SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A No.1
(Mark One)
[X] Amendment No.1 to Annual Report pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934(No fee required)
For the fiscal year ended December 27, 1997
or
Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No fee required)
For the transaction period from ---- to ----
Commission file number 0-10345
Cache, Inc.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-1588181
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1460 Broadway, New York, New York 10036
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 575-3200
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.01 par value
---------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to filing requirements for
the past 90 days.
Yes [X] No_____
As of February 28, 1998, the aggregate market value of the voting
stock held by non-affiliates of the registrant (based on the
closing price in the NASDAQ National Market) was approximately $8.6
million.
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K [x].
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of February 28, 1998, 9,091,338 common shares were outstanding.
<PAGE>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
See also "Executive Officers of the Company" under Item 3 of
Registrant's report on Form 10-K for the fiscal year ended
December 27, 1997 previously filed with the Securities and
Exchange Commission.
DIRECTORS OF THE REGISTRANT
The Board of Directors of the Company presently consists of
the following seven members: Messrs. Andrew M. Saul, Joseph E.
Saul, Roy C. Smith, Thomas E. Reinckens, Morton J. Schrader and
Mark E. Goldberg and Ms. Mae Soo Hoo, each of whom is expected to
be a nominee for re-election at the company's next Annual Meeting
of Shareholders.
Director
Name Age Principal Occupation Since
- ------------------------ --- ---------------------------------- --------
Andrew M. Saul ......... 51 Chairman of the Board and 1986
Partner, Saul Partners (1)
Roy C. Smith ........... 59 Executive Vice-President of 1993
the Company (2)
Thomas E. Reinckens .... 44 Executive Vice-President, Chief 1993
Financial Officer of the Company (3)
Mae Soo Hoo ............ 43 Executive Vice President of 1995
the Company (4)
Joseph E. Saul ......... 78 Partner, Saul Partners (5) 1986
Morton J. Schrader ..... 66 Real Estate Broker, 1989
Newmark & Company Real Estate, Inc.(6)
Mark E. Goldberg ....... 41 Attorney in Private Practice (7) 1989
_________________________
(1) Mr. Saul, who became Chairman of the Board of Directors on
February 27, 1993, has been a partner of Saul Partners, an
investment partnership, since 1986. He is the son of Mr.
Joseph E. Saul.
(2) Mr. Smith has served as an Executive Vice President of the
Company since October 1990; from December 30, 1986 to
October 1990, Mr. Smith was Vice President/Director of
Store Operations of the Company.
(3) Mr. Reinckens has served as Vice President and Chief
Financial Officer of the Company since November 30, 1989;
from 1987 to November 1989, Mr. Reinckens served as the
Company's Controller. He was appointed Executive Vice
President on September 13, 1995.
(4) Ms. Soo Hoo has served as a Vice President of
Merchandising since February 1987. She was appointed to
the Board of Directors on September 13, 1995 and was also
appointed Executive Vice President/General Merchandise
Manager on that date.
2
<PAGE>
(5) Mr. Saul has been a partner of Saul Partners, an
investment partnership, since 1986. He is the father of
Mr. Andrew M. Saul.
(6) Mr. Schrader was the President of Abe Schrader Corp., a
manufacturer of women's apparel, from 1968 through March
1989. Since 1989, he has been active as a real estate
broker for Newmark & Company Real Estate, Inc..
(7) Mr. Goldberg has been an attorney in private practice
since 1985. Mr. Goldberg has provided legal assistance to
the Company since 1988 and is expected to continue to do
so in 1998.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation
for the past three years of the Chief Executive Officer and the
Company's other four most highly compensated executive officers
(collectively, the "Named Executive Officers").
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------ ------------
SECURITIES ALL OTHER
NAME AND FISCAL UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) OPTIONS(#) ($)(1)
- -------------------------- ----- -------- ------------ ------------
ANDREW M. SAUL 1997 -
(CHAIRMAN) 1996 -
1995 -
MAE SOO HOO 1997 255,852 103,750 1,874
(EXECUTIVE VICE 1996 255,852 - 1,786
PRESIDENT/DIRECTOR) 1995 178,077 50,000 541
ROY C. SMITH 1997 250,000 97,500 8,611
(EXECUTIVE VICE 1996 250,000 - 7,983
PRESIDENT/DIRECTOR) 1995 229,231 50,000 2,375
THOMAS E. REINCKENS 1997 230,000 75,000 2,441
(EXECUTIVE VICE PRESIDENT, 1996 210,000 - 2,260
CHIEF FINANCIAL 1995 189,231 50,000 823
OFFICER/DIRECTOR)
BARRY B. SCHWARTZ 1997 126,923 50,000 138
(VICE PRESIDENT)
- -------------------------
3
<PAGE>
(1) Included in the figures shown under this column for
1997 are the following insurance premiums paid by the
Company with respect to term life insurance for the
benefit of the executive officer and long-term
disability insurance: $2,836 and $5,775, respectively,
for Mr. Smith; $940 and $1,501, respectively, for Mr.
