Item 1. BUSINESS
Scope of Business -
Farah Incorporated (formerly Farah Manufacturing Company, Inc.) was incorporated as a Texas corporation in 1947. Farah Incorporated and its subsidiaries (collectively, the "Company") are engaged in the production and sale of multiple apparel lines for men, young men and boys.
Farah U.S.A., Inc. ("Farah U.S.A.") is the Company's largest operating subsidiary. Its products are sold throughout the United States. The largest area of sales volume for Farah U.S.A. is Men's apparel ("Men's"), with Boys' apparel ("Boys'") and Young Men's apparel ("Young Men's") being the next most significant, in that order. The major apparel items included in Farah U.S.A.'s lines are dress and casual slacks, sport coats and suit separates. The products are manufactured in a variety of fabrics, styles, colors and sizes. The Company believes that Farah U.S.A. is among the largest United States sources of Men's and Boys' slacks. Farah U.S.A. sales are made primarily through an employee sales force.
Farah U.S.A. sells most of its products under the Farah, Farah Clothing Company and Savane labels. PROCESS 2000 is a trademark used to signify easy care fabrics, and is widely used on a number of Savane products. Farah U.S.A. also has an exclusive license agreement to manufacture and sell men's slacks, trousers, blazers, sport coats and shorts in the United States, its territories and possessions and Canada under the John Henry label. The Company believes all of the above trademarks to be important and material. Farah U.S.A. owns the Farah, Farah Clothing Company, Savane and Process 2000 trademarks. The John Henry trademark is under license from Zodiac International Trading Corporation and is renewable through May 31, 2038. Farah U.S.A. sells its products primarily to major department stores and specialty retailers.
Farah International, Inc. ("Farah International") products are sold primarily through individual subsidiaries in the United Kingdom, Ireland, Australia and New Zealand. Farah International's largest subsidiary, Farah Manufacturing (U.K.) Limited ("Farah U.K."), is a wholesale apparel supplier in the United Kingdom. It also operates retail outlets in customer stores. Sales in the U.K. are primarily men's slacks, and to a lesser extent shirts,
knitwear and sweaters. Farah Australia is the Company's other significant international subsidiary which sells its products in Australia. Sales in Australia are primarily men's slacks. The Company also sells products in New Zealand and certain European countries. Farah International sales are made primarily through employee sales forces, supplemented to a lesser degree by foreign distributors. Farah International sales are made primarily under the Farah label which the Company considers to be important and material. Additional information on foreign operations is presented in Note 9 to the consolidated financial statements, which is incorporated by reference.
Value Slacks, Inc. ("Value Slacks") is the Company's factory outlet division which is used primarily to sell excess or slow moving Farah U.S.A. product. Value Slacks also sells shirts and other apparel accessory items sourced from third party vendors. As of November 5, 1993, Value Slacks operated 20 U.S. stores and 11 Puerto Rican stores.
The Company's apparel is primarily marketed for the Spring and Fall retail selling seasons each year, with interim lines introduced periodically to complement the two primary lines. In past years, sales volume for the first quarter was generally the lowest of the year with each quarter getting progressively larger. However, with the introduction of more year-round basic products, the seasonality has been diminished somewhat. The Company anticipates that its first quarter will remain its lowest sales volume quarter. Farah U.S.A. closes some of its factories in the first quarter for approximately two weeks at Christmas time. This, combined with lower first quarter sales volumes, normally results in the first quarter being the lowest quarter in terms of profitability. The remaining three quarters are expected to be comparable in terms of sales and profitability, with the fourth quarter being somewhat higher than the second and third.
Production -
Farah U.S.A. and Farah International sourced approximately 67% and 94%, respectively, of their 1993 production from their own manufacturing facilities and the remainder from outside contractors. In response to increased sales, Farah U.S.A. has increased the use of outside production contractors. Additional needs in 1994 are anticipated to be satisfied through increased efficiencies in owned facilities and use of outside contractors. Farah U.S.A. considers its contractors to be an important component of its product sourcing strategy. In an effort to minimize the risk that would result from the failure of any one contractor, Farah U.S.A. uses a number of different contractors in different countries for production.
