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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
FINLAY ENTERPRISES, INC.
(Name of Issuer)
Common Stock, $.01 Par Value
(Title of Class of Securities)
317884 20 3
(CUSIP Number)
James Martin Kaplan, Esq.
Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174
(212) 885-5000
(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)
April 24, 1998
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box.
/ /
Page 1 of 14 Pages.
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CUSIP NO. 317884 20 3
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Arthur E. Reiner
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a) / /
(b) /X/
3. SEC USE ONLY
4. SOURCE OF FUNDS (See Instructions)
PF
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
Number of Shares 7. SOLE VOTING POWER
Beneficially Owned 79,279
by Each Reporting
Person With 8. SHARED VOTING POWER
0
9. SOLE DISPOSITIVE POWER
79,279
10. SHARED DISPOSITIVE POWER
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
79,279
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) /X/
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.76% (See Item 5)
14. TYPE OF REPORTING PERSON
IN
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SCHEDULE 13D
Item 1 - Security and Issuer.
This Amendment No. 1 to Schedule 13D dated April 6, 1995 relates to the
Common Stock, par value $.01 per share ("Common Stock"), of Finlay Enterprises,
Inc., a Delaware corporation (the "Company"). This Amendment reflects certain
information required to be disclosed herein pursuant to Rule 13d-2 promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, with respect to the sale by Arthur E. Reiner of shares of
Common Stock of the Company.
The address of the Company's principal executive office is 521 Fifth
Avenue, New York, New York 10175.
Item 2 - Identity and Background.
This Schedule 13D is being filed by Arthur E. Reiner, the President,
Chief Executive Officer, Vice Chairman and a director of the Company. The
business address of Mr. Reiner is c/o Finlay Enterprises, Inc., 521 Fifth
Avenue, New York, New York 10175.
Mr. Reiner's principal occupation is President, Chief Executive
Officer and Vice Chairman of the Company and Chairman and Chief Executive
Officer of the Company's wholly-owned subsidiary,
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Finlay Fine Jewelry Corporation ("FFJC"). The Company and FFJC are
located at 521 Fifth Avenue, New York, New York 10175.
During the last five years, Mr. Reiner has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
During the last five years, Mr. Reiner has not been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws, or finding any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On April 6, 1995, Mr. Reiner purchased, from his personal funds, 6,122
shares of Common Stock at a price of $14.00 per share in the Company's public
offering of Common Stock (the "Offering"). On January 3, 1995, Mr. Reiner
purchased 138,525 shares of Common Stock from the Company at a purchase price of
$7.23 per share. The aggregate purchase price of such shares was paid in the
form of a note issued by Mr. Reiner to the Company (the "Note"), the repayment
of which was secured by such shares and certain proceeds
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received by Mr. Reiner upon disposition of such shares or upon any distribution
paid on or with respect to such shares. In addition, on January 3, 1995, the
Company granted to Mr. Reiner options to purchase an aggregate of 69,263 shares
of Common Stock, of which one-half are time based (the "Time-Based Options") and
one-half are performance based (the "Performance-Based Options"). Of the
Time-Based Options, one-third became exercisable on each of February 3, 1996,
February 1, 1997 and January 31, 1998. Of the Performance-Based Options,
one-third will vest for each year commencing with 1995 for which certain
performance levels of the Company are met. To date, none of the
Performance-Based Options have vested.
On March 5, 1997, the Company granted to Mr. Reiner, under the
Company's Long Term Incentive Plan (the "Plan"), options to purchase an
aggregate of 139,719 shares of Common Stock at an exercise price of $14.00 per
share. On March 6, 1997, the Company granted to Mr. Reiner, under the Company's
1997 Long Term Incentive Plan (the "1997 Plan") (subject to shareholder approval
of the 1997 Plan, which occurred on June 19, 1997), options to purchase an
aggregate of 160,281 shares of Common Stock at an exercise price of $13.875 per
share. The 139,719 options granted under the Plan and the 160,281 options
granted under the 1997 Plan become exercisable on January 2, 2001 so long as Mr.