Reinckens; and $553 and $1,321, respectively, for Ms.
Soo Hoo; $138 and $0, respectively, for Mr. Schwartz.
Included in the figures shown under this column for
1996 are the following insurance premiums paid by the
Company with respect to term life insurance for the
benefit of the executive officer and long-term
disability insurance: $2,591 and $5,392, respectively,
for Mr. Smith; $879 and $1,381, respectively, for Mr.
Reinckens; $565 and $1,221, respectively, for Ms. Soo
Hoo.
Included in the figures shown under this column for
1995 are the following insurance premiums paid by the
Company with respect to term life insurance for the
benefit of the executive officer and long-term
disability insurance: $2,375 and $5,392, respectively,
for Mr. Smith; $823 and $1,381, respectively, for Mr.
Reinckens and $541 and $1,221, respectively, for Ms.
Soo Hoo.
AGGREGATED FISCAL YEAR-END STOCK OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY STOCK OPTIONS
STOCK OPTIONS AT FY-END(#) AT FY-END ($) (1)
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ----------- ------------- ----------- -------------
Roy C. Smith 22,125 125,375 - -
Thomas E. Reinckens 18,750 106,250 - -
Mae Soo Hoo 23,062 130,688 - -
Barry B. Schwartz 7,500 42,500 - -
_______________________
(1)In-the money Stock Options are those where the fair
market value of the underlying stock exceed the
exercise price of the Option. The amounts in this
column represent the difference between the exercise
price of the Stock Options and the closing price of
the Company's Common Stock on December 26, 1997 (the
last day of trading for Fiscal 1997) for all options
held by each Named Executive Officer, whether vested
or unvested. The closing price of the Company's
Common Stock as reported on NASDAQ/NMS on December
31, 1997 was $3.03 per share.
4
<PAGE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to stock
options granted in Fiscal 1997 to each of the Named Executive Officers.
<TABLE>
<CAPTION>
Potential
Realizable Value
At Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term (4)
------------------------------------------------ --------------------
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Employees in Price Expiration
Name Granted(#) Fiscal Year ($)/share) Date 5%($) 10%($)
- ----------------------- ---------- ------------ --------- ----------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Barry B. Schwartz(1) 50,000 13.29% $3.75 01/31/07(3) 51,803 114,471
Mae Soo Hoo 103,750 27.58% $3.06 12/31/03(2) 87,784 193,980
Roy C. Smith 97,500 25.91% $3.06 12/31/03(2) 82,496 182,294
Thomas E. Reinckens 75,000 19.93% $3.06 12/31/03(2) 63,458 140,227
Barry B. Schwartz 50,000 13.29% $3.06 12/31/03(3) 42,306 93,484
</TABLE>
(1) On January 24,1997, the Company granted 50,000 incentive stock options to
Mr. Schwartz under the Company's 1994 stock option plan. The options were
granted at an exercise price of $3.75, (the closing price of the Common
Stock on NASDAQ/NMS on January 24, 1997) per share, expiring on January
31,2007, subject to accelerated vesting at the maximum rate of up to 25%
per year for the four years ended December 31,1997, 1998, 1999 and 2000,
to the extent the company's earnings plan was achieved.
On December 10,1997, the Company cancelled these options and issued new
options pursuant to such plan having an exercise price of $3.06, (the
closing price of the Common Stock on NASDAQ/NMS on December 10, 1997) per
share, expiring on January 31,2007 and becoming exercisable on January
31,2007, subject to accelerated vesting at the maximum rate of up to 25%
per year for the four years ended December 31,1997,1998,1999 and 2000, to
the extent the Company's earnings plan was achieved.
