<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
GIANT GROUP, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LOGO OF GIANT GROUP, LTD]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 12, 2000
To the Stockholders of
GIANT GROUP, LTD.:
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of GIANT GROUP, LTD. (the "Company") will be held at the offices of
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, 2121 Avenue of
the Stars, 18th Floor, Los Angeles, California 90067, on Monday, June 12, 2000
at 4:00 p.m. (local time), for the following purposes:
1. To elect a Board of five directors;
2. To ratify the appointment of Arthur Andersen LLP as the Company's
independent auditors for fiscal 2000; and
3. To transact such other business as may properly come before the
Meeting and any adjournment(s) or postponement(s) thereof.
A Proxy Statement describing matters to be considered at the Meeting is
attached to this Notice. Only stockholders of record at the close of business
on April 27, 2000 will be entitled to notice of and to vote at the Meeting.
By Order of the Board of Directors
/s/ William H. Pennington
WILLIAM H. PENNINGTON, Secretary
Beverly Hills, California
April 28, 2000
IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE SELF-ADDRESSED, POSTAGE PREPAID
ENVELOPE WHICH HAS BEEN PROVIDED FOR YOUR CONVENIENCE. IN THE EVENT YOU ATTEND
THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
GIANT GROUP, LTD.
9440 SANTA MONICA BOULEVARD, SUITE 407
BEVERLY HILLS, CALIFORNIA 90210
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 12, 2000
GENERAL
This Proxy Statement and the accompanying proxy card are furnished in
connection with the solicitation of proxies by the Board of Directors of GIANT
GROUP, LTD., a Delaware corporation (the "Company"), for use at its Annual
Meeting of Stockholders (the "Meeting") and any adjournment(s) or
postponement(s) thereof. The Meeting is to be held on Monday, June 12, 2000 at
4:00 p.m. at the offices of Christensen, Miller, Fink, Jacobs, Glaser, Weil &
Shapiro, LLP, 2121 Avenue of the Stars, 18th Floor, Los Angeles, California
90067. The approximate date of the mailing of this Proxy Statement and
accompanying proxy card to the Company's stockholders is May 5, 2000.
In an effort to have as large a representation at the Meeting as possible,
proxy solicitation may be made personally or by telephone or telegram by
officers or employees of the Company, without added compensation. The Company
will reimburse brokers, banks and other custodians, nominees and fiduciaries for
their expenses in sending proxy materials to beneficial owners.
RECORD DATE AND VOTING SECURITIES
The close of business on April 27, 2000 (the "Record Date") has been fixed as
the Record Date for the determination of the stockholders of the Company
entitled to notice of and to vote at the Meeting. As of the Record Date, the
Company had outstanding 3,989,648 shares of Common Stock, par value $.01 per
share (the "Common Stock"). Each share of Common Stock entitles the record
holder thereof to one vote on all matters properly coming before the Meeting.
PRINCIPAL HOLDERS
The following lists the only stockholders who, to the knowledge of management
of the Company, based upon filings with the Securities and Exchange Commission
(the "SEC"), are the beneficial owners of more than 5% of the Common Stock.
<TABLE>
<CAPTION>
Name & Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(1) Class(2)
----------------- ----------------------- -----------
<S> <C> <C>
Burt Sugarman.................................................2,988,672 shares (3) 51.6%
9440 Santa Monica Boulevard, Suite 407
Beverly Hills, CA 90210
Glenn Sands.....................................................768,691 shares (4) 19.3%
2 Rio Vista Drive
Alpine, New Jersey 07620
Dimensional Fund Advisors, Inc..................................273,800 shares (5) 6.9%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
David Gotterer..................................................235,875 shares (6). 5.7%
c/o Mason & Company, LLP
400 Park Avenue
New York, New York 10022
</TABLE>
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(1) Under the rules of the SEC a person is deemed to be the beneficial owner of
a security if such person has or shares the power to vote or to direct the
voting of such security, or the power to dispose or to direct the
disposition of such security. A person is also deemed to be the beneficial
owner of any securities which that person has the right to acquire
beneficial ownership within 60 days as well as any securities owned by such
person's spouse, children or other relatives living in the same house.
Unless otherwise indicated, the named person has sole voting and investment
power with respect to the shares held by them.
(2) Computed on the basis of 3,989,648 shares of Common Stock issued and
outstanding as of the Record Date plus stock options of each reporting
person currently exercisable or exercisable within 60 days of the Record
Date.