Raw materials used in manufacturing operations consist mainly of fabrics made from cottons, wools, synthetics and blends of synthetics with cotton and wool. These fabrics are purchased principally from major textile producers located in the United States. In addition, the Company purchases such items as thread, zippers and trim from a large number of other suppliers. Five vendors supplied approximately 73% and 52% of Farah U.S.A.'s and Farah International's fabric and trim requirements, respectively, during the fiscal year ended November 5, 1993. The Company has no long-term contracts with any of its suppliers, nor does it anticipate shortages of raw materials in 1994. In order to be responsive to customer's "Quick Response" needs (see "Backlog" for more discussion), the Company maintains base stocks of certain raw materials and finished goods. However, most inventory is produced in response to indications of demand provided by customers.
Competition -
The apparel industry is highly competitive and includes a number of concerns (domestic and foreign) which have financial resources greater than those of the Company. Farah U.S.A.'s primary branded competitors are Haggar Corp. and Levi Strauss & Co. The Company believes that these competitors may have greater financial resources than those of the Company. In addition, there are a number of other competitors, including customer's private label products.
The primary competitive factors in the apparel industry are styling, quality, price, customer service and brand recognition. The Company believes it is a significant supplier because of its volume, recent product innovations, and quality.
Competitors of Farah U.K. are primarily its customer's private label products. The primary competitors of Farah Australia are other branded resources. The same competitive factors affecting Farah U.S.A. also affect Farah International.
The Company's primary market is department stores. During fiscal year 1993, The May Department Stores Company, an unrelated company, accounted for approximately 12.4% of the Company's consolidated revenues.
Backlog - Many of Farah U.S.A.'s major customers participate in an inventory replenishment concept referred to as "Quick Response". Essentially, Quick Response means that the Company will maintain enough shelf stock of certain key items to meet the customer's needs on short notice. As a result, customers tend to place orders closer to delivery dates than has been the historic case in the apparel industry. In addition, because of the trend toward Quick Response, orders which are received are not necessarily firm commitments. Therefore, the Company does not consider customer orders to be "backlog" or necessarily an indication of future sales.
Inventory Management - As discussed above, the retail industry is requiring its manufacturing sources to maintain inventory for Quick Response purposes. As a result, Farah U.S.A. has maintained higher inventory levels during 1993 than was necessary historically. This, in turn, has resulted in higher borrowings by Farah U.S.A. to finance such inventories.
Other Matters - In the fiscal years ended November 5, 1993, November 6, 1992 and October 31, 1991 the Company spent approximately $744,000, $530,000 and $530,000, respectively, on activities relating to the development of new products and the improvement of existing products.
As of November 5, 1993, the Company employed approximately 5,300 people.
Item 2.
Item 2. PROPERTIES
The following table reflects the Company's significant real properties:
APPROXIMATE TYPE OF LOCATION SQUARE FEET PROPERTY Owned:
El Paso, Texas (1) 116,000 Garment manufacturing plant
Chihuahua, Mexico 54,000 Garment manufacturing plant
San Jose, Costa Rica 168,000 Two garment manufacturing plants
Galway & Kiltimagh, Ireland 59,000 Two garment manufacturing plants
Leased (2)(3):
El Paso, Texas (4) 1,033,000 Garment manufacturing plant, warehouse and office facility
Piedras Negras, Mexico 98,000 Four garment manufacturing 	 plants
Ballyhaunis, Ireland 24,000 Garment manufacturing plant
Sydney, Australia 15,000 Office/Warehouse
Suva, Fiji 24,000 50% owned joint venture for garment manufacturing
Witham, United Kingdom 57,000 Office/Warehouse
Auckland, New Zealand 6,000 Office/Warehouse
Various retail locations in the United States and Puerto Rico 118,000 Retail stores
(1) Building is under lien (see Note 3 to the consolidated financial statements, included in the Company's 1993 Annual Report to Shareholders). Underlying land is leased through February 2002.
