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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1998 Commission File Number 0-19737
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ___________ to __________.
NOEL GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 13-2649262
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
</TABLE>
667 Madison Avenue, New York, New York 10021
(Address of principal executive offices, including zip code)
(212) 371-1400
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
<TABLE>
<S> <C>
Title of each class Name or exchange on which registered
None Not Applicable
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value per share
(Title of Class)
----------------------
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. [X]
The aggregate market value of voting stock held by non-affiliates of the
registrant on March 22, 1999, was approximately $15,161,138. On such date, the
last sale price of registrant's common stock was $1.25 per share. Solely for the
purposes of this calculation, shares beneficially owned by directors and
officers of the registrant and beneficial owners of in excess of 10% of the
registrant's common stock have been excluded, except shares with respect to
which such persons or entities disclaim beneficial ownership. Such exclusion
should not be deemed a determination or admission by registrant that such
individuals or entities are, in fact, affiliates of registrant.
Indicate number of shares outstanding of each of the registrant's classes of
common stock, as of March 22, 1999.
<TABLE>
<S> <C>
Class Outstanding on March 22, 1999
----- -----------------------------
Common Stock, par value $.10 per share 20,567,757
DOCUMENTS INCORPORATED BY REFERENCE:
Part of the Form 10-K in to which
Document the Document is Incorporated
- ------------------------- ----------------------------------
None N/A
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Noel Group, Inc. (the "Registrant", the "Company" or "Noel"), a Delaware
corporation, is filing this Amendment No. 1 on Form 10-K/A (this "Amendment") to
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998 (the "Original Report") in order to provide the information required by
Part III of the Form 10-K (Items 10, 11, 12 and 13), which information was
omitted from the Original Report as provided in General Instruction G(3) of the
instructions to Form 10-K. This Amendment to the Original Report speaks as of
the original date of filing of the Original Report.
PART I
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information set forth below, furnished to the Company by the respective
individuals, shows as to each executive officer and director of the Company (i)
his name and age; (ii) his principal position with the Company; (iii) his
principal occupation or employment, if different; and (iv) the month and year in
which his service began as an officer or director of the Company.
<TABLE>
<CAPTION>
Present Position Principal Occupation or
Name and Age With Noel Employment, If different Officer/Director Since
------------ --------- ------------------------ ----------------------
<S> <C> <C> <C>
Stanley R. Rawn, Jr. (71) Chief Executive - June 1990
Officer; Director(1)
Todd K. West (38) Vice President-Finance, - August 1990
Chief Financial Officer
and Secretary
Joseph S. DiMartino (55) Director(1) Chairman of the Dreyfus Group of October 1990
Mutual Funds
Herbert M. Friedman (67) Director(1)(2) Attorney April 1988
James K. Murray, Jr. (63) Director(3) Chairman of the Board and Chief February 1995
Executive Officer, HealthPlan
Services Corporation
Samuel F. Pryor, III (70) Director(1)(2)(3) Senior Counsel, Davis Polk & October 1990
Wardwell
James A. Stern (48) Director(3) Chairman, The Cypress Group L.L.C. October 1991
</TABLE>
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(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Stock Option and Compensation Committee.
There is no arrangement or understanding between any director or executive
officer and any other person pursuant to which he was selected as a director or
officer. Directors hold office until the next Annual Meeting of Shareholders and
until their successors have been elected and qualified. The executive officers
of the Company are elected at the Annual Meeting of the Board of Directors
immediately following the Annual Meeting of Shareholders and hold office until
their successors have been elected and qualified or their earlier resignation or
removal. No family relationship currently exists among any of the executive
officers and directors of the Company.
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BIOGRAPHICAL INFORMATION
STANLEY R. RAWN, JR. became Chief Executive Officer of Noel effective March
1995. Mr. Rawn served as a director of Noel and its predecessor company from
1969 until January 1987 and has served as a director of Noel since June 1990.
