<PAGE> 1
ALFIN, INC.
720 FIFTH AVENUE
NEW YORK, NEW YORK 10019
COMMISSION FILE NUMBER 1-9135
DISCLOSURE STATEMENT
PURSUANT TO
SECTION 14(f) OF THE
SECURITIES EXCHANGE ACT OF 1934 AND
RULE 14f-1 THEREUNDER
INTRODUCTION
This Statement is being mailed on or about February 20, 1998 to holders of
record on February 18, 1998, of the shares of Common Stock, par value $0.01 per
share (the "Common Stock"), of Alfin, Inc., a New York corporation, (the
"Company"). It is being furnished in connection with the change of a majority of
the Company's directors to be effected at a Board meeting to be held on March 4,
1998.
BACKGROUND OF TRANSACTION
Elisabeth Fayer, a former director and chief executive officer of the Company,
beneficially owns 7,188,935 shares of Common Stock which represents 61% of the
currently issued and outstanding Common Stock. On February 2, 1998, Ms. Fayer
granted options (collectively the "Options") to Barry W. Blank, Carol J. Lubin
and Janet M. Portelly (the "Blank Group") to purchase all of her shares at $0.25
per share for a period of 12 months commencing August 1, 1998. In connection
therewith, Ms. Fayer also granted to Mr. Blank the right to vote her shares (the
"Proxy") during the period that the Options remain outstanding.
Ms. Fayer granted the Options and the Proxy in consideration for the Blank
Group's agreement to immediately lend the Company $500,000 in the form of
convertible subordinated notes (the "Notes"), and Mr. Blank's agreement to use
his best efforts to provide the Company with no less than an additional $2
million in financing by April 30, 1998. The Notes bear interest at the rate of
12% per annum and are convertible commencing August 1, 1998 into Common Stock at
a price of $0.25 per share. Interest is payable quarterly and principal is due
on January 31, 2003.
In connection with the foregoing transactions, Mr. Blank was also given the
right to designate the Company's directors. Accordingly, in a Directors
meeting held on February 9, 1998, Ms. Fayer resigned and Mr. Blank replaced
her. The Company's current directors, in addition to Mr. Blank, are Jacques
Desjardins, Steven Korda and Suzanne Langlois. The Board has scheduled a
meeting for March 5, 1998 at which Messrs. Desjardins and Korda and Ms.
Langlois will resign, and Barry Feiner, Joseph Giamenco and John E.
McConnaughy, Jr. will be installed in their places. Messrs. Feiner, Giamenco
and McConnaughy are Mr. Blank's designees.
Mr. Blank has become the Company's Chairman of the Board, President and Chief
Executive and Operating Officer. Michael D. Ficke is currently the Company's
Vice President, Chief Financial Officer and Secretary, and Mary Panvini is
the Company's Vice President, General Manager - Retail Sales. Mr. Ficke and
Ms. Panvini will retain these
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positions. Except as set forth herein, Mr. Blank has not specified to the Board
any future plans he may have with respect to the management and financing of the
Company or the marketing of its products.
REASON FOR DISCLOSURE STATEMENT
The Company, because all of its directors are being changed otherwise than at a
meeting of stockholders, is required pursuant to Rule 14f-1 promulgated under
the Securities Exchange Act of 1934 (the "Exchange Act") to provide its
stockholders and the Securities and Exchange Commission (the "Commission") with
certain information not less than ten days prior to the date on which the change
will take place. This Disclosure Statement is being filed with the Commission
and sent to stockholders in compliance with that Rule.
INFORMATION RELATING TO THE COMPANY'S SECURITIES.
As of January 30, 1998, there were 11,787,983 shares of Common Stock
outstanding. Each outstanding share of Common Stock entitles the record holder
thereof to one vote on all matters which are to be presented to stockholders for
their consideration.
The Company also currently has 30, 000 shares of 14.5% Senior Cumulative
Redeemable Preferred Stock (the "Preferred Stock") authorized, issued and
outstanding. The Preferred Stock has a liquidation preference and stated value
of $25.00 per share, cumulative dividends payable annually in advance at the
rate of 14.5%, a mandatory redemption date of July 5, 2003, and a redemption
price equal to 103% of the stated value. Dividends may be paid, at the Company's
option, in cash or Common Stock. In the event that an amount equal to six
consecutive quarterly dividends is in arrears, the Preferred Stock holders will
have the right, voting as a class, to elect two directors, and to convert their
Preferred Stock into Common Stock at the rate of ten shares of Common Stock for
each share of Preferred Stock.
