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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 26, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
===============================================================================
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
LILLIAN VERNON CORPORATION
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(Exact name of Registrant as specified in its character)
DELAWARE 13-2529859
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Theall Road, Rye, New York 10580-1450
-----------------------------------------
(Address of Principal Executive Office)
EMPLOYEE STOCK PURCHASE PLAN
----------------------------
(Full Title of Plan)
Lillian Vernon
--------------
(Chairman and Chief Executive Officer)
Lillian Vernon Corporation
One Theall Road
Rye, New York 10580-1450
(914) 925-1200
-------------------------------------------------------
(Name, address including zip code and telephone number,
including area code, of agent for service).
Copies to:
Alan M. Rashes, Esq.
Salon, Marrow & Dyckman, LLP
685 Third Avenue
New York, New York 10017
------------------------
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class Amount to be Proposed Maximum Proposed Amount of
of Securities to be Registered Offering Price Maximum Registration
Registered ------------- Per Share Aggregate Fee
- ------------------- ---------------- Offering Price ------------
--------------
<S> <C> <C> <C> <C>
Common Stock, $.01 100,000 (1)(2) $17.75(3) $1,775,000 $523.63
</TABLE>
- ------------------
(1) Represents the shares issuable to employees under the Employee Stock
Purchase Plan.
(2) Includes an indeterminable number of shares of common stock which may
become issuable pursuant to the anti-dilution provisions of the Plan.
(3) Calculated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) based upon the closing price of the Common Stock as
reported by the American Stock Exchange (the "AMEX") on August 25, 1998.
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LILLIAN VERNON CORPORATION
Cross Reference Sheet Pursuant to Rule SK 501(b) Between Registration Statement
(Form S-8) and Section 10(a) Prospectus.
Item Number and Caption Heading in Prospectus
----------------------- ---------------------
1. (a) General Plan Information Cover, Prospectus
Summary, The Company,
Cover
(b) Securities to be Offered Cover
(c) Employees Who May Participate Eligibility
(d) Purchase of Securities Securities Covered by
Pursuant to the Plan and the Prospectus, Payment
Payment for Securities Offered Periods and Option Price
(e) Resale Restrictions Not Applicable
(f) Tax Effects of Federal Income Tax
Plan Participation Consequences
(g) Investment of Funds Not Applicable
(h) Withdrawal from the Plan, Not Applicable
Assignment of Interest
(i) Forfeitures and Penalties Termination of Rights
(j) Charges and Deductions Not Applicable
and Liens Therefor
2. Information with Respect Available Information,
to the Registrant The Company
3. Incorporation of Certain Documents Incorporated
Information by Reference by Reference
4. Description of Securities Securities Covered by the
Prospectus, Part II
5. Interests of Named Experts Legal Matters, Part II
and Counsel
6. Indemnification of Directors Indemnification of
and Officers Directors and Officers,
Part II
7. Exemption from Registration Not Applicable
Claimed
8. Exhibits Part II
9. Undertakings Part II
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PROSPECTUS
Lillian Vernon Corporation
$ .01 Par Value
This Prospectus relates to the offering of a maximum 100,000 shares of
Common Stock to employees of Lillian Vernon Corporation, as described in the
Employee Stock Purchase Plan.
Securities Covered by Prospectus
100,000 shares of Common Stock $ .01 par value, under the Employee
Stock Purchase Plan.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
No dealer, salesman or other person has been authorized to give any
information or to make any representations, other than as contained in this
Prospectus, in connection with the offering described herein, and information
or representations not herein contained in this Prospectus, and if given or
made, must not be relied upon as having been authorized by the Company, or
anyone who may be an underwriter with respect to such offering. This Prospectus
does not constitute an offer to sell, or the solicitation of an offer to buy
the securities offered hereby in any state to any person to whom it is unlawful
to make such offer or solicitation, except where otherwise indicated herein.
This Prospectus speaks as of its date and neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of the Company
since the date hereof.
-----------------
The date of this Prospectus is August 26, 1998.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-8 together with all
amendments (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Common Stock described in
this Prospectus and of which this Prospectus forms a part. Such Registration
Statement and the exhibits thereto can be inspected and copied at the Public
Reference Room of the Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act'), and in
accordance therewith, files reports and other information with the Commission.
Such reports, proxy statements and other information filed by the Company with
the Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices located at 7 World Trade
Center, New York, New York 10048; and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Statements herein concerning the contents of any contract or other
document are not necessarily complete, and in each instance reference is made
to such contract or other document filed with the Commission as an exhibit to
the Registration Statement, or otherwise, each such statement being qualified
and amplified in all respects by such reference.
