UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended JANUARY 31, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-16309
FAMILY BARGAIN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 51-0299573
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4000 RUFFIN ROAD, SAN DIEGO, CALIFORNIA 92123
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 627-1800
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
COMMON STOCK, $0.01 PAR VALUE PER SHARE NONE
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
COMMON STOCK, $0.01 PAR VALUE PER SHARE (THE "COMMON STOCK")
SERIES A 9 1/2% CUMULATIVE PREFERRED STOCK, $0.01 PAR VALUE PER SHARE
("SERIES A PREFERRED")
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
At April 17, 1998, the aggregate market value of the voting stock of the
Registrant held by non-affiliates was approximately $12,336,000.
At April 17, 1998, the Registrant had outstanding 4,929,122 shares of Common
Stock and 33,714 shares of Series B Junior Convertible, Exchangeable Preferred
Stock, par value $0.01 per share ("Series B Preferred").
DOCUMENTS INCORPORATED BY REFERENCE:
None.
NYFS10...:\79\44479\0001\2119\RPT5278X.06B
<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K of Family
Bargain Corporation (the "Company"), amends and restates in their entirety Items
10, 11, 12 and 13 of Part III.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The Board of Directors (the "Board") of the Company is divided into three
classes. Directors are elected, by class, for three-year terms by the holders of
Common Stock and the holders of Series B Preferred. Successors to the class of
directors whose term expires at any annual meeting shall be elected for the next
three-year term. The terms of office expire for Class I in 2000, for Class II in
1998 and for Class III in 1999.
The following table sets forth certain information regarding each director:
EXPIRATION OF
NAME AGE POSITION TERM AS DIRECTOR
- ---- --- -------- ----------------
James D. Somerville...... 56 Director, Chairman of the Board 2000
John J. Borer III........ 39 Director 1999
Peter V. Handal.......... 54 Director 1998
Ronald Rashkow........... 56 Director 1998
Michael Searles.......... 48 Director, President and Chief
Executive Officer for General
Textiles and Factory 2-U (1) 1998
J. William Uhrig......... 36 Director 1998
H. Whitney Wagner........ 41 Director 2000
Thomas G. Weld........... 34 Director 2000
- -----------
(1) General Textiles Inc. ("General Textiles") and Factory 2-U Inc.
("Factory 2-U") are wholly owned operating subsidiaries of the Company.
As the President and Chief Executive Officer of the Company's operating
subsidiaries, Mr. Searles performs policy making functions for the
Company and, pursuant to Rule 3b-7 of the Exchange Act, is considered an
"executive officer" of the Company.
James D. Somerville has been a director and Chairman of the Board of the
Company since February 1997. He has more than 30 years of broad-based experience
in both consulting and general management. Since 1996, Mr. Somerville has headed
his own firm, Somerville & Associates, consulting to senior management and
boards of directors. He also serves as Chairman of the Board of American
Re-Manufacturers, Inc. From 1991 until 1996, he served as Executive Vice
President of BET, Inc. and as a director of BET plc, an international services
conglomerate.
John J. Borer III has been a director of the Company since August 1994. From
October 1991 to March 1998, Mr. Borer was a Managing Director of Rodman and
Renshaw, Inc., an investment banking firm. Since March 1998, Mr. Borer is a
Senior Managing Director of R&R Capital Group.
Peter V. Handal has been a director of the Company since February 1997.
Since 1990, he has been President of COWI International Group (a management
consulting firm). Mr. Handal is also a partner in Carlisle & Handal
International (consultants and advisors on matters relating to international
business), Chief Executive Officer of J4P Associates LP (a real estate
developer), and President of Fillmore Leasing Company,
2
<PAGE>
Inc. (which leases automobiles, computers and warehouse equipment). He serves on
the Board of Directors of Cole National Corporation, Jos. A. Bank Clothiers,
Perry Ellis International and Graham-Field Health Products, Inc.