From November 1985 until May 1992, Mr. Rawn was Chairman and Chief Executive
Officer and a director of Adobe Resources Corporation, an oil and gas
exploration and production company which merged into Santa Fe Energy Resources,
Inc. in May 1992. Mr. Rawn is a Senior Managing Director and a director of Swiss
Army'r' Brands, Inc. ("Swiss Army"), the exclusive United States and Canadian
importer and distributor of Victorinox Original Swiss Army Officers' knives and
professional cutlery, as well as the marketer of Swiss Army watches and other
products. Mr. Rawn is also a director of Hudson River Capital LLC, an LBO
partnership ("Hudson River"), a director of Victory Ventures LLC, a venture
capital partnership ("Victory Ventures"), a director of Paradyme Corporation, a
professional employee organization, a director of First International Oil
Corporation and a director of Career Blazers, Inc., a provider of diversified
temporary staffing services to a broad range of businesses in various industries
("Career Blazers"). Mr. Rawn has served on the Board of The Jet Propulsion
Laboratory since 1976 and has been a Trustee of the California Institute of
Technology since 1974.
TODD K. WEST has served as Vice President-Finance since August 1990, as
Secretary since November 1991 and as Chief Financial Officer since January 1993.
Mr. West also served as Treasurer and Chief Financial Officer from August 1990
until November 1991. Mr. West joined The Prospect Group, Inc. ("Prospect"), a
company which prior to its adoption of a Plan of Complete Liquidation and
Dissolution in 1990 and subsequent dissolution in 1997, conducted its major
operations through subsidiaries acquired in leveraged buyout transactions, in
September 1988 and served as Assistant Vice President-Finance, Assistant
Treasurer and Assistant Secretary from February 1989 until November 1990, when
he became Vice President-Finance, Chief Financial Officer, Treasurer and
Secretary of Prospect. Mr. West became a certified public accountant in 1987.
JOSEPH S. DIMARTINO has served as a director of Noel since October 1990.
Mr. DiMartino served as Chairman of the Board of Noel from March 1995 until
November 30, 1997. Mr. DiMartino serves as Chairman of the Dreyfus Group of
mutual funds and served as President and Chief Operating Officer of The Dreyfus
Corporation, an investment adviser and manager of the Dreyfus Group of mutual
funds, from 1982 until December 31, 1994. Mr. DiMartino is also a director of
Carlyle Industries, Inc., a distributor of a line of home sewing and craft
products, principally buttons, Career Blazers, HealthPlan Services Corporation
("HealthPlan Services"), a leading managed healthcare services company, and
Century Business Systems, Inc., a provider of various outsourcing functions for
small and medium sized companies. Mr. DiMartino is also a director of numerous
funds in the Dreyfus Group of mutual funds and a director of the National
Muscular Dystrophy Association.
HERBERT M. FRIEDMAN has served as a director of Noel since April 1988. Mr.
Friedman is an attorney who performs legal services for various entities,
including Swiss Army, Hudson River, Victory Ventures and the Company. From 1967
through April 1998, Mr. Friedman was a partner in the law firm of Zimet,
Haines, Friedman & Kaplan. Prior to its dissolution in April 1998, Zimet,
Haines, Friedman & Kaplan acted as counsel to the Company. Mr. Friedman
also serves as a director of Swiss Army and Connectivity Technologies Inc.
JAMES K. MURRAY, JR. has served as a director of Noel since February 1995.
Mr. Murray has served as Chairman of the Board and Chief Executive Officer of
HealthPlan Services since January 1998 and from October 1994 through January
1998, he served as Chairman of the Board and President of such company. He has
also been a director of HealthPlan Services since October 1994. Mr. Murray
co-founded the predecessor to HealthPlan Services in 1970 under the name Plan
Services, Inc. Following the acquisition of the predecessor company by The Dun &
Bradstreet Corporation ("D&B") in 1978, Mr. Murray served as President of the
predecessor until April 1989, when he assumed the position of President of D&B
Credit Services. Mr. Murray also held the position of Corporate Senior Vice
President from March 1990 until his retirement from D&B in December 1993. Mr.
Murray also served as President of Reuben H. Donnelley Corp., a publisher of
telephone yellow pages, from March 1990 until August 1991 and as its Chairman
from August 1991 until December 1993.
