================================================================================
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
[X] Filed by the Registrant
[ ] 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
14-a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
KASPER A.S.L., LTD.
(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) 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 transactions: $
5) Total fee paid: $
[ ] Fee paid previously with preliminary materials.
[ ] Checkbox 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:
================================================================================
NY2:\903199\08\55745.0003
<PAGE>
KASPER A.S.L., LTD.
77 METRO WAY
SECAUCUS, NEW JERSEY 07094
---------------------------------
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON
JUNE 21, 2000
---------------------------------
May 19, 2000
To Our Stockholders:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders (the "Meeting") of Kasper A.S.L., Ltd., a Delaware corporation (the
"Company"), to be held on June 21, 2000, at 10:00 a.m., Eastern time, at the
offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York
10153. The following matters are to be presented for consideration at the
Meeting:
(1) the election of seven directors to serve until the next Annual
Meeting of Stockholders and until their respective successors are
elected and qualify;
(2) a proposal to ratify the appointment of Arthur Andersen LLP as the
Company's independent auditors for the fiscal year ending December
30, 2000; and
(3) the transaction of such other business as may properly come before
the Meeting and any adjournments or postponements thereof.
The close of business on May 17, 2000 has been fixed as the record
date for the determination of stockholders entitled to notice of, and to vote
at, the Meeting and any adjournments or postponements thereof. A list of such
stockholders of the Company as of the close of business on May 17, 2000 will be
open to the examination of any stockholder for any purpose germane to the
meeting during normal business hours for a period of at least 10 days prior to
the Meeting at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, New York 10153.
By Order of the Board of Directors,
Lester E. Schreiber
Secretary
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR NOT
YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED
PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO ASSURE
REPRESENTATION OF YOUR SHARES. NO POSTAGE IS NEEDED IF MAILED IN THE UNITED
STATES.
<PAGE>
KASPER A.S.L., LTD.
77 METRO WAY
SECAUCUS, NEW JERSEY 07094
---------------------------------
PROXY STATEMENT
---------------------------------
FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD
JUNE 21, 2000
May 19, 2000
This Proxy Statement is furnished to holders (the "Stockholders") of
common stock, par value $0.01 per share (the "Common Stock"), of Kasper A.S.L.,
Ltd., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company to be voted at
the 2000 Annual Meeting of Stockholders of the Company (the "Meeting") to be
held on June 21, 2000, at 10:00 a.m., Eastern time, at the offices of Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153 and at any
adjournments or postponements thereof. The following matters are to be presented
for consideration at the Meeting:
(1) the election of seven directors to serve until the next Annual
Meeting of Stockholders and until their respective successors are
elected and qualify;
(2) a proposal to ratify the appointment of Arthur Andersen LLP as the
Company's independent auditors for the fiscal year ending December
30, 2000; and
(3) the transaction of such other business as may properly come before
the Meeting and any adjournments or postponements thereof.
The Board of Directors of the Company has fixed the close of business
on May 17, 2000 as the record date (the "Record Date") for the determination of
the holders of the Company's Common Stock entitled to notice of, and to vote at,
the Meeting and any adjournments or postponements thereof. Each Stockholder will
be entitled to one vote per share of Common Stock held on all matters to come
before the Meeting and may vote in person or by proxy authorized in writing. At
the close of business on the Record Date, there were 6,800,000 shares of Common
Stock issued, outstanding and entitled to vote. The Company's mailing address
is, and its principal executive offices are, 77 Metro Way, Secaucus, NJ 07094.
This Proxy Statement and the accompanying form of proxy are first
being sent to Stockholders on or about May 19, 2000.
<PAGE>
VOTING RIGHTS
QUORUM
A majority of the total of the outstanding shares of Common Stock,
represented in person or by proxy at the Meeting, is required to constitute a
quorum for the transaction of business at the Meeting. Proxies submitted which
contain abstentions or broker non-votes will be deemed present at the Meeting
when determining the presence of a quorum.
REQUIRED VOTES
(1) Election of Directors. The affirmative vote of a plurality of votes
cast at the Meeting by the holders of Common Stock will be required
for the election of directors.
(2) Ratification of Independent Auditors. The affirmative vote of a
majority of votes cast at the Meeting by the holders of Common Stock
will be required for the ratification of the appointment of Arthur
Andersen LLP as the Company's independent auditors for the fiscal
year ending December 30, 2000.
VOTING AND REVOCATION OF PROXIES
Stockholders are requested to complete, date, sign and promptly
return the accompanying form of proxy in the enclosed envelope. Common Stock
represented by properly executed proxies received by the Company and not revoked
will be voted at the Meeting in accordance with the instructions contained
therein. Proxies received for which instructions are not given will be voted FOR
the election of each nominee for director named herein and FOR the ratification
of the appointment of the independent auditors. Proxies will be voted in the
discretion of those named in the proxy with respect to any other matters as may
come before the Meeting, including matters or motions dealing with the conduct
of the Meeting. The Board of Directors is not aware of any matters which are
intended to be presented for action at the Meeting other than as set forth in
the Notice of the 2000 Annual Meeting.
