<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
|X| Amendment No. 1 to Annual Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 for the
fiscal year ended December 30, 1995
OR
[ ] Transition Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
0-15942
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(Commission File No.)
INTEGRATED BRANDS, INC.
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(Exact name of registrant as specified in its charter)
New Jersey 11-2778439
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4175 Veterans Highway, Ronkonkoma, New York 11779
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(Address of principal executive offices including zip code)
Registrant's Telephone Number, including area code: (516) 737-9700
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, par value $0.01 per share
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes __X__ No _____
The aggregate market value of the registrant's Common Stock held by
non-affiliates as of March 15, 1996 was $8,052,000.
As of March 15, 1996, there were 10,203,288 shares of the registrant's Common
Stock outstanding.
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Item 10 - Directors and Executive Officers of Registrant, Item 11 Executive
Compensation, Item 12 - Security Ownership of Certain Beneficial Owners and
Management and Item 13 - Certain Relationships and Related Transactions, of
Registrant's Annual Report on Form 10-K for the year ended December 30, 1995 are
hereby amended as set forth in the attached pages.
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<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
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The directors and executive officers of the Company and their
ages and positions are as follows:
Name Age Position
---- --- --------
Richard E. Smith 54 Chairman of the Board,
Chief Executive
Officer and Director
Gary P. Stevens 51 President, Treasurer
and Chief Financial
Officer
Gerard M. Tucci 46 Vice President -
Operations,
Secretary
and Director
David M. Smith 29 Vice President
and Director
David J. Stein 35 Vice President
John R. Welty, Jr. 46 Vice President
Karl Eller 67 Director
Benjamin Raphan 58 Director
All directors are serving a current term of office which
continues until the next annual meeting of stockholders.
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Richard E. Smith, has been Chairman of the Board, Chief
Executive Officer and a Director of the Company since October 1985. Mr. Smith
has also been the Chairman of the Board, Secretary and a Director of Calip
Dairies, Inc. for more than the past five years. Calip Dairies, Inc. is a major
distributor of ice cream products in the New York metropolitan area. Calip
Dairies, Inc. also owns the trademark and tradenames of Dolly Madison Ice Cream.
Gary P. Stevens, has been the President of the Company since
June 1990 and Treasurer and Chief Financial Officer since April 1989. He was
Vice Chairman of the Board of the Company from August 1988 until June 1990. Mr.
Stevens became a Director of Swensen's, Inc. in October 1987 and served as
President of Swensen's, Inc. from October 1987 until June 1990.
Gerard M. Tucci, has been the Vice President - Operations and
Secretary of the Company since October 1985 and Director of the Company since
December 1989. Mr. Tucci has also been the Vice President - Operations of Calip
Dairies, Inc. since 1981.
John R. Welty, Jr., has been the President of Swensen's, Inc.
and Vice President of the Company since June 1990. From November 1986 through
October 1987, he was Group Vice President -Corporate Operations and from October
1987 through May 1990, he served as Executive Vice President of Swensen's, Inc.
David M. Smith, has been a Vice President of the Company since
December 1989 and its Executive Director of Marketing and New Product
Development since August 1988. Mr. Smith has been a director of the Company
since September 1993.
David J. Stein, has been a Vice President of the Company since
December 1989 and its Executive Director of Marketing and Advertising since
August 1988.
Karl Eller has been a Director of the Company since September
1993. Since 1992 Mr. Eller has been the President of Eller Outdoor Advertising
Co., Inc., an advertising company, and since 1980 the Chairman of the Board of
Red River Resources, Inc., a holding company. From 1983 through 1990 Mr. Eller
was the Chairman and Chief Executive Officer of The Circle K Corporation, an
owner and operator of convenience stores. The Circle K Corporation filed a
petition under Chapter 11 of the United States Bankruptcy Code in May 1990. From
1980 to 1987 he was the Chairman of the Board of Swensen's, Inc. Mr. Eller
currently serves on the Board of Directors of Inter-Tel, Inc., a telephone
communications company, El Dorado Company, an investment company, and the
Phoenix Suns of the National Basketball Association.
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<PAGE>
Benjamin Raphan has been a Director of the Company since
September 1993. Mr. Raphan has been a partner at Tenzer Greenblatt LLP, the
Company's general counsel, since 1970.
Item 11. Executive Compensation.
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The following table discloses the compensation awarded by the
Company, for the three fiscal years ended December 30, 1995, December 31, 1994
and January 1, 1994 to Mr. Gary P. Stevens, its President and Chief Financial
Officer, Mr. John R. Welty, Jr., the President of Swensen's, Inc. and a Vice
President of the Company, and Mr. David J. Stein, Vice President, and Executive
Director of Marketing and Advertising of the Company, who were the only
executive officers of the Company whose salaries equaled or exceeded $100,000
during the 1995 fiscal year.