2
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SAMUEL F. PRYOR, III has served as a director of Noel since October 1990.
Mr. Pryor has been Senior Counsel in the law firm of Davis Polk & Wardwell since
1961. Mr. Pryor was also a director of Prospect, a director of the Provident
Loan Society, Chairman of the Board of the World Rehabilitation Fund, Chairman
of the Westchester Land Trust and a commissioner of the Palisades Park
Commission.
JAMES A. STERN has served as a director of Noel since October 1991. Mr.
Stern has been Chairman of The Cypress Group, L.L.C., a merchant banking firm,
since its formation in April 1994. Prior to joining Cypress, Mr. Stern spent his
entire career with Lehman Brothers Inc. ("Lehman"), most recently as head of
the Merchant Banking Group. In addition, Mr. Stern was a member of Lehman's
Operating Committee. Mr. Stern is a also director of AMTROL, Inc., Cinemark
U.S.A., Inc., Franks' Nursery & Crafts Inc., Lear Corporation, Genesis ElderCare
Corp., WESCO Distribution, Inc., and a trustee of Tufts University.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
officers and directors of the Company and holders of more than 10% of the
Company's common stock (collectively, "Reporting Persons") to file reports of
ownership and changes in ownership of such common stock with the Securities and
Exchange Commission ("SEC") and to furnish the Company with copies of all such
reports. Based solely on its review of the copies of such reports furnished to
the Company by such Reporting Persons or on the written representations of such
Reporting Persons with respect to whether any reports on Form 5 were required,
the Company believes that during the year ended December 31, 1998, all of the
Reporting Persons complied with their Section 16(a) filing requirements with
respect to their ownership of the Company's common stock.
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table sets forth certain information regarding compensation
awarded or paid to, or earned by, each of the following persons during each of
the last three fiscal years: (i) the person who served as the Company's Chief
Executive Officer during the fiscal year ended December 31, 1998 ("Fiscal
1998"), (ii) the Company's sole officer (other than the Chief Executive Officer)
who was serving as an officer at the end of Fiscal 1998, and (iii) one other
former officer of the Company whose compensation would have been disclosed
herein had she been an officer of the Company at the end of Fiscal 1998
(collectively, the "Named Officers"). The footnotes reflect options granted to,
and directors' fees received by, the Named Officers from certain entities some
or all of which may be deemed to be "subsidiaries" of Noel within the meaning of
the federal securities laws.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS ALL OTHER
-------------------------------------------------------- ------------- ------------
NAME AND OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION($)(1) OPTIONS/SARs(#) COMPENSATION($)
------------------ ---- ---------- --------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Stanley R. Rawn, Jr. 1998 12,000(2) -0- -0- -0- -0-
Chief Executive 1997 12,300(2) -0- -0- -0-(3) 374,200(4)
Officer 1996 13,000(2) -0- -0- -0- -0-
Karen Brenner 1998 212,500(5) -0- 4,643(6) -0- 447,548(7)
Former Managing 1997 666,667(8) 155,814(9) 4,430(6) -0-(10) 2,314(11)
Director 1996 563,440(12) 550,000(13) 4,233(6) -0-(14) 77,018(15)
Todd K. West 1998 175,000 120,000 4,261(6) -0- 5,792(16)
Vice President- 1997 147,250 120,000 4,070(6) -0-(3) 128,033(17)
Finance 1996 117,000 120,000 3,890(6) -0- 4,750(16)
</TABLE>
- --------------------------
3
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(1) Except as otherwise indicated, the dollar value of perquisites and other
personal benefits for each of the Named Officers was less than established
reporting thresholds.
(2) Consists of salary paid to Mr. Rawn pursuant to his employment arrangement
with Noel which is currently at will.
(3) See Item 13 "-Surrender of Options and Warrants" below for certain
information relating to the surrender of certain options and/or warrants
held by the Named Officer.
(4) Consists of a tax gross-up payment made by Noel on behalf of the Named
Officer on the surrender of a warrant to purchase 320,000 shares of Common
Stock granted on March 9, 1995 (the "Rawn Warrant"). The warrant was
granted to Mr. Rawn to induce Mr. Rawn to enter into an employment
agreement with Noel. See Item 13 "-Surrender of Options and Warrants"
below.
