees, Expenses and Conveyance Taxes

   A-42

Section 5.12

  

Financing Efforts

   A-42

Section 5.13

  

Section 16b-3

   A-46

Section 5.14

  

Agreements with Principal Stockholders

   A-46

Section 5.15

  

Transaction Litigation

   A-46

Section 5.16

  

Applicable Exchange De-listing

   A-47


ARTICLE VI CONDITIONS
 
A-47

Section 6.1

  

Conditions to Each Party's Obligation to Effect the Merger

   A-47

Section 6.2

  

Conditions to Obligations of Parent and Merger Sub

   A-47

Section 6.3

  

Conditions to Obligation of the Company

   A-48

Section 6.4

  

Frustration of Closing Conditions

   A-48


ARTICLE VII TERMINATION; TERMINATION FEES AND EXPENSES
 
A-48

Section 7.1

  

Termination by Mutual Consent

   A-48

Section 7.2

  

Termination by Either Parent or the Company

   A-48

Section 7.3

  

Termination by Parent

   A-49

Section 7.4

  

Termination by the Company

   A-49

Section 7.5

  

Manner and Effect of Termination

   A-50

Section 7.6

  

Fees and Expenses Following Termination

   A-50

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ARTICLE VIII MISCELLANEOUS
 
A-52

Section 8.1

  

Certain Definitions

   A-52

Section 8.2

  

Interpretation

   A-57

Section 8.3

  

No Survival

   A-58

Section 8.4

  

Governing Law

   A-58

Section 8.5

  

Submission to Jurisdiction; Service

   A-59

Section 8.6

  

WAIVER OF JURY TRIAL

   A-59

Section 8.7

  

Notices

   A-60

Section 8.8

  

Amendment

   A-61

Section 8.9

  

Extension; Waiver

   A-61

Section 8.10

  

Entire Agreement

   A-61

Section 8.11

  

No Third-Party Beneficiaries

   A-62

Section 8.12

  

Severability

   A-62

Section 8.13

  

Rules of Construction

   A-62

Section 8.14

  

Assignment

   A-62

Section 8.15

  

Specific Performance

   A-63

Section 8.16

  

Counterparts; Effectiveness

   A-64

Section 8.17

  

Special Committee Approval

   A-64

Section 8.18

  

No Recourse to Financing Sources

   A-64

Section 8.19

  

Breach of Rollover Investors Disregarded

   A-64

Exhibits

A   Certificate of Incorporation   A-67
B   Bylaws   A-69

Disclosure Letters

Company Disclosure Letter
Parent Disclosure Letter

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INDEX OF DEFINED TERMS

Term
  Section
Acceptable Confidentiality Agreement   8.1(a)
Affiliate   8.1(b)
Affiliate Transactions   3.24
Agreement   Preamble
Alternate Terms and Conditions   5.12(a)
Anticorruption Laws   8.1(c)
Applicable Exchange   8.1(d)
Articles of Merger   1.3
Balance Sheet Date   3.12(a)
Book-Entry Shares   2.1(c)(ii)
Business Day   8.1(e)
Certificates   2.1(c)(ii)
Chosen Courts   8.5(a)
Closing   1.2
Closing Date   1.2
Code   8.1(f)
Common Stock   8.1(g)
Company   Preamble
Company Assets   3.7
Company Board   Recitals
Company Board Recommendation   Recitals
Company Disclosure Letter   III
Company Employee Benefits   3.16(a)
Company Equity Plan   8.1(h)
Company Financial Advisor   3.25
Company Material Adverse Effect   3.7
Company Option   2.3(a)
Company Performance Stock Award   2.3(d)
Company Permits   3.22(a)
Company Proxy Statement   3.6(b)
Company Related Parties   8.1(j)
Company Restricted Stock Award   2.3(c)
Company RSUs   2.3(e)
Company SAR   2.3(b)
Company SEC Reports   3.10(a)
Company Severance Plan   5.6(b)
Company Stock Award   2.3(d)
Company Stockholders Meeting   3.6(b)
Company Termination Fee   7.6(c)
Confidentiality Agreements   5.3(b)
Continuation Period   5.6(a)
Contract   8.1(k)
Conveyance Taxes   5.11
Damages   5.7(b)
Debt Commitment Letters   4.6(a)
Debt Financing   4.6(a)
Dissenting Shares   2.4(a)
Divestiture Action   5.9(d)

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Term
  Section
Dollars   8.2(c)
Effective Time   1.3
Employee   5.6(a)
Enforceability Exceptions   8.1(l)
Environmental Law   3.19
ERISA   3.16(a)
ERISA Affiliate   3.16(a)
Exchange Act   3.6(b)
Excluded Shares   2.1(b)
Expenses   5.11
FBCA   Recitals
Financing   4.6(a)
Financing Commitments   4.6(a)
Financing Contingencies   8.1(m)
Financing Sources   8.1(n)
Foreign Competition Law   3.6(f)
Forward-Looking Information   III
FS Provisions   8.11
GAAP   3.11(a)(ii)
Governmental Authority   8.1(o)
Governmental Authorizations   3.6
Guarantor   4.12
Hazardous Substances   8.1(p)
HSR Act   3.6(e)
Indemnified Parties   5.7(a)
Intellectual Property   8.1(q)
Intervening Event   5.4(f)
IRS   3.16(b)
Knowledge   8.1(r)
Law   8.1(s)
Legal Actions   3.14
Lenders   4.6(a)
Liabilities   3.12
Liens   8.1(t)
Limited Guarantee   4.12
Material Contracts   3.15
Maximum Premium   5.7(c)
Merger   Recitals
Merger Consideration   2.1(c)(i)
Merger Sub   Preamble
Non-U.S. Employee Benefit   3.16(a)
Option Consideration   2.3(a)
Orders   8.1(u)
Organizational Documents   8.1(v)
Owned Intellectual Property   8.1(w)
Parent   Preamble
Parent Assets   4.4(b)
Parent Contracts   4.4(c)
Parent Disclosure Letter   IV
Parent Material Adverse Effect   8.1(x)

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Term
  Section
Parent Plan   5.6(c)
Parent Related Parties   8.1(y)
Parent Termination Fee   7.6(d)
Paying Agent   2.2(a)
Payment Fund   2.2(b)
Permits   3.22(a)
Permitted Lien   8.1(z)
Person   8.1(aa)
Pledgor   4.12
Preferred Stock   3.8(a)
Principal Stockholders   Recitals
Prior Service   5.6(c)
Real Property Leases   3.21(b)
Representatives   8.1(bb)
Requisite Company Vote   8.1(cc)
Rights   8.1(dd)
Rollover Investment   4.6(a)
Rollover Investors   4.6(a)
Rollover Letters   4.6(a)
SAR Consideration   2.3(b)
Schedule 13E-3   3.6(b)
SEC   3.6(b)
Securities Act   3.10(a)
Pledge and Security Agreement   4.12
Solvent   8.1(ee)
Special Committee   Recitals
Subsidiary   8.1(ff)
Superior Proposal   8.1(gg)
Surviving Bylaws   1.6
Surviving Charter   1.5
Surviving Corporation   1.1
Takeover Proposal   8.1(hh)
Tax Returns   8.1(ii)
Taxes   8.1(jj)
Termination Date   7.2(a)
Transaction Litigation   5.15
Voting Agreement   Recitals
Willful and Material Breach   8.1(kk)

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AGREEMENT AND PLAN OF MERGER

        AGREEMENT AND PLAN OF MERGER, dated as of June 15, 2018 (this "Agreement"), by and among Feldenkreis Holdings LLC, a Delaware limited liability company ("Parent"), GF Merger Sub, Inc., a Florida corporation and a wholly-owned subsidiary of Parent ("Merger Sub"), and Perry Ellis International, Inc., a Florida corporation (the "Company").


RECITALS

        WHEREAS, the Board of Directors of the Company (the "Company Board") established a Special Committee (the "Special Committee"), consisting solely of independent and disinterested directors, to, among other things, consider and negotiate strategic transactions involving the Company, including the merger of Merger Sub with and into the Company on the terms and subject to the conditions of this Agreement (the "Merger") and the other transactions contemplated by this Agreement, and to make a recommendation to the Company Board with respect thereto;

        WHEREAS, the Special Committee has determined that it is fair to, advisable and in the best interests of the Company and the holders of Common Stock to enter into this Agreement with Parent and Merger Sub, providing for the Merger and the other transactions contemplated hereby, in each case in accordance with the Florida Business Corporation Act (the "FBCA");

        WHEREAS, the Company Board, based on the recommendation of the Special Committee, at a meeting thereof duly called and held, has (a) approved and declared advisable this Agreement, the Merger and the other transactions contemplated by this Agreement, (b) declared that it is fair to, advisable and in the best interests of the Company and the stockholders of the Company that the Company enter into this Agreement and consummate the Merger on the terms and subject to the conditions set forth in this Agreement, (c) directed that the adoption of this Agreement be submitted to a vote at a meeting of the stockholders of the Company, and (d) recommended to the stockholders of the Company that they adopt this Agreement (the "Company Board Recommendation");

        WHEREAS, the board of directors of Merger Sub, at a meeting thereof duly called and held, has approved and declared advisable, and the managing member of Parent has approved, this Agreement, the Merger and the transactions contemplated by this Agreement, on the terms and subject to the conditions set forth in this Agreement;

        WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to the willingness of the Company to enter into this Agreement, (i) the Guarantor is entering into a Limited Guarantee and (ii) the Pledgor is entering into a Pledge and Security Agreement, in each case in favor of the Company with respect to certain of Parent's and Merger Sub's obligations under this Agreement;

        WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to the willingness of Parent and Merger Sub to enter into this Agreement, each Rollover Investor has entered into a Rollover Letter with Parent pursuant to which, among other things, the Rollover Investors have agreed, on the terms and subject to the conditions set forth in their respective Rollover Letters, to make the Rollover Investment;

        WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to the willingness of Parent and the Company to enter into this Agreement, certain stockholders of the Company (the "Principal Stockholders") are entering into a voting agreement (the "Voting Agreement") with Parent and the Company pursuant to which, among other things, the Principal Stockholders have agreed, on the terms and subject to the conditions set forth in the Voting Agreement, to (a) vote their shares of Common Stock in favor of adoption of this Agreement (and have delivered to the Company's Board of Directors an irrevocable proxy to so vote with respect to this

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Agreement to the extent provided therein) and (b) take certain other actions in furtherance of the transactions contemplated by this Agreement.

        Accordingly, in consideration of the mutual representations, warranties, covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement, intending to be legally bound, agree as follows:


ARTICLE I

THE MERGER

        Section 1.1    The Merger.     Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the FBCA, at the Effective Time, (a) Merger Sub shall be merged with and into the Company, (b) the separate corporate existence of Merger Sub shall cease and the Company shall continue its corporate existence under the FBCA as the surviving corporation in the Merger (the "Surviving Corporation") and (c) the Surviving Corporation shall become a wholly-owned Subsidiary of Parent.


        Section 1.2    Closing.     Subject to the satisfaction or waiver of all of the conditions to closing contained in Article VI, the closing of the Merger (the "Closing") shall take place (a) at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York, at 10:00 a.m. (local time) on the second Business Day after the day on which the conditions set forth in Article VI (other than those conditions that by their terms are to be satisfied by actions taken at the Closing, but subject to the satisfaction or waiver of those conditions) are satisfied or waived in accordance with this Agreement, or (b) at such other place and time as Parent and the Company may agree in writing. The date on which the Closing occurs is referred to as the "Closing Date."