PRINCIPAL STOCKHOLDERS.
The following table sets forth as of February 11, 1998, certain information with
respect to all those known by the Company to be record or beneficial owners of
more than 5% of its outstanding Common Stock, each Director and director
designee and all Directors and director designees and Officers as a group.
Except as indicated in the footnotes to the table, the listed stockholders hold
sole voting and investment power over their respective shares.
<TABLE>
<CAPTION>
SHARES OF APPROXIMATE
COMMON STOCK PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OWNED (1) CLASS (1)
- ---------------- --------- ---------
<S> <C> <C>
Elisabeth Fayer (2) (2)
3143040 Canada, Inc.,
Fine Fragrances
Distribution, Inc.
32 Belvedere
Westmont, Quebec
H34 IP4
</TABLE>
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<TABLE>
<CAPTION>
SHARES OF APPROXIMATE
COMMON STOCK PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OWNED (1) CLASS (1)
- ---------------- --------- ---------
<S> <C> <C>
Barry W. Blank (3) 7,188,935 (2) 61 (2)
c/o Alfin, Inc.
720 Fifth Avenue
New York, New York 10019
Jacques Desjardins (3) -0- -0-
c/o Alfin, Inc.
720 Fifth Avenue
New York, New York 10019
Suzanne Langlois (3) -0- -0-
c/o Alfin, Inc.
720 Fifth Avenue
New York, New York 10019
Steven Korda (3) -0- -0-
c/o Alfin, Inc.
720 Fifth Avenue
New York, New York 10019
Barry Feiner (3) (4) -0- -0-
1345 Avenue of the Americas
Suite 2200
New York, New York 10105
Joseph Giamenco (3) -0- -0-
GHM, Inc.
74 Trinity Place
New York, New York 10006
John E. McConnaughy, Jr. (3) -0- -0-
EMC Corp.
1011 High Ridge Road
Stamford, Connecticut. 06905
Carol J. Lubin (2) (2)
4079 Governor Drive
#231
San Diego, California 92122
Janet M. Portelly (4) (2) (2)
c/o Barry Feiner
1345 Avenue of the Americas
Suite 2200
New York, New York 10105
</TABLE>
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<TABLE>
<CAPTION>
SHARES OF APPROXIMATE
COMMON STOCK PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OWNED (1) CLASS (1)
- ---------------- --------- ---------
<S> <C> <C>
Officers and Directors 7,188,935 (2) 61 (2)
as a Group (4 persons)
</TABLE>
- --------------------
(1) Ownership is of record and beneficial except as otherwise noted. This Stock
does not include 2 million shares issuable upon conversion of the Notes as
follows: 900,000 to Barry W. Blank; 900,000 to Carol J. Lubin; and 200,000 to
Janet M. Portelly. See "Background of Transaction."
(2) These shares are owned of record by Fine Fragrances Distribution, Inc.
("FFD"), a wholly-owned subsidiary of 3143040 Canada, Inc. which is controlled
by Ms. Fayer. Ms. Fayer has caused FFD to grant an irrevocable proxy to Mr.
Blank with respect to these shares. She has also caused FFD to grant Options to
purchase these shares at $0.25 per share for a period of 12 months commencing
August 1, 1998 as follows: 3,235,021 to Mr. Blank; 3,235,021 to Ms. Lubin; and
718,893 to Ms. Portelly. Mr. Blank has sole investment and voting discretion
with respect to these shares and, accordingly, is deemed to be the beneficial
owner of them. See "Background of Transaction."
(3) Mr. Blank became a director on February 9, 1998. At a meeting of the Board
of Directors to be held on March 5, 1998, Messrs. Desjardins and Korda and Ms.
Langlois will resign, and Messrs. Feiner, Giamenco and McConnaughy, who are
designees of Mr. Blank, will be installed in their places. See "Background of
Transaction."
(4) Mr. Feiner is Ms. Portelly's husband. He disclaims beneficial ownership in
the Note and Option acquired by Ms. Portelly.
CHANGE IN CONTROL.