(3) Includes 1,799,202 shares underlying presently exercisable stock options.
Does not include 148,950 shares owned by Mr. Sugarman's spouse as to which
he disclaims beneficial ownership.
(4) Does not include up to 47,305 contingent shares which may be issued based on
the amount by which pre-tax profits of Periscope Sportswear, Inc., the
Company's wholly owned subsidiary, exceed $13 million (determined in
accordance with the GIANT GROUP, LTD./Periscope Merger Agreement dated
December 4, 1998, as amended). Such shares have been pledged to secure a
loan in favor of BankBoston N.A. and are held pursuant to a voting trust
agreement of which Mr. Sugarman is the trustee. Pursuant to the terms of the
voting trust, in the absence of a default by Mr. Sands under the loan, in
any election of directors the shares will be voted in favor of the Company's
nominees and in all other matters the shares will be voted in accordance
with the recommendations of the Board of Directors. In the event of a
default under the loan, BankBoston N.A. may, at its option vote such shares.
The Company has been informed that such loan is in default.
(5) As reported in a Schedule 13G dated February 11, 2000, Dimensional Fund
Advisors, Inc. ("Dimensional"), a registered investment advisor is deemed to
have beneficial ownership of 273,800 shares of Common Stock as of December
31, 1999. Dimensional disclaims beneficial ownership of all such shares.
(6) Includes 123,375 shares underlying presently exercisable stock options, but
excludes 63,375 shares underlying options held by Mr. Gotterer, as to which
he disclaims beneficial ownership since a business partner is entitled to
the beneficial ownership of such shares upon any exercise of such options.
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ELECTION OF DIRECTORS
[PROPOSAL NO. 1]
Nominees
At the Meeting, five directors are to be elected to serve until the Annual
Meeting of Stockholders in 2001 and until their successors are elected and
qualified. The Board of Directors has nominated Burt Sugarman, David Gotterer,
Terry Christensen, David Malcolm and Jeffrey Rosenthal.
The Board of Directors has no reason to expect that any of the nominees will
be unable to stand for election. In the event that a vacancy among the original
nominees occurs prior to the Meeting, the proxies will be voted for a substitute
nominee or nominees named by the Board of Directors and for the remaining
nominees.
The following table sets forth information as of the Record Date about each
nominee for director and the ownership of equity securities by all directors and
executive officers of the Company as a group:
<TABLE>
<CAPTION>
Shares and
Percent of
Director Common Stock
Age Since Owned(1)
------ ---------- ---------------------
<S> <C> <C> <C>
BURT SUGARMAN................................................. 61 1982 2,988,672 shs.(2)
Mr. Sugarman has been Chairman of the Board of the Company 51.6%
since 1983, and President and Chief Executive Officer since
May 1985. Mr. Sugarman was Chairman of the Board of Rally's
Hamburgers, Inc. (NASDAQ) ("Rally's"), an operator and
franchiser of double drive-through hamburger restaurants in
which the Company has an equity investment, from November
1994 through October 1997, having served as its Chairman of
the Board and Chief Executive Officer from 1990 through
February 1994. He remains a director of Checkers Drive-In
Restaurants, Inc. (NASDAQ) ("Checkers") after its merger
with Rally's in 1999. He also has been serving as a director
of Santa Barbara Restaurant Group, Inc. since March 1999.
DAVID GOTTERER................................................ 71 1984 235,875 shs.(3)
Mr. Gotterer has been Vice Chairman of the Company since May 5.7%
1986. He has been a senior partner in the accounting firm of
Mason & Company, LLP, New York, New York, for more than the
last five years. He is a Director of Checkers (formerly
Rally's).
TERRY CHRISTENSEN............................................. 59 1994 85,000 shs.(4)
Mr. Christensen has been a partner in the law firm 2.1%
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro,
LLP, Los Angeles, California, for more than the last five
years. He is a Director of MGM Grand, Inc. (New York Stock
Exchange) and Checkers.
DAVID MALCOLM................................................. 47 1996 35,000 shs.(5)
Mr. Malcolm has been Chairman of the Board of Suncoast *
Financial Mortgage Corporation, a mortgage banking and real
estate development company, since 1978, President of West
Coast Restaurant Enterprises, an owner operator of 18
Rally's restaurants, since February 1995, and
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C> <C>
Vice President of Artemis Capital Group, an investment
banking firm, since November 1996. Mr. Malcolm also served
as Executive Vice President of Grigsby Brandford & Co.,
Inc., an investment banking firm, from February 1994 to
October, 1996. Mr. Malcolm is Chairman of the San Diego
Unified Port District and a Commissioner on the California
Commission on Judicial Performance.