(2) On December 10,1997, the Company cancelled 326,250 options previously
granted under the company's 1994 stock option plan and issued new options
pursuant to such plan having an exercise price of $3.06 (the closing
price of the common Stock on NASDAQ/NMS on December 10, 1997) per share,
expiring on December 31, 2003 and becoming exercisable on December
31,1998, subject to accelerated vesting at the maximum rate of up to 25%
per year for the three years ended December 31,1995, 1996 and 1997 to the
extent the Company's plan was achieved. Such options were granted to the
following executives, exercisable for the following shares of Common
Stock: Roy C. Smith, 97,500 shares; Thomas E. Reinckens, 75,000 shares
and Mae Soo Hoo, 103,750 shares. The options for Ms. Soo Hoo, Mr. Smith
and Mr. Reinckens were 15% exercisable at December 31,1997 (41,437
shares) and the remaining options become exercisable on December 31,
1998.
5
<PAGE>
(3) Mr. Schwartz's options become exercisable on January 31, 2002, subject to
accelerated vesting as described in the next sentence. The options may
become exercisable earlier at the maximum rate of 25% per year for the
four years ended December 31, 1997, 1998, 1999 and 2000 to the extent the
Company earnings plan as approved by the Company's Compensation and Plan
Administration Committee, is achieved, based on the following sliding
scale:
Options Which
Will Become
Percentage of Earnings Exercisable
------------------------- --------------
Greater than or equal to 90% . . . . . . . . . . . . . . . 25%
Greater than or equal to 75%, but less than 90% . . . . . 20%
Greater than or equal to 60%, but less than 75% . . . . . 15%
Less than 60% . . . . . . . . . . . . . . . . . . . . . . 0%
These options also become immediately exercisable as of the effective
date of a "change in control" (as defined in the 1994 Plan,)
(4) Potential realizable value is based on an assumption that the market
price of the stock appreciates at the stated rate compounded annually,
from the date of grant to the expiration date. These values are
calculated on requirements promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock
price appreciation. Actual gains, if any, are dependent on the future
market price of the Company's Common Stock.
Compensation and Plan Administration Committee Report on Repricing of Options
The Compensation and Plan Administration Committee, (the "Committee")
which administers the Company's 1994 stock option plan, granted stock options
to Messrs. Smith and Reinckens and Ms. Soo Hoo in 1994 for 97,500, 75,000 and
103,750 shares of Common Stock, respectively. The 1994 stock options granted
to such executives had an exercise price of $4.25 per share and would of
become exercisable on December 31,1998 (subject to accelerated vesting as
described in the next sentence), and would have expired on December 31,2003.
The 1994 stock options would have become exercisable earlier at the maximum
rate of up to 25% per year for the three years ended December 31,1995, 1996,
and 1997 to the extent the Company's earnings plan as approved by the
committee was achieved, based on a sliding scale. On December 10 1997, the
stock options granted in 1994 were cancelled and new stock options were issued
to such executives in the same amounts and having the same terms as the
cancelled options, except that (i) the exercise price of the new options was
reduced to $3.06 per share and (ii) the new options became exercisable earlier
than December 31, 1998 at the maximum rate of up to 75% on December 31, 1997
to the extent the company's earnings plan, as approved by the Committee, was
achieved, based on a sliding scale. The Committee authorized such cancellation
and new issuance of stock options to avoid the consequences to option holders
of the reduction in market price of the Common Stock. The cancelled options
had been granted at the closing price of the common stock on the NASDAQ/NMS on
December 10, 1997.
6
<PAGE>
The foregoing report has been furnished by the Compensation and Plan
Committee consisting of Messrs. Andrew M. Saul, Morton J. Schrader and Mark E.
Goldberg.
Board of Directors Report on Repricing of Options
In December 1997, the Board of Directors reviewed options granted to
executive officers of the Company pursuant to the Company's 1994 stock option
plan and determined that the exercise price of these options exceeded the fair
market value of the Company's Common Stock. The Board was concerned that the
Company's total compensation package for its senior executives was less
attractive than compensation offered by its competitors and other comparable
companies because the exercise price of options granted to new executives of
such companies would afford greater opportunity for appreciation than the
Company's options.
The Board concluded that (i) the Company's future success is dependent in
large part on its ability to retain its key executives; (ii)competition for
such personnel is intense; and (iv) it is important and cost effective to
provide equity incentives to executive officers of the Company to improve the
Company's performance and the value of the Company for it's shareholders. On
balance, considering all these factors, the Board determined it to be in the
best interests of the Company and its shareholders to restore the incentive
for its executive officers to remain employees of the Company and to exert
their maximum efforts on behalf of the Company by granting stock options with
exercise prices reflecting recent trading prices.
