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
28, 1996
OR
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
0-15942
(Commission File No.)
INTEGRATED BRANDS INC.
(Exact name of registrant as specified in its charter)
New Jersey 11-2778439
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4175 Veterans Highway, Ronkonkoma, New York 11779
(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
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 27, 1997 was $6,036,424.
As of March 25, 1997, there were 10,103,288 shares of the registrant's Common
Stock outstanding.
<PAGE>
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 28, 1996 are
hereby amended as set forth in the attached pages.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
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 47 Vice President -
Operations,
Secretary
and Director
David M. Smith 30 Vice President
and Director
David J. Stein 36 Vice President
John R. Welty, Jr. 47 Vice President
Karl Eller 68 Director
Benjamin Raphan 59 Director
All directors are serving a current term of office which continues until
the next annual meeting of stockholders.
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.
<PAGE>
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.
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.
The following table discloses the compensation awarded by the Company, for
the three fiscal years ended December 28, 1996, December 30, 1995 and December
31, 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 $100,000 during the 1996
fiscal year.
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long Term
Name and Principal Year Compensation Compensation
- ------------------ ---- -------------------------------- ------------
Position(1) Salary($) Bonus($) Options (#)
- ----------- --------- -------- -----------
<S> <C> <C> <C> <C>
Gary P. Stevens 1996 133,635 106,250(2)
President, Chief 1995 130,776 --
Financial Officer and 1994 130,548 --
Treasurer
John R. Welty, Jr. 1996 119,548 62,500(3)
Vice President, 1995 119,548 --
President of 1994 119,548 --
Swensen's Inc.
David J. Stein 1996 110,640 62,500(4)
Vice President 1995 102,231 --
and Executive 1994 57,840 --
Director of Marketing
and Advertising
</TABLE>
- ----------
(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 28, 1996 was $999,000. See --- Certain Relationships
and Related Transactions.
(2) The options to Mr. Stevens were granted on July 18, 1996 with an exercise
price of $.9375 per share and are fully vested. On July 18, 1996 options
issued to Mr. Stevens in prior years to purchase 85,000 shares at $.6875
per share expired.
(3) The options to Mr. Welty were granted on July 18, 1996 with an exercise
price of $.9375 per share and are fully vested. On July 18, 1996 options
issued to Mr. Welty in prior years to purchase 50,000 shares at $.6875 per
share expired.
(4) The options to Mr. Stein were granted on July 18, 1996 with an exercise
price of $.9375 per share and are fully vested. On July 18, 1996 options
issued to Mr. Stein to purchase 50,000 shares at $.6875 per share expired.
<PAGE>
The following table sets forth information concerning the value of
unexercised stock options held by the named executive officers as of December
28, 1996. During such fiscal year no stock options were exercised.
Aggregate Year-End Option Values
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
December 28, 1996 December 28, 1996
Shares ----------------------- ---------------------
Acquired on Value Rea- Exerci- Unexer- Exerci- Unexer-
Name Exercise (#) lized ($) sable cisable sable cisable
- ---- ------------ ---------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Gary P. -- -- 106,250 -- -- --
Stevens
John R. -- -- 62,500 -- -- --
Welty, Jr.
David J. -- -- 62,500 -- -- --
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."
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
<PAGE>
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 1996, options for 543,600 shares at an exercise
price of $.6875 per share expired and options to purchase an aggregate of
459,000 shares were granted under the Plan at an average exercise price of $.90
per share. No options were exercised through April 23, 1997. Messrs. Stevens,
Welty, Stein and David Smith received 106,250, 62,500, 62,500 and 25,000
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.
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information regarding the Common
Stock owned on April 23, 1997 (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 25.21
Gerard M. Tucci
4175 Veterans Highway
Ronkonkoma, New York 11779............................................. 83,568 0.82
Karl Eller (2)
Eller Media Group
2850 E. Camelback Road
Suite 300
Phoenix, Arizona 85016.................................................. 100,000 0.99
Benjamin Raphan
c/o Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174............................................... 164,100 1.62
David M. Smith (3)
4175 Veterans Highway
Ronkonkoma, New York 11779............................................. 542,000 5.34
Directors and officers as a
group (8 persons) (4) .................................................. 4,057,783 39.16
</TABLE>
- ----------
(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 100,000 shares of stock issuable upon the exercise of stock
options.
(3) Includes 25,000 shares of Stock issuable upon the exercise of stock options
exercisable as of April 23, 1997 issued under the Company's stock option
plan.
(4) Includes 256,250 shares of stock issuable upon the exercise of stock
options held by certain of the Company's executive officers exercisable as
of April 23, 1997 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.
<PAGE>
Item 13. Certain Relationships and Related Transactions.
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 28, 1996
were approximately $2,333,000.
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 28, 1996 was approximately
$999,000.
During the year ended December 28, 1996, the Company paid Tenzer Greenblatt
LLP, general counsel to the Company,
<PAGE>
approximately $101,000 for legal fees. Mr. Benjamin Raphan, a director of the
Company, is a partner in Tenzer Greenblatt LLP.
<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 28, 1997 /s/ Gary P. Stevens
--------------------------------
Name: Gary P. Stevens
Title: President