A change in control of the Company has been effected pursuant to the acquisition
of the Proxy by Mr. Blank from Ms. Fayer for the 7,188,935 shares of the
Company's Common Stock owned by her. These shares represent approximately 61% of
the currently outstanding Common Stock.
LEGAL PROCEEDINGS.
There are no legal proceedings to which any director, officer or affiliate of
the Company, any owner of record or beneficially of more than five percent of
the Company's Common Stock, or any associate of any of the foregoing, is a party
adverse to the Company or any of its subsidiaries or has a material interest
adverse to Company or any of its subsidiaries. See "Directors and Executive
Officers and Related Transaction; Compensation Arrangements" for information
relating to litigation currently existing between the Company and Adrienne
Newman, a former executive officer of the Company.
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DIRECTORS AND EXECUTIVE OFFICERS
AND RELATED TRANSACTIONS.
DIRECTORS AND EXECUTIVE OFFICERS.
The directors, designated directors and executive officers of the Company are:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Barry W. Blank 57 President and Chairman of
the Board of Directors
Jacques Desjardins (1) 64 Director
Steven Korda (1) 57 Director
Suzanne Langlois (1) 44 Director
Joseph Giamenco (2) 56 Director Designee
John E. McConnaughy, Jr. (2) 68 Director Designee
Barry Feiner (2) 63 Director Designee
Mary Panvini 50 Senior Vice President
General Manager - Retail Sales
Michael D. Ficke 42 Vice President, Secretary and
Chief Financial Officer
</TABLE>
- --------------------
(1) These directors plan to resign at a Board meeting scheduled to be held on
March 5, 1998. See "Background of Transaction."
(2) Messrs. Giamenco, McConnaughy and Feiner are designees of Mr. Blank. They
will replace Messrs. Desjardins and Korda and Ms. Langlois as directors at the
Board meeting scheduled to be held on March 5, 1998.
Directors serve until the Company's next annual meeting and until their
successors have been elected and qualified. Officers serve at the discretion of
the Board of Directors subject to certain employment agreements.
BARRY W. BLANK became Chief Executive Officer, President and Chairman of the
Board of Directors on February 9, 1998. Mr. Blank is and has been since April
1997 the Manager of the Phoenix, Arizona branch office of J. Robbins Securities,
LLC, a NASD securities brokerage firm. For more than ten years prior thereto Mr.
Blank acted in a similar capacity with a number of other securities brokerage
firms including Coleman and Company Securities, Inc. from May 1995 to April
1997, RAS Securities, Inc. from April 1993 to May 1995, and Dickinson & Co. from
July 1991 to April 1993. Mr. Blank owns a seat on the New York and American
Stock Exchanges, and for approximately 30 years has served as a reserve office
with the Phoenix Police Department.
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JACQUES DESJARDINS, a Canadian citizen, was elected a director of the Company in
November 1992 and has for more than the past five years been engaged in private
practice as a general legal advisor (a notary and title attorney) in Montreal,
Quebec, Canada.
STEVEN KORDA, a Canadian citizen, was elected a director of the Company in
November 1992 and has for more than the past five years been the principal of
Korda & Associates, a law firm located in Montreal, Quebec, Canada, engaged in
the general and commercial practice of law.
SUZANNE LANGLOIS, a Canadian citizen, was elected a director of the Company in
November 1992 and has been legal counsel to privately held Canadian
corporations.
JOSEPH GIAMENCO is and has been for more than the past five years the President
of GHM, Inc., a company which acts as a specialist on the American Stock
Exchange.
JOHN E. MCCONNAUGHY, JR. is and has been for more than the past five years the
Chairman and Chief Executive Officer of JEMC Corporation, a private investment
company located in Stamford, Connecticut.
BARRY FEINER is and has been for more than the past five years an attorney
practicing in New York City.
MARY PANVINI joined the Company as Senior Vice President/General Manger of
Retail Sales in June 1997 and has served in this capacity since that time. Prior
to her joining the Company, Ms. Panvini acted as a consultant for two years.
Prior thereto, she served as a Regional Sales Director with Christian Dior
Perfumes.
MICHAEL D. FICKE joined the Company in July 1989. Mr. Ficke served Alfin,
Inc. as Corporate Controller until his promotion to Vice President and Chief
Financial Officer in November, 1993. Prior to joining the Company, from 1977
to 1989, Mr. Ficke, a C.P.A., served as Assistant Controller of Chanel Inc.,
a manufacturer and distributor of fragrance and cosmetic products.