Ronald Rashkow has been a director of the Company since February 1997. He
has been a principal of Chapman Partners, L.L.C., an investment banking firm,
since its founding in September 1995. For more than five years prior thereto, he
served as Chief Executive Officer and Chairman of the Board of Directors of
Handy Andy Home Improvement Centers, Inc. (a building supply retailer started by
his family in 1946 and consensually liquidated in 1996). Mr. Rashkow is also a
director of Garden Ridge Corporation, a specialty retailing company ("Garden
Ridge"). From 1989 to 1993, Mr. Rashkow was a director, vice president and
consultant to Spirit Holdings Company, Inc. and its two operating subsidiaries,
Central Hardware Company, Inc. and Witte Hardware Corporation (each a retailer
and wholesaler of hardware and building materials). Spirit Holdings Company,
Inc., Central Hardware Company, Inc. and Witte Hardware Corporation filed a
voluntary petition under Chapter 11 of the United States Bankruptcy Code in
March 1993 and emerged from bankruptcy in February 1994.
J. William Uhrig has been a director of the Company since January 1997. Mr.
Uhrig has been a Managing Director of TCR Associates since 1991. Mr. Uhrig
joined TCR Associates in 1984. From January 1993 to January 1998, Mr Uhrig
served on the board of directors of MLX Corp., a holding company ("MLX").
Michael Searles has been a director of the Company and President and Chief
Executive Officer of General Textiles and Factory 2-U since March 1998. Between
May 1996 and June 1997, Mr. Searles held the position of President,
Merchandising and Marketing, at Montgomery Ward Inc. Prior to that, from April
1993 to July 1995, Mr. Searles served as President and Chief Executive Officer
of the Women's Special Retail Group (Casual Corner Group), a division of U.S.
Shoe Corp. Earlier in his career, from 1984 to 1993, Mr. Searles was President
of Kids "R" US, a division of Toys "R" US, Inc.
H. Whitney Wagner has been director of the Company since January 1997. He
has been a Managing Director of TCR Associates since 1989. He joined TCR
Associates in 1983 and was elected a Vice President in 1986. Mr. Wagner also
serves on the boards of directors of Garden Ridge. From January 1993 to January
1998, Mr. Wagner served on the board of directors of MLX.
Thomas G. Weld has been a director of the Company since January 1997. Mr.
Weld has been a Managing Director of TCR since 1993. From 1988 until 1993, Mr.
Weld was an associate with McKinsey and Company, a management consulting firm.
3
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth certain information concerning the executive
officers of the Company, other than Messrs. Searles and Somerville who are
listed in the table above.
OFFICER OF THE
COMPANY AND/OR ITS
NAME POSITION AGE SUBSIDIARIES SINCE
---- -------- --- ------------------
B. Mary McNabb........ Executive Vice President - 49 1990
Merchandising for General
Textiles and Factory 2-U (1)
William F. Cass....... Executive Vice President - 48 1996
Operations for General
Textiles and Factory 2-U (2)
Jonathan W. Spatz..... Executive Vice President and 42 1997
Chief Financial Officer
- -----------------
(1) General Textiles and Factory 2-U are wholly owned operating subsidiaries
of the Company. As Executive Vice-President-Merchandising of the
Company's operating subsidiaries, Ms. McNabb performs policy making
functions for the Company and, pursuant to Rule 3b-7 of the Exchange
Act, is considered an "executive officer" of the Company.
(2) As Executive Vice-President-Operations of General Textiles and Factory
2-U, Mr. Cass performs policy making functions for the Company and,
pursuant to Rule 3b-7 of the Exchange Act, is considered an "executive
officer" of the Company.
B. Mary McNabb is the Executive Vice President of Merchandising of General
Textiles and Factory 2-U. Ms. McNabb joined General Textiles and Factory 2-U in
1990.
William F. Cass is the Executive Vice President of Operations of General
Textiles and Factory 2-U. Mr. Cass joined General Textiles and Factory 2-U in
March 1996. Prior to joining General Textiles and Factory 2-U, Mr. Cass held
positions as Managing Director, Director of New Business Development and Senior
Vice President of Merchandising at Clothestime.