Summary Compensation Table
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<TABLE>
<CAPTION>
Annual Long Term
Name and Principal Year Compensation Compensation
- ------------------ ---- ------------------------------- ------------
Position(1) Salary($) Bonus($) Options (#)
- ----------- --------- -------- -----------
<S> <C> <C> <C> <C>
Gary P. Stevens 1995 130,776 -
President, Chief 1994 130,548
Financial Officer and 1993 130,548 20,000 85,000(2)
Treasurer
John R. Welty, Jr. 1995 119,548 -
Vice President, 1994 119,548 -
President of 1993 112,184 50,000(3)
Swensen's Inc.
David J. Stein 1995 102,231
Vice President 1994 57,840
and Executive 1993 53,350 50,000(4)
Director of Marketing
and Advertising
</TABLE>
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(1) Richard E. Smith, the Chairman of the Board and Chief
Executive Officer of the Company, Gerard M. Tucci, the Vice
President-Operations and Secretary of the Company and David
M. Smith, a Vice President of the Company are paid by other
companies affiliated with Mr. Richard Smith. Pursuant to
the terms of the Management Agreement with the Company,
Calip Dairies, Inc., receives a management fee for
providing a portion of the management, administrative and
other personnel as required by the Company. The management
fee for the year ended December 30, 1995 was $891,000. See
Certain Relationships and Related Transactions.
(2) The options to Mr. Stevens were granted on July 18, 1991
with an exercise price of $.6875 per share, subject to
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<PAGE>
vesting over a five-year period as follows: 23,000 shares
in 1991, 17,000 shares in 1992 and 15,000 shares in each of
1993, 1994 and 1995. On July 18, 1991 the Company
cancelled options issued to Mr. Stevens to purchase 10,000
shares at $1.12 per share.
(3) The options to Mr. Welty were granted on July 18, 1991 with
an exercise price of $.6875 per share, subject to vesting
over a five-year period as follows: 14,500 shares in 1991,
10,000 shares in 1992 and 8,500 shares in each of 1993,
1994 and 1995. On July 18, 1991 the Company cancelled
options issued to Mr. Welty to purchase 7,500 shares at
$1.12 per share.
(4) The options to Mr. Stein were granted on July 18, 1991 with
an exercise price of $.6875 per share, subject to vesting
over a five-year period as follows: 13,000 shares in 1991,
10,000 shares in 1992 and 9,000 shares in 1993, 1994 and
1995. On July 18, 1991 the Company cancelled options
issued to Mr. Stein to purchase 5,000 shares at $1.12 per
share.
The following table sets forth information concerning the
value of unexercised stock options held by the named executive officers as of
December 30, 1995. During such fiscal year no stock options were exercised.
Aggregate Year-End Option Values
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<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
December 30,1995 December 30,1995
Shares ------------------------ ----------------
Acquired on Value Rea- Exerci- Unexer- Exerci- Unexer-
Name Exercise (#) lized ($) sable cisable sable cisable
- ---- ------------ ---------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Gary P. - - 85,000 $ 90,312
Stevens
John R. - - 50,000 $ 53,125
Welty, Jr.
David J. - - 50,000 $ 53,125
Stein
</TABLE>
Stock Option Plan
The Company has adopted a Stock Option Plan (the "Plan")
pursuant to which 1,070,000 shares of the Company's Common Stock have been
reserved for issuance to key employees, officers, agents, consultants and others
upon exercise of options designated as "incentive stock options" within the
meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the
"Code"), or "nonqualified options."
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The exercise price of any option which may be granted under
the Plan must not be less than the fair market value of the Company's Common
Stock on the date of grant. With respect to any participant who owns more than
10% of the Company's outstanding voting stock, the exercise price of an
incentive stock option must be not less than 110% of fair market value of the
stock on the date of grant. In the event the Company's Common Stock is not
publicly traded at the time an option is granted, fair market value will be
determined by the Board of Directors or a committee of the Board of Directors.
The Plan contains antidilution provisions authorizing appropriate adjustments in
certain circumstances. Shares of the Company's Common Stock subject to options
which expire without being exercised or which are cancelled as a result of
cessation of employment, are available for further grants.
The Plan is administered by the entire Board of Directors or
by a committee appointed by the Board of Directors. A member of the committee is
not eligible to participate in the Plan while a member of the committee. Options
granted under the Plan are generally exercisable within 5 years from the date of
grant. Options are not transferable or assignable, except upon the death of the
optionee. Options may be exercised only while the optionee is employed by the
Company and, under certain circumstances, for three months thereafter, except
that, in the event of death while employed or within three months after
termination of employment, options may be exercised during a 12-month period
following death. The Company may not, in the aggregate, grant incentive stock
options that are first exercisable by an optionee in any calendar year to the
extent that the aggregate fair market value of the underlying stock (determined
at the date of grant) exceeds $100,000. In July 1991, options for 147,500 shares
at an exercise price of $1.12 per share were cancelled and options to purchase
an aggregate of 479,050 shares were granted under the Plan at an exercise price
of $.6875 per share. Each exercise price was the mean between the bid and asked
market price of said shares at the time of grant. No options were exercised
through April 26, 1996. Messrs. Stevens, Tucci, Welty, Stein and David Smith
received 85,000, 100,000, 50,000, 50,000 and 20,000 options, respectively.
