sec document

DEF 14A 1 def14a03733_06022006.htm sec document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement
/ / Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to ss. 240.14a-12

EVERLAST WORLDWIDE 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):

/X/ No fee required.

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(i) Title of each class of securities to which transaction applies

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(ii) Aggregate number of securities to which transaction applies:

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(iii) 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):

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(iv) Proposed maximum aggregate value of transaction:

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(v) Total fee paid

/ / Fee paid previously with preliminary materials.

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

(1) Amount previously paid:

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(vi) Form, Schedule or Registration Statement No.:

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(vii) Filing Party:

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(viii) Date Filed

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EVERLAST WORLDWIDE INC.
1350 BROADWAY, SUITE 2300
NEW YORK, NEW YORK 10018

NOTICE OF 2006 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 2006

NOTICE IS HEREBY GIVEN that the 2006 Annual Meeting of Stockholders (the
"Annual Meeting") of Everlast Worldwide Inc. (the "Company") will be held on
Friday, June 2, 2006 at 10:00 AM, local time, at The Kitano, 66 Park Avenue (at
38th Street), New York, New York 10016, in the Park Avenue Room on the 18th
floor, for the following purposes:

1. To amend the bylaws of the Company to classify the composition of the
Board of Directors.

2. To elect eight members of the Board of Directors to serve until (i)
the Annual Meeting when the term of their respective classes expire
and their successors are elected and qualified, if Proposal No. 1 is
approved, or (ii) the next Annual Meeting at which their successors
are to be elected and qualified, if Proposal No. 1 is not approved.

3. To ratify the selection of Berenson LLP as the Company's independent
auditors.

4. To transact such other business as may properly come before the
stockholders at the Annual Meeting and any adjournments thereof.

The Board of Directors has fixed the close of business on May 1, 2006 as
the record date for the determination of the Company's shares of common stock,
par value $.002 per share, entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof.

By Order of the Board of Directors

Seth Horowitz
President and Chief Executive Officer

Dated: May 2, 2006
New York, New York

IMPORTANT

WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, WE URGE YOU
TO SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE TO
ENSURE THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING. A SELF-ADDRESSED
STAMPED ENVELOPE IS ENCLOSED FOR THAT PURPOSE. IF YOU SEND IN YOUR PROXY AND
THEN DECIDE TO ATTEND THE ANNUAL MEETING TO VOTE YOUR STOCK IN PERSON, YOU MAY
STILL DO SO. YOUR PROXY IS REVOCABLE AT YOUR REQUEST.

EVERLAST WORLDWIDE INC.
1350 BROADWAY, SUITE 2300
NEW YORK, NEW YORK 10018

PROXY STATEMENT

INFORMATION CONCERNING SOLICITATION AND VOTING

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board of Directors") of Everlast
Worldwide Inc. (the "Company") to be voted at the 2006 Annual Meeting of
Stockholders to be held on Friday, June 2, 2006 at 10:00 AM, local time, at The
Kitano, 66 Park Avenue (at 38th Street), New York, New York 10016, in the Park
Avenue Room on the 18th floor, and at any adjournments thereof (the "Annual
Meeting") for the purposes set forth in the accompanying Notice of 2005 Annual
Meeting of Stockholders.

The approximate date on which the enclosed form of proxy and this Proxy
Statement are first being sent to stockholders is May 2, 2005.

When a proxy is returned properly signed, the shares represented thereby
will be voted by the proxies in accordance with the stockholder's directions. If
the proxy is signed and returned without choices having been specified, the
shares will be voted against the amendment to the bylaws to classify the
composition of the Board of Directors and for the ratification of the selection
of Berenson LLP as the Company's independent auditors. If for any reason any of
the nominees of the Board of Directors shall become unavailable for election,
the proxies may use their discretionary authority to vote for substitutes
proposed by the Board of Directors.

A stockholder giving a proxy has the power to revoke it at any time before
it is voted by sending a written notice of revocation to the Secretary of the
Company, by sending a duly executed later-dated proxy, or by attending in
person, requesting the return of the proxy at the Annual Meeting and voting in
person.

Only stockholders of record at the close of business on May 1, 2006 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. As
of the Record Date, there were outstanding 3,770,471 shares of the Common Stock,
$.002 par value per share of the Company (the "Common Stock"). Each share of
Common Stock is entitled to one vote.

The holders of a majority of the outstanding shares of Common Stock,
whether present in person or represented by proxy, will constitute a quorum for
each of the matters identified in the Notice of the 2006 Annual Meeting of
Stockholders. Broker "non-votes" and the shares as to which a stockholder
abstains are included for purposes of determining whether a quorum is present at
the Annual Meeting. A broker "non-vote" occurs when a nominee holding shares for
a beneficial owner does not vote on a particular proposal because the nominee
does not have the discretionary voting power with respect to that item and has
not received instructions from the beneficial owner. Proxies marked as
abstaining with respect to the proposal to approve the classification of the
Board of Directors and to ratify the appointment of independent auditors will
have the effect of a vote against such proposal.

The cost of solicitation of proxies will be borne by the Company. In
addition to the solicitation of proxies by use of the mails, some of the
officers, directors and regular employees of the Company, without extra
remuneration, may solicit proxies personally or by telephone, telefax or similar

transmission. The Company will reimburse record holders for expenses in
forwarding proxies and proxy soliciting material to the beneficial owners of the
shares held by them.

NO APPRAISAL RIGHTS

Under the General Corporation Law of the State of Delaware, stockholders of
the Company do not have appraisal rights in connection with any of the proposals
upon which a vote is scheduled to be taken at the Annual Meeting.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of May 1, 2006 for (i)
each of the Company's directors, (ii) each of the Company's executive officers,
(iii) each stockholder known to be the beneficial owner of more than five
percent of any class of the Company's voting securities, and (iv) all directors
and executive officers as a group. Beneficial ownership has been determined in
accordance with Rule 13d-3 under the Securities and Exchange Act of 1934 and
does not necessarily bear on the economic incidents of ownership or the rights
to transfer the shares described below. Unless otherwise indicated, (i) each
stockholder has sole voting power and dispositive power with respect to the
indicated shares and (ii) the address of each stockholder who is a director or
executive officer is c/o Everlast Worldwide, Inc., 1350 Broadway, Suite 2300,
New York, New York 10018.

Beneficial Ownership

Common Stock (1)
Percentage of
Name and Address of Beneficial Owner Number Outstanding Stock
------------------------------------ ------ -----------------
(2)
OFFICERS AND DIRECTORS

Seth Horowitz 744,374 19.7%

James K. Anderson 109,189 2.9%

Larry Kring 43,533 1.1%

Edward R. Epstein 4,433 *

Teddy Atlas 1,000 *
James J. McGuire Jr 19,319 *
Jeffrey M. Schwartz 1,000 *
Mark Ackereizen 0 *
Angelo Giusti 19,533 *

Gary J. Dailey 0 *

OVER 5% BENEFICIAL OWNERS
The Estate of George Q Horowitz 727,208 19.3%
Address: c/o Seth A. Horowitz, Trustee
1350 Broadway, Suite 2300
New York, New York 10018

Ben Nadorf 455,700 12.1%
Address: 6650 Audubon Trace West,
West Palm Beach, Florida 33412-3301

Burlingame Equity Investors, LP 327,058 (11) 8.6%
Burlingame Equity Investors II, LP
Burlington Asset Management LLC
Blair E. Sanford
Address: One Samsone St., Suite 2900,
San Francisco, CA 94104
Burlingame Equity Investors (Offshore) Ltd
Address: c/o Appleby Corporate Services
(Cayman) Limited, Clifton House, 75 Fort
St., PO Box 350 GT, George Town, Grand
Cayman, Cayman Islands

Contender Partners LLC 237,664 (12) 6.3%
Address: c/o Dreamworks Television LLC
100 Universal City Plaza, Bldg. 5121
Universal City, CA 91608

Guerrilla Capital Management LLC 183,757 (13) 4.8%
Guerrilla Partners, LP (13)
Address: 237 Park Avenue, 9th Floor
New York, New York 10017

Five Points Capital, Inc. 180,000 (14) 4.8%
Paul McNulty (14)
Address: 410 Park Avenue,
New York, New York 10022

ALL DIRECTORS AND 949,381 24.7%
EXECUTIVE OFFICERS AS A GROUP (10 persons) (3) (4) (5) (6) (7)
(8) (9) (10)
-----------------------------
*Less than one percent.
(1) Under rules adopted by the Securities and Exchange Commission, a person is
deemed to be a beneficial owner of securities with respect to which such
person has or shares: (i) voting power, which includes the power to vote or
direct the vote of the security, or (ii) investment power, which includes
the power to dispose of or to direct the disposition of the security.
Unless otherwise indicated below, the persons named in the table above have
sole voting and investment power with respect to all shares beneficially
owned.