As a consequence, on December 10, 1997, the Board of Directors cancelled
all options issued on December 16, 1994 and January 24,1997 and described
above under the heading "Compensation and Plan Administration Committee Report
on Repricing of Options". On the same date the Board of Directors issued new
options to replace the cancelled options. All such options granted under the
1994 Plan have an exercise price of $3.06 per share (which reflected the
closing price of the Common Stock on NASDAQ/NMS on December 10, 1997),
terminate on December 31, 2003 and January 31,2007 and become exercisable on
December 31, 1998 and January 31, 2002, subject to accelerated vesting as
described in footnotes(1) and (2) to the "Option Grants in Last Fiscal Year"
table under the heading "Executive Compensation."
The foregoing report has been furnished by the Board of Directors of the
Company consisting of Messrs. Joseph E. Saul, Andrew M. Saul, Morton J.
Schrader, Mark E. Goldberg, Mae Soo Hoo, Thomas E. Reinckens and Roy C. Smith.
7
<PAGE>
TEN-YEAR OPTION REPRICING
The following table provides the specified information concerning all
repricings of options to purchase the Company's Common Stock held by an
executive officer of the Company during the last ten years:
<TABLE>
<CAPTION>
Length of
Number of Market Original
Securities Price of Exercise Option Term
Underlying Stock at Price at New Remaining at
Options Time of Time of Exercise Date of
Name Date Repriced Repricing($) Repricing($) Price($) Repricing
- ----------------------- -------- ---------- ------------ ------------ -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Roy C.Smith 10/15/90 118,750(1) 2.00(1) 1.50(1) 2.00(1) 26.5 months
(Executive Vice 07/28/94 37,500 6.75 8.50 6.75 47 months
President/Director) 12/16/94 37,500 4.25 6.75 4.25 42 months
12/10/97 37,500 3.06 4.25 3.06 6.5 months
12/10/97 60,000 3.06 4.25 3.06 12.5 months
Thomas E. Reinckens 10/15/90 62,500(1) 2.00(1) 5.00(1) 2.00(1) 26.5 months
(Executive Vice 7/28/94 25,000 6.75 8.50 6.75 47 months
President/Chief 12/16/94 25,000 4.25 6.75 4.25 42 months
Financial Officer/ 12/10/97 25,000 3.06 4.25 3.06 6.5 months
Director) 12/10/97 50,000 3.06 4.25 3.06 12.5 months
Mae Soo Hoo 10/15/90 31,250(1) 2.00(1) 5.00(1) 2.00(1) 26.5 months
(Executive Vice 7/28/94 18,750 6.75 8.50 6.75 47 months
President/Director) 12/16/94 18,750 4.25 6.75 4.25 42 months
12/10/97 18,750 3.06 4.25 3.06 6.5 months
12/10/97 85,000 3.06 4.25 3.06 12.5 months
Barry B. Schwartz 12/10/97 50,000 3.06 4.25 3.06 49.5 months
(Vice President)
Roy C. Chapman(2) 10/15/90 712,500(1) 2.00(1) 1.50(1) 2.00(1) 26.5 months
Michael A. Warner(3) 7/28/94 125,000 6.75 8.50 6.75 47 months
12/16/94 125,000 4.25 6.75 4.25 42 months
Karen Hubchik(4) 7/28/94 18,750 6.75 8.50 6.75 47 months
12/16/94 18,750 4.25 6.75 4.25 42 months
</TABLE>
(1) Adjusted to reflect the Company's one-for-four reverse stock split of its
Common Stock on September 15,1993.
(2) Mr. Chapman was Chairman of the Board of Directors for the Company from
January 1987 through February 1993.
(3) Mr. Warner was President of the Company from October 1990 through
September 1995.
(4) Ms. Hubchik was a Vice President of the Company from November 1990 through
October 1995.
8
<PAGE>
Employment Contracts and Change-of-Control Provisions
All of the options granted under the Company's 1994
Stock Option Plan contain a provision under which the option
will become immediately exercisable (the "Accelerated
Exercise") with respect to all shares subject to it as
follows: (i) except as provided in clause (iii) below,
immediately after the first date on which less than 25% of
the outstanding Common Stock in the aggregate is
beneficially owned (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) by Andrew M. Saul and
Joseph E. Saul, members of their immediate families and one
or more trusts established for the benefit of such
individuals or members, (ii) immediately prior to the sale
of the Company substantially as an entirety (whether by sale
of stock, sale of assets, merger, consolidation or
otherwise), (iii) immediately prior to the expiration of any
tender offer or exchange offer for shares of Common Stock of
the Company, where: (x) all holders of Common Stock are
entitled to participate, and (y) the Sauls have agreed (or
have announced their intent) to sell such number of their
shares of Common Stock as will result in the Sauls
beneficially owning less than 25% of the outstanding shares
of Common Stock in the aggregate, and (iv) immediately, if
20% or more of the directors elected by shareholders to the
Board of Directors are persons who were not nominated by
management in the most recent proxy statement of the
Company. The Company is required to give appropriate notice
so as to permit an optionee to take advantage of the
foregoing provisions.
