RETROSPETTIVA, INC.
8825 West Olympic Blvd.
Beverly Hills, California 90211
PROXY STATEMENT AND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 1998
To the shareholders of Retrospettiva, Inc.:
The Annual Meeting of the shareholders of Retrospettiva, Inc. (the
"Company") will be held at the Company's executive offices, 8825 West Olympic
Blvd., Beverly Hills, California 90211, at 4:00 P.M. on June 18, 1998, or at any
adjournment or postponement thereof, for the following purposes:
1. To elect seven directors of the Company.
2. To transact such other business as may properly come before the meeting.
Details relating to the above matters are set forth in the attached Proxy
Statement. All shareholders of record of the Company as of the close of business
on April 30, 1998 will be entitled to notice of and to vote at such meeting or
at any adjournment or postponement thereof.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU DO NOT
PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN, DATE AND PROMPTLY RETURN THE
ENCLOSED PROXY. A REPLY CARD IS ENCLOSED FOR YOUR CONVENIENCE. THE GIVING OF A
PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
Michael D. Silberman
Chief Financial Officer
May 4, 1998
<PAGE>
PROXY STATEMENT
RETROSPETTIVA, INC.
8825 West Olympic Blvd.
Beverly Hills, California 90211
Telephone: (310) 657-1745
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Retrospettiva, Inc. (the "Company"), a
California corporation, of no par value Common Stock ("Common Stock") to be
voted at the Annual Meeting of Shareholders of the Company ("Annual Meeting") to
be held at 4:00 P.M. on June 18, 1998, or at any adjournment or postponement
thereof. The Company anticipates that this Proxy Statement and the accompanying
form of proxy will be first mailed or given to all shareholders of the Company
on or about May 4, 1998. The shares represented by all proxies that are properly
executed and submitted will be voted at the meeting in accordance with the
instructions indicated thereon. Unless otherwise directed, votes will be cast
for the election of the nominees for directors hereinafter named. The holders of
a majority of the shares represented at the Annual Meeting in person or by proxy
will be required to elect directors and approve any proposed matters.
Any shareholders giving a proxy may revoke it at any time before it is
exercised by delivering written notice of such revocation to the Company, by
substituting a new proxy executed at a later date, or by requesting, in person,
at the Annual Meeting, that the proxy be returned.
All of the expenses involved in preparing, assembling and mailing this
Proxy Statement and the materials enclosed herewith and all costs of soliciting
proxies will be paid by the Company. In addition to the solicitation by mail,
proxies may be solicited by officers and regular employees of the Company by
telephone, telegraph or personal interview. Such persons will receive no
compensation for their services other than their regular salaries. Arrangements
will also be made with brokerage houses and other custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of the
shares held of record by such persons, and the Company may reimburse such
persons for reasonable out of pocket expenses incurred by them in so doing.
VOTING SHARES AND PRINCIPAL SHAREHOLDERS
The close of business on April 30, 1998 has been fixed by the Board of
Directors of the Company as the record date (the "record date") for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting. On the record date, there were outstanding 2,900,000 shares of Common
Stock, each share of which entitles the holder thereof to one vote on each
matter which may come before the Annual Meeting. Cumulative voting for directors
is permitted.
1
<PAGE>
A majority of the issued and outstanding shares entitled to vote,
represented at the meeting in person or by proxy, constitutes a quorum at any
shareholders' meeting.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information concerning the holdings of
Common Stock by each person who, as of April 30, 1998, holds of record or is
known by the Company to hold beneficially or of record, more than 5% of the
Company's Common Stock, by each director, and by all directors and executive
officers as a group. All shares are owned beneficially and of record. The
address of all persons is in care of the Company at 8825 West Olympic Blvd.,
Beverly Hills, California 90211.
Amount of Percent of
Name Ownership Class
---- --------- -----
Borivoje Vukadinovic (1) 2,454,051 53.6%
Michael D. Silberman (2) 178,735 3.9%
Ivan Zogovic (3) 66,712 1.5%
Mojgan Keywanfar (3) 66,712 1.5%
S. William Yost (4) 23,826 0.5%
Donald E. Tormey (4) 23,826 0.5%
Philip E. Graham (4) 23,826 0.5%
All officers and directors
as a group (7 persons) 2,837,688 62.0%
- ----------
(1) Includes stock options to purchase up to 1,191,300 shares of Common Stock
at $6.25 per share and 166,777 shares at $.63 per share exercisable until
April 2006.
(2) Includes stock options to purchase up to 119,128 shares of Common stock at
$6.25 per share exercisable until April 2006.
