<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
BARRY'S JEWELERS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (set forth the amount on which
the filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
BARRY'S JEWELERS, INC.
111 WEST LEMON AVENUE
MONROVIA, CALIFORNIA 91016
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 4, 1997
------------------------
TO THE SHAREHOLDERS OF BARRY'S JEWELERS, INC.:
The 1997 Annual Meeting of Shareholders of Barry's Jewelers, Inc., a
California corporation (the "Company"), will be held at The Wyndham Garden
Hotel, Salon E, 700 W. Huntington Drive, Monrovia, California on Tuesday,
November 4, 1997, at 11:00 a.m. local time, to consider and vote on the
following matters:
1. To elect a Board of Directors to serve until the next annual meeting of
shareholders and until their successors are elected and qualified; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof (the "Meeting").
October 3, 1997 has been fixed as the record date for shareholders entitled
to notice of and to vote at the Meeting, and only holders of record of shares of
the Company's Common Stock at the close of business on that day will be entitled
to receive notice of and to vote at the Meeting.
All shareholders are cordially invited to attend the Meeting. To insure
your representation at the Meeting, whether or not you plan to attend, you are
urged to complete and promptly return the enclosed proxy, which is solicited by
the Board of Directors, in the return envelope provided. Returning your proxy
does not deprive you of your right to attend the Meeting and to vote your shares
in person, should you desire to do so.
By Order of the Board of Directors
October 14, 1997
Monrovia, California
PLEASE DATE AND SIGN THE ACCOMPANYING PROXY CARD AND MAIL IT PROMPTLY IN
THE ENCLOSED ENVELOPE.
<PAGE> 3
BARRY'S JEWELERS, INC.
111 WEST LEMON AVENUE
MONROVIA, CALIFORNIA 91016
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 4, 1997
INTRODUCTION
This Proxy Statement (the "Proxy Statement") is furnished to the holders of
common stock (the "Common Stock") of Barry's Jewelers, Inc., a California
corporation (the "Company"), in connection with the solicitation of proxies for
use at the Annual Meeting of Shareholders to be held at The Wyndham Garden
Hotel, Salon E, 700 W. Huntington Drive, Monrovia, California on Tuesday,
November 4, 1997, beginning at 11:00 a.m. local time, and at any adjournment or
postponement thereof (the "Meeting"), for the purposes set forth in the
preceding notice. A form of proxy for use at the Meeting is also enclosed. The
Company anticipates first mailing this Proxy Statement to its shareholders on or
about October 14, 1997.
Only shareholders of record of the Company's Common Stock at the close of
business on October 3, 1997 (the "Record Date") will be entitled to notice of
and to vote at the Meeting. On the Record Date there were 4,029,372 shares of
Common Stock outstanding.
On May 11, 1997, the Company filed a voluntary petition for reorganization
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in
the United States Bankruptcy Court (the "Bankruptcy Court") for the Central
District of California (In re Barry's Jewelers, Inc., Case No. LA 97-27988-VZ)
(the "Bankruptcy Filing"). The Company is currently operating as a
debtor-in-possession under the Bankruptcy Code.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Each shareholder is entitled to one vote, in person or by proxy, for each
share of Common Stock held by such shareholder on the Record Date on all matters
that properly come before the Meeting, except that in the election of directors
each shareholder has cumulative voting rights and is entitled to cast a number
of votes equal to the number of shares held by the shareholder on the Record
Date multiplied by the number of directors to be elected, which votes may be
cast for a single candidate or distributed among any or all of the candidates.
However, no shareholder shall be entitled to cumulate votes for any candidate
unless the shareholder, or any other shareholder, has given notice at the
Meeting prior to the voting of his intention to cumulate his votes. The
candidates receiving the highest number of votes, up to the number of directors
to be elected, will be elected. At this time, the holders of proxies do not
intend to cumulate the votes that they will hold unless the required notice by a
shareholder is given at the Meeting, in which case the proxy holders may
cumulate the proxies held by them. The persons authorized to vote shares
represented by executed proxies in the enclosed form (if authority to vote for
the election of directors is not withheld) will have full discretion and
authority to vote cumulatively and to allocate votes among any or all of the
Board of Directors' nominees as they may determine or, if authority to vote for
a specified candidate or candidates has been withheld, among those candidates
for whom authority to vote has not been withheld. Voting on all matters that may
properly come before the Meeting other than the election of directors will be on
a non-cumulative basis. The presence at the Meeting, in person or by proxy, of
the holders of a majority of the outstanding shares of the Company's
<PAGE> 4
Common Stock entitled to vote is necessary to constitute a quorum for the
transaction of business at the Meeting.
A proxy may be revoked by filing with the Secretary of the Company a
written notice of revocation or a duly executed proxy bearing a later date, or
by attending the Meeting and voting in person. Attendance in person at the
Meeting does not itself revoke an otherwise valid proxy; however, any
shareholder who attends the Meeting may orally revoke his proxy at the Meeting
and vote in person. All properly executed proxies received prior to or at the
Meeting and not revoked will be voted at the Meeting in accordance with the
instructions indicated on such proxies. If no instructions are indicated, such
proxies will be voted FOR the election of the Board of Directors' nominees as
directors. In addition, the proxy holders will vote in their sole discretion
upon such other business as may properly come before the Meeting.
This solicitation of proxies is being made by the Board of Directors of the
Company (the "Board"), and the cost of the solicitation will be borne by the
Company. The principal solicitation of proxies is being made by mail, except
that, if necessary, directors, officers and regular employees of the Company may
make solicitations of proxies personally or by telephone or telegraph, but such
persons will not be specially compensated for such services. The Company may
reimburse brokers, banks, custodians, nominees and fiduciaries for their
reasonable charges and expenses in forwarding proxies and proxy materials to the
beneficial owners of such shares.