(5) Consists of $87,500 in salary paid to Ms. Brenner by Noel pursuant to the
termination provisions of her employment agreement and $125,000 in salary
paid to Ms. Brenner by Carlyle Industries, Inc. ("Carlyle").
(6) Consists of the premium for supplemental long-term disability insurance
reported as compensation income for the Named Officer.
(7) Consists of (i) $262,500 in severance payments paid to Ms. Brenner by the
Company, (ii) $100,000 in compensation to Ms. Brenner upon the exercise
of certain options with respect to the common stock of Lincoln Snacks
Company, a former subsidiary of Noel ("Lincoln Snacks"), (iii) the amount
of the benefit to Ms. Brenner of the payment by the Company of a life
insurance premium with respect to split dollar life insurance calculated in
accordance with SEC guidelines, (iv) premiums for term life insurance
reported as compensation income for Ms. Brenner by Noel, and (v) $83,333
in consulting fees and severance payments paid to Ms. Brenner by Carlyle.
(8) Consists of $350,000 in salary paid to Ms. Brenner by Noel, $66,667 in
salary paid to Ms. Brenner by Lincoln Snacks and $250,000 in salary paid to
Ms. Brenner by Carlyle.
(9) Consists of a bonus of $155,814 paid to Ms. Brenner by Carlyle.
(10) In 1997, Carlyle granted Ms. Brenner options to purchase 150,000 shares of
Carlyle common stock and Lincoln Snacks granted Ms. Brenner options to
purchase 150,000 shares of Lincoln Snacks common stock.
(11) Consists of (i) the amount of the benefit to Ms. Brenner of the payment by
the Company of a life insurance premium with respect to split dollar life
insurance calculated in accordance with SEC guidelines and (ii) premiums
for term life insurance reported as compensation income for Ms. Brenner.
(12) Consists of (i) $350,000 paid to Ms. Brenner by Noel pursuant to her
employment agreement, (ii) $188,440 paid to Ms. Brenner by Carlyle pursuant
to her consulting agreement with Carlyle pursuant to which Ms. Brenner is
paid at the annual rate of $250,000 per annum and (iii) $25,000 paid by
Lincoln Snacks to Ms. Brenner pursuant to her employment arrangement with
Lincoln Snacks.
(13) Consists of (i) a bonus of $400,000 awarded to Ms. Brenner by Noel in
January 1997 with respect to services rendered by her during 1996; and (ii)
a bonus of $150,000 awarded to Ms. Brenner by Carlyle with respect to
services rendered to Carlyle during 1996.
(14) In 1996, Carlyle granted Ms. Brenner options to purchase 211,000 shares of
common stock. In 1996, Lincoln Snacks granted Ms. Brenner options to
purchase 150,000 shares of common stock.
(15) Consists of the (i) $4,750 contributed by Noel to Ms. Brenner's account in
the Company's 401(k) Plan plus (ii) $72,268, the amount of the benefit to
Ms. Brenner of the payment by the Company of a life insurance premium with
respect to split dollar life insurance, calculated in accordance with the
SEC guidelines. Does not include director's fees of $21,083 paid by Carlyle
with respect to service by Mr. Brenner on the board of directors thereof.
(16) Consists of (i) premiums for term life insurance reported as compensation
and (ii) amounts contributed by the Company to Mr. West's account in the
Company's 401(k) Plan.
4
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(17) Consists of (i) premiums for term life insurance reported as compensation
income for Mr. West and (ii) $127,340 as a tax gross-up payment made by
Noel on behalf of the Named Officer on the surrender of options to purchase
Noel common stock. See Item 13 "-Surrender of Options and Warrants" below.
