================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10K/A
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period from ____ to _____
Commission File No. 1/11812
---------------------
STARTER CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 06-0872266
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
370 James Street
New Haven, Connecticut 06513
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 781-4000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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. [X] Yes [ ] 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. [_]
As of March 20, 1998, the aggregate market value of Common Stock held by
nonaffiliates of the registrant was $26,959,590.
As of March 20, 1998, 27,886,049 shares of Common Stock were outstanding.
================================================================================
<PAGE>
STARTER CORPORATION
ANNUAL REPORT
ON FORM 10K/A
TABLE OF CONTENTS
Page
----
PART III..........................................................2
ITEM 10. Directors and Executive Officers of the Registrant................2
ITEM 11. Executive Compensation............................................6
ITEM 12. Security Ownership of Certain Beneficial Owners and Management...13
ITEM 13. Certain Relationships and Related Transactions...................15
Signatures .................................................................16
<PAGE>
Starter Corporation (the "Corporation" or "Starter") hereby amends the following
items of Part III of its Form 10-K for the fiscal year ended December 31, 1997
filed with the Securities and Exchange Commission on April 3, 1998:
PART III
ITEM 10. EXECUTIVE OFFICERS AND DIRECTORS OF THE REGISTRANT.
Officers and Directors
The names of officers and directors and their ages, as of April 1, 1998, and
certain other information about them are set forth below:
Name Age Principal Occupation or Employment and
- ---- --- Position with the Corporation
-----------------------------
David A. Beckerman 55 Chairman of the Board, President and
Chief Executive Officer of the Corporation
Benjamin E. Cohen 70 Retired Partner, Blum, Shapiro & Company, P.C.,
and accounting firm and Director of the
Corporation
Carmen L. Cozza 67 Assistant to the President and Director of
Athletics, Yale University and Director of the
Corporation
Douglas T. Dryburgh 55 Senior Vice President, Sales & Marketing
Robert G. Felice 41 Vice President, Field Sales
Joseph P. Grant 66 Managing Director - Worldwide of Summit Properties
International and Director of the Corporation
Gary S. Letendre 38 Senior Vice President
Steven B. Raab 34 Vice President, Marketing
Richard H. Saletan 54 Chairman of the Board and Chief Executive CSC
Weston Group , a management consulting firm, since
1971 and Director of the Corporation
Mark G. Sklarz 52 Partner, Cummings & Lockwood, since August, 1996,
previously a partner in Sklarz, Gallant & Temkin,
P.C., and its predecessors since 1983 and Director
of the Corporation
Sean T. Smith 37 Controller and Chief Accounting Officer
Theodore R. Voss 55 General Counsel and Assistant Secretary
John C. Warfel 45 Senior Vice President and Chief Financial Officer
Thomas G. White 37 Vice President, National Account Sales
Julianne Wilhelm 54 Vice President, Human Resources
2
<PAGE>
Mr. Beckerman reassumed the position of President of the Corporation on August
22, 1997, a title he had relinquished in August 1994. He continues to serve as
Chairman of the Board and Chief Executive Officer of the Corporation, which
positions he has held for more than five years.
Mr. Cohen has served as a Director of the Corporation since 1993. On December
31, 1995, Mr. Cohen retired from Blum, Shapiro & Company, P.C., where he had
been a partner since prior to 1989.
Mr. Cozza has served as a Director of the Corporation since 1995. In 1996, Mr.
Cozza retired as Head Coach of the Yale University Football Team, a position he
had held since 1965.
Mr. Dryburgh was appointed Senior Vice President, Sales & Marketing of the
Corporation in November of 1997. From April 1997, when he joined the
Corporation, until November 1997, he was Senior Vice President, Sales. Prior to
joining the Corporation he was Executive Vice President of Phillips Van Heusen
from April 1994 to April 1997. From January 1992 to April 1994, Mr. Dryburgh was
President of Boston Traders Men's, a division of Boston Trading, Inc.
Mr. Felice was appointed Vice President Field Sales of the Corporation in April
1998. From March 1995 to April 1998, Mr. Felice was Vice President,
International. From January 1991 to March 1995, Mr. Felice was Managing Director
International. From September 1990 to January 1991, Mr. Felice was International
Sales Manager and Sales Manager Special Markets.