JEFFREY ROSENTHAL............................................. 42 1997 30,000 shs.(6)
Mr. Rosenthal has served as Chairman and Chief Executive *
Officer of TV Fanfare Publications, Inc., an international
advertising company with offices in 40 cities and four
countries, since 1984.
All Directors and Executive Officers as a group (6 persons)... 3,389,547 shs.(7)
55.9%
</TABLE>
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* indicates less than 1%
(1) Unless otherwise indicated, the beneficial owner has both sole voting and
sole investment powers with respect to his shares. Computed on the basis of
3,989,648 shares of Common Stock outstanding as of the Record Date plus
stock options of each reporting person currently exercisable or exercisable
within 60 days of the Record Date.
(2) Includes 1,799,202 shares underlying presently exercisable stock options.
Does not include 148,950 shares of Common Stock owned by Mr. Sugarman's
spouse, as to which shares he disclaims beneficial ownership.
(3) Includes 123,375 shares that Mr. Gotterer may purchase under presently
exercisable stock options, but excludes 63,375 shares underlying options
held by Mr. Gotterer, as to which shares he disclaims beneficial ownership
since a business partner is entitled to the beneficial ownership of such
shares upon any exercise of such options.
(4) Includes 80,000 shares underlying presently exercisable stock options.
(5) Includes 30,000 shares underlying presently exercisable stock options.
(6) Includes 25,000 shares underlying presently exercisable stock options.
(7) This total includes 2,072,577 shares which such executive officers and
directors may acquire upon the exercise of presently exercisable stock
options.
Meetings of the Board of Directors and Committees
During the 1999 fiscal year the Board of Directors of the Company met on 6
occasions, excluding consents in lieu of meetings. Each of the directors who
served as a director in 1999 attended at least 75% of all meetings of the Board
of Directors and the meetings held by all committees of the Board on which such
director served.
Committees of the Board of Directors
The Company has an Executive Committee, a Compensation Committee, an Option
Committee, an Audit Committee and an Incentive Compensation Committee. The
members of each Committee are appointed by the Board of Directors for a term
beginning after the first regular meeting of the Board of
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Directors following the Annual Meeting of Stockholders and serve until their
respective successors are elected and qualified.
The Executive Committee, consisting of Messrs. Sugarman, Gotterer and
Christensen, did not meet formally during 1999, but its members consulted
regularly on an informal basis in connection with the functions of this
Committee. This Committee was established to act in the place of the Board
between Board meetings.
The Compensation Committee presently consists of Messrs. Gotterer and
Christensen. The Compensation Committee did not meet formally during 1999.
The Option Committee presently consists of Messrs. Gotterer and Christensen.
The Option Committee did not meet formally during 1999. The Option Committee
administers the Company's stock option plans.
The Audit Committee is responsible for exercising such supervisory control
over the internal auditing and accounting procedures, practices and personnel of
the Company as the Audit Committee deems necessary or advisable and makes
recommendations annually to the Board of Directors concerning the appointment of
the Company's independent auditors for the ensuing fiscal year. The members of
the Audit Committee are Messrs. Christensen, Malcolm and Rosenthal. The Audit
Committee met on one occasion during 1999, and its members consulted regularly
on an informal basis in connection with functions of this Committee.
The Incentive Compensation Committee presently consists of Messrs. Malcolm and
Rosenthal. The Incentive Compensation Committee did not meet formally during
1999.
There is no standing nominating committee or other committee performing
similar functions.
Compensation of Directors
Non-employee directors of the Company are compensated at a rate of $10,000 per
annum, plus $500 for each meeting of the Board of Directors attended. Non-
employee directors also participate in the Company's 1996 Stock Option Plan for
Non-Employee Directors (the "Director Plan"). Pursuant to the Director Plan
each non-employee director receives 5,000 options on each May 20 or, if a
director was not a director on May 20, 1996 (the adoption date of the Director
Plan), on each anniversary of their election to the Board of Directors. In
addition, each non-employee director who is appointed to the Executive Committee
will receive 5,000 options upon their appointment and 5,000 options on each
anniversary thereof. Each option has a five-year term and is immediately
exercisable. The exercise price of each option is the fair market price of the
options on the date of grant. Members of the Audit Committee are compensated
for their services thereon at the rate of $250 per meeting attended.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long-term
compensation for services in all capacities to the Company for the three years
ended December 31, 1999, 1998, and 1997 of those persons who were (i) the Chief
Executive Officer and (ii) executive officers of the Company during 1999 and
whose cash compensation exceeded $100,000 for services performed by such persons
for the Company during 1999 (collectively, the "Named Executives").