ELECTION OF DIRECTORS
The number of directors constituting the Board of Directors is presently
set at eight, and currently there are seven members of the Board with one of
such positions being vacant. Effective as of the date of the Meeting, and
pursuant to the authority granted the Board in the Company's Bylaws, the number
of directors constituting the Board of Directors will be set at seven. All seven
of the Company's directors to be elected at the Meeting will hold office until
the next Annual Meeting of Shareholders, or until their respective successors
are elected and qualified. Each of the Board nominees set forth below has
consented to being named in this Proxy Statement and to serve if elected. The
holders of proxies may not vote such proxies for a greater number of persons
than seven.
It is the intention of the holders of proxies, unless authorization to do
so is withheld, to vote FOR the election of the Board nominees listed below.
However, the persons authorized to vote shares represented by executed proxies
in the enclosed form (if authority to vote for the election of directors is not
withheld) will have full discretion and authority to vote cumulatively and to
allocate votes among any or all of such nominees as they may determine or, if
authority to vote for a specified candidate or candidates has been withheld,
among those candidates for whom authority to vote has not been withheld. If
prior to the Meeting any such nominee should become unavailable for election, an
event which is not now anticipated by the Board, the proxies will be voted for
the election of such person or persons as shall be determined by the holders of
proxies in accordance with their judgment.
Under California law and the Company's Bylaws, the nominees receiving the
highest number of affirmative votes of the shares entitled to vote shall be
elected directors. Since there is no particular percentage of either the
outstanding shares or the shares represented at the Meeting required to elect a
director, abstentions and broker nonvotes will have the same effect as the
failure of shares to be represented at the Meeting, except that the shares
subject to such abstentions or non-votes will be counted in determining whether
there is a quorum for taking shareholder action.
BOARD OF DIRECTORS' NOMINEES
Set forth below is biographical information for each of the Board nominees.
David W. Cochran, 51, has been a director of the Company since June 1992.
From December 1978 to November 1994, Mr. Cochran was President, Chief Executive
Officer and a Principal of R.F. Simmons Company, Inc., a jewelry manufacturer.
From November 1994 to October 1995, Mr. Cochran was President and Chief
Executive Officer of Simmons & Company, Inc., a jewelry manufacturer. Mr.
Cochran is currently
2
<PAGE> 5
the President and Chief Executive Officer of Riverbank Associates, Inc., a real
estate investment company, which position he has held since December 1995, and
the Chairman of Page Walker & Co., a jewelry manufacturer, which position he has
held since January 1993. Mr. Cochran is a consultant to G. Austin Young Co., dba
Attleboro Jewelry Makers, a retail outlet representing 20 jewelry and gift
manufacturers.
William D. Eberle, 74, has been Chairman of the Company since August 1996.
Mr. Eberle has been Chairman of Manchester Associates, Ltd., a venture capital
and international consulting firm since 1977, and of counsel to the law firm of
Kaye, Scholer, Fierman, Hays & Handler since 1993. From 1989 to 1993, Mr. Eberle
was of counsel to the law firm of Donovan, Leisure, Newton & Irvine. Mr. Eberle
is presently Chairman of America Service Group, Inc. and of Showscan
Entertainment, Inc., Deputy Chairman of Mid-States Plc, and a director for Ampco
Pittsburgh Corp., FAC Realty, Inc., Horace Small Apparel Company Plc, Mitchell
Energy and Development Corp. and Sirrom Capital Corporation.
John W. Gildea, 54, has been a director of the Company since August 1996.
Since September 1990, Mr. Gildea has been an advisor to The Network Funds, a
series of investment funds. From 1986 to 1990, Mr. Gildea was the manager of the
Corporate Services Group of Donaldson, Lufkin & Jenrette Securities Corporation.
Mr. Gildea is presently a Managing Director of Gildea Management Company, an
investment management company, which position he has held since 1990, and a
director of America Service Group, Inc., FAC Realty, Inc., UNC, Inc., and
General Chemical.
Carol R. Goldberg, 66, has been a director of the Company since November
1996. Ms. Goldberg is currently President of the Avcar Group, Ltd., an
investment and management consulting firm, which position she has held since
December 1989. Ms. Goldberg previously served as Chief Operating Officer of The
Stop & Shop Companies, Inc., a retailing company, from 1982 to November 1989, as
its President from October 1985 to November 1989, as its Executive Vice
President from 1982 to 1985, and as its Senior Vice President -- Manufacturing
from 1979 to 1982. Ms. Goldberg is currently a director of The Gillette Company,
America Service Group, Inc., and SelfCare, Inc. and is Senior Advisor of New
England for America International Group, Inc.
Samuel J. Merksamer, 56, has been the Company's President and Chief
Executive Officer, and a director, since February 1997. Before joining the
Company, Mr. Merksamer was the President and Chief Executive Officer of
Merksamer Jewelers, Inc. from 1992 to June 1996. Merksamer Jewelers, Inc. was
previously involved as a debtor-in-possession in reorganization proceedings
under Chapter 11 of the Bankruptcy Code, emerging from such proceedings in 1992.
Cleaveland D. Miller, 58, has been a director of the Company since June
1992. Mr. Miller is presently a partner with the law firm of Semmes, Bowen &
Semmes. Mr. Miller is a director of EA Engineering, Science, and Technology,
Inc. Since 1988, Mr. Miller has been Chairman of Legal Mutual Liability
Insurance Society of Maryland. Mr. Miller served as President of the Maryland
State Bar Association from 1987 to 1988.