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<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
more detailed information appearing elsewhere in this Prospectus.
THE COMPANY
Lillian Vernon Corporation (the "Company"), a Delaware corporation, is
a direct mail specialty catalog company concentrating on the marketing of gift,
household, gardening, kitchen, Christmas and children's products. The Company,
a predecessor of which was founded in 1951, seeks to provide customers with
reasonably priced products that can be differentiated from competitive
products, either by design, price or personalization. In fiscal 1998, the
Company published 34 catalog editions, and mailed over 178,000,000 catalogs to
past and prospective customers.
6
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EMPLOYEE STOCK PURCHASE PLAN
GENERAL
The Employee Stock Purchase Plan (the "Purchase Plan") was adopted by
the Company's Board of Directors in February 1998 and approved by the Company's
stockholders at the Company's Annual Meeting held on July 15, 1998.
The Purchase Plan replaced the Company's prior Employee Stock Purchase
Program which terminated in fiscal 1998 upon the utilization of the shares
reserved for that Program.
Pursuant to the Purchase Plan, shares of the Company's Common Stock
will be offered to eligible employees, at a discount of up to 15% from the
prevailing market price. The Board of Directors believes that the Purchase Plan
will act as an incentive to encourage stock ownership by employees of the
Company by acquiring or increasing their proprietary interest in the Company.
The Purchase Plan is designed to encourage eligible employees to remain in the
employ of the Company.
There are 100,000 shares of Common Stock reserved for issuance under
the Purchase Plan.
The following is a summary of the basic provisions of the Employee
Stock Purchase Plan, which summary does not purport to be complete and is
subject in all respects to the provisions of the Employee Stock Purchase Plan,
to which reference is made. This summary is modified in its entirety by such
reference and does not relate, or give effect, to provisions of statutory or
common law.
ADMINISTRATION OF THE PURCHASE PLAN
The Purchase Plan is administered by the Compensation
Committee (the "Committee"). At the present time, the Committee is
composed of the following outside directors: Richard A. Berman (Chairman),
Bert W. Wasserman and Jonah Gitlitz.
From time to time, the Board of Directors or the Committee may grant
to each eligible employee who is a participant in the Purchase Plan, options to
purchase shares of Common Stock during a period to be established by the Board
or the Committee (the "Payment Period").
SHARES AVAILABLE FOR DISTRIBUTION
The Company has reserved 100,000 shares for issuance under the
Purchase Plan. Such number of shares is subject to increase or decrease by
reason of stock splits, reclassifications, stock dividends, changes in par
value and the like. The shares subject to the Purchase Plan shall be authorized
and unissued shares of Common Stock or shares re-acquired by the
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<PAGE>
Company, including shares purchased in the open market and shares held as
treasury stock.
AMENDMENT TO THE PURCHASE PLAN
The Purchase Plan may be terminated at any time by the Board of
Directors. It will terminate when all or substantially all of the shares of
Common Stock reserved for the purposes of the Purchase Plan have been
purchased. If at any time the number of shares reserved for the Purchase Plan
are not in sufficient number to satisfy all of the unfilled purchase
requirements, the available shares shall be apportioned among participants in
proportion to their options and the Purchase Plan will terminate. Upon
termination of the Purchase Plan, all payments not used to purchase stock will
be refunded. The Board of Directors may amend the Purchase Plan, but no
amendment may become effective, to (i) increase the number of shares to be
offered under the Purchase Plan or (ii) change the class of employees eligible
to receive options under the Purchase Plan, without prior approval of the
Company's stockholders.
INTERPRETATION
The interpretation and construction by the Committee of any provisions
of the Purchase Plan or of any option granted under the Purchase Plan shall be
final unless otherwise determined by the Board of Directors.
ELIGIBILITY
All employees of the Company and any of its participating
subsidiaries, shall be eligible to receive options under the Purchase Plan to
purchase the Company's Common Stock, except:
(i) employees who have been employed less than two years;
(ii) employees whose customary employment is 20 hours or less per
week; or
(iii) employees whose customary employment is for not more than five
months in any calendar year.
Any employee who has satisfied the eligibility requirements under the Company's
qualified Profit Sharing Plan shall be eligible to receive options under the
Purchase Plan to purchase the Company's Common Stock. Notwithstanding the
above, any employee who is a "highly compensated employee" as that term is
defined by Section 414(q) of the Code, and who is an executive officer and/or
vice president of the Company is not eligible to participate in the Purchase
Plan. No options will be granted to any employee if he or she owns five percent
or more of the total combined voting power of all classes of stock of the
Company.