(2) Leased properties are occupied under non-cancellable leases which expire at various dates through 2016.
(3) See Note 8 to the consolidated financial statements included in the Company's 1993 Annual Report to Shareholders, for discussion of leases.
(4) Originally owned by the Company and sold and leased back in 1988. Initial lease term is ten years ending in 1998.
The Company's garment manufacturing plants and offices are of steel and masonry construction. All facilities are kept in good condition. The Company considers both its domestic and international facilities to be suitable and adequate for current operations. During 1993, all properties were fully utilized. Farah U.S.A. has sub-leased approximately 45% of the El Paso, Texas building through May 31, 1998. Including such sub-lease, all of the El Paso, Texas building is fully utilized. In increased sales, Farah U.S.A. has increased the use of outside production contractors. Additional needs in 1994 are anticipated to be satisfied through increased efficiencies in owned facilities and use of outside contractors. 							
Item 3.
Item 3. LEGAL PROCEEDINGS
The Company is a defendant in several legal actions. In the opinion of management, based upon the advice of the respective attorneys handling such actions, the aggregate of expected fees, expenses, possible settlements and liability is not material.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
Item 5.
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required under this item is set forth under the caption "Common Stock" on page 29 of the Company's Annual Report to Shareholders for the fiscal year ended November 5, 1993 and is incorporated herein by reference.
Item 6.
Item 6. SELECTED FINANCIAL DATA
The information required under this item is set forth under the caption "Selected Financial Data" on page 39 of the Company's Annual Report to Shareholders for the fiscal year ended November 5, 1993 and is incorporated herein by reference.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required under this Item is set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 30 to 38 of the Company's Annual Report to Shareholders for the fiscal year ended November 5, 1993 and is incorporated herein by reference.
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of Farah Incorporated and Subsidiaries included in the Company's Annual Report to Shareholders for fiscal year ended November 5, 1993 on page 28 and 12 through 27 are incorporated herein by reference:
Quarterly Data (Unaudited) - Supplementary Data for fiscal years 1993 and 1992 Consolidated Statements of Operations - Years ended November 5, 1993, November 6, 1992 and October 31, 1991 Consolidated Balance Sheets - November 5, 1993 and November 6, 1992 Consolidated Statements of Shareholders' Equity - Years ended November 5, 1993, November 6, 1992 and October 31, 1991 Consolidated Statements of Cash Flows - Years ended November 5, 1993, November 6, 1992 and October 31, 1991 Notes to Consolidated Financial Statements - November 5, 1993, November 6, 1992 and October 31, 1991 Report of Independent Public Accountants
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
Item 10.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required under this item is set forth under the caption "Directors and Executive Officers" on pages 4 and 5 of the Company's Proxy Statement prepared in connection with its 1994 Annual Meeting of Shareholders and is incorporated herein by reference.
Item 11.
Item 11. EXECUTIVE COMPENSATION
The information required under this item is set forth under the caption "Compensation of Executive Officers" on pages 7 through 10 of the Company's Proxy Statement prepared in connection with its 1994 Annual Meeting of Shareholders and is incorporated herein by reference.
Item 12.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required under this item is set forth under the caption "Ownership of Common Stock" on pages 2 and 3 of the Company's Proxy Statement prepared in connection with its 1994 Annual Meeting of Shareholders and is incorporated herein by reference.
Item 13.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required under this item is set forth under the captions "Certain Matters Involving Directors and Shareholders" and "Compensation of Directors" on pages 6 and 7 and 10 and 11, respectively, of the Company's Proxy Statement prepared in connection with its 1994 Annual Meeting of Shareholders and is incorporated herein by reference.
