-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QxWupeAablw7wa32wqEFjDoGuJVcEUA+kPMdQ4cMvexCol8NoOglkln4JLwYMRMa 9joTS/5NPjqzcjVG1bk4pA== 0000950123-95-003070.txt : 19951031 0000950123-95-003070.hdr.sgml : 19951031 ACCESSION NUMBER: 0000950123-95-003070 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19951030 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOVIE STAR INC /NY/ CENTRAL INDEX KEY: 0000093631 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', CHILDREN'S & INFANTS' UNDERGARMENTS [2340] IRS NUMBER: 135651322 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-05893 FILM NUMBER: 95585383 BUSINESS ADDRESS: STREET 1: 136 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2126797260 MAIL ADDRESS: STREET 1: 136 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10016 FORMER COMPANY: FORMER CONFORMED NAME: SANMARK STARDUST INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: STARDUST INC /NY/ DATE OF NAME CHANGE: 19810526 10-K/A 1 MOVIE STAR, INC. FORM 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 TO ANNUAL REPORT For the Fiscal Year Ended June 30, 1995 Filed Pursuant to Section 12, 13 or 15(d) of The Securities Exchange Act of 1934 MOVIE STAR, INC. (Exact name of registrant as specified in charter) Commission File Number 1-5893 New York 13-56513222 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 136 Madison Avenue, New York, NY 10016 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number including area code (212) 679-7260 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered Common Stock, $.01 par value American Stock Exchange $25,000,000 12-7/8% Debenture American Stock Exchange due October 1, 2001 Securities registered pursuant to Section 12(g) of the Act: None (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 ---- ---- Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference on Part III of Form 10-K or this amendment to the Form 10-K. / / The aggregate market value of voting stock held by nonaffiliates of the Registrant totalled $8,204,731 on August 31, 1995, based upon the closing price of $0.875 at the close of trading on August 31, 1995. As of August 31, 1995 there were 13,959,650 common shares outstanding. The undersigned Registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report on Form 10-K for the year ended June 30, 1995 as set forth in the pages attached hereto: Item 10. Executive Officers and Directors of the Registrant Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management Item 13. Certain Relationships and Related Transactions Item 14. Exhibits Page 1 of 14 Total Pages 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned thereunto duly authorized. Dated: October 30, 1995 MOVIE STAR, INC. BY: /s/ Saul Pomerantz -------------------------- SAUL POMERANTZ Senior Vice President 3 ITEM 10 EXECUTIVE OFFICERS AND DIRECTORS OF THE REGISTRANT
DIRECTOR SINCE NAME AGE POSITION - -------- ---- --- -------- 1981 Mark M. David 48 Chairman of the Board; Director 1987 Clayton E. Medley 47 President; Chief Operating Officer; Director 1983 Saul Pomerantz 46 Senior Vice President; Chief Financial Officer; Secretary; Director 1981 Helen Samuels 64 Vice President; Treasurer; Director OFFICER SINCE - -------- 1995 Barbara T. Khouri 47 Chief Executive Officer
- -------------- Mark M. David was re-elected Chairman of the Board and Chief Executive Officer on December 8, 1994. On August 14, 1995 Mr. David relinquished the position of Chief Executive Officer, but remained as Chairman of the Board. He had been Chairman of the Board and Chief Executive Officer since December 1985, President from April 1983 to December 1987 and Chief Operating Officer of the Company since the merger with Stardust Inc. in 1981 until December 1987. Prior to the merger, he was founder, Executive Vice President and Chief Operating Officer of Sanmark Industries Inc. Barbara T. Khouri joined the Company and was appointed Chief Executive Officer on August 14, 1995. Prior to joining the Company, Ms. Khouri was Executive Director of the Accessories Council, an apparel industry trade organization. From 1992 to 1994, she was Senior Vice President of Leslie Fay Companies, Inc. responsible for that company's accessories and licensing business. Before joining Leslie Fay, from 1989 to 1992, Ms. Khouri was President and Chief Executive of Mutterperl Group Ltd., a leather goods accessories company. Clayton E. Medley was elected President and Chief Operating Officer on December 3, 1987 and was re-elected on December 8, 1994. He had been the Vice President-Manufacturing of the Company since September 1985. He has been employed by the Company in various capacities since 1978, consisting of Chief Engineer, General Manager and President of the Georgia-based operations. Saul Pomerantz, CPA, was elected Senior Vice President on December 3, 1987 and was re-elected on December 8, 1994. Previously, he was Vice President-Finance since 1981. He has been Chief Financial Officer since 1982 and Secretary of the Company since 1983. 