(2) As of May 1, 2006, there were outstanding 3,770,471 shares of Common Stock.

(3) Consists of (i) 500 shares of Common Stock, (ii) 16,666 shares of Common
Stock issuable upon exercise of options exercisable currently or within 60
days at $2.75, and (iii) 727,208 shares of Common Stock beneficially held
by Seth A. Horowitz, as trustee of The Estate of George Q Horowitz.

(4) Consists of (i) 92,356 shares of Common Stock of which Mr. Anderson owns
39,300 shares of Common Stock with his wife, as joint tenants, and (ii)
16,833 shares of Common Stock issuable upon exercise of options exercisable
currently or within 60 days, including:

(A) 3,200 shares @ $2.23 expiring January 2, 2007
(B) 3,400 shares @ $2.05 expiring January 2, 2008
(C) 3,400 shares @ $2.35 expiring January 2, 2009
(D) 3,400 shares @ $3.83 expiring January 2, 2010
(E) 2,267 shares @ $3.03 expiring January 2, 2011
(F) 1,166 shares @ $7.00 expiring January 2, 2012

(5) Consists of (i) 30,300 shares of Common Stock and (ii) 13,233 shares of
Common Stock issuable upon the exercise of options currently exercisable or
within 60 days, including:

(A) 3,300 shares @ $2.05 expiring January 2, 2008
(B) 3,300 shares @ $2.35 expiring January 2, 2009
(C) 3,300 shares @ $3.83 expiring January 2, 2010
(D) 2,200 shares @ $3.03 expiring January 2, 2011
(E) 1,133 shares @ $7.00 expiring January 2, 2012

(6) Consists of 4,433 shares of Common Stock issuable upon exercise of options
exercisable currently or within 60 days, including options to purchase, (A)
1,100 shares of Common Stock at an exercise price of $7.00, which expire
January 3, 2012 and (B) 3,333 shares of Common Stock at an exercise price
of $2.75, which expire July 23, 2014.

(7) Consists of 1,000 shares of Common Stock issuable upon exercise of options
exercisable currently or within 60 days at an exercise price of $7.00

(8) Consists of Common shares held jointly by Mr. McGuire and his wife.

(9) Consists of 1,000 shares of Common Stock issuable upon exercise of options
exercisable currently or within 60 days at an exercise price of $7.00.

(10) Consists of (i) 3,700 shares of Common Stock and (ii) 15,833 shares of
Common Stock issuable upon exercise of options exercisable currently or
within 60 days, including options to purchase (A) 2,500 shares of Common
Stock at an exercise price of $2.094 per share, which expire on June 6,
2008, (B) 2,500 shares of Common Stock at an exercise price of $3.97, which
expire March 22, 2009, (C) 2,500 shares of Common Stock at an exercise
price of $2.23, which expire December 31, 2009, (D) 5,000 shares at an
exercise price of $3.06 per share, which expire March 8, 2011 and (E) 3,333
shares at an exercise price of $2.75 per share, which expire July 23, 2014.

(11) Based on a Schedule 13G jointly filed with the Securities and Exchange
Commission on February 21, 2006 by Burlingame Equity Investors, L.P.,
Burlingame Equity Investors II, L.P., Burlingame Equity Investors
(Offshore) Ltd., and Blair E. Sanford.

(12) Based on a Schedule 13G/A filed with the Securities and Exchange Commission
on March 21, 2006 by Contender Partners, LP.

(13) Based on a schedule 13G filed with the Securities and Exchange Commission
on February 10, 2006. Such shareholder owned 5.8% of the outstanding shares
as of February 10, 2006.

(14) Based on a Schedule 13G/A filed with the Securities and Exchange Commission
on January 24, 2006. Such shareholder reportedly owned 5.6% of the
outstanding shares as of January 24, 2006.

CODE OF ETHICS

Everlast has adopted a Code of Ethics for Senior Officers and Directors
(the "Code") effective December 2003, which applies to its Board of Directors,
chief executive officer, president, principal financial officer, principal
accounting officer and persons performing similar functions. A copy of the Code
can be found on Everlast's website (www.everlast.com). Everlast intends to
disclose on its website the nature of any future amendments to and waivers of
the Code that apply to the directors, chief executive officer, the president,
the principal financial officer, the principal accounting officer or persons
performing similar functions.

PROPOSAL 1 -

AMENDMENT TO THE BYLAWS OF THE COMPANY TO
CLASSIFY THE COMPOSITION OF THE BOARD OF DIRECTORS

On November 3, 2005, the Board of Directors of the Company adopted a
resolution, subject to the approval of the holders of a majority of the
outstanding shares of Common Stock of the Company, to amend the Bylaws of the
Company to classify the composition of the Board of Directors. If this Proposal
No. 1 is approved, the Company's Bylaws would provide for classified terms of
the directors of the Company effective immediately and affecting the directors
elected at the Annual Meeting.

Under the proposed amendment to Sections 3.01 and 3.02 of the Company's
Bylaws, attached hereto as Exhibit A, the Board of Directors would be divided
into three classes with each Class I director elected to serve until the 2007
annual meeting of stockholders, each Class II director elected to serve until
the 2008 annual meeting of stockholders, and each Class III director elected to
serve until the 2009 annual meeting of stockholders. At each annual meeting of
stockholders following this Annual Meeting, the number of directors equal to the
number of directors in a class whose term expires at the time of such annual
meeting would be elected to serve until the third succeeding annual meeting of
stockholders. Notwithstanding the foregoing, directors would serve until their
successors are elected and qualified or until their death, resignation or
removal from office. Vacancies that occur during the year would be filled by the
majority vote of the remaining members of the Board of Directors then in office,
and each person so elected would serve the remainder of the full term of the
class to which the new director was elected.

The Board of Directors believes that the three-year term of a classified
board, with its election of approximately one-third of the directors each year,
will help assure the continuity and stability of the Company's long-term
policies in the future since a majority of the directors at any given time will
have prior experience as directors of the Company. In addition, the Board of
Directors believes that a classified Board of Directors will permit it to
represent more effectively the interests of all stockholders in a variety of
situations, including dealing with proposals or actions by a disruptive
substantial stockholder or stockholder group. The Company is not currently aware
of any such proposals or actions.

A classified board will also have an effect of making it more difficult to
replace incumbent directors and management, even if the reason for the desired
change is inadequate performance. For so long as the Board of Directors is
classified into three classes, a minimum of three annual meetings of
stockholders would generally be required to replace the entire Board of
Directors, absent intervening vacancies. While the proposal is not intended as a
takeover-resistive measure in response to a specific threat, it may discourage
the acquisition of large blocks of the Company's shares by causing it to take
longer for a person or group of person who acquire such block of shares to
effect a change in management.