Abstentions and broker non-votes are not counted in determining the
votes cast in connection with any of the matters presented for consideration at
the Meeting. Accordingly, abstentions and broker non-votes will have the
practical effect of reducing the number of votes "for" needed to approve the
election of each nominee for director named herein and the ratification of the
appointment of the independent auditors.
The 177,268 shares of Common Stock issued in the name of the Plan
Administrator of the reorganization of The Leslie Fay Companies, Inc., of which
the Company had been a division ("Leslie Fay"), who holds such shares for the
benefit of the creditors of the Company pending the resolution of certain
creditor claims, will be voted in respect of each proposal submitted at the
Meeting in the same proportion as all other shares voted at the Meeting.
Any proxy signed and returned by a Stockholder may be revoked at any
time before it is voted by filing with the Secretary of the Company, at the
address of the Company set forth herein, written notice of such revocation or a
duly executed proxy bearing a later date or by attending the Meeting and voting
in person. Attendance at the Meeting will not in and of itself constitute
revocation of a proxy.
2
<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS
The Company's Amended and Restated By-laws provide that the number of
members of the Board of Directors shall be fixed from time to time pursuant to a
resolution adopted by the agreement of the whole Board of Directors but shall
not be less than seven. The Board of Directors presently consists of seven
members.
Unless authority to do so is withheld, proxies will be voted at the
Meeting FOR the election of each of the nominees named below to serve as a
Director of the Company until the next Annual Meeting of Stockholders and until
their respective successors are elected and qualify. If any of the nominees
should become unavailable or unable to serve for any reason, the persons named
in the form of proxy will vote for such substitute nominees as the Board of
Directors of the Company may propose. The Company does not expect that any of
the nominees will be unavailable or unable to serve as a Director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE AS A
DIRECTOR TO HOLD OFFICE UNTIL THE NEXT ANNUAL MEETING OF STOCKHOLDERS AND UNTIL
THEIR RESPECTIVE SUCCESSORS ARE ELECTED AND QUALIFY.
INFORMATION ABOUT NOMINEES
The following table sets forth certain information concerning the
nominees for Director of the Company (as of May 17, 2000):
Name Age Position
- ---- --- --------
Arthur S. Levine 59 Chairman of the Board and Chief Executive Officer
H. Sean Mathis 53 Director
Salvatore M. Salibello 54 Director
Lester E. Schreiber 51 Chief Operating Officer and Director
Denis J. Taura 60 Director
Olivier Trouveroy 45 Director
Martin Bloom 67 Director Nominee
BACKGROUND OF DIRECTORS AND NOMINEES
Arthur S. Levine has served as the Chairman of the Board and Chief
Executive Officer of the Company since its separation from Leslie Fay in June
1997. Prior thereto and since 1975, he was Chief Executive Officer of Sassco
Fashions, Ltd. ("Sassco"), the Company's predecessor, which was sold to Leslie
Fay in May 1980.
H. Sean Mathis has served as a Director of the Company since March
2000. He is the President of Litchfield Asset Holdings, Inc., an investment
advisory company he founded in 1983. He served as Chairman of the Board of Allis
Chalmers, Inc., an industrial manufacturer, from 1996 to 1999, and as Chairman
of Universal Gym Equipment, Inc., a private exercise equipment manufacturer,
from 1996 to 1997. In 1997, Universal Gym Equipment, Inc. filed for protection
under the United States federal bankruptcy laws. Mr. Mathis served as a Director
of Allied Digital Technologies, Corp. from 1993 to 1998; as President of its
predecessor, RCL Acquisition Corp., from 1991 to 1993; and as President and a
Director of RCL Capital Corp. from 1993 until it was merged into DISC Graphics,
Inc. in November 1995. He currently serves as a Director of Thousand Trails,
Inc., an operator of recreational parks, and ARCH Communications Group, Inc., a
communications company.
Salvatore M. Salibello has served as a Director of the Company since
July 1998. Mr. Salibello is a certified public accountant and founded Salibello
& Broder, an accounting/consulting firm, in 1978 and currently serves as its
Managing Partner.
3
<PAGE>
Lester E. Schreiber has served as Chief Operating Officer since May
1996 and as a Director of the Company since its separation from Leslie Fay in
June 1997. Prior to becoming Chief Operating Officer of the Company, Mr.
Schreiber served as Vice President of Operations from January 1989 to April
1996.
Denis J. Taura has served as a Director of the Company since July
1998. He is a certified public accountant and a partner in Taura Flynn &
Associates, a firm specializing in reorganization and management consulting,
which he founded in April 1998. From September 1991 to March 1998, he served as
Chairman of D. Taura & Associates, a consulting firm. Mr. Taura is also the
Chairman and Chief Executive Officer of Darling International, Inc.
Olivier Trouveroy has served as a Director of the Company since its
separation from Leslie Fay in June 1997. He has served as a Managing Partner of
ING Equity Partners, L.P. I., a private equity partnership, since July 1994. ING
Equity Partners, L.P. I beneficially owns 9.4% of the Common Stock of the
Company. Mr. Trouveroy also serves as a Director of Cost Plus, Inc.
Martin Bloom is the Chairman of MBI International, Inc., an
international consulting firm, and the Chairman of Geomar Philms, Inc., a
producer of educational films. Prior thereto Mr. Bloom held various positions
with The May Department Stores Company, ultimately serving from 1985 to July
1996 as President and Chief Executive Officer of the international division.
MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended January 1, 2000, the Board of Directors
held 12 meetings. Each Director attended at least 75% of the meetings of the
Board of Directors held during the period he served as a Director with the
exception of Mr. Taura, who attended 8 meetings.
COMMITTEES
On June 10, 1997, the Board of Directors established an Audit
Committee, Compensation Committee and Finance Committee.
The Audit Committee is currently composed of Messrs. Mathis,
Nightingale and Salibello. The function of the Audit Committee is to make
recommendations concerning the selection each year of independent auditors of
the Company, to review the effectiveness of the Company's internal accounting
methods and procedures and to determine, through discussions with the
independent auditors, whether any restrictions or limitations have been placed
upon them in connection with the scope of their audit or its implementation and
to address such other issues as may be appropriate. The Audit Committee met 5
times in 1999, with each member attending at least 75% of the meetings held
during the period he served on the Committee.
The Compensation Committee is currently composed of Messrs. Mathis,
Salibello, Taura and Trouveroy. The function of the Compensation Committee is to
review and recommend to the Board of Directors policies, practices and
procedures relating to compensation of key employees and to administer employee
benefit plans. The Compensation Committee met 3 times in 1999, with each member
attending at least 75% of the meetings held during the period he served on the
Committee.
The Finance Committee is currently composed of Messrs. Nightingale,
Salibello, Taura and Trouveroy. The function of the Finance Committee is to
evaluate and review on a continuing basis specific financing programs and
requirements to meet the near and long-term needs of the Company, advise
management of the Company's business plans and budgets, review the organization
and functions of the Company's finance department and participate in the
development and implementation of the investment and the investor programs. In
1999 these issues were addressed by the Board of Directors as a whole.
4
<PAGE>
COMPENSATION OF DIRECTORS
Each Director who is not an employee of the Company is paid for
service on the Board of Directors at the rate of $40,000 per annum. With the
exception of Mr. Mathis, who was elected to the Board of Directors on March 14,
2000, each current non-employee Director also received an option at the time of
their election to the Board of Directors to purchase 20,000 shares of Common
Stock ("Director Options"). Such options vest ratably over the first three
anniversaries of the date of the grant; are exercisable at a price of $14.00 per
share of Common Stock; and vest immediately at the time a Director ceases to be
a Director of the Company. The Company also reimburses each Director for
reasonable expenses in attending meetings of the Board of Directors. Directors
who are also employees of the Company are not separately compensated for their
services as Directors.
PRESENT BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of May 17, 2000 for (i) each person
known by the Company to own beneficially more than five percent of Common Stock,
(ii) each of the Company's Directors and the Director Nominee, (iii) each of the
executive officers named in the Summary Compensation Table under "Executive
Compensation" and (iv) all Directors and executive officers of the Company as a
group. Unless otherwise indicated, the business address of each person listed is
c/o Kasper A.S.L., Ltd., 77 Metro Way, Secaucus, New Jersey 07094.
NUMBER OF SHARES PERCENTAGE
NAME AND ADDRESS OF BENEFICIALLY OWNERSHIP OF
BENEFICIAL OWNER OWNED COMMON STOCK
- ---------------- ----- ------------
Arthur S. Levine........................ 202,740 (1) 3.0%
William J. Nightingale.................. 13,534 (2) *
H. Sean Mathis.......................... -- --
Salvatore M. Salibello.................. 6,767 (3) *
Lester E. Schreiber..................... 400 (4) *
Denis J. Taura.......................... 6,667 (3) *
Olivier Trouveroy....................... 639,535 (5) 9.4%
Martin Bloom............................ 10,000 *
Gregg I. Marks.......................... 37,200 (6) *
Mary Ann Domuracki...................... -- --
Barbara Bennett......................... -- --
Whippoorwill Associates, Inc............ 1,279,091 (7) 18.8%
11 Martine Avenue
White Plains, NY 10606
Bay Harbor Management, L.C. ............ 975,771 (8) 14.4%
777 South Harbour Island Boulevard
Ste. 270
Tampa, FL 33602
Blue Ridge L.P.......................... 730,000 (9) 10.7%
660 Madison Avenue
New York, NY 10021
5
<PAGE>
NUMBER OF SHARES PERCENTAGE
NAME AND ADDRESS OF BENEFICIALLY OWNERSHIP OF
BENEFICIAL OWNER OWNED COMMON STOCK
- ---------------- ----- ------------
ING Equity Partners, L.P. I............. 639,535 (5) 9.4%
520 Madison Avenue
New York, NY 10022
Harvard Management Company.............. 357,304 (10) 5.3%
660 Atlantic Avenue
Boston, MA 02210
Directors and executive officers as a group 906,843 (11) 13.3%
(12 persons)............................
- ----------
*Less than one percent.
(1) Does not include approximately 709 shares of Common Stock which may
be distributed to Mr. Levine on an "if and when issued" basis from
shares of Common Stock held for the benefit of creditors (the
"Holdback") of the Company pending the resolution of certain creditor
claims.