RELATED TRANSACTIONS.
The Company's subsidiary, Adrein Arpel, Inc. ("ARPEL"), has periodically
retained Display Creations, Inc. ("DCI"), a promotional display creator, to
supply ARPEL with point of purchase displays. Ronald Newman, the husband of
Adrienne Newman, the former Executive Vice President of the Company and former
Chief Executive Officer of ARPEL, is the sole owner of DCI. During the fiscal
year ended July 31, 1997, the Company purchased point of purchase displays from
DCI in the amount of approximately $128,000.
STANDING AUDIT, NOMINATING AND COMPENSATION COMMITTEES.
During the fiscal year ended July 31, 1997, the Board of Directors had an
Executive Committee, consisting of Ms. Fayer, and an Audit Committee and a Stock
Option Committee, each consisting of Messrs. Korda and Desjardins. None of these
committees had any meetings during the 1997 fiscal year. The Company has no
compensation or nominating committees.
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INFORMATION RELATING TO BOARD OF DIRECTORS MEETINGS.
The Board of Directors held four meetings during the 1997 fiscal year as
follows: September 10, 1996, and February 17, May 15, and May 20, 1997.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information for the fiscal years ended July 31,
1997, 1996 and 1995 respecting all compensation awarded to, earned by or paid to
the Company's Chief Executive Officer and its other executive officers who
earned in excess of $100,000 for fiscal 1997 (the "Named Executive Officers") in
all capacities in which such officers served.
<TABLE>
<CAPTION>
Long Term
Annual Compensation
Compensation
----------------------------------------------------
Name and Principal Position Year Salary Bonus Other Annual Stock
Compensation Option/
Warrants
Compen-
sation
Awards
<S> <C> <C> <C> <C> <C>
Elisabeth Fayer, (1) 1997 $574,167 $ -0- $ -0- (2) -0
Chairman and Chief 1996 290,000 -0- -0- (2) -0-
Executive Officer 1995 114,500 -0- -0- (2) 100,000
Adrienne Newman (3) 1997 $ -0- $ 986,488 (4) $22,500 (5) -0-
President and Chief 1996 250,000 3,448,105 (4) $65,000 (5) -0-
Executive Officer 1995 250,000 3,374,990 (4) $65,000 (5) -0-
of Adrien Arpel, Inc.
Michael D. Ficke 1997 $123,533 $ -0- $ -0- (2) -0-
Vice President, 1996 96,500 -0- $ -0- (2) -0-
Chief Financial Officer, 1995 93,000 -0- $ -0- (2) -0-
Secretary
Jo Ann Segal (6)
Senior Vice President
and General Manager 1997 $135,938 $ -0- $ -0- (2) 25,000
1996 -0- -0- -0- (2) -0-
1995 -0- -0- -0- (2) -0-
</TABLE>
- --------------------
(1) Named President of the Company in September 1996, became Chief Executive
Officer on October 23, 1996 and resigned on February 9, 1998.
(2) Excludes personal benefits which did not exceed the lesser of $50,000 or
10%, on an annual basis, of such officer's salary and bonus.
(3) Employment agreement terminated on October 28, 1996. Ms. Newman and the
Company are currently involved in litigation. See "Executive Compensation;
Compensation Arrangement."
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(4) Commissions paid based on 1/3 of the revenues, net of direct expenses,
derived from television shopping sales of cosmetics.
(5) Represents an annual non-accountable expense allowance of $65,000.
(6) Terminated as of June 6, 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Ms. Fayer, who served as President and Chief Executive Officer of the Company
during the Company's fiscal year ended July 31, 1997, determined compensation
for the 1997 fiscal year although she abstained in the consideration of her
compensation as the Chief Executive Officer.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
During fiscal 1997 no new options were granted to the Named Executive Officers
and none of the Named Executive Officers exercised any options.
YEAR-END OPTION VALUES TABLE
The following table sets forth information at July 31, 1997, respecting
exercisable and non-exercisable options held by the Named Executive Officers.
The table also includes the value of "in-the-money" options which represents the
spread between the exercise price of the existing stock options and the year-end
price of the Common Stock.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE MONEY OPTIONS
OPTIONS HELD AT HELD AT
JULY 31, 1997 JULY 31, 1997 (1)
------------------------- --------------------------
NOT NOT
NAME EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
- ---- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Adrienne Newman (2) 625,000 -0- $ -0- $ -0-
Elisabeth Fayer (3) 100,000 -0- $ -0- $ -0-
</TABLE>
- --------------------
(1) Based on a July 31, 1997 closing price of $0.625.