REQUIRED VOTE

The approval of the proposal to adopt amendments to the Bylaws of the
Company to classify the composition of the Board of Directors requires the
affirmative vote of a majority of the outstanding shares of Common Stock of the
Company.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ADOPTION OF AMENDMENTS TO THE BYLAWS OF THE COMPANY
TO CLASSIFY THE COMPOSITION OF THE
BOARD OF DIRECTORS OF THE COMPANY

PROPOSAL 2 -

ELECTION OF DIRECTORS

Unless otherwise specified, all Proxies received will be voted in favor of
the election of the persons named below as directors of the Company. If Proposal
No. 1 were approved, the directors would be divided into three classes. At the
Annual Meeting, two Class I Directors would be elected, each to serve a one-year
term until the 2007 Annual Meeting of Stockholders and until their successors
are elected and qualified. The nominees for Class I Directors are Jeffrey
Schwartz and Mark Ackereizen. At the Annual Meeting, three Class II Directors
would be elected, each to serve a two-year term until the 2008 Annual Meeting of
Stockholders and until their successors are elected and qualified. The nominees
for Class II Directors are Mr. Edward R. Epstein, Teddy Atlas and James McGuire
Jr. At the Annual Meeting, three Class III Directors would be elected, each to
serve a three-year term until the 2009 Annual Meeting of Stockholders and until
their successors are elected and qualified. The nominees for Class III Directors
are Seth A. Horowitz, James K. Anderson and Larry Kring. Following the Annual
Meeting, one class of directors would be elected each year, and the members of
such class would hold office for a three-year term and until their successors
are duly elected and qualified, or until their death, resignation or removal
from office. If Proposal No. 1 is not approved, then eight directors will be
elected at the Annual Meeting, each to serve for a one-year term until the 2007
Annual Meeting of Stockholders and until their successors are elected and
qualified.

Each of the nominees is currently serving as a director of the Company. The
terms of office of the current directors expire at the Annual Meeting, and when
their successors are duly elected and qualify. Management has no reason to
believe that any of the nominees will be unable or unwilling to serve as a
director, if elected. Should any of the nominees not remain a candidate for
election at the date of the Annual Meeting, the Proxies will be voted in favor
of those nominees who remain candidates and may be voted for substitute nominees
selected by the Board of Directors. The names of the nominees and certain
information concerning them are set forth below:

Proposed
Nominee Class Age Director Since
------- ----- --- --------------
Seth Horowitz III 29 2005
James K. Anderson III 68 1992 (1) (2) (3)
Larry Kring III 64 1993 (1) (2) (3)
Edward R. Epstein II 66 1996 (3)
Teddy Atlas II 49 2004
James McGuire Jr. II 70 2004 (1)
Jeffrey Schwartz I 46 2004 (2)
Mark Ackereizen I 61 2004

(1) Member of the Compensation Committee of the Board of Directors.
(2) Member of the Audit Committee of the Board of Directors.
(3) Member of the Corporate Governance and Nominating Committee of the Board of
Directors.

Upon his promotion as President and Chief Operating Officer of the Company,
Seth Horowitz was elected by the Board of Directors as director of the Company
effective July 2005, filing a vacancy created by the resignation of Rita Cinque
Kriss as a director earlier that month. Messrs. Anderson, Kring, Atlas, McGuire,
Schwartz and Ackereizen are deemed to be independent under NASDAQ Rule 4200 and
as such the Board of Directors is composed of a majority of independent board
members as required by NASDAQ Rule 4350.

MR. SETH HOROWITZ has been our Chairman of the Board, President and Chief
Executive Officer ("CEO") since November 29, 2005. Mr. Horowitz has also been a
director, our President and Chief Operating Officer since July 2005. Mr.
Horowitz joined Everlast (formerly known as Active Apparel Group, Inc.) in 1998,
as Director of Research and Marketing. His immediate leadership and innovative
thinking were the driving factors in Everlast's online presence and first
e-commerce website, everlastusa.com. Upon the signing of the men's Everlast
license, in 1999, Mr. Horowitz was named Director Men's Division. Mr. Horowitz
played an instrumental role in the merger of Active Apparel Group, Inc. and
Everlast World's Boxing Headquarters, forming Everlast Worldwide, Inc. After the
completion of the merger, Mr. Horowitz was named Executive Vice President,
Everlast Worldwide, until July 2005. Mr. Horowitz serves as a Member of the YPO,
Young Presidents Organization. Mr. Horowitz was recently elected to the Board of
Directors of The American Heart Association. Mr. Horowitz has been named one of
"25 Leaders to Watch" by Sports Edge Magazine.

MR. JAMES K. ANDERSON has been a director of the Company since August 1992
and was Chairman of the Board of Directors from January 1994 through December
1995. Since January 1996, he has been Vice-Chairman of the Board of Directors.
Since July 1987, he has been a management consultant in restructuring
businesses. From 1981 to 1987, Mr. Anderson served as the President of Pacific
First Financial Corp. and Pacific First Federal Savings Bank and from 1984 to
1987, Mr. Anderson served as the Chairman of the Board and Chief Executive
Officer of each of the aforementioned companies. Mr. Anderson has served on the
board of directors of numerous businesses, civic, arts and educational
organizations and is Chairman of the Whitman College Board of Overseers. He is
currently a member of the Board of Directors of Northwest Hospital and Medical
Center, a hospital and medical center in Seattle, Washington and is on the
Governing Committee of the Washington State Hospital Association. Additionally,
Mr. Anderson is a director and the Chief Executive Officer of Adaptis Inc., a
business and technology outsourcing company serving the health care industry.

MR. LARRY KRING has been a director of the Company since January 1993. From
August 1993 to the present, Mr. Kring has been a Group Vice President of
Esterline Technologies, a diversified instrumentation, equipment and component
manufacturing company listed on the New York Stock Exchange, where he is
responsible for, among other things, management and financial reporting for his
group. From July 1978 to July 1993, Mr. Kring was the President and Chief
Executive Officer of Heath Tecna Aerospace Company, a manufacturer of aircraft
interior and aerospace components and a division of Ciba-Geigy Corporation. Mr.
Kring also has a Master in Business Administration and has previously served as
a financial executive.

MR. EDWARD R. EPSTEIN has been a director of the Company since January,
1996. Mr. Epstein is a practicing attorney and is admitted to practice law in
the States of New York and Florida. He is an experienced litigator and has
represented clients in all aspects of the garment industry for more than 30
years. He is a member of the bar of the State of Florida, the State of New York,
and various United States District Courts and the United States Court of Appeals
for the Second Circuit. He is also a member of the New York State Bar
Association.

MR. TEDDY ATLAS has been associated with boxing and the boxing industry for
well over 30 years as a fighter, trainer and television color commentator. Mr.
Atlas is a 1976 Adirondack Golden Gloves champion. Mr. Atlas has trained
championship fighters for Cus D'Amato, members of the 1980 Swedish Olympic Team,

Mike Tyson, Barry McGuigan, Donnie LaLonde and Simon Brown. Additionally, Mr.
Atlas has trained renowned dancer choreographer Twyla Tharp and other Hollywood
stars for their roles in various movies. Mr. Atlas does color commentary for
fight shows on ESPN 2 "Friday Night Fights." In addition, Mr. Atlas has done
television analysis for the 2000 and 2004 Olympic Games boxing events. Mr. Atlas
is involved in many community organizations, including running the "The Doctor
Theodore A. Atlas Memorial Foundation," a charity foundation for people in need.

MR. JAMES J. MCGUIRE, JR. is a practicing attorney and is admitted to
practice law in New Jersey and the Commonwealth of Virginia. Mr. McGuire has
expertise in municipal and government law and criminal law and has worked in
various law firms in New Jersey since 1975, with the last five years working as
a sole practitioner. In addition, Mr. McGuire served as Judge of the Municipal
Court of the Borough of Shrewsbury, New Jersey from 1987 to 1991. Mr. McGuire
has an exemplary military background and is a retired Lieutenant Colonel in the
U.S. Army. He is the recipient of the Bronze Star Medal, the Legion of Merit and
the Meritorious Service Medal. Mr. McGuire has served on the board of directors
for not-for-profit and educational organizations and also currently participates
in various community and civic activities.