4 Helen Samuels was elected Vice President on December 3, 1987 and was re-elected on December 8, 1994. She has been the Treasurer of the Company since April 1983. She was the Controller of Sanmark from 1979 until the merger with Stardust Inc. in March 1981, and continued as Controller of the merged Company until she became Treasurer in 1983. As a result of the resignations of Harold B. Pomeranz and John J. Ross as directors of the Company effective on February 1, 1995 and June 1, 1995, respectively, the Company does not have any independent directors and is currently not in compliance with the listing requirements of the American Stock Exchange. Based on its recent poor financial performance, the Company's efforts to attract suitable candidates to serve as independent members of its Board of Directors have been unsuccessful. The Company will diligently continue to attempt to recruit qualified individuals to serve as outside directors. If the Company is unable to add at least two independent directors to its Board within a reasonable time, the governing body of the American Stock Exchange may initiate steps to have the Company's shares delisted from trading on that exchange. There are no family relationships between the various executive officers and directors. ITEM 11 EXECUTIVE COMPENSATION Report of the Compensation Committee on Executive Compensation During fiscal year 1995, two directors of the Company, Harold B. Pomeranz and John J. Ross, each an outside director who had previously served as members of the Compensation Committee of the Board of Directors (the "Committee"), resigned their directorships. Accordingly, there were no outside directors available to serve as a Compensation Committee and this function was carried out by the Board of Directors, as a whole. Effective in May 1995, all of the executive officers of the Company decided to reduce their salaries in light of the Company's continuing poor financial performance. Compensation Policies In formulating its decision to reduce executive officers' salaries, the Board of Directors did not adhere to the policies previously established for determining compensation; rather it based its decision solely on the Company's current financial condition. In the past, the Committee has based its recommendations to the Board of Directors on (1) the Company's ability to attract and retain experienced individuals with proven leadership and managerial skills, (2) the executives' motivation to enhance the Company's performance for the benefit of its shareholders and customers and (3) the executives' contributions to the accomplishment of the Company's annual and long-term business objectives. Salaries generally have been determined based on the Committee's evaluation of the value of each executive's contribution to the Company, results of the past fiscal year in 5 light of prevailing business conditions, the Company's goals for the ensuing fiscal year and prevailing levels at companies considered to be comparable to and competitors of the Company. The Committee has also recommended that stock options be granted to the executive officers of the Company in order to reward the officers' commitment to maximizing shareholder return and long-term results. Base Salary Compensation Based on recommendations from the Company's Chairman of the Board and the other Committee members' collective experience in the Company's industry, base salaries have been determined from year to year. The Committee did not utilize outside consultants to obtain comparative salary information, but believed that the salaries paid by the Company are competitive, by industry standards, with those paid by companies with similar sales volume to the Company. The Committee placed considerably more weight on each executive's contribution to the Company's development and maintenance of its sources of supply, manufacturing capabilities, marketing strategies and customer relationships than on the compensation policies of the Company's competitors; however, the Committee did not establish or rely on target levels of performance in any of these areas to arrive at its recommendations. The current senior executives of the Company, except Ms. Khouri, have been associated with the Company in senior management positions for periods ranging from thirteen to more than twenty-five years. The Committee believed that base salary levels for fiscal year 1995, which were originally established in fiscal year 1994, were appropriate. Stock Option Grants In 1983, the Company adopted an Incentive Stock Option Plan (the "ISOP") to provide a vehicle to supplement the base salary compensation paid to key employees. All of the Company's senior executives were eligible to receive grants under the ISOP. Options under the ISOP were granted at fair market value at the date of grant. In the past, the Committee has recommended and the Board of Directors has granted options under the ISOP to each of the senior executives, except the Chairman of the Board. Mark M. David was not eligible to receive options under the ISOP because his ownership of shares of the Company exceeds 10% of the outstanding shares of the