8
<PAGE>
PAYMENT PERIODS AND OPTION PRICE
From time to time, the Board of Directors or the Committee may grant
to each eligible employee options to purchase, during the Payment Period, the
Company's Common Stock at an Option Price established by the Board or the
Committee. In no event may the option period exceed twenty-seven (27) months.
The Board or the Committee shall have the discretion to determine the number of
options granted at a particular time. Any options granted shall be allocated
equally to each Purchase Plan participant. A participant who has received an
option may purchase shares of Common Stock by exercising any and all options
granted to him or her during the Payment Period. The Payment Period for the
grant shall be established by the Board or the Committee at the time of each
grant.
The Option Price for each Payment Period shall be no less than 85% of
the average market price of the Common Stock on the last business day of the
fiscal quarter. The average market price is the average of the high and low
prices of the Common Stock as traded on the American Stock Exchange. Business
day for the purposes of the Purchase Plan means a day on which there is trading
on a national securities exchange.
No employee shall be granted an option which permits his or her rights
to purchase Common Stock to accrue at a rate which exceeds $25,000 of such
stock for each calendar year in which such option is outstanding.
TERMINATION OF RIGHTS
An employee's rights under the Purchase Plan terminates when he or she
ceases to be an employee of the Company because of retirement, resignation,
layoff, discharge, death, change of status or for any other reason.
TRANSFERABILITY
Employee's rights under the Purchase Plan are non-transferable.
EXERCISE OF OPTIONS
Employees will be deemed to have exercised all or a portion of his or
her grant of options by (i) tendering payment in cash or such other medium
acceptable to the Committee; and (ii) by completing such administrative forms
as prescribed by the Committee. The purchase price and the completed forms must
be completed and tendered before the last business day of the Payment Period
for a particular grant.
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RE-OFFER OF SHARES
Although the Purchase Plan is intended to provide Common Stock to
employees for investment and not resale, the Company does not intend to
restrict or influence any employee in the conduct of his or her own affairs.
Upon the filing and effectiveness of this registration statement, an employee
may sell stock purchased under the Purchase Plan at any time he or she chooses.
Due to certain federal tax requirements, each employee pursuant to the Purchase
Plan, will agree to give the Company notice of any stock disposed of by the
employee within two years of the grant of the option or within one year of the
exercise of the option, showing the number of shares of stock disposed of.
FEDERAL INCOME TAX CONSIDERATIONS
The Company intends the Employee Stock Purchase Plan to qualify as a
Code Section 423(b) Plan. Accordingly, if the employee does not dispose of the
stock acquired through the Purchase Plan within two years from the date of the
granting of the option to purchase or within one year after the transfer of the
shares to the employee, then no income will be realized by the employee either
at the time of the grant of the option or when the shares are actually
acquired. Where the option price for the stock is between 85% and 100% of the
fair market value of the stock at the time the option was granted, the employee
realizes ordinary income to the extent of the lesser of (i) the amount by which
the fair market value of the stock at the time the option was granted exceeds
the option price; or (ii) the amount by which the fair market value of the
stock at the time of disposition of the stock exceeded the price paid. Any
remaining gains, representing appreciation that has occurred from the date the
stock was acquired to the date the stock was disposed of, will be taxed at
capital gain rates.
Absent an early disposition of the stock by an employee, the Company
will not be entitled to a deduction at the grant or exercise date.
Transfer Agent
The transfer agent for the Company's Common Stock is
Continental Stock Transfer & Trust Company, 2 Broadway, New York,
New York 10004.
Documents Incorporated by Reference
The Company hereby incorporates by reference into this Prospectus, (i)
its Annual Report on Form 10-K for the year ended February 28, 1998, (ii) its
Form 10-Q report for the period ended May 30, 1998; and (iii) its Proxy
Statement for the Annual Meeting of Stockholders held on July 15, 1998. The
description of the Company's Common Stock as set forth in the final prospectus
contained in the Company's Form S-1 Registration Statement which
10
<PAGE>
became effective on August 12, 1987 is also incorporated by reference. All
documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Exchange Act subsequent to the filing of the Registration Statement of
which the Prospectus is a part and prior to the termination of the offering
made hereby are also incorporated herein by reference. A copy of any such
document will be provided by the Company without charge to each person to whom
a copy of this Prospectus is delivered or the written or oral request of such
person to the Company at One Theall Road, Rye, New York 10580-1450. Attention:
Susan Handler, Secretary, Telephone No. (914) 925-1200.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of the Prospectus to the effect that a statement contained herein
or in any subsequently filed document which also is incorporated or deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Prospectus.