William P. O'Donnell, 43, has been a director of the Company since August
1996. Since 1992, Mr. O'Donnell has been an advisor to The Network Funds, a
series of investment funds. From 1990 to 1992, Mr. O'Donnell was a Vice
President in the Corporate Finance Group of Chrysler Capital Corporation, a
finance company. Mr. O'Donnell is presently a Managing Director of Gildea
Management Company, a position he has held since 1992.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During the Company's fiscal year ended May 31, 1997 ("Fiscal 1997"), the
Board held an aggregate of six regularly scheduled and special meetings. No
incumbent director attended fewer than 75% of the aggregate number of meetings
of the Board and meetings of any committee upon which any such director served.
The Audit Committee of the Board currently consists of William P.
O'Donnell, who acts as such committee's Chairman, and David W. Cochran, John W.
Gildea, Cleaveland D. Miller and Carol R. Goldberg. It held six meetings during
Fiscal 1997. The functions of the Audit Committee are, among other things, to
recommend to the Board selection of the Company's independent accountants, to
review the scope
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<PAGE> 6
and results of the year-end audit with the independent accountants, and to
review the Company's internal accounting and financial controls and reporting
systems and practices.
The Compensation Committee of the Board currently consists of Carol R.
Goldberg, who acts as such committee's Chairman, and David W. Cochran, John W.
Gildea, Cleaveland D. Miller and William P. O'Donnell. It held six meetings
during Fiscal 1997. The functions of the Compensation Committee are, among other
things, to make recommendations to the Board concerning compensation plans and
salaries of the Company's officers and other key personnel and to administer the
Company's stock option, incentive stock, employee stock purchase and bonus
plans.
THE BOARD RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE NOMINEES.
EXECUTIVE OFFICERS
The following individuals currently serve as the Company's executive
officers.
Samuel J. Merksamer, 56, has been the Company's President and Chief
Executive Officer, and a director, since February 1997. Additional biographical
information regarding Mr. Merksamer is set forth under the caption "Election of
Directors -- Board of Directors' Nominees."
E. Peter Healey, 44, has been the Company's Executive Vice President, Chief
Financial Officer and Secretary since February 1997. From 1994 to 1996, Mr.
Healey was the Vice President, Chief Financial Officer, Secretary and Treasurer
of MS Financial, Inc. From 1985 to 1993, Mr. Healey was Vice President and
Treasurer of Zale Corporation. Zale Corporation was previously involved as a
debtor-in-possession in reorganization proceedings under Chapter 11 of the
Bankruptcy Code, emerging from such proceedings in 1993.
Randy N. McCullough, 45, has been the Company's Senior Vice President -
Merchandise since April 1997. Prior to joining the Company, Mr. McCullough
served as President of Silverman's Factory Jewelers from 1991 to March 1997.
Bill R. Edgel, 31, has been the Company's Vice President - Marketing since
February 1997. Prior to joining the Company, Mr. Edgel served as Director of
Credit Marketing of Macy's West, a division of Federated Department Stores, from
1996 to 1997. From 1995 to 1996, Mr. Edgel served as Director of Marketing for
Merksamer Jewelers, Inc. Merksamer Jewelers, Inc. was previously involved as a
debtor-in-possession in reorganization proceedings under Chapter 11 of the
Bankruptcy Code, emerging from such proceedings in 1992. From 1993 to 1995, Mr.
Edgel served as Advertising Manager/Creative Director for Troutman's Emporium,
Inc. From 1992 to 1993, Mr. Edgel served as Partner/Creative Director of Vaki
Advertising, Inc.
Daniel L. Felsenthal, 40, has been the Company's Vice President - Finance
since October 1996 and its Vice President - Finance, Treasurer and Assistant
Secretary since April 1997. Prior to joining the Company, Mr. Felsenthal served
as the Controller for Quarterdeck Corporation during 1996. From 1990 to 1996,
Mr. Felsenthal was employed by Mac Frugal's Bargains - Close-outs Inc., serving
as its Controller from 1991 to 1994, and as its Vice President - Finance from
1994 to 1996.
Chad C. Haggar, 34, has been the Company's Vice President - Operations
since February 1997. Prior to joining the Company, Mr. Haggar served as Director
of Stores of Fred Meyer, Inc. from 1996 to 1997. From before 1992 to 1996, Mr.
Haggar served as Regional Manager of Merksamer Jewelers, Inc. Merksamer
Jewelers, Inc. was previously involved as a debtor-in-possession in
reorganization proceedings under Chapter 11 of the Bankruptcy Code, emerging
from such proceedings in 1992.
4
<PAGE> 7
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, information as to
the beneficial ownership of the Company's Common Stock by (i) each person who is
known by the Company to own beneficially more than 5% of its outstanding shares
of Common Stock, (ii) each of the Company's directors and director nominees,
(iii) each of the officers named in the Summary Compensation Table under the
caption "Compensation of Directors and Executive Officers -- Executive
Compensation," and (iv) all executive officers and directors of the Company as a
group. In each instance, information as to the number of shares owned and the
nature of ownership has been provided by the person or entity identified or
described and is not within the direct knowledge of the Company.
<TABLE>
<CAPTION>
AMOUNT PERCENT
BENEFICIALLY OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED (1) CLASS
--------------------------------------------------------- ------------ -------
<S> <C> <C>
Robert W. Bridel......................................... 22,000 **
500 W. Harbor Drive, Apt. 124
San Diego, CA 92101
Thomas S. Liston......................................... -- **
14518 Las Brizas Lane
Sun City, AZ 85375
Samuel J. Merksamer*..................................... -- **
Joseph M. Maisano........................................ -- **
14 Creekview Street
Sanger, TX 76266
William D. Eberle*....................................... 82,600(3) 2.0%
David W. Cochran*........................................ 3,600(2) **
Carol R. Goldberg*....................................... 400(2) **
Cleaveland D. Miller*.................................... 3,600(2) **
John W. Gildea........................................... 595,600(4) 14.8%
115 East Putnam Avenue
Greenwich, CT 06830
William P. O'Donnell..................................... 535,600(5) 13.3%
115 East Putnam Avenue
Greenwich, CT 06830
Network Fund III, Ltd.................................... 525,000(6) 13.0%
P.O. Box 219, Butterfield House
Grand Cayman, Cayman Islands, B.W.I.