Compensation of Directors
All non-employee Directors (Messrs. Andrew Saul, Joseph
Saul, Mark Goldberg and Morton Schrader) are compensated for
their services to the Company by participation in the
Company's group medical insurance program at an approximate
cost to the Company of $11,500 per individual per year.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation and Plan Administration
Committee consists of Messrs. Andrew M. Saul, Mark E.
Goldberg and Morton J. Schrader. Andrew M. Saul is also the
Chairman of the Board of the Company.
Mr. Goldberg is also an attorney in private practice.
He has been retained by the Company to provide legal
services since 1988 and is expected to provide further legal
services in 1998. During the fiscal year ended December 27,
1997, Mr. Goldberg received $30,438 from the Company for
legal services rendered during Fiscal 1997.
9
<PAGE>
COMPENSATION AND PLAN ADMINISTRATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
General
Executive compensation consists generally of two components
- - base salary and option awards, and sometimes a third component
- - a discretionary bonus award. The Compensation and Plan
Administration Committee (the "Committee"), currently consisting
of Messrs. Andrew M. Saul, Mark E. Goldberg and Morton J.
Schrader, administers the Company's option plans pursuant to
which option awards are granted, determines the remuneration
arrangements for the three most senior executive officers and
reviews and approves the remuneration arrangements for the other
executive officers of the Company, which arrangements are
determined by the Chairman, in accordance with parameters set by
the Committee.
This report of the Committee of the Board of Directors
addresses the Company's compensation policies for Fiscal 1997
applicable to Cache's executives including the Named Executive
Officers.
The Committee's Report on Executive Compensation shall not
be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing
under the Securities Act of 1933 or under the Securities Exchange
Act of 1934, except to the extent that the Company specifically
incorporates this Report on Executive Compensation by reference,
and shall not otherwise be deemed filed under such Acts.
Philosophy
The Cache executive compensation program is designed to
attract and retain key executives. Its objectives are to reward
executives who contribute to the success of the Company through
individual and company performances. Specifically, compensation
includes a competitive base salary program and long-term stock
option awards. The Company will sometimes grant discretionary
bonuses to certain key executive officers with respect to prior
contributions as well as to serve as incentives to attract key
executives into the Company's employ.
Base Salary
The Company believes a competitive base salary is necessary
to retain key management employees. Base salaries are determined
based upon a review of an individual's experience and
responsibilities, general industry practice and the competitive
environment for each position. Annual salary adjustments are
determined based upon an individual's performance, the Company's
performance, general industry practice and any new duties or
responsibilities assumed by the individual during the last year.
10
<PAGE>
Long-Term Incentives
The Company believes that employee equity ownership is
highly motivating, provides a major incentive to employees in
building stockholder value, and serves to align the interests of
employees with stockholders. Options are based upon the relative
position and responsibilities of each executive officer,
historical and expected contributions of each officer to the
Company, and previous option grants to such executive officers.
Options are recommended with a goal to provide competitive equity
compensation for executive officers compared to executive
officers of similar rank in companies of the Company's industry,
geographic location and size.
Cache's stock option programs were designed by the Company
as a long-term incentive program for key executives. The stock
option programs have created an incentive for executives to
maximize shareholder return, by linking long-term compensation
with the valuation of the Company's Common Stock. The stock
option plans typically have included initial grants which have
vested from three to five years. Stock options granted under the
1994 Plan are required to have an exercise price at least equal
to the fair market value of the Company's common stock at the
date of grant. Among other factors considered by the Committee
in determining who qualified for stock option grants under the
1993 Plan and 1994 Plan and the amount of such grants were an
executive's business experience and his potential to contribute
to the future success of the Company.
In establishing incentive arrangements for 1997, the
Compensation and Plan Administration Committee, which
administered the 1993 Plan and administers the 1994 Plan, granted
376,250 stock options in Fiscal 1997. Options totaling 326,250
were canceled, in Fiscal 1997.
Other Compensation
The Company provides certain other benefits, such as health
insurance, to the executive officers that are generally available
to Company employees. In addition, the Company provides its
executives, including the Named Executive Officers, with term
life insurance and additional long-term disability insurance, at
the Company's cost.
The foregoing report has been furnished by the Compensation
and Plan Administration Committee consisting of Messrs. Andrew M.