PART IV
Item 14.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The consolidated financial statements and notes together with the Report of Independent Public Accountants and Selected Financial Highlights as included in the Company's Annual Report to Shareholders for fiscal year ended November 5, 1993 filed with this Annual Report on Form 10-K are incorporated herein by reference (only the financial statements listed below, which are included in the Annual Report to Shareholders for the fiscal year ended November 5, 1993, are filed herewith and the remainder of the Annual Report to Shareholders for the fiscal year ended November 5, 1993 is furnished to the Commission for its information):
Consolidated Statements of Operations - Years ended November 5, 1993, November 6, 1992 and October 31, 1991 Consolidated Balance Sheets - November 5, 1993 and November 6, 1992 Consolidated Statements of Shareholders' Equity - Years ended November 5, 1993, November 6, 1992 and October 31, 1991 Consolidated Statements of Cash Flows - Years ended November 5, 1993, November 6, 1992 and October 31, 1991 Notes to Consolidated Financial Statements Report of Independent Public Accountants Quarterly Data (unaudited) - Supplementary Data for fiscal years 1993 and 1992 Selected Financial Data for fiscal years ended 1989 to 1993
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last quarter of the period for which this report is filed.
(c) Exhibits.
3 Articles of Incorporation and Bylaws.
* 3.1Restated Articles of Incorporation dated March 29, 1988 (filed as Exhibit 3.1 to Form 10-K as of October 31, 1988).
3.2 Bylaws of Farah Incorporated Amended and Restated as of September 1, 1993.
4 Instruments defining the Rights of Security Holders, including Indentures.
*4.1 Indenture, dated as of February 1, 1969 (filed as Exhibit 2.4 to Form 10- K as of October 31, 1980).
Pursuant to subsection (b)(4)(iii) of Item 601 of Regulation S-K, Registrant hereby agrees to furnish to the Commission upon request copies of other instruments defining rights of holders of long-term debt, none of which instruments authorizes indebtedness in an amount in excess of 10% on consolidated assets.
10 Material Contracts.
* 10.1 Employment Agreement dated March 1, 1993, (filed as Exhibit 10.4- 22 to Form 10-Q as of May 7, 1993).
* 10.2 Employment Agreement dated March 1, 1993 (filed as Exhibit 10.4- 23 to Form 10-Q as of May 7, 1993).
10.3 Amended and Restated Employment Agreement dated September 30, 1993.
10.4 Amended and Restated Employment Agreement dated September 30, 1993.
10.5 Amended and Restated Employment Agreement dated September 30, 1993.
* 10.6 Net Lease, dated as of May 16, 1988, between Farah U.S.A., Inc. and Far Pass Realty Associates, Ltd. (filed as Exhibit 5 to Form 8-K dated May 25, 1988).
* 10.7 Guarantee of Lease by Farah Incorporated (filed as Exhibit 6 to Form 8-K dated May 25, 1988).
* 10.8 Pledge Agreement by Farah U.S.A., Inc. to Far Pass Realty Associates, Ltd. (filed as Exhibit 7 to Form 8-K dated May 25, 1988).
* 10.9 Amended and Restated Farah Manufacturing Company, Inc. 1986 Stock Option Plan, and Form of Stock Option Agreement (filed as Exhibit 4 (a) to the Company's Registration Statement on Form S- 8, Registration No. 2-75949).
* 10.10 Farah Manufacturing Company, Inc. Executive Stock Option Plan, as amended, and form of Stock Option Agreement (filed as Exhibit 10.29 to Form 10-K as of October 31, 1988).
* 10.11 Amended and Restated Farah Manufacturing Company, Inc. 1981 Stock Option Plan, and form of Stock Option Agreement (filed as Exhibit 28.2 to the Company's Registration Statement on Form S- 8, Registration No. 33-11930).
* 10.12 Farah Incorporated 1988 Non- Employee Directors Stock Option Plan and form of Stock Option Agreement (filed as Exhibit 10.31 to Form 10-K as of October 31, 1988).
* 10.13 Accounts Financing Agreement (Security Agreement), dated August 2, 1990 between Farah U.S.A., Inc. ("Farah U.S.A.") and Congress Financial Corporation (Southwest) ("Congress") (filed as Exhibit 10.53 to Form 10-Q as of July 31, 1990).