Legal Matters
The legality of the shares offered hereby have been passed upon by
Salon, Marrow & Dyckman, LLP, 685 Third Avenue, New York, New York 10017. Leo
Salon, a partner of Salon, Marrow & Dyckman, LLP, is a director of the Company
and owns 2,250 shares of Common Stock. Mr. Salon has the right to acquire 4,500
shares of Common Stock pursuant to the Company's 1987 Performance Unit,
Restricted Stock, Non-Qualified Option and Incentive Stock Option Plan, and the
right to acquire 12,500 shares of Common Stock pursuant to the Company's 1993
Stock Option Plan for Non-Employee Directors. Mr. Salon also has the right to
acquire 5,000 shares of Common Stock pursuant to the Company's 1997 Performance
Unit, Restricted Stock, Non-Qualified Option and Incentive Stock Option Plan.
Mr. Salon is a director of the Lillian Menasche Vernon Foundation, Inc., a
charitable foundation, which foundation owns an aggregate of 536,098 shares of
Common Stock.
Experts
The Company's consolidated financial statements as of February 28,
1998 and February 22, 1997 and for each of the three fiscal years in the period
ended February 28, 1998, incorporated by reference in this Registration
Statement have been incorporated herein in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
the firm as experts in accounting and auditing.
Indemnification of Directors and Officers
Pursuant to the provisions of the Delaware General Corporation Law, a
corporation organized under the laws of the state of Delaware has the power to
indemnify a corporate agent
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(i.e., any person who is or was an officer, director, employee or agent of a
corporation) against his expenses and liabilities in any proceeding brought
against him or in the defense of any claim, in connection with any proceeding
involving the corporate agent by reason of his being or having been such a
corporate agent, other than a proceeding by or in the right of the corporation
if (a) such corporate agent acted in good faith and a manner reasonably
believed to be in or not opposed to the best interests of the corporation; and
(b) with respect to any criminal proceeding, such corporate agent had no
reasonable cause to believe his conduct was unlawful. In certain cases, a
corporate agent must be indemnified where he has been successful on the merits
or otherwise in defense of any claim, issue or matter therein. In other cases,
indemnification may be made by a corporation upon a determination that
indemnification is proper in the circumstances because the corporate agent
either acted in good faith and in a manner he reasonably believed to be not
opposed to the best interests of the corporation or in the case of a criminal
proceeding, had no reason to believe his conduct was unlawful. In other
instances, if a corporation upon application of a corporate agent, has failed
or refused to provide for indemnification as either required or permitted, a
corporate agent may apply to a court for an award of indemnification.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Act and is therefore unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by the director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel, the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction, the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such an issue.
12
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Part II
Item 3. Incorporation of Documents by Reference
The following documents filed with the Commission by Lillian Vernon
Corporation, a Delaware corporation (the "Company") are incorporated as to
their respective dates in this Registration Statement by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
February 28, 1998;
(b) The Company's Quarterly Report on Form 10-Q for the three (3)
months ended May 30, 1998;
(c) All other reports filed by the Company pursuant to Section 13(a)
and 15(d) of the Securities Exchange Act of 1934 since the end of the Company's
fiscal year ended February 28, 1998; and
(d) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1, Registration No. 33-15430.
All documents filed by the Company with the Commission, pursuant to
Section 13, 14 or 15(d) of the Exchange Act hereto, but prior to the filing of
a post-effective amendment to the Registration Statement which indicates that
all securities offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated herein by
reference and to be a part hereof from their respective dates of filing. Any
statement contained herein shall be deemed to be modified or superseded for
purposes of the Prospectus to the extent that a statement contained herein or
in any other subsequently filed document, which also is or deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel
The legality of the shares offered hereby has been passed upon for the
Company by Salon, Marrow & Dyckman, LLP, 685 Third Avenue, New York, New York
10017. Leo Salon, a partner of Salon, Marrow & Dyckman, LLP, a director of the
Company, owns 2,250 shares of Common Stock. He has the right to acquire 4,500
shares of Common Stock pursuant to the Company's 1987 Performance Unit,
Restricted Stock, Non-Qualified Option and Incentive Stock Option Plan and has
the right to acquire 12,500 shares of Common Stock
II-1
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pursuant to the Company's 1993 Stock Option Plan for Non-Employee Directors.