MR. JEFFREY M. SCHWARTZ is a practicing attorney and is admitted to
practice law in New York State as well as the United States Federal Court -
Southern District of New York and the United States Federal Court - Eastern
District of New York. Mr. Schwartz has expertise in commercial litigation,
personal injury litigation, real estate, and trusts and estates and has operated
his own practice since 1990. Prior to such time, he was a partner in the law
firm of Bernstein and Schwartz from 1986 to 1990 and an associate in the law
firm of Reiter, Sabellico and Blutman from 1984 to 1986. He is a member of
various bar associations including the New York State Bar Association and the
Bar Association of the City of New York.

MR. MARK ACKEREIZEN is a partner in the CPA firm of Levine, Neider & Wohl
where he has worked since August 2003. Prior to this, Mr. Ackereizen was a
partner in the CPA firm of Gettry, Marcus, Stern and Lehre. Mr. Ackereizen has
been practicing in the field of accounting, finance and taxation for 38 years.
Mr. Ackereizen is a member of the American Institute of Certified Public
Accountants. He also belongs to the New York State Society of Certified Public
Accountants where he served as a member of the Apparel & Textile Committee and
was a member of the Cooperation with Commercial Credit Grantors & Bankers
Committee.

MEETINGS

The Board of Directors met seven (7) times during the fiscal year ended
December 31, 2005. All current and active board members attended at least 75% of
the meetings. Seth Horowitz attended all the meetings subsequent to his
appointment as director in July 2005.

Each director is expected to make reasonable efforts to attend Board of
Directors meetings, meetings of committees of which such director is a member
and the Annual Meeting of Stockholders. All of the current and active directors
attended the 2005 Annual Meeting of Stockholders.

EXECUTIVE SESSIONS

Commencing in fiscal 2005, the Board of Directors will have regularly
scheduled meetings or sessions at which only independent directors are present
("executive sessions"), as required by NASD Rule 4350(c) (2). There was one
executive session during fiscal 2005.

PROCEDURES FOR CONTACTING DIRECTORS

The Board of Directors has established a process for stockholders to send
communications to the Board of Directors. Stockholders may communicate with the
Board of Directors generally or with a specific director at any time by writing
to: Angelo Giusti, Secretary, Everlast Worldwide Inc., 1350 Broadway, Suite
2300, New York, New York 10018. The Secretary shall review all messages he
receives and shall forward any message that reasonably appears to be a
communication from a stockholder about a matter of stockholder interest that is
intended for communication to the Board of Directors. Communications are sent as
soon as practicable to the director to whom they are addressed, or to the Board
of Directors generally. Because other appropriate avenues of communication exist
for matters that are not of stockholder interest, such as general business
complaints or employee grievances, communications that do not relate to matters
of stockholder interest are not forwarded to the Board of Directors. The
Secretary has the right, but not the obligation, to forward such other
communications to appropriate channels within the Company.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has established three standing committees to assist
it in carrying out its responsibilities. These committees are the Corporate
Governance and Nominating Committee, the Compensation Committee, and the Audit
Committee.

Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee was formed in April 2004
through a board resolution. Although the Corporate Governance and Nominating
Committee does not have a charter, its purpose, as outlined in the board
resolutions adopting such committee, is to identify individuals qualified to
serve on the Board of Directors, recommend to the Board of Directors persons to
be nominated for election as directors at the annual meeting of the stockholders
or to be appointed by the Board of Directors to fill existing or newly created
vacancies on the Board of Directors, identify and recommend members of the Board
of Directors to serve on each board committee and to serve as chairman thereof,
and develop and recommend to the Board of Directors corporate governance
guidelines. In evaluating and determining whether to nominate a candidate for a
position on the Board of Directors, the Corporate Governance and Nominating
Committee considers candidates who possess high professional ethics and values,
relevant management and/or industry experience and a commitment to enhancing
stockholder value. The Corporate Governance and Nominating Committee regularly
assesses the size of the Board of Directors, whether any vacancies are expected
due to new corporate governance requirements, retirements or otherwise and the
need for particular expertise on the Board of Directors. Candidates may come to
the attention of the Corporate Governance and Nominating Committee from current
members of the Board of Directors, stockholders, officers or other persons. The
Corporate Governance and Nominating Committee reviews all candidates in the same
manner regardless of the source of the recommendation.

The Corporate Governance and Nominating Committee was formed in April 2004
through a board resolution and is currently comprised of James Anderson, Larry
Kring and Ed Epstein, with Mr. Epstein acting as chairperson. Messrs. Kring and
Anderson are independent directors, as defined in Rule 4200 of the NASD listing
standards. Although Mr. Epstein is not an independent director because he serves
as an outside legal counsel of the Company, the Board of Directors believes that
his work experience, external contacts and knowledge of the corporate
operations, financial and legal affairs of the Company enables him to provide
valuable insight and analysis of the Company that is critical in recommending
and determining individual members to the Board of Directors. Since Rule 4350 of
the NASD listing standards allows a non-independent director to sit on the
Corporate Governance and Nominating Committee for only two years, it is expected
that Mr. James McGuire will be nominated to replace Mr. Epstein as a member of
the Corporate Governance and Nominating Committee by the Board of Directors at
its next scheduled meeting in May 2006. The Corporate Governance and Nominating
Committee met once during the fiscal year ended December 31, 2005.

Stockholders who have continuously held at least $2,000 in market value, or
one percent of the Company's securities entitled to vote, for one year from the
date of nomination and who wish to nominate a director candidate prior to a
stockholders meeting must give written notice to Angelo Giusti, Secretary,
Everlast Worldwide Inc., 1350 Broadway, Suite 2300, New York, New York 10018,
either by personal delivery or by United States mail, postage prepaid. The
stockholder's notice must be received by the Secretary not later than the close
of business on the 120th calendar day prior to the date on which notice of the
prior year's annual meeting was first mailed to stockholders. The stockholder's
written notice to the Secretary shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,

as amended, including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected; and (b) as to
the stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination is made (i) the name and address of such stockholder, as
they appear on the Company's books, and of such beneficial owner, (ii) the class
and number of shares of the Company which are owned beneficially and of record
by such stockholder and such beneficial owner and (iii) a representation that
the stockholder is a holder of record of shares of the Company and intends to
appear in person or by proxy at the meeting to propose such business.

Compensation Committee

The Compensation Committee recommends to the Board of Directors
remuneration for the President, Chief Executive Officer and other elected
officers. It also grants stock options, supervises the administration of the
Company's stock option plans, and approves and administers other compensation
plans or agreements. For the fiscal year ended December 31, 2005, the members of
the Compensation Committee were James Anderson, Chairman, Larry Kring, and James
J. McGuire, Jr., each of whom are independent directors, as defined in Rule 4200
of the NASD listing standards. The Compensation Committee met three times during
the fiscal year ended December 31, 2005.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

GENERAL

The Compensation Committee determines the cash and other incentive
compensation, if any, to be paid to the Company's executive officers and key
employees. Messrs. James Anderson, Larry Kring and James J. McGuire, Jr. serve
as members of the Compensation Committee. The Compensation Committee is also
responsible for the supervision of the administration and award of stock options
under the Company's 1995 and 2005 Non-Employee Director Stock Option Plan and
the 2000 Employee Incentive Stock Option Plan. All three members of the
Compensation Committee are non-employee directors of the Company, as defined
under Rule 16b-3 of the Securities Exchange Act of 1934, as amended. Mr.
Anderson serves as Chairman of the Compensation Committee. The Compensation
Committee met three times during the fiscal year ended December 31, 2005.

COMPENSATION PHILOSOPHY

The Compensation Committee's executive compensation philosophy is to base
management's pay, in part, on achievement of the Company's annual and long-term
performance goals, to provide competitive levels of compensation, to recognize
individual initiative, achievement and length of service to the Company, and to
assist the Company in attracting and retaining qualified management. The
Compensation Committee also believes that the potential for equity ownership by
management is beneficial in aligning management and stockholders' interests in
the enhancement of stockholder value. The Company has not established a policy
with regard to Section 162(m) of the Internal Revenue Code of 1986, as amended.