Reiner is employed by the Company at such date. Such options are also subject to
early vesting and early termination under certain circumstances and are subject
to
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various conditions.
On April 24, 1998, Mr. Reiner sold an aggregate of 100,000 shares of
Common Stock at a price of $27.50 per share. The shares were sold in connection
with the offering by the Company and certain other selling stockholders of an
aggregate of 1,800,000 shares of Common Stock (the "Equity Offering"), of which
the Company sold 567,310 shares and the selling stockholders (including Mr.
Reiner) sold 1,232,690 shares. Mr. Reiner used a portion of the proceeds from
the sale of his shares in the Equity Offering to repay the entire outstanding
balance of the Note, together with accrued interest thereon, in the aggregate
amount of $1,275,657.
Item 4. Purpose of Transaction.
Mr. Reiner acquired the Common Stock currently held by him for
investment purposes. Depending upon various factors, including, but not limited
to, the Company's business, prospects and financial condition and other
developments concerning the Company, available opportunities for Mr. Reiner to
acquire or dispose of Common Stock, and other business opportunities available
to Mr. Reiner, and other relevant factors, Mr. Reiner may in the future take
such actions with respect to such holdings in the Company's Common Stock as he
deems appropriate in light of the circumstances and conditions existing from
time to time. Such actions may include the purchase
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of additional Common Stock in the open market, the purchase of additional Common
Stock in privately negotiated transactions (including privately negotiated
purchases from the Company or other stockholders of the Company) or otherwise,
the disposition, from time to time or at any time, of all or a portion of the
Common Stock now owned or hereafter acquired by Mr. Reiner, either in a sale of
Common Stock in the open market or the sale of Common Stock in privately
negotiated transactions to one or more purchasers.
Except as described above, Mr. Reiner has not formulated any plans or
proposals which relate to or would result in any of the following:
(a) The acquisition by any person of additional securities of
the Company, or the disposition of securities of the Company;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Company or
any of its subsidiaries;
(d) Any change in the present Board of Directors or management of the
Company, including any plans or proposals to change the number or term of
Directors or to fill any existing vacancies on the Board, except for the
possible addition by the Company of one or more independent directors to its
Board of Directors;
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(e) Any material change in the present capitalization or dividend
policy of the Company;
(f) Any other material change in the Company's business or corporate
structure;
(g) Changes in the Company's charter, by-laws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Company by any person;
(h) Causing a class of securities of the Company to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) and (b) Mr. Reiner beneficially owns 79,279 shares of Common Stock,
including 44,647 shares of Common Stock owned directly by him and 34,632 shares
of Common Stock underlying the Time-Based Options held by him. The number of
shares of Common Stock beneficially owned by Mr. Reiner does not include the
34,631 shares of Common Stock underlying the Performance-Based Options, the
139,719 shares of Common Stock underlying the options granted to Mr. Reiner on
March 5, 1997 or the 160,281 shares of Common Stock underlying the options
granted to Mr. Reiner on March 6, 1997, none of which options are currently
exercisable or will become exercisable within 60 days of the date hereof. The
79,279 shares of Common Stock constitute, in the aggregate, approximately .76%
of the issued and outstanding shares of such stock as of the date hereof.
Except as described below, Mr. Reiner has sole power to vote
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or direct the vote of 79,279 shares of Common Stock, shared power to vote or
direct the vote of no shares of Common Stock, sole power to dispose or to direct
the disposition of 79,279 shares of Common Stock and shared power to dispose or
to direct the disposition of no shares of Common Stock.
Mr. Reiner is a party to the Amended and Restated Stockholders'
Agreement dated as of March 6, 1995, as amended (the "Amended and Restated
Stockholders' Agreement"), by and among the Company, Mr. Reiner and certain
other stockholders of the Company (the "Other Stockholders"), which sets forth
certain rights and obligations of the parties with respect to the Common Stock
and corporate governance of the Company. The Amended and Restated Stockholders'
Agreement provides that the parties thereto must vote their shares to fix the
number of members of the Board of Directors of the Company at eight and to vote
in favor of six directors who will be nominated as follows: two will be
nominated by the Thomas H. Lee Company and certain of its officers, employees,
consultants and affiliates (the "Lee Investors"), one will be nominated by
Equity-Linked Investors, L.P. and Equity-Linked Investors-II (the "Desai
Investors"), two will be nominated by David B. Cornstein, Chairman and former
Chief Executive Officer of the Company, and one will be nominated by Mr. Reiner.