Jonathan W. Spatz is the Executive Vice President and Chief Financial
Officer of the Company. Mr. Spatz joined the Company in June 1997. Prior to
joining the Company, from July 1994 to June 1997, Mr. Spatz was the Chief
Financial Officer of Strouds.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and any persons who own more than ten percent of the
Common Stock or Series A Preferred to file reports of initial ownership of the
Common Stock or Series A Preferred, as the case may be, and subsequent changes
in that ownership with the SEC. Officers, directors and greater than ten percent
beneficial owners are also required to furnish the Company with copies of all
Section 16(a) forms they file. Based solely upon the review of the copies of the
forms furnished to the Company, or written representations from certain
reporting persons that no Forms 5 were required, the Company believes that
during the fiscal year ended January 31, 1998, the Section 16(a) filing
requirements were complied with, except for the following reports which were
filed late by the following persons: Five reports for eleven transactions by
Ronald Rashkow, one report for one transaction by Thomas A. Weld, three reports
for four transactions by William W. Mowbray, four reports for five transactions
by James D. Somerville, one report for one transaction by William J. Uhrig, one
report for two transactions by B. Mary McNabb, two
4
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reports for five transactions by William F. Cass, three reports for four
transactions by James M. Baker, four reports for five transactions by John J.
Borer III and one report for two transactions by Jonathan W. Spatz.
ITEM 11. EXECUTIVE COMPENSATION
The following tables and descriptive materials set forth information concerning
compensation earned for services rendered to the Company and its subsidiaries by
the current and former Chief Executive Officer of the Company, and its four
other most highly compensated executive officers, who were serving as executive
officers of the Company at January 31, 1998, the end of Fiscal 1997.
SUMMARY OF COMPENSATION
The following table summarizes the compensation earned by the Named Executive
Officers during Fiscal 1997, 1996 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------------- ----------------------
AWARDS
OTHER ----------------------
ANNUAL RESTRICTED SECURITIES PAYOUTS ALL OTHER
FISCAL COMPEN- STOCK UNDERLYING LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR(1) SALARY BONUS SATION AWARD(S) OPTIONS/SARS PAYOUTS SATION(2)
- --------------------------- ------- ------ ----- ------ -------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James D. Somerville............ 1997 $137,308 $0 $-(3) $0 257,500 $0 $0
Chairman of the
Board
William F. Cass................ 1997 $199,038 $32,500 $-(3) $0 110,000 $0 $3,900
Executive Vice President - 1996 $110,769 $0 $-(3) $0 10,000 $0 $0
Operations for General
Textiles and Factory 2-U
B. Mary McNabb................. 1997 $197,596 $42,500 $-(3) $0 275,000 $0 $ 900
Executive Vice President - 1996 $168,846 $0 $-(3) $0 7,417 $0 $1042
Merchandising for General 1995 $154,372 $17,832 $-(3) $0 17,583 $0 $789
Textiles and Factory 2-U
Denis LeClair 1997 $145,000 $3,800 $-(3) $0 32,417 $0 $870
Vice President 1996 $138,692 $ 0 $-(3) $0 0 $0 $549
Divisional Marchandise 1995 $109,858 $25,328 $-(3) $0 17,583 $0 $723
Manager for General
Textiles and Factory 2-U
William W. Mowbray............. 1997 $388,328 $125,000 $-(3) $0 652,500 $0 $900
Former President and Chief 1996 $332,078 $0 $-(3) $0 10,000 $0 $900
Executive Officer(4) 1995 $260,345 $224,852 $-(3) $0 100,000 $0 $410
Michael Searles................ 1997 $0 $0 $0 $0 0 $0 $0
President and Chief Executive
Officer of General Textiles
and Factory 2-U(5)
Jonathan W. Spatz.............. 1997 $139,423 $65,000 $-(3) $0 120,000 $0 $3,398
Executive Vice President
and Chief Financial Officer(6)
</TABLE>
5
<PAGE>
(1) In previous years the Company referred to a fiscal year according to the
year in which the fiscal year ended (for example, the fiscal year ended
February 1, 1997 was previously referred to by the Company as Fiscal Year
1997). The Company now refers to the fiscal year as the year in which most
of the activity occurred (for example, the fiscal year ended January 31,
1998 is referred to herein as Fiscal Year 1997).
(2) "All Other Compensation" for 1997 includes (i) contributions made for the
named Executive Officers under the Family Bargain Corporation 401(k)
Savings Plan, a defined contribution plan meeting the requirements of
Section 401(k) of the Internal Revenue Code of 1986, as amended, to match
1997 pre-tax elective deferral contributions (included under "Salary") made
to such plan by the named Executive Officer, (ii) with regards to Mr. Cass
an additional $3,000 paid for moving expenses and (iii) with regards to Mr.