SALARIES

Base salaries for the Company's executive officers are determined initially
by evaluating the responsibilities of the position held and the experience of
the individual, and by reference to the competitive marketplace for management
talent, including a comparison of base salaries for comparable positions at

other comparable companies. Base salaries of executive officers are reviewed
annually by the Compensation Committee and recommendations of the Compensation
Committee in that regard are acted upon by the Board of Directors. Annual salary
adjustments are determined by evaluating (i) the competitive marketplace; (ii)
the performance of the Company which includes in descending level of importance,
operating income, cash management, production efficiency and quality of
products; (iii) the performance of the executive; the length of the executive's
service to the Company; and (iv) any increased responsibilities assumed by the
executive. The Company places itself between the low and medium levels in
determining salaries compared to the other comparable holding companies of
industrial businesses.

INCENTIVE COMPENSATION

The Company from time to time considers the payment of discretionary
bonuses to its executive officers. Bonuses would be determined, first, upon the
level of achievement by the Company of its strategic and operating goals and,
second, upon the level of personal achievement by participants. The achievement
of goals by the Company includes, among other things, the performance of the
Company as measured by return on assets and the operating income of the Company,
production efficiency and quality of products. The achievement of personal goals
includes the actual performance of the unit of the Company for which the
executive officer has responsibility as compared to the planned performance
thereof, the level of cost savings achieved by such executive officer, other
individual contributions, the ability to manage and motivate employees and the
achievement of assigned projects. Bonuses are determined annually after the
close of each fiscal year. Despite achievement of personal goals, bonuses may
not be given based upon the performance of the Company as a whole.

STOCK OPTION AND OTHER PLANS

It is the philosophy of the Compensation Committee that stock options
should be awarded to employees of the Company to promote long-term interests
between such employees and the Company's stockholders through an equity interest
in the Company and assist in the retention of such employees. The Compensation
Committee also considered the amount and terms of options previously granted to
executive officers. The Compensation Committee believes the potential for equity
ownership by management is beneficial in aligning management's and stockholders'
interest in the enhancement of stockholder value and to provide incentive to
executive officers to contribute to corporate growth and profitability.

COMPENSATION COMMITTEE
----------------------

James K. Anderson
Larry Kring
James J. McGuire, Jr.

Audit Committee

The Audit Committee reviews the Company's financial statements. It then
makes recommendations to the Board of Directors concerning the accuracy of such
statements and whether or not they should be included in the Company's annual
report. It also reviews filings with the Securities and Exchange Commission
containing the Company's financial statements. Additionally, it reviews the
qualifications of and makes recommendations to the Board of Directors not only
concerning the selection of the Company's independent auditors but also the
nature and scope of additional professional services to be provided by such
auditors. As part of its duties, the Audit Committee serves as an independent
and objective monitor of the performance of the Company's financial reporting

processes and systems of internal control. For the fiscal year ended December
31, 2005, the members of the Audit Committee were Larry Kring, Chairman, James
Anderson and Jeffrey Schwartz, each of whom are independent directors, as
defined in Rule 4200 of the NASD listing standards. The Board of Directors has
determined that Larry Kring, Chairman of the Audit Committee, is the financial
expert serving on the Audit Committee. The Audit Committee is governed by a
written Audit Committee Charter approved by the Board of Directors in 2004
following the commencement of our 2004 Annual Meeting. The Audit Committee
reviews and reassesses the adequacy of its charter on an annual basis and during
2005 did not make any amendments. The Audit Committee met five times during the
fiscal year ended December 31, 2005. All members of the Audit Committee attended
at least 75% of the Audit Committee meetings.

AUDIT COMMITTEE REPORT

Our audit committee is comprised of three directors, all of which are
independent, and operates under a written charter. The audit committee, in its
oversight role over (1) our financial accounting and reporting process, (2) our
system of internal controls established by management and (3) the external audit
process, has met with management and our independent auditors. Discussions about
our audited financial statements included our independent auditor's judgments
about the quality, not just the acceptability, of our accounting principles and
underlying estimates used in our financial statements, as well as other matters,
as required by Statement on Auditing Standards No. 61, Communication with Audit
Committees ("SAS 61"), as amended by Statement on Auditing Standards No. 90,
Audit Committee Communications, and by our Audit Committee Charter. In
conjunction with the specific activities performed by the audit committee in its
oversight role, it issued the following report:

1. The audit committee has reviewed and discussed the audited financial
statements, including a discussion of the quality, not just the acceptability,
of the accounting principles, the reasonableness of significant judgments, and
the clarity of disclosures in the financial statements as of and for the year
ended December 31, 2005 with our management.

2. The audit committee has discussed with the independent auditors the
matters required to be discussed by SAS 61, as amended by Statement on Auditing
Standards No. 90 ( Communication with Audit Committees.)

3. The audit committee has received from the independent accountants,
required by Independence Standards Board Standard No.1, Independence Discussions
with Audit Committee, (i) a written disclosure, indicating all relationships, if
any, between the independent auditor and its related entities and the Company
and its related entities which, in the auditor's professional judgment,
reasonably may be thought to bear on the auditor's independence, and (ii) a
letter from the independent auditor confirming that, in its professional
judgment, it is independent of the Company; and the audit committee has
discussed with the auditor the auditor's independence from the Company.

Based on the review and discussions referred to in paragraphs (1) through
(3) above, the audit committee recommended to the Board of Directors, and the
Board of Directors has approved, that the audited financial statements should be
included in our Annual Report on Form 10-K for the fiscal year ended December
31, 2005 for filing with the Securities and Exchange Commission.

AUDIT COMMITTEE
---------------
Larry Kring
James Anderson
Jeffrey Schwartz

COMPENSATION OF DIRECTORS

Directors of the Company who are neither officers nor employees of the
Company receive options to purchase shares of Common Stock pursuant to the
Company's 2005 Non-Employee Director Stock Option Plan ( prior to which grants
were made under the 1995 Non-Employee Director Stock Option Plan) (the
"Directors' Plan") as part of their compensation for services as directors of
the Company. The Directors' Plan provides for annual automatic grants on the
first working day of the fiscal year of options to purchase 3,000 shares of
Common Stock to each such director serving at the time of the grant. The
automatic option grant was as amended to 5,000 shares commencing on January 1,
2006. The Chairman and Secretary of the Board of Directors and the chairperson
of a committee of the Board of Directors also receive an automatic grant of
options to purchase an additional 200 shares of Common Stock, provided he or she
is not an officer nor an employee of the Company. Each member of a committee of
the Board of Directors, provided that he or she is neither an officer nor an
employee of the Company, also receives an automatic grant of options to purchase
an additional 100 shares of Common Stock. The exercise price per share for all
such options is the fair market value of the shares of Common Stock on the date
of grant. The term of each option is seven years from the date of grant, and the
options vest in three equal installments on the first, second and third
anniversaries of the date of grant.

For the fiscal year ended December 31, 2005, Messrs. James K. Anderson,
Edward R. Epstein, Larry Kring, Mark Ackereizen, Teddy Atlas, Jim McGuire and
Jeff Schwartz each received a total of $6,000. Effective as of January 1, 2006,
each director of the Company who is neither an officer nor an employee of the
Company shall receive an annual fee of $12,000, one-fourth of such amount
payable at the end of each quarter. Directors also receive reimbursement of
expenses incurred by them in performing their duties and in attending meetings
of the Board of Directors, provided that such expenses are reasonable and
evidenced by appropriate documentation.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ELECTION OF EACH OF THE DIRECTOR NOMINEES

MANAGEMENT

OTHER EXECUTIVE OFFICERS

Name Age Position Held
---- --- -------------
Angelo Giusti 55 Secretary & President of
Sports Products Equipment
Business
Gary J. Dailey 38 Chief Financial Officer

MR. ANGELO GIUSTI has been Secretary and President of the Sporting Products
Equipment Business since October 2000. From June 1997 to October 2000, he served
as Vice President of Operations of the Company. Mr. Giusti also served as a
director of the Company from January 1997 to October 2000. From 1984 until June
1997, Mr. Giusti was President of Universal Business Forms, a printing company
in New York City. From 1978 to 1984, Mr. Giusti was Sales Manager in New York
for Uarco, a national printing company. Mr. Giusti has served on many community
boards. He was a New York City Public School teacher and has remained active in
local education and in youth sports activities. He is a former President of the
Holmdel Pop Warner Football League in New Jersey.