Mr. Salon also has the right to acquire 5,000 shares of Common Stock pursuant
to the Company's 1997 Performance Unit, Restricted Stock, Non-Qualified Option
and Incentive Stock Option Plan. Mr. Salon is a director of the Lillian
Menasche Vernon Foundation, Inc. a charitable foundation, which foundation owns
an aggregate of 536,098 shares of Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102 of the Delaware General Corporation Law ("DGCL") allows a
corporation to eliminate the personal liability of directors of a Company to
the Company or to any of its stockholders for monetary damage for a breach of
his fiduciary duty as a director, except in the case where the director
breaches his duty of loyalty, fails to act in good faith, engages in
intentional misconduct or knowingly violates a law, authorizes the payment of a
dividend or approves a stock repurchase in violation of the DGCL or obtains an
improper personal benefit. The Company's Certificate of Incorporation, a copy
of which is incorporated by reference, contains a provision which eliminates
directors' personal liability as set forth above.
Section 145 of the DGCL permits a corporation to indemnify its
directors and officers.
Article IV of the Company's By-Laws provides for indemnification of
corporate agents as follows:
"Section 1. Non-Derivative Actions. The Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or contemplated action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that he is or was a director,
officer or employee of the Company, or is or was serving at the request of the
Company as a director, officer or employee of another corporation, partnership,
joint-venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him in connection with such action, suit or proceeding,
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful."
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"Section 2. Derivative Actions. The Company shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or contemplated action or suit by or in the right of the Company to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer or employee of the Company, or is or was serving at the
request of the Company as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) judgments, fines and amounts paid in
connection with the defense or settlement of such action or suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Company and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Company unless
and only to the extent that the Court of Chancery of Delaware or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication or liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper."
"Section 3. Expenses. To the extent that a director, officer or
employee of the Company has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section 1 and 2 of
this Article IV, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith."
"Section 4. Standard of Conduct. Any indemnification under Sections 1
and 2 of this Article IV (unless ordered by a court) shall be made by the
Company only as authorized in the specific case upon a determination that
indemnification of the director, officer or employee is proper in the
circumstances because he has met the applicable standard of conduct set forth
in Sections 1 and 2. Such determination shall be made (1) by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by a
majority vote of the stockholders."
"Section 5. Undertakings. Expenses incurred in defending a civil,
criminal, administrative or investigative action, suit or proceeding may be
paid by the Company in advance of the final disposition of such action, suit or
proceeding if authorized by the Board of Directors in the specific case and
only upon receipt of an undertaking by or on behalf of the director, officer or
employee to repay such amount unless it shall ultimately be determined that he
is entitled to be indemnified by the Company as authorized in this Article IV."
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"Section 6. Non-Exclusivity. The indemnification provided by this
Article IV shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any By-Law, agreement, vote of
stockholders or disinterested directors, statute, court decision, insurance
policy or otherwise, now or hereafter in effect, and shall continue as to a
person who has ceased to be a director, officer or employee and shall inure to
the benefit of the heirs, executors and administrators of such a person."
"Section 7. Insurance. The Company may purchase and maintain insurance
on behalf of any person who is or was a director, officer or employee of the
Company, or is or was serving at the request of the Company as a director,
officer or employee of another corporation, partnership, joint venture, trust
or other enterprise, against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether or not
the Company would have the power to indemnify him against such liability under
the provisions of this Article IV or of the General Corporation Law of the
State of Delaware."
"Section 8. Definitions. For the purpose of this Article IV,
references to "other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the Company" shall include any service as a director, officer or employee of
the Company which imposes duties on, or involves services by, such director,
officer or employee with respect to any employee benefit plan, its participants
or beneficiaries; and a person who acting in good faith and in a manner he
reasonably believes to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Company" as referred to in this Article
IV".
"Section 9. Indemnification Agreements. Without limiting the
generality of the foregoing, the Company shall have the express authority to
enter into such agreements as the Board of Directors deems appropriate for the
indemnification of present or future directors and officers of the Company in
connection with their service to or status with the Company or any other
corporation, entity or enterprise with whom such person is serving at the
express written request of the Company."
The Company has entered into indemnification agreements with its
officers and directors providing for payment of (i) all expenses incurred by an
officer and director in connection with any potential liability, (ii) any
awards or judgments rendered against said officer and director and (iii) any
amount paid in settlement provided that the officer and director did not act in
bad faith and acted in a manner he or she reasonably believed to be in or not
opposed to the best interests of the Company. The indemnification
II-4
<PAGE>
agreements provide for advancement of expenses in certain circumstances.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
3 Articles of Incorporation as amended
and By Laws(1)
4.1 Employee Stock Purchase Plan E-1
5.1 Opinion of Salon, Marrow & Dyckman, LLP E-6
24(a) Consent of Salon, Marrow & Dyckman,
LLP to be named in the Registration
Statement. Reference is made to
Exhibit 5.1 to this Registration
Statement which includes
such consent.