(2) Includes 13,334 shares of Common Stock issuable upon exercise of
currently exercisable Director Options. Mr. Nightingale disclaims
beneficial ownership of 100 shares of Common Stock held by his
spouse.
(3) Includes 6,667 shares of Common Stock issuable upon exercise of
currently exercisable Director Options.
(4) Mr. Schreiber disclaims beneficial ownership of 100 shares of Common
Stock held by his spouse and 100 shares of Common Stock held by each
of his two children.
(5) Includes 13,334 shares of Common Stock issuable upon exercise of
currently exercisable Director Options which were issued to ING
Equity Partners, L.P. I pursuant to Mr. Trouveroy's status as a
non-employee Director of the Company, a position for which he was
designated by ING Equity Partners, L.P. I. Mr. Trouveroy is a
Managing Partner of ING Equity Partners, L.P. I. He disclaims
beneficial ownership of all shares of Common Stock listed.
Notwithstanding his disclaimer, Mr. Trouveroy may be deemed to be a
beneficial owner to the extent of his pecuniary interests in the
partnership. Does not include approximately 17,195 shares of Common
Stock which may be distributed to ING Equity Partners, L.P. I on an
"if and when issued" basis pursuant to the Holdback. Mr. Trouveroy's
business address is c/o ING Equity Partners, L.P. I, 520 Madison
Avenue (33rd Floor), New York, New York 10022.
(6) Mr. Marks disclaims beneficial ownership of 100 shares of Common
Stock held by each of his two daughters.
(7) Based on information contained in a Form 4 filed with the Securities
and Exchange Commission (the "SEC") on December 8, 1999. These shares
of Common Stock are owned by various limited partnerships, a limited
liability company, a trust and third party accounts for which
Whippoorwill Associates, Inc. has discretionary authority and acts as
general partner or investment manager.
(8) Based on information contained in a Schedule 13G/A filed with the SEC
on February 14, 2000. These shares of Common Stock are also
indirectly owned by Tower Investment Group, Inc., the majority
stockholder of Bay Harbor Management, L.C., Steven A. Van Dyke, a
stockholder and President of Tower Investment Group, Inc., and
Douglas P. Teitelbaum, a stockholder of Tower Investment Group, Inc.,
each of whom may also be deemed to be a beneficial owner of such
shares of Common Stock.
6
<PAGE>
(9) Based on information contained in a Form 5 filed with the SEC on
February 15, 2000. These shares of Common Stock are also indirectly
owned by JAG Holdings, LLC, the General Partner of Blue Ridge L.P.,
and John A. Griffin, the Managing Member of JAG Holdings LLC, each of
whom may also be deemed to be a beneficial owner of such shares of
Common Stock.
(10) Based on information contained in a Schedule 13G filed with the SEC
on February 11, 2000.
(11) Includes 40,002 shares of Common Stock issuable upon exercise of
currently exercisable Director Options.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
("Section 16(a)"), requires the Company's Directors and officers, and any
persons who beneficially own more than ten percent of the Company's Common Stock
(collectively, the "Insiders"), to file forms reporting ownership and changes in
their ownership with the SEC and the Nasdaq National Market. Insiders are also
required by SEC regulations to furnish the Company with copies of all such
Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that its Insiders complied
with all applicable Section 16(a) filing requirements for fiscal year 1999, with
the exception of Mr. Levine, who filed a late Form 4 and Isaac Franco, Wendy
R.Chivian and Merle Sloss, each of whom filed a late Form 3.
NON-DIRECTOR EXECUTIVE OFFICERS AND KEY EMPLOYEES
The following table sets forth certain information with respect to
the executive officers and key employees of the Company (as of May 17, 2000):
Name Age Position
- ---- --- --------
Gregg I. Marks 47 President
Mary Ann Domuracki 45 Executive Vice President--Finance and Administration
Beverly I. Katz 57 Senior Vice President, General Counsel and Assistant
Secretary
Barbara Bennett 48 Senior Vice President--Design
Gwen J. Gepfert 43 Chief Financial Officer
Peter Eng 45 Vice President--Piece Goods
Peter Lee 52 Managing Director--Asia Expert, Ltd.
Isaac Franco 35 Co-Creative Director and Senior Vice President of
Design for the
Company's Anne Klein division
Kenneth Kaufman 36 Co-Creative Director and Senior Vice President of
Design for the
Company's Anne Klein division
Wendy R. Chivian 39 President--Anne Klein Apparel
Merle Sloss 52 President--Anne Klein Licensing
Gregg I. Marks has served as President of the Company since its
separation from Leslie Fay in June 1997, and had been the President of Sassco,
the Company's predecessor, since January 1989, having served in a number of
other positions in Sassco since August 1983.
7
<PAGE>
Mary Ann Domuracki has served as Executive Vice President--Finance
and Administration since January 1999. Prior to joining the Company, Ms.
Domuracki worked as a consultant with the financial advisory firm of Conway Del
Genio Gries & Co., LLC from April 1998 to December 1998. From June 1987 to March
1998, Ms. Domuracki held several executive positions at Danskin, Inc.,
ultimately serving as Chief Executive Officer and President from April 1996 to
March 1998. Ms. Domuracki is a certified public accountant.
Beverly I. Katz has served as Senior Vice President, General Counsel
and Assistant Secretary since February 2000. From 1987 to September 1999, Ms.