Mr. Grant has served as a Director of the Corporation since 1993. In January
1997, Mr. Grant was appointed Managing Director-Worldwide of Summit Properties
International. From October 1995 through 1996, Mr. Grant was President of
Licensed Properties International. From 1991 to 1995, Mr. Grant was President
and Chief Executive Officer of Time Warner Sports Merchandising (a Time Warner
company). Mr. Grant had previously been employed at Time Warner companies in
various capacities since 1968. All of these organizations are licensing
companies.
Mr. Letendre was appointed Vice President, Operations of the Corporation in
April 1998. From March 1995 to April 1998, he was Senior Vice President,
Sourcing. From September 1993 to March 1995, Mr. Letendre was Senior Vice
President and Chief Operating Officer. From 1992 to September 1993, Mr. Letendre
was Vice President and Chief Operating Officer. From 1988 to 1992, Mr. Letendre
was Vice President and Chief Financial Officer.
Mr. Raab was appointed Vice President Marketing of the Corporation in February
1998. From December 1996 until February 1998, he held the position of Director
of Special Markets. From May 1995 to December 1996, he held the position of
General Manager Olympics. From October 1994 to May 1995, he held the position of
Marketing Manager, Hockey and Baseball. From September 1992 until June of 1994,
Mr. Raab was a student at the Harvard Business School.
Mr. Saletan has served as a Director of the Corporation since 1995. He became
Chairman of the Board of CSC Weston Group in 1995.
Mr. Sklarz has served as a Director of the Corporation since 1978. Mr. Sklarz is
a partner in the law firm of Cummings & Lockwood. See "Compensation Committee
Interlocks and Inside Participation."
In April of 1998 Mr. Smith was appointed Controller and Chief Accounting Officer
of the Corporation. From February 1997 to April 1998, he was Controller of the
Corporation. Mr. Smith jointed Starter in July 1995 and served as Director of
Financial Reporting from July 1995 to February 1997. Mr. Smith was a Senior
Manager in the accounting firm of Ernst & Young LLP from 1989 to July 1995.
3
<PAGE>
Mr. Voss joined the Corporation in October 1994 as General Counsel. In March
1995, he was appointed Assistant Secretary of Starter. From 1985 to October
1994, Mr. Voss was the Assistant General Counsel and Assistant Secretary of
Crystal Brands, Inc., a manufacturer and distributor of apparel and costume
jewelry.
Mr. Warfel was appointed Senior Vice President, and Chief Financial Officer of
the Corporation in April 1998. From March 1995 to April 1998, Mr. Warfel was
Senior Vice President Administration and Finance. From 1992 to March 1995, Mr.
Warfel was Vice President and Chief Financial Officer. From 1988 to 1992, Mr.
Warfel was Vice President and Chief Operating Officer. Mr. Warfel serves as a
member of the Board of Directors of the Aristotle Corporation.
Mr. White was appointed Vice President, National Account Sales of the
Corporation in October 1996. From March 1995, to October 1996, Mr. White served
as Vice President Sales. From January 1994 to March 1995, Mr. White was Director
Retail Sales. From June 1991 to January 1994, Mr. White was National Sales
Manager and, from April 1987 to June 1991, he was Regional/National Accounts
Manager.
Ms. Wilhelm was appointed Vice President, Human Resources of the Corporation in
May 1996. Ms. Wilhelm was Director of Human Resources of Starter from April 1994
until May 1996. From April 1993 until April 1994, Ms. Wilhelm was Executive
Recruiter of Johnson Smith & Knisely. Ms. Wilhelm was Vice President of Human
Resources at Medical Economics Company from September 1990 until December 1993.
4
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
The Corporation's executive officers and directors are required under the
Securities and Exchange Act of 1934 to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Copies of those reports
must also be furnished to the Corporation. Based solely on the Corporation's
review of the copies of reports it has received, the Corporation believes that,
in 1997, all its executive officers, directors and greater than ten percent
beneficial owners complied with all filing requirements applicable to them.
5
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
Executive Compensation
The following table sets forth, for 1997, 1996 and 1995, information concerning
the compensation for services in all capacities to the Corporation received by
the chief executive officer and each of the other five most highly compensated
officers who received total salary and bonus compensation in excess of $100,000
during the Corporation's last fiscal year (the "Named Executive Officers") and
two former executives who would have been Named Executive Officers in 1997 based
on their salary and bonuses but for the fact that they left the employ of the
Corporation prior to December 31, 1997.
