GLENGATE APPAREL, INC.
75 Rod Smith Place
Cranford, New Jersey 07016
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 16, 1998
To the Shareholders of GLENGATE APPAREL, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
of GlenGate Apparel, Inc. (the "Company") will be held on Monday, February 16,
1998 at 9:30 A.M. at 75 Rod Smith Place, Cranford, New Jersey 07016, for the
following purposes:
1. To elect four directors of the Company;
2. To ratify the selection of BDO Seidman, LLP as the
Company's independent auditors for the fiscal year ending September 30, 1998;
and
3. To transact such other business as may properly
come before the meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on
January 14, 1998 are entitled to notice of and to vote at the Annual Meeting or
any adjournments thereof.
By Order of the Board of Directors
George J. Gatesy
President, Chairman of the Board
January 23, 1998
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IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING:
PLEASE FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE
PROVIDED FOR THAT PURPOSE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE, AND IF YOU ARE
PRESENT AT THE MEETING YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AT THAT TIME AND
EXERCISE THE RIGHT TO VOTE YOUR SHARES PERSONALLY.
- --------------------------------------------------------------------------------
GLENGATE APPAREL, INC.
75 Rod Smith Place
Cranford, New Jersey 07016
Telephone No. (908) 653-9100
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 16, 1998
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of GlenGate Apparel, Inc. (the
"Company") for use at the Annual Meeting of Shareholders to be held on February
16, 1998, including any adjournment or adjournments thereof, for the purposes
set forth in the accompanying Notice of Meeting.
Management intends to mail this proxy statement and the
accompanying form of proxy to shareholders on or about January 23, 1998.
The costs of soliciting proxies will be borne by the Company.
In addition to solicitation by mail, directors, officers and regular employees
of the Company (who will not specifically be compensated for such services) may
solicit proxies by telephone or otherwise. Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries to forward
proxies and proxy material to their principals, and the Company will reimburse
them for their expenses.
Proxies in the accompanying form, duly executed and returned
to the Company and not revoked, will be voted at the Annual Meeting. Any proxy
given pursuant to such solicitation may be revoked by the shareholder at any
time prior to the voting of the proxy by a subsequently dated proxy, by written
notification to the Secretary of the Company, or by personally withdrawing the
proxy at the meeting and voting in person.
OUTSTANDING STOCK
Only shareholders of record at the close of business on
January 14, 1998 (the "Record Date") are entitled to notice and to vote at the
Annual Meeting. As of the Record Date, there were issued and outstanding
10,613,932 shares of the Company's Common Stock, par value $.001 per share (the
"Common Stock"), the Company's only class of voting securities. Each share
entitles the holder to one vote on each matter submitted to a vote at the Annual
Meeting.
VOTING PROCEDURES
The directors will be elected by the affirmative vote of a
plurality of the shares of Common Stock present in person or represented by
proxy at the Annual Meeting, provided a quorum exists. All other matters in the
Annual Meeting will be decided by a majority of the votes cast by the holders of
shares of Common Stock present in person or represented by proxy at the Annual
Meeting, provided a quorum exists. Votes will be counted and certified by one or
more Inspectors of Election. A quorum will exist at the Annual Meeting if at
least a majority of the outstanding shares of Common Stock as of the Record Date
are present in person or represented by proxy. The Board of Directors does not
know of any matters, other than the matters described in this Proxy Statement,
which are expected to be represented for consideration at the Annual Meeting. If
any other matters are properly presented at the Annual Meeting, the persons
named in the Proxy will have the discretion to vote on such matters in
accordance with their best judgment.
"Votes cast" at a meeting of shareholders by the holders of
shares entitled to vote are determinative of the outcome of the matter to be
voted on; failures to vote, broker non-votes and abstentions will not be
considered "votes cast." The enclosed proxies will be voted in accordance with
the instructions thereon. Unless otherwise stated, all shares represented by
such proxy will be voted as instructed. Proxies may be revoked as noted above.