Saul, Morton J. Schrader and Mark E. Goldberg.
11
<PAGE>
FIVE-YEAR PERFORMANCE COMPARISON
The following graph compares the yearly percentage change in
the Company's cumulative total shareholder return on Common Stock
with (i) the cumulative total return of the NASDAQ National
Market Index (which tracks the aggregate performance of equity
securities of companies traded on the NASDAQ National Market
System ("NASDAQ/NMS")) and (ii) the cumulative total return of
companies with the same four-digit standard industrial code (SIC)
as the Company (SIC Code 5621, titled "Women's Clothing Stores"),
over the period from December 27, 1992 to December 27, 1997. The
graph assumes an initial investment of $100 and reinvestment of
dividends. The graph is not necessarily indicative of future
price performance.
The graph shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or
under the Securities Exchange Act of 1934, except to the extent
that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such
Acts.
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
-------------------------------------------------
COMPANY 1992 1993 1994 1995 1996 1997
- ----------------- ----- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
CACHE INC. 100 70.59 61.76 39.71 42.65 35.66
INDUSTRY INDEX 100 73.26 70.48 56.80 67.26 80.82
BROAD MARKET 100 119.95 125.94 163.35 202.99 248.30
</TABLE>
12
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP
BY MANAGEMENT
The following table sets forth certain information as to
the beneficial ownership of the Company's equity securities as of
April 30, 1998 by (i) each director or nominee of the Company,
(ii) each Named Executive Officer, (iii) each person who is known
to the Company to be the beneficial owner of more than 5% of the
Common Stock, and (iv) all executive officers and directors as a
group. Unless otherwise indicated, the beneficial ownership for
each person consists of the sole voting and sole investment power
with respect to all shares beneficially owned by him. For
purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any shares as of a given date
which such person has the right to acquire within 60 days after
such date. For purposes of computing the percentage of outstand-
ing shares held by each person or group of persons named above on
a given date, any security which such person or persons has the
right to acquire within 60 days after such date is deemed to be
outstanding, but is not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person.
Percentage of
Number of shares Outstanding Shares
Person and Address of Common Stock of Common Stock
- ------------------- ----------------- ------------------
Andrew M. Saul
630 Fifth Avenue
New York, NY 10111 (1) 6,382,729 70.21%
Joseph E. Saul
630 Fifth Avenue
New York, NY 10111 (2) 6,382,729 70.21%
Norma G. Saul
630 Fifth Avenue
New York, NY 10111 (3) 6,382,729 70.21%
Trust f/b/o
Jennifer B. Saul
pursuant to Trust
Agreement dated
March 28, 1995
630 Fifth Avenue
New York, NY 10111 (4) 756,314 8.32%
Trust f/b/o
Kimberly E. Saul
pursuant to Trust
Agreement dated
March 28, 1995
630 Fifth Avenue
New York, NY 10111 (4) 756,314 8.32%
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Percentage of
Number of shares Outstanding Shares
Person and Address of Common Stock of Common Stock
- -------------------------- ----------------- ------------------
Jane Saul Berkey
Cache, Inc.
1460 Broadway
New York, NY 10036 (5) 494,046 5.43%
Roy C. Smith
Cache, Inc.
1460 Broadway
New York, NY 10036 (6) 107,125 1.18%
Mae Soo Hoo
Cache, Inc.
1460 Broadway
New York, NY 10036 (7) 64,793 Less than 1%
Thomas E. Reinckens
Cache, Inc.
1460 Broadway
New York, NY 10036 (8) 60,250 Less than 1%
Barry B. Schwartz
Cache, Inc.
1460 Broadway
New York, NY 10036 (9) 7,500 Less than 1%
Mark E. Goldberg
225 Broadway
New York, NY 10067 4,225 Less than 1%
Morton J. Schrader
733 Park Avenue
New York, NY 10021 5,000 Less than 1%
All Current
Executive Officers
and Directors as a
Group (seven persons) 6,631,622 72.38%
_________________
(1) Represents shares beneficially owned by the group
consisting of Andrew Saul, Joseph Saul, Norma
Saul and the Trusts (defined below) according to a
Schedule 13D, as amended, filed by the group with the
Securities and Exchange Commission. Andrew M. Saul may be
deemed to own beneficially 2,891,218 shares of Common
Stock (31.8%), if all shares owned by him or issuable
pursuant to rights owned by him are deemed outstanding
(including the shares owned by the Trusts of which Andrew
Saul is a trustee, and the shares owned by the A. Saul
Foundation, of which Andrew Saul is a director, but
excluding all shares issuable pursuant to rights held by
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persons other than Andrew Saul, the Trusts of which
Andrew Saul is a trustee and the A. Saul Foundation),
consisting of (i) 2,585,158 shares of Common Stock owned
by Andrew Saul, (ii) 140,530 shares of Common Stock owned
by the 85 J. Saul Trust of which Andrew Saul is a
trustee, (iii) 140,530 shares of Common Stock owned by
the 84 K. Saul Trust of which Andrew Saul is a trustee,
and (iv) 25,000 shares of Common Stock owned by the A.