        Section 1.3    Effective Time.     At the Closing, Parent and the Company shall cause an articles of merger (the "Articles of Merger") to be executed, signed, acknowledged and filed with the Secretary of State of the State of Florida in such form as is required by the relevant provisions of the FBCA, and shall make all other deliveries, filings or recordings required by the FBCA in connection with the Merger. The Merger shall become effective when the Articles of Merger has been duly filed with the Secretary of State of the State of Florida or at such other subsequent date or time as Parent and the Company may agree and specify in the Articles of Merger in accordance with the FBCA (the "Effective Time").


        Section 1.4    Effects of the Merger.     The Merger shall have the effects set forth in the FBCA, this Agreement and the Articles of Merger. From and after the Effective Time, the Surviving Corporation shall possess all of the rights, powers, privileges, franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the Company, all as provided in the FBCA.


        Section 1.5    Certificate of Incorporation.     The certificate of incorporation of the Company shall, at the Effective Time and without any further action on the party of any party hereto, be amended and restated to read in its entirety as set forth on Exhibit A and, as so amended and restated, shall be the certificate of incorporation of the Surviving Corporation (the "Surviving Charter"), until amended as provided therein and by applicable Law.


        Section 1.6    Bylaws.     The bylaws of the Company shall, at the Effective Time and without any further action on the party of any party hereto, be amended and restated to read in its entirety as set forth on Exhibit B and, as so amended and restated, shall be the bylaws of the Surviving Corporation (the "Surviving Bylaws"), until amended as provided in the Surviving Charter and the Surviving Bylaws and by applicable Law.


        Section 1.7    Directors.     The parties shall take all requisite action so that the directors of Merger Sub immediately before the Effective Time shall be, from and after the Effective Time, the directors of

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the Surviving Corporation until their successors are duly elected and qualified or until their earlier death, resignation or removal in accordance with the Surviving Charter, the Surviving Bylaws and applicable Law.


        Section 1.8    Officers.     The officers of the Company immediately before the Effective Time shall be, from and after the Effective Time, the officers of the Surviving Corporation until their successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Surviving Charter, the Surviving Bylaws and applicable Law.


ARTICLE II

EFFECT OF THE MERGER ON CAPITAL STOCK

        Section 2.1    Conversion of Capital Stock.     At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or the holder of any shares of capital stock of Merger Sub or the Company:

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        Section 2.2    Surrender of Certificates and Book-Entry Shares.     

A-4

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A-5

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        Section 2.3    Company Options, Company SARs and Company Stock Awards.     

A-6

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        Section 2.4    Dissenting Shares.     

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        Except as set forth in (x) the confidential disclosure letter delivered by the Company to Parent before or in connection with the execution of this Agreement (the "Company Disclosure Letter"), it being agreed that disclosure of any item in any section of the Company Disclosure Letter (whether or not an explicit cross reference appears) shall be deemed to be disclosure with respect to any other section of the Company Disclosure Letter and any other representation or warranty made elsewhere in Article III, in either case, to which the relevance of such item is reasonably apparent on the face of such disclosure or (y) the Company SEC Reports filed with, or furnished to, the SEC on or after January 1, 2017 and prior to the date of this Agreement (other than disclosures contained under the captions "Risk Factors" or "Forward-Looking Statements" to the extent that such disclosures are general in nature or cautionary, predictive or forward-looking in nature (or any other disclosures contained in the Company SEC Reports that are similarly predictive or forward-looking in nature) (collectively, "Forward-Looking Information")), the Company represents and warrants to Parent and Merger Sub that:


        Section 3.1    Organization and Power.     The Company is duly organized, validly existing and in good standing under the laws of the State of Florida and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each of the Company's Subsidiaries is duly organized, validly existing and in good standing under the laws of the relevant jurisdiction of organization and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted.


        Section 3.2    Foreign Qualifications.     Each of the Company and its Subsidiaries is duly qualified or licensed to do business as a foreign corporation, limited liability company or other legal entity and is in good standing in each jurisdiction where the nature of its business or ownership, leasing or operation of its properties requires such qualification, except where failure to be so qualified, licensed or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.


        Section 3.3    Corporate Authorization.     Assuming that the representations and warranties of Parent and Merger Sub contained in Section 4.5(c) are true and correct, the Company has all necessary corporate power and authority to enter into, deliver, and perform its obligations under, this Agreement and, subject to the receipt of the Requisite Company Vote with respect to the Merger, to consummate the transactions contemplated by this Agreement. Each of the Company Board and the Special Committee at a meeting duly called and held has duly adopted resolutions: (a) authorizing and approving the execution, delivery and performance of this Agreement and the transactions contemplated hereby, (b) approving and declaring advisable this Agreement, the Merger and the transactions contemplated by this Agreement, (c) declaring that it is in the best interests of the stockholders of the Company that the Company enter into this Agreement and consummate the Merger on the terms and subject to the conditions set forth in this Agreement, (d) directing that the adoption of this Agreement be submitted to a vote at a meeting of the stockholders of the Company and (e) recommending to the stockholders of the Company that they adopt this Agreement. Assuming that the representations and warranties of Parent and Merger Sub contained in Section 4.5(c) are true and correct and that the Requisite Company Vote is received, the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary corporate action on the part of the Company.

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        Section 3.4    Enforceability.     This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.


        Section 3.5    Subsidiaries.     Except as disclosed in Section 3.8(c) of the Company Disclosure Letter, each of the Subsidiaries of the Company is wholly-owned by the Company, directly or indirectly, free and clear of any Liens (other than Permitted Liens). Section 3.5 of the Company Disclosure Letter sets forth a true and complete list of all of the Subsidiaries of the Company, including the jurisdiction of organization of each such Subsidiary.


        Section 3.6    Governmental Authorizations.     Assuming that the representations and warranties of Parent and Merger Sub contained in Section 4.3 are true and correct, the execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement do not and will not require any consent, approval, order, waiver or other authorization of, or, registration, declaration or filing with or notification to (collectively, "Governmental Authorizations"), any Governmental Authority, other than:


        Section 3.7    Non-Contravention.     The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement do not and will not (a) contravene or conflict with, or result in any violation or breach of, any provision of the Organizational Documents of the Company, (b) contravene or conflict with, or result in any violation or breach of, any Law applicable to the Company or any of its Subsidiaries or by which any assets of the Company or any of its Subsidiaries ("Company Assets") are bound, assuming that all Governmental Authorizations described in Section 3.6 have been obtained or made, (c) conflict with or result in any violation or breach of, or constitute a default (with or without notice or lapse of time or both) under, or give rise to, or to a right of, termination, modification or cancellation under, any Material Contracts, (d) result in the creation of any Lien upon any of the properties, assets or rights of the Company or any of its Subsidiaries (other than any Lien created as a result of any action

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taken by Parent or Merger Sub) or (e) require any consent, approval or other authorization of, or filing with or notification to, any Person under any Material Contracts, other than in the case of clauses (b), (c), (d) and (e) of this Section 3.7, as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect (without regarding to the exclusions set forth in clause (ix) and (xiii) of the definition of "Company Material Adverse Effect").


        Section 3.8    Capitalization.     

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        Section 3.9    Voting.     Assuming that the representations and warranties of Parent and Merger Sub contained in Section 4.5(c) are true and correct, the Requisite Company Vote is the only vote of the holders of any class or series of the capital stock of the Company necessary to approve and adopt this Agreement, the Merger and the transactions contemplated by this Agreement.


        Section 3.10    SEC Reports; Company Proxy Statement; Schedule 13E-3.     

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        Section 3.11    Financial Statements; Internal Controls.     

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        Section 3.12    Liabilities.     There are no liabilities or obligations of any kind, whether accrued, contingent, absolute, inchoate or otherwise (collectively, "Liabilities"), of the Company or any of its Subsidiaries which are required to be reflected or reserved against on a consolidated balance sheet of the Company and its Subsidiaries in accordance with GAAP, other than:

        Neither the Company nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any off balance sheet partnership, joint venture or any similar arrangement (including any Contract relating to any transaction or relationship between or among the Company and/or any of its Subsidiaries, on the one hand, and any other Person, including any structured finance, special purpose or limited purpose Person, on the other hand), or any "off-balance sheet arrangement" (as defined in Item 303(a) of Regulation S-K promulgated under the Securities Act).


        Section 3.13    Absence of Certain Changes.     Except as otherwise contemplated, required or permitted by this Agreement, since the Balance Sheet Date (a) through the date hereof, the Company and each of its Subsidiaries have conducted their respective business, in all material respects, in the ordinary course of such businesses consistent with past practice and (b) there has not been any Company Material Adverse Effect.


        Section 3.14    Litigation.     As of the date hereof, there are no legal actions, arbitrations, litigations, suits or other civil or criminal proceedings (collectively, "Legal Actions") pending or, to the Knowledge of the Company, threatened in writing against the Company or any of its Subsidiaries or to which any of their respective properties or assets is subject that have had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and as of the date of this Agreement there is no Legal Action pending or, to the Knowledge of the Company, threatened in writing against the Company or any of its Subsidiaries that would or seeks to materially delay or prevent the consummation of the Merger or the transactions contemplated by this Agreement. As of the date hereof, there are no Orders outstanding to which the Company or any of its Subsidiaries is subject or bound that have had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect nor are there any Orders outstanding as of the date of this Agreement that would or seek to materially delay or prevent the consummation of any of the transactions contemplated by this Agreement.


        Section 3.15    Material Contracts.     Except for Contracts filed as exhibits to the Company SEC Reports or as disclosed in Section 3.15 of the Company Disclosure Letter, as of the date of this Agreement, (i) neither the Company nor any of its Subsidiaries is a party to, and (ii) none of the Company, any of its Subsidiaries or any of their respective properties or assets are bound by (in each case, other than any Company Employee Benefit) (collectively, the Contracts of the type described in clauses (a) through (j) below are referred to herein as, the "Material Contracts"):

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        Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect: (i) each Material Contract is, subject to the Enforceability Exceptions, a valid and binding agreement of the Company or its applicable Subsidiary and, to the Knowledge of the Company, each other party thereto, and is in full force and effect and enforceable against the Company or its Subsidiary and, to the Knowledge of the Company, each other party thereto, in accordance with its terms, (ii) none of the Company, its applicable Subsidiary or, to the Knowledge of the Company, any other party thereto, is in breach of or default under any such Material Contract, (iii) to the Knowledge of the Company, no party to any Material Contract has committed or failed to perform any act under and no event has occurred which, with or without notice, lapse of time or both, would constitute a default, require consent or result in the loss of a material benefit or give rise to any right of termination, amendment, acceleration or cancellation, under the provisions of such Material Contract, and (iv) neither the Company nor any of its Subsidiaries has received written notice from any other party to a Material Contract of the existence of any event, or condition which constitutes, or, after notice or lapse of time or both, will constitute, a default on the part of the Company or any of its Subsidiaries under any Material Contract. The Company has made available to Parent true and complete copies of all Material Contracts in effect as of the date hereof, including any material amendments thereto.


        Section 3.16    Benefit Plans.     

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        Section 3.17    Labor Relations.     


        Section 3.18    Taxes.     Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:

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        Section 3.19    Environmental Matters.     Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect: (a) since January 1, 2015, the operations of the Company and each of its Subsidiaries have complied with applicable Law relating to (i) pollution, contamination, protection of the environment, and human health and safety to the extent relating to exposure to Hazardous Substances, (ii) emissions, discharges, disseminations, releases or threatened releases of Hazardous Substances into the air (indoor or outdoor), surface water, groundwater, soil, land surface or subsurface, or (iii) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances (collectively, "Environmental Law"), (b) the Company and its Subsidiaries possess and maintain in good standing all Permits required under Environmental Law necessary for their respective operations, and such operations are in compliance with applicable Permits, (c) no Legal Action or written notice of violation or potential liability arising under or pursuant to Environmental Law is pending, or to the Knowledge of the Company, threatened in writing against the Company or any of its Subsidiaries, (d) there are no Orders arising under or pursuant to Environmental Law outstanding to which the Company or any of its Subsidiaries is subject or bound, and (e) to the Knowledge of the Company, there has been no release of Hazardous Substances on, at, above, under or from any facility or real property currently or formerly owned, leased or operated by the Company or any of its Subsidiaries. This Section 3.19 constitutes the exclusive representations and warranties of the Company with respect to the subject matters set forth in this Section 3.19.