ELECTION OF DIRECTORS
Directors are elected annually by the shareholders. At this
year's Annual Meeting of Shareholders, two directors will be elected to hold
office for a three-year term ending in 2001, one director will be elected to
hold office for a two year term ending in 2000, and one director will be elected
to hold office for a one year term ending in 1999, or until a director's earlier
resignation or removal. The Board of Directors of the Company does not have
standing audit, nominating or compensation committees, or committees performing
similar functions.
At this year's Annual Meeting of Shareholders, the proxies
granted by shareholders will be voted individually for the election as directors
of the Company of the persons listed below for the term ending on the date of
the annual meeting of shareholders of the Company in the year opposite their
names unless a proxy specifies that it is not to be voted in favor of a nominee
for director. In the event any of the nominees listed below shall be unable to
serve, it is intended that the proxy will be voted for such other nominees as
are designated by the Board of Directors. Each of the persons named below has
indicated to the Board of Directors of the Company that he will be available to
serve.
Term To First Became
Nominee and Age Expire Director
George J. Gatesy, 45 2001 November 1993
Martin D. Koffman, 37 2001 October 1996
James C. Willcox, 53 2000 July 1997
Travis R. Metz, 27 1999 July 1997
Information concerning the nominees and continuing directors is set forth below:
Nominees:
GEORGE J. GATESY age 45, Director since November 1993
George J. Gatesy, President and Chairman of the Board of the Company,
received a Bachelor of Arts Degree from Farleigh Dickinson University. Mr.
Gatesy served from 1975 to 1978 with the MacGregor Brunswick Golf Company as
sales agent and sales representative. From 1978 to 1984 Mr. Gatesy served as a
field representative for Etonic, Inc. While with Etonic, Mr. Gatesy received
Etonic's President's Award in years 1981 and 1982. This award was for surpassing
the $1,000,000 sales mark in each year. In 1984 Mr. Gatesy joined the EJ Manley
Company (Aureus Ltd.) as an independent golf sales representative. For
increasing his territory's sales volume from $450,000 to $2,400,000, Mr. Gatesy
was awarded the Aureus Salesman of the Year award during the selling season
1988/1989. In the Spring of 1990, Mr. Gatesy became Polo/Ralph Lauren's National
Sales Manager. In 1991 he was promoted to Vice President of Sales with total
responsibility for all segments of the golf division.
MARTIN D. KOFFMAN age 37, Director since October 1996
Martin D. Koffman is a Director and President of The Koffman Group, Inc., a
diversified investment firm. Mr. Koffman worked as a tax specialist with Coopers
& Lybrand in 1984. In 1986 Mr. Koffman became associated with the law firm of
Squadron, Ellenoff, Plesent & Lehrer. Since 1990, Mr. Koffman has been a
principal of Jomar Management Corp., a diversified holding company. Mr. Koffman
is the cousin of Jeffrey P. Koffman.
JAMES C. WILLCOX age 53, Director since July 1997
James C. Willcox is President and Chief Executive Officer of American
Marketing Industries Inc. which is a holding company for three apparel
companies, Swingster, Dunbrooke and Allison Manufacturing. Prior to becoming the
President of American Marketing Industries, Mr. Willcox served as President and
Chief Executive Officer of Hasco International in St. Charles, Missouri from
1993 to 1996. Mr. Willcox also served as President of House of Lloyd in
Grandview, Missouri and has over twenty-one years experience with AVon Products
including a position as Senior Vice President with responsibilities in
manufacturing, sales and distribution.
TRAVIS R. METZ age 27, Director since July 1997
Travis R. Metz is an Associate of Jupiter Partners Inc., the management
company of Jupiter Partners L.P. Jupiter Parnters L.P. is a $350 million private
investment firm. Mr. Metz worked as a financial analyst at Lazard Freres & Co.
from 1991 to 1993 and has been with Jupiter Partners Inc. since 1994. Mr. Metz
is a director of American Marketing Industries Inc. and American Marketing
Industries Holdings Inc., of which Jupiter Partners L.P. is the principal
shareholder.