24(b) Consent of PricewaterhouseCoopers LLP E-8
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change of such information in the Registration Statement;
- ---------------
(1) Filed with the Registration Statement on Form S-1 (File No. 33-15430) and
with Form 10-Q for the Quarter ended August 28, 1987 and incorporated by
reference herein.
II-5
<PAGE>
Provided however that paragraphs (a)(l)(i) and (a)(l)(ii) shall not
apply to information contained in periodic reports filed by the registrant
pursuant to Section 13 or Section l5(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for the filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned; thereunto duly
authorized in Rye, New York on this 25th day of August, 1998.
II-6
<PAGE>
LILLIAN VERNON CORPORATION
Dated: August 25, 1998 By: /s/ Lillian Vernon
----------------------------
Lillian Vernon
Chairman of the Board
and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below, hereby constitutes and appoints Lillian Vernon and David C.
Hochberg and each acting alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any or all amendments and
supplements to this Registration Statement and to file the same with all
exhibits thereto and other documents in connection with all exhibits thereto,
with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents full power and authority to do and perform each and
every act and thing necessary or appropriate to be done with respect to this
Registration Statement or any amendments or supplements hereto and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, each acting alone, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1933,
as amended, this Registration Statement has been signed by the following
persons in their respective capacities with Lillian Vernon Corporation and on
the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Lillian Vernon
- ------------------------- Chairman of the Board August 25, 1998
Lillian Vernon of Directors and Chief
Executive Officer
(Principal Executive
Officer)
/s/ Robert S. Mednick
- ------------------------- Vice President-Chief August 25, 1998
Robert S. Mednick Financial Officer
(Prinicpal Financial
and Accounting Officer)
/s/ Howard P. Goldberg
- ------------------------- President and Director August 25, 1998
Howard P. Goldberg
/s/ David C. Hochberg
- ------------------------- Vice President-Public August 25, 1998
David C. Hochberg Affairs and Director
II-7
<PAGE>
/s/ Leo Salon
- ------------------------- Director August 25, 1998
Leo Salon
/s/ Bert W. Wasserman
- ------------------------- Director August 25, 1998
Bert W. Wasserman
/s/ Richard A. Berman
- ------------------------- Director August 25, 1998
Richard A. Berman
/s/ Jonah Gitlitz
- ------------------------- Director August 25, 1998
Jonah Gitlitz
- ------------------------- Director _________, 1998
Elizabeth M. Eveillard
II-8
<PAGE>
INDEX TO EXHIBITS
4.1 Employee Stock Purchase Plan E-1
5.1 Opinion of Salon, Marrow & Dyckman, LLP E-6
24(a) Consent of Salon, Marrow & Dyckman, LLP
(included in Exhibit 5.1)
24(b) Consent of PricewaterhouseCoopers LLP E-8
II-9
<PAGE>
LILLIAN VERNON CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose
This Employee Stock Purchase Plan (the "Plan") is intended as an
incentive to encourage stock ownership by all eligible employees of Lillian
Vernon Corporation (the "Company") and participating subsidiaries so that they
may share in the success of the Company by acquiring or increasing their
proprietary interest in the Company. The Plan is designed to encourage eligible
employees to remain in the employ of the Company. It is intended that options
issued pursuant to this Plan shall constitute options issued pursuant to an
"employee stock purchase plan" within the meaning of Section 423 of the
Internal Revenue Code (the "Code").
2. Eligible Employees
All employees of the Company or any of its participating subsidiaries
shall be eligible to receive options under the Plan to purchase the Company's
Common Stock, except:
(i) employees who have been employed less than two years;
(ii) employees whose customary employment is 20 hours or less
per week; or
(iii) employees whose customary employment is for not more
than five months in any calendar year.
Any employee who has satisfied the eligibility requirements under the Company's
qualified profit sharing plan shall be eligible to receive options under this
Plan to purchase the Company's Common Stock. Notwithstanding the above, any
employee who is a "highly compensated employee" as that term is defined by
Section 414(q) of the Code, and who is an executive officer and/or
vice-president of the Company is not eligible to participate in the Plan. In no
event may an employee be granted an option if such employee, immediately after
the option is granted, owns stock possessing 5 percent or more of the total
combined voting power or value of all classes of stock of the Company or of its
parent corporation or subsidiary corporation, as the term "parent corporation"
and "subsidiary corporation" are defined in Section 424(e) and (f) of the Code.
For purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply and stock which the employee may
purchase under outstanding options shall be treated as stock owned by the
employee.