        Section 3.20    Intellectual Property.     

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        Section 3.21    Real Property.     


        Section 3.22    Permits; Compliance with Law.     

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        Section 3.23    Insurance.     Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (a) the Company and/or its Subsidiaries maintain insurance policies in such amounts and against such risks as are customary in the industry in which the Company and its Subsidiaries operate, (b) to the Knowledge of the Company, each such insurance policy is legal, valid, binding and enforceable subject to the Enforceability Exceptions, (c) neither the Company nor any of its Subsidiaries is in breach of, or default under, any such insurance policy and (d) as of the date hereof, no written notice of cancellation or termination has been received with respect to any such insurance policy, other than in connection with ordinary renewals.


        Section 3.24    Affiliated Transactions.     No director, officer or Affiliate (other than Subsidiaries of the Company) of the Company is, or since January 1, 2017 has been, a party to any transaction, Contract, agreement, arrangement or understanding with the Company or its Subsidiaries, nor are there any of the foregoing currently proposed to the Company's audit committee, or has any material interest in any property used by the Company or its Subsidiaries, in each case that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act (collectively, "Affiliate Transactions"). The Company maintains and enforces a policy requiring that all Affiliate Transactions be presented to the Company's audit committee for prior authorization and approval or ratification.


        Section 3.25    Opinions of Financial Advisor.     PJ SOLOMON, L.P. (the "Company Financial Advisor") has delivered to the Special Committee its written opinion to the effect that, as of the date of this Agreement, and subject to the various limitations, assumptions, factors and matters set forth therein, the Merger Consideration is fair to the stockholders of the Company (other than Parent, Merger Sub and their Affiliates), from a financial point of view.


        Section 3.26    Brokers.     No broker, finder or investment banker other than the Company Financial Advisor is entitled to any brokerage, finder's or other similar fee or commission in connection with the Merger or the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or any of its Subsidiaries. The Company has made available to Parent true and complete copies of all Contracts under which any such fees or expenses are payable and all indemnification and other Contracts related to the engagement of the Person to whom such fees are payable.


        Section 3.27    State Takeover Laws.     Assuming the representations and warranties of Parent and Merger Sub contained in Section 4.5(c) are true and correct, the Board of Directors of Company has approved this Agreement and the transactions contemplated hereby as required to render inapplicable to this Agreement and such transactions the restrictions on "business combinations", "affiliated transactions" and "control share acquisitions" set forth in Section 607.0901 and Section 607.0902 of the FBCA or any other "moratorium," "control share," "fair price," "takeover" or "interested stockholder" law.


        Section 3.28    Certain Business Practices.     

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        Section 3.29    No Other Representations or Warranties.     Except for the representations and warranties contained in this Article III, neither the Company nor any other Person on behalf of the Company makes any express or implied representation or warranty with respect to the Company or with respect to any other information provided to Parent or Merger Sub in connection with the Merger and the other transactions contemplated hereby.


ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

        Except as set forth in the corresponding sections of the confidential disclosure letter delivered by Parent to the Company before or in connection with the execution of this Agreement (the "Parent Disclosure Letter"), it being agreed that disclosure of any item in any section of the Parent Disclosure Letter (whether or not an explicit cross reference appears) shall be deemed to be disclosure with respect to any other section of the Parent Disclosure Letter and any other representation and warranty made elsewhere in Article IV, in either case, to which the relevance of such item is reasonably apparent on the face of such disclosure, Parent and Merger Sub, jointly and severally, represent and warrant to the Company that:


        Section 4.1    Organization and Power.     Each of Parent and Merger Sub is duly organized, validly existing and in good standing under the Law of its jurisdiction of organization. Each of Parent and Merger Sub has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted.


        Section 4.2    Corporate Authorization.     Each of Parent and Merger Sub has all necessary power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. The board of directors or equivalent governing body of each of Parent and Merger Sub has adopted resolutions approving this Agreement and the transactions contemplated by this Agreement. The board of directors or equivalent governing body of each of Parent and Merger Sub have (a) approved and declared advisable this Agreement, the Merger and the transactions contemplated by this Agreement and (b) declared that it is in the best interests of the securityholders of Parent or Merger Sub that Parent or Merger Sub, as applicable, enter into this Agreement and consummate the Merger on the terms and subject to the conditions set forth in this Agreement. The execution, delivery and performance of this Agreement by each of Parent and Merger Sub and the consummation by each of Parent and Merger Sub of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary action on the part of Parent and Merger Sub. This Agreement constitutes a legal, valid and binding agreement of Parent and Merger Sub, enforceable against each of

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them in accordance with its terms, subject to the Enforceability Exceptions. No vote or consent of the members of Parent is required by applicable Law or the Organizational Documents of Parent in connection with the Merger or the other transactions contemplated by this Agreement.


        Section 4.3    Governmental Authorizations.     The execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated by this Agreement do not and will not require any Governmental Authorization, other than:


        Section 4.4    Non-Contravention.     The execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated by this Agreement do not and will not:


        Section 4.5    Capitalization; Interim Operations of Merger Sub; Ownership of Common Stock.     

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        Section 4.6    Financing.     

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        Section 4.7    Solvency.     On and as of the Closing Date, and after giving effect to the transactions contemplated by this Agreement, including the Financing and any alternative financing (including any financing to be issued or incurred in lieu of any bridge facility in any Debt Commitment Letter) permitted by this Agreement, the payment of the Merger Consideration, the incurrence of indebtedness in connection with the Debt Financing, and the repayment or refinancing of debt as contemplated herein and in the Financing Commitments, and assuming (i) the Company is Solvent immediately prior to the Effective Time, (ii) the satisfaction of the conditions to Parent's and Merger Sub's obligations to consummate the Merger as set forth herein, or the waiver of such conditions and (iii) the satisfaction of the conditions to the Company's obligation to consummate the Merger set forth in Section 6.3(a), Parent, the Surviving Corporation and the Surviving Corporation's Subsidiaries, taken as a whole, will be Solvent.


        Section 4.8    Litigation.     As of the date of this Agreement, there is no Legal Action pending or, to the Knowledge of Parent, threatened in writing against Parent or any of its Affiliates before any Governmental Authority that would or seeks to materially delay or prevent the consummation of the Merger or the transactions contemplated by this Agreement. As of the date of this Agreement, neither Parent nor any of its Affiliates is subject to any Order of, or, to the Knowledge of Parent, continuing investigation by, any Governmental Authority, or any Order of any Governmental Authority that would or seeks to materially delay or prevent the consummation of any of the transactions contemplated by this Agreement.


        Section 4.9    No Regulatory Impediment.     There is no material fact relating to Parent or any of its Affiliates' respective businesses, operations, financial condition or legal status, including any officer's, director's or current employee's status, that would reasonably be expected to impair the ability of the parties to this Agreement to obtain, on a timely basis, any authorization, consent, Order, declaration or approval of, or ability to contract with, any Governmental Authority or third party necessary for the consummation of the transactions contemplated by this Agreement.


        Section 4.10    Absence of Certain Arrangements.     Other than this Agreement, the Voting Agreement, the Rollover Letters and those other agreements contemplated hereby, there are no contracts, undertakings, commitments, agreements or obligations or understandings between Parent or Merger Sub or any of their respective Affiliates, on the one hand, and any member of the Company's management or the Company Board or any of their respective Affiliates (including any of the Principal Stockholders), on the other hand, relating to the transactions contemplated by this Agreement or the operations of the Company after the Effective Time.


        Section 4.11    Brokers.     The Company will not be responsible for any brokerage, finder's or other fee or commission to any broker, finder or investment banker in connection with the transactions contemplated by this Agreement based on arrangements made by or on behalf of Parent or Merger Sub, other than any such fee that is conditioned upon consummation of the Merger.

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        Section 4.12    Limited Guarantee and Pledge and Security Agreement.     Concurrently with the execution of this Agreement, Parent and Merger Sub have delivered to the Company (a) a limited guarantee of George Feldenkreis (the "Guarantor") in favor of the Company, dated the date hereof (as amended, modified or supplemented from time to time in accordance with its terms, the "Limited Guarantee") and (b) a pledge and security agreement of George Feldenkreis (the "Pledgor") in favor of the Company, dated the date hereof (as amended, modified or supplemented from time to time in accordance with its terms, the "Pledge and Security Agreement"). Each of the Limited Guarantee and the Pledge and Security Agreement is in full force and effect and constitutes the legal, valid and binding obligation of the Guarantor and Pledgor, respectively, enforceable against the Guarantor and Pledgor, respectively, in accordance with its terms, subject to the Enforceability Exceptions, and has not been amended, withdrawn or rescinded in any respect. As of the date hereof, no event has occurred which, with or without notice, lapse of time or both, would constitute a default on the part of the Guarantor or Pledgor under either the Limited Guarantee or the Pledge and Security Agreement, respectively.


        Section 4.13    Proxy Statement; Schedule 13E-3.     None of the information to be supplied by Parent or Merger Sub for inclusion in the Company Proxy Statement or the Schedule 13E-3 will (i) in the case of the Schedule 13E-3 (or any amendment thereof or supplement thereto), as of the date of filing and as of the date of the Company Stockholders Meeting and (ii) in the case of the Company Proxy Statement (or any amendment thereof or supplement thereto), as of the date of filing or mailing to the Company's stockholders and as of the date of the Company Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, with respect to information provided by Parent or Merger Sub, in light of the circumstances under which they are made, not misleading.


        Section 4.14    Independent Investigation.     In entering into this Agreement and each of the other documents and instruments relating to the Merger and the other transactions contemplated by this Agreement, Parent and Merger Sub have each relied solely upon its own investigation and analysis, and Parent and Merger Sub acknowledge and agree (a) that, except for the specific representations and warranties of the Company contained in this Agreement (including the Company Disclosure Letter and the Company SEC Reports), none of the Company, its Affiliates or any of its or their respective stockholders, controlling persons or Representatives makes or has made any representation or warranty, either express or implied, with respect to the Company or its Subsidiaries or Affiliates or their business, operations, technology, assets, Liabilities, results of operations, financial condition, prospects, projections, budgets, estimates or operational metrics, or as to the accuracy or completeness of any of the information (including any statement, document or agreement delivered pursuant to this Agreement and any financial statements and any projections, estimates or other forward-looking information) provided (including in any management presentations, information or descriptive memorandum, certain "data rooms" maintained by the Company, supplemental information or other materials or information with respect to any of the above) or otherwise made available to Parent and Merger Sub or any of their respective stockholders or Representatives and (b) that, to the fullest extent permitted by applicable Law, none of the Company, its Affiliates or any of its or their respective stockholders, controlling persons or Representatives shall have any liability or responsibility whatsoever to Parent or Merger Sub, their respective Affiliates, stockholders, controlling persons or Representatives on any basis (including in contract or tort, at law or in equity, under federal or state securities Laws or otherwise) based upon any information provided or made available, or statements made (or any omissions therefrom), to Parent or Merger Sub, their respective Affiliates, stockholders, controlling persons or Representatives, except as and only to the extent expressly set forth in this Agreement. Each of Parent and Merger Sub acknowledges and agrees that it has been furnished with, or given adequate access to, all information and materials relating to the Company and its Subsidiaries that it has requested and Representatives of the Company have answered all inquiries that Parent or Merger Sub has made of them concerning the Company and its Subsidiaries.

