-----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, HzUy/fEGqUQiTkoIxfuiPjkYQKE6zTxH0lHxKJVXcoWQIxMlIqhm5zIuLXYE6c+H wwLiW0VMUGpJuKq6xu2kiQ== 0000085149-98-000003.txt : 19980527 0000085149-98-000003.hdr.sgml : 19980527 ACCESSION NUMBER: 0000085149-98-000003 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980131 FILED AS OF DATE: 19980526 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSES HOLDINGS INC CENTRAL INDEX KEY: 0000085149 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 560382475 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-00631 FILM NUMBER: 98631279 BUSINESS ADDRESS: STREET 1: PO DRAWER 947 STREET 2: 218 S GARNETT ST CITY: HENDERSON STATE: NC ZIP: 27536 BUSINESS PHONE: 9194302600 FORMER COMPANY: FORMER CONFORMED NAME: ROSES STORES INC DATE OF NAME CHANGE: 19920703 10-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K/A-1 (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 1998 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No 0-631 ROSE'S HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 56-2043000 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 150 East 52nd Street 21st Floor New York, NY 10022 (Address and zip code of principal executive offices) Registrant's telephone number, including area code: (212) 813-1500 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock, No Par Value Stock Warrants (to purchase Common Stock) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( ) (continued on following page) PAGE (continued from previous page) APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes X No As of January 31, 1998, of the 10,000,000 shares of common stock delivered to First Union National Bank of North Carolina ("FUNB"), as Escrow Agent, pursuant to the Modified and Restated First Amended Joint Plan of Reorganiza- tion, 1,367,659 shares have been returned to the Company and canceled, and 8,620,391 shares are outstanding. The remaining 19,680 shares held in escrow will be distributed by FUNB in satisfaction of disputed Class 3 claims as and when such claims are resolved. To the extent that escrowed shares of common stock are not used to satisfy claims, they will revert to the Company and will be retired or held in the treasury of the Company. As of April 7, 1998, the aggregate market value of common stock held by non- affiliates of the Company (assuming all pending claims are resolved adversely to the Company) was approximately $9,089,484. PAGE The Registrant's Form 10-K for the fiscal year ended January 31, 1998 is hereby amended to include the following items: Item 10. Directors and Executive Officers of the Registrant. Set forth below is certain information concerning the directors of the Corporation as of May 1, 1998.
Name and Age Occupation and Other Directorships Jack L. Howard (36) Mr. Howard has served as a director of the (term expires 1999) Corporation since 1996 and Vice President, Secretary and Treasurer of the Corporation since December 1997. Mr. Howard has been a registered principal of Mutual Securities, Inc., a stock brokerage firm, since prior to 1993. He is a director of Gateway Industries, Inc. and Scientific Software Intercomp, Inc. Warren G. Lichtenstein (32) Mr. Lichtenstein has served as a director of the (term expires 1998) Corporation since 1996 and President and Chief Executive Officer of the Corporation since December 1997. Mr. Lichtenstein has been Chief Executive of the General Partner of Steel Partners II, LP, a private investment firm, since 1993 and Chairman of Steel Partners Services, Ltd., a private investment firm, since 1993. Mr. Lichtenstein was Executive Vice President of Alpha Technologies Group, Inc., a manufacturer of electronic components, from September 1994 through September 1995. Mr. Lichtenstein is a director of Saratoga Spring Water Corporation, Inc. and Gateway Industries, Inc. ("Gateway"). Gateway was the sole stockholder of Marsel Mirror and Glass Products, Inc. ("Marsel") from November 1995 to December 1996. Mr. Lichtenstein served as President of Marsel from its formation as an acquisition subsidiary until the acquisition was consummated. Thereafter, Marsel appointed a President who had no prior affiliation with Gateway. Mr. Lichtenstein served as Marsel's sole director until Gateway disposed of its interest in Marsel. Marsel filed for protection under Chapter 11 of the Bankruptcy Code shortly following Gateway's disposition of Marsel. Earle C. May (80) