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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 2)*
BERNARD CHAUS, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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(Title of Class of Securities)
162510101
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(CUSIP Number)
Josephine Chaus
c/o Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York, Attn: Richard A. Goldberg (212) 758-9500
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
November 22, 1994
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(Date of Event which requires filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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SCHEDULE 13D
CUSIP No. 162510101 Page 2 of Pages
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Josephine Chaus
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF SHARES BENEFICIALLY OWNED BY
EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
14,587,200
8. SHARED VOTING POWER
118,000
9. SOLE DISPOSITIVE POWER
14,587,200
10. SHARED DISPOSITIVE POWER
118,000
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
14,705,200
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
68.4%
14. TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
AMENDMENT NO. 2
BERNARD CHAUS, INC.
This Amendment No. 2 to the Statement on Schedule 13D (as defined below)
amends and restates the Statement on Schedule 13D relating to the event date of
April 5, 1990 (the "Schedule 13D") and the Amendment No. 1 to the Schedule 13D
relating to the event date of October 16, 1992 reported by Josephine Chaus,
each relating to the common stock, par value $0.01 per share (the "Shares") of
Bernard Chaus, Inc., a New York corporation (the "Issuer"). The above-
referenced Schedule 13D, Amendment No. 1 and this Amendment No. 2 are
collectively referred to herein as the "Schedule 13D."
ITEM 1. SECURITY AND ISSUER.
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This Schedule 13D relates to Shares of the Issuer. The principal
executive offices of the Issuer are located at 1410 Broadway, New York, New
York 10018.
ITEM 2. IDENTITY AND BACKGROUND.
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(a) This Schedule 13D is being filed by Ms. Josephine Chaus. Ms. Chaus
is sometimes referred to herein as the "Reporting Person".
(b) - (c) The Reporting Person is the Chairwoman of the Board and
member of the Office of the Chairman of the Issuer. The principal business
address of Ms. Chaus is 1410 Broadway, New York, New York 10018. The principal
business of the Issuer, together with its subsidiaries, is designing, arranging
for the manufacture of, and marketing of four lines of women's apparel in an
extensive selection of styles and sizes.
(d) - (e) During the past five years, the Reporting Person has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). During the past five years, the Reporting Person has not been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding been subject to a judgment,
decree or final order enjoining future violations of, prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) Ms. Chaus is a citizen of the United States.
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
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The Reporting Person purchased an aggregate of 5,833,000 Shares (after
giving effect to a May 1986 stock split) prior to the Issuer becoming a
reporting company.
Each of the Reporting Person and her husband, the late Bernard Chaus,
acquired 13,000 Shares of the Issuer in accordance with purchases made in
reliance upon the exemption set forth in Rule 10b-18 of the rules and
regulations promulgated under the Securities Exchange Act of 1934. The
purchases were made as follows: (i) on March 7, 1990, each of Mr. and Ms. Chaus
purchased 2,400 shares; (ii) on April 4, 1990, each of them purchased 8,550
shares; and (iii) on April 5, 1990, each of them purchased 2,050 shares. All
of such shares were purchased at a price of $3.75 per share, which was the
market price of the shares on each of the dates of purchase. The purchase was
financed with the personal funds of each of Mr. and Ms. Chaus.
On October 16, 1992 the Estate of Bernard Chaus distributed 5,728,100
Shares to the Reporting Person as beneficiary pursuant to the will of Bernard
Chaus.
During fiscal 1994, the Reporting Person provided credit support to the
Issuer in the form of a letter of credit in the aggregate amount of $7,200,000
to assist the Issuer which required availability under its working capital
credit line in excess of the amount available under its borrowing base formula.
The Reporting Person initially provided a letter of credit in the amount of
$3,000,000 on April 15, 1994 which was increased to $5,000,000 on June 14, 1994
and further increased on September 13, 1994 to $7,200,000. In addition, the
expiration date of the letter of credit was extended from October 15, 1994 to
April 15, 1995 (the "Extension").
In consideration for the Reporting Person's provision of credit support to
the Issuer, a special committee of independent members of the Board of
Directors of the Issuer (the "Special Committee"), authorized the issuance to
the Reporting Person, subject to shareholder approval, of (i) warrants to
purchase 338,000 shares of Common Stock at an exercise price of $3.00 per share
(the "$3.00 Warrants") for the initial $3 million letter of credit; (ii)
warrants to purchase 206,000 shares of Common Stock at an exercise price of
$2.25 per share (the "$2.25 Warrants") for the $2 million increase in the
letter of credit; (iii) warrants to purchase 32,500 shares of Common
Stock at an exercise price of $4.62 per share (the "$4.62 Warrants") for the
$2.2 million increase in the letter of credit; and (iv) warrants to purchase
640,000 shares of Common Stock at an exercise price of $4.62 per share for the
Extension (the "Extension Warrants"). The exercise prices of the $3.00
Warrants and $2.25 Warrants represent a 20% premium over the closing price of
the Common Stock on the New York Stock Exchange on April 15, 1994 and June 23,
1994, respectively,
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the dates when the Special Committee approved the issuance of such warrants.
The exercise prices of the $4.62 Warrants and the Extension Warrants represent
a 20% premium over the average closing price of the Issuer's Common Stock on
the New York Stock Exchange over the five trading day period commencing
September 27, 1994 (i.e., subsequent to the public announcement of Andrew
Grossman's employment by the Issuer as the new Chief Executive Officer and two
trading days after the announcement of the Issuer's 1994 fiscal year results).