Summary Compensation Table
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------- ----------------------
Payouts
-------
Awards
------
Restricted Securities
Name & Principal Other Annual Stock Underlying LTIP All Other
Position Year Salary Bonus ($) Compensation Awards($) Options (#) Payouts($) Compensation($)
- -------- ------ --------- ------------ --------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David A. Beckerman (1) 1997 750,000 - - - - - 6,400 (2)
Chairman of the Board, 1996 750,000 - - - - - 6,000 (2)
and President, and Chief 1995 749,996 - - - - - 6,000 (2)
Executive Officer
Frederick T. Burke, II (3) 1997 155,000 - - - 15,000 - 4,700 (2)
1996 31,415 - - - 5,000 -
Gary S. Letendre 1997 185,773 30,000 - 6,400 (2)
Sr. Vice President 1996 175,006 100,000 6,000 (2)
Sourcing 1995 175,006 30,000 6,000 (2)
Lawrence C. Longo, Jr.(4) 1997 175,006 - - - 15,000 - 6,400 (2)
1996 156,538 - - - 45,000 - 6,000 (2)
1995 129,226 - - - 35,000 - 5,169 (2)
John C. Warfel 1997 165,000 - - - 10,000 - 6,400 (2)
Sr. Vice President 1996 159,230 - - - 95,000 - 6,000 (2)
Administration and Finance 1995 140,010 - - - 10,000 - 5,600 (2)
and Chief Financial Officer
John M. Tucker (5) 1997 336,537 - - - - - 163,464 (7)
1996 500,000 - - - - - -
1995 350,012 - - - 50,000 - -
John S. Thorbeck (6) 1997 181,441 - - - - - 16,827 (7)
1996 202,500 - - - 25,000 - -
1995 10,769 - - - - - -
</TABLE>
6
<PAGE>
(1) For certain information concerning compensation to be paid to Mr.
Beckerman, see "Employment Contracts and Termination of Employment".
(2) Represents contributions made to the Corporation's 401(k) plan.
(3) Mr. Burke became an employee of the Corporation in October 1996 and left
the employ of the Corporation in April 1998. Mr. Burke held the position
of V.P. Field Sales prior to leaving the employ of the Corporation.
(4) Mr. Longo left the employ of the Corporation in April 1998. Mr. Longo held
the position of Chief Financial Officer prior to leaving the employ of the
Corporation.
(5) Mr. Tucker left the employ of the Corporation in August 1997. Mr. Tucker
held the position of President prior to leaving the employ of the
Corporation.
(6) Mr. Thorbeck left the employ of the Corporation in November 1997. Mr.
Thorbeck held the position of V.P. Marketing prior to leaving the employ
of the Corporation.
(7) Represents severance compensation.
Stock Option Plan
In 1993, the Board of Directors established the Starter Corporation 1993 Stock
Option Plan (the "Option Plan") which was subsequently approved by the
Corporation's stockholders. The Option Plan provides that stock options may be
granted through the year 2003 to management and other employees of the
Corporation. An aggregate of 2,000,000 shares of Common Stock were reserved for
grant under the Option Plan and to date options for an aggregate of 1,242,500
shares have been granted under the Option Plan.
Compensation Committee Interlocks and Insider Participation
Mr. Sklarz accepts no compensation for his position as Secretary of the
Corporation. Mr. Sklarz is a partner in the law firm of Cummings & Lockwood. The
law firm acted as counsel to the Corporation in the fiscal year ended December
31, 1997 and continues to provide legal services to the Corporation. The
Corporation paid Cummings & Lockwood legal fees of approximately $219,933 in
1997.
Mr. Saletan was a member of the Compensation Committee until October 1997. Mr.
Saletan is the Chief Executive Officer of C.S.C. Weston Group, a management
consulting firm. C.S.C. Westin Group provided consulting services to the
Corporation in the fiscal year 1997 and continues to provide consulting services
to the Corporation. The Corporation paid C.S.C. Weston Group consulting fees of
approximately $152,901 in 1997.