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ARTICLE V

COVENANTS

        Section 5.1    Conduct of Business of the Company.     From and after the date of this Agreement and prior to the earlier of the Effective Time or the termination of this Agreement pursuant to Article VII, except as provided in this Agreement, as set forth in Section 5.1 of the Company Disclosure Letter, as disclosed in the Company SEC Reports (other than in any Forward-Looking Information), or as required by applicable Law, Order or to comply with any notice from a Governmental Authority, without the prior written consent of Parent, such consent not to be unreasonably withheld, delayed or conditioned, the Company shall, and shall cause each of its Subsidiaries to, (a) conduct its operations only in the ordinary course of business consistent with past practice and (b) use its reasonable best efforts to preserve substantially intact the business organization of the Company and its Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and its Subsidiaries, and to preserve, in all material respects, the current relationships of the Company and its Subsidiaries with customers, licensees, suppliers and other Persons with which the Company and its Subsidiaries have material business relations. Without limiting the generality of the foregoing, and except as otherwise provided in this Agreement, as set forth in Section 5.1 of the Company Disclosure Letter, as disclosed in the Company SEC Reports (other than in any Forward-Looking Information) or as otherwise required by applicable Law, from and after the date of this Agreement and prior to the earlier of the Effective Time or the termination of this Agreement pursuant to Article VII, the Company shall not, and shall cause its Subsidiaries not to, take any of the following actions, without the prior written consent of Parent, such consent not to be unreasonably withheld, delayed or conditioned:

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Any action expressly permitted under any one clause of this Section 5.1 shall be permitted under all other clauses of this Section 5.1. Notwithstanding anything to the contrary herein, (x) any or all actions taken by, or omissions of, the Company, in an effort to satisfy or facilitate the Financing Contingencies will not constitute a breach of the Company's obligations under this Section 5.1 (including for purposes of Section 6.2(b) and Section 5.12(b)), and (y) any or all action taken by, or omission of, the Company in breach of this Section 5.1 at the direction of or with the consent of Oscar Feldenkreis, in his capacity as Chief Executive Officer of the Company, or which Oscar Feldenkreis, in his capacity as Chief Executive Officer of the Company, had prior or contemporaneous knowledge of or reasonably should have had prior or contemporaneous knowledge of, shall in each case be disregarded and not deemed to be a breach of Section 5.1 (including for purposes of Section 6.2(b) and Section 5.12(b)).

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        Nothing contained in this Agreement gives, or is intended to give, Parent or Merger Sub, directly or indirectly, the right to control or direct the Company's or its Subsidiaries' operations prior to the Effective Time, and nothing contained in this Agreement gives, or is intended to give, the Company, directly or indirectly, the right to control or direct Parent's or its Subsidiaries' operations. Prior to the Effective Time, each of Parent, Merger Sub and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries' respective operations.


        Section 5.2    Conduct of Business of Parent.     Parent shall not, and shall not permit any of its Affiliates to, without the prior written consent of the Company (such consent not to be unreasonably withheld, delayed or conditioned) take or agree to take any action that would reasonably be expected to (a) delay or prevent the consummation of the transactions contemplated by this Agreement, (b) impose or cause any delay in the obtaining of, or increase the risk of not obtaining, any Governmental Authorization necessary to consummate the transactions contemplated by this Agreement or the expiration or termination of any waiting period under applicable Law, (c) result in any Governmental Authority entering an Order prohibiting the consummation of the transactions contemplated by this Agreement or (d) materially interfere with Parent's ability to make available to the Paying Agent immediately prior to the Effective Time funds sufficient for the satisfaction of all of Parent's and Merger Sub's obligations under this Agreement, including the payment by Parent and Merger Sub of the Merger Consideration, any fees and expenses of or payable by Parent, Merger Sub or the Surviving Corporation, and any related repayment or refinancing of any indebtedness of the Company or any of its Subsidiaries, and any other amounts required to be paid in connection with the consummation of the transactions contemplated by this Agreement.


        Section 5.3    Access to Information; Confidentiality.     

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        Section 5.4    No Solicitation.     

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        Section 5.5    Company Proxy Statement; Schedule 13E-3; Company Stockholders Meeting.     

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        Section 5.6    Employees; Benefit Plans.     

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        Section 5.7    Directors' and Officers' Indemnification and Insurance.     

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        Section 5.8    Reasonable Best Efforts.     Upon the terms and subject to the conditions set forth in this Agreement and in accordance with applicable Law, each of the parties to this Agreement shall, and shall cause its Affiliates to, use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to ensure that the conditions set forth in Article VI are satisfied and to consummate the transactions contemplated by this Agreement as promptly as reasonably practicable; provided, that, prior to the Effective Time, in no event shall the Company or its Subsidiaries be required to pay, or otherwise incur any Liability with respect to, any fees (except for customary fees to Governmental Authorities), penalties or other consideration to obtain any consent or approval required for the consummation of the transactions contemplated by this Agreement. Notwithstanding the foregoing, the terms of this Section 5.8 shall not limit the rights of the Company set forth in Section 5.4.


        Section 5.9    Consents; Filings; Further Action; Notices.     

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        Section 5.10    Public Announcements.     The initial press release concerning this Agreement and the transactions contemplated hereby shall be a joint press release to be reasonably agreed upon by the Company and Parent. Following such initial press release, except as provided for in this Agreement, Parent and the Company shall consult with each other before issuing any press release or otherwise making any public statements about this Agreement or any of the transactions contemplated by this Agreement. Neither Parent nor the Company shall issue any such press release or make any such public statement prior to such consultation, except to the extent required by applicable Law or the Applicable Exchange requirements, in which case that party shall use its reasonable best efforts to consult with the other party before issuing any such release or making any such public statement; provided, that each party may, without complying with the foregoing obligations, make any public statement regarding the transactions contemplated by this Agreement in response to questions from the press, analysts, investors or those attending industry conferences, and may make internal announcements to employees, to the extent that such statements are not inconsistent with previous press releases, public disclosures or public statements made jointly by the parties and otherwise in

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compliance with this Section 5.10 and do not reveal material non-public information regarding this Agreement or the transactions contemplated by this Agreement; provided, further, that Parent's consent shall not be required, and the Company shall not be required to consult with Parent in connection with, or provide Parent an opportunity to review or comment upon, any press release or other public statement or comment to be issued or made with respect to any Takeover Proposal or with respect to any actions contemplated by Section 5.4(e), Section 5.4(f) or Section 5.4(g). Notwithstanding the foregoing, without the prior consent of the other parties, (a) the Company may communicate with customers, vendors, suppliers, financial analysts, investors and media representatives in a manner consistent with its past practice in compliance with applicable Law, (b) may disseminate the information included in a press release or other document previously approved for external distribution by Parent and (c) this Section 5.10 shall not apply to any disclosure of information concerning this Agreement in connection with any dispute between the parties regarding this Agreement.


        Section 5.11    Fees, Expenses and Conveyance Taxes.     Except as explicitly provided otherwise in this Agreement, whether or not the Merger is consummated, all fees, costs and expenses (including those payable to Representatives) incurred by any party to this Agreement or on its behalf in connection with this Agreement and the transactions contemplated by this Agreement ("Expenses") shall be paid by the party incurring those Expenses; except that (i) the filing fees for any filings made under the HSR Act or any Foreign Competition Law shall be paid by Parent, and (ii) all documentary, sales, use, real property transfer, real property gains, registration, value added, transfer, stamp, recording and similar Taxes, fees, and costs together with any interest thereon, penalties, fines, costs, fees, additions to Tax or additional amounts with respect thereto incurred in connection with this Agreement and the transactions contemplated hereby ("Conveyance Taxes"), shall be paid by Parent, and Parent shall file all Tax Returns related thereto, regardless of who may be liable therefor under applicable Law.


        Section 5.12    Financing Efforts.     

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        Any information provided to Parent or Merger Sub pursuant to this Section 5.12(b) shall be subject to the Confidentiality Agreements. Parent shall, on demand, reimburse the Company for all reasonable and documented out-of-pocket costs incurred by the Company and its Subsidiaries in connection with such cooperation. The Company and its Representatives shall be given a reasonable opportunity to review and comment on any materials that are to be presented during any meetings conducted in connection with the Financing, and Parent shall give due consideration to any such comments proposed by the Company and its Representatives. The Company hereby consents to the reasonable use of its and its Subsidiaries' logos in connection with the Financing; provided, that such logos are used solely in a manner that is not intended to, and is not reasonably likely to, harm or disparage the Company or

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any of its Subsidiaries or the reputation or goodwill of the Company, its Subsidiaries and its or their respective marks. Notwithstanding anything to the contrary, the condition set forth in Section 6.2(b) of this Agreement, as it applies to the Company's obligations under this Section 5.12(b), shall be deemed satisfied if the Company's material breach hereof was not the primary cause of the failure of funding under the Financing Commitments (provided that any or all action taken by, or omission of, the Company in breach of this Section 5.12(b) at the direction of or with the consent of Oscar Feldenkreis, in his capacity as Chief Executive Officer of the Company, or which Oscar Feldenkreis, in his capacity as Chief Executive Officer of the Company, had prior or contemporaneous knowledge of or reasonably should have had prior or contemporaneous knowledge of, shall in each case be disregarded and not deemed to be a breach of this Section 5.12(b) (including for purposes of Section 6.2(b))). Parent and Merger Sub acknowledge and agree that the Company and its Affiliates and their respective Representatives shall not have any responsibility for, or incur any Liability to any Person under or in connection with, the arrangement of the Financing or any alternative financing that Parent or Merger Sub may raise in connection with the transactions contemplated by this Agreement except arising from the actual and intentional fraud, willful misconduct or intentional misrepresentation of the Company, any of its Subsidiaries or any of their respective Representatives, and Parent and Merger Sub shall, on a joint and several basis, indemnify and hold harmless the Company, its Affiliates and its and their respective Representatives from and against any and all Damages suffered or incurred by any of them in connection with the arrangement of the Financing or any alternative financing, except to the extent such Damages arose out of or resulted from the actual and intentional fraud, willful misconduct or intentional misrepresentation of the Company, any of its Subsidiaries or any of their respective Representatives.


        Section 5.13    Section 16b-3.     Prior to the Effective Time, the Company shall (and shall be permitted to) take such steps as may be reasonably required to cause dispositions of the Company's equity securities (including derivative securities) pursuant to the transactions contemplated by this Agreement by each individual who is a director or officer of the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.


        Section 5.14    Agreements with Principal Stockholders.     From and after the date hereof until the Requisite Company Vote is obtained, in no event shall Parent or Merger Sub or any of their respective Affiliates, on the one hand, enter into any Contract with any of the Principal Stockholders or any of their respective Affiliates, on the other hand, relating to the transactions contemplated by this Agreement or the business, operations or other interests of the Company and its Subsidiaries after the Effective Time, unless such Contract shall terminate, by its terms, upon the termination of this Agreement without payment or penalty or any further obligations. In addition, from and after the date hereof until the Requisite Company Vote is obtained, in no event shall Parent amend, or waive any requirement under, the Voting Agreement or any Rollover Letter, in each case, without the prior written consent of the Company.


        Section 5.15    Transaction Litigation.     Prior to the earlier of the Effective Time or the termination of this Agreement pursuant to Article VII, the Company shall control the defense of any Legal Action (including any class action or derivative litigation) relating directly or indirectly to this Agreement or transactions contemplated by this Agreement, including disclosures made under securities laws and regulations related thereto ("Transaction Litigation"); provided, however, that the Company shall, as promptly as reasonably practicable after obtaining Knowledge thereof, notify Parent in writing of, and

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shall (i) give Parent the right to review and comment on all material filings or responses to be made by the Company in connection with any Transaction Litigation (and the Company shall in good faith take such comments into account), and the opportunity to participate in the defense and settlement of, any Transaction Litigation and (ii) if Parent does not exercise such right to participate (subject to the Company's control right), keep Parent reasonably and promptly informed with respect to the status of such Transaction Litigation. Except as permitted on Section 5.15 of the Company Disclosure Letter, no compromise or settlement of any Transaction Litigation shall be agreed to by the Company without Parent's prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).