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation Awards
------------------- -------------------------------------------
Securities
Name & Principal Other Annual Restricted Underlying All Other
- ---------------- Salary Bonus Compensation Stock Option/SARS Compensation
Position Year $ $ $ Award (s) # $
- ---------- ------------- ---------- -------- -------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Burt Sugarman 1999 1,000,000 -0- 7,644 (1) -0- -0- 27,475 (2)
Chairman of the 1998 1,000,000 -0- 18,057 (1) -0- -0- 27,115 (2)
Board, President 1997 1,000,000 -0- 54,747 (1) -0- -0- 28,889 (2)
and Chief
Executive Officer
William H. 1999 166,704 -0- -0- -0- -0- -0-
Pennington 1998 158,446 -0- -0- -0- -0- -0-
Vice President, 1997 (3) 27,129 -0- -0- -0- 15,000 -0-
Secretary and Chief
Financial Officer
- -------------------
</TABLE>
- ------------------
(1) Amounts represent the value of use of the Company's airplane, which was
sold in April 1998, and automobile.
(2) Represents amounts paid to Mr. Sugarman by Rally's and Checkers.
(3) Mr. Pennington joined the Company in October 1997.
Employment Contracts
Mr. Sugarman is employed as Chairman of the Board, President and Chief
Executive Officer of the Company pursuant to an employment agreement dated
December 3, 1998 and expiring on December 31, 2005. The agreement, which was an
amendment and restatement of his agreement of February 24, 1997, provides that
Mr. Sugarman is to receive an annual base salary of $1,000,000 increased
annually by 10% over the prior year to a maximum of $1,600,000, life insurance
in the face amount of $5,000,000, and an annual bonus in an amount determined
from year to year by the Compensation Committee of the Board of Directors, at
its discretion, and certain additional benefits. The employment agreement is
terminable prior to the expiration of the term of the Agreement (1) by the
Company for cause (as defined therein) and (2) by Mr. Sugarman (a) for cause (as
defined therein), (b) at any time for any reason, after January 1, 2000 or (c)
if Mr. Sugarman ceases to own or control at least 10% of the Common Stock of the
Company. Should the employment agreement be terminated by the Company without
cause or by Mr. Sugarman for cause or for other reasons described in the
preceding sentence, Mr. Sugarman would be entitled to (1) continuation of all
health insurance benefits through the expiration of the term of the agreement,
or for 40 months from termination, whichever period is longer and (2) a lump sum
payment in an amount equal to the greater of (a) two times the annual base
salary, and (b) the amount
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<PAGE>
which would have been payable throughout the remainder of the term of the
agreement or 40 months, whichever is shorter, provided that if the agreement is
terminated within one year following a change in ownership of the Company (as
defined therein), Mr. Sugarman will receive a lump sum payment equal to 2.99
times the average annual compensation paid to Mr. Sugarman by the Company during
the five years prior to such change in ownership. In the event of Mr. Sugarman's
death or disability he (or his estate) would be entitled to receive a lump sum
payment equal to the greater of (a) two times the annual base salary and (b) the
amount which would have been payable throughout the remainder of the term of the
agreement and continuation of all health insurance benefits for the remainder of
the term. In the event of Mr. Sugarman's death, the Company would also be
obligated to continue all health insurance benefits for Mr. Sugarman's immediate
family for two years. Upon the expiration of the agreement, the Company is
obligated to pay to Mr. Sugarman a lump sum equal to two times the then annual
base salary and continue all health insurance benefits for two years. Pursuant
to the employment agreement, Mr. Sugarman has agreed during the term of the
agreement, not to render services to, or plan for or organize, a business which
is materially competitive with or similar to the business of the Company or any
of its subsidiaries. In January 2000, Mr. Sugarman voluntarily authorized the
Company to decrease his annual salary to $450,000. No change to his benefits was
made. Mr. Sugarman, at his discretion, may, at any time, increase his salary to
the current level as stated in his current contract. In such case, no
retroactive salary adjustment will be made.