Description of Employment Agreements
Karen Brenner, a former Managing Director of Noel, is party to an
employment agreement with Noel dated March 1, 1996, the term of which expired on
March 1, 1998. This agreement replaced the agreement with Noel dated March 22,
1995 (except with respect to the vesting provisions of a certain option which
provisions remained in full force and effect). Noel agreed to pay to Ms. Brenner
an amount equal to twelve months' base pay at her then current rate, payable in
equal installments over the twelve months following the expiration of the term
and, to the extent practicable, Ms. Brenner was entitled to continue to receive,
during such twelve month period, the same benefits that would have been
available to her had she remained a Noel employee during that time. Such twelve
month period expired on March 1, 1999.
Directors' Fees
Each non-employee director receives an annual fee of $5,000 for serving as
a director of the Company and additional fees of $1,000 for each meeting of the
Board attended by any such director and $500 for each meeting of a committee of
the Board attended by such director. Directors of Noel are also reimbursed for
their out-of-pocket expenses incurred in connection with their service as
directors, including travel expenses, and are eligible to participate in Noel's
1988 Stock Option Plan and Noel's 1995 Stock Option Plan. Non-employee directors
are eligible to participate in Noel's Non-Employee Directors' Stock Option Plan.
The Company does not anticipate granting any additional options under such
plans. In addition, all directors are entitled to participate in Noel's matching
gift program which matches charitable contributions of up to $10,000 per annum.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee during 1998 were Messrs. James K.
Murray, Jr., Samuel F. Pryor, III and James A. Stern. Mr. Murray is Chairman of
the Board, Chief Executive Officer and a director of HealthPlan Services. Except
for Mr. Murray, none of these individuals was an officer or employee of the
Company (or any entity which may be deemed to be a subsidiary of Noel under the
federal securities laws) during their term of service on the Compensation
Committee. Mr. Murray is a director of Noel and the Chairman of Noel's
Compensation Committee.
During 1998, no executive officer of Noel served as a director or member of
the Compensation Committee (or other board committee performing equivalent
functions or, in the absence of any such committee, the entire board of
directors) of another entity, one of whose executive officers served as a
director of Noel or on Noel's Compensation Committee.
Davis Polk & Wardwell, a law firm of which Samuel F. Pryor, III is a
partner, provides legal services, from time to time, to the Company.
5
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information as to each person who, to the
knowledge of the Company, as of March 22, 1999, was the beneficial owner of more
than 5% of the issued and outstanding shares of Common Stock:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
NUMBER AND ADRRESS OF BENEFICIAL OWNER OF COMMON STOCK CLASS(1)
-------------------------------------- ---------------- ----------
<S> <C> <C>
Fir Tree, Inc. et al 5,017,367(2) 24.4%
211 Avenue of the Americas, 29th Floor
New York, New York 10036
Davidson Kempner Partners et al 4,811,300(3) 23.4%
888 Third Avenue
New York, New York 10022
Ariel Management Corp. et al 1,748,136(4) 8.5%
450 Park Avenue
New York, New York 10022
HBK Investments L.P. et al 2,974,200(5) 14.5%
777 Main Street, Suite 2750
Fort Worth, Texas 76102
</TABLE>
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(1) Based on 20,567,757 shares of Noel Common Stock ("Common Stock") issued and
outstanding on March 22, 1999.
(2) According to Amendment No. 8 to Schedule 13D, dated December 8, 1997, filed
with the Securities and Exchange Commission (the "SEC") jointly by Fir
Tree, Inc. d/b/a Fir Tree Partners ("Fir Tree") and Jeffrey Tannenbaum, the
sole director, executive officer and shareholder of Fir Tree ("Mr.
Tannenbaum"), Fir Tree has sole power to vote and dispose of 5,017,367
shares of Common Stock and does not have shared power to vote or dispose of
any shares of Common Stock. The Amendment further states that the 5,017,367
shares beneficially owned by Fir Tree and Mr. Tannenbaum are for the
accounts of (i) Fir Tree Value Fund, L.P., of which Mr. Tannenbaum is the
general partner, (ii) Fir Tree Institutional Fund, L.P., of which Mr.
Tannenbaum is a member of the general partner and (iii) Fir Tree Value
Partners, of which Mr. Tannenbaum acts as an investment adviser.