Company. The options granted under the ISOP were exercisable at a rate of 11% per year for the first eight years of service after grant and 12% for the ninth year after grant. No options have been granted to the Company's senior executives under the ISOP since 1986 and no further options may be granted under the ISOP. 6 On July 15, 1994 the Committee adopted a new Incentive Stock Option Plan (the "1994 ISOP") to replace the expired 1983 ISOP. All of the Company's management and administrative employees are eligible to receive grants under the 1994 ISOP. The 1994 ISOP was approved by the Company's shareholders at the Company's annual meeting on December 8, 1994. Subject to shareholder approval, options under the 1994 ISOP were granted to each of the Company's senior executives (except Mark M. David) on July 15, 1994 at fair market value at that date. As a condition to the grant of options to the Company's senior executives, the Committee required each of the recipients to surrender for cancellation any interest in options granted prior to July 15, 1994. In addition to the ISOP, in 1988, the Committee recommended and the Board of Directors adopted a non-qualified stock option plan to provide an additional continuing form of long-term incentive to selected officers of the Company. Generally these options are issued with a 10-year exercise period in order to encourage the executive officers to take a long-term approach to the formulation and accomplishment of the Company's goals. In 1988, the Committee recommended and the Board of Directors approved the grant of options under the non-qualified option plan to each of the executive officers. No options have been granted under the non-qualified option plan since 1988. Each of the executive officers receiving options under the 1994 ISOP surrendered their outstanding options under the 1988 non-qualified plan. Compensation of the Chief Executive Officer For fiscal year 1995, the annual base salary paid to Mark M. David, the Company's Chairman of the Board and Chief Executive Officer, was not increased. The Committee believed that in view of the Company's results of operations for the fiscal year ended June 30, 1994, no increase in Mr. David's compensation was warranted. In May 1995, Mr. David's base salary for the remainder of the fiscal year and for fiscal year 1996 was reduced by fifty (50%) percent. Compensation Committee Interlocks and Insider Participation John J. Ross, a former director of the Company, owned or was a shareholder in insurance agencies which have written policies covering automobiles, property, casualty, and directors' and officers' insurance for the Company with premiums totaling approximately $422,000 during the 1995 fiscal year. These policies were written at competitive rates and on competitive terms. 7 Harold B. Pomeranz, also a former director of the Company, is a member of the firm of Graubard Mollen & Miller. The Company paid legal fees and disbursements for the fiscal year ended June 30, 1995 to said firm. The fees paid by the Registrant were less than 5% of the total revenues of the law firm. Mark M. David Clayton E. Medley Saul Pomerantz Helen Samuels 8
SUMMARY COMPENSATION TABLE - ----------------------------------------------------------------------------------------------------------------------------------- ANNUAL COMPENSATION LONG TERM COMPENSATION ------------------------------------------------------------ RESTRICTED FISCAL STOCK OPTIONS ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY ($) AWARDS($) (# SHARES) COMPENSATION - ----------------------------------------------------------------------------------------------------------------------------------- Mark M. David 1995 522,857 - 333,333(1) 8,145(8) Chairman of the Board and 1994 550,000 - 333,333(1) 8,145(8) Chief Executive Officer of the 1993 550,000 - 333,333(1) 8,145(8) Company - ----------------------------------------------------------------------------------------------------------------------------------- Clayton E. Medley 1995 270,846 - 477,467(2)(9) _ President and Chief Operating 1994 275,000 - 423,889(3) _ Officer of the Company; 1993 275,000 - 423,889(3) _ Director - ----------------------------------------------------------------------------------------------------------------------------------- Saul Pomerantz 1995 161,663 - 312,467(4)(9) _ Senior Vice President and 1994 165,000 - 312,778(5) _ Chief Financial Officer of the 1993 165,000 - 312,778(5) _ Company; Director - ----------------------------------------------------------------------------------------------------------------------------------- Helen Samuels 1995 127,476 - 219,648(6)(9) _ Vice President and Treasurer 1994 130,000 - 218,667(7) _ of the Company; Director 1993 130,000 - 218,667(7) _ - -----------------------------------------------------------------------------------------------------------------------------------