        Section 5.16    Applicable Exchange De-listing.     The Surviving Corporation shall cause the Common Stock to be de-listed from the Applicable Exchange and de-registered under the Exchange Act at or as soon as practicable following the Effective Time.


ARTICLE VI

CONDITIONS

        Section 6.1    Conditions to Each Party's Obligation to Effect the Merger.     The respective obligation of each party to this Agreement to effect the Merger and the other transactions contemplated hereby is subject to the satisfaction or waiver on or before the Closing Date of each of the following conditions:


        Section 6.2    Conditions to Obligations of Parent and Merger Sub.     The obligations of each of Parent and Merger Sub to effect the Merger and the other transactions contemplated hereby are also subject to the satisfaction or waiver by Parent on or before the Closing Date of the following conditions:

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        Section 6.3    Conditions to Obligation of the Company.     The obligation of the Company to effect the Merger and the other transactions contemplated hereby is also subject to the satisfaction or waiver by the Company on or before the Closing Date of the following conditions:


        Section 6.4    Frustration of Closing Conditions.     Neither the Company, on the one hand, nor Parent or Merger Sub, on the other hand, may rely, either as a basis for not consummating the Merger or for terminating this Agreement and abandoning the Merger and the other transactions contemplated hereby, on the failure of any condition set forth in Section 6.1, Section 6.2 or Section 6.3, as the case may be, to be satisfied if such party's breach of any provision of this Agreement or failure to use its reasonable best efforts to consummate the Merger and the other transactions contemplated by this Agreement, as required by and subject to Section 5.8, Section 5.9 and Section 5.12, materially contributed to the failure of such condition to be satisfied.


ARTICLE VII

TERMINATION; TERMINATION FEES AND EXPENSES

        Section 7.1    Termination by Mutual Consent.     This Agreement may be terminated at any time before the Effective Time by mutual written consent of Parent and the Company (but with respect to the Company, only pursuant to a resolution adopted by the Special Committee).


        Section 7.2    Termination by Either Parent or the Company.     This Agreement may be terminated by either Parent or the Company (only pursuant to a resolution adopted by the Special Committee) at any time before the Effective Time:

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        Section 7.3    Termination by Parent.     This Agreement may be terminated by Parent at any time before the Effective Time:


        Section 7.4    Termination by the Company.     This Agreement may be terminated by the Company (only pursuant to a resolution adopted by the Special Committee) at any time before the Effective Time:

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        Section 7.5    Manner and Effect of Termination.     Any party terminating this Agreement pursuant to any of Section 7.2, Section 7.3 or Section 7.4 shall give written notice of such termination to the other party in accordance with this Agreement, which written notice shall specify the provision or provisions hereof pursuant to which such termination is being effected. If this Agreement is terminated pursuant to this Article VII, it shall become void and of no further force and effect, with no Liability on the part of any party to this Agreement (or any Parent Related Party or Company Related Party) other than as provided in Section 7.6; provided, that notwithstanding anything to the contrary contained in this Agreement, the provisions of Section 5.3(b), Section 5.10, Section 5.11, the final sentence of Section 5.12(b), this Section 7.5, Section 7.6, Article VIII, the Limited Guarantee, the Pledge and Security Agreement and the Confidentiality Agreements shall survive any termination of this Agreement.


        Section 7.6    Fees and Expenses Following Termination.     

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ARTICLE VIII

MISCELLANEOUS

        Section 8.1    Certain Definitions.     For purposes of this Agreement:

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        Section 8.2    Interpretation.     Unless the express context otherwise requires:

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        Section 8.3    No Survival.     None of the representations and warranties contained in this Agreement or in any instrument delivered under this Agreement (other than the Limited Guarantee and the Pledge and Security Agreement in accordance with their terms) shall survive the Effective Time. This Section 8.3 shall not limit any covenant or agreement of the parties to this Agreement which, by its terms, contemplates performance after the Effective Time, which, in each case, shall survive in accordance with its terms and conditions.


        Section 8.4    Governing Law.     

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        Section 8.5    Submission to Jurisdiction; Service.     


        Section 8.6    WAIVER OF JURY TRIAL.     EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION DIRECTLY OR INDIRECTLY

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ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE FINANCING COMMITMENTS OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, INCLUDING ANY LITIGATION AGAINST ANY FINANCING SOURCES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE FINANCING COMMITMENTS. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED AND UNDERSTANDS THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.6.


        Section 8.7    Notices.     All notices and other communications hereunder shall be in writing and shall be addressed as follows (or at such other address for a party as shall be specified by like notice):

        If to Parent or Merger Sub, to:

        with a copy (which shall not constitute notice) to:

        If to the Company, to:

        with a copy (which shall not constitute notice) to:

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        All such notices or communications shall be deemed to have been delivered and received (a) if delivered in person, on the day of such delivery, (b) if by facsimile or electronic mail, on the day on which such facsimile or electronic mail was sent; provided, that receipt is personally confirmed by telephone, (c) if by certified or registered mail (return receipt requested), on the seventh Business Day after the mailing thereof or (d) if by reputable overnight delivery service, on the second Business Day after the sending thereof.


        Section 8.8    Amendment.     This Agreement may be amended by the parties to this Agreement at any time before the Effective Time, whether before or after obtaining the Requisite Company Vote, so long as (a) no amendment that requires further stockholder approval under applicable Law after stockholder approval hereof shall be made without such required further approval and (b) such amendment has been duly approved by the board of directors or manager, as applicable, of each of Merger Sub, Parent and the Company (only pursuant to a resolution adopted by the Special Committee). This Agreement may not be amended except by an instrument in writing signed by each of the parties to this Agreement. Notwithstanding anything to the contrary in this Section 8.8, any amendments, modifications supplements to or waivers of any FS Provisions (or any other provision of this Agreement to the extent an amendment or waiver of such provision would modify the substance of any FS Provision) in a manner adverse to the Financing Sources shall require the prior written consent of the Financing Sources.


        Section 8.9    Extension; Waiver.     At any time before the Effective Time, Parent and Merger Sub, on the one hand, and the Company (only pursuant to a resolution adopted by the Special Committee), on the other hand, may (a) extend the time for the performance of any of the obligations of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered under this Agreement or (c) subject to applicable Law, waive compliance with any of the covenants or conditions contained in this Agreement; provided that, notwithstanding anything to the contrary in this Section 8.9, any waivers of any FS Provisions (or any other provision of this agreement to the extent a waiver of such provision would modify the substance of any FS Provision) in a manner adverse to the Financing Sources shall require the prior written consent of the Financing Sources. Any agreement on the part of a party to any extension or waiver shall be valid only if set forth in an instrument in writing signed by such party. The failure of any party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege under this Agreement.


        Section 8.10    Entire Agreement.     This Agreement (including the exhibits and schedules hereto), the Company Disclosure Letter, the Parent Disclosure Letter, the Limited Guarantee, the Pledge and Security Agreement, the Rollover Letters, the Voting Agreement and the Confidentiality Agreements contain all of the terms, conditions and representations and warranties agreed to by the parties relating to the subject matter of this Agreement and supersede all prior or contemporaneous agreements, negotiations, correspondence, undertakings, understandings, representations and warranties, both written and oral, among the parties to this Agreement with respect to the subject matter of this Agreement. Without limiting the generality of Section 4.14, no representation, warranty, inducement, promise, understanding or condition not set forth in this Agreement (including the exhibits and

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schedules hereto), the Company Disclosure Letter, the Parent Disclosure Letter, the Limited Guarantee, the Pledge and Security Agreement, the Rollover Letters, the Voting Agreement and the Confidentiality Agreements has been made or relied upon by any of the parties to this Agreement.


        Section 8.11    No Third-Party Beneficiaries.     Except (a) as provided in Section 5.7, (b) for the provisions of Article II (which, from and after the Effective Time, shall be for the benefit of holders of Common Stock, Company Options and Company Stock Awards as of the Effective Time) and (c) for the provisions of the last sentence of Section 5.12(b), which shall be for the benefit of the Company, its Affiliates and their respective Representatives, Parent and the Company hereby agree that their respective representations, warranties, covenants and agreements set forth herein are solely for the benefit of the other party hereto, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein, except that the Financing Sources are made express third party beneficiaries to Section 7.6(f), Section 8.4(b), Section 8.5(b), Section 8.6, Section 8.8, Section 8.9, this Section 8.11, Section 8.14 and Section 8.18 (collectively, the "FS Provisions"). The representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties hereto. Any inaccuracies in such representations and warranties are subject to waiver by the parties hereto in accordance with Section 8.9 without notice or liability to any other Person. The representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the Knowledge of any of the parties hereto. Accordingly, Persons other than the parties hereto may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.


        Section 8.12    Severability.     The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions of this Agreement. If any provision of this Agreement, or the application of that provision to any Person or any circumstance, is invalid or unenforceable, then (a) a suitable and equitable provision shall be substituted for that provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid or unenforceable provision and (b) the remainder of this Agreement and the application of that provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of that provision, or the application of that provision, in any other jurisdiction. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a reasonably acceptable manner so that the transactions contemplated hereby may be consummated as originally contemplated to the fullest extent possible.


        Section 8.13    Rules of Construction.     The parties have participated jointly in negotiating and drafting this Agreement. If an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. Subject to and without limiting the introductory language to Article III and Article IV, each party to this Agreement has or may have set forth information in its respective disclosure letter in a section of such disclosure letter that corresponds to the section of this Agreement to which it relates. The fact that any item of information is disclosed in a disclosure letter to this Agreement shall not constitute an admission by such party that such item is material, that such item has had or would have a Company Material Adverse Effect or Parent Material Adverse Effect, as the case may be, or that the disclosure of such be construed to mean that such information is required to be disclosed by this Agreement.


        Section 8.14    Assignment.     This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their permitted successors and assigns. No party to this Agreement may assign

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or delegate, by operation of law or otherwise, all or any portion of its rights or liabilities under this Agreement without the prior written consent of the other parties to this Agreement, which any such party may withhold in its absolute discretion; and any purported assignment without such prior written consents shall be void; provided that, notwithstanding anything contained in this Agreement to the contrary, Parent and Merger Sub may assign this Agreement to any Financing Source (so long as any such assignment does not relieve Parent or Merger Sub of its respective obligations hereunder) under terms of the Financing solely for the purpose of creating a security interest herein or otherwise assigning collateral with respect to the Financing.


        Section 8.15    Specific Performance.     

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        Section 8.16    Counterparts; Effectiveness.     This Agreement may be executed in any number of counterparts, as if the signatures to each counterpart were upon a single instrument, and all such counterparts together shall be deemed an original of this Agreement. Facsimile signatures or signatures received as a pdf attachment to electronic mail shall be treated as original signatures for all purposes of this Agreement. This Agreement shall become effective when, and only when, each party hereto shall have received a counterpart signed by all of the other parties hereto.


        Section 8.17    Special Committee Approval.     Notwithstanding anything to the contrary herein, no amendment or waiver of any provision of this Agreement and no decision or determination shall be made, or action taken, by or on behalf of the Company under or with respect to this Agreement without first obtaining the approval of the Special Committee.


        Section 8.18    No Recourse to Financing Sources.     Notwithstanding anything herein or in the Financing Commitments to the contrary, (i) no Financing Source shall have any liability for any obligations or liabilities of the parties hereto, or any of their respective Subsidiaries, Affiliates or Representatives, or for any claim (whether in tort, contract or otherwise), based on, in respect of, or by reason of this Agreement, the Financing, the Financing Commitments or the transactions contemplated hereby or thereby or in respect of any oral representations made or alleged to be made in connection herewith or therewith and (ii) neither the Company nor its Subsidiaries, Affiliates or Representatives shall have any rights or claims (whether in tort, contract or otherwise) against any Financing Source based on, in respect of, by reason of, or in any way relating to this Agreement, the Financing, the Financing Commitments or the transactions contemplated hereby or thereby or in respect of any oral representations made or alleged to be made in connection herewith or therewith. Notwithstanding anything herein to the contrary, other than pursuant to the Financing Commitments with respect to Parent and/or Merger Sub, (i) in no event shall any party hereto, nor any of its Affiliates, and each of the parties hereto hereby agrees not to and to cause its Affiliates not to, (a) seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Financing Source or (b) seek to enforce the commitments against, make any claims for breach of the Debt Commitment Letters against, or seek to obtain any other damages of any kind from, or otherwise sue, the Financing Sources for any reason, including in connection with the Debt Commitment Letters. Nothing in this Section 8.18 shall in any way limit or qualify the liabilities of the Financing Sources and the other parties to the Financing (or the definitive documents entered into pursuant thereto) to each other thereunder or in connection therewith. No Financing Source shall be subject to any special, consequential, punitive or indirect damages or damages or a tortious nature.


        Section 8.19    Breach of Rollover Investors Disregarded.     Any breach or assertion of any breach of this Agreement by the Company or any of its Representatives that is attributable to or caused by the actions of or failure to act by George Feldenkreis or Oscar Feldenkreis, including in connection with any representations or warranties made hereunder or any actions taken or failure to act, in each case in contravention hereof, shall be disregarded for all purposes under this Agreement.

[Signature page follows]

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        IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties to this Agreement as of the date first written above.

 
    
    
    

  FELDENKREIS HOLDINGS LLC

 

By:

  

SIG

      Name:   George Feldenkreis

      Title:   Sole Member

 

GF MERGER SUB, INC.

 

By:

  

SIG

      Name:   George Feldenkreis

      Title:   Chief Executive Officer & President

 

PERRY ELLIS INTERNATIONAL, INC.

 

By:

  

 

      Name:   Oscar Feldenkreis

      Title:   Chief Executive Officer

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        IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties to this Agreement as of the date first written above.

 
    
    
    

  FELDENKREIS HOLDINGS LLC

 

By:

  

  

      Name:    

      Title:    

 

GF MERGER SUB, INC.

 

By:

  

  

      Name:    

      Title:    

 

PERRY ELLIS INTERNATIONAL, INC.

 

By:

  

SIG

      Name:   Oscar Feldenkreis

      Title:   Chief Executive Officer

[Signature Page to Merger Agreement]

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EXHIBIT A

SIXTH AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PERRY ELLIS INTERNATIONAL, INC

        Pursuant to the provisions of Section 607.0202 of the Florida Business Corporation Act, the undersigned does hereby execute and submit for filing with the Florida Department of State these Articles of Incorporation as follows:


ARTICLE I—NAME

        The name of the corporation is Perry Ellis International, Inc.


ARTICLE II—ADDRESS

        The principal office and mailing address of the corporation is 4810 NW 74th Avenue, Miami, Florida 33166.


ARTICLE III—CAPITAL STOCK

        The corporation is authorized to issue [            ] shares of common stock, par value $0.01 per share.


ARTICLE IV—REGISTERED OFFICE AND REGISTERED AGENT

        The address of the registered office of the corporation is 1200 South Pine Island Road, Plantation, Florida 33324 and the name of the registered agent of the corporation at such address is NRAI Services, Inc.


ARTICLE VI—INDEMNIFICATION

        The corporation may insure and shall indemnify and shall advance expenses on behalf of its officers and directors and any persons serving at the request of the corporation as an officer, director, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise to the fullest extent not prohibited by law in existence either now or hereafter.

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        IN WITNESS WHEREOF, the undersigned has caused these Sixth Amended and Restated Articles of Incorporation to be duly executed as of [        ], 2018.

  PERRY ELLIS INTERNATIONAL, INC.

 

By:

  

 

      Name:   George Feldenkreis

      Title:    

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EXHIBIT B

         THIRD AMENDED AND RESTATED BYLAWS

OF

PERRY ELLIS INTERNATIONAL, INC.
a Florida Corporation

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THIRD AMENDED AND RESTATED BYLAWS

OF

PERRY ELLIS INTERNATIONAL, INC.
a Florida Corporation

ARTICLE I

OFFICES

        Section 1.    The location of the registered office of Perry Ellis International, Inc., a Florida corporation (the "Corporation"), shall be as stated in the Articles of Incorporation, which location may be changed from time to time by the Board of Directors of the Corporation (the "Board of Directors").

        Section 2.    The Corporation may also have offices at such other places, both within and without the State of Florida, as the Board of Directors may from time to time determine or as the business of the Corporation may require.


ARTICLE II

MEETINGS OF SHAREHOLDERS

        Section 1.    Meetings of the shareholders may be held at such place either within or without the State of Florida as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof.

        Section 2.    Annual meetings of shareholders shall be held on such date and at such time as may be fixed from time to time, provided, that there shall be an annual meeting held every calendar year at which shareholders shall elect a Board of Directors and transact such other business as may properly be brought before the meeting.

        Section 3.    Special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Articles of Incorporation, may be called by the Chairman of the Board or the President of the Corporation, and shall be called by the Board of Directors at the request in writing of a majority of the Board of Directors or at the request in writing of the holders of not less than 50% of all the shares entitled to vote at a meeting which shall state in such request the purpose or purposes of the proposed meeting.

        Section 4.    The officer or agent who has charge of the stock transfer book for shares of the Corporation shall make and certify a complete list of the shareholders entitled to vote at a shareholders' meeting, or any adjournment thereof. Such list shall be arranged alphabetically and by voting group and shall show the address of each shareholder and the number of shares registered in the name of each shareholder. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any shareholder who is present.

        Section 5.    Except as may be provided by statute, written notice of an annual or special meeting of shareholders stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be delivered, either personally or by first-class mail, not less than 10 nor more than 60 days before the date of the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the shareholder at his address as it appears on the stock transfer books of the Corporation with postage thereon prepaid.

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shareholders for the transaction of business except as otherwise expressly required by statute or by the Articles of Incorporation or these Bylaws. All shareholders present in person or represented by proxy at such meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. If, however, such quorum shall not be initially present at any meeting of shareholders, a majority of the shareholders entitled to vote thereat shall nevertheless have power to adjourn the meeting from time to time and to another place, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting, at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally called. If after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting. Once a share is represented for any purpose at a meeting, it is deemed presented for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.

        Section 7.    When an action other than the election of directors is to be taken by vote of the shareholders, it shall be authorized if the votes cast favoring the action exceed the votes cast against the action, except as otherwise expressly required by statute, the Articles of Incorporation, or these Bylaws, in which case such express provision shall govern and control the decision of such question. "Shares represented at the meeting" shall be determined as of the time the existence of the quorum is determined. Except as otherwise expressly required by the Articles of Incorporation, directors shall be elected by a plurality of the votes cast at an election.

        Section 8.    Except as otherwise provided by law or the Articles, each shareholder shall at every meeting of the shareholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such shareholder except as otherwise expressly required in the Articles of Incorporation. A vote may be cast either orally or in writing. Each proxy shall be in writing and signed by the shareholder or his authorized agent or representative. A proxy is not valid after the expiration of 11 months after its date unless the person executing it specifies therein the length of time for which it is to continue in force. Unless prohibited by law, a proxy otherwise validly granted by facsimile shall be deemed to have been signed by the granting shareholder. All questions regarding the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided by the presiding officer of the meeting.

        Section 9.    Attendance of a person at a meeting of shareholders in person or by proxy constitutes a waiver of notice of the meeting except where the shareholder, at the beginning of the meeting, objects to holding the meeting or transacting business at the meeting.

        Section 10.    Any action required to be taken at any annual or special meeting of the shareholders, or any other action which may be taken at any annual or special meeting of the shareholders may be taken without a meeting, without prior notice, and without a vote if a consent in writing, setting forth the action so taken, shall be signed by holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize such action at a meeting at which all shares entitled to vote thereon were present and voted. Within 10 days after obtaining such authorization by written consent, notice shall be given to those shareholders who have not consented in writing. The notice shall fairly summarize the material features of the authorized action and, if the action is of a type for which dissenters' rights are provided for by statute, the notice shall contain a clear statement of the right of shareholders dissenting therefrom to be paid the fair value of their shares upon compliance with further provisions of such statute regarding the rights of dissenting shareholders.

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ARTICLE III

DIRECTORS

        Section 1.    The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the shareholders.

        Section 2.    The number of directors of the Corporation shall be determined from time to time by resolution of the Board of Directors. In the absence of an express determination by the Board of Directors, the number of directors, until changed by the Board of Directors, shall be that number of directors elected at the most recently held annual meeting of shareholders or, if no such meeting has been held, the number elected by the incorporator. The directors shall be elected at the annual meeting of the shareholders, except as provided in Section 3 of this Article, and each director elected shall hold office until his successor is duly elected and qualified or until his death, resignation or removal. Directors need not be shareholders or officers of the Corporation.

        Section 3.    Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by the affirmative vote of a majority of the directors then in office, though less than a quorum, or by a sole remaining director, or by the shareholders, and the directors so chosen shall hold office until the next annual election of directors by the shareholders and until their successors are duly elected and qualified or until their death, resignation or removal. Any director may be removed, with or without cause, by the shareholders at a meeting of the shareholders called expressly for that purpose. A director may resign by written notice to the Corporation. The resignation is effective upon its delivery to the Corporation or a subsequent time as set forth in the notice of resignation.

        Section 4.    The Board of Directors may hold meetings, both regular and special, either within or without the State of Florida. Unless otherwise restricted by the Articles of Incorporation, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this section shall constitute presence in person at such meeting.

        Section 5.    Regular meetings of the Board of Directors may be held at such time and at such place as shall from time to time be determined by the Board of Directors or by the President of the Corporation. Any notice given of a regular meeting need not specify the business to be transacted or the purpose of the meeting. Regular meetings of the Board of Directors may also be held without notice.

        Section 6.    Special meetings of the Board of Directors may be called by the Board of Directors or President of the Corporation on two days' notice to each director by mail or 24 hours' notice either personally or by telephone or facsimile transmission. The notice need not specify the business to be transacted or the purpose of the special meetings. The notice shall specify the place of the special meeting.

        Section 7.    At all meetings of the Board of Directors, a majority of the number of directors then serving shall constitute a quorum for the transaction of business. At all meetings of a committee of the Board of Directors a majority of the directors then members of the committee in office shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which there is a quorum shall be the act of the Board of Directors or the committee, unless the vote of a larger number is specifically required by statute, by the Articles of Incorporation, or by these Bylaws. If a quorum shall not be present at any meeting of the Board of Directors or a committee, the

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members present thereat may adjourn the meeting from time to time and to another place without notice other than announcement at the meeting, until a quorum shall be present.

        Section 8.    Unless otherwise provided by the Articles of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if, before or after the action, all members of the Board of Directors or committee consent thereto in writing. The written consents shall be filed with the minutes of proceedings of the Board of Directors or committee. Such consents shall have the same effect as a vote of the Board of Directors or committee for all purposes.

        Section 9.    A majority of the full Board of Directors may, by resolution, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation; provided, however, such a committee shall not have the power or authority to:

Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. A committee, and each member thereof, shall serve at the pleasure of the Board of Directors.