In approving such warrants, the Special Committee sought the advice of
Lehman Brothers, which provided its view as to the commercial reasonableness of
the transaction. The Issuer's shareholders approved the issuance of the
warrants at the Annual Meeting of Shareholders held on November 22, 1994.
In order to provide additional equity to the Issuer, to enhance the
Issuer's balance sheet and accommodate the Issuer's bank, the Reporting Person
agreed to purchase and the Special Committee agreed to sell, 1,914,500 shares
of Common Stock of the Issuer at a purchase price equal to $3.85 per share (the
five trading day average of the closing sale price of the Issuer's Common Stock
commencing September 27, 1994). Pending shareholder approval of her purchase
of the shares of Common Stock, the Reporting Person loaned $7,200,000 to the
Issuer and the Issuer issued promissory notes in the aggregate principal amount
of $7,200,000 (the "Notes") to the Reporting Person, bearing interest at 12%.
The sale of the shares were approved by the shareholders at the Issuer's 1994
Annual Meeting of Shareholders held on November 22, 1994. The Notes were
exchanged for the shares of Common Stock effective upon the date of such
approval.
In approving the sale of the shares of Common Stock to the Reporting
Person, the Special Committee sought the advice of Lehman Brothers, which
provided its view as to the commercial reasonableness of the transaction.
ITEM 4. PURPOSE OF TRANSACTION.
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Ms. Chaus intends to hold all the Shares owned by her for investment
purposes and to review her investment from time to time. Ms. Chaus has no
current plans or proposals which relate to or would result in any of the
subjects covered in paragraphs (a) through (j) of Item 4. Ms. Chaus reserves
the right to acquire additional shares of common stock, to dispose of shares of
common stock, or to formulate other purposes, plans or proposals regarding the
Issuer to the extent deemed advisable in light of her general investment
policies, market conditions and other factors.
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
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(a) The aggregate number of Shares beneficially owned by the
Reporting Person is 14,705,200 Shares or approximately 68.4% of the number of
Shares outstanding. The 14,705,200 Shares beneficially owned by the Reporting
Person include 1,216,500 Shares purchasable upon the exercise of the warrants
described in Item 3 hereof.
(b) The Reporting Person has the sole power to vote, direct the vote
or dispose of 14,587,200 Shares. She shares power to vote, direct the vote or
dispose of the ownership of 118,000 Shares held by her as co-trustee for her
children.
(c) All transactions in the Shares that were effected by the
Reporting Person since the most recent filing on Schedule 13D are set forth in
Item 3 hereof.
(d)-(e) Not applicable.
ITEM 6. CONTRACTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
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The warrants described in Item 3 hereof are exercisable upon the effective
date of issuance (November 22, 1994) and will expire five years from such date.
The warrants will contain customary antidilution provisions. The Reporting
Person has agreed to forfeit a pro rata portion of the Extension Warrants if
the Letter of Credit is terminated before April 15, 1995.
On September 1, 1994 the Reporting Person entered into a letter agreement
(the "Letter Agreement"), with Andrew Grossman, the Issuer's new Chief
Executive Officer, pursuant to which she agreed to vote all her shares in favor
of, among other things, a bonus plan in favor of and the grant of options to
Mr. Grossman at the Annual Meeting of Shareholders of the Issuer held on
November 22, 1994. The Letter Agreement is hereby incorporated herein by this
reference.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
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Exhibit A -Letter Agreement dated September 1, 1994 between Josephine
Chaus and Andrew Grossman
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Signature
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.
Dated: December 7, 1994
/s/ Josephine Chaus
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Josephine Chaus
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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A Letter Agreement dated September 1,
1994 between Josephine Chaus and
Andrew Grossman
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Exhibit A
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JOSEPHINE CHAUS
c/o Bernard Chaus, Inc.
1410 Broadway
New York, New York 10018
September 1, 1994
Andrew Grossman
210 East 65th Street
Apartment 14D
New York, New York 10021
Dear Mr. Grossman:
In connection with the employment agreement (the "Agreement")
between Bernard Chaus, Inc. (the "Company") and you dated of even date herewith
and in consideration of the mutual covenants, agreements and undertakings set
forth therein, I agree, on behalf of myself and my heirs, executors and
administrators of my estate and my successors and assigns, to vote all of my
shares of common stock of the Company in favor of the following proposals which
the Company has agreed in the Agreement to present for a vote of shareholders
at the next annual meeting of shareholders (or in the case of (i) below, each
annual meeting held during the term of the Agreement):
(i) your re-election to the Company's board of directors;
(ii) a bonus plan providing for your Net Profit Participation (as
defined in Section 5(a) of the Agreement);
(iii) the grant of options to you to purchase 1,500,000 shares of
Common Stock as set forth in the first sentence of Section 8 of the Agreement;
and
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(iv) the grant of additional options to you to purchase 1,500,000
shares of Common Stock as set forth in the second sentence of Section 8 of the
Agreement.
I represent and warrant to you that as of the date hereof, I have the
power to vote in excess of 50% of issued and outstanding shares of common stock
of the Company.
Very truly yours,
/s/Josephine Chaus
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Josephine Chaus
Accepted and Agreed to:
/s/ Andrew Grossman
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Andrew Grossman
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