Katz was the General Counsel of Takihyo Inc., the parent company of Anne Klein
Company LLC, and Senior Vice President, General Counsel and Secretary from
November 1988.
Barbara Bennett has served as Senior Vice President--Design of the
Company since its separation from Leslie Fay in June 1997, and had managed
Sassco's design division since October 1980.
Gwen J. Gepfert has served as Chief Financial Officer since March
2000. Prior to joining the Company, Ms. Gepfert served as Chief Financial
Officer of Ariat International, Inc., a manufacturer and wholesaler of athletic
footwear from June 1995 to September 1999. She served as a strategy consultant
for Ariat International, Inc. from September 1999 to February 2000. From 1988 to
1995, Ms. Gepfert served in several executive positions at Esprit de Corp.,
ultimately serving as Vice President of Finance. Ms. Gepfert is a certified
public accountant.
KEY EMPLOYEES
The following key employees of the Company make significant
contributions to the operations of the Company:
Peter Eng has served as Vice President--Piece Goods since the Company
separated from Leslie Fay in June 1997, and had managed Sassco's piece goods
division since November 1982. Mr. Eng is responsible for the development of new
fabrics as well as variations of current fabrics.
Peter Lee has served as Managing Director--Asia Expert, Ltd. since
joining the Company in January 1997. Mr. Lee is responsible for management of
the Company's Hong Kong buying office. Prior to joining the Company, Mr. Lee
served for 25 years as Vice President in charge of administration and production
in Taiwan and the Philippines for Carnival Textiles, a publicly-traded Taiwanese
company and one of the Company's largest suppliers.
Kenneth Kaufman has served as Co-Creative Director and Senior Vice
President of Design for the Company's Anne Klein division since it was acquired
by the Company in July 1999. Previously, he was Co-Creative Director and Vice
President of Design for Anne Klein Company LLC since January 1997. Prior to
joining Anne Klein Company LLC, he was a designer for Emanuel/Emanuel Ungaro.
Isaac Franco has served as Co-Creative Director and Senior Vice
President of Design for the Company's Anne Klein division since it was acquired
by the Company in July 1999. Previously, he was Co-Creative Director and Vice
President of Design for Anne Klein Company LLC since January 1997. Prior to
joining Anne Klein Company LLC, he was a designer for Emanuel/Emanuel Ungaro.
Wendy R. Chivian has been President--Anne Klein Apparel since August
1999. Prior to August 1999, Ms. Chivian was president of DKNY Kids from 1997 to
1999. From 1991 to 1997, she was with Anne Klein & Company, the predecessor to
Anne Klein Company LLC, where she held various senior level positions and most
recently served as Senior Vice President of Sales.
8
<PAGE>
Merle Sloss has been President--Anne Klein Licensing since December
1999, a position she also held from 1995 to 1996. Prior to rejoining the
Company, Ms. Sloss served as president of Ralph Lauren Footwear, a division of
Rockport, from 1996 to 1999.
EXECUTIVE COMPENSATION
The following table sets forth a summary of all compensation awarded
or paid to or earned by the Chief Executive Officer and the other four most
highly compensated executive officers of the Company in the last fiscal year
(the "Named Executive Officers") for services rendered in all capacities to the
Company (including its subsidiaries) for the fiscal years ended January 1, 2000,
January 2, 1999 and January 3, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------
ANNUAL COMPENSATION SECURITIES
------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- --------------------------- ---- ------ ----- ------- ------------
<S> <C> <C> <C> <C> <C>
Arthur S. Levine................... 1999 $ 2,000,000 $ --(1) -- $ 19,868(2)
Chairman of the Board and 1998 2,000,000 --(1) -- 20,540(3)
Chief Executive Officer 1997 1,200,000 -- 1,240,252(9) 1,507,635(4)
Gregg I. Marks..................... 1999 $ 800,000 $ 200,000 $ 15,924(5)
President 1998 830,769 115,000 -- 16,218(5)
1997 500,000 370,000 171,068(9) 16,824(5)
Lester E. Schreiber................ 1999 $ 269,616 $ 85,000 -- $ 16,841(6)
Chief Operating Officer 1998 258,173 50,000 -- 17,052(6)
1997 162,580 62,500 85,536(9) 16,382(6)
Mary Ann Domuracki................. 1999 $ 259,135 $ -- -- $ 1,522(7)
Executive Vice President-- 1998 -- -- -- --
Finance and Administration 1997 -- -- -- --
Barbara Bennett.................... 1999 $ 600,000 $ 150,000 -- $ 1,135(8)
Senior Vice President--Design 1998 623,077 50,000 -- 1,591(8)
1997 600,000 50,000 171,068(9) 3,566(8)
</TABLE>
- --------------
(1) Mr. Levine's employment agreement with the Company provides for a
bonus commencing in fiscal year 1998 in an amount between $500,000
and $1.5 million based upon the fulfillment of certain EBITDA hurdles
for fiscal years 1998, 1999 and thereafter. Such hurdles were not met
in either fiscal year 1998 or 1999.
(2) Includes $2,478 in Group Term Life Insurance and $17,390 in
automobile allowance.