        Section 10.    Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

        Section 11.    By resolution of the Board of Directors and irrespective of any personal interest of any director, the Board of Directors may establish reasonable compensation of directors for services to the Corporation as directors, officers or members of a committee. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

        Section 12.    Attendance of a director at a meeting constitutes a waiver of notice of the meeting except where a director states, at the beginning of the meeting or promptly upon arrival at the meeting, any objection to the transaction of business because the meeting is not lawfully called or convened.


ARTICLE IV

NOTICES

        Section 1.    Whenever, under the provisions of the statutes or of the Articles of Incorporation or of these Bylaws, written notice is required to be given to any director, committee member or shareholder, such notice may be (but is not required to be) given in writing by mail (registered, certified or other first class mail) addressed to such director, shareholder or committee member at his

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address as it appears on the records of the Corporation, with postage thereon prepaid. Such notice shall be deemed to be given at the time when the same shall be deposited in a post office or official depository under the exclusive care and custody of the United States postal service.

        Section 2.    Whenever any notice is required to be given under the provision of the statutes or of the Articles of Incorporation or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the shareholders, directors or a committee, need be specified in any written waiver of notice.


ARTICLE V

OFFICERS

        Section 1.    The officers of the Corporation shall be chosen by the Board of Directors at its first meeting after each annual meeting of shareholders. The officers of the Corporation may consist of a president, one or more vice presidents, a secretary and a treasurer and, if elected by the Board of Directors by resolution, a Chairman of the Board of Directors. Any number of offices may be held by the same person.

        Section 2.    The Board of Directors may from time to time appoint such other officers and assistant officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.

        Section 3.    The salaries of all officers of the Corporation shall be fixed by the Board of Directors.

        Section 4.    The officers of the Corporation shall hold office until their successors are chosen and qualified. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors with or without cause whenever, in its judgment, the best interests of the Corporation will be served thereby. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors. An officer may resign by written notice to the Corporation. The resignation is effective upon its delivery to the Corporation or at a subsequent time specified in the notice of resignation.

        Section 5.    Unless otherwise provided by resolution of the Board of Directors, the president shall be the chief executive officer of the Corporation, shall, in the absence or non-election of a chairman or vice chairman of the Board of Directors, preside at all meetings of the shareholders and the Board of Directors (if he shall be a member of the Board of Directors), shall have general and active management of the business and affairs of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute on behalf of the Corporation, and may affix or cause the corporate seal (if adopted by the Board of Directors) to be affixed to, all instruments requiring such execution except to the extent the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation, and he shall have the authority to vote any shares of stock owned by the Corporation.

        Section 6.    The vice-presidents shall act under the direction of the president. They shall perform such duties and have such other powers as the president or the Board of Directors may from time to time prescribe. The Board of Directors may designate one or more executive vice-presidents or may otherwise specify the order of seniority of the vice-presidents.

        Section 7.    The secretary shall act under the direction of the president. Subject to the direction of the president he or she shall attend all meetings of the Board of Directors and all meetings of the shareholders and record the proceedings. The secretary shall perform like duties for the standing

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committees when required. The secretary shall give, or cause to be given, notice of all meetings of the shareholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the president or the Board of Directors. The secretary shall keep in safe custody the seal of the Corporation, if a corporate seal is adopted by the Board of Directors. When authorized by the president or the Board of Directors, the secretary shall cause the seal of the Corporation to be affixed to any instrument requiring it. The secretary shall be responsible for maintaining the stock transfer book and minute book of the Corporation and shall be responsible for their updating.

        Section 8.    The assistant secretaries shall act under the direction of the president. In the order of their seniority in office, unless otherwise determined by the president or the Board of Directors, they shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary. They shall perform such other duties and have such other powers as the president or the Board of Directors may from time to time prescribe.

        Section 9.    The treasurer shall act under the direction of the president. Subject to the direction of the president, the treasurer shall have custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The treasurer shall disburse the funds of the Corporation as may be ordered by the president or the Board of Directors, taking proper vouchers for such disbursements, and shall render to the president and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions as treasurer and of the financial condition of the Corporation. The treasurer may affix or cause to be affixed the seal of the Corporation to documents so requiring the seal, if a corporate seal is adopted by the Board of Directors.

        Section 10.    The assistant treasurers in the order of their seniority of office, unless otherwise determined by the president or the Board of Directors shall, in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. They shall perform such other duties and have such other powers as the president or the Board of Directors may from time to time prescribe.

        Section 11.    To the extent the powers and duties of the several officers are not provided from time to time by resolution or other directive of the Board of Directors or by the president (with respect to other officers), the officers shall have all powers and shall discharge the duties customarily and usually held and performed by like officers of corporations similar in organization and business purposes to this Corporation.


ARTICLE VI

CERTIFICATES OF STOCK
AND SHAREHOLDERS OF RECORD

        Section 1.    The shares of stock of the Corporation shall be represented by certificates signed by, or in the name of the Corporation by, the president or a vice-president and by the secretary or an assistant secretary of the Corporation provided that the Board of Directors may provide by resolution or resolutions that some or all of any classes or series of its stock shall be uncertificated shares. Notwithstanding the adoption of such a resolution by the Board of Directors, each holder of stock in the Corporation shall be entitled to have such a certificate certifying the number of shares owned by him in the Corporation.

        Section 2.    Any or all of the signatures on the certificate may be a facsimile if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation itself or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue. The seal of the Corporation or a facsimile thereof may, but need not, be affixed to the certificates of stock.

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        Section 3.    The Board of Directors may direct a new certificate for shares to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost or destroyed.

        Section 4.    Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its stock transfer book for shares of the Corporation.

        Section 5.    In order that the Corporation may determine the shareholders entitled to notice of, or to vote at, any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or for the purpose of any other action, the Board of Directors may fix, in advance, a date as a record date, which shall not be more than 70 nor less than 10 days before the date of such meeting, nor more than 70 days prior to any other action. The stock transfer books of the Corporation shall not be closed.

        If no record date is fixed:

        A determination of shareholders of record entitled to notice or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

        Section 6.    The Corporation shall be entitled to recognize the exclusive right of a person registered upon its stock transfer book for shares of the Corporation as the owner of shares for all purposes, including voting and dividends, and shall not be bound to recognize any equitable or other claim to interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Florida.


ARTICLE VII

INDEMNIFICATION

        Section 1.    Subject to the other provisions of this Article, the Corporation shall indemnify and hold harmless, to the fullest extent permitted by the Florida Business Corporation Act, as amended (the "FBCA"), as the same exists now or as it may be hereinafter amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), any person (and the heirs, executors, administrators or estate of such person) who was or is a party or is threatened to be made a party to, or otherwise becomes involved in, a Proceeding (as defined in Section 17 of this Article) other than an action by or in the right of the Corporation) by reason of the fact that such person is or was serving, or had agreed to serve, in an Official Capacity (as defined in

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Section 17 of this Article) for the Corporation, or while serving in an Official Capacity for the Corporation is or was serving at the request of the Corporation in an Official Capacity for another corporation, partnership, limited liability company, joint venture, trust or other enterprise (an "Other Enterprise"), including service with respect to employee benefit plans maintained or sponsored by the Corporation, or is an employee of the Corporation specifically designated by the Board of Directors as an indemnified employee (hereinafter, each of the foregoing persons, a "Covered Person"), against Expenses (as defined in Section 17 of this Article), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal Proceeding, had reasonable cause to believe that such person's conduct was unlawful.

        Section 2.    Subject to the other provisions of this Article, the Corporation shall indemnify and hold harmless, to the fullest extent permitted by the FBCA, any Covered Person who was or is a party or is threatened to be made a party to, or otherwise becomes involved in, a Proceeding by or in the right of the Corporation against Expenses actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such Expenses which such court shall deem proper.

        Section 3.    To the extent that a Covered Person has been successful on the merits or otherwise in defense of any Proceeding described in Section 1 or Section 2 of this Article, or in defense of any claim, issue or matter therein, such person shall be indemnified against Expenses actually and reasonably incurred by such person in connection therewith.

        Section 4.    Subject to the other provisions of this Article, the Corporation shall have power to indemnify its employees and its agents to the extent not prohibited by the FBCA or other applicable law. The Board of Directors shall have the power to delegate the determination of whether employees or agents shall be indemnified to such person or persons as the Board of Directors determines.

        Section 5.

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        Section 6.    Subject to the requirements in Section 3 of this Article and the FBCA, the Corporation shall not be obligated to indemnify any person pursuant to this Article in connection with any Proceeding (or any part of any Proceeding):

        Section 7.

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        Section 8.

        Section 9.    All of the rights conferred in this Article, as to indemnification, advancement of Expenses and otherwise, shall be contract rights between the Corporation and each indemnified person to whom such rights are extended that vest at the commencement of such indemnified person's service to or at the request of the Corporation and (i) no amendment, modification or repeal of this Article shall affect, to the detriment of the indemnified person and such indemnified person's heirs, executors, administrators and estate, such obligations of the Corporation in connection with a claim based on any act or failure to act occurring before such modification or repeal, and (ii) all of such rights shall continue as to any such indemnified person who has ceased to serve in an Official Capacity for the Corporation or ceased to serve at the request of the Corporation in an Official Capacity for an Other Enterprise, and shall inure to the benefit of such indemnified person's heirs, executors, administrators and estate, and shall be applicable to proceedings commenced after the adoption hereof, whether arising from acts or omissions occurring before or after the adoption hereof.

        Section 10.    All of the rights conferred pursuant to this Article, as to indemnification, advancement of Expenses and otherwise, (i) shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of Expenses may be entitled under the Articles of Incorporation or any statute, bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in such person's Official Capacity and as to action in another capacity while holding such office, and (ii) cannot be terminated or impaired by the Corporation, the Board of

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Directors or the shareholders of the Corporation with respect to a person's service prior to the date of such termination. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advancement of Expenses, to the fullest extent not prohibited by the FBCA or other applicable law.

        Section 11.

        Section 12.    Persons who after the date of the adoption of this Article serve or continue to serve the Corporation in an Official Capacity or who, while serving in an Official Capacity, serve or continue to serve in an Official Capacity for an Other Enterprise, shall be conclusively presumed to have relied on the rights to indemnification and advancement of Expenses contained in this Article.

        Section 13.    The knowledge and/or actions, or failure to act, of any other officer, director, employee or agent of the Corporation or an Other Enterprise shall not be imputed to an indemnified person for purposes of determining the right to indemnification under this Article.

        Section 14.    The rights to indemnification and advancement of Expenses conferred by this Article shall continue as to a person who has ceased to be a director, officer, employee, or agent of the Corporation or an Other Enterprise and shall inure to the benefit of the heirs, executors, administrators and estate of such person.

        Section 15.    Any notice, request or other communication required or permitted to be given to the Corporation under this Article shall be in writing and either delivered in person or sent by mail or other method of delivery, or by e-mail or other electronic transmission, to the Secretary of the Corporation and shall be effective only upon receipt by the Secretary.

        Section 16.    If this Article or any provision hereof shall be held by a court of competent jurisdiction to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article (including, without limitation, each section and subsection of this Article containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired hereby, and (b) to the fullest extent possible and permitted by the FBCA and other applicable law, the provisions of this Article (including, without limitation, each portion of any section or subsection of this Article containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give maximum effect to the intent manifested by the provision held to be invalid, illegal or unenforceable.

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        Section 17.

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ARTICLE VIII

GENERAL PROVISIONS

        Section 1.    All checks, drafts or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may from time to time designate.

        Section 2.    The fiscal year of the Corporation shall be fixed from time to time by resolution of the Board of Directors, but shall end on December 31st of each year if not otherwise fixed by the Board of Directors.

