<PAGE>
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. 1)
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 Rule 14a-11(c) or Rule 14a-12
SIGNATURE EYEWEAR, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
<PAGE>
SIGNATURE EYEWEAR, INC.
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 1998
----------------
TO OUR SHAREHOLDERS:
Notice is hereby given that the 1998 Annual Meeting of Shareholders of
Signature Eyewear, Inc. ("the Company") will be held at The Renaissance Hotel,
9620 Airport Boulevard, Los Angeles, California, 90045, on May 15, 1998 at
10:30 a.m., Pacific Standard time. The Annual Meeting is being held for the
following purposes:
1. To elect a Board of six Directors to hold office until the next Annual
Meeting of Shareholders and until their respective successors have been
elected. The persons nominated by the Board of Directors of the Company
(Ms. Heldman and Messrs. Weiss, Prince, Warren, Buchsbaum and Johnson)
are described in the accompanying Proxy Statement;
2. To approve an amendment to the Company's 1997 Stock Plan to increase the
maximum number of shares of Common Stock that may be issued pursuant to
awards granted under the plan from 600,000 shares to 800,000 shares; and
3. To transact such other business as may properly come before the Annual
Meeting or any of its adjournments or postponements.
Only shareholders of record of the Common Stock of the Company at the close
of business on April 10, 1998 are entitled to notice of, and to vote at, the
Annual Meeting and any of its adjournments or postponements.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the Annual Meeting, you are
urged to mark, sign and return the enclosed Proxy as promptly as possible in
the postage prepaid envelope enclosed for that purpose. Any shareholder
attending the Annual Meeting may vote in person, even though he or she has
returned a Proxy.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Julie Heldman
Julie Heldman
Co-Chairman of the Board, President and
Secretary
Inglewood, California 90302
April 17, 1998
IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU MAY, IF YOU PREFER, REVOKE YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
SIGNATURE EYEWEAR, INC.
----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 15, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Signature Eyewear, Inc., a California
corporation (the "Company"), for use at the 1998 Annual Meeting of
Shareholders (the "Annual Meeting") to be held at The Renaissance Hotel, 9620
Airport Boulevard, Los Angeles, California, 90045, on May 15, 1998 at 10:30
a.m., Pacific Standard time, and at any of its adjournments or postponements,
for the purposes set forth herein and in the attached Notice of Annual Meeting
of Shareholders. Accompanying this Proxy Statement is the Board of Directors'
Proxy for the Annual Meeting, which you may use to indicate your vote on the
proposals described in this Proxy Statement.
All Proxies which are properly completed, signed and returned to the Company
prior to the Annual Meeting, and which have not been revoked, will unless
otherwise directed by the shareholder be voted in accordance with the
recommendations of the Board of Directors set forth in this Proxy Statement. A
shareholder may revoke his or her Proxy at any time before it is voted either
by filing with the Secretary of the Company, at its principal executive
offices, a written notice of revocation or a duly executed proxy bearing a
later date, or by attending the Annual Meeting and expressing a desire to vote
his or her shares in person.
The close of business on April 10, 1998 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at,
the Annual Meeting and any of its adjournments or postponements. At the record
date, 5,268,027 shares of Common Stock, par value $.001 per share (the "Common
Stock"), were outstanding. The Common Stock is the only outstanding class of
capital stock of the Company.
A shareholder is entitled to cast one vote for each share held of record on
the record date on all matters to be considered at the Annual Meeting. The six
nominees for election as directors at the Annual Meeting who receive the
highest number of affirmative votes will be elected. The amendment of the 1997
Stock Plan to increase by 200,000 the number of shares of Common Stock that
may be issued pursuant to awards under the 1997 Stock Plan will require (i)
the affirmative vote of a majority of the shares of the Company's Common Stock
present or represented and voting on this matter at the 1998 Annual Meeting,
and (ii) the affirmative vote of a majority of the quorum. Abstentions and
broker non-votes will be included in the number of shares present at the
Annual Meeting for the purpose of determining the presence of a quorum.
Abstentions will be counted toward the tabulation of votes cast on proposals
submitted to shareholders and will have the same effect as negative votes,
while broker non-votes will not be counted either as votes cast for or against
such matters.
This Proxy Statement and the accompanying Proxy were mailed to shareholders
on or about April 17, 1998.
<PAGE>
ELECTION OF DIRECTORS
In accordance with the Bylaws of the Company, the Company's directors are
elected at each Annual Meeting of Shareholders and hold office until the next
election of directors and until their successors are duly elected. The Bylaws
of the Company provide that the Board of Directors shall consist of no fewer
than four and no more than seven directors as determined from time to time by
the Board of Directors. In February 1998, the Board of Directors was expanded
to six directors. There are currently five directors on the Board of Directors
and one vacancy.
Unless otherwise instructed, the Proxy holders will vote the Proxies
received by them for the nominees named below. If any nominee is unable or
unwilling to serve as a director at the time of the Annual Meeting or any of
its postponements or adjournments, the Proxies will be voted for such other
nominee(s) as shall be designated by the current Board of Directors to fill
any vacancy. The Company has no reason to believe that any nominee will be
unable or unwilling to serve if elected as a director.
The Board of Directors proposes the election of the following nominees as
directors:
Bernard Weiss
Julie Heldman
Michael Prince
Daniel Warren
Maurice Buchsbaum
Joel Johnson
If elected, each nominee is expected to serve until the 1999 Annual Meeting
of Shareholders and his or her successor is duly elected and qualified. The
six nominees for election as directors at the Annual Meeting who receive the
highest number of affirmative votes will be elected.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES LISTED ABOVE.