Saul Foundation of which A. Saul is a director. Andrew
Saul, his wife Denise, and Sidney Silberman comprise the
Board of Directors of the A. Saul Foundation and Andrew
Saul is its President. Andrew Saul, in his capacity as
one of the trustees of the trusts referenced in (ii) and
(iii) above, may be deemed to have shared voting power
and disposition power over the shares of Common Stock
owned by such trusts. Andrew Saul, in his capacity as
one of the directors of the A. Saul Foundation, may be
deemed to have shared voting power and disposition power
over the shares held by such foundation. Andrew Saul
disclaims beneficial ownership of the shares not directly
owned or under rights owned by him.
(2) Represents shares beneficially owned by the group
consisting of Andrew Saul, Joseph Saul, Norma
Saul and the Trusts, according to a Schedule 13D, as
amended, filed by the group with the Securities and
Exchange Commission. Joseph E. Saul may be deemed to own
beneficially 2,591,111 shares of Common Stock (28.5%), if
all shares owned by him or issuable pursuant to rights
owned by him are deemed outstanding (including the shares
owned by the Trusts of which Joseph Saul is a trustee,
and the shares owned by the J. Saul Foundation, of which
Joseph Saul is a director, but excluding all shares
issuable pursuant to rights held by persons other than
Joseph Saul, the Trusts of which Joseph Saul is a trustee
and the J. Saul Foundation), consisting of (i) 970,983
shares of Common Stock owned by Joseph Saul, (ii)756,314
shares of Common Stock owned by the 85 J. Saul Trust of
which Joseph Saul is a trustee, (iii) 756,314 shares of
Common Stock owned by the 85 K. Saul Trust of which
Joseph Saul is a trustee and (iv) 107,500 shares of
Common Stock owned by the J. Saul Foundation of which
Saul is a director. Joseph Saul, his wife Norma, and
Sidney Silberman comprise the Board of Directors of the
J. Saul Foundation and Joseph Saul is its President.
Joseph Saul, in his capacity as one of the trustees of
the trusts referenced in (ii) and (iii) above, may be
deemed to have shared voting power and disposition power
over the shares of Common Stock owned by such trusts.
Joseph Saul, in his capacity as one of the directors of
the J. Saul Foundation, may be deemed to have shared
voting power and disposition power over the shares held
by such foundation. Joseph Saul disclaims beneficial
ownership of the shares not directly owned or under
rights owned by him.
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(3) Represents shares beneficially owned by the group
consisting of Andrew Saul, Joseph Saul, Norma
Saul and the Trusts, according to a Schedule 13D, as
amended, filed by the group with the Securities and
Exchange Commission. Norma Saul may be deemed to own
beneficially 2,520,528 shares of Common Stock (27.7%), if
all shares owned by her or issuable pursuant to rights
owned by her are deemed outstanding (including the shares
owned by the Trusts of which Norma Saul is a trustee and
the shares owned by the J. Saul Foundation, of which
Norma Saul is a director, but excluding all shares
issuable pursuant to rights held by persons other than
Norma Saul, the Trusts of which Norma Saul is a trustee
and the J. Saul Foundation), consisting of (i) 900,400
shares of Common Stock owned by Norma Saul, (ii) 756,314
shares of Common Stock owned by the 85 J. Saul Trust of
which Norma Saul is a trustee, (iii) 756,314 shares of
Common Stock owned by the 85 K. Saul Trust of which Norma
Saul is a trustee and (iv) 107,500 shares of Common Stock
owned by the J. Saul Foundation of which Norma Saul is a
director. Norma Saul, in her capacity as one of the
trustees of the trusts referenced in (ii) and (iii)
above, may be deemed to have shared voting power and
disposition power over the shares of Common Stock owned
by such trusts. Norma Saul, in her capacity as one of
the directors of the J. Saul Foundation, may be deemed to
have shared voting power and disposition power over the
shares held by such foundation. Norma Saul disclaims
beneficial ownership of the shares not directly owned or
under rights owned by her.