(3) Includes $3,150 in Group Term Life Insurance and $17,390 in
automobile allowance.
(4) Includes $2,325 in Group Term Life Insurance, $17,390 in automobile
allowance and $1,487,920 in consulting fees which Mr. Levine received
in fiscal year 1997 as principal of two consulting firms prior to
June 4, 1997, at which time Mr. Levine became Chairman of the Board
and Chief Executive Officer of the Company.
9
<PAGE>
(5) Includes $924, $1,218 and $1,824 in Group Term Life Insurance and
$15,000, $15,000 and $15,000 in automobile allowance for fiscal years
1999, 1998 and 1997, respectively.
(6) Includes $941, $1,152, and $482 in Group Term Life Insurance and
$15,900, $15,900 and $15,900 in automobile allowance for fiscal years
1999, 1998 and 1997, respectively.
(7) Represents $464 in Group Term Life insurance and a clothing allowance
of $1,058.
(8) Represents $924, $1,218 and $1,566 in Group Term Life Insurance and a
clothing allowance of $211, $373 and $2,000 for fiscal years 1999,
1998 and 1997, respectively.
(9) Cancelled on November 10, 1999 pursuant to an agreement between the
Company and the optionholders.
EMPLOYMENT AGREEMENTS
The Company has entered into a five-year employment agreement with
Mr. Levine, dated June 4, 1997, which provides for his employment as Chief
Executive Officer and Chairman of the Board of the Company. The agreement
provides for an annual base compensation of $2 million and a bonus commencing in
fiscal year 1998 in an amount between $500,000 and $1.5 million based upon the
fulfillment of certain EBITDA hurdles for fiscal years 1998, 1999 and
thereafter. Mr. Levine is entitled to participate in standard benefit plans,
such as the Company's option plans and medical plans. The Company does not
maintain a key person life insurance policy on the life of Mr. Levine.
The employment agreement requires Mr. Levine to provide at least 30
days' notice of intent to terminate the agreement. In addition, the employment
agreement provides that following termination, other than termination by Mr.
Levine for "good reason" (as defined in the agreement) or by the Company without
"cause" (as defined in the agreement), Mr. Levine shall not participate or
engage in, either directly or indirectly, any business activity that is directly
competitive with the Company for the balance of the original term of the
employment agreement.
The agreement provides that, upon termination for cause (as defined
in the agreement), Mr. Levine will be entitled to receive accrued but unpaid
salary and benefit payments and expense reimbursements; provided, however, that
if Mr. Levine's termination for cause arises out of his material insubordination
(as defined in the agreement), he shall also be entitled to any bonus he would
have received if he had not been terminated. The agreement also provides that if
Mr. Levine terminates his employment for good reason (as defined in the
agreement) or the Company terminates his employment without cause, Mr. Levine
will be entitled to receive a severance payment in one lump sum equal to his
base salary for the remainder of his term of employment, plus any benefits to
which he is entitled, and expense reimbursements; provided, however, that if Mr.
Levine terminates his employment for good reason following a change in control
(as defined in the agreement), his lump sum payment of base salary shall be
reduced by 43%.
1999 SHARE INCENTIVE PLAN AND 1997 MANAGEMENT STOCK OPTION PLAN
On March 14, 2000, the Company's shareholders approved the Kasper
A.S.L., Ltd. 1999 Share Incentive Plan (the "1999 Plan"). Pursuant to the terms
of the 1999 Plan, the 1999 Plan became effective as of July 28, 1999, the date
on which the 1999 Plan was approved by the Compensation Committee. The 1999 Plan
is intended to provide incentives which will attract, retain and motivate highly
competent persons as non-employee Directors, officers and key employees of, and
consultants to, the Company and its subsidiaries and affiliates.
Participants in the 1999 Plan will consist of such Directors,
officers and key employees of, and such consultants to, the Company and its
subsidiaries and affiliates as the Compensation Committee in its sole discretion
determines to be responsible for the success and future growth and profitability
of the Company and whom the Compensation Committee may designate from time to
10
<PAGE>
time to receive benefits under the 1999 Plan. All of the Company's non-employee
Directors will be eligible to participate in the 1999 Plan. Currently, there are
five non-employee Directors. The number of officers and key employees who are
eligible to participate in the 1999 Plan is estimated to be 100. An estimate of
the number of consultants who are eligible to participate in the 1999 Plan has
not been made.
The 1999 Plan provides for the grant of any or all of the following
types of benefits: (1) stock options, including incentive stock options and
non-qualified stock options; (2) stock appreciation rights; (3) stock awards;
(4) performance awards; and (5) stock units.
The maximum number of shares of Common Stock that may be granted
under the 1999 Plan is 2,500,000 and the maximum number of shares that may be
granted to an individual participant shall not exceed 1,500,000. The unanimous
consent of the Compensation Committee is required for the grant of options to
any recipient if, upon that grant, the aggregate number of shares underlying
options held by that recipient would be equal to or greater than 20,000. As of
May 17, 2000, no shares had been granted under the 1999 Plan.
The 1999 Plan is scheduled to terminate on July 28, 2009.