(2) 1,000,000 Warrants granted 11/19/93 @$1.25. 375,000 of these options have
expired.
(3) 100,000 options granted April 28, 1995 at $1.00. These options have been
returned to the Company.
COMPENSATION ARRANGEMENTS
Ms. Adrienne Newman was employed as the President and Chief Executive Officer of
ARPEL pursuant to an employment agreement with the Company dated as of April 4,
1990 as amended November 18, 1991 and November 19, 1993 (collectively the
"Employment Agreement"). The Employment Agreement was to terminate on the
earliest to occur of (i) April 4, 1998, (ii) the last day of any month in which
Ms. Newman dies, (iii) the last day of the month in which the Company elects to
terminate Ms. Newman's employment due to a physical or mental disability, (iv)
the termination by the Company of Ms. Newman's employment for "good cause" as
therein defined, or (v) the termination of the Company's television marketing
efforts after April 4, 1995.
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The employment agreement provided for salary, fringe benefits and commission
payments based upon 33% of the revenue, net of direct expenses, attributable to
television shopping sales. Ms. Newman, who served as the selling host under the
name of Adrien Arpel, in the Company's sales program on the Home Shopping
Network, Inc. ("HSN"), also had vested rights in 625,000 warrants, 500,000 of
which were scheduled to expire on November 19, 1998 but expired when Ms.
Newman's contract was terminated as noted below, and the remaining 125,000 of
which were scheduled to expire on July 31, 2001.
On October 28, 1996, the Company received notice from Ms. Newman purporting to
terminate her Employment Agreement based on an alleged breach of the Employment
Agreement by the Company. On November 8, 1996, the Company and Ms. Newman
reached an agreement (the "Interim Agreement") whereby Ms. Newman agreed to
appear as the selling host for ARPEL on HSN shows scheduled for November and
December 1996 and January 1997 (the "HSN Selling Period"). During the HSN
Selling Period, Ms. Newman acted as an independent contractor and not as an
employee of the Company. The Company and Ms. Newman also agreed to refrain from
initiating legal action against the other in connection with their dispute over
Ms. Newman's termination of the Employment Agreement until after the HSN Selling
Period.
On January 28, 1997, after the expiration of the HSN Selling Period, Ms. Newman
served the Company with a summons and complaint returnable in the Supreme Court,
New York County whereby Ms. Newman asserted claims for damages against the
Company based upon alleged breaches by the Company of Ms. Newman's Employment
Agreement and the Interim Agreement. Unspecified damages were claimed. A further
claim requested a judicial determination that the Employment Agreement was
materially breached by the Company resulting in its termination.
On March 19, 1997, the Company served an Answer and Counterclaim in response to
the action commenced by Ms. Newman. The Company's Counterclaim asserts various
claims against Ms. Newman, seeking damages and injunctive relief. Among other
things, it is the position of the Company that Ms. Newman was in material breach
of her Employment Agreement when she terminated the Employment Agreement on
October 28, 1996. As a consequence, it is the Company's belief that Ms. Newman's
refusal to provide services to the Company throughout the term of her Employment
Agreement which expires in April 1998, particularly her willful refusal and
failure to appear as the Company's selling host on HSN, will damage the Company
in the sum of at least eleven million ($11,000,000) dollars. The Company also
asserted claims against Ms. Newman for breaches of her covenant not to compete
and her covenant not to disclose trade secrets and proprietary data.
During May 1997, Ms. Newman started appearing on HSN as a representative of her
own company selling cosmetic products under the name "Signature Club A." Ms.
Newman has subsequently appeared on HSN on a monthly basis. The Company and its
attorneys are currently reviewing these appearances and may seek further legal
remedies and actions against Ms. Newman. During these appearances Ms. Newman was
not acting on behalf of the Company or its trademark protected Adrien Arpel
product line.
The case is currently in the discovery phase. Upon completion of discovery the
action will be ready for trial but no trial date has yet been fixed.