2
<PAGE>
INFORMATION ABOUT NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth certain information about the nominees and
executive officers of the Company as of March 1, 1998:
<TABLE>
<CAPTION>
YEAR
FIRST
ELECTED
AGE AT OR
MARCH 1, APPOINTED
NAME: 1998 DIRECTOR PRINCIPAL OCCUPATION
----- -------- --------- --------------------
<C> <C> <C> <S>
NOMINEES:
Bernard Weiss(1) 59 1983 Mr. Weiss has served as Chief Executive
Officer of the Company since 1983. Mr.
Weiss served as Chairman of the Board
from 1983 to 1988, and has served as Co-
Chairman of the Board since 1989. Mr.
Weiss started in the optical industry in
1975 as Vice President of Sales and
Marketing for Optique du Monde. From 1977
until he founded the Company in 1983, Mr.
Weiss worked in a variety of executive
positions at companies in the optical
industry.
Julie Heldman(1) 52 1985 Ms. Heldman has served as Co-Chairman of
the Board since 1989 and President of the
Company since 1995. Ms. Heldman joined
the Company in 1985 and since that time
has served in various executive positions
including Chief Financial Officer and
Executive Vice President of Operations.
She held the position of Chief Operating
Officer from 1992 until she was appointed
President of the Company in 1995. Ms.
Heldman graduated from Stanford
University in 1966 and has a law degree
from UCLA Law School which she obtained
in 1981. Ms. Heldman worked as an
attorney from 1981 until she joined the
Company in 1985.
Michael Prince 48 1994 Mr. Prince joined the Company in 1993 and
has served as the Chief Financial Officer
and as a Director of the Company since
March 1994. For more than 14 years before
joining the Company, Mr. Prince's
principal occupation was as a consultant
with Prince & Co., a business consulting
firm which he owned.
Daniel Warren 40 1993 Mr. Warren has served as a director of
the Company since 1993. From January 1996
until the present, Mr. Warren has been
self-employed as a consultant. From March
1992 until January 1996, Mr. Warren was
Vice President of Planning and Accounting
of National Vision Associates, Ltd.
Maurice Buchsbaum 55 1997 Mr. Buchsbaum has served as a director of
the Company since November 1997. From
January 1993 until September 1995, he was
President of Emerald Partners, Inc., and
he served as Senior Vice President and
Managing Director of Fechtor Detwiler &
Co., Inc. from September 1995 until
February 1998. Mr. Buchsbaum is currently
Senior Vice President of Southeast
Research Partners, an investment banking
firm.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
YEAR
FIRST
ELECTED
AGE AT OR
MARCH 1, APPOINTED
NAME: 1998 DIRECTOR PRINCIPAL OCCUPATION
----- -------- --------- --------------------
<C> <C> <C> <S>
Joel Johnson 43 Mr. Johnson has been designated
by Fechtor, Detwiler & Co., Inc.
to be nominated to serve on the
Board of Directors. Mr. Johnson
is owner and President of Orchard
Partners, Inc., a professional
firm providing advisory services
in corporate finance which he
formed in February 1998. For
eight years prior to forming
Orchard Partners, Mr. Johnson
served in the investment banking
department of Fechtor, Detwiler &
Co., Inc. He received an MBA in
Finance from the University of
Colorado in 1980 and an AB from
Harvard College in 1976.
OTHER EXECUTIVE OFFICERS:
Robert Fried 53 Mr. Fried has served as the
Company's chief marketing
executive since joining the
Company in 1990. In 1995, he was
appointed the Company's Senior
Vice President of Marketing.
Before joining the Company in
1990, Mr. Fried served in various
executive marketing positions at
Motorola, Quasar Electronics,
Rockwell International, Starcraft
Leisure Products, Marantz Stereo
Company, Nautilus Fitness, Inc.
and Hansen Foods.
Robert Zeichick 47 Mr. Zeichick has served as the
Company's chief advertising and
promotion executive since joining
the Company in November 1990. In
1995, he was appointed the
Company's Vice President of
Advertising and Sales Promotion.
From 1988 until joining the
Company in 1990, Mr. Zeichick
served as Vice President of
Advertising and Sales Promotion
at Nautilus Fitness, Inc. and
Hansen Foods. Mr. Zeichick worked
as an independent advertising
consultant from 1984 until 1988
and worked on such brand names as
Applause, Walt Disney Home Video
and Marantz.
</TABLE>
- --------
(1) Mr. Weiss and Ms. Heldman are married.
AGREEMENT TO NOMINATE DIRECTOR
Pursuant to an Underwriting Agreement among the Company, Fechtor, Detwiler &
Co., Inc. ("Fechtor Detwiler") and certain selling shareholders entered into
in connection with the Company's initial public offering in September 1997,
the Company has agreed, until September 2000, to use its best efforts to cause
one nominee designated by Fechtor Detwiler to be elected to the Board of
Directors. Mr. Johnson has been designated by Fechtor Detwiler to be nominated
to serve on the Board of Directors.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held six meetings during fiscal 1997. No director
attended less than 75% of all the meetings of the Board of Directors and those
committees on which he or she served in fiscal 1997.