Spatz $3,398 paid for moving expenses.
(3) The aggregate amount of such compensation is less than the lesser of
either $50,000 or 10% of such person's total annual salary and bonus.
(4) Mr. Mowbray was President and Chief Executive Officer of the Company until
his resignation on August 1, 1997.
(5) Mr. Searles was appointed President and Chief Executive Officer of General
Textiles and Factory 2-U in March 1998.
(6) Mr. Spatz was appointed Executive Vice President and Chief Financial
Officer of the Company in June 1997.
GRANTS OF STOCK OPTIONS
The following table sets forth information concerning the award of stock
options to the Named Executive Officers during Fiscal 1997.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES % OF TOTAL ANNUAL RATES OF
UNDERLYING OPTIONS/SARS STOCK PRICE
OPTIONS/SARS GRANTED TO EXERCISE OF APPRECIATION FOR
GRANTED EMPLOYEES IN BASE PRICE OPTION TERM (1)
NAME (#) FISCAL YEAR ($/SH) EXPIRATION DATE 5%($) 10%($)
- ---- --------- --------------- ----------- --------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
William F. Cass....... 110,000 4.05% $ 2.25 4/3/2002 $ 68,200 $ 150,700
Danis LeClair......... 32,417 1.20% $ 2.25 4/3/2002 $ 20,099 $ 44,411
B. Mary McNabb........ 275,000 10.13% $ 2.25 4/3/2002 $170,500 $ 376,750
William W. Mowbray.... 652,500 24.08% $ 2.25 4/3/2002 $404,550 $ 893,925
Michael Searles....... 0 0% $ 0 - $ 0 $ 0
James D. Somerville... 257,500 9.48% $ 2.25 4/3/2002 $159,650 $ 352,775
Jonathan W. Spatz..... 120,000 4.42% $ 2.25 6/24/2002 $ 55,200 $ 140,400
</TABLE>
- ---------------
(1) These amounts represent assumed rates of appreciation only. Actual gains,
if any, on stock option exercises are dependent on the future performance
of the Common Stock and overall stock market conditions.
6
<PAGE>
EXERCISE OF STOCK OPTIONS
The following table sets forth information concerning the exercise of stock
options during Fiscal 1997 by each of the Named Executive Officers and the
fiscal year-end value of unexercised options.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
------------ ------------
AT FY END(#) AT FY END($)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- ------------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C>
William F. Cass.......... 0 0 0/120,000 $0/1,560
Denis LeClair............ 0 0 0/50,000 $0/2,374
B. Mary McNabb........... 0 0 0/300,000 $0/3,900
William W. Mowbray....... 0 0 0/762,500 $0/17,160
Michael Searles.......... 0 0 0/0 $0/0
James D. Somerville...... 0 0 0/257,500 $0/0
Jonathan W. Spatz........ 0 0 0/120,000 $0/0
- ---------------
</TABLE>
COMPENSATION OF DIRECTORS
All directors are reimbursed for any out-of-pocket travel expenses incurred by
them in attending meetings of the Board of Directors or committees thereof.
Directors who are not salaried employees of the Company or TCR receive a $10,000
annual fee payable quarterly and a fee of $1,000 for each meeting of the Board
of Directors attended. In addition, commencing as of June 20, 1997, the three
independent directors of the Company, Messrs. Borer, Handal and Rashkow are
granted at the end of each fiscal quarterly period, options to acquire 1,250
shares of Common Stock, exercisable immediately. The Chairman of the Board is a
salaried employee of the Company and consequently does not receive a director's
fee. There are no other arrangements or agreements pursuant to which any of the
directors are entitled to be compensated for serving as directors.
EMPLOYMENT CONTRACTS WITH NAMED EXECUTIVE OFFICERS AND SEVERANCE ARRANGEMENTS
The Mowbray Separation Agreement. On August 1, 1997 the Company and Mr. William
W. Mowbray entered into a Separation Agreement (the "Separation Agreement"),
whereby Mr. Mowbray resigned from his positions as director and officer of the
Company and the Amended and Restated Employment Agreement, dated February 24,
1997 (the "Employment Agreement"), between Mr. Mowbray and the Company was
terminated. Under the Separation Agreement, Mr. Mowbray agreed that for the
period ending December 31, 2000, he will not, directly or indirectly, compete
with the Company or any of its subsidiaries in any of the States in which the
Company is operating. In consideration therefor, the Company agreed to pay Mr.