(3) According to Amendment No. 3 to Schedule 13D, dated September 29, 1998,
filed with the SEC jointly by Davidson Kempner Advisors Inc. ("DKA"),
Davidson Kempner Endowment Partners ("Endowment"), Davidson Kempner
Institutional Partners, L.P. ("DKIP"), Davidson Kempner International
Advisors, L.L.C. ("DKIA"), Davidson Kempner International Ltd. ("DKI"),
Davidson Kempner Partners ("DKP"), MHD Management Co. ("MHD"), M.H.
Davidson & Co. ("MH"), Marvin H. Davidson ("Mr. Davidson"), Thomas L.
Kempner, Jr. ("Mr. Kempner"), Stephen M. Dowicz ("Mr. Dowicz"), Scott E.
Davidson ("Mr. S. Davidson") and Michael J. Leffell ("Mr. Leffell"), (i)
DKP has sole power to vote and dispose of 277,200 shares of Common Stock
and does not have shared power to vote or dispose of any shares of Common
Stock, (ii) DKIP has sole power to vote and dispose of 474,300 shares of
Common Stock and does not share power to vote or dispose of any shares of
Common Stock, (iii) Endowment has sole power to vote and dispose of 148,800
shares of Common Stock and does not share power to vote or dispose of any
shares of Common Stock, (iv) MHD has sole power to vote and dispose of
426,000 shares of Common Stock and does not share power to vote or dispose
of any shares of Common Stock, (v) MH has sole power to vote and dispose of
18,100 shares of Common Stock and does not share power to vote or dispose
of any shares of Common Stock, (vi) DKA has sole power to vote and dispose
of 474,300 shares of Common Stock and does not share power to vote or
dispose of any shares of Common Stock, (vii) DKI has sole power to vote and
dispose of 47,200 shares of Common Stock and does not share power to vote
or dispose of any shares of Common Stock, (viii) DKIA has sole power to
vote and dispose of 47,200 shares of Common Stock and does not share power
to vote or dispose any shares of Common Stock and (ix) each of Messrs.
Davidson, Kempner, Dowicz, S. Davidson and Leffell share power to vote and
dispose of 2,898,200
6
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shares of Common Stock but none of such individuals has sole power to vote
or dispose of any shares of Common Stock.
(4) According to the Schedule 13G, dated April 15, 1998, filed with the SEC
jointly by Ariel Fund Limited ("Ariel Fund"), Ariel Management Corp., as
investment advisor to Ariel Fund ("Ariel Management"), Gabriel Capital,
L.P. ("Gabriel"), and J. Ezra Merkin, the general partner of Gabriel and
the sole shareholder and president of Ariel Management ("Mr. Merkin"), (i)
Gabriel shares power to vote and dispose of 706,246 shares of Common Stock
but does not have sole power to vote and dispose of any shares of Common
Stock, (ii) Ariel Fund has shared power to vote and dispose of 1,041,890
shares of Common Stock but does not have sole power to vote or dispose of
any shares of Common Stock, (iii) Ariel Management has shared power to vote
and dispose of 1,041,890 shares of Common Stock but does not have sole
power to vote or dispose of any shares of Common Stock and (iv) Mr. Merkin
has shared power to vote and dispose of 1,748,136 shares of Common Stock
but does not have sole power to vote or dispose of any shares of Common
Stock.
(5) According to Amendment No. 2 to Schedule 13G, dated February 5, 1999, filed
with the SEC jointly by HBK Investments L.P. ("HBK Investments"), HBK Main
Street Investments L.P. ("HBK Main Street") and HBK Finance L.P. ("HBK
Finance"), (i) HBK Investments has sole power to vote and dispose of
1,992,700 shares of Common Stock and shares power to vote and dispose of
981,500 shares of Common Stock, (ii) HBK Main Street shares power to vote
and dispose of 40,050 shares of Common Stock and does not have sole power
to vote or dispose of any shares of Common Stock and (iii) HBK Finance
shares power to vote 941,450 shares of Common Stock and does not have sole
power to vote or dispose of any shares of Common Stock.