Gary Gelman.............................................. 456,700(7) 11.3%
One Jerico Plaza
Jerico, NY 11753
J. Ezra Merkin........................................... 325,000(8) 8.1%
450 Park Avenue
New York, NY 10022
All executive officers and directors as a group (12
persons)............................................... 697,400 17.1%
</TABLE>
- ---------------
(1) To the Company's knowledge, except as otherwise set forth in this table, the
persons and entities in this table have sole voting, investment and
dispositive power with respect to all shares of Common Stock shown as
beneficially owned by them, subject to community property laws where
applicable.
(2) All of such shares are issuable upon the exercise of currently-exercisable
options outstanding under the Company's 1994 Stock Option Plan (the "1994
Stock Option Plan"), which is administered by the Compensation Committee of
the Board.
(3) 15,000 of such shares are issued and outstanding. 35,000 of such shares are
issuable upon the exercise of currently-exercisable options. 32,000 of such
shares are restricted shares, as to which Mr. Eberle has sole voting power.
600 of such shares are issuable upon the exercise of currently-exercisable
options
5
<PAGE> 8
outstanding under the Company's 1994 Stock Option Plan, which is
administered by the Compensation Committee of the Board. See "Compensation
of Directors and Executive Officers -- Directors."
(4) 600 of such shares are issuable upon the exercise of currently-exercisable
options outstanding under the Company's 1994 Stock Option Plan, which is
administered by the Compensation Committee of the Board. With respect to the
remaining 595,000 of such shares, pursuant to an amended Schedule 13D filed
by Mr. Gildea under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), dated June 11, 1996, as of such date Mr. Gildea had sole voting
and dispositive power as to 70,000 of such shares and shared dispositive
power with Network Fund III, Ltd. as to 525,000 of such shares.
(5) 600 of such shares are issuable upon the exercise of currently-exercisable
options outstanding under the Company's 1994 Stock Option Plan, which is
administered by the Compensation Committee of the Board. With respect to the
remaining 535,000 of such shares, pursuant to a Form 3 filed by Mr.
O'Donnell under the 1934 Act dated September 10, 1996, as of such date Mr.
O'Donnell had sole voting and dispositive power as to 10,000 of such shares
and shared dispositive power with Network Fund III, Ltd. as to 525,000 of
such shares.
(6) The Network Fund III, Ltd. has shared dispositive power with Mr. Gildea and
Mr. O'Donnell as to such shares. See footnotes 4 and 5 above.
(7) As set forth in an amended Schedule 13D filed by Mr. Gelman under the 1934
Act dated January 15, 1997, as of such date Mr. Gelman had sole voting and
dispositive power with respect to all such shares.
(8) As set forth in a Schedule 13D filed by Mr. Merkin under the 1934 Act dated
May 22, 1996, as of such date Mr. Merkin had sole voting and dispositive
power as to 20,475 of such shares, shared voting and dispositive power with
Gabriel Capital, L.P. as to 126,425 of such shares, and shared voting and
dispositive power with Ariel Management Corp. as to 178,100 of such shares.
* Address is c/o Barry's Jewelers, Inc., 111 West Lemon Avenue, Monrovia,
California 91016.
** Less than one percent.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
The Company pays each of its non-employee directors (including any
non-employee director holding an officer's title with the Company but who is not
separately compensated for serving in such position) an annual retainer fee of
$18,000, plus, for serving on either committee of the Board, an additional
$1,500 (or $4,500 for the chairman of each committee); except that, in lieu of
such retainer and committee fees, the Company pays its Chairman of the Board
$100,000 annually. In addition to such retainer and committee fees, under the
Company's 1994 Stock Option Plan, each director who is newly elected or added to
the Board and who at the time thereof is not an employee of the Company is
automatically granted an option to purchase 2,000 shares of Common Stock at such
time, and each non-employee director is further granted an option to purchase
1,000 shares of Common Stock as of the date of each Annual Meeting of
Shareholders at which such director is re-elected (including at the date of the
Meeting). All such options have an exercise price equal to the market price of
the Common Stock on the date of grant. Directors are also reimbursed for
reasonable expenses incurred in connection with attending meetings of the Board
and its committees.
On November 5, 1996, the Compensation Committee granted Mr. Eberle, the
Company's Chairman, in his capacity as an active Chairman of the Board, the
following options: (i) options to purchase 35,000 shares of the Company's Common
Stock, immediately exercisable, at an exercise price of $2.50 per share, the
fair market value of the Common Stock on such date, and (ii) options to purchase
50,000 shares of the Company's Common Stock at an exercise price of $2.50 per
share, the fair market value of the Common Stock on such date, 25,000 of which
become exercisable if the Company reports earnings of at least $1.00 per share
during Fiscal 1997 or its 1998 fiscal year, and 25,000 of which become
exercisable if the Company reports earnings of at least $2.00 per share during
such periods. On February 7, 1997, in recognition of the decline in price of the
Company's Common Stock, the Compensation Committee awarded Mr. Eberle 32,000
6
<PAGE> 9
shares of restricted stock based on a formula reflecting such decline. Such
restricted stock vests as to 16,000 of such shares if the Company reports
earnings per share of at least $1.00 for its 1998 fiscal year, and as to all of
such shares if the Company reports earnings per share of at least $2.00 or more
for its 1998 fiscal year.