4
<PAGE>
Following the Company's initial public offering in September 1997, the Board
of Directors formed an Audit Committee. The Audit Committee currently consists
of Daniel Warren and Maurice Buchsbaum. The Audit Committee recommends the
engagement of the Company's independent public accountants, reviews the scope
of the audit to be conducted by such independent public accountants, and meets
with the independent public accountants and the Chief Financial Officer of the
Company to review matters relating to the Company's financial statements, the
Company's accounting principles and its system of internal accounting
controls, and reports its recommendations as to the approval of the financial
statements of the Company to the Board of Directors. No meetings of the Audit
Committee were held during the year ended October 31, 1997.
COMPENSATION OF DIRECTORS
Each director who is not an officer of, or otherwise employed by, the
Company receives an annual fee of $8,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company does not currently have a Compensation Committee. For the fiscal
year ended October 31, 1997, all decisions regarding executive compensation
were made by the Board of Directors. Mr. Buchsbaum was appointed to the
Company's Board of Directors in November 1997 and did not participate in any
decisions relating to executive compensation for fiscal 1997. Ms. Heldman and
Messrs. Weiss and Prince, executive officers of the Company, participated in
deliberations regarding executive compensation. No interlocking relationship
exists between any member of the Board of Directors and any member of any
other company's board of directors or compensation committee.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Company's Board of Directors is responsible for establishing and
administering the policies that govern executive compensation and benefit
practices. The Board of Directors does not currently maintain a Compensation
Committee.
COMPENSATION PHILOSOPHY. The Company's executive compensation program is
designed to (1) provide levels of compensation that integrate pay and
incentive plans with the Company's strategic goals, so as to align the
interests of executive management with the long-term interests of the
Company's shareholders, (2) attract, motivate and retain executives of
outstanding abilities and experience capable of achieving the strategic
business goals of the Company, (3) recognize outstanding individual
contributions, and (4) provide compensation opportunities which are
competitive to those offered by other prescription eyeglass frame companies of
similar size and performance. To achieve these goals, the Company's executive
compensation program consists of three main elements: (i) base salary, (ii)
annual cash bonus and (iii) long-term incentives. Each element of compensation
has an integral role in the total executive compensation program.
BASE SALARY. Base salaries are negotiated at the commencement of an
executive's employment with the Company, or upon renewal of his or her
employment agreement, and are designed to reflect the position, duties and
responsibilities of each executive officer, the cost of living in the area in
which the officer is located and the market for base salaries of similarly
situated executives at other companies engaged in businesses similar to that
of the Company. During fiscal 1997, Bernard Weiss served as the Company's
Chief Executive Officer and Julie Heldman served as the Company's President.
Mr. Weiss's and Ms. Heldman's base salaries of $185,000 each were determined
based upon their services to the Company, the financial performance of the
Company in the fiscal year ended October 31, 1996, and the salaries received
by similarly situated executives at other companies. In September 1997, Mr.
Weiss and Ms. Heldman each entered into employment agreements with the Company
providing for, among other things, the payment to Mr. Weiss and Ms. Heldman of
base salaries of $190,000 each during the terms of their agreements, subject
to increases from time to time approved by the Company's Board of Directors.
5
<PAGE>
ANNUAL CASH BONUSES. Executive officers are eligible for annual incentive
bonuses in amounts determined at the discretion of the Board of Directors. The
Board considers an award of an annual bonus subjectively, taking into account
factors such as the financial performance of the Company, increases in
shareholder value, the achievement of corporate goals and individual
performance. Neither Mr. Weiss nor Ms. Heldman received a cash bonus for
fiscal 1997.
LONG-TERM INCENTIVES. The Company provides its executive officers with long-
term incentive compensation through grants of awards under the Company's 1997
Stock Plan. Under the 1997 Stock Plan, the Board of Directors is authorized to
grant any type of award which might involve the issuance of shares of Common
Stock, an option, warrant, convertible security, stock appreciation right or
similar right or any other security or benefit with a value derived from the
value of the Common Stock. The Board of Directors is currently responsible for
selecting the individuals to whom grants of awards should be made, the timing
of grants, the determination of the per share exercise price and the number of
shares subject to each award. All awards granted by the Board of Directors
pursuant to the 1997 Stock Plan have been in the form of stock options. The
Board of Directors believes that stock options provide the Company's executive
officers with the opportunity to purchase and maintain an equity interest in
the Company and to share in the appreciation of the value of the Common Stock.
The Board of Directors believes that stock options directly motivate an
executive to maximize long-term shareholder value. The options incorporate
vesting periods in order to encourage key employees to continue in the employ
of the Company. All options granted in fiscal 1997 were granted at the fair
market value of the Company's Common Stock on the date of grant. During fiscal
1997, Mr. Weiss and Ms. Heldman were each granted options to purchase 20,000
shares of the Company's Common Stock. The Board of Directors considers the
grant of each option subjectively, considering factors such as the individual
performance of executive officers and competitive compensation packages in the
industry.
OMNIBUS BUDGET RECONCILIATION ACT IMPLICATIONS FOR EXECUTIVE COMPENSATION.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
places a limit of $1,000,000 on the amount of compensation that may be
deducted by the Company in any year with respect to each of the Company's five
most highly paid executive officers. Certain "performance-based" compensation
that has been approved by the Company's shareholders is not subject to the
deduction limit. The Company's 1997 Stock Plan is qualified so that awards
under the plan constitute performance-based compensation not subject to
Section 162(m) of the Code. All compensation paid to the Company's employees
in fiscal 1997 will be fully deductible.