Mowbray the following sums: (i) $970,000 to be paid in three installments on
March 30, 1998, March 30, 1999 and August 1, 2000 and (ii) $341,536, $365,444,
$391,025 and $418,396, to paid during the years 1997, 1998, 1999 and 2000,
respectively, in addition to the bonus due for Fiscal 1997 under the Company's
existing bonus plan and payment for accrued and unused vacation days. In the
event of a change of control of the Company, all such amounts mentioned in (ii)
above shall become immediately due and payable.
The Company also agreed to continue to provide Mr. Mowbray with all of the
health, life insurance and automobile benefits set forth in the Employment
Agreement. In addition, the Company agreed to amend the
7
<PAGE>
Secured Promissory Note, which Mr. Mowbray issued to the Company in connection
with his purchase of Series B Preferred, to forgive and waive all interest
payable thereunder.
Mr. Mowbray's stock options were also amended to enable him to exercise fifty
percent (50%) of such options if the market price of the Common Stock exceeds $6
per share for sixty (60) consecutive days and the remaining fifty percent (50%)
of such options if the market price of the Common Stock exceeds $7.50 per share
for sixty (60) consecutive days.
The Searles Employment Agreement. Mr. Michael Searles, General Textiles'
President and Chief Executive Officer and a member of the Company's Board of
Directors, is employed pursuant to a five-year employment agreement, dated March
30, 1990, among the Company, General Textiles and Mr. Searles (the "Searles
Agreement"). Pursuant to the Searles Agreement, Mr. Searles is entitled to
receive an annual salary of not less than $600,000 and (b) an annual bonus
targeted at 50% of the base salary.
In connection with the execution of the Searles Agreement, Mr. Searles was
granted equity compensation in the form of (a) options under the Company's
incentive stock option plan to acquire 300,000 shares of Common Stock at the
closing market price on March 10, 1998. Such options shall vest in equal
increments on the first five anniversaries of the Searles Agreement; (b) options
to acquire 900,000 shares of Common Stock at a price of $2.00 per share of which
options to purchase 450,000 shares shall become exercisable when the closing
market price is equal to or exceeds $6.00 for 60 trading days during any twelve
month period and the options to purchase the remaining 450,000 shares shall
become exercisable when the closing market price is equal to or exceeds $7.50
for 60 trading days during any twelve month period; and (c) 1,400 shares of
Series B Preferred to be purchased by Mr. Searles, the cost of which shall be
loaned to Mr. Searles by the Company. With respect to such 1,400 shares, Mr.
Searles will grant the Company an option to acquire such shares in the event
that Mr. Searles' employment under the Searles Agreement shall be terminated, at
the prices and on the terms described in the Searles Agreement.
The Searles Agreement further provides for the indemnification of Mr. Searles by
the Company if Mr. Searles is made a party to or threatened to be made a party
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer of
the Company, General Textiles or any other affiliate ("Constituent Corporation")
or is or was serving at the request of the Constituent Corporation as a
director, officer, member, employee, fiduciary or agent of another entity.
The Company will obtain officer and director liability insurance policies
covering Mr. Searles in the same aggregate amount and under the same terms as
are maintained by the Company for senior officers and directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Company are Messrs. John J.
Borer III, Ronald Rashkow, James D. Somerville and Thomas G. Weld. Except for
Mr. Somerville, no member of the Compensation Committee of the Board of
Directors of the Company was, during Fiscal 1997, an officer or employee of the
Company or any of its subsidiaries, or was formerly an officer of the Company or
any of its subsidiaries.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Voting Stock as of January 31, 1998: (i) by each
person who is known by the Company to own beneficially more than 5% of the
outstanding shares of the Common Stock or the Series B Preferred; (ii) by each
of the Company's directors; (iii) by each of the Company's executive officers
named in the Summary Compensation Table herein (the "Named Executive Officers");
and (iv) by all directors and executive officers as a group. Except as otherwise
indicated, the Company believes that the beneficial owners of the securities
listed below, based on
8
<PAGE>
information furnished by such owners, have sole investment and voting power with
respect to the Voting Stock shown as being beneficially owned by them.