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
for services during each of the Company's last three fiscal years to (i) those
persons serving as chief executive officer of the Company during Fiscal 1997 and
(ii) two additional executive officers of the Company during Fiscal 1997 who
would have been among the four most highly compensated executive officers during
Fiscal 1997 but who were not serving as such at the end of Fiscal 1997 (none of
the Company's executive officers during Fiscal 1997 serving as such at the end
of Fiscal 1997 earned an annual salary and bonus exceeding $100,000).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION -------------------------
----------------------------------- SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION STOCK OPTIONS/ COMPENSATION
PRINCIPAL POSITION YEAR(1) ($) ($) ($)(2) AWARDS(S)($) SARS(#) ($)
- ---------------------------- ------- ------- ------ ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Samuel J. Merksamer 1997(3) 98,462 -- -- -- --
President and Chief 1996 -- -- -- -- -- --
Executive Officer 1995 -- -- -- -- -- --
Robert W. Bridel 1997 231,250 8,231(4) -- -- -- 113,511(5)
Former President 1996 261,126 31,386(6) -- 34,375(7) 110,000 2,795(8)
and Chief Executive 1995 200,000 51,343(6) -- -- 15,000 --
Officer
Thomas S. Liston 1997 213,462 8,231(4) -- -- -- 80,721(5)
Former Chief Financial 1996 279,396 31,386(6) -- 34,375(7) 100,000 2,795(8)
Officer, Secretary and 1995 225,000 62,513(6) -- -- 15,000 --
Treasurer
Joseph M. Maisano 1997 124,308 -- -- -- -- 16,833(6)
Former Senior Vice 1996 155,369 -- -- -- 15,000 --
President -- Operations 1995 -- -- -- -- 4,000 --
</TABLE>
- ---------------
(1) "1997," "1996," and "1995" represent fiscal years ended May 31, 1997, 1996
and 1995, respectively.
(2) Excludes perquisites, other personal benefits, securities and property,
which, in the aggregate, did not exceed in any year shown the lesser of
$50,000 or 10% of the total annual salary and bonus reported for such
individual for such year.
(3) All compensation shown for Mr. Merksamer dates from February 13, 1997.
(4) Represents bonus payments paid to Messrs. Bridel and Liston during Fiscal
1997, in connection with their resignations from the Company, for payments
made with respect to taxes due upon vesting of 5,000 of their respective
10,000 shares of restricted stock. See "Employment Agreements and
Change-in-Control Arrangements."
(5) Represents (i) with respect to Mr. Bridel, $60,580 in vacation pay, $50,000
in severance pay, auto lease payments of $1,155, and $1,776 of group
insurance benefits, (ii) with respect to Mr. Liston, $32,463 in vacation
pay, $46,154 in severance pay, auto lease payments of $595, and $1,509 of
group insurance benefits, and (iii) with respect to Mr. Maisano, $16,338 in
vacation pay and auto lease payments of $495.
(6) Represents bonus payments pursuant to the Company's cash bonus plans for
fiscal 1996 (the "1996 Plan") and fiscal 1995 (the "1995 Plan"). The 1996
Plan provided for the payment of bonuses to participants from a pool of up
to 15% of the Company's pre-tax, pre-bonus earnings (the "Pre-Bonus
Earnings") for the fiscal year ending May 31, 1996, except that no awards
were to be made if the amount of Pre-Bonus Earnings was less than
$3,000,000. The 1995 Plan provided for the payment of bonuses to
participants from a pool of up to 15% of the Company's Pre-Bonus Earnings
for the fiscal year ending May 31, 1995, except that no awards were to be
made if the amount of Pre-Bonus Earnings was less than
7
<PAGE> 10
$2,000,000. With respect to the 1996 Plan and the 1995 Plan, 90% of the pool
amount was awarded based on the participation weight assigned in such plan
to each participant and 10% was awarded to participants in the discretion of
the Compensation Committee after consultation with the Chief Executive
Officer.
(7) Reflects the value of a 10,000 share restricted stock grant made as of April
8, 1996 to each of Messrs. Bridel and Liston based on the market value of
such stock as of the date of issuance (without giving effect to the
diminution in value attributed to restrictions on such shares). See
"Employment Contracts and Change-in-Control Arrangements."
(8) Represents Company contributions on behalf of Messrs. Bridel and Liston
under the Company's Deferred Compensation Plan.
OPTION/SAR GRANTS IN FISCAL 1997
None of those persons serving as chief executive officer of the Company
during Fiscal 1997 or any other executive officer of the Company named in the
Summary Compensation Table under the caption "Compensation of Directors and
Executive Officers -- Executive Compensation" was issued any option to acquire
the Company's Common Stock during Fiscal 1997.
AGGREGATED 1997 OPTION/SAR EXERCISES
AND YEAR-END OPTION VALUES
No stock options were exercised during or held at the end of Fiscal 1997 by
any of those persons serving as chief executive officers of the Company during
Fiscal 1997 or any other executive officer of the Company named in the Summary
Compensation Table under the caption "Compensation of Directors and Executive
Officers -- Executive Compensation."
EMPLOYMENT AGREEMENTS AND CHANGE-IN-CONTROL ARRANGEMENTS
During Fiscal 1997 until their resignations on February 13, 1997, Robert W.
Bridel served as the Company's President and Chief Executive Officer and Thomas
S. Liston served as the Company's Chief Financial Officer, Secretary and
Treasurer. Both Messrs. Bridel and Liston served in such capacities under
employment agreements with the Company (the "Agreements") dated April 8, 1996,
the initial terms of which extended through April 8, 1998. The Agreements
provided for annual salaries of $325,000 and $300,000 to Messrs. Bridel and
Liston, respectively. Under the Agreements, Mr. Bridel and Mr. Liston received
options to purchase 35,000 shares and 25,000 shares, respectively, of the
Company's Common Stock, and restricted stock awards of 10,000 shares each, the
vesting of such options and stock awards to occur one-half on each of the first
and second anniversary dates of such Agreements (provided, with respect to the
stock awards, that such executive officer remained employed by the Company on
each such anniversary date). The Agreements contained certain severance
provisions, and in connection with the resignations from the Company of Messrs.