Under the terms of the Employment Agreement, Ms. Newman served as Executive Vice
President of the Company and President and Chief Executive Officer of ARPEL at
an annual base salary of $250,000. The Employment Agreement also provided for a
non-accountable expense allowance of $65,000 per year, and prohibited Ms.
Newman, during its term, from
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engaging or being interested in any business which operated leased beauty
cosmetic departments or concessions in stores, or which acted as a direct vendor
of or advisor with respect to cosmetics or facial services to any store which
was a member of a retail group which the Company engaged in business at the time
Ms. Newman's employment terminated, or which was competitive with the business
activities of a business which was using the "Adrien Arpel" name and trademark
under license from ARPEL at the time Ms. Newman's employment with the Company
terminated.
In September 1991, the Company entered into an incentive compensation plan
agreement with Ms. Newman pursuant to which she was entitled to be paid an
annual bonus based on 11% of the annual pre-tax profits (as defined in the
agreement) of ARPEL, for each fiscal year during her employment from August 1,
1991 through July 31, 1994. No bonus compensation was earned for fiscal 1994
since there were no pre-tax profits as calculated. Ms. Newman was also entitled
to receive 1/3 of the revenues from television sales of cosmetics after
deducting direct expenses. For fiscal 1997, 1996, and 1995 she received
$986,488, $3,448,105 and $3,374,990, respectively, from such revenues.
Ms. Langlois has been providing consulting services to the Company at a rate of
$9,600 per annum, commencing in December 1992. This was increased to $16,800 per
annum effective November 1, 1994. These services consisted of legal advice on
contract matters as requested by the Company, were not full time and have now
been terminated by the Company. There was no written agreement between the
Company and Ms. Langlois.
Ms. Fayer was retained to provide consulting services to the Company and ARPEL
commencing November 1, 1994 at an annual rate of $84,000. This was increased to
$290,000 per annum effective May 1, 1995 and $600,000 per annum effective
September 1, 1996. During September 1996, Ms. Fayer was elected President of the
Company and served as Chief Executive Officer from October 1996, when the acting
Chairman of the Board and Chief Executive Officer, Jean Farat, resigned from the
Company, through February 9, 1998, when she resigned. She was responsible for
overseeing the management of the Company. There was no written agreement between
the Company and Ms. Fayer.
Jo Ann Segal was employed pursuant to an agreement dated October 23, 1996. This
agreement terminated on the earlier to occur of (i) October 27, 1997, or (ii)
the termination of Ms. Segal's employment for "good cause" as therein defined.
After October 27, 1997, this agreement could have been terminated on 90 days
prior written notice. During June 1997 the Company terminated Ms. Segal for
"good cause." Ms. Segal served as Senior Vice President/ General Manger of the
Company at an annual base salary of $225,000, plus certain benefits which did
not exceed 10% of her compensation. Ms. Segal was also to receive stock options
for 25,000 shares of the Company's Common Stock valued at the closing price on
the date of the grant with options for 10,000 shares becoming fully exercisable
after being employed by the Company for a period of one year and the remaining
options for 15,000 shares becoming fully exercisable after being employed by the
Company for a period of two years.
Michele Mas was employed pursuant to an employment agreement dated November 1,
1996. This agreement was to terminate on the earlier to occur of (i) November 1,
1998, or (ii) the termination of Ms. Mas' employment for "good cause" as therein
defined. Ms. Mas served as Vice President/Marketing of the Company at an annual
base salary of $144,000, plus certain benefits which do not exceed 10% of her
compensation. During June 1997 Ms. Mas and the Company agreed to cancel the
employment agreement.
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Mr. Ficke is currently earning $125,000 per annum. There is no written
employment agreement between the Company and Mr. Ficke.
Mary Panvini serves as Senior Vice President/General Manager of retail sales of
the Company at an annual base salary of $115,000 plus certain benefits which
exceed 10% of her compensation. There is no written employment agreement between
the Company and Ms. Panvini.
COMPENSATION FOR SERVICE AS DIRECTOR
Each Director who was not also an officer or employee of or consultant to the
Company (Messrs. Desjardins and Korda for fiscal 1996) received $650 per meeting
and $200 for telephonic participation at any meeting conducted by telephone
conference. Directors who are officers or employees of the Company receive no
additional compensation for attendance at Board of Directors or Committee
meetings.
DATED: FEBRUARY 20, 1998 ALFIN, INC.
MICHAEL D. FICKE, SECRETARY
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