Directors with Terms to Expire in 1999:
JEFFREY P. KOFFMAN age 32, Director since October 1996
Jeffrey P. Koffman is President of Apparel America, Inc., a manufacturer of
women's swimwear and apparel. He is also a Director and Treasurer of The Koffman
Group, Inc., a diversified investment company. Mr. Koffman served as a financial
analyst with Security Pacific from 1987 to 1989. In 1989, Mr. Koffman became
Vice President of Pilgrim Industries and in 1990, he became the President of
that company. From 1994 to the present, Mr. Koffman has served in an executive
capacity with Tech Aerofoam Products. Mr. Koffman is the cousin of Martin D.
Koffman.
ROBERT J. MUNCH age 46, Director since February 1996
Robert J. Munch is a Senior Vice President of the Canadian Imperial Bank of
Commerce (CIBC) Managing Director, Global Energy, CIBC Wood Gundy, and a member
of CIBC Wood Gundy's Management Group. Mr. Munch is a member of the Canadian
Society of New York and has served on the Board of Governors and on the faculty
of the American Institute of Banking.
Directors with Terms to Expire in 2000:
PETER J. KOSTIS age 50, Director since November 1993
Peter J. Kostis, is a world renowned golf instructor having taught over 125
PGA Tour Players. He is a television analyst for CBS Sports and USA Network. Mr,
Kostis is a professional panel member for Golf Digest magazine and currently is
a director of The Kostis/McCord Golf School at Grayhawk Golf Club, Scottsdale,
Arizona. He has appeared seven times on the cover of Golf Digest Magazine and is
the author of Inside Path to Better Golf.
During the fiscal year ended September 30, 1998, the Board of Directors
held two meetings at which all of the Directors were present and also took
action by unanimous written consent of the directors in lieu of meetings. There
are no standing committees of the Board of Directors of the Company.
Compensation of Directors
Directors are reimbursed for all out-of-pocket expenses incurred in
attending Board Meetings and are eligible to receive options under the Company's
1994 Stock Option Plan, subject to the terms thereof.
EXECUTIVE COMPENSATION
Executive Officers
In addition to Mr. George J. Gatesy, the Company's other executive officer
is Mr. Peter Culbertson, COO/CFO and Secretary-Treasurer. Mr. Culbertson
commenced employment with the Company on January 6, 1997. Mr. Culbertson was
formerly Senior Vice President of Woolrich, Inc. and President of Leslie Fay
Sportswear, New York, New York. Officers are elected by the Board of Directors
and serve at the discretion of the Board.
Information regarding compensation of the Company's officers is set forth
below.
<PAGE>
- 6 -
Summary Compensation Table(s)
Other
Name and Annual
Principal Position Year Salary Bonus(s) Compensation ($)
George Gatesy 1997 $155,127 - 0 - - 0 -
President 1996 $148,000 - 0 - - 0 -
Norman Britman(1) 1996 $103,000 - 0 - - 0 -
Secretary-Treasurer
Peter Culbertson(2) 1997 $ 90,000 - 0 - - 0 -
COO/CFO and 1996 - 0 - - 0 - - 0 -
Secretary-Treasurer
(1)Mr. Britman's employment with the Company terminated on January 3, 1997.
(2)Mr. Culbertson commenced employment with the Company on January 6, 1997.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
% of Total
Number of Securities Options Granted Exercise or
Underlying Options to Employees Base Price Expiration
Name Granted(#) in Fiscal Year ($/Sh.) Date
<S> <C> <C> <C> <C>
George Gatesy 0 0 - -
Norman Britman 0 0 - -
Peter Culbertson 0 0 - -
</TABLE>
<PAGE>
FY-End Option Values
Number of
Securities Value of
Underlying Unexercised
Unexercised in-the-Money
Options Options
at FY-End(#) at FY-End($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
George Gatesy 12,500/0 None
Norman Britman 0/0 None
Peter Culbertson 0/0 None
The Company does not have a written employment contract with any of its
executives. However, the company has agreed with George Gatesy, President and
CEO to enter into a three year contract at a base salary of $185,000 beginning
10/1/97. The salaries of the Company's executives are reviewed annually at the
discretion of the Board of Directors. The Company is the beneficiary of a
$5,000,000 Key Man Life Insurance policy on the life of Mr. Gatesy.