(3) Represents stock options to purchase up to 30,973 shares of Common Stock at
$1.68 per share exercisable until April 2001, 11,913 shares at $2.94 per
share exercisable until May 2001, and 23,826 shares at $2.94 per share
exercisable until April 2006.
(4) Represents stock options to purchase up to 23,826 shares of Common Stock at
$2.94 per share exercisable until May 2001.
ELECTION OF DIRECTORS
At the Annual Meeting, the shareholders will elect seven directors of the
Company. Cumulative voting is permitted in the election of directors. In the
absence of instructions to the contrary, the person named in the accompanying
proxy will vote in favor of the election of each of the persons named below as
2
<PAGE>
the Company's nominees for directors of the Company. All of the nominees are
presently members of the Board of Directors. Each of the nominees has consented
to be named herein and to serve if elected. It is not anticipated that any
nominee will become unable or unwilling to accept nomination or election, but if
such should occur, the person named in the proxy intends to vote for the
election in his stead of such person as the Board of Directors of the Company
may recommend.
The following table sets forth certain information regarding each nominee
and each executive officer of the Company.
Officer or
Name Age Office Director Since
---- --- ------ --------------
Borivoje Vukadinovic(1) 39 Chairman of the Board of 1991
Directors, President and
Chief Executive Officer
Michael D. Silberman(2) 42 Vice-President - Sales and 1996
Marketing, and Director
Ivan Zogovic 39 Vice-President - Special 1996
Accounts, and Director
Mojgan Keywanfar 35 Secretary, Treasurer, and Chief
Financial Officer 1996
S. William Yost(1)(2) 69 Director 1996
Donald E. Tormey(1)(2) 66 Director 1996
Philip E. Graham(1) 41 Director 1996
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
Directors hold office for a period of one year from their election at the
annual meeting of stockholders and until their successors are duly elected and
qualified. Officers of the Company are elected by, and serve at the discretion
of, the Board of Directors. Directors not employed by the Company do not receive
fees for attending Board of Directors' meetings but are reimbursed for
out-of-pocket expenses, and each outside director has been granted stock options
to purchase 23,826 shares of the Company's Common Stock.
Background
The following is a summary of the business experience of each executive
officer and director of the Company for at least the last five years:
3
<PAGE>
Borivoje Vukadinovic has been a director and executive officer of the
Company since January 1991, and its Chief Executive Officer since January 1993.
From June 1990 to August 1993, he was Vice President and a principal stockholder
of Celtex ENT, a Los Angeles, California based company that established and
administered production of yarns and raw textiles in Yugoslavia, Turkey and
Macedonia. From May 1988 to June 1990, he was founder, owner and President of
Duty Off, Inc., a Los Angeles, California based company that produced young
men's apparel. He earned a Bachelor of Arts degree in Business from the
University of Banja Luka in Yugoslavia and a Bachelor of Arts degree in Art from
Bern University in Switzerland.
Michael D. Silberman has served as Chief Financial Officer and as a
director of the Company since April 1996. From May 1994 until he joined the
Company in April 1996, Mr. Silberman was a financial advisor with Prudential
Securities Inc. From April 1992 to February 1994, he was a portfolio manager for
Private Investment Fund, a privately-held and managed investment fund. From
September 1991 to April 1992, Mr. Silberman was president of UMB Commercial
Capital, a division of United Mercantile Bank of Pasadena, California, a
federally chartered bank, where he administered the division's accounts'
receivable finance department. From 1983 to 1991, Mr. Silberman served as the
Executive Vice President of Allied Business Capital, a privately-held Los
Angeles, California based commercial finance company. Mr. Silberman received his
Bachelor of Arts degree in Economics from the University of California, Los
Angeles and his MBA (Masters of Business Administration) degree from the
Anderson School at the University of California, Los Angeles.
Ivan B. Zogovic has been employed by the Company as its
Manager-Export/Import since January 1994 and was appointed a director in May
1996. Mr. Zogovic is responsible for the export and import of raw materials and
finished goods including customers clearing, scheduling and freight forwarding,
between the United States and the Company's contract manufacturers in Eastern
Europe. He earned a law degree from the University of Belgrade Law School and
practiced law in Yugoslavia from 1984 until 1992.
Mojgan Keywanfar has been employed by the Company as its accounting manager
since February 1991 and was appointed a director in December 1996. Ms. Keywanfar
manages the Company's bookkeeping and management information systems. She holds
a B.A. degree in Economics from the California State University, Northridge.