7
<PAGE>
Aggregated Option Exercises and Fiscal Year-End Option Values
The following table sets forth certain information as to stock options exercised
in 1997 and the value of the stock options held at December 31, 1997 by each
Named Executive Officer and Messrs. Tucker and Thorbeck.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Acquired Value Options at Fiscal Year-End(#) at Fiscal Year-End($)
Name On Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- -------------- ----------- --------------------------- -------------------------
<S> <C> <C> <C> <C>
David A. Beckerman -- -- 0/0 0/0
Frederick T. Burke II -- -- 0/15,000 0/0
Gary S. Letendre -- -- 0/140,000 0/0
Lawrence C. Longo -- -- 0/95,000 0/0
John S. Thorbeck -- -- 0/0 0/0
John M. Tucker -- -- 0/0 0/0
John C. Warfel -- -- 0/115,000 0/0
</TABLE>
Compensation of Directors
Each non-employee director of the Corporation receives an annual director's fee
of $5,000, an attendance fee of $1,000 for each meeting of the Board of
Directors attended and $250 for each meeting of a committee of the Board of
Directors attended. The non-employee directors who serve on the executive
committee of the Board of Directors have traditionally not accepted any fee for
attending such meetings thereof. Directors who are employees of the Corporation
receive no compensation for service as members of the Board of Directors. All
directors are reimbursed for expenses incurred in connection with attendance at
meetings. Each non-employee director as of the conclusion of each Annual Meeting
of Stockholders automatically receives an option to purchase 2,500 shares of
Common Stock pursuant to the Starter Corporation 1994 Stock Option Plan for
Non-Employee Directors. In 1998 the Board of Directors unanimously decided to
waive their annual fee and attendance fees until the Corporation's fiscal
situation improves.
Employment Contracts and Termination of Employment
Effective January 1, 1997, the Corporation and Mr. Beckerman amended Mr.
Beckerman's employment agreement. The amended employment agreement (the
"Beckerman Employment Agreement"), with a three-year term (with an automatic
annual renewal period thereafter), provides that Mr. Beckerman will serve as
Chairman of the Board of Directors and Chief Executive Officer of the
Corporation and will receive an annual base salary of $750,000 and a bonus (a
"First Level Bonus") of up to 150% of his base salary if the Corporation
achieves certain goals to be established by the Board of Directors or the
Compensation Committee. In addition, Mr. Beckerman is entitled to receive, at
the discretion of the Board of Directors or the Compensation Committee, an
additional bonus (a "Second Level Bonus") of up to 150% of his base salary if
the Corporation achieves certain financial and other performance-related goals
established from time to time by the Board of Directors or the Compensation
8
<PAGE>
Committee. See "Compensation Committee Report On Executive Compensation" with
respect to allowable deductions of certain executive compensation pursuant to
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
The Beckerman Employment Agreement further provides for certain payments to Mr.
Beckerman upon termination of employment without cause or as a result of death
or disability. If Mr. Beckerman's employment under the Beckerman Employment
Agreement is terminated without cause, Mr. Beckerman is entitled to receive (i)
within 60 days, a lump sum amount equal to two times Mr. Beckerman's annual base
salary and (ii) on each of the two annual anniversary dates succeeding the date
of termination, lump sum amounts equal to the aggregate of a First Level Bonus
and a Second Level Bonus as if the Board of Directors had fully awarded such
bonuses to Mr. Beckerman as of such anniversary dates. In the event of a change
of control of the Corporation, Mr. Beckerman is entitled to terminate his
employment and receive three annual payments each equal in amount to his annual
base salary as of the date of termination. Mr. Beckerman has also agreed, in
consideration for the execution of the Beckerman Employment Agreement by the
Corporation and the compensation to be paid him thereunder, not to compete with
the business of the Corporation for a period of two years following termination
of his employment. See "Compensation Committee Report on Executive
Compensation."
Prior to his leaving the employ or the Corporation, on January 1, 1996, the
Corporation entered into a three-year employment agreement with Mr. Tucker to
serve as President and Chief Operating Officer of the Corporation (the "Tucker
Employment Agreement"). The Tucker Employment Agreement provided for an annual
base salary of $500,000, a First Level Bonus of up to 75% of his base salary and
a Second Level Bonus of up to an additional 75% of his base salary. Mr. Tucker
left the employ of the Corporation in November 1997 and agreed to waive any
compensation provisions of the agreement pertaining to 1998.