- 8 -
VOTING SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of
January 8, 1998, based on information obtained from the persons named below,
with respect to the beneficial ownership of shares of Common Stock by (i) each
person known by the Company to be the beneficial owner of more than five percent
of the outstanding shares of Common Stock, (ii) the Named Executives, (iii) each
of the Company's directors and (iv) all executive officers and directors as a
group:
% of
Number of Outstanding
Name of Shareholder of Shares Shares
George J. Gatesy 2,001,200 18.85%
Peter Culbertson 0 0
Martin Koffman 0 0
Jeffrey Koffman 22,500(1) *
Peter J. Kostis 509,500 4.8%
Robert J. Munch 6,000 *
The Koffman Group, Inc. 1,032,500(2) 9.73%
American Marketing Industries, Inc. 3,500,000(3) 32.97%
James C. Willcox 1,000 *
Travis R. Metz 0 0
All Executive Officers 2,540,200 23.93%
and nominated directors
as a group (7 persons)
* Less than 1%
(1) These shares include 15,000 shares underlying a currently exercisable
warrant.
(2) These shares include 75,000 shares underlying currently exercisable
warrants. Jeffrey Koffman and Martin Koffman are principals of The Koffman
Group, Inc.
(3) These shares include 1,000,000 shares underlying a currently
exercisable option to purchase shares from the Company. James C. Willcox and
Travis R. Metz are principals of American Marketing Industries, Inc.
CERTAIN TRANSACTIONS
In April 1996, George Gatesy, a director and shareholder of the
Company, loaned the Company $100,000. The loan bears interest at a rate per
annum of 1-1/2% over prime and matured on April 15, 1997. Mr. Gatesy has agreed
to convert such loan to a demand loan. The note is subordinated to all creditors
of the Company.
In September 1996, the Company completed a private placement with The
Koffman Group, Inc. of 1,250,000 shares of Common Stock. Total gross proceeds
from this private placement was $1,250,000. In connection with the private
placement, the Company granted warrants to The Koffman Group, Inc. to purchase
an additional 85,000 shares at $1.00 per share, such warrants to be exercisable
until September 1997. Pursuant to a contract dated August 23, 1996 between the
Company and The Koffman Group, Inc., the Company granted The Koffman Group, Inc.
certain rights in the nature of preemptive rights as to the purchase of
additional Common Stock should the Company seek to issue additional Common
Stock. Such rights shall exist until such time as The Koffman Group, Inc. shall
own less than 250,000 shares of Common Stock. The Koffman Group, Inc. also
received a fee of $30,000 in connection with their original investment. Jeffrey
P. Koffman and Martin D. Koffman are principals of The Koffman Group, Inc. and
directors of the Company.
In January 1997, George Gatesy and Peter Kostis, directors and
shareholders of the Company, loaned the Company $100,000 and $150,000,
respectively, to satisfy working capital needs. The notes are payable upon
demand and bear interest at a rate per annum of 12% payable monthly over the
life of the notes. The notes are subordinated to all creditors of the Company.
In April 1997, as an ancillary term to its financing arrangement with a
lending group of which the Koffman Group, Inc. and Jeffrey Koffman are members,
the Company agreed to use its best efforts to convene a special meeting of the
shareholders for the purpose of approving an amendment to its Certificate of
Incorporation to increase the number of authorized shares of Common Stock. Upon
the approval of such amendment by the shareholders, the Company further agreed
to issue to the lending group warrants to acquire up to 450,000 shares of Common
Stock at 60% of the then market price of Common Stock, such warrants to be
exercisable from August 8, 1997 until April 8, 2000, at which time such warrants
expire. In July 1997, the shareholders approved the amendment to increase the
number of authorized shares of Common Stock from 10,000,000 to 17,000,000.
Following such amendment, the Company issued the lending group warrants to
acquire 270,000 shares, such warrants to be exercisable from August 8, 1997
until April 8, 2000 at which time the warrants shall expire.