MR. GARY J. DAILEY has been Chief Financial Officer of the Company since
July 2004. From July 2003 to June 2004, he was Vice President of Finance. From
January 1999 through 2003, Mr. Dailey was Vice President, Finance, of The Hain
Celestial Group, Inc. a publicly held natural and organic food manufacturer and
distributor. Prior to that, Mr. Dailey was an Assurance and Advisory Senior
Manager with Ernst & Young LLP from September 1988 through December 1998,
serving small and middle market companies in the manufacturing, wholesale and
retail industries.

EXECUTIVE COMPENSATION

The following Summary Compensation Table sets forth certain information
concerning total annual compensation paid to George Q Horowitz, the Company's
former Chief Executive Officer, who passed away on November 28, 2005, Seth
Horowitz, current President and Chief Executive Officer, Angelo Giusti, the
Company's Secretary and President of Sports Equipment Products and Gary J
Dailey, the Company's Chief Financial Officer and Chief Accounting Officer
(collectively, the "Named Executive Officers"), for services rendered in all
capacities by them to the Company during fiscal years ended December 31, 2005,
2004, and 2003.

SUMMARY COMPENSATION TABLE

Annual Compensation
-------------------

Name and Other Annual All Other Securities
Principal Compensation Compensation Underlying
Positions (1) Year Salary ($) Bonus($) ($) ($) Options (#)
------------- ---- ---------- -------- --- --- -----------
George Horowitz
(former Chairman, 2005 $435,000 $151,544 (2) $ 53,754 (3) $2,969 (6) 100,000
President and Chief 2004 435,519 147,435 (2) 53,754 (4) 2,969 (6) 60,000
Executive Officer) 2003 398,673 157,132 (2) 55,766 (5) 1,596 (6) 0

Seth Horowitz 2005 $250,079 (7) $126,000(8) 13,620 (9) 0 100,000
(Chairman, President
and Chief Executive
Officer)

Angelo Giusti 2005 $211,945 $ 38,000 0 0 10,000
(Secretary & Senior 2004 202,192 18,000 0 0 10,000
Vice President of 2003 173,269 18,000 0 0 0
Operations)

Gary J Dailey 2005 $177,437 $ 58,000 0 0 15,000
(Chief Financial 2004 164,423 15,000 0 0 15,000
Officer & Chief 2003 57,000 (10) 0 (10) 0 0 0
Accounting Officer)

(1) Other than George Q Horowitz, Seth Horowitz, Angelo Giusti and Gary Dailey,
the Company had no other executive officer to whom it paid more than
$100,000 to in total salary and bonuses for fiscal year ended December 31,
2005.

(2) Consists of annual bonus paid pursuant to Mr. Horowitz's employment
agreement.

(3) Consists of (i) $32,000 paid to a trust account pursuant to the Deferred
Compensation Plan adopted by the Board of Directors on December 17, 1999
and (ii) an aggregate of $21,754 paid by the Company, on behalf of Mr.
Horowitz, in fiscal year 2005 in connection with automobile lease
installment payments ($16,190), related insurance premiums ($715) and
parking expenses ($4,849). Upon Mr. George Horowitz's death, the Company
was obligated to pay $1 million in deferred compensation, or the difference
between its prior annual paid contributions into this deferred compensation
plan and the $1 million commitment. At December 31, 2005, the Company has
accrued approximately $800,000 remaining towards this deferred contribution
commitment. The Company has paid this commitment in early March 2006 to the
estate of George Horowitz.

(4) Consists of (i) $32,000 paid to a trust account pursuant to the Deferred
Compensation Plan adopted by the Board of Directors on December 17, 1999
and (ii) an aggregate of $21,754 paid by the Company, on behalf of Mr.
Horowitz, in fiscal year 2004 in connection with automobile lease
installment payments ($17,564), related insurance premiums ($715) and
parking expenses ($4,646).

(5) Consists of (i) $32,000 paid to a trust account pursuant to the Deferred
Compensation Plan adopted by the Board of Directors on December 17, 1999
and (ii) an aggregate of $23,766 paid by the Company, on behalf of Mr.
Horowitz, in fiscal year 2003 in connection with automobile lease
installment payments ($17,564), related insurance premiums ($1,556) and
parking expenses ($4,646).

(6) Represents premiums paid by the Company in fiscal years 2005, 2004, and
2003 on term life insurance policies for the benefit of Mr. Horowitz.

(7) Mr. Seth Horowitz was named President and Chief Operating Officer in July
2005, and then named Chief Executive Officer in November 2005.

(8) Consists of annual bonus of $106,000 pursuant to Mr. Horowitz's employment
agreement dated January 9, 2006.

(9) Consists of an aggregate of $13,620 paid by the Company, on behalf of Mr.
Horowitz, in fiscal year 2005 in connection with automobile lease
installment payments ($8,820), and parking expenses ($4,800).

(10) From July 2003 to June 2004, Gary J. Dailey was Vice President of Finance
for the Company. Mr. Dailey's compensation for 2003 covers the period from
July 2003 to the end of December 2003.

LONG-TERM INCENTIVE AND PENSION PLANS

The Company currently has no long-term incentive or defined pension plans.
The Company offers all employees a 401(k) savings plan that allows the employees
to voluntarily defer a certain portion of their income before taxes. The Company
pays all the administrative fees for the plan.

STOCK OPTION GRANT AND EXERCISES IN LAST FISCAL YEAR

The table below sets forth information with respect to grants of stock
options to our named executives during our fiscal year ended December 31, 2005.

OPTION GRANTS IN LAST FISCAL YEAR

Individual Grant Potential Realizable
---------------- Value At Assumed
Annual Rate of Stock
Price Appreciation For
Option Term
-----------

Number of Percent of
Securities Total
Underlying Options Granted Exercise Of
Options To Employees Base Price Expiration
Name Granted (#) In Fiscal year ($/Sh) Date 5% ($) 10% ($)
---- ----------- -------------- ------ ---- ------ -------

George Horowitz 100,000(1) 34% $3.59 11/02/2015 $225,773 $378,912
Seth Horowitz 100,000(1) 34% $3.59 11/02/2015 $225,773 $378,912
Angelo Giusti 10,000(1) 3% $3.59 11/02/2015 $22,577 $37,891
Gary J. Dailey 15,000(1) 5% $3.59 11/02/2015 $33,866 $56,837

(1) Issued under the Company's 2000 Stock Option Plan. The option was granted
on November 2, 2005 and one-third of the number of shares subject to the
option are exercisable commencing November 2, 2006, one-third of the number
of shares subject to the option are exercisable commencing November 2,
2007, and the final one-third of the number of shares subject to the option
are exercisable commencing November 2, 2008. Mr. George Horowitz's options
were terminated upon his passing on November 28, 2005. Mr. Seth Horowitz's
options are non-qualified stock options.

The table below sets forth information with respect to exercises of options
by our named executives during our fiscal year ended December 31, 2005.

Number of Securities Value of Unexercised In-the
Underlying Unexercised Money Options at
Options at December 31, 2005 December 31, 2005 (1)
Shares
Acquired On Value
Name Exercise (#) Realized Exercisable Unexercisable Exercisable Unexercisable
---- ------------ -------- ----------- ------------- ----------- -------------

George Q Horowitz 25,000 $207,854 585,000 (2) 0 (2) $1,373,000 0
Seth Horowitz 10,000 $73,208 16,667 133,333 $126,000 $924,000
Angelo Giusti - - 15,833 16,667 $118,000 $117,600
Gary J Dailey - - 5,000 25,000 $38,000 $176,000

(1) Represents the total gain that would be realized if all the in-the-money
options held at December 31, 2005 were exercised, determined by multiplying
the number of shares underlying the options by the difference between the
per share option exercise price and the closing sale price of Common Stock
of $10.31 per share as reported on the NASDAQ SmallCap Market for December
31, 2005. An option is in-the-money if the fair market value of the
underlying shares exceeds the exercise price of the option.