S. William Yost became a director of the Company in May 1996. He has been
an adjunct professor of Operations and Technology Management at the Anderson
Graduate School of Management of the University of California, Los Angeles,
since 1986. He has over 20 years experience in industrial positions together
with four years as a presidential appointee in the executive branch of the
federal government, three years in management consulting and in the early 1980's
as the Assistant Commissioner of the Trademark and Patent Office of the federal
government in Washington, D.C. Dr. Yost holds a doctorate in Business
Administration (DBA) from the Harvard Business School, and MBA from the Anderson
Graduate School of Management at the University of California, Los Angeles, and
a B.A. from the University of California, Berkeley. He serves on the Board of
Directors of a number of small privately-held companies and is a consultant to a
variety of public and private clients.
4
<PAGE>
Donald Tormey became a director of the Company in May 1996. From 1958 until
he retired in 1995, Chevron Corporation employed him in a number of positions
culminating as its Refinery General Manager in El Segundo, California from 1994
until his retirement. He holds a BSCE degree in engineering from the University
of Wisconsin School of Engineering.
Philip E. Graham became a director of the Company in May 1996. Since
February 1997, he has been the Information Technology Executive at the Avionics
and Communications Finance and Information Technology department of Rockwell
Avionics and Communications, Inc. From 1989 until February 1997, AirTouch
Cellular employed him in a number of positions, culminating as its director of
Information Technology from July 1989 to February 1997. Mr. Graham holds an MBA
degree from the Anderson Graduate School of Management at the University of
California, Los Angeles, and M.S. degree from the California State University at
Fullerton and a B.S. degree from the University of California at Irvine.
Section 16(a) Beneficial Ownership Reporting Compliance
Michael D. Silberman failed to timely report, on Form 4, the sale of 2,500
shares of Common Stock in September 1997 by the required deadline of October 10,
1997. The Form 4 was filed in November 1997. Form 4 requires that transactions
(purchases or sales of Common Stock of the Company) by officers, directors or
principal stockholders must be reported using Form 4 by the 10th of the month
following the month in which the transaction occurred.
Executive Compensation
The following table discloses all compensation awarded to, received by, and
paid to the Chief Executive Officer of the Company for the years ended December
31, 1997, 1996 and 1995. No executive officer's annual compensation exceeded
$100,000 in 1997.
<TABLE>
<CAPTION>
ANNUAL LONG-TERM COMPENSATION
COMPENSATION AWARDS PAYOUTS
(a) (b) (c) (d) (e) (f) (g) (h) (i)
All Other
Name and Other Annual Restricted Stock Options/ LTIP Compen-
Principal Position Year Salary($) Bonus($) Compensation($) Award(s)($) SARS(#) Payouts($) sation($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Borivoje Vukadinovic
Chief Executive
Officer 1997 80,001 -0- -0- -0- -0- -0- -0-
1996 40,928 -0- -0- -0- 1,358,067(1) -0- -0-
1995 26,500 -0- 34,258(2) -0- -0- -0- -0-
(1) See "1996 Stock Option Plan" for description of the options.
(2) Represents sales commission paid to Mr. Vukadinovic.
5
</TABLE>
<PAGE>
Stock Option Plan
In May 1996, the Company adopted a stock option plan (the "Plan"), which
provides for the grant to employees, officers, directors and consultants of
options to purchase up to 1,786,930 shares of Common Stock, consisting of both
"incentive stock options" within the meaning of Section 422A of the United
States Internal Revenue Code of 1986 (the "Code") and "non-qualified" options.
Incentive stock options are issuable only to employees of the Company, while
non-qualified options may be issued to non-employee directors, consultants and
others, as well as to employees of the Company.
The Plan is administered by at least three members of the Board of
Directors (at least two of whom are independent), which determines those
individuals who shall receive options, the time period during which the options
may be partially or fully exercised, vesting periods required for issuance of
options, the number of shares of Common Stock that may be purchased under each
option and the option price.
The per share exercise price of the Common Stock subject to an incentive
stock option may not be less than the fair market value of the Common Stock on
the date the option is granted. The per share exercise price of the Common Stock
subject to a non-qualified option is established by the Board of Directors. The
aggregate fair market value (determined as of the date the option is granted) of
the Common Stock that any employee may purchase in any calendar year pursuant to
the exercise of incentive stock options may not exceed $100,000. No person who
owns, directly or indirectly, at the time of the granting of an incentive stock
option to him, more than 10% of the total combined voting power of all classes
of stock of the Company is eligible to receive any incentive stock options under
the Plan unless the option price is at least 110% of the fair market value of
the Common Stock subject to the option, determined on the date of grant.