Bridel and Liston, the Company and each of Messrs. Bridel and Liston entered
into severance agreements, under which the following benefits are payable to or
on behalf of Messrs. Bridel and Liston: (i) $371,250.00 and $342,692.33,
respectively, representing salary from February 17, 1997 through April 8, 1998,
(ii) $8,230.63 to each representing bonuses in respect of tax obligations with
respect to 5,000 shares of restricted stock that vested as to each on February
13, 1997 (the "Resignation Date"), (iii) $3,082.50 and $2,464.62, respectively,
representing accrued vacation, (iv) reimbursement of the cost of their electing
to continue to be included in the Company's medical insurance plan from the
Resignation Date through April 8, 1998 (totaling $5,769.69 and $4,519.48,
respectively), (v) payment of fees of an outplacement services firm up to
$25,000 each, (vi) inclusion in the Company's life insurance and disability
plans from the Resignation Date through April 8, 1998 and (vii) continuation of
automobile-related benefits from the Resignation Date through April 8, 1998
(totaling $8,086.54 and $8,321.32, respectively).
Simultaneously with the resignation of Mr. Bridel as President and Chief
Executive Officer of the Company, the Company retained Samuel J. Merksamer as
its President and Chief Executive Officer. Effective February 13, 1997, the
Company and Mr. Merksamer entered into a non-binding letter of intent
8
<PAGE> 11
under which they agreed, among other things, to negotiate a definitive
employment contract by May 15, 1997. The Bankruptcy Court has authorized the
Company to enter into employment agreements with Mr. Merksamer and with certain
other executive officers of the Company, a summary description of certain terms
of which is set forth under the caption "Compensation Committee
Report -- Implementation of Philosophy."
COMPENSATION COMMITTEE REPORT
COMPENSATION PHILOSOPHY
The Compensation Committee of the Board is responsible for developing and
implementing the Company's executive compensation policies. The Compensation
Committee's philosophy of executive compensation is to enhance the profitability
of the Company, and thus shareholder value, by closely aligning the financial
interests of the executive officers with those of the shareholders.
IMPLEMENTATION OF PHILOSOPHY
Generally, the Compensation Committee seeks to realize this objective by
the use of short term incentives in the form of salary and cash bonuses, and
long term incentives in the form of stock option and restricted stock grants.
Salaries initially are set based on the executive officer's experience and
competitive conditions. Thereafter, salaries may be adjusted based on various
factors, including the executive's performance. In setting and making
adjustments to salaries, the Compensation Committee also considers salaries paid
to similarly situated executive officers in comparable companies.
Consistent with the foregoing, in February 1997, after a nationwide search
for a management team capable of analyzing the reasons for the Company's poor
performance and developing and executing a plan to improve such performance, the
Compensation Committee approved compensation terms for each of Messrs. Merksamer
and Healey. Effective February 13, 1997, the Company entered into a non-binding
letter of intent with each of Mr. Merksamer and Mr. Healey to employ Mr.
Merksamer as President and Chief Executive Officer of the Company and Mr. Healey
as Executive Vice President, Chief Financial Officer and Secretary of the
Company.
Prior to the Bankruptcy Filing, the Compensation Committee began to
re-evaluate the Company's executive employment needs in the context of potential
formal or informal reorganization proceedings. As a result of such reevaluation,
and recognizing the decline in the value of non-cash compensation in the form of
equity in the Company, the difficulties to be faced by its executives in an
attempt to lead the Company out of any such proceedings and the importance of
retaining key executives during such proceedings, the Compensation Committee
determined that it was in the best interests of the Company to enter into
employment agreements with such executives. At a hearing of the Bankruptcy Court
held on September 24, 1997, the Bankruptcy Court authorized the Company to enter
into employment agreements (the "Employment Agreements") with Mr. Merksamer and
each of Messrs. Healey, McCullough, Haggar and Edgel (each an "Executive"). Upon
entry of the related Bankruptcy Court order, the Company will enter into such
Employment Agreements, which extend through confirmation of a plan of
reorganization of the Company. Set forth below is a summary of certain other
terms of such Employment Agreements.
9
<PAGE> 12
CERTAIN TERMS OF EMPLOYMENT AGREEMENTS
<TABLE>
<CAPTION>
PLAN OF REORGANIZATION CONFIRMATION BONUS
(AS A PERCENTAGE OF ANNUAL BASE SALARY)(2)
-------------------------------------------------
MAXIMUM ANNUAL IF CONFIRMA- IF CONFIRMA-
CASH BONUS (AS TION OCCURS ON TION OCCURS ON
A OR AFTER OR AFTER
PERCENTAGE OF MAY 1, 1998 JULY 1, 1998
ANNUAL IF CONFIRMATION THROUGH AND AND PRIOR TO
ANNUAL BASE BASE OCCURS PRIOR TO INCLUDING SEPTEMBER 30,
EXECUTIVE/TITLE SALARY SALARY)(1) MAY 1, 1998 JUNE 30, 1998 1998
- -------------------------------- ----------- -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Samuel J. Merksamer............. $ 400,000 100% 125% 100% 75%
President and Chief Executive
Officer
E. Peter Healey................. $ 275,000 75% 125% 100% 75%
Executive Vice President,
Chief Financial Officer and
Secretary
Randy N. McCullough............. $ 225,000 60% 125% 100% 75%
Senior Vice President --
Merchandising
Chad C. Haggar.................. $ 165,000 50% 125% 100% 75%
Vice President -- Operations
Bill R. Edgel................... $ 120,000 33% 125% 100% 75%
Vice President -- Marketing
</TABLE>
- ---------------
(1) Such bonuses are payable as follows: (i) 50% thereof are payable if the
Company achieves projected earnings before interest, taxes, depreciation and
amortization for its 1998 fiscal year, (ii) 10% thereof are payable if the
Company meets or exceeds its November 30, 1997 projected inventory levels,
(iii) 10% thereof are payable if the Company meets or exceeds its December
31, 1997 projected cash deposit, receivable and inventory levels, (iv) 10%
thereof are payable if the Company meets its December 31, 1997 projected
general and administrative expenses, (v) 10% thereof are payable if, as of
February 1998, there is total availability under the borrowing base in the
Company's revolving credit facility (as modified by the cash collateral
stipulation filed with the Bankruptcy Court) plus total cash balances of at
least $4.1 million, and payables are maintained within agreed upon vendor
terms, and (vi) the remaining 10% are payable upon receipt from vendors of
1.4 times the amount of inventory returned by November 1997 and at the end
of February 1998.