* 10.14 Covenant Supplement to Accounts Financing Agreement (Security Agreement) dated August 2, 1990, between Farah U.S.A. and Congress (filed as Exhibit 10.54 to Form 10-Q as of July 31, 1990).
* 10.15 Inventory and Equipment Security Agreement Supplement to Accounts Financing Agreement (Security Agreement) dated August 2, 1990, between Farah U.S.A. and Congress (filed as Exhibit 10.56 to Form 10-Q as of July 31, 1990).
*10.16 Trade Financing Agreement Supplement to Accounts Financing Agreement (Security Agreement) dated August 2, 1990, between Farah U.S.A. and Congress (filed as Exhibit 10.57 to Form 10-Q as of July 31, 1990).
* 10.17 Form of Pledge and Security Agreement, dated August 2, 1990 (filed as Exhibit 10.58 to Form 10-K as of October 31, 1990).
* 10.18 Collateral Assignment of License, dated August 2, 1990, by Farah U.S.A. in favor of Congress (filed as Exhibit 10.60 to Form 10-Q as of July 31, 1990).
* 10.19 Estoppel and Consent Agreement, dated August 2, 1990 by Farah Incorporated ("Farah") (filed as Exhibit 10.61 to Form 10-Q as of July 31, 1990).
* 10.20 Deed of Trust and Security Agreement, dated July 30, 1990, by Farah U.S.A. and Farah in favor of Congress (filed as Exhibit 10.63 to Form 10-Q as of July 31, 1990).
* 10.21 Form of Guarantee and Waiver, dated August 2, 1990 (filed as Exhibit 10.64 to Form 10-K as of October 31, 1990).
* 10.22 Collateral Assignment of Agreements, dated August 2, 1990, by Farah in favor of Congress (filed as Exhibit 10.68 to Form 10-Q as of July 31, 1990).
* 10.23 Collateral Assignment of Agreements, dated August 2, 1990, by Farah Manufacturing Company of New Mexico, Inc. in favor of Congress (filed as Exhibit 10.69 to Form 10-Q as of July 31, 1990).
* 10.24 Subordination Agreement, dated August 2, 1990, by Farah U.S.A. and Farah (filed as Exhibit 10.70 to Form 10-Q as of July 31, 1990).
* 10.25 Form of Pledge and Security Agreement, dated August 2, 1990 (filed as Exhibit 10.71 to Form 10-K as of October 31, 1990).
* 10.26 Trademark Collateral Assignment and Security Agreement, dated August 2, 1990, by Farah in favor of Congress (filed as Exhibit 10.75 to Form 10-Q as of July 31, 1990).
* 10.27 Patent Collateral Assignment and Security Agreement, dated August 2, 1990, by Farah in favor of Congress (filed as Exhibit 10.76 to Form 10-Q as of July 31, 1990).
* 10.28 General Security Agreement, dated August 2, 1990, by Farah in favor of Congress (filed as Exhibit 10.77 to Form 10-Q as of July 31, 1990).
* 10.29 Form of General Security Agreement, dated August 2, 1990 (filed as Exhibit 10.78 to Form 10-K as of October 31, 1990).
* 10.30 Amendment No. 1, dated November 5, 1990, to Financing Agreements dated August 2, 1990 (filed as Exhibit 10.98 to Form 10-K as of October 31, 1990).
* 10.31 Amendment No. 2 dated February 11, 1991, to Financing Agreements dated August 2, 1990 (filed as Exhibit 10.103 to Form 10-Q as of January 31, 1991).
* 10.32 Sublease between Farah U.S.A., Inc. and The Tonka Corporation, dated January 6, 1992 (filed as Exhibit 10.107 to Form 10-K as of October 31, 1991).
* 10.33 Farah Incorporated 1991 Stock Option and Restricted Stock Plan dated October 15, 1991 (filed as Exhibit 10.108 to Form 10-K as of October 31, 1991).
* 10.34 Amendment No. 3 dated January 29, 1992, to Financing Agreements dated August 2, 1990 (filed as Exhibit 10.112 to Form 10-Q as of February 7, 1992).