Non-qualified options are not subject to these limitations.
No incentive stock option may be transferred by an optionee other than by
will or the laws of descent and distribution, and during the lifetime of an
optionee, the option will be exercisable only by him or her. In the event of
termination of employment other than by death or disability, the optionee will
have three months after such termination during which he or she can exercise the
option. Upon termination of employment of an optionee by reason of death or
permanent total disability, his or her option remains exercisable for 12 months
thereafter to the extent it was exercisable on the date of such termination. No
similar limitation applies to non-qualified options.
Options under the Plan must be granted within ten years from the effective
date of the Plan. The incentive stock options granted under the Plan cannot be
exercised more than ten years from the date of grant except that incentive stock
options issued to 10% or greater stockholders are limited to five year terms.
All options granted under the Plan provide for the payment of the exercise price
in cash or by delivery to the Company of shares of Common Stock already owned by
the optionee having a fair market value equal to the exercise price of the
6
<PAGE>
options being exercised, or by a combination of such methods of payment.
Therefore, an optionee may be able to tender shares of Common Stock to purchase
additional shares of Common Stock and may theoretically exercise all of his
stock options with no additional investment other than his original shares. Any
unexercised options that expire or that terminate upon an optionee ceasing to be
an officer, director or an employee of the Company become available once again
for issuance.
As of the date hereof, 1,701,635 options have been granted under the Plan
to officers, directors and employees including 1,477,205 options granted to
Messrs. Vukadinovic and Silberman, an aggregate of 71,478 options granted to the
Company's three non-employee directors and 152,952 options granted to other
employees. The per share exercise prices range from $0.63 to $6.25, which prices
represented at least the fair market value of the Company's Common Stock on the
respective dates the options were granted, based on prior sales of the Company's
Common Stock. The table below sets for the total number of options issued to
each executive officer and director of the Company and the exercise price.
Messrs. Vukadinovic's and Silberman's options are exercisable until April 2006.
The remaining options expire at various times in 2006. All options were granted
in 1996 and no options were exercised in 1996.
CERTAIN TRANSACTIONS
In April 1996 the Company executed a three-year employment agreement with
Mr. Vukadinovic, its Chief Executive Officer, and Mr. Silberman, its Chief
Financial Officer, providing for annual salaries of $95,000 and $60,000,
respectively. In connection with their employment, Messrs. Vukadinovic and
Silberman received options under the Plan to purchase 1,191,300 shares and
119,128 shares, respectively, of the Company's Common Stock. Mr. Silberman also
received 81,007 shares of Common Stock for services rendered valued at $0.42 per
share on the date of grant, or an aggregate value on such date of $34,000.
At December 31, 1997, Mr. Vukadinovic was indebted to the Company in the
amount of $288,496.27 advanced by the Company under a credit facility granted to
Mr. Vukadinovic in the maximum amount of $350,000 and evidenced by three
promissory notes. The three promissory notes are unsecured; bear interest at 10%
per annum and are due on demand.
Until December 31, 1996, Mr. Vukadinovic was a 22.5% stockholder in Easy
Concepts, Inc. ("ECI"), an apparel customer of the Company. At December 31, 1996
and December 31, 1997, ECI was indebted to the Company for apparel purchases on
open account in the amounts of $1,182,202 and $218,457, respectively. On January
1, 1997 Mr. Vukadinovic returned all of his ECI stock to ECI for no
consideration. He elected to do so because he had received his ECI stock for
nominal consideration in the form of services rendered and he wanted to
eliminate any potential for conflict of interest caused by his ECI
stockholdings. He was never an officer or director of ECI and ECI is no longer a
customer of the Company.
At December 31, 1997, ECI's indebtedness to the Company was $218,457. The
amount relates to apparel purchased through February 1997 and is therefore more
than 180 days past due. As the indebtedness was incurred on open account for
apparel purchases, the amount is not evidenced by a promissory note, no interest
7
<PAGE>
has been charged and there is no maturity date for full payment. However, the
Company believed that ECI would pay off the remaining amount due by December
1997 and if it failed to do so, the Company was prepared to take such legal
action as was necessary to enforce its claim against ECI. At December 31, 1997,
ECI had $106,000 worth of pants at cost in the PII warehouse. The market value
of the pants is estimated to be $150,000, and it is ECI's intention to sell
those goods to pay indebtedness to the Company. To reflect the partial potential
uncollectibility of ECI's indebtedness, the Company elected to take an allowance
of $83,000. The Company believes that the goods will be sold by June 30, 1998
and the proceeds will be paid to the Company in their entirety.