(4) The trust f/b/o Jennifer B. Saul and the Trust f/b/o
Kimberly E. Saul each own 756,314 shares of Common Stock,
according to a Schedule 13D, as amended, filed with the
Securities and Exchange Commission. Joseph E. Saul, his
wife Norma Saul and Sidney J. Silberman, Esq., are
trustees of such trusts.
(5) Represents shares beneficially owned by Jane Saul Berkey
according to a Schedule 13D, as amended, filed by Ms.
Berkey with the Securities and Exchange Commission. Jane
Saul Berkey is the daughter of Mr. Joseph Saul and the
sister of Mr. Andrew Saul.
(6) Consists of 85,000 shares of Common Stock and options to
acquire 22,125 shares of Common Stock.
(7) Consists of 41,731 shares of Common Stock and options to
acquire 23,062 shares of Common Stock.
(8) Consists of 41,500 shares of Common Stock and options to
acquire 18,750 shares of Common Stock.
(9) Consists of options to acquire 7,500 shares of Common
Stock.
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Section 16(a) Beneficial Ownership Reporting Compliance
Two stock purchases by Norma G. Saul, which are included in
beneficial ownership of Mr. Joseph E. Saul were inadvertently omitted
from the Form 4 filed on September 9, 1997 in Mr. Saul's behalf. An
amended Form 4 was filed on April 29,1998. These transactions were
previously included in the Schedule 13-D filed on December 22,1997.
On November 12,1997, Joseph Saul made a gift of 300 shares of
Cache Common Stock. This was inadvertently omitted from the Form 4 filed
on January 9,1998. A Form 5 was filed on May 14,1998, which reported
this transaction.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1990, Joseph Saul loaned the Company an aggregate of
$1,750,000. All such loans bore interest at the rate of 8 1/2%
per annum and matured on January 1, 1994. On December 14, 1993,
Joseph Saul agreed to replace the promissory note with a new
promissory note, having an interest rate of 7% per annum and a
maturity date of January 31, 1997 (the "First Note"), which note
was subordinated to the National Westminster Bank loan dated
December 15, 1993.
In 1991, Joseph Saul made a loan to the Company of an
additional $250,000, which loan bore interest at the rate of 7
1/2% per annum and was due on January 1, 1994. On December 14,
1993, Joseph Saul agreed to replace the promissory note with a
new promissory note (together with the First Note, the "Notes"),
which note was subordinated to the National Westminster Bank loan
dated December 15, 1993. This note bore interest at the rate of
7% per annum and had a maturity date of January 31, 1997.
In August 1996, the Company amended and restated its
revolving credit facility with Fleet Bank, N.A. (Successor in
interest to National Westminister Bank, New Jersey). In
connection therewith, Joseph Saul and the Company agreed that the
Company would not repay the Notes until such revolving credit
facility was terminated and all senior debt thereunder repaid,
except that the Company is permitted to repay an aggregate of
$1,000,000 on the Notes if the Company's tangible net worth (as
defined in the credit agreement) at December 31, 1997 is greater
than or equal to $25 million, and to repay an additional
$1,000,000 on the Notes if the Company's tangible net worth at
December 31, 1998 is greater than or equal to $29 million. The
interest rate on the Notes remains 7% per annum, payable
annually.
On December 16, 1994, the Company loaned $170,000 to Roy
Smith, Executive Vice President and a Director of the Company and
$80,000 to Thomas E. Reinckens, Vice President, Chief Financial
Officer and a Director of the Company, in each case for personal
reasons. All such loans are with full recourse to the executive,
payable on demand from the Company, secured by a pledge of shares
of the Company's Common Stock owned by such executive and bear
interest at a rate of 9% per annum. The balance (as of April
30,1998) and the highest balance during fiscal 1997 for these
loans were $170,000 and $80,000, respectively. There have been no
additional borrowings or repayments for these notes since 1994.
See Also "Executive Compensation--Compensation Committee
Interlocks and Insider Participation."
As of April 30, 1998, the Sauls beneficially owned in the
aggregate 6,382,729 shares of the Company's outstanding Common
Stock, representing approximately 70.21% of the Company's
outstanding Common Stock. See "Principal Shareholders and Share
Ownership by Management."
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SIGNATURES
Pursuant to the requirement of section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: May 15, 1998 CACHE INC.
(Registrant)
By:/s/ Thomas E. Reinckens
------------------------------
THOMAS E. REINCKENS
Executive Vice President
And Chief Financial Officer
(Principal Financial and
Principal Accounting Officer)
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