* 10.35 Amendment No. 4 dated June 25, 1992, to Accounts Financing Agreement dated August 2, 1990 between Congress Financial Corporation (Southwest) and Farah U.S.A., Inc. (filed as Exhibit 10.118 to Form 10-Q as of August 7, 1992).
* 10.36 Amendment No. 5 dated August 31, 1992, to Accounts Financing Agreement dated August 2, 1990 between Congress Financial Corporation (Southwest) and Farah U.S.A., Inc. (filed as Exhibit 10.119 to Form 10-Q as of August 7, 1992).
* 10.37 Amendment No. 6 dated September 4, 1992, to Accounts Financing Agreement dated August 2, 1990 between Congress Financial Corporation (Southwest) and Farah U.S.A., Inc. (filed as Exhibit 10.120 to Form 10-Q as of August 7, 1992).
* 10.38 Amendment No. 7 dated September 16, 1992, to Accounts Financing Agreement dated August 2, 1990 between Congress Financial Corporation (Southwest) and Farah U.S.A., Inc. (filed as Exhibit 10.121 to Form 10-Q as of August 7, 1992).
* 10.39 Stock Purchase Agreement dated August 4, 1992, between Farah Incorporated and Marciano Investments, Inc. (filed as Exhibit 10.122 to Form 10-Q as of August 7, 1992).
*	 10.40 Letter Agreement dated October 28, 1992, amending the Accounts Financing Agreement dated August 2, 1990 between Farah U.S.A., Inc. and Congress Financial Corporation (Southwest), (filed as Exhibit 10.125 to Form 10-K as of November 6, 1992).
* 10.41 Amended and Restated Farah Savings and Retirement Plan, as of January 1, 1991, (filed as Exhibit 10.125 to Form 10-K as of November 6, 1992).
* 10.42 Amended and Restated Stock Purchase Agreement dated March 12, 1993 (amending and restating the stock purchase agreement dated February 23, 1993) between Farah Incorporated, the Georges Marciano Trust and the Paul Marciano Trust, (filed as Exhibit 10.128 to Form 10-Q as of May 7, 1993).
* 10.43 Amendment No. 8 to Financing Agreements as of May 7, 1993 between Farah U.S.A., Inc. and Congress Financial Corporation (Southwest), (filed as Exhibit 10.129 to Form 10-Q as of May 7, 1993).
* 10.44 Amendment No. 9 dated July 16, 1993 to Accounts Financing Agreement dated August 2, 1990 between Congress Financial Corporation (Southwest) and Farah U.S.A., Inc., (filed as Exhibit 10.130 to Form 10-Q as of August 6, 1993).
* 10.45 Consulting Agreement dated June 15, 1993, (filed as Exhibit 10.131 to Form 10-Q as of August 6, 1993).
* 10.46 Deferred Compensation Agreement dated July 30, 1993, (filed as Exhibit 10.132 to Form 10-Q as of August 6, 1993).
* 10.47 Deferred Compensation Agreement dated July 30, 1993, (filed as Exhibit 10.133 to Form 10-Q as of August 6, 1993).
10.48 Deferred Compensation Agreement dated July 30, 1993.
10.49 Amendment No. 10 dated November 5, 1993 to Accounts Financing Agreement dated August 2, 1990 between Congress Financial Corporation (Southwest) and Farah U.S.A., Inc.
*Incorporated herein by reference.
22 Subsidiaries of Farah Incorporated
24 Consent of Independent Public Accountants
(d) The following consolidated financial statement schedules are included in the Annual Report on Form 10-K along with the Report of Independent Public Accountants on supporting schedules:
Page
Report of Independent Public Accountants on Supporting Schedules 14
II- Amounts receivable from related parties, underwriters, promoters and employees other than related parties - Years ended November 5, 1993, November 6, 1992 and October 31, 1991 15
X- Supplementary Income Statement Information - Years ended November 5, 1993, November 6, 1992 and October 31, 1991 16
All other schedules are omitted because they are not applicable, not required under the instructions, or the information is reflected in the consolidated financial statements or notes thereto.