(2) The exercisable options granted to George Q Horowitz passed on to The
Estate of George Q Horowitz and remained exercisable until February 27,
2006. The unexercisable options granted to George Q Horowitz terminated
immediately upon his death on November 29, 2005.

DISCLOSURE OF EQUITY COMPENSATION PLAN INFORMATION

The table below sets forth information with respect to our compensation plans as
of December 31, 2005.

Number of securities Number of securities
to be issued upon Weighted-average remaining available for
exercise of exercise price of future issuance under equity
outstanding options, outstanding compensation plans
warrants and rights options, warrants (excluding securities
Plan Category (a) and rights reflected in column (a))
------------- ------------------- ---------- ------------------------

Equity compensation plans 1,107,134 $6.75 1,222,200
approved by security
holders

EMPLOYMENT CONTRACTS

SETH HOROWITZ - The Company and Seth Horowitz are parties to an employment
agreement, dated as of January 9, 2006 (the "Agreement"), pursuant to which Mr.
Horowitz will serve as the President and Chief Executive Officer of the Company

through December 31, 2010 (the "Term"). Mr. Horowitz's annual salary shall
initially be $325,000 (the "Base Salary") and shall be considered for increase
by the Board of Directors. In addition to the Base Salary, Mr. Horowitz is
entitled to an annual cash bonus (the "Cash Bonus") based upon certain "before
tax profits" targets. Under the Agreement, Mr. Horowitz is also entitled to
receive a monthly automobile allowance, reimbursement for parking expenses,
health and medical insurance, and participation in any retirement, life and
disability insurance, dental insurance and any bonus, incentive or
profit-sharing plans which the Company makes available from time to time to its
executives. The Company has also agreed to include Mr. Horowitz as a named
insured in any director or officer liability insurance policy the Company
maintains on the same basis as is made available to the directors and other
executive officers of the Company. The Agreement generally restricts Mr.
Horowitz from disclosing certain confidential information during the Term and
for a period of one year following the Term, and further restricts Mr. Horowitz
from competing with the Company for a period of one year following the Term. The
Agreement may be terminated (i) by Mr. Horowitz for "good reason" or (ii) by the
Company "for cause". If the Agreement is terminated by the Company "for cause"
or in the event of the resignation by Mr. Horowitz without "good reason," the
obligations of the Company under the Agreement will terminate (except with
respect to certain indemnification provisions). In the event of termination of
the Agreement by reason of Mr. Horowitz's death, his estate is entitled to
receive the pro-rata amount of the Cash Bonus as of the time of his death at the
end of the same fiscal year. If Mr. Horowitz's employment is terminated due to a
Change of Control (as defined in the Agreement), he will be entitled to a lump
sum payment of 2.99 times the sum of the Base Salary, Cash Bonus and benefits
and payment for expenses incurred as a result of such termination and any
deferred compensation, including but not limited to deferred bonuses allocated
or credited to Mr. Horowitz as of the date of his termination.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS / CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Edward R. Epstein, a Director and a member of the Corporate Governance and
Nominating Committee, was paid an aggregate of $321,000 for legal services for
the fiscal year ending December 31, 2005. Other than a verbal retainer agreement
to provide for legal services, Mr. Epstein has no other contract or agreement
with the Company and serves as an independent contractor of the Company.

COMMON STOCK PERFORMANCE GRAPH

The following graph compares, for each of the fiscal years indicated, the
yearly percentage change in the Company's cumulative total stockholder return on
the Company's Common Stock with the cumulative total return of a) the NASDAQ
Market Index, a broad equity market index, and b) Coredata Group Index, a peer
group index for the apparel industry.

COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKET

------------------------------- ---------------------------------------------------------------------------------------
FISCAL YEAR
------------------------------- ---------------------------------------------------------------------------------------
Company/Index/Market 12/31/2000 12/29/2001 12/31/2002 12/31/2003 12/31/2004 12/31/2005
------------------------------- -------------- --------------- -------------- -------------- -------------- -----------

------------------------------- -------------- --------------- -------------- -------------- -------------- -----------
Everlast Worldwide Inc 100.00 123.29 191.50 154.77 398.22 540.92
------------------------------- -------------- --------------- -------------- -------------- -------------- -----------
Textile-Apparel Clothing 100.00 102.81 101.61 130.22 156.16 169.72
------------------------------- -------------- --------------- -------------- -------------- -------------- -----------
NASDAQ Market Index 100.00 79.71 55.60 83.60 90.63 92.62
------------------------------- -------------- --------------- -------------- -------------- -------------- -----------

[GRAPHIC OMITTED]

ASSUMES $100 INVESTED ON DEC. 31, 2000
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2005

There can be no assurance that the Common Stock's performance will continue
with the same or similar trends depicted in the graph above.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who beneficially own
more than ten percent of the Company's Common Stock, to file reports of
ownership of Common Stock and other equity securities of the Company with the
Securities and Exchange Commission (the "Commission"). Officers, directors and
more than ten percent stockholders are required by Commission regulation to
furnish the Company with copies of all Section 16(a) reports they file. To the
Company's knowledge, based solely on review of the copies of such reports
furnished to the Company during the fiscal year ended December 31, 2005, all
required Section 16(a) reports for our directors, officers and beneficial owners
of 5% of our outstanding stock were filed on a timely basis except for the
following reports and transactions that were inadvertently reported late:

1) James K. Anderson - Form 4 for January 3, 2005 was filed February 4,
2005.

2) Larry Kring - Form 4 for January 3, 2005 was filed on January 24,
2005; Form 4 for December 22, 2005 was filed on January 4, 2006.

3) Edward R. Epstein - Form 4 for January 3, 2005 was filed on January
24, 2005.

4) Teddy Atlas - Form 4 for January 3, 2005 was filed on January 24,
2005.

5) James McGuire Jr. - Form 4 for January 3, 2005 was filed on March 20,
2005.

6) Jeffrey Schwartz - Form 4 for January 3, 2005 was filed on January 24,
2005.

7) Mark Ackereizen - Form 4 for January 3, 2005 was filed on March 24,
2005.

8) Gary J. Dailey - Form 4 for November 2, 2005 was filed on November 8,
2005.

PROPOSAL 3 - RATIFICATION OF THE COMPANY'S INDEPENDENT AUDITORS

The Board of Directors has selected Berenson LLP ("Berenson") as the
Company's independent auditors for the fiscal year ending December 31, 2006.
Stockholder ratification of the selection of Berenson as the Company's
independent accountants is not required by the Company's By-laws or otherwise.
However, as was true for the 2005 Annual Meeting of Stockholders (at which the
stockholders ratified the selection of Berenson), the Board of Directors is
submitting the selection of Berenson to the stockholders for ratification as a
matter of good corporate practice. If the stockholders fail to ratify the
selection, the Audit Committee and the Board of Directors will reconsider
whether or not to retain the services of Berenson.

The Audit Committee reviews and pre-approves the audit and non-audit
services to be provided by our independent auditors during the year, considers
the effect that performing those services might have on audit independence and
approves management's engagement of our independent auditors to perform those
services. The Audit Committee reserves the right to appoint a different
independent accounting firm at any time during the year even if the selection of
Berenson is ratified, if the Board of Directors and the Audit Committee believe
that the change is in the best interest of the Company and its stockholders.

Berenson was originally engaged as the Company's independent auditors in
May 1995. Berenson has audited the Company's financial statements for the fiscal
years ended December 31, 1995 through December 31, 2005. A representative of
Berenson will be present at the Annual Meeting, will have an opportunity to make
a statement if he desires to do so, and will be available to respond to
questions.