        Section 3.    The Board of Directors may adopt a corporate seal for the Corporation. The corporate seal shall have inscribed thereon the name of the Corporation and the words "Corporate Seal, Florida." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Except as otherwise provided by law, the failure to affix the seal of the Corporation to a document shall not affect the validity thereof.

        Section 4.    The Corporation shall keep within or without the State of Florida books and records of account and minutes of the proceedings of its shareholders, Board of Directors and executive committee, if any. The Corporation shall keep at its registered office or at the office of its transfer agent within or without the State of Florida a stock transfer book for shares of the Corporation containing the names and addresses of all shareholders, the number, class and series of shares held by each and the dates when they respectively became holders of record thereof. Any such stock transfer book, books, records or minutes may be in written form or in any other form capable of being converted into written form within a reasonable time.

        Section 5.    These Bylaws shall govern the internal affairs of the Corporation, but only to the extent they are consistent with law and the Articles of Incorporation. Nothing contained in the Bylaws shall, however, prevent the imposition by contract of greater voting, notice or other requirements than those set forth in these Bylaws.


ARTICLE IX

AMENDMENTS

        Section 1.    The Bylaws may be amended or repealed, or new Bylaws may be adopted, by action of either the shareholders or the Board of Directors. The shareholders may from time to time specify particular provisions of the Bylaws which may not be altered or repealed by the Board of Directors.

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APPENDIX B

    June 15, 2018

Special Committee of the Board of Directors
 
 
Perry Ellis International, Inc.    
3000 N.W. 107th Avenue    
Miami, Florida 33172    

Ladies and Gentlemen:

        You have asked us to advise you with respect to the fairness to the holders (other than Feldenkreis Holdings LLC ("Parent") and its affiliates) of the outstanding shares of common stock, par value $0.01 per share (the "Shares"), of Perry Ellis International, Inc. (the "Company"), from a financial point of view of the $27.50 in cash per Share (the "Consideration") to be paid to the holders of the Shares pursuant to the terms of the Agreement and Plan of Merger, dated as of June 15, 2018 (the "Agreement"), by Parent, GF Merger Sub, Inc., a wholly owned subsidiary of Parent ("Merger Sub"), and the Company.

        We understand that the Agreement provides for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving corporation in the merger as a wholly-owned subsidiary of Parent (the "Merger"), and that, upon effectiveness of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (other than Excluded Shares and Dissenting Shares (each as defined in the Agreement) will be cancelled and converted into the right to receive the Consideration.

        For purposes of the opinion set forth herein, we have:

        We have assumed and relied upon the accuracy and completeness of the information reviewed by us for the purposes of this opinion and we have not assumed any responsibility for independent verification of such information and have relied on such information being complete and correct. We have relied on assurances of the management of the Company that they are not aware of any facts or

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circumstances that would make such information inaccurate or misleading in any respect material to our opinion. With respect to the financial projections, we have assumed that the financial projections were reasonably prepared on bases reflecting the best currently available estimates and judgments of management of the Company of the future financial performance of the Company. We have not conducted a physical inspection of the facilities or property of the Company. We have not assumed any responsibility for or performed any independent valuation or appraisal of the assets or liabilities of the Company, nor have we been furnished with any such valuation or appraisal. Furthermore, we have not considered any tax, accounting or legal effects of the Merger or the transaction structure on any person or entity.

        We have assumed that the final form of the Agreement will be substantially the same as the last draft reviewed by us and will not vary in any respect material to our analysis. We have also assumed that the Merger will be consummated in accordance with the terms of the Agreement, without waiver, modification or amendment of any material term, condition or agreement (including, without limitation, the Consideration to be paid to the holders (other than Parent and its affiliates) of the Shares in the Merger) and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases for the Merger, no delay, limitation, restriction or condition will be imposed that would have an adverse effect on the Company or the contemplated benefits of the Merger. We have further assumed that all representations and warranties set forth in the Agreement are and will be true and correct as of all the dates made or deemed made and that all parties to the Agreement will comply with all covenants of such parties thereunder.

        Our opinion is necessarily based on economic, market and other conditions as in effect on, and the information made available to us as of June 14, 2018. In particular, we do not express any opinion as to the prices at which the Shares may trade at any future time or as to the impact of the Merger on the solvency or viability of the Company, Parent or Merger Sub or the ability of the Company, Parent or Merger Sub to pay their respective obligations when they come due. Furthermore, our opinion does not address the Company's underlying business decision to undertake the Merger, and our opinion does not address the relative merits of the Merger as compared to any alternative transactions or business strategies that might be available to the Company. Our opinion does not address any other aspect or implication of the Merger or any other agreement, arrangement or understanding entered into in connection with the Merger or otherwise except as expressly identified herein.

        Natixis, S.A. ("Natixis"), which became the holder of a majority of our outstanding equity on June 8, 2016, is, together with its affiliates, engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management, insurance and other financial and nonfinancial activities and services for various persons and entities. Natixis and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Company, Parent, any of their respective affiliates and third parties, including affiliates of George Feldenkreis, an affiliate of Parent (the "Principal Shareholder"), or any currency or commodity that may be involved in the Merger.

        We have acted as financial advisor to the Special Committee of the Board of Directors of the Company in connection with this transaction and will receive a fee for our services, a substantial portion of which is contingent upon the closing of the Merger and a portion of which is payable upon the delivery of this letter. In addition, the Company has agreed to reimburse our expenses and indemnify us against certain liabilities arising out of our engagement. We have not during the two years prior to the date hereof provided any financial advisory services to the Company, Parent, the Principal Shareholder or their respective affiliates for which we received payment. In the future, we, Natixis and our respective affiliates may provide financial advisory services to the Company, Parent, the Principal

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Shareholder and their respective affiliates, and in the future may receive compensation for rendering these services.

        This letter and our advisory services are provided for the information and assistance of the Special Committee of the Board of Directors of the Company and the Board of Directors of the Company (in their capacities as such) in connection with their consideration of the Merger. This letter may not be reproduced, summarized, described, referred to or used for any other purpose without our prior written consent, except as part of a proxy statement that is required to be filed by the Company in connection with the Merger, except to the extent provided in our engagement letter dated February 22, 2018. We express no view as to, and our opinion does not address, the fairness (financial or otherwise) of the amount or nature or any other aspect of any compensation to any officers, directors or employees of any parties to the Merger, or any class of such persons, relative to the Consideration to be paid to the holders (other than Parent and its affiliates) of the Shares pursuant to the Agreement. This letter does not constitute a recommendation to any holder of Shares as to how any such holder should vote on the Merger or act on any matter relating to the Merger. The issuance of this opinion has been authorized by our fairness opinion committee.

        Based on, and subject to, the foregoing, we are of the opinion that on the date hereof, the Consideration to be paid to the holders (other than Parent and its affiliates) of the Shares pursuant to the Agreement is fair from a financial point of view to such holders.

    Very truly yours,

 
 
SIGNATURE

 
 
PJ SOLOMON SECURITIES, LLC

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APPENDIX C

        607.1301    Appraisal rights; definitions.—The following definitions apply to ss. 607.1302-607.1333:

        History.—s. 118, ch. 89-154; s. 21, ch. 2003-283; s. 2, ch. 2005-267.

        607.1302    Right of shareholders to appraisal.—

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        History.—s. 119, ch. 89-154; s. 5, ch. 94-327; s. 31, ch. 97-102; s. 22, ch. 2003-283; s. 1, ch. 2004-378; s. 3, ch. 2005-267; s. 5, ch. 2014-209.

        607.1303    Assertion of rights by nominees and beneficial owners.—

        History.—s. 23, ch. 2003-283.

        607.1320    Notice of appraisal rights.—

        History.—s. 120, ch. 89-154; s. 35, ch. 93-281; s. 32, ch. 97-102; s. 24, ch. 2003-283.

        607.1321    Notice of intent to demand payment.—

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        History.—s. 25, ch. 2003-283; s. 7, ch. 2004-378.

        607.1322    Appraisal notice and form.—

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        History.—s. 26, ch. 2003-283.

        607.1323    Perfection of rights; right to withdraw.—

        History.—s. 27, ch. 2003-283.

        607.1324    Shareholder's acceptance of corporation's offer.—

        History.—s. 28, ch. 2003-283.

        607.1326    Procedure if shareholder is dissatisfied with offer.—

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        History.—s. 29, ch. 2003-283.

        607.1330    Court action.—

        History.—s. 2, ch. 2004-378.

        607.1331    Court costs and counsel fees.—

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        History.—s. 30, ch. 2003-283; s. 98, ch. 2004-5.

        607.1332    Disposition of acquired shares.—Shares acquired by a corporation pursuant to payment of the agreed value thereof or pursuant to payment of the judgment entered therefor, as provided in this chapter, may be held and disposed of by such corporation as authorized but unissued shares of the corporation, except that, in the case of a merger or share exchange, they may be held and disposed of as the plan of merger or share exchange otherwise provides. The shares of the surviving corporation into which the shares of such shareholders demanding appraisal rights would have been converted had they assented to the merger shall have the status of authorized but unissued shares of the surviving corporation.

        History.—s. 31, ch. 2003-283.

        607.1333    Limitation on corporate payment.—

        History.—s. 32, ch. 2003-283.

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 YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. Vote by Internet or Telephone - QUIC K EAS Y IMMEDIATE - 24 Hours a Day, 7 Days a Week or by Mail PERRY ELLIS INTERNATIONAL, INC. Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. Votes submitted electronically over the Internet or by telephone must be received by 11:59 p.m., Eastern Time, on XXXX XX, 201X. INTERNET/MOBILE – www.cstproxyvote.com Use the Internet to vote your proxy. Have your proxy card available when you access the above website. Follow the prompts to vote your shares. PHONE – 1 (866) 894-0536 Use a touch-tone telephone to vote your proxy. Have your proxy card avail-able when you call. Follow the voting instructions to vote your shares. MAIL – Mark, sign and date your proxy card and return it in the postage-paid envelope provided. PROXY FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED X THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR PROPOSAL 1, FOR PROPOSAL 2, AND FOR PROPOSAL 3. 1.To adopt the Agreement and Plan of Merger, dated as of June 15, 2018, by and among Perry Ellis International, Inc., Feldenkreis Holdings LLC, and GF Merger Sub, Inc. FORAGAINST ABSTAIN 3.To adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies. FORAGAINST ABSTAIN 2.To approve, on an advisory (non-binding) basis, the “golden parachute compensation.” FORAGAINST ABSTAIN NOTE: IN THEIR DISCRETION, THE PROXY HOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING. CONTROL NUMBER Signature Signature, if held jointly Date , 2018 Note: Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

 


 FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PERRY ELLIS INTERNATIONAL, INC. The undersigned hereby constitutes and appoints [ ] and [ ], and each of them, as proxies, with full power of substitution, to vote all shares of common stock of Perry Ellis International, Inc. (the “Company”) which the undersigned would be entitled to vote if present at the Special Meeting of Shareholders of the Company to be held at [ ] at [ ] [a.m.] [p.m.], Eastern Time, on [ ], 2018 (the “Special Meeting“) and any adjournment, postponement or recess thereof. THE PROXY HOLDER IS AUTHORIZED TO ACT, IN ACCORDANCE WITH HIS OR HER DISCRETION, UPON ALL MATTERS INCIDENT TO THE CONDUCT OF THE MEETING AND UPON OTHER MATTERS THAT PROPERLY COME BEFORE THE SPECIAL MEETING, SUBJECT TO COMPLIANCE WITH RULE 14A-4(C) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO SUCH DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED, SUCH SHARES WILL BE VOTED FOR PROPOSAL 1, FOR PROPOSAL 2 AND FOR PROPOSAL 3; AND ACCORDING TO THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING AND ANY ADJOURNMENT, POSTPONEMENT OR RECESS THEREOF. (Continued, and to be marked, dated and signed, on the other side)