SUMMARY. The Board of Directors believes that its executive compensation
philosophy of paying its executive officers by means of base salaries, annual
cash bonuses and long-term incentives, as described in this report, serves the
interests of the Company and its shareholders.
BOARD OF DIRECTORS
Bernard Weiss
Julie Heldman
Michael Prince
Daniel Warren
Maurice Buchsbaum
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth, for the Chief Executive Officer and each of
the other four most highly compensated officers whose compensation exceeded
$100,000 during the last fiscal year (the "Named Executive Officers"),
information concerning all compensation paid for services to the Company in
all capacities during the last two fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
NUMBER OF
FISCAL YEAR ANNUAL COMPENSATION SECURITIES
NAME AND PRINCIPAL ENDED ------------------- UNDERLYING ALL OTHER
POSITION (1) OCTOBER 31, SALARY BONUS OPTIONS COMPENSATION
------------------ ----------- ------ --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Bernard Weiss........... 1997 $ 185,000 $ -- 20,000 $ 1,332(2)
Chief Executive Officer 1996 145,414 -- -- 1,335(2)
Julie Heldman........... 1997 $ 185,000 $ -- 20,000 $ 2,062(2)
President 1996 161,700 -- 5,542(2)
Michael Prince.......... 1997 $ 170,712 $ -- 35,000 $ --
Chief Financial Officer 1996 157,345 300,000 -- 300,000(3)
Robert Fried............ 1997 $ 170,712 $ -- 35,000 $ --
Senior Vice President,
Marketing 1996 138,692 50,000 -- --
Robert Zeichick......... 1997 $ 162,923 $ -- 35,000 $ --
Vice President, Adver-
tising and Sales 1996 138,692 50,000 -- --
Promotion
</TABLE>
- --------
(1) For a description of the employment contract between each officer and the
Company, see "Employment Contracts," below.
(2) Consists of additional compensation for use of Company automobiles.
(3) Represents the value in May 1996 (as determined by the Board of Directors)
of 108,016 shares of Common Stock issued to Mr. Prince in consideration of
services rendered to the Company.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding the grant of
stock options made during the fiscal year ended October 31, 1997 to the Named
Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED
NUMBER OF RATE OF STOCK PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED OPTION TERM(1)
OPTION TO EMPLOYEES IN EXERCISE OR EXPIRATION --------------------
NAME GRANTED(2) FISCAL YEAR(3) BASE PRICE(4) DATE 5% 10%
---- ---------- ---------------- ------------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Bernard Weiss........... 20,000 4.4% $10.00 09/10/07 $125,800 $318,800
Julie Heldman........... 20,000 4.4% $10.00 09/10/07 $125,800 $318,800
Michael Prince.......... 35,000 7.7% $10.00 09/10/07 $220,150 $557,900
Robert Fried............ 35,000 7.7% $10.00 09/10/07 $220,150 $557,900
Robert Zeichick......... 35,000 7.7% $10.00 09/10/07 $220,150 $557,900
</TABLE>
- --------
(1) The potential realizable value is based on the assumption that the Common
Stock appreciates at the annual rate shown (compounded annually) from the
date of grant until the expiration of the option term. These amounts are
calculated pursuant to applicable requirements of the Commission and do
not represent a forecast of the future appreciation of the Common Stock.
(2) The option grants set forth on this chart vest in annual installments of
40%, 20%, 20%, and 20%, with the first installment vesting on April 1,
1998.
(3) Options covering an aggregate of 457,250 shares were granted to eligible
persons during the fiscal year ended October 31, 1997.
(4) The exercise price and tax withholding obligations related to exercise may
be paid by delivery of already owned shares, subject to certain
conditions.
STOCK OPTIONS HELD AT FISCAL YEAR END
The following table sets forth, for each of the Named Executive Officers,
certain information regarding the number of shares of Common Stock underlying
stock options held at fiscal year end and the value of options held at fiscal
year end based upon the last reported sales price of the Common Stock on the
Nasdaq Stock Market's National Market on October 31, 1997 ($9.50 per share).
No stock options were exercised by any Named Executive Officer during fiscal
1997.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
OCTOBER 31, 1997 AT OCTOBER 31, 1997
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Bernard Weiss............... 0 20,000 $ 0 $ 0
Julie Heldman............... 0 20,000 0 0
Michael Prince.............. 0 35,000 0 0
Robert Fried................ 0 35,000 0 0
Robert Zeichick............. 0 35,000 0 0
</TABLE>
8
<PAGE>
EMPLOYMENT CONTRACTS
Bernard Weiss, Julie Heldman, Michael Prince, Robert Fried and Robert
Zeichick have each entered into an employment agreement with the Company that
took effect on September 16, 1997. Pursuant to those agreements, these
executive officers have agreed to render services until October 31, 2000, and
will be entitled to salary at the following annual rates during the term of
their contracts (subject to increases from time to time approved by the Board
of Directors or Compensation Committee): Mr. Weiss--$190,000; Ms. Heldman--
$190,000; Mr. Prince--$175,000; Mr. Fried--$175,000; and Mr. Zeichick--
$160,000. Upon termination of employment by the Company without cause or by an
executive officer upon an adverse event, an executive officer will continue to
receive salary and benefits until the later to occur of October 31, 2000 or
one year following termination. The employment agreements define an "adverse
event" to include the occurrence of any of the following, without the prior
written consent of the executive officer: (i) the executive's demotion as
evidenced by the loss of the executive officer's title, (ii) a significant
diminution of the executive's on-going duties and responsibilities, (iii) the
relocation of the Company's principal executive offices outside the Los
Angeles Metropolitan area, or (iv) the Company requiring the executive to
relocate to an office outside the Los Angeles Metropolitan area for a period
exceeding three months in any calendar year. If employment terminates as a
result of death, the executive officer's estate will receive a payment equal
to the aggregate amount of unpaid salary through October 31, 2000. If the
Company maintains key person life insurance on the executive, the payment will
be made upon receipt of the policy's proceeds. Otherwise, the payment will be
made over the term of the executive's employment agreement. If employment
terminates as a result of disability, the executive officer will continue to
receive salary and benefits through October 31, 2000, offset by any government
benefits and any benefits the employee receives under disability insurance
provided by the Company.