(1) Represents options to purchase 333,333 shares of Common Stock granted under the Company's Non-Qualified Stock Option Plan ("1988 Plan"). (2) Represents options to purchase 477,467 shares of Common Stock granted under the Company's 1994 Incentive Stock Option ("1994 Plan"). (3) Represents options to purchase 222,222 shares of Common Stock granted under the 1988 Plan and 201,667 shares of Common Stock under the Company's 1983 Incentive Stock Option Plan ("1983 Plan"). (4) Represents options to purchase 312,467 shares of Common Stock under the 1994 Plan. (5) Represents options to purchase 111,111 shares of Common Stock under the 1988 Plan and 201,667 shares of Common Stock under the 1983 Plan. (6) Represents options to purchase 219,648 shares of Common Stock under the 1994 Plan. (7) Represents options to purchase 111,111 shares of Common Stock under the 1988 Plan and 107,556 shares of Common Stock under the 1983 Plan. (8) Represents annual premiums paid by the Company for a split dollar form of life insurance policy on the life of Mark M. David. (9) As a condition to the grant of options under the 1994 Plan, each recipient was required to surrender all of the outstanding options previously granted to him or her under the 1983 Plan and the 1988 Plan. The exercise prices of options granted under the 1983 Plan and the 1988 Plan were higher than the exercise price of options granted under the 1994 Plan. 9
OPTION GRANTS IN LAST FISCAL YEAR - ----------------------------------------------------------------------------------------------------------------------------------- INDIVIDUAL GRANTS - ----------------------------------------------------------------------------------------------------------------------------------- % OF TOTAL OPTIONS/SHARES OPTIONS/ GRANTED TO EXERCISE MARKET PRICE SHARES EMPLOYEES IN PRICE ON DATE OF EXPIRATION NAME GRANTED (#) FISCAL YEAR ($/SHARE) GRANT ($) DATE - ----------------------------------------------------------------------------------------------------------------------------------- Clayton E. Medley 477,467(1) 34.56% 1.125 1.125 2004 President and Chief Operating Officer of the Company; Director - ----------------------------------------------------------------------------------------------------------------------------------- Saul Pomerantz 312,467(1) 22.62% 1.125 1.125 2004 Senior Vice President and Chief Financial Officer of the Company; Director - ----------------------------------------------------------------------------------------------------------------------------------- Helen Samuels 219,648(1) 15.90% 1.125 1.125 2004 Vice President and Treasurer of the Company; Director - -----------------------------------------------------------------------------------------------------------------------------------
(1) Represents options granted on July 15, 1994 under the 1994 Plan. 10 ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AS OF AUGUST 31, 1995 The following table sets forth as of August 31, 1995 certain information with respect to ownership of the Common Stock of the Company by (i) all persons known by the Company to own beneficially more than five percent of its Common Stock, (ii) each director of the Company, and (iii) all directors and officers of the Company as a group.
NAME OF BENEFICIAL AMOUNT AND NATURE OF PERCENT OF OWNER BENEFICIAL OWNERSHIP CLASS(L) - ------------------ ------------------- ---------- Mark M. David 110 East 57th Street New York, NY 10022 2,990,773(2)(7) 20.9248% Republic National Bank as Trustee for the ESOP 452 Fifth Avenue New York, NY 10018 1,438,655; Direct 10.3058% Mrs. Abraham David 8710 Banyan Court Tamarac, FL 33321 1,622,959(3)(8) 11.6261% Saul Pomerantz 114,132(4) 0.8124% Clayton E. Medley 199,466(5) 1.4109% Helen Samuels 313,370(6) 2.2306% Dimensional Fund Advisors Inc. 1299 Ocean Avenue Santa Monica, CA 90401 943,645; Direct(10)(11) 6.7598% Abraham David 8710 Banyan Court Tamarac, FL 33321 31,000; Direct 0.2221% All directors and officers as a group 5,240,700(2)(4)(5) (4 persons) (6)(9) 35.7763%
11 - ------------------ (1) Based upon 13,959,650 shares (excluding 2,016,802 treasury shares) outstanding and options, where applicable, to purchase shares of Common Stock, exercisable within 60 days. (2) Includes 58,674 shares owned as custodian for his children, 30,000 shares owned as custodian for his sisters' children and 26,560 shares owned by his spouse. Also includes the options granted to him for 333,333 shares, under the 1988 Non-Qualified Stock Option Plan, exercisable within 60 days. (3) Includes 506,695 shares owned by Annie David as a trustee for the benefit of her daughters, Marcia Sussman and Elaine Greenberg. (4) Includes options granted to Saul Pomerantz for 88,888 shares pursuant to the 1994 ISOP, exercisable within 60 days; and 244 shares owned by his spouse and 8,000 held jointly with his spouse. (5) Includes options granted to Clayton E. Medley for 177,776 shares pursuant to the 1994 ISOP, exercisable within 60 days. (6) Includes 28,554 shares owned by Helen Samuels with her husband, as joint tenants, and 88,888 shares pursuant to the 1994 ISOP, exercisable within 60 days. (7) Does not include Mrs. Abraham David's shares for which he holds the proxy. (8) Mark M. David holds a proxy for these shares. (9) Includes the shares held by Mrs. Abraham David. (10) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment advisor, is deemed to have beneficial ownership of 943,645 shares of Movie Star, Inc. stock as of June 30, 1995. The information set forth herein with respect to Dimensional is derived from Schedule 13g filed by Dimensional with the Securities and Exchange Commission. (11) All of the information set forth in the foregoing tables is as of August 31, 1995, except the information with respect to Dimensional Fund Advisors Inc. which is as of June 30, 1995. Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and officers and persons who beneficially own more than ten percent of the Company's Common Stock to file with the Securities and Exchange Commission ("SEC") and the American Stock Exchange initial reports of ownership and reports of changes in ownership of Common Stock of the Company. Officers, directors and greater-than-ten percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they filed. To the Company's knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required, during 12 the two fiscal years ended June 30, 1995, all Section 16(a) filing requirements were complied with, except that during fiscal year 1995 Clayton E. Medley, Saul Pomerantz and Helen Samuels did not file monthly reports in connection with surrender of certain options and the grant of new options. These reports were subsequently filed late. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. John J. Ross, was a director of the Company until June 1, 1995 and owned or was a shareholder in insurance agencies which have written policies covering automobiles, property, casualty, and directors' and officers' insurance for the Company with premiums totalling approximately $422,000 during the 1995 fiscal year. These policies were written at competitive rates and on competitive terms. Harold B. Pomeranz, was a director of the Company until February 1, 1995 and is of counsel to the firm of Graubard Mollen & Miller. The Company paid legal fees and disbursements for the fiscal year ended June 30, 1995 to said firm. The fees paid by the Registrant were less than 5% of the total revenues of the law firm. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
Exhibit Number Exhibit Method of Filing - ------- ------- ---------------- 10.6.6 Letter Agreement dated October Filed herewith. 13, 1995 among Republic National Bank of New York and NatWest Bank N.A. and Registrant amending the Credit and Security Agreement dated September 14, 1995 among Republic National Bank of New York and NatWest Bank N.A. and the Registrant.
13 EXHIBIT INDEX ------------- Exhibit No Exhibit - ------- ------- 10.6.6 Letter Agreement dated October 13, 1995 among Republic National Bank of New York and NatWest Bank N.A. and Registrant amending the Credit and Security Agreement dated September 14, 1995 among Republic National Bank of New York and NatWest Bank N.A. and the Registrant. EX-10.6 2 LETTER AGREEMENT, DATED OCTOBER 13, 1995 1 REPUBLIC NATIONAL BANK OF NEW YORK INDIVIDUALLY AND AS AGENT 452 FIFTH AVENUE NEW YORK, NY 10018 NATWEST BANK N.A. 1133 AVENUE OF THE AMERICAS NEW YORK, NY 10036 October 13, 1995 Movie Star, Inc. 136 Madison Avenue New York, NY 10016 Re: Credit & Security Agreement among Republic National Bank of New York and NatWest Bank N.A. dated as of September 11, 1995 (the "Agreement") Gentlemen: You have requested that the Agreement be amended and upon your delivery to us of a duly executed counterpart of this letter, the Agreement shall be amended as follows: Section 1.17 Due Date shall be amended by deleting December 31, 1995 and substituting the date June 30, 1996. Section 1.34 shall be amended by deleting August 9, 1995 and substituting the date October 31, 1995. Section 8.1 shall be amended by deleting clause (vi) from Section 8.1. The provisions of Section 6.14 (b) are hereby waived solely with respect to your obligation to furnish us with audited financial statements for fiscal year 1995 within ninety (90) days of the end of the fiscal year; provided that such audited financial statements are furnished to us by the close of business on october 13, 1995. Notwithstanding any provision of the Agreement to the contrary, an unfavorable variance from the Projections of not more than ten percent (10%) shall not be a breach of (i) any term, covenant or condition of the Agreement by which Movie Star, Inc. is bound, or (ii) any representation or warranty made therein by Movie Star, Inc. Except as modified herein all terms and conditions of the Agreement shall remain in full force and effect. Please indicate your acceptance of these changes by your signature below. Very truly yours, Republic National Bank of New York NatWest Bank N.A. /S/ JOEL BURBANK /S/ CYNTHIA E. SACHS - ----------------------------- ------------------------------ By: Joel Burbank By: Cynthia E. Sachs Sr. Vice President Vice President ACCEPTED AND AGREED: Movie Star, Inc. /S/ SAUL POMERANTZ - ----------------------------- By: Saul Pomerantz Sr. Vice President -----END PRIVACY-ENHANCED MESSAGE-----