Option Plans
The Company has a 1985 Non-Qualified Stock Option Plan (the "1985 Stock Option
Plan"). The 1985 Stock Option Plan provided for the grant of options to
purchase 3,000,000 shares of Common Stock; provided that, pursuant to the terms
of the 1985 Stock Option Plan, no further grants may be made under the plan. As
of December 31, 1999, options to purchase 1,750,952 shares were outstanding, and
options for 307,500 shares had been exercised.
The Company has a 1996 Employee Stock Option Plan (the "1996 Stock Option
Plan") and the Director Plan. The 1996 Stock Option Plan presently provides for
the grant of options to purchase 1,000,000 shares of Common Stock to officers
and key management personnel of the Company. As of December 31, 1999, options
to purchase 215,000 shares were outstanding, no options had been exercised and
during fiscal 1999 no options were granted. The Director Plan presently
provides for the grant of 400,000 shares of Common Stock. As of December 31,
1999, options to purchase 170,000 shares were outstanding and no options had
been exercised.
FISCAL YEAR END OPTION VALUE
<TABLE>
<CAPTION>
Value of
Unexercised in
Number of Unexercised the Money Options at
Options at December 31,
December 31, 1999 1999
--------------------- ---------------------
Shares
------
Acquired On Value
----------- -----
Name Exercise Realized Exercisable Unexercisable Exercisable
---- -------- -------- ----------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
Burt Sugarman....... -0- -0- 1,799,202 -0- $-0- (1)
William H. Pennington -0- -0- 10,000 5,000 $-0- (2)
</TABLE>
(1) Based upon the closing price of the Common Stock on December 31, 1999 of
$3.50 minus the option exercise price of $6.75 per share for 1,599,202
shares and $8.25 per share for 200,000 shares.
(2) Based upon the closing price of the Common Stock on December 31, 1999 of
$3.50 minus the option exercise price of $7.8125 per share for 10,000
shares.
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<PAGE>
Compensation Committee Interlocks and Insider Participation
During 1999 the Compensation Committee and Option Committee of the Board of
Directors consisted of David Gotterer and Terry Christensen. David Gotterer is
Vice Chairman of the Company and a Senior Partner in the accounting firm of
Mason & Company, LLP, which received $98,512 from the Company for rendering
consulting, financial and accounting services to the Company during 1999. Terry
Christensen is a partner in the law firm of Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP, which represents the Company and Checkers (formerly
Rally's) in certain corporate and litigation matters. Both Mr. Gotterer and Mr.
Christensen are directors of Checkers (formerly Rally's).
COMPENSATION COMMITTEE REPORT
The Compensation Committee is responsible for developing and making
recommendations to the Company with respect to executive officer compensation
policies, addressing such matters as salaries, bonuses, incentive plans,
benefits and overall compensation. The Compensation Committee also determines
the compensation to be paid to the Chief Executive Officer and each of the other
executive officers of the Company. The Compensation Committee, however, does
not administer the Company's 1997 Incentive Compensation Plan for Executive
Officers (the "Incentive Plan"). The Incentive Plan is administered by the
Incentive Compensation Committee. No amounts were earned under the Incentive
Plan in 1999.
The objectives of the Compensation Committee in determining the type and
amount of executive officer compensation are to provide a level of compensation
that allows the Company to attract and retain competent executives. The
Compensation Committee further believes that the Company's compensation programs
should provide personnel with a financial interest in the Company similar to the
interests of the Company's stockholders and that there should be a correlation
between the performance of the Company and individual performance and
compensation. During 1999 the Compensation Committee did not award any bonuses
to either of the Named Executives.
Mr. Sugarman, the Chief Executive Officer of the Company is eligible to
participate in the same compensation plans available to the Company's other
executives. In 1999 Mr. Sugarman received base compensation of $1,000,000
pursuant to the terms of his employment agreement. The Compensation Committee
did not award Mr. Sugarman a discretionary bonus for 1999.