The following table sets forth, as of March 22, 1999, the number of shares
of Common Stock owned of record or beneficially by each director of the Company,
by each executive officer of the Company listed in the Summary Compensation
Table above, and by all such executive officers and directors of the Company as
a group, which amount includes the number of shares which each such person may
have the right to acquire within sixty days after such date upon exercise of
stock options. The footnotes reflect the ownership by such persons of each class
of equity securities of certain entities some or all of which may be deemed to
be "subsidiaries" of Noel within the meaning of the federal securities laws.
<TABLE>
<CAPTION>
NAME OF NUMBER OF SHARES PERCENT OF
BENEFICIAL OWNER OF COMMON STOCK CLASS (1)
---------------- --------------- ---------
<S> <C> <C>
Joseph S. DiMartino 8,334(2) *
Herbert M. Friedman 22,334(3) *
James K. Murray, Jr. 0 0
Samuel F. Pryor, III 5,555(4) *
Stanley R. Rawn, Jr. 262,523(5) 1.3%
James A. Stern 38,334(6) *
Todd K. West 2,000(7) *
All directors and executive officers as a
group (7 persons) 339,080(8) 1.6%
</TABLE>
- -------------------------------------------
* Less than 1%.
(1) Based on 20,567,757 shares of Common Stock issued and outstanding on March
22, 1999.
(2) Mr. DiMartino is also the beneficial owner of 29,878 shares (less than 1%)
of Carlyle common stock, consisting of options to purchase 9,400 shares
issuable upon exercise of currently exercisable options and 20,478 shares
7
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held by Mr. DiMartino as trustee under two "rabbi" trusts established for
the benefit of former executives of Carlyle (with Mr. DiMartino disclaiming
beneficial ownership in such shares held by such trusts), and 100,696
shares (less than 1%) of Series B preferred stock of Carlyle consisting of
shares held by Mr. DiMartino as trustee under two "rabbi" trusts (with
respect to which shares Mr. DiMartino disclaims beneficial ownership).
(3) Mr. Friedman is also the beneficial owner of 4,875 shares (less than 1%) of
Carlyle common stock.
(4) Mr. Pryor is also the beneficial owner of 2,436 shares (less than 1%) of
Carlyle common stock.
(5) Mr. Rawn is also the beneficial owner of 2,196 shares (less than 1%) of
Carlyle common stock.
(6) Consists of 33,334 shares held directly by Mr. Stern, 5,000 shares held by
Mr. Stern's wife as custodian for their children. Mr. Stern is also the
beneficial owner of 6,724 shares (less than 1%) of Carlyle common stock
consisting of 5,847 shares held directly and 877 shares held by Mr. Stern's
wife as a custodian for their children.
(7) Consists of 2,000 shares held indirectly in Mr. West's 401(k) account. Mr.
West is also the beneficial owner of 214 shares (less than 1%) of Carlyle
common stock and 25,174 shares (less than 1%) of preferred stock of
Carlyle.
(8) The executive officers and directors as a group hold shares of capital
stock (including certain shares as to which beneficial interest is
disclaimed) of the following entities some or all of which may be deemed to
be subsidiaries of Noel within the meaning of the federal securities laws:
Carlyle: 46,323 shares (less than 1%) of Carlyle common stock and 125,870
shares (1.2%) of Series B preferred stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Noel has entered into a number of transactions with certain persons who, at
the time of such transactions, might have been deemed control persons or
affiliates of Noel. The terms of the transactions set forth are believed by Noel
to be comparable to terms that would have been negotiated with nonaffiliated
parties. Although Noel may in the future, in connection with the implementation
of its Plan, engage in transactions involving asset sales or securities
exchanges involving entities owned by Noel or Noel's affiliates to other
affiliates, any such transactions are expected to be on terms comparable to
transactions with third parties and based on fair values as determined by
independent and disinterested members of Noel's Board of Directors.