CERTAIN TRANSACTIONS WITH
DIRECTORS AND EXECUTIVE OFFICERS
Robert Fried and Robert Zeichick, executive officers of the Company, are
officers, directors and significant shareholders of Brandmark, Inc., a
corporation which until December 1997 had a license from Laura Ashley Limited
and Laura Ashley Manufacturing B.V. to produce timepieces bearing the Laura
Ashley trademark. In fiscal 1997, the Company purchased from Brandmark, Inc.
an aggregate of $516,575 of timepieces bearing the Laura Ashley trademark, as
promotional incentives for certain customers.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, requires the Company's
executive officers, directors, and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Executive officers, directors and greater-than-ten percent
shareholders are required by SEC regulations to furnish the Company with all
Section 16(a) forms they file. Based solely on its review of the copies of the
forms received by it and written representations from certain reporting
persons that they have complied with the relevant filing requirements, the
Company believes that, during the year ended October 31, 1997, all the
Company's executive officers, directors and greater-than-ten percent
shareholders complied with all Section 16(a) filing requirements.
9
<PAGE>
PERFORMANCE GRAPH
The following graph sets forth the percentage change in cumulative total
shareholder return of the Company's Common Stock during the period from
September 11, 1997 (the date the Company's initial public offering commenced)
to October 31, 1997, compared with the cumulative returns of the Nasdaq Stock
Market (U.S.) Index and the Russell 2000 Index. The Comparison assumes $100
was invested on September 11, 1997 in the Common Stock and in each of the
foregoing indices. The stock price performance on the following graph is not
necessarily indicative of future stock price performance.
COMPARISON OF CUMULATIVE RETURN AMONG
SIGNATURE EYEWEAR, INC., THE NASDAQ STOCK
MARKET (U.S.) INDEX AND THE RUSSELL 2000 INDEX
[PERFORMANCE GRAPH APPEARS HERE]
* $100 INVESTED ON 9/11/97 IN STOCK OR INDEX ON 8/31/97 IN INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING OCTOBER 31.
<TABLE>
<CAPTION>
SEPTEMBER 11, 1997 OCTOBER 31, 1997
------------------ ----------------
<S> <C> <C>
Signature Eyewear, Inc.............. $100 $ 95
NASDAQ Stock Market (U.S.) Index.... 100 100
Russell 2000 Index.................. 100 103
</TABLE>
10
<PAGE>
PROPOSAL TO AMEND THE 1997 STOCK PLAN
GENERAL
The Board of Directors has approved an amendment (the "Amendment") to the
1997 Stock Plan (the "Stock Plan") to increase the number of shares of Common
Stock available for issuance under the Stock Plan from 600,000 shares to
800,000 shares. The Amendment is being submitted to the Shareholders for
approval.
The Board of Directors approved the Amendment to ensure that a sufficient
number of shares are available for issuance under the Stock Plan. At March 1,
1998, 139,500 shares remained available for grants of awards under the Stock
Plan. The Board of Directors believes that the ability to grant stock-based
awards is important to the future success of the Company. The grant of stock
options and other stock-based awards can motivate high levels of performance
and provide an effective means of recognizing employee contributions to the
success of the Company. In addition, stock-based compensation can be valuable
in recruiting and retaining highly qualified technical and other key personnel
who are in great demand as well as rewarding and providing incentives to its
current employees. The increase in the number of shares available for awards
under the Stock Plan will enable the Company to continue to realize the
benefits of granting stock-based compensation.
As of February 27, 1998, the last reported sales price of the Common Stock
on the Nasdaq Stock Market's National Market was $9.25 per share.
SUMMARY OF THE STOCK PLAN
Purpose. The purpose of the Stock Plan is to advance the interests of the
Company and its shareholders by strengthening the Company's ability to obtain
and retain the services of the types of employees, consultants, officers and
directors who will contribute to the Company's long term success and to
provide incentives which are linked directly to increases in stock value which
will inure to the benefit of all shareholders of the Company.
Administration. The Stock Plan may be administered by the Board of
Directors, or a committee of the Board of Directors whose members serve at the
pleasure of the Board. The party administering the Stock Plan is referred to
as the "Administrator." Subject to the provisions of the Stock Plan, the
Administrator has full and final authority to (i) to select from among
eligible directors, officers, employees and consultants, those persons to be
granted awards under the Stock Plan, (ii) to determine the type, size and
terms of individual awards to be made to each person selected, (iii) to
determine the time when awards will be granted and to establish objectives and
conditions (including, without limitation, vesting and performance
conditions), if any, for earning awards, (iv) to amend the terms or conditions
of any outstanding award, subject to applicable legal restrictions and to the
consent of the other party to such award, (v) to authorize any person to
execute, on behalf of the Company, any instrument required to carry out the
purposes of the Stock Plan, and (vii) to make any and all other determinations
which the Administrator determines to be necessary or advisable in the
administration of the Stock Plan. The Administrator has full power and
authority to administer and interpret the Plan and to adopt, amend and revoke
such rules, regulations, agreements, guidelines and instruments for the
administration of the Stock Plan and for the conduct of its business as the
Administrator deems necessary or advisable.