In July 1997, the Company entered into a Trademark Licensing Agreement
with American Marketing Industries, Inc. ("AMI"), a shareholder of the Company,
whereby the Company granted to AMI, subject to certain limitations, conditions
and restrictions, an exclusive domestic license to use various trademarks of the
Company in connection with the sale of certain products to entities who acquire
such products solely for distribution to their employees, directors and officers
or to their customers for promotional purposes only. The Company also granted to
AMI the exclusive right to market and distribute certain products which bear
trademarks licensed by the Company within the domestic market to entities who
acquire the products solely for distribution to their employees, directors and
officers or to their customers for promotional purposes only.
In July 1997, the Company completed a private placement with AMI of
2,500,000 shares of Common Stock and options to acquire up to 2,500,000 shares
of Common Stock. Total gross proceeds from this private placement was
$2,500,000. The options acquired by AMI consist of (i) an option to acquire up
to 1,000,000 shares of Common Stock at a purchase price of $1.50 per share, such
option to be immediately exercisable and expiring three years after the date of
the grant, and (ii) an option to acquire up to 1,500,000 shares at a purchase
price of $1.00 per share for 240,000 shares, and $2.00 per share for 1,260,000
shares, such option to become exercisable one year from the date of the grant
and expiring three years after the date of the grant. James C. Willcox and
Travis D. Metz are principals of AMI and directors of the Company.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
BDO Seidman, LLP has audited and reported upon the financial
statements of the Company for the fiscal years ended September 30, 1995, 1996
and 1997. BDO Seidman, LLP has been selected by the Board of Directors to
examine and report upon the financial statements of the Company for the fiscal
year ending September 30, 1998. The Board of Directors recommends that the
shareholders of the Company ratify such selection. A representative of BDO
Seidman, LLP is expected to be present at the Annual Meeting with the
opportunity to make a statement if he or she desires to do so and is expected to
be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Shareholders who wish to present proposals appropriate for
consideration at the Company's 1998 Annual Meeting of Shareholders must submit
the proposal in proper form to the Company at its address set forth on the first
page of this Proxy Statement not later than September 15, 1998 in order for the
proposition to be considered for inclusion in the Company's proxy statement and
form of proxy relating to such annual meeting. Any such proposals, as well as
any questions related thereto, should be directed to the Secretary of the
Company.
By order of the Board of Directors
George J. Gatesy
Chairman of the Board and President
GLENGATE APPAREL, INC.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON FEBRUARY 16, 1998
The undersigned hereby appoints George J. Gatesy and Robert J.
Munch and each of them, as the true and lawful attorneys, agents and proxies of
the undersigned, with full power of substitution, to represent and to vote all
shares of Common Stock of GlenGate Apparel, Inc. held of record by the
undersigned on January 14, 1998, at the Annual Meeting of Stockholders to be
held on Monday, February 16, 1998 at 9:30 A.M. at 75 Rod Smith Place, Cranford,
New Jersey 07016, and at any and all adjournments thereof. Any and all proxies
heretofore given are hereby revoked.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DESIGNATED BY THE
UNDERSIGNED. IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED FOR THE NOMINEES
LISTED IN ITEM 1 AND FOR PROPOSAL NUMBER 2.
1. Election of Directors WITHHOLD (INSTRUCTION: To withhold
FOR all nominees listed AUTHORITY authority to vote for
below (except as marked to vote for any individual, strike
list to the contrary below) nominees a line through the nominee's
below name in the list below
---- ----
GEORGE J. GATESY, MARTIN D. KOFFMAN, JAMES C. WILLCOX and TRAVIS R. METZ
2. Proposal to Ratify the Selection of BDO Seidman, LLP as the Company's
Independent Auditors for the Fiscal Year Ending September 30, 1998.
____ FOR ____ AGAINST ____ ABSTAIN
(Continued and to be dated and signed on reverse side.)
In their discretion, the Proxies are authorized to vote upon such other business
that may properly come before the meeting.
Dated: , 1998
Signature
Signature
IMPORTANT: Please sign exactly as name appears below. Each joint owner
shall sign. Executors, administrators, trustees, etc. should give full title as
such. If signor is a corporation, please give full corporate name by duly
authorized officer. If a partnership, please sign in partnership name by
authorized person.