<PAGE>
3. Stock Subject to the Plan
The stock subject to the options shall be shares of the Company's
authorized but unissued Common Stock or shares of the Company's Common Stock
reacquired by the Company including shares purchased in the open market. The
aggregate number of shares which may be issued pursuant to the Plan is 100,000,
subject to increase or decrease by reason of stock split-ups,
reclassifications, stock dividends, changes in par value and the like.
4. Administration of the Plan
The Plan shall be administered by the Compensation Committee (the
"Committee"), which Committee is appointed by the Board of Directors (the
"Board") of the Company . The Committee shall consist of not less than two
members of the Company's Board. The Board may from time to time remove members
from, or add members to, the Committee. Vacancies on the Committee, howsoever
caused, shall be filled by the Board. The Committee shall select one of its
members as Chairman, and shall hold meetings at such times and places as it may
determine. Acts by a majority of the Committee, or acts reduced to or approved
in writing by a majority of the members of the committee, shall be the valid
acts of the Committee. No member of the Committee shall be eligible to
participate in the Plan while serving as a member of the Committee.
The interpretation and construction by the Committee of any provisions
of the Plan or of any option granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. No member of the
Board or the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any option granted under it.
5. Payment Periods and Stock Options
From time to time, as the Board or the Committee in its discretion
shall determine, the Board or the Committee may grant to each eligible employee
who is then a participant in the Plan, options to purchase, during the Payment
Period, the Company's Common Stock at an Option Price established by the Board
or the Committee. In no event may the option award exceed twenty-seven (27)
months. The Board or the Committee shall have the discretion to determine the
total number of options which shall be granted at a particular time; however,
any options granted shall be allocated among Plan participants so that the
dollar value of options received by each is the same. A participant who has
received an option grant may purchase shares of the Common Stock of the Company
by exercising any or all of the options granted to him or her during the
Payment Period. The Payment Period for a particular grant shall be established
by the Board or the Committee at the time of each grant. The Option Price for
<PAGE>
each Payment Period shall be no less than 85% of the average market price of
the Company's Common Stock on the last business day of the fiscal quarter,
rounded up to avoid fractions other than 1/4, 1/2 and 3/4.
For purposes of this Plan the term "average market price" means, if
the Common Stock is listed on a national securities exchange, the average of
the high and low prices of the Common Stock of the Company on such exchange or
such other national securities exchange as shall be designated by the Board or
Committee or, if the Common Stock is traded in the over-the-counter securities
market, the mean between the bid and asked prices of the Common Stock.
For purposes of this Plan the term "business day" as used herein means
a day on which there is trading on any national securities exchange as shall be
designated by the Board or Committee pursuant to the preceding paragraph.
No employee shall be granted an option which permits his or her rights
to purchase Common Stock under the Plan and any similar plans of the Company or
any parent or subsidiary corporations qualified under Section 423 of the Code
to accrue at a rate which exceeds $25,000 of the average market price of such
stock (determined at the time such option is granted) for each calendar year in
which such option is outstanding at any time. The purpose of the limitation in
the preceding sentence is to comply with Section 423(b)(8) of the Code.
6. Exercise of Options
Each participant in the Plan who has received a grant of options shall
be deemed to have exercised all or any portion of such grant by: (a) tendering
payment in cash, or such other medium acceptable to the Committee; and (b)
completing such administrative forms as may be prescribed by the Committee.
Provided, however, that (a) and (b) above must be completed on or before the
last business day of the Payment Period for a particular grant of options.
7. Issuance of Stock
Certificates for stock issued to participants will be delivered as
soon as practicable after each Payment Period.
Stock purchased under the Plan will be issued only in the name of the
employee, or if his authorization so specifies, in the name of the employee and
another person of legal age as joint tenants with rights of survivorship.
8. No Transfer or Assignment of Employee's Rights
An employee's rights under the Plan are his or hers alone and may not
be transferred or assigned to, or availed of,
<PAGE>
by any other person. Any option granted to an employee may be exercised only by
him or her.
9. Termination of Employee's Rights
An employee's rights under the Plan will terminate when he or she
ceases to be an employee because of retirement, resignation, layoff, discharge,
death, change of status, or for any other reason.
10. Termination and Amendments to Plan
The Plan may be terminated at any time by the Company's Board. It will
terminate in any case when all or substantially all of the shares of stock
reserved for the purposes of the Plan have been purchased. If at any time
shares of stock reserved for the purposes of the Plan remain available for
purchase but not in sufficient number to satisfy all then unfilled purchase
requirements, the available shares shall be apportioned among participants in
proportion to their options and the Plan shall terminate. Upon such termination
or any other terminations of the Plan, all payments not used to purchase stock
will be refunded.