1998 Performance Goals
Section 162(m) precludes a deduction by a publicly held corporation for
compensation paid to each of its Chief Executive Officer and its next four most
highly compensated employees in excess of $1 million unless such compensation is
qualified performance-based compensation, the material terms of which are
disclosed to and approved by a majority of the stockholders of such corporation
before the compensation is paid. Qualified performance-based compensation must
be paid solely on account of the realization of one or more pre-established
objective goals. The Compensation Committee of the Board of Directors has
adopted, subject to stockholder approval, the 1998 Quality Performance Based
Goals (the "1998 Performance Goals") under which incentive compensation paid to
the Chief Executive Officer and the President is designed to satisfy the
requirements of Section 162(m). The material terms of the 1998 Performance Goals
are described below.
The maximum amount of incentive compensation that may be paid to the Chief
Executive Officer is 300% of his base salary, consisting of a First Level Bonus,
equal to 150% of his base salary, and a Second Level Bonus, also equal to 150%
of his base salary. The Chief Executive Officer's base salary for 1998 is fixed
at $750,000 in accordance with the terms of the Beckerman Employment Agreement.
9
<PAGE>
The business criteria for the First Level Bonus will be based on performance
goals related to net earnings before taxes. The Chief Executive Officer will not
be eligible to receive any First Level or Second Level Bonuses unless all other
employees of the Corporation who participate in the Corporation's Incentive
Compensation Plan (the "Incentive Plan") are eligible to receive incentive
compensation under the Incentive Plan and unless a specified positive cash flow
is attained The Chief Executive Officer is not eligible to participate in the
Incentive Plan.
The business criteria for Second Level Bonuses will be based on the increase of
the average price of the Common Stock above $6.50 per share during the month of
December 1998.
The 1998 Performance Goals will be administered by a committee composed of not
less than two non-employee directors of the Corporation (the "Committee") to be
designated by the Board of Directors. The Committee will determine the degree of
realization of performance goals, the amount, if any, to be paid as First or
Second Level Bonuses and the timing and form of such payment. Such payments will
be made as soon as practicable. The Committee has no discretion to pay more than
the maximum First and Second Level Bonuses specified above. Receipt of First or
Second Level Bonuses, or the possibility thereof, does not preclude
participation in other compensation and incentive plans of the Corporation.
Compensation Committee Report on Executive Compensation
The Compensation Committee establishes and reviews the Corporation's
arrangements and programs for compensating executive officers, including the
Named Executive Officers. The Compensation Committee is composed entirely of
directors who are not employees of the Corporation. The Compensation Committee
has been advised by outside legal counsel and by compensation consultants in
formulating the Compensation Committee's overall philosophy and objectives
regarding executive compensation and in structuring the Chief Executive
Officer's compensation package.
Philosophy and Policy
The Corporation's compensation program for executive officers consists of three
major elements: a base salary, a bonus that is conditioned upon the
Corporation's return on assets achieving a specified ratio to the return on
assets of the Standard & Poor's Textile-Apparel Manufacturing Companies (or, in
the case of Mr. Beckerman, a bonus as provided in his employment agreement) and
periodic grants of stock options. The Compensation Committee's policy is to
design executive compensation packages that reward the achievement of both
short-term and long-term objectives of the Corporation. In addition, the
Corporation seeks to establish executive compensation in a manner to be
competitive with companies in the apparel industry, with which the Corporation
competes with respect to products, and companies located in the same general
geographic area as the Corporation, with which the Corporation competes with
respect to attracting talented executives. Under this approach, the attainment
of short-term objectives is compensated through discretionary annual bonuses and
the attainment of long-term objectives is rewarded through the periodic grants
of stock options under the Option Plan. The Compensation Committee believes
that, in addition to
10
<PAGE>
compensating executives for attaining long-term objectives of the Corporation
which the Corporation believes eventually will be reflected in the market value
of the Common Stock, the granting of stock options aligns the interest of the
executives with those of the Corporation's stockholders. The Compensation
Committee, after considering management's recommendations, determines the
recipients to be awarded stock option grants. In 1997, the Compensation
Committee considered the following factors with regard to the executives to whom
options were be granted and the size of the options granted: (i) the executive's
position with the Corporation, (ii) the performance of the departments for which
the executive is responsible, (iii) the past performance of the executive, (iv)
the overall performance of the Corporation (including sales levels, bookings and
anticipated results for the fiscal year) and (v) the number of options currently
held by the executive. The weight accorded each of the foregoing factors varies
depending on the executive and his position with the Corporation.