(2) A condition to the payment of such bonus will require that the Company have
an asset-based, working capital credit facility on market terms on the
confirmation date of a plan of reorganization.
Under the Employment Agreements, if an Executive's employment is terminated
by the Company without cause, by the Executive with good reason (including a
sale of the Company under the Bankruptcy Code), due to an Executive's death or
disability, or as a result of the confirmation of a plan of reorganization, such
Executive is entitled to receive (i) accrued annual base salary and vacation,
(ii) his maximum annual cash bonus if (A) the fiscal year end 1998 performance
targets have been achieved (provided that such target will be prospectively
applicable with respect to termination resulting from confirmation of a plan
prior to the end of such fiscal year) or (B) in the event of a Change-in-Control
(as defined below) of the Company at a time when the Company is a going concern
or the death or disability of an Executive if any applicable performance
conditions have been met, and (iii) if such termination without cause or with
good reason occurs prior to confirmation of a plan of reorganization of the
Company, his confirmation bonus. If the Executive's employment is terminated by
the Company for cause (i.e., malfeasance or misfeasance) or by the Executive
without good reason, such Executive is entitled to receive accrued annual base
salary and vacation, but no annual cash bonus or confirmation bonus (if such
termination occurs prior to confirmation). Under the Employment Agreements, a
"Change-in-Control" includes the dissolution or liquidation of the Company, a
reorganization, merger or consolidation of the Company with one or more
corporations in which the Company is not the surviving entity or as a result of
which the Company's outstanding voting securities are converted to
10
<PAGE> 13
or reclassified as cash, securities of another corporation or other property, a
sale of assets of the Company or its subsidiaries having a fair market value
equal to more than 50% of the total fair market value of the Company's assets to
a nonaffiliate of the Company, or the acquisition of more than 30% of the
then-outstanding voting securities of the Company by a nonaffiliate.
1997 COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The base salary of the Company's Chief Executive Officer is established
through negotiations between the Compensation Committee and such Chief Executive
Officer. Until his resignation on February 13, 1997, Robert W. Bridel was the
Company's Chief Executive Officer. In setting Mr. Bridel's annual salary and
incentive compensation for Fiscal 1997, the Compensation Committee considered
numerous factors, including Mr. Bridel's previous salary level, his experience
and his overall performance. Samuel J. Merksamer succeeded Mr. Bridel as the
Company's President and Chief Executive Officer. In setting Mr. Merksamer's
annual salary and incentive compensation for Fiscal 1997, the Compensation
Committee considered numerous factors, including Mr. Merksamer's extensive
experience in the jewelry industry, his prior success in turning around troubled
companies and the market rate for presidents and chief executive officers with
knowledge and experience commensurate to that of Mr. Merksamer. Based on these
factors, and after negotiations between the Compensation Committee and Mr.
Merksamer, the Compensation Committee established Mr. Merksamer's compensation
terms in the non-binding letter of intent referred to above. After the
Compensation Committee's re-evaluation of the Company's executive employment
needs in the context of potential formal or informal reorganization proceedings,
and after additional negotiations between the Compensation Committee and Mr.
Merksamer, the Compensation Committee established Mr. Merksamer's compensation
terms as reflected in his Employment Agreement described above.
THE COMPENSATION COMMITTEE
Carol R. Goldberg, Chairman
David W. Cochran
John W. Gildea
Cleaveland D. Miller
William P. O'Donnell
11
<PAGE> 14
PERFORMANCE GRAPH
Set forth below is a comparison of the yearly percentage change in total
shareholder return of the Company's Common Stock and the returns for the CRSP
Total Return Index for the Nasdaq Stock Market and the Nasdaq Retail Stocks. The
total shareholder return calculation is for the five-year period commencing on
June 1, 1992 and includes the reinvestment of dividends.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Barry's Nasdaq Retail
<S> <C> <C> <C>
1992 100 100 100
1993 236.36 120.29 99.56
1994 145.45 126.64 100.99
1995 87.27 150.64 103.01
1996 116.36 218.96 141.43
1997 11.82 246.71 136.59
</TABLE>
Note: Assumes $100 invested on May 31, 1992 in Barry's Jewelers, Inc., CRSP
Total Return Index for the Nasdaq Stock Market and the Nasdaq Retail
Stocks. Assumes reinvestment of dividends on a daily basis.
12
<PAGE> 15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
David Blum and Gerson I. Fox, each a current shareholder and former officer
and director of the Company, presently own and lease to the Company, through a
partnership, the Company's headquarters building. In May 1990, the Company moved
into the new headquarters office building that allowed the Company to
consolidate all corporate credit, collection, merchandising and administrative
functions into a single location for more efficient management and to allow
future growth. The building is a special-purpose building built to the Company's
specifications. The base annual rent for the first five years was $574,284.