The Board also reserves the right to amend the Plan from time to time,
in any respect provided, however, that no amendment shall be effective without
prior approval of the stockholders, which would (a) except as provided in
Article 3, increase the number of shares of Common Stock to be offered above or
(b) change the class of employees eligible to receive options under the Plan.
11. Limitations on Sale of Stock Purchased Under the Plan
The Plan is intended to provide common stock for investment and not
for resale. The Company does not, however, intend to restrict or influence any
employee in the conduct of his or her own affairs. Subject to any securities
law restrictions that may apply, an employee may, therefore, sell stock
purchased under the Plan at any time he or she chooses. Provided, however, that
because of certain Federal tax requirements, each employee will agree by
exercising an option to give the Company notice of any such stock disposed of
within two years after the date of the grant of options or within one year of
option exercise showing the number of such shares disposed of. The employee
assumes the risk of any market fluctuations in the price of such stock.
12. Company's Payment of Expenses Related to Plan
The Company will bear all costs of administering and carrying out the
Plan.
<PAGE>
13. Participating Subsidiaries
The term "participating subsidiaries" shall mean any subsidiary of the
Company which is designated by the Board to participate in the Plan. The Board
shall have the power to make such designation before or after the Plan is
approved by the stockholders.
14. Optionees Not Stockholders
The granting of an option to an employee shall not constitute such
employee a stockholder of the shares covered by an option until such shares
have been purchased by and issued to him or her.
15. Application of Funds
The proceeds received by the Company from the sale of Common Stock
pursuant to options granted under the Plan will be used for general corporate
purposes.
16. Governmental Regulation
The Company's obligation to sell and deliver shares of the Company's
Common Stock under this Plan is subject to the approval of any governmental
authority required in connection with the authorization, issuance or sale of
such stock.
17. Withholding of Additional Federal Income Tax
The Company, in accordance with the Internal Revenue Code and the
Regulations and Rulings promulgated thereunder, if it determines that it is
required to do so, may withhold from the wages of participating employees, in
all payroll periods following and in the same calendar year as the date on
which compensation is deemed received by the employee, additional income taxes
in respect of the amount that is considered compensation includible in the
employee's gross income.
18. Approval of Stockholders
The Plan shall not take effect until approved by the holders of a
majority of the outstanding shares of Common Stock of the Company, which
approval must occur within the period beginning 12 months before and ending 12
months after the date the Plan is adopted by the Board of Directors.
<PAGE>
[SALON, MARROW & DYCKMAN,LLP LETTERHEAD]
August 25, 1998
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Lillian Vernon Corporation
--------------------------
Gentlemen:
We have acted as counsel for Lillian Vernon Corporation (the
"Company") in connection with the preparation and filing of the Registration
Statement on Form S-8 (the "Registration Statement") pursuant to which 100,000
shares of the Company's common stock (the "Common Stock") are reserved for
issuance to the employees of the Company pursuant to the terms of the Employee
Stock Purchase Plan (the "Purchase Plan").
We are familiar with the proceedings by which the Purchase Plan and
the shares of Common Stock have been authorized. We have reviewed and are
familiar with the Company's Certificate of Incorporation, so amended, and the
By-Laws of the Company, and such other corporate records and documents as we
have deemed necessary to express the opinion herein stated. We have assumed the
genuineness of all signatures and the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies, and the authenticity of the
originals of such latter documents.
<PAGE>
[SALON, MARROW & DYCKMAN, LLP]
U.S. Securities and Exchange Commission
August 25, 1998
Page 2
Based upon the foregoing and having regard to legal considerations we
deem relevant, we are of the opinion that the shares of Common Stock have been
duly and validly authorized for issuance by the Company, and when issued, under
the circumstances contemplated by the Purchase Plan, will be legally issued,
fully paid and non-assessable. We consent to the reference to our firm and the
use of the opinion as Exhibits 5.1 to the Registration Statement.
Very truly yours,
/s/ Salon, Marrow & Dyckman
SALON, MARROW & DYCKMAN, LLP
AMR:val
<PAGE>
EXHIBIT 24(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement of Lillian Vernon Corporation on Form S-8 of our report dated
April 15, 1998 on our audits of the consolidated financial statements of
Lillian Vernon Corporation and Subsidiaries as of February 28, 1998 and
February 22, 1997, and for each of the three fiscal years in the period ended
February 28, 1998, which report is included in its Annual Report on Form 10-K
of Lillian Vernon Corporation filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1934. We also consent to the reference to our
Firm under the heading "Experts".
/s/ PricewaterhouseCoopers LLP
-----------------------------------
PRICEWATERHOUSECOOPERS LLP
August 26, 1998