No options ("Management Options") were issued pursuant to the
Company's 1997 Management Stock Option Plan (the "1997 Plan") during 1999. On
November 10, 1999, all outstanding Management Options, with the exception of
those Management Options held by Peter Huang, were cancelled pursuant to an
agreement between the Company and the optionholders. These 1,710,692 Management
Options were held by Messrs. Levine, Marks, Schreiber and Eng and Ms. Bennett.
Mr. Huang passed away on October 31, 1999. Pursuant to the terms of the 1997
Plan, all 42,767 Management Options held by him vested at such time and Mr.
Huang's executor has two years from the date of his death to exercise his
options. The Board of Directors does not currently intend to issue any
additional options pursuant to the 1997 Plan.
NON-EMPLOYEE DIRECTOR STOCK OPTIONS
On June 10, 1997, the Board of Directors approved the grant of stock
options to purchase 20,000 shares of Common Stock to each of its five
non-employee Directors. Each such Director Option has an exercise price of
$14.00 per share; vests ratably over the first three anniversaries following the
date of the grant; and vests immediately at the time a Director ceases to be a
Director of the Company. Director Options will expire on the fifth anniversary
of the date of the grant. Director Options are not transferable by the optionee
other than by will or the laws of descent and distribution, and each Director
Option is exercisable during the lifetime of the optionee only by such optionee.
At the date of issue, the closing price per share was $15.50.
On July 30, 1998, the Board of Directors approved the grant of stock
options to purchase 20,000 shares of Common Stock to Salvatore M. Salibello and
Denis J. Taura, its two newly elected Directors, under the same terms as the
Director Options granted on June 10, 1997. In addition, the Director Options
granted to Clifford B. Cohn and Robert L. Sind, the two outgoing Directors,
became fully vested as of that date. The closing price per share on July 30,
1998 was $13.00.
The 6,766 Director Options of Larry G. Schafran vested upon the
election of his successor on March 14, 2000, at the Re-Adjournment of 1999
Annual Meeting of Shareholders. The closing price per share on March 14, 2000
was $2.06.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of Messrs. Mathis,
Salibello, Taura and Trouveroy. No executive officer of the Company serves as a
member of the Board of Directors or Compensation Committee of any entity which
11
<PAGE>
has one or more executive officers serving as a member of the Company's Board of
Directors or Compensation Committee.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee's responsibility is to review and
recommend to the Board of Directors policies, practices and procedures relating
to compensation of key employees and to administer employee benefit plans. The
Compensation Committee is presently composed of Messrs. Mathis, Salibello, Taura
and Trouveroy.
The Company's compensation policies are designed to enable the
Company to attract, motivate and retain senior management by providing
competitive compensation opportunities based both on individual performance and
the financial performance of the Company. Accordingly, benefits are provided
through stock option incentives and bonuses which are generally consistent with
the goal of coordinating rewards to management with a maximization of
stockholder return. In reviewing Company performance, consideration is given to
the Company's earnings. Also taken into account are external economic factors
that affect results of operations. An attempt is also made to maintain
compensation within the range of that afforded like executive officers of
companies whose size and business is comparable to that of the Company.
Chief Executive Officer Compensation. Mr. Levine's salary equalled
$2,000,000 for each of the fiscal years 1998 and 1999. In addition, Mr. Levine's
employment agreement with the Company provides for a bonus commencing in fiscal
year 1998 in an amount between $500,000 and $1.5 million based upon the
fulfillment of certain EBITDA hurdles for fiscal years 1998, 1999 and
thereafter. Such hurdles were not met in either fiscal year 1998 or 1999. The
terms of Mr. Levine's compensation arose out of the separation of the Company
from Leslie Fay in 1997.
The foregoing report is approved by all members of the Compensation
Committee.
Respectfully submitted,
Compensation Committee
--------------------------
H. Sean Mathis
Salvatore M. Salibello
Denis J. Taura
Olivier Trouveroy
CERTAIN TRANSACTIONS
The Director Options granted to Larry G. Schafran, the outgoing
Director, became fully vested as of March 14, 2000, the date of the election of
Mr. Mathis to the Board of Directors. The closing price per share on March 14,
2000 was $2.06.
12
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return
(stock price appreciation plus dividends) on the Company's Common Stock with the
cumulative total return of the Nasdaq Market Index1 and a market weighted index
of publicly traded peers. The returns are calculated by assuming an investment
in the Company's Common Stock and each index of $100 on June 10, 1997 (the first
date on which a stock quote was available in the over-the-counter market for the
Company's Common Stock). On August 7, 1998, the Company's Common Stock was
listed and began trading on the Nasdaq National Market. The publicly traded
companies included in the peer group are: Liz Claiborne, Inc., Russell
Corporation and V. F. Corporation.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG KASPER A.S.L., LTD.,
NASDAQ MARKET INDEX AND S&P PEER GROUP INDEX
COMPANY/INDEX/MARKET 6/10/1997 1/02/1998 12/31/1998 01/01/2000
Kasper A.S.L. Ltd 100.00 77.42 32.26 14.13
Textiles Apparel 100.00 98.68 85.40 63.74
NASDAQ Market Index 100.00 112.57 158.77 280.02
ASSUMES $100 INVESTED ON JUNE 10, 1997
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING JANUARY 1, 2000
- --------
1 The Nasdaq Market Index is calculated using all companies which trade on the
NASD National Market System or on the NASD supplemental listing. It includes
both domestic and foreign companies. The index is weighted by the then current
shares outstanding and assumes dividends reinvested. The return is calculated on
a monthly basis.