The base salary of each of the executives was determined by the Chairman of the
Board and the President. Mr. Beckerman's compensation was determined as
described below.
Compensation of the Chief Executive Officer
Mr. Beckerman's compensation for 1997 was established by the Beckerman
Employment Agreement. The base salary level included in such agreement was
determined by the Board of Directors in 1993, prior to establishment of the
Compensation Committee, and is intended to be competitive with companies which
were believed to be comparable to the Corporation in the apparel industry. In
connection therewith, the base salary level was determined after reviewing the
levels of executive compensation paid by companies including Liz Claiborne Inc.,
Fruit of the Loom, Inc. and VF Corporation (each of which are included in
Standard & Poor's Textile-Apparel Manufacturer Index). Mr. Beckerman received no
bonus for 1997. In determining any bonus compensation granted to Mr. Beckerman,
see "1998 Performance Goals."
Performance Graph
The following graph compares the total stockholder return on the Common Stock
with the cumulative total return of the Standard & Poor's 500 Stock Index and
the Standard & Poor's Textile - Apparel Manufacturer Index for the period
commencing April 8, 1993, the date of the Corporation's initial public offering,
through December 31, 1997. The graph assumes that the value of the investment in
Common Stock was $100 on April 8, 1993. The total return assumes divided
reinvestment.
11
<PAGE>
COMPARISON OF 57 MONTH CUMULATIVE TOTAL RETURN*
AMONG STARTER CORPORATION, THE S & P 500 INDEX
AND THE S & P TEXTILES (APPAREL) INDEX
[The following table was depicted as a line chart in the printed material.]
4/08/93 12/93 12/94 12/95 12/96 12/97
------- ----- ----- ----- ----- -----
(DOLLARS)
STARTER CORPORATION 100 78 32 32 26 24
S & P 500 100 108 107 147 181 241
S & P TEXTILES (APPAREL) 100 81 77 87 99 106
* $100 INVESTED ON 4/08/93 IN STOCK OR ON 3/31/93 IN INDEX - INCLUDING
REINVESTMENT OF DIVIDENDS, FISCAL YEAR ENDING DECEMBER 31.
12
<PAGE>
ITEM. 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table provides certain information as of April 1, 1998 with
respect to shares of Common Stock beneficially owned by each director, nominee
and beneficial owner of more than 5% of the outstanding shares of Common Stock,
the only class of voting securities of the Corporation outstanding and each of
the Names Executive Officers and Messrs. Thorbeck and Tucker, and by all
directors and executive officers as a group:
Number of Shares
Beneficially Owned and Percent of Outstanding
Nature Common Stock
Name of Beneficial Owner (1) Of Beneficial Ownership Beneficially Owned (2)
- --------------------------------------------------------------------------------
David A. Beckerman 17,615,729 (3) 63.2%
Frederick T. Burke II .................. 1,138 *
Benjamin C. Cohen ...................... 9,400 (4) *
Carmen L. Cozza ........................ 2,500 (5) *
Joseph P. Grant ........................ 8,500 (6) *
Gary S. Letendre ....................... 30,994 (7) *
Lawrence L. Longo, Jr. ................. 3,000 *
Richard H. Saletan ..................... 2,500 (8) *
Mark G. Sklarz ......................... 8,700 (9) *
John S. Thorbeck .......................
John M. Tucker .........................
John C. Warfel ......................... 32,136 (10) *
All executive officers and
directors as a group 17,793,563 (11) 63.8%
(consisting of 16 individuals)
- --------------------------------------------------------------------------------
*Less than 1%
(1) Identifies persons having voting or investment power with respect to the
shares set forth opposite their names, according to information furnished
to the Corporation. Each such person has sole voting or investment power
with respect to such shares, except as otherwise disclosed in the
footnotes to the table.