For its fiscal 2005 and 2004 services, the Company paid Berenson total fees
of $222,000 and $186,000 respectively comprised of:

AUDIT FEES

The aggregate fees billed by Berenson for professional fees rendered in
connection with the audit of the Company's annual financial statements and the
reviews of the Company's financial statements included in the Company's
quarterly reports on Form 10-Q, including services related thereto, were
$159,000 for the year ended December 31, 2005 and $143,000 for the year ended
December 31, 2004.

AUDIT RELATED FEES

Audit related fees associated with security filings and accounting research
amounted to $24,000 for the year ended December 31, 2005. There were no audit
related fees billed by Berenson for the years ended December 31, 2004.

TAX FEES

The aggregate fees billed by Berenson for professional services rendered
for tax compliance, tax advice and tax planning were $39,000 for the year ended
December 31, 2005, and $43,000 for the year ended December 31, 2004. The
services comprising the fees reported as "Tax Fees" included tax return
preparation, consultation regarding various tax issues, and support provided to
management in connection with income and other tax audits.

ALL OTHER FEES

There were no other fees billed by Berenson for products and services,
other than those described for the years ended December 31, 2005 and December
31, 2004.

The Audit Committee has considered whether the provision by Berenson of the
services covered by the fees other than the audit fees is compatible with
maintaining Berenson's independence and has determined that it is compatible.
All audit and non-audit services to be performed by the Company's independent
accountant must be approved in advance by the Audit Committee.

REQUIRED VOTE

The approval of the proposal to ratify the appointment of Berenson requires
the affirmative vote of a majority of the votes cast.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF THE APPOINTMENT OF BERENSON LLP

STOCKHOLDER PROPOSALS

Stockholder proposals made in accordance with Rule 14a-8 under the
Securities Exchange Act of 1934, as amended and intended to be presented at the
Company's 2006 Annual Meeting of Stockholders must be received by the Company at
its principal office in New York, New York no later than January 2, 2007 for
inclusion in the proxy statement for that meeting.

OTHER MATTERS

The Board of Directors does not intend to present and has not been informed
that any other person intends to present any matters for action at the Meeting
other than those specifically referred to in this proxy statement. If any other
matters properly come before the Annual Meeting, it is intended that the holders
of the proxies will act in respect thereof in accordance with their best
judgment.

A copy of the Company's Form 10-K containing the Company's financial
statements for the year ending December 31, 2005, as filed with the Commission,
was included as part of the Company's Annual Report to Stockholders which is
being furnished along with this Proxy Statement to all beneficial stockholders

or stockholders of record as of the Record Date. For further copies, please
contact: Secretary, EVERLAST WORLDWIDE INC., 1350 Broadway, Suite 2300, New
York, New York 10018.

May 1, 2006

By Order of the Board of Directors

Seth Horowitz
President and Chief Executive Officer

EXHIBIT A

AMENDMENT TO THE COMPANY'S BYLAWS
TO CLASSIFY THE COMPOSITION OF THE BOARD OF DIRECTORS

SECTION 3.01. Number and Term of Office; Qualifications. The number of the
directors constituting the entire board of directors shall be the number, not
less than one nor more than 10, fixed from time to time, subject to the
provisions of the certificate of incorporation, by a majority of the total
number of directors that this corporation would have, prior to any increase or
decrease, if there were no vacancies; provided, however, that no decrease shall
shorten the term of an incumbent director. Until otherwise fixed by the
directors, the number of directors constituting the entire board of directors
shall be eight. Commencing with the election of directors at the annual meeting
of stockholders in 2006, the board of directors shall be divided into three
classes as nearly equal in number as possible. The terms of office of the
directors initially classified shall be as follows: that of Class I shall expire
at the next annual meeting of stockholders in 2007, Class II at the second
succeeding annual meeting of stockholders in 2008 and Class III at the third
succeeding annual meeting of stockholders in 2009. Commencing with the 2007
annual meeting of stockholders of this corporation, directors elected to succeed
those directors whose terms have thereupon expired shall be elected for a term
of office to expire at the third succeeding annual meeting of stockholders of
this corporation after their election and until their respective successors are
elected and qualify. The foregoing notwithstanding, each director shall serve
until his successor shall have been duly elected and qualifies, unless he shall
resign, become disqualified, disabled or shall otherwise be removed.

SECTION 3.02. Resignation; Vacancies. Any director of this corporation may
resign at any time by giving written notice of such resignation to the board of
directors or the secretary of this corporation. Any such resignation shall take
effect at the time specified therein or, if no time be specified, upon receipt
thereof by the board of directors or the secretary; and, unless specified
therein, the acceptance of such resignation shall not be necessary to make it
effective. When one or more directors shall resign from the board of directors
effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office as
provided in these By-Laws in the filling of other vacancies.

Unless otherwise provided in the certificate of incorporation, vacancies
and newly created directorships resulting from any increase in the authorized
number of directors may be filled by a majority of the directors then in office,
although less than a quorum, or by the sole remaining director, and the
directors so chosen shall hold office for the unexpired portion of the term of
the class in which such directors were chosen to serve and until their
successors are elected and qualify.

EVERLAST WORLDWIDE INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

2006 ANNUAL MEETING OF STOCKHOLDERS

June 2, 2006

The undersigned hereby appoints Messrs. Seth A. Horowitz and James K.
Anderson, and each of them, as proxies, each with the power to appoint his
substitute, and authorizes each of them to represent and to vote, as designated
on the reverse hereof, all of the shares of common stock, par value $.002 per
share, of Everlast Worldwide Inc. (the "Company") held of record by the
undersigned at the close of business on May 1, 2006 at the 2006 Annual Meeting
of Stockholders of the Company to be held on Friday, June 2, 2006 at 10 AM,
local time, at The Kitano, 66 Park Avenue (38th Street), New York, New York
10016, in the Park Avenue Room on the 18th floor, or at any adjournment thereof,
on the matters described in the Notice of 2006 Annual Meeting of Stockholders
and Proxy Statement and upon such other business as may properly come before
such meeting or any adjournments thereof, hereby revoking any proxies heretofore
given.

(CONTINUED , AND TO BE MARKED, DATED AND SIGNED ON THE OTHER SIDE.)

PROXY

THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE PROPOSALS. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS

Please mark your vote like this /X/

1. ADOPTION OF PROPOSAL TO AMEND THE COMPANY'S BYLAWS TO CLASSIFY THE
COMPOSITION OF THE BOARD OF DIRECTORS OF THE COMPANY:

FOR / / AGAINST / / ABSTAIN / /

2. ELECTION OF DIRECTORS:

(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW OR LIST THEIR NAMES IN THE
SPACE PROVIDED.)

Seth A. Horowitz, James K. Anderson, Larry Kring, Edward R. Epstein, Teddy Atlas, James J. McGuire Jr.,
Jeffrey M. Schwartz and Mark Ackereizen

FOR / / WITHHOLD AUTHORITY / /
--------------------------------
--------------------------------

Note: If Proposal No. 1, is approved, the nominees for Class I
Directors are Jeffrey Schwartz and Mark Ackereizen. The
nominees for Class II Directors are Mr. Edward R. Epstein,
Teddy Atlas and James McGuire Jr. The nominees for Class III
Directors are Seth A. Horowitz, James K. Anderson and Larry
Kring. If Proposal No. 1 is not approved, then each of the

eight director nominees stands for election for a one-year
term until the 2007 Annual Meeting of Stockholders and until
his successor has been elected and qualified.

3. RATIFICATION OF THE APPOINTMENT OF BERENSON LLP AS THE COMPANY'S AUDITORS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006:

FOR / / AGAINST / / ABSTAIN / /

4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.

SIGNATURE SIGNATURE IF HELD JOINTLY DATE:
---------------------- ------------------ --------

NOTE: Please sign exactly as set forth herein. When shares are held by joint
owners, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a partnership,
please sign in partnership by authorized person.