For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into registrant's Registration Statements on Form S-8 Nos. 33-46661 (filed March 24, 1992), 33-11930 (filed February 12, 1987) and 2-75949 (filed February 4, 1982):
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable, in the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FARAH INCORPORATED (Registrant)
/s/ James C. Swaim James C. Swaim Principal Financial Officer Principal Accounting Officer
Dated: January 28, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on January 28, 1994.
/s/ Richard C. Allender Richard C. Allender President and Chief Executive Officer, Director
/s/ Christopher L. Carameros Christopher L. Carameros Director
/s/ Sylvan Landau Sylvan Landau Director
/s/ Edward J. Monahan Edward J. Monahan Director
/s/ Timothy B. Page Timothy B. Page Director
/s/ Byron H. Rubin Byron H. Rubin Director
/s/ James C. Swaim James C. Swaim Executive Vice President, Chief Financial Officer and Director
/s/ Thomas G. Wyman Thomas G. Wyman Director
FARAH INCORPORATED AND SUBSIDIARIES
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPORTING SCHEDULES
To the Shareholders of Farah Incorporated:
We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in Farah Incorporated's annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated December 15, 1993. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. Schedules II and X are the responsibility of the company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
/s/ Arthur Andersen & Co.
ARTHUR ANDERSEN & CO.
Dallas, Texas December 15, 1993
Schedule II
FARAH INCORPORATED AND SUBSIDIARIES
AMOUNTS RECEIVABLE FROM RELATED PARTIES, UNDERWRITERS, PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES YEARS ENDED NOVEMBER 5, 1993, NOVEMBER 6, 1992 AND OCTOBER 31, 1991
PART ONE OF SCHEDULE II TABLE:
Balance at Year beginning ended Name of debtor of period
10/31/91 William F. Farah $ 100,708
11/6/92 - -
11/5/93 - -
PART TWO OF SCHEDULE II TABLE:
Deducted Year Amounts Amounts ended Additions Collectedwritten off
10/31/91 - 100,708 -
11/6/92 - - -
11/5/93 - - -
PART THREE OF SCHEDULE II TABLE:
Balance at end of period Year Not ended Current Current
10/31/91 - -
11/6/92 - -
11/5/93 - -
Schedule X
FARAH INCORPORATED AND SUBSIDIARIES SUPPLEMENTARY INCOME STATEMENT INFORMATION For years ended November 5, 1993, November 6, 1992 and October 31, 1991
November 5, November 6, October 31, 1993 1992 1991 (thousands of dollars)
Amortization of intangible assets $ 200 489 592
Taxes other than income taxes and payroll taxes $ 843 934 1,096
Advertising $ 11,230 6,825 4,719
Neither royalties nor repairs and maintenance exceeded 1% of revenues in fiscal 1993.
FARAH INCORPORATED AND SUBSIDIARIES
FORM 10-K INDEX TO ATTACHED EXHIBITS (All Exhibits listed are on pages 17 through 113)
Page Numbers
Exhibit 3.2 Bylaws of Farah Incorporated Amended 18 and Restated as of September 1, 1993.
Exhibit 10.3 Amended and Restated Employment Agreement 38 dated September 30, 1993.
Exhibit 10.4 Amended and Restated Employment Agreement 47 dated September 30, 1993.
Exhibit 10.5 Amended and Restated Employment Agreement 54 dated September 30, 1993.
Exhibit 10.48 Deferred Compensation Agreement dated 62 July 30, 1993.
Exhibit 10.49 Amendment No. 10 dated November 5, 1993 64 to Accounts Financing Agreement dated August 2, 1990 between Congress Financial Corporation (Southwest) and Farah U.S.A., Inc.
Exhibit 13 Annual Report to Shareholders for Fiscal 83 Year 1993.
Exhibit 22 Subsidiaries of Farah Incorporated. 112
Exhibit 24 Consent of Independent Public Accountants. 113