DAVID GOTTERER
TERRY CHRISTENSEN
Performance Graph
The following graph compares the yearly percentage change in the Company's
cumulative total stockholder return on the Common Stock for the five years ended
December 31, 1999, based upon the market price of the Common Stock as reported
on the New York Stock Exchange with the cumulative total return (and assuming
reinvestment of dividends), with (i) the NYSE Stock Index and (ii) an index of a
group of companies in the apparel industry selected by the Company, consisting
of Kellwood, Tropical Sportswear and Perry Ellis International (acquired Supreme
International in 1999). Happy Kids, which
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<PAGE>
was included in the index in prior years, is excluded from the index because it
was acquired by RHG Capital in 1999 which is not publicly traded. In December
1998 the Company acquired Periscope Sportswear, Inc., an apparel company.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG GIANT GROUP, LTD.
NYSE STOCK MARKET AND PEER GROUP INDEXES
TOTAL RETURN TO SHAREHOLDERS
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1994 1995 1996 1997 1998 1999
---------------------------------------------------------------------
GIANT GROUP, LTD. 100.00 135.19 124.07 103.70 135.19 51.85
---------------------------------------------------------------------
PEER GROUP 100.00 104.79 105.25 158.69 168.35 122.04
---------------------------------------------------------------------
NYSE MARKET INDEX 100.00 129.66 156.20 205.49 244.52 267.75
---------------------------------------------------------------------
- ------------
(1) In December 1998 the Company acquired an apparel company and, therefore, has
included a peer group of apparel companies as indicated above. Happy Kids is
excluded because it was acquired by RHG Capital which is not publicly
traded. Supreme International was replaced by Perry Ellis International
which acquired Supreme International in 1999.
(2) On April 24, 2000, the Company ceased trading on the New York Stock
Exchange.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
David Gotterer, Vice Chairman and a Director of the Company and of Rally's, is
a Senior Partner in the accounting firm of Mason & Company, LLP, which received
$98,512 from the Company for rendering consulting, financial and accounting
services to the Company during 1999.
RATIFICATION OF AUDITORS
[PROPOSAL NO. 2]
Arthur Andersen LLP has been selected by the Board of Directors to serve as
the independent auditors for the Company for the year ending December 31, 2000.
The firm has served as the Company's accountants since 1996. A representative
of Arthur Andersen LLP is expected to be available by telephone and will be
given the opportunity to make a statement if he or she so desires and to respond
to appropriate questions from stockholders.
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<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR FISCAL 2000.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and 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 SEC and provide the Company with
copies of such reports. 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, during
the past fiscal year all filing requirements applicable to its executive
officers, directors, and greater than ten-percent stockholders were complied
with.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2001 Annual Meeting must
be received by the Company for inclusion in its proxy statement and form of
proxy by January 6, 2001. To assure that a stockholder's proposal is included
in the proxy statement and form of proxy, it will be necessary for the
stockholder to comply with the regulations of the SEC governing inclusion of
such proposals in such documents. In addition, stockholders may directly
nominate persons for director only by complying with the following procedure set
forth in the Company's By-Laws; the stockholder must submit the names of such
persons in writing to the Secretary of the Company not less than 70 days nor
more than 90 days prior to the date of the preceding year's annual meeting. The
nominations must be accompanied by all information relating to such person that
is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended, and the name, record
address, and class and number of shares of the Company owned by the stockholder
making the nomination. A stockholder may properly bring business before the
Annual Meeting of Stockholders only by complying with the following procedure
set forth in the Company's By-Laws; the stockholder must submit to the Secretary
of the Company, not less than 70 days nor more than 90 days prior to the date of
the preceding year's annual meeting, a written statement describing the business
to be brought by him at the Annual Meeting, the name, record address, and class
and number of shares of the Company owned by the stockholder making the
submission, and a description of any material interest of the stockholder in
such business.
Any such proposal should be communicated in writing to the Secretary of the
Company at 9440 Santa Monica Boulevard, Suite 407, Beverly Hills, California,
90210.
VOTING PROCEDURES
At the Meeting, stockholders will be requested to act upon the matters set
forth in this Proxy Statement. If you are not present at the Meeting, your
shares can be voted only when represented by proxy. The shares represented by
your proxy will be voted in accordance with your directions if the proxy is
properly signed and returned to the Company at or before the Meeting. If no
instructions are specified in the proxy with respect to any proposal, the shares
represented thereby will be voted for the nominees for the Board of Directors
listed in this Proxy Statement and for the ratification of Arthur Andersen, LLP
as independent
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<PAGE>
auditors for the Company. If any other matters shall properly come before the
Meeting, the enclosed proxy will be voted in accordance with the best judgment
of the persons voting such proxy.