(2) Expressed as a percentage of the shares of Common Stock outstanding as of
April 1, 1998. For the purpose of calculating each person's beneficial
ownership, any shares subject to options exercisable within 60 days of
April 1, 1998 are deemed to be beneficially owned by, and outstanding with
respect to, such person.
13
<PAGE>
(3) Includes 143,338 shares owned by The Beckerman Family Associates Limited
Partnership (the "Partnership"), of which Mr. Beckerman is the general
partner. Mr. Beckerman owns a 1% general partnership interest and an 11%
limited partnership interest in the Partnership.
(4) Includes 4,500 shares which are subject to currently exercisable options.
(5) Includes 2,500 shares which are subject to currently exercisable options.
(6) Includes 4,500 shares which are subject to currently exercisable options.
(7) Includes 24,000 shares which are subject to currently exercisable options.
(8) Includes 1,500 shares which are subject to currently exercisable options.
(9) Includes 4,500 shares which are subject to currently exercisable options.
(10) Includes 23,000 shares which are subject to currently exercisable options.
(11) Includes 127,000 shares which are subject to currently exercisable
options. Does not include information with respect to the number of shares
benefically owned by Messrs, Thorbeck and Tucker as the Corporation does
not have information with respect to such holdings as of April 1, 1998.
14
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Corporation leases space from Acorn Realty, a company owned by Mr.
Beckerman. Total lease payments were approximately $75,000 in 1997.
For a description of Certain Transactions and Business Relationships including
Messrs. Sklarz and Saletan see "Executive Compensation - Compensation Committee
Interlocks and Insider Participation".
Mr. Sklarz accepts no compensation for his position as Secretary of the
Corporation. Mr. Sklarz is a partner in the law firm of Cummings & Lockwood. The
law firm acted as counsel to the Corporation in the fiscal year ending December
31, 1997 and continues to provide legal services to the Corporation. The
Corporation paid Cummings & Lockwood legal fees of approximately $219,933 in
1997.
Mr. Beckerman and the Corporation entered into an Agreement dated as of March
31, 1998 pursuant to which Mr. Beckerman agreed to guarantee up to $22 million
of the Corporation's credit facility and the Corporation agreed to pay to Mr.
Beckerman an annual fee equal to 3% of the amount of the guarantee and, if the
guarantee is ever drawn upon by the providers of the credit facility, interest
on the amount drawn at 3% per annum above the prime rate of interest until such
amount is repaid to Mr. Beckerman by the Corporation.
15
<PAGE>
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
STARTER CORPORATION
Date: May 7, 1998
By: /s/ David A. Beckerman
-----------------------
David A. Beckerman
Chairman of the Board and
Chief Executive Officer
Date: May 7, 1998
By: /s/Sean T. Smith
-----------------
Sean T. Smith
Controller and
Chief Accounting Officer
Know All Men By These Presents, that each individual whose signature appears
below hereby constitutes and appoints, Sean T. Smith, Theodore R. Voss and John
C. Warfel, and each of them individually, his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to (i) act on, sign
and file with the Securities and Exchange Commission any and all amendments to
this report together with all schedules and exhibits thereto, (ii) act on, sign
and file with the Securities and Exchange Commission any exhibits to this
report, (iii) act on, sign and file such certificates, instruments, agreements
and other documents as may be necessary or appropriate in connection therewith
and (iv) take any and all actions which may be necessary or appropriate in
connection therewith, granting unto such agents, proxies and attorneys-in-fact,
and each of them individually, full power and authority to do and perform each
and every act and thing necessary or appropriate to be done, as fully for all
intents and purposes as he might or could do in person, hereby approving,
ratifying and confirming all that such agents, proxies and attorneys-in-fact,
any of them or any of his or their substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
16
<PAGE>
DIRECTORS:
Date: May 7, 1998
By: /s/ Benjamin E. Cohen
----------------------
Benjamin E. Cohen
Director
Date: May 7, 1998
By:/s/ Carmen L. Cozza
--------------------
Carmen L. Cozza
Director
Date: May 7, 1998
By: /s/ Joseph P. Grant
--------------------
Joseph P. Grant
Director
Date: May 7, 1998
By:/s/ Richard H. Saletan
-----------------------
Richard H. Saletan
Director
Date: May 7, 1998
By: /s/ Mark G. Sklarz
-------------------
Mark G. Sklarz
Director