Compensation Committee Interlocks and
Insider Participation In Compensation Decisions
The Company does not have a Compensation Committee of its Board of
Directors or other committee performing similar functions. Decisions as to
compensation are made by the Company's Board of Directors based primarily upon
recommendations made by Mr. Richard E. Smith, the Company's Chairman of the
Board.
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<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
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The following table sets forth certain information regarding the
Common Stock owned on April 26, 1996 (i) by each person who is known by the
Company to own beneficially more than 5% of the Common Stock, (ii) by each of
the Company's directors and (iii) by all directors and officers as a group:
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address Beneficial Percent
of Beneficial Owner Ownership(1) of Class
------------------- ------------ --------
<S> <C> <C>
Richard E. Smith
4175 Veterans Highway
Ronkonkoma, New York 11779................................. 2,547,200 24.9%
Gerard M. Tucci (2)
4175 Veterans Highway
Ronkonkoma, New York 11779................................. 168,568 1.6%
Karl Eller
Red River Resources, Inc.
2122 East Highland Avenue
Suite 425
Phoenix, Arizona 85016...................................... 100,000 1.0%
Benjamin Raphan
c/o Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174................................... 164,100 1.6%
David M. Smith (3)
4175 Veterans Highway
Ronkonkoma, New York 11779................................. 537,000 5.3%
Directors and officers as a
group (8 persons) (4) ...................................... 4,070,729 39.2%
</TABLE>
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(1) A person is deemed to be a beneficial owner of any security of which
that person has the right to acquire beneficial ownership within 60
days. The named individuals have sole voting and investment power with
respect to the shares held by them.
(2) Includes 85,000 shares of stock issuable upon the exercise of stock
options exercisable as of April 26, 1996 issued under the Company's
stock option plan.
(3) Includes 20,000 shares of Stock issuable upon the exercise of stock
options exercisable as of April 26, 1996 issued under the Company's
stock option plan.
(4) Includes 185,000 shares of stock issuable upon the exercise of stock
options held by certain of the Company's executive officers
exercisable as of April 26, 1996 issued under the Company's stock
option plan. Also includes 1,535 shares of Common Stock as to which
one of the executive officers disclaims beneficial ownership.
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<PAGE>
Item 13. Certain Relationships and Related Transactions.
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On September 1, 1994, the Company purchased one million shares of
common stock from Red River Resources, Inc. at the price of $0.70 per share.
Karl Eller, a director of the Company, is the sole stockholder of Red River
Resources, Inc.
On September 1, 1994, the Company purchased one million shares of
common stock from Andal Corp. at the price of $0.75 per share. At the time of
the purchase Andal Corp. owned in excess of 10% of the outstanding Common Stock
of the Company.
The Company has entered into an agreement with Calip Dairies, Inc.
(the "Distributor") terminable on 30 days' notice, to sell to the Distributor at
an agreed upon price, the Company's products for distribution to certain retail
outlets in New York, New Jersey, southern Connecticut and the
Philadelphia-Delaware areas. The Company believes that the price at which the
Company's products are sold to the Distributor is competitive with the prices
generally paid by distributors for similar products in the New York metropolitan
area. Sales of ice cream to the Distributor for the year ended December 30, 1995
were approximately $2,751,000.
Certain officers of the Company are also officers of the Distributor
and will be obtaining customers and site locations for T & W dip shops as well
as for Steve's Ice Cream Stores and Swensen's Ice Cream Shoppes. While the
Company believes that desirable locations for T & W dip shops, Steve's Ice Cream
Stores and Swensen's Ice Cream Shoppes are different for the most part, there
will be some overlap, and there can be no assurance that such decisions will not
adversely affect the Company.
On April 15, 1986, the Company entered into a Management Agreement
with the Distributor which, as extended in April 1992, expires April 15, 1998.
Pursuant to the terms of the Management Agreement, the Distributor will provide
a portion of the management, administrative and other personnel required for the
operation of the Company's business until April 15, 1998. For the services
provided by the Distributor, the Distributor will receive an annual management
fee equal to 10% of the gross revenues of the Company, up to $5,000,000 in gross
revenues, and 2% of gross revenues thereafter up to a maximum annual fee of
$1,000,000. In addition, the Distributor is entitled to receive an additional
incentive management fee equal to 5% of the Company's annual net after tax
income in excess of $3,000,000. While the Management Agreement was not
negotiated at arms' length, the Company believes that the terms of the
Management Agreement are fair. The management fee for the year ended December
30, 1995 was approximately $891,000.
During the year ended December 30, 1995, the Company paid Tenzer
Greenblatt LLP, general counsel to the Company, approximately $141,654 for legal
fees. Mr. Benjamin Raphan, a director of the Company, is a partner in Tenzer
Greenblatt LLP.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to be signed on its behalf
by the undersigned, thereunto duly authorized.
INTEGRATED BRANDS, INC.
Dated: April 26, 1996
---------------------------------
Name: Gary P. Stevens
Title: President
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