Eligibility. Any person who is a director, officer, employee or consultant
of the Company, or any of its subsidiaries (a "Participant"), is eligible to
be considered for the grant of awards under the Stock Plan. No Participant may
receive awards representing more than 25% of the number of shares of Common
Stock covered by the Stock Plan (200,000 shares if the amendment is approved
by the shareholders). At March 1, 1998, approximately 110 persons were
eligible to receive awards under the Stock Plan.
Types of Awards. Awards authorized under the Stock Plan may consist of any
type of arrangement with a Participant that, by its terms, involves or might
involve or be made with reference to the issuance of shares of the Company's
Common Stock, or a derivative security with an exercise or conversion price
related to the Common Stock or with a value derived from the value of the
Common Stock. Awards are not restricted to any specified form or structure and
may include sales, bonuses and other transfers of stock, restricted stock,
stock options, reload stock options, stock purchase warrants, other rights to
acquire stock or securities convertible into or redeemable for stock, stock
appreciation rights, phantom stock, dividend equivalents, performance units or
11
<PAGE>
performance shares, or any other type of award which the Administrator shall
determine is consistent with the objectives and limitations of the Stock Plan.
An award may consist of one such security or benefit, or two or more of them
in tandem or in the alternative.
Consideration. The Common Stock or other property underlying an award may be
issued for any lawful consideration as determined by the Administrator,
including, without limitation, a cash payment, services rendered, or the
cancellation of indebtedness. An award may provide for a purchase price of the
Common Stock or other property at a value less than the fair market value of
the Common Stock or other property on the date of grant. In addition, an award
may permit the recipient to pay the purchase price of the Common Stock or
other property or to pay such recipient's tax withholding obligation with
respect to such issuance, in whole or in part, by delivering previously owned
shares of capital stock of the Company or other property, or by reducing the
number of shares of Common Stock or the amount of other property otherwise
issuable pursuant to such award.
Termination of Awards. All awards granted under the Stock Plan expire ten
years from the date of grant, or such shorter period as is determined by the
Administrator. No option is exercisable by any person after such expiration.
If an award expires, terminates or is canceled, the shares of Common Stock not
purchased thereunder shall again be available for issuance under the Stock
Plan.
Amendment and Termination of the Stock Plan. The Administrator may amend the
Stock Plan at any time, may suspend it from time to time or may terminate it
without approval of the shareholders; provided, however, that shareholder
approval is required for any amendment which materially increases the number
of shares for which awards may be granted, materially modifies the
requirements of eligibility, or materially increases the benefits which may
accrue to recipients of awards under the Stock Plan. However, no such action
by the Board of Directors or shareholders may unilaterally alter or impair any
award previously granted under the Stock Plan without the consent of the
recipient of the award. In any event, the Stock Plan shall terminate on May
27, 2007 (ten years following the date it was approved by the Company's
shareholders) unless sooner terminated by action of the Board of Directors.
FEDERAL INCOME TAX CONSEQUENCES FOR STOCK OPTIONS
As of March 1, 1998, the only type of award granted by the Company under the
Stock Plan has been stock options. The following is a general discussion of
the principal tax considerations for both "incentive stock options" within the
meaning of Section 422 of the Code ("Incentive Stock Options") and non-
statutory stock options ("Non-statutory Stock Options"), and is based upon the
tax laws and regulations of the United States existing as of the date hereof,
all of which are subject to modification at any time. The Stock Plan does not
constitute a qualified retirement plan under Section 401(a) of the Code (which
generally covers trusts forming part of a stock bonus, pension or profit-
sharing plan funded by the employer and/or employee contributions which are
designed to provide retirement benefits to participants under certain
circumstances) and is not subject to the Employee Retirement Income Security
Act of 1974 (the pension reform law which regulates most types of privately
funded pension, profit sharing and other employee benefit plans).
Consequences to Employees: Incentive Stock Options. No income is recognized
for federal income tax purposes by an optionee at the time an Incentive Stock
Option is granted, and, except as discussed below, no income is recognized by
an optionee upon his or her exercise of an Incentive Stock Option. If the
optionee makes no disposition of the Common Stock received upon exercise
within two years from the date such option was granted or one year from the
date such option is exercised, the optionee will recognize mid-term or long-
term capital gain or loss when he or she disposes of his or her Common Stock
depending on the length of the holding period. Such gain or loss generally
will be measured by the difference between the exercise price of the option
and the amount received for the Common Stock at the time of disposition.
If the optionee disposes of the Common Stock acquired upon exercise of an
Incentive Stock Option within two years after being granted the option or
within one year after acquiring the Common Stock, any amount realized from
such disqualifying disposition will be taxable as ordinary income in the year
of disposition to the extent that (i) the lesser of (a) the fair market value
of the shares on the date the Incentive Stock Option was exercised or (b) the
fair market value at the time of such disposition exceeds (ii) the Incentive
Stock Option
12
<PAGE>
exercise price. Any amount realized upon disposition in excess of the fair
market value of the shares on the date of exercise will be treated as long-
term, mid-term or short-term capital gain, depending upon the length of time
the shares have been held.