Currently, the base annual rent is $643,476. On the 121st month, the rent may be
increased based on a cost-of-living index. The Company is responsible for
leasehold improvements, insurance, property taxes, maintenance and repairs. The
lease has a 15-year term, but the Company has the right to terminate the lease
earlier (the "Early Termination Right"), provided that the Company gives six
months' notice and pays $15,000 for each month remaining in the 15-year term
after the effective date of such termination. In connection with certain
consulting agreements between the Company and each of Messrs. Blum and Fox (each
of which expired on May 31, 1995) and a financing secured by the leased
premises, and at the request of the lessor, the Company agreed in 1995 to waive
such Early Termination Right. The Company believes that the terms of the
foregoing lease are presently above market, and is currently negotiating with
the lessor so as to revise such terms to more closely reflect current market
conditions (although no assurances can be given that the Company will be
successful in such negotiations).
William D. Eberle, the Company's Chairman, is of counsel to the law firm of
Kaye, Scholer, Fierman, Hays & Handler LLP, which firm provided certain legal
services to the Company during Fiscal 1997.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has examined the financial statements of the Company
for the fiscal year ended May 31, 1997. The Board has not yet made a
determination regarding the selection of the independent certified public
accountants for fiscal 1998. A representative of Deloitte & Touche LLP is
expected to be present at the Meeting, with the opportunity to make a statement
if the representative desires to do so. That representative is also expected to
be available to respond to appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the 1934 Act, the officers and directors of the
Company and certain shareholders beneficially owning more than 10% of the
Company's Common Stock ("Ten Percent Shareholders") are required to file with
the Securities and Exchange Commission and the Company reports of ownership, and
changes in ownership, of Company Common Stock. During Fiscal 1997, Ms. Goldberg
did not file, as of the required date, a report on Form 4 regarding her purchase
of 10,000 shares of the Company's Common Stock in November 1996. Such report was
subsequently filed in compliance with Section 16(a). Except for the foregoing,
based solely on a review of the reports received by it, the Company believes
that, during Fiscal 1997, all of its officers and directors and Ten Percent
Shareholders complied with all applicable filing requirements under Section
16(a).
OTHER
The Company does not know of any other business to be presented at the
Meeting and does not intend to bring any other matters before the Meeting.
However, if any other matters properly come before the Meeting, the persons
named in the accompanying proxy are empowered, in the absence of contrary
instructions, to vote according to their best judgment.
SHAREHOLDER PROPOSALS
If a shareholder wishes to present a proposal at the next Annual Meeting of
Shareholders, such a proposal must be received by the Company at its principal
executive offices prior to June 16, 1998.
13
<PAGE> 16
ANNUAL REPORT
The Company is delivering with this Proxy Statement a copy of its Annual
Report to Shareholders for Fiscal 1997. However, it is not intended that the
Annual Report to Shareholders be a part of this Proxy Statement or a
solicitation of proxies.
By Order of the Board of Directors
Monrovia, California
October 14, 1997
PLEASE PROMPTLY VOTE, DATE, SIGN AND RETURN THE ENCLOSED PROXY, WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING. A RETURN ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES. PROMPT
RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED. AT ANY TIME BEFORE
A VOTE YOU MAY REVOKE YOUR PROXY BY (1) A LATER PROXY OR A WRITTEN NOTICE OF
REVOCATION DELIVERED TO THE INSPECTOR OF ELECTIONS OR (2) ADVISING THE INSPECTOR
OF ELECTIONS AT THE MEETING THAT YOU ELECT TO VOTE IN PERSON. ATTENDANCE AT THE
MEETING WILL NOT IN AND OF ITSELF REVOKE A PROXY.
THE ANNUAL MEETING IS ON NOVEMBER 4, 1997. PLEASE RETURN YOUR PROXY IN
TIME.
14
<PAGE> 17
PROXY BARRY'S JEWELERS, INC.
111 WEST LEMON AVENUE, MONROVIA, CALIFORNIA 91016
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of BARRY'S JEWELERS, INC., a California
corporation (the "Company"), hereby appoints Samuel J. Merksamer and E. Peter
Healey and each or either of them, the proxy or proxies of the undersigned, with
full power of substitution to such proxy and substitute, to vote all shares of
Common Stock of the Company that the undersigned is entitled to vote at the
Annual Meeting of Shareholders of the Company to be held at The Wyndham Garden
Hotel, Salon E, 700 W. Huntington Drive, Monrovia, California, at 11:00 a.m.,
local time, November 4, 1997 and all adjournments and postponements thereof with
authority to vote said stock on the matters set forth below:
The Board of Directors recommends a vote FOR Item 1.
1. ELECTION OF DIRECTORS. David W. Cochran, William D. Eberle, John W. Gildea,
Carol R. Goldberg, Samuel J. Merksamer,
Cleaveland D. Miller and William P. O'Donnell.
[ ] FOR all nominees listed above, except that a vote shall be withheld from
the following nominee(s) (insert names, if any)
- --------------------------------------------------------------------------------
[ ] WITHHOLD AUTHORITY to vote for all nominees.
This proxy also grants to the proxyholders the discretionary power to vote
the shares of Common Stock represented cumulatively for one or more of the
above nominees other than those (if any) for whom authority to vote is
withheld above.
15
<PAGE> 18
2. In their discretion, the proxyholders will vote upon such other business
as may be properly brought before the meeting and each adjournment or
postponement thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF EACH NOMINEE FOR DIRECTOR.
Dated: 1997
-----------------,
------------------------
(Signature)
------------------------
(Signature)
Please sign your name exactly as
it appears on the left.
executors, administrators,
trustees, guardians, attorneys
and agents should give their
full titles and submit evidence
of the appointment unless
previously furnished to the
Company or its transfer agent.
All joint owners should sign.
PLEASE MARK, DATE, SIGN AND RETURN USING THE ENCLOSED ENVELOPE.
YOUR PROMPT ATTENTION WILL BE APPRECIATED.
16