13
<PAGE>
PROPOSAL 2. RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors of the Company, upon recommendation of the
Audit Committee, has appointed the firm of Arthur Andersen LLP to serve as
independent auditors of the Company for the fiscal year ending December 30,
2000, subject to ratification of this appointment by the Stockholders of the
Company. Arthur Andersen LLP currently serves as the Company's independent
auditors, and are considered by management of the Company to be well qualified.
The Company has been advised by Arthur Andersen LLP that neither it nor any
member thereof has any direct or material indirect financial interest in the
Company.
One or more representatives of Arthur Andersen LLP will be present at
the Meeting, will have an opportunity to make a statement if he or she desires
to do so, and will be available to respond to appropriate questions.
Ratification of the appointment of the independent auditors requires
the affirmative vote of a majority of the votes cast by the holders of the
shares of Common Stock voting in person or by proxy at the Meeting. If the
Stockholders do not ratify the appointment of Arthur Andersen LLP, the Board of
Directors will reconsider the appointment.
All shares of Common Stock which are entitled to vote and are
represented at the Meeting by properly executed proxies prior to or at the
Meeting, and not revoked, will be voted at the Meeting in accordance with the
instructions indicated on such proxies. If no instructions are indicated, such
proxies will be voted for the ratification of the appointment of Arthur Andersen
LLP as independent auditors of the Company for the fiscal year ending December
30, 2000.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS
INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 30,
2000.
14
<PAGE>
MISCELLANEOUS
PROXY PROCEDURES AND EXPENSES OF SOLICITATION
The Company will hold the votes of all Stockholders in confidence
from the Company, its Directors, officers and employees, except: (i) as
necessary to meet applicable legal requirements and to assert or defend claims
for or against the Company; (ii) in case of a contested proxy solicitation;
(iii) if a Stockholder makes a written comment on the proxy card or otherwise
communicates his/her vote to management; or (iv) to allow the inspectors of
election or transfer agent of the Company to certify the results of the vote.
The cost of preparing, assembling and mailing the proxy materials is
to be borne by the Company. The Company will also reimburse brokers, fiduciaries
and custodians for their expenses in forwarding proxies and proxy soliciting
materials to the beneficial owners of Common Stock held in their names. The
Company has retained Innisfree M&A Incorporated to assist the Company in
connection with the solicitation of proxies at a cost of approximately $7,500
plus reimbursement of reasonable out-of-pocket expenses. In addition to the use
of the mails, proxies may be solicited without extra compensation by Directors,
officers and employees of the Company by telephone, telecopy, telegraph or
personal interview.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders must be received by the Company at 77 Metro Way,
Secaucus, New Jersey 07094, Attention: Secretary on or before February 1, 2001,
to be eligible for inclusion in the Company's Proxy Statement and form of proxy
relating to that meeting.
According to the Company's Amended and Restated By-laws, for
nominations or other business to be properly brought before an annual meeting by
a Stockholder, the Stockholder must have given timely notice thereof in writing
(in the form specified in the Amended and Restated By-laws) to the Secretary of
the Company, and such other business must otherwise be a proper matter for
Stockholder action. To be timely, a Stockholder's notice must be delivered to
the Secretary at the principal executive offices of the Company not less than
seventy days nor more than ninety days prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event the date
of an annual meeting is advanced by more than thirty days or delayed by more
than seventy days from the first anniversary date of the previous year's annual
meeting, notice by the Stockholder to be timely must be so delivered not earlier
than the ninetieth day prior to such annual meeting and not later than the close
of business on the later of the seventieth day prior to such annual meeting or
the tenth day following the day on which public announcement of the date of such
meeting is first made by the Company.
ADDITIONAL INFORMATION
Management of the Company does not know of any matters other than
those referred to in the accompanying Notice of the 2000 Annual Meeting which
may properly come before the Meeting or other matters incident to the conduct of
the Meeting. As to any other matter or proposal that may properly come before
the Meeting, including voting for the election of any person as a Director in
place of a nominee named herein who becomes unable to serve or for good cause
will not serve and voting on a proposal omitted from this Proxy Statement
pursuant to the rules of the SEC, it is intended that proxies received will be
voted in accordance with the discretion of the proxy holders.
15
<PAGE>
This Proxy Statement and the accompanying form of Proxy have been
approved by the Board of Directors and are being mailed and delivered to
Stockholders by its authority.
By Order of the Board of Directors,
Lester E. Schreiber
Secretary
New York, New York
May 19, 2000
-------------------------
THE ANNUAL REPORT TO STOCKHOLDERS OF THE COMPANY FOR THE FISCAL YEAR
ENDED JANUARY 1, 2000, WHICH INCLUDES FINANCIAL STATEMENTS, IS BEING FURNISHED
TO STOCKHOLDERS CONCURRENTLY HEREWITH. THE ANNUAL REPORT DOES NOT FORM ANY PART
OF THE MATERIAL FOR SOLICITATIONS OF PROXIES.
-------------------------
16