The use of stock acquired through exercise of an Incentive Stock Option to
exercise an Incentive Stock Option will constitute a disqualifying disposition
if the applicable holding period requirement has not been satisfied.
For alternative minimum tax purposes, the excess of the fair market value of
the stock as of the date of exercise over the exercise price of the Incentive
Stock Option is included in computing that year's alternative minimum taxable
income. However, if the shares are disposed of in the same year, the maximum
alternative minimum taxable income with respect to those shares is the gain on
disposition. There is no alternative minimum taxable income from a
disqualifying disposition in subsequent years.
Consequences to Employees: Non-statutory Stock Options. No income is
recognized by a holder of Non-statutory Stock Options at the time Non-
statutory Stock Options are granted under the Stock Plan. In general, at the
time shares of Common Stock are issued to a holder pursuant to exercise of
Non-statutory Stock Options, the holder will recognize ordinary income equal
to the excess of the fair market value of the shares on the date of exercise
over the exercise price.
A holder will recognize gain or loss on the subsequent sale of Common Stock
acquired upon exercise of Non-statutory Stock Options in an amount equal to
the difference between the selling price and the tax basis of the Common
Stock, which will include the price paid plus the amount included in the
holder's income by reason of the exercise of the Non-statutory Stock Options.
Provided the shares of Common Stock are held as a capital asset, any gain or
loss resulting from a subsequent sale will be short-term, mid-term or long-
term capital gain or loss depending upon the length of time the shares have
been held.
Consequences to the Company: Incentive Stock Options. The Company will not
be allowed a deduction for federal income tax purposes at the time of the
grant or exercise of an Incentive Stock Option. There are also no federal
income tax consequences to the Company as a result of the disposition of
Common Stock acquired upon exercise of an Incentive Stock Option if the
disposition is not a disqualifying disposition. At the time of a disqualifying
disposition by an optionee, the Company will be entitled to a deduction for
the amount received by the optionee to the extent that such amount is taxable
to the optionee as ordinary income.
Consequences to the Company: Non-statutory Stock Options. Generally, the
Company will be entitled to a deduction for federal income tax purposes in the
year and in the same amount as the optionee is considered to have realized
ordinary income in connection with the exercise of Non-statutory Stock
Options.
REQUIRED VOTE
The approval of the Amendment requires (i) the affirmative vote of a
majority of the shares of the Company's Common Stock present or represented
and voting on this matter at the 1998 Annual Meeting, and (ii) the affirmative
vote of a majority of the quorum. Thus, abtentions and broker non-votes can
have the effect of preventing approval of the Amendment where the number of
affirmative votes, though a majority of the votes cast, does not constitute a
majority of the quorum.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
THE APPROVAL OF THE AMENDMENT TO THE 1997 STOCK PLAN.
13
<PAGE>
OTHER INFORMATION
PRINCIPAL SHAREHOLDERS
The following table sets forth as of April 10, 1998 certain information
relating to the ownership of the Common Stock by (i) each person known by the
Company to be the beneficial owner of more than five percent of the
outstanding shares of the Company's Common Stock, (ii) each of the Company's
directors and nominees for director, (iii) each of the Named Executive
Officers, and (iv) all of the Company's executive officers and directors as a
group. Except as may be indicated in the footnotes to the table and subject to
applicable community property laws, each such person has the sole voting and
investment power with respect to the shares owned. The address of each person
listed is in care of the Company, 498 North Oak Street, Inglewood, California
90302, unless otherwise set forth below such person's name.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK
NAME AND ADDRESS BENEFICIALLY OWNED (1) PERCENT (1)
---------------- --------------------- -----------
<S> <C> <C>
The Weiss Family Trust(2).................. 2,120,972 40.3%
Bernard Weiss(2)(3)........................ 2,128,972 40.4
Julie Heldman(2)(3)........................ 2,128,972 40.4
Daniel Warren(4)........................... 312,208 5.9
85 Old Stratton Chase
Atlanta, Georgia 30328
Robert Fried(5)............................ 191,849 3.6
Robert Zeichick(5)......................... 191,849 3.6
Michael Prince(5).......................... 114,941 2.2
Maurice Buchsbaum(4)....................... 2,000 *
Southeast Research Partners, Inc.
2101 Corporate Boulevard, Suite 402
Boca Raton, Florida 33431
Joel Johnson............................... 0 *
Orchard Partners, Inc.
30 Monument Square, Suite 155
Concord, Massachusetts 01742
Directors and executive officers as a group
(8 persons)(6)............................ 2,949,819 55.3%
</TABLE>
- --------
* Less than one percent.
(1) Under Rule 13d-3, certain shares may be deemed to be beneficially owned by
more than one person (if, for example, persons share the power to vote or
the power to dispose of the shares). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the
shares (for example, upon exercise of an option) within 60 days of the
date as of which the information is provided. In computing the percentage
ownership of any person, the amount of shares outstanding is deemed to
include the amount of shares beneficially owned by such person (and only
such person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in this table does
not necessarily reflect the person's actual ownership or voting power with
respect to the number of shares of Common Stock actually outstanding at
April 10, 1998.
(2) Bernard Weiss and Julie Heldman are married. Mr. Weiss and Ms. Heldman are
co-trustees of The Weiss Family Trust, and have voting and investment
power for shares held by The Weiss Family Trust.
(3) Includes 8,000 shares of Common Stock reserved for issuance upon exercise
of stock options which are currently exercisable.