The Company uses a portion of a consolidating warehouse in Astoria, New
York for short-term storage and for consolidating services in connection with
finished goods imported from Macedonia pending pick up by the Company's
customers. Positive Influence, Inc. ("PII"), the owner of the warehouse and the
provider of the consolidating services, is a non-affiliated former customer of
the Company which was indebted to the Company in the amount of $115,210 at
December 31, 1997 for goods previously purchased from the Company. The Company
is charged an average of approximately $10,000 per month for use of the
warehouse and for consolidating services provided by PII, which amount is
deducted from the amount owed by PII to the Company. PII also provides Easy
Concepts, Inc. ("ECI"), a former affiliate of the Company, with warehouse space
and consolidating services. Charges due from ECI to PII are also deducted from
the amount owed by PII to the Company and ECI pays such amounts directly to the
Company. Consolidating services involve accepting finished goods shipments,
combining the goods into larger quantities for pickup by, or delivery to,
customers and storage of the goods prior to customer acceptance.
In July 1997, Mr. Vukadinovic personally guaranteed the Company's line of
credit with Merrill Lynch Business Financial Services Inc. in the amount of
$500,000. In November 1997, the line of credit was increased to a maximum of
$1,500,000.
The Company believes that the transactions described above were fair,
reasonable and consistent with the terms of transactions that the Company could
have entered into with non-affiliated third parties. All future transactions
with affiliates will be approved by a majority of the Company's disinterested
directors.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
AJ. Robbins, P.C., Denver, Colorado, conducted the audit of the Company's
financial statements for the year ended December 31, 1997. It is the Company's
understanding that this firm is obligated to maintain audit independence as
prescribed by the accounting profession and certain requirements of the
Securities and Exchange Commission. As a result, the directors of the Company do
not specifically approve, in advance, non-audit services provided by the firm,
nor do they consider the effect, if any, of such services on audit independence.
8
<PAGE>
PROPOSALS OF SHAREHOLDERS FOR PRESENTATION
AT NEXT ANNUAL MEETING OF SHAREHOLDERS
Any shareholders of record of the Company who desires to submit a proper
proposal for inclusion in the proxy materials relating to the next annual
meeting of shareholders must do so in writing and it must be received at the
Company's principal executive offices prior to the Company's fiscal year end.
The proponent must be a record or beneficial shareholder entitled to vote at the
next annual meeting of shareholders on the proposal and must continue to own the
securities through the date on which the meeting is held.
OTHER BUSINESS
Management of the Company is not aware of any other matters which are to be
presented to the Annual Meeting, nor has it been advised that other persons will
present any such matters. However, if other matters properly come before the
meeting, the individual named in the accompanying proxy shall vote on such
matters in accordance with his best judgment.
The above notice and Proxy Statement are sent by order of the Board of
Directors.
Michael D. Silberman
Chief Financial Officer
May 4, 1998
9
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
RETROSPETTIVA, INC.
TO BE HELD JUNE 18, 1998
The undersigned hereby appoints Borivoje Vukadinovic as the lawful agent and
Proxy of the undersigned (with all the powers the undersigned would possess if
personally present, including full power of substitution), and hereby authorizes
him to represent and to vote, as designated below, all the shares of Common
Stock of Retrospettiva, Inc. held of record by the undersigned on April 30,
1998, at the Annual Meeting of Shareholders to be held June 18, 1998, or any
adjournment or postponement thereof.
1. ELECTION OF DIRECTORS
_____ FOR the election as a director of all nominees listed below
(except as marked to the contrary below).
_____ WITHHOLD AUTHORITY to vote for all nominees listed below.
NOMINEES:________________________________________________________
INSTRUCTION: To withhold authority to vote for individual nominees, write their
names in the space provided below.
________________________________________________________________________________
2. In his discretion, the Proxy is authorized to vote upon any matters
which may properly come before the Annual Meeting, or any adjournment or
postponement thereof.
It is understood that when properly executed, this proxy will be voted in
the manner directed herein by the undersigned shareholder. WHERE NO CHOICE IS
SPECIFIED BY THE SHAREHOLDER THE PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS NAMED IN ITEM 1 ABOVE.
The undersigned hereby revokes all previous proxies relating to the shares
covered hereby and confirms all that said Proxy may do by virtue hereof.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full 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 name by authorized person.
10
<PAGE>
Dated:____________________________ ____________________________________
Signature
PLEASE MARK, SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE. ____________________________________
Signature, if held jointly
PLEASE CHECK THIS BOX IF YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING OF
SHAREHOLDERS. _____
11