Notwithstanding the foregoing, the rights of various persons to designate
directors will be reduced or eliminated at such time as such person owns less
than
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certain specified percentages of the shares of Common Stock then outstanding or
in certain cases are no longer an employee of the Company. The Amended and
Restated Stockholders' Agreement also provides that the executive committee will
consist of five directors, including one independent director selected by the
Board of Directors, one member designated by Thomas H. Lee (so long as the Lee
Investors have the right to designate a nominee for director), one member
designated by the Desai Investors (so long as the Desai Investors have the right
to designate a nominee for director) and two members designated by Mr. Cornstein
(which number will be reduced to one if Mr. Cornstein is only entitled to
designate one nominee for director and none if Mr. Cornstein ceases to have the
right to designate a nominee for director). When a stockholder or group of
stockholders loses the right to designate a director, such director is to be
designated instead by a majority of the directors of the Company.
In addition, the Amended and Restated Stockholders' Agreement provides
that the parties thereto have (i) certain "come along" rights allowing them to
participate in private sales of Common Stock by parties selling at least a
majority of the outstanding shares of Common Stock and (ii) certain "take along"
rights allowing parties who are selling at least a majority of the outstanding
shares of Common Stock to require the other parties to sell all or a portion of
their shares of Common Stock to the same
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purchaser in the same transaction on the same terms.
Pursuant to Rule 13d-4 under the Securities Exchange Act of 1934, as
amended, Mr. Reiner declares that the filing of this Statement shall not be
construed as an admission that any person other than Mr. Reiner is the
beneficial owner of any securities covered by this Statement or that Mr. Reiner
is the beneficial owner of any securities held by any other persons (including,
but not limited to, the Other Stockholders).
(c) Except for the sale by Mr. Reiner of 100,000 shares of Common Stock
in the Equity Offering, as described elsewhere herein, no transactions in Common
Stock were effected by the person named in response to Paragraphs (a) and (b) of
this Item 5 during the period beginning sixty days prior to the date of the
event which requires the filing of this statement.
(d) No person other than Mr. Reiner has the right to receive or the
power to direct the receipt of dividends from the shares of Common Stock
beneficially owned by Mr. Reiner or the right to receive or the power to direct
the receipt of the proceeds from the sale of such shares.
(e) Not Applicable.
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Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
There are no contracts, arrangements, understandings or
relationships (legal or otherwise) between Mr. Reiner and any person with
respect to any securities of the Company, including, but not limited to,
transfer or voting of any of the securities, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies, except:
(i) The Amended and Restated Stockholders' Agreement, as
described in Item 5 above.
(ii) In connection with the Equity Offering, Mr. Reiner agreed
with the underwriters for the Equity Offering (the "Underwriters") not to offer,
sell, contract to sell or otherwise dispose of any shares of Common Stock (other
than shares being sold in the Equity Offering) or any rights to acquire Common
Stock for a period of 180 days after the date of the prospectus relating to the
Equity Offering, without the prior consent of the representative of the
Underwriters. These restrictions expire October 17, 1998.
(iii) Mr. Reiner has certain registration rights pursuant to a
Registration Rights Agreement, dated as of May 26, 1993, as amended, by and
among the Company, Mr. Reiner and certain
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other stockholders of the Company. Mr. Reiner also has certain registration
rights pursuant to the Employment Agreement dated as of January 3, 1995, as
amended, between the Company, FFJC and Mr. Reiner.
Item 7. Material to be Filed as Exhibits.
None.
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After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned hereby certifies that the information set
forth in this statement is true, complete and correct.
Dated: May 15, 1998
By /s/Arthur E. Reiner
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Arthur E. Reiner
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