Surrender of Options and Warrants
During 1997 certain directors and executive officers of the Company held
options and/or warrants (collectively, the "Options") to purchase shares of the
Company's common stock granted from time to time by the Company, which options
and warrants contained certain anti-dilution provisions. Prior to the adoption
of the Company's Plan of Complete Liquidation and Dissolution, with respect to
property distributed by the Company to its stockholders, the Company maintained
a policy of reserving for holders of outstanding options and warrants property
in an amount sufficient so that upon the exercise of such options and warrants
the holders thereof would receive their pro-rata share of such property had such
options and warrants been exercised immediately prior to such distribution. This
policy was later changed to a right to receive cash of an equivalent value to
such property, with an appropriate reserve being maintained by the Company.
The Company made a pro-rata liquidating distribution on April 25, 1997 to
holders of its common stock of shares of common stock of HealthPlan Services
held in its portfolio (the "HealthPlan Distribution"). To prevent the HealthPlan
Distribution from diminishing the value of the Options, in May 1997 the
Compensation Committee of the Noel Board of Directors implemented the
anti-dilution provisions of the Options by permitting the holders of outstanding
options and warrants to elect to receive upon the exercise thereof the number of
shares of common stock of HealthPlan Services that they would have received had
they exercised immediately prior to the record date for the HealthPlan
Distribution. All holders of Options were notified of the Compensation
Committee's action and advised that, in light of the Company's ongoing
liquidation process, the Compensation Committee did not intend to make any
further adjustments to the Options for future liquidating distributions.
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As the Compensation Committee determined not to make any further adjustment
to the Options, after weighing the interests of the Company's stockholders at
large and the situation of the holders of Options, the committee determined
that, in lieu of the exercise thereof, certain alternatives would be made
available to current employees holding Options issued to them in that capacity
and former employees holding 20,000 or more Options and issued to them in that
capacity. Upon the surrender of such Options (and in complete cancellation
thereof), such employees would be entitled to receive, on the basis of the net
value of the Options held (after deducting the aggregate net exercise price from
the gross value): (i) cash, (ii) shares of Noel Common Stock, (iii) shares of
common stock of HealthPlan Services, or (iv) any combination of the foregoing.
In addition, holders of Options who were employees of the Company and elected to
receive cash or shares of common stock of HealthPlan Services would also be
entitled to receive a cash payment for a portion of their federal, state and
local income taxes liabilities.
In 1997, the following employees and former employees made the following
elections with respect to Options held by each of them. All values represent the
net value of the Options held (after deducting the aggregate net exercise price
thereof from the gross value): with respect to the Rawn Warrant, Mr. Rawn
elected to receive $659,501 in cash (with a tax gross-up payment made by Noel of
$374,200); with respect to the warrant to purchase 800,000 shares of Common
Stock granted by Noel to Mr. DiMartino in January 1995 in connection with his
employment (the "DiMartino Warrant"), Mr. DiMartino elected to receive
$1,074,377 in cash, which amount represents one half of the net value of the
DiMartino Warrant, and the other half in 56,185 shares of common stock of
HealthPlan Services (with an aggregate tax gross-up payment made by Noel of
$2,051,193, of which approximately $415,997 was paid in 1998); and with respect
to options to purchase 30,000 shares of Noel Common Stock, Mr. West elected to
receive the net value of such portion in 5,931 shares of common stock of
HealthPlan Services, and, with respect to options to purchase 20,000 shares of
Noel Common Stock, Mr. West elected to receive $75,739 in cash (with an
aggregate tax gross-up payment made by Noel of $127,340).
Other Transactions
In 1998, Noel paid certain amounts for legal services rendered to it by the
law firm of Zimet, Haines, Friedman & Kaplan, of which Herbert M. Friedman,
prior to such firm's dissolution in April 1998, was a partner. The Company,
following such firm's dissolution, retained Mr. Friedman to act as its general
counsel. Davis Polk & Wardwell, of which Samuel F. Pryor, III is a partner, also
provides legal services, from time to time, to Noel.
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.
NOEL GROUP, INC.
(Registrant)
By /s/ Stanley R. Rawn, Jr.
--------------------------
Stanley R. Rawn, Jr.
Chief Executive Officer
Date: April 29, 1999
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STATEMENT OF DIFFERENCES
The registered trademark symbol shall be expressed as....................... 'r'