A proxy may be revoked at any time prior to it being voted at the Meeting by
delivering to the Secretary of the Company a signed writing revoking the proxy
or a duly executed proxy bearing a later date, or by appearing and voting in
person at the Meeting. The mere presence at the Meeting of a person appointing
a proxy does not revoke the appointment. Please note that it is important to
date your proxy because the last dated proxy will revoke any earlier dated
proxies and will be the one that is voted at the Meeting.
A majority of the outstanding shares of Common Stock represented at the
Meeting, in person or by proxy, will constitute a quorum. The votes of
stockholders present in person or represented by proxy at the Meeting will be
tabulated by an inspector of election appointed by the Company. The five
nominees for director of the Company who receive the greatest number of votes
cast by stockholders present in person or represented by proxy at the Meeting
and entitled to vote thereon will be elected directors of the Company.
Abstentions will have no effect on the outcome of the vote for the election of
directors or the ratification of accountants.
OTHER BUSINESS
The Board of Directors does not know of any matters to be presented for action
at the Meeting other than as set forth in this Proxy Statement. If any other
business should properly come before the Meeting, the persons named in the proxy
intend to vote thereon with their best judgment.
The Company's Annual Report to Stockholders for the fiscal year ended December
31, 1999 (which contains a copy of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1999) accompanies this Proxy Statement.
THE COMPANY'S 1999 ANNUAL REPORT ON FORM 10-K (INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULE THERETO) WILL BE PROVIDED WITHOUT CHARGE TO EACH
STOCKHOLDER UPON WRITTEN REQUEST. EACH REQUEST MUST SET FORTH A GOOD FAITH
REPRESENTATION THAT, AS OF APRIL 27, 2000, THE RECORD DATE FOR THE MEETING, THE
PERSON MAKING THE REQUEST WAS THE BENEFICIAL OWNER OF SHARES OF COMMON STOCK OF
THE COMPANY. THE REQUEST SHOULD BE DIRECTED TO: WILLIAM H. PENNINGTON,
SECRETARY, GIANT GROUP, LTD., 9440 SANTA MONICA BOULEVARD, SUITE 407, BEVERLY
HILLS, CALIFORNIA 90210, TELEPHONE (310) 273-5678.
By Order of the Board of Directors
/s/ WILLIAM H. PENNINGTON
------------------------------------
WILLIAM H. PENNINGTON, Secretary
April 28, 2000
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<PAGE>
GIANT GROUP, LTD.
P
This Proxy is Solicited on behalf of the Board of Directors
R Annual Meeting of Stockholders - Monday June 12, 2000
O The undersigned hereby appoints Burt Sugarman and David Gotterer, and
each of them, proxies with power of substitution each, for and in the name
X of the undersigned to vote all shares of Common Stock of GIANT GROUP LTD., a
Delaware corporation (the "Company"), that the undersigned would be entitled
Y to vote at the Company's 2000 Annual Meeting of Stockholders (the
"Meeting"), and at any adjournments thereof, upon the matters set forth in
the Notice of the Meeting as stated hereon, hereby revoking any proxy
heretofore given. In their discretion, the proxies are further authorized to
vote upon such other business as may properly come before the Meeting.
The undersigned acknowledges receipt of the Notice of the Meeting and the
accompanying Proxy Statement and Annual Report.
- --------------------------------------------------------------------------------
-FOLD AND DETACH HERE-
<PAGE>
- --------------------------------------------------------------------------------
THE BOARD RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2. Please mark
your vote as [X]
indicated in
the example
<TABLE>
<S> <C>
FOR WITHHELD FOR WITHHELD ABSTAIN
1. Election of Directors Below. [ ] [ ] 2. Ratification of the appointment of Arthur [ ] [ ] [ ]
Andersen LLP as independent auditors.
Nominees: Terry Christensen, David Gotterer,
David Malcolm, Jeffrey Rosenthal, Burt Sugarman
For, except vote withheld from the following THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION
nominee(s): IS INDICATED, WILL BE VOTED FOR THE ELECTION OF THE NOMINEES
FOR DIRECTORS LISTED ABOVE. FOR RATIFICATION OF THE APPOINTMENT
- -------------------------------------------- OF THE AUDITORS AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING.
------+
|
|
Signature ______________________________________ Signature __________________________________________ Date ___________________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
- --------------------------------------------------------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
</TABLE>