(a) Security Ownership of Certain Beneficial Owners.
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE
VOTING POWER
OF
COMMON STOCK SERIES B PREFERRED COMMON STOCK
NAME AND ADDRESS NUMBER PERCENT NUMBER PERCENT AND
OF BENEFICIAL OWNER(1) OF SHARES OF CLASS(2) OF SHARES OF CLASS(3) SERIES B PREFERRED(4)
- ---------------------- --------- ----------- --------- ----------- ---------------------
<S> <C> <C> <C> <C> <C>
Three Cities Fund II L.P.(5)......... 231,198 4.7 6,665 19.8 16.5
Three Cities Offshore II C.V.(6)..... 390,978 7.9 11,272 33.4 27.9
TCR Offshore Associates L.P.(6)...... 390,978 7.9 11,272 33.4 27.9
TCR Associates L.P.(5)............... 231,198 4.7 6,665 19.8 16.5
Willem F.P. de Vogel................. 231,198 4.7 6,665 19.8 16.5
Quilvest American Equity, Ltd.(7).... 763,984 14.0 4,484 13.3 13.4
Craigmuir Chambers...................
P.O. Box 71, Road Town
Tortola, British Virgin Islands
Kennedy Capital Management, Inc.(8).. 620,708 12.0 2,580 7.6 8.6
10829 Olive Blvd.
St. Louis, MO 63141
Wynnefield Group(9).................. 278,000 5.64 - - 1.2
c/o Mr. Nelson Obus
One Penn Plaza - Suite 4720
New York, NY 10119
Bank of New York(10)................. - - 2,243 6.7 5.2
as Trustee for
Employees Retirement Plan of
Brooklyn Union Gas Co.
</TABLE>
- --------------------------
1. Except as otherwise indicated, the address of the Beneficial Owners is c/o
Three Cities Research, Inc., 135 East 57 Street, New York, NY 10022. For
information concerning the beneficial ownership of shares by Messrs. J.
William Uhrig, H. Whitney Wagner and Thomas G. Weld, see the following table
concerning Security Ownership of Directors, et al.
2. The percent of the class is calculated pursuant to Rule 13d-3 ("Rule 13d-3")
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), based on 4,929,122 shares outstanding on January 31, 1998.
3. The percent of the class is calculated pursuant to Rule 13d-3, based on
33,714 shares outstanding on January 31, 1998.
4. The percent of aggregate voting power is equal to a fraction, the numerator
of which is the sum of (a) the number of outstanding shares of Common Stock
held by such Beneficial Owner and (b) the number of votes attributable to
the shares of Series B Preferred held by such Beneficial Owner (calculated
by multiplying the number of such shares by 526.093), and the denominator of
which is the sum of (a) the number of shares of Common Stock outstanding and
(b) the total number of votes attributable to the 33,714 shares of Series B
Preferred outstanding (calculated by multiplying the number of such shares
by 526.093).
5. Information obtained from Schedule 13D/A, filed with the Securities and
Exchange Commission (the "SEC") on April 7, 1997 by Three Cities Fund II
L.P. ("Fund II"), TCR Associates L.P. ("TCR Associates"), Willem F.P. de
Vogel and Thomas G. Weld. All shares are held by Fund II. TCR Associates, as
general partner of Fund II, and Mr. de Vogel, as general partner of TCR
Associates, are each deemed, pursuant to Rule 13d-3, to have beneficial
ownership of all shares held by Fund II. Fund II, TCR Associates and Mr. de
Vogel all report shared voting power and shared dispositive power with
respect to such shares. With regard to information concerning the beneficial
ownership of shares of Mr. Thomas G. Weld, see the following table
concerning Security Ownership of Directors, et al.