(4) Includes 2,000 shares of Common Stock reserved for issuance upon exercise
of stock options which are currently exercisable.
(5) Includes 14,000 shares of Common Stock reserved for issuance upon exercise
of stock options which are currently exercisable.
(6) Includes 62,000 shares of Common Stock reserved for issuance upon exercise
of stock options which are currently exercisable.
14
<PAGE>
SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal at the next Annual Meeting
of Shareholders for inclusion in the Company's Proxy Statement and Proxy form
relating to such Annual Meeting must submit that proposal to the Company at
its principal executive offices by December 18, 1998.
INDEPENDENT PUBLIC ACCOUNTANTS
Altschuler, Melvoin and Glasser LLP, independent public accountants, were
selected by the Board of Directors to serve as independent public accountants
of the Company for the year ended October 31, 1997. The Audit Committee has
not yet had the opportunity to review with Altschuler, Melvoin and Glasser LLP
the proposed terms of their engagement to audit the Company's 1998 financial
statements; and until the terms of that engagement have been finalized and
agreed upon, the Audit Committee cannot finalize its selection of auditors for
that year. Representatives of Altschuler, Melvoin and Glasser LLP are expected
to be present at the Meeting, and will be afforded the opportunity to make a
statement if they desire to do so, and will be available to respond to
appropriate questions from shareholders.
SOLICITATION OF PROXIES
It is expected that the solicitation of proxies will be primarily by mail.
The cost of solicitation by management will be borne by the Company. The
Company will reimburse brokerage firms and other persons representing
beneficial owners of shares for their reasonable disbursements in forwarding
solicitation material to those beneficial owners. Proxies may also be
solicited by certain of the Company's directors and officers, without
additional compensation, personally or by mail, telephone, telegram or
otherwise for the purpose of soliciting those proxies.
ANNUAL REPORT ON FORM 10-K
THE COMPANY'S ANNUAL REPORT ON FORM 10-K, WHICH HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR ENDED OCTOBER 31, 1997, WILL
BE MADE AVAILABLE TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO
MICHAEL PRINCE, CHIEF FINANCIAL OFFICER, 498 NORTH OAK STREET, INGLEWOOD,
CALIFORNIA 90302, U.S.A.
ON BEHALF OF THE BOARD OF DIRECTORS
/s/ Julie Heldman
Julie Heldman
Co-Chairman of the Board, President and
Secretary
Inglewood, California 90302
April 17, 1998
15
<PAGE>
SIGNATURE EYEWEAR, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
The undersigned, a shareholder of SIGNATURE EYEWEAR, INC., a
California corporation (the "Company"), hereby appoints Bernard Weiss
and Julie Heldman, and each of them, the proxy of the undersigned,
with full power of substitution, to attend, vote and act for the
undersigned at the Company's Annual Meeting of Shareholders (the
"Annual Meeting"), to be held on May 15, 1998, and at any of its
postponements or adjournments, to vote and represent all of the shares
of the Company which the undersigned would be entitled to vote, as
follows:
The Board of Directors recommends a WITH vote on Proposal 1 and a
FOR vote on Proposal 2.
1. ELECTION OF DIRECTORS, as provided in the Company's Proxy
Statement:
[_] WITH [_] WITHOUT Authority to vote for the nominees listed
below.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY FOR A NOMINEE, LINE THROUGH OR
OTHERWISE STRIKE OUT THE NAME OF THE NOMINEE BELOW)
Bernard Weiss, Julie Heldman, Michael Prince, Daniel Warren, Maurice
Buchsbaum, Joel Johnson
2. The approval of the amendment to the Signature Eyewear, Inc. 1997
Stock Plan (the "Stock Plan") to increase the number of shares of
the Company's Common Stock reserved for issuance under the Stock
Plan from 600,000 to 800,000 shares.
[_] FOR [_] AGAINST [_] ABSTAIN
The undersigned hereby revokes any other proxy to vote at the Annual
Meeting, and hereby ratifies and confirms all that the proxy holder
may lawfully do by virtue of this proxy. AS TO ANY OTHER BUSINESS THAT
MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND ANY OF ITS
POSTPONEMENTS OR ADJOURNMENTS, THE PROXY HOLDER IS AUTHORIZED TO VOTE
IN ACCORDANCE WITH HIS OR HER BEST JUDGMENT.
This Proxy will be voted in accordance with the instructions set
forth above. THIS PROXY WILL BE TREATED AS A GRANT OF AUTHORITY TO
VOTE FOR THE ELECTION OF THE DIRECTORS NAMED AND THE AMENDMENT TO THE
1997 STOCK PLAN, AND AS THE PROXY HOLDER SHALL DEEM ADVISABLE ON ANY
OTHER BUSINESS THAT MAY COME BEFORE THE ANNUAL MEETING, UNLESS
OTHERWISE DIRECTED.
The undersigned acknowledges receipt of a copy of the Notice of
Annual Meeting and accompanying Proxy Statement dated April 17, 1998
relating to the Annual Meeting.
Date: ________________, 1998
----------------------------
----------------------------
Signature(s) of
Shareholder(s)
(See Instructions Below)
The above signature(s)
should correspond exactly
with the name(s) of the
shareholder(s) appearing on
the Stock Certificate. If
stock is jointly held, all
joint owners should sign.
When signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If
signer is a corporation,
please sign the full
corporation name, and give
title of signing officer.
THIS PROXY IS SOLICITED BY THE BOARD
OF DIRECTORS OF SIGNATURE EYEWEAR, INC.