9
<PAGE>
6. Information obtained from Schedule 13D/A, filed with the SEC on April 4,
1997 by Three Cities Offshore II C.V. ("Offshore II"), TCR Offshore
Associates L.P. ("Offshore Associates"), J. William Uhrig and H. Whitney
Wagner. All shares are held by Offshore II. Offshore Associates as general
partner of Offshore II is deemed, pursuant to Rule 13d-3, to have beneficial
ownership of all shares held by Offshore II. Offshore II and Offshore
Associates report shared voting power and shared dispositive power with
respect to such shares. With regard to information concerning the beneficial
ownership of shares by Messrs. J. William Uhrig and H. Whitney Wagner, see
the following table concerning Security Ownership of Directors, et al.
7. Information obtained from Schedule 13D, filed with the SEC on March 9, 1998
by Quilvest American Equity, Ltd. ("QAE"). The ownership of the Common Stock
includes 538,440 shares of Common Stock issuable upon conversion of 210,000
shares of Series A Preferred at a rate of conversion of 2.564 shares of
Common Stock for each share of Series A Preferred.
8. The ownership of the Common Stock includes 248,708 shares of Common Stock
issuable upon conversion of 97,000 shares of Series A Preferred.
9. Information obtained from Schedule 13D, filed with the SEC on November 7,
1997 by Wynnefield Partners Small Cap Value, L.P. (the "Partnership"),
Wynnefield Small Cap Value Offshore Fund, Ltd. (the "Fund") and Wynnefield
Partners Small Cap Value, L.P. I (the "Partnership I", and, collectively
with the Partnership and the Fund, the "Wynnefield Group"). Wynnefield
Capital Management, LLC, a New York limited liability company ("WCM"), is
the general partner of the Partnership and the Partnership I. Messrs.
Nelson Obus, Joshua Landes and Robert Melnick are the managing members of
WCM and the principal executive officers of Wynnefield Capital, Inc., the
investment manager of the Fund. Pursuant to Rule 13d-4, Messrs. Obus,
Landes and Melnick disclaim beneficial ownership of any shares owned by
the Wynnefield Group and disclaim membership in the Wynnefield Group with
respect to the shares for the purposes of Sections 13(d) and 13(g) of the
Exchange Act.
10. Information obtained from Exhibits 3 and 4 of Schedule 13D/A filed with the
SEC by Terfin International, Ltd. on April 4, 1997. Bank of New York's
address is not specified in such filing.
(b) Security Ownership of Directors, Named Executive Officers and Executive
Officers and Directors as a Group.
<TABLE>
<CAPTION>
PERCENT OF
AGGREGATE
VOTING POWER
OF
COMMON STOCK SERIES B PREFERRED COMMON STOCK
NAME OF NUMBER PERCENT NUMBER PERCENT AND
DIRECTOR/OFFICER OF SHARES OF CLASS(1) OF SHARES OF CLASS(2) SERIES B PREFERRED(3)
---------------- --------- ----------- --------- ----------- ---------------------
<S> <C> <C> <C> <C> <C>
John J. Borer III.................... 255,569 (4) 4.9 90 * 1.3
William F. Cass...................... - - 50 * *
Peter V. Handal...................... 41,697 (5) * 250 * *
Denis LeClair........................ - - - - -
B. Mary McNabb....................... 12,500 * 200 * *
William W. Mowbray(6)................ - - 500 1.5 *
Ronald Rashkow....................... 101,900 (7) 2.0 350 (8) 1.0 1.3
James D. Somerville.................. 19,000 * 750 2.2 *
Jonathan W. Spatz.................... - - 250 * *
Michael Searles(9)................... - - - - -
J. William Uhrig(10)(11)............. 399,952 8.1 11,272 33.4 27.9
H. Whitney Wagner(10)................ 390,978 7.9 11,272 33.4 27.9
Thomas G. Weld(12)................... 238,890 4.8 6,665 19.9 16.5
Officers and Directors as a Group.... 1,069,508 (13) 20.1 20,377 60.4 51.1
</TABLE>
- ------------------------------
* Less than 1%.
1. The percent of the class is calculated pursuant to Rule 13d-3, based on
4,929,122 shares outstanding on January 31, 1998.
2. The percent of the class is calculated pursuant to Rule 13d-3, based on
33,714 shares outstanding on January 31, 1998.
10
<PAGE>
3. The percent of the aggregate voting power is equal to a fraction, the
numerator of which is the sum of (a) the number of outstanding shares of
Common Stock held by such Director or Officer and (b) the number of votes
attributable to the shares of Series B Preferred held by such Director or
Officer (calculated by multiplying the number of such shares by 526.093),
and the denominator of which is the sum of (a) the number of shares of
Common Stock outstanding and (b) the total number of votes attributable to
the 33,714 shares of Series B Preferred outstanding (calculated by
multiplying such number of shares by 526.093).
4. Includes 23,750 shares which Mr. Borer has a right to acquire within 60 days
through the exercise of stock options; 15,896 shares of Common Stock
issuable upon conversion of 6,200 shares of Series A Preferred; and 212,812
shares issuable upon conversion of 83,000 shares of Series A Preferred which
Mr. Borer has the right to acquire within 60 days through the exercise of a
warrant.
5. Includes 3,750 shares which Mr. Handal has a right to acquire within 60 days
through the exercise of stock options and 37,947 shares issuable upon
conversion of 14,800 shares of Series A Preferred held by Mr. Handal.
6. Mr. Mowbray resigned from his position as President and Chief Executive
Officer of the Company in August 1, 1997.
7. Includes 11,000 shares of Common Stock held by members of Mr. Rashkow's
family; 64,612 shares of Common Stock issuable upon conversion of 25,200
shares of Series A Preferred held by Mr. Rashkow; 11,538 shares of Common
Stock issuable upon conversion of 4,500 shares of Series A Preferred held by
members of Mr. Rashkow's family; and 3,750 shares which Mr. Rashkow may
acquire within 60 days through the exercise of stock options.
8. Includes 250 shares of Series B Preferred held by members of Mr. Rashkow's
family.
9. Mr. Searles was appointed Chief Executive Officer of General Textiles and
Factory 2-U in March 1998.
10. Information obtained from Schedule 13D/A, filed with the SEC on April 4,
1997 by Offshore II, Offshore Associates, and Messrs. Uhrig and Wagner. All
shares are held by Offshore II. Messrs. Uhrig and Wagner, in their capacity
as general partners of Offshore Associates, the general partner of Offshore
II, are deemed, pursuant to Rule 13d-3, to have beneficial ownership of all
shares held by Offshore II. Messrs. Uhrig and Wagner both report shared
voting power and shared dispositive power with respect to such shares.
11. Mr. Uhrig's beneficial ownership also includes 8,974 shares issuable upon
conversion of 3,500 shares of Series A Preferred held directly by Mr.
Uhrig.
12. Information obtained from Schedule 13D/A, filed with the SEC on April 7,
1997 by Fund II, TCR Associates and Messrs. de Vogel and Weld. All shares
are held by Fund II. Mr. Weld, in his capacity as general partner of TCR
Associates, the general partner of Fund II, is deemed, pursuant to Rule
13d-3, to have beneficial ownership of all shares held by Fund II. Mr.
Weld reports shared voting power and shared dispositive power with respect
to such shares. Mr. Weld's beneficial ownership also includes 7,692 shares
issuable upon conversion of 3,000 shares of Series A Preferred held
directly by Mr. Weld.
13. Includes 31,250 shares of Common Stock which Officers and Directors of the
Company have the right to acquire within 60 days through the exercise of
stock options; 146,660 shares of Common Stock issuable upon conversion of
57,200 shares of Series A Preferred held by Officers and Directors of the
Company; and 212,812 shares of Common Stock issuable upon conversion of
83,000 shares of Series A Preferred which Mr. Borer has a right to acquire
within 60 days through the exercise of a warrant.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 20, 1997 and June 16, 1997, the Company sold 1,865 shares and 250
shares, respectively, of Series B Preferred to its senior employees and officers
(of which 1000 were sold to the Named Executive Officers) at a purchase price of
$1,000 per share, which was paid in the form of full-recourse notes receivable
secured by the issued stock. The notes accrue interest at 8% per annum and
require principal payments equivalent to 16.25% of the annual bonus of each
purchaser and a balloon payment of the unpaid principal and interest at
maturity. The notes mature in March 2002.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FAMILY BARGAIN CORPORATION
(Registrant)
By: /s/ James D. Somerville
------------------------------
James D. Somerville
Chairman
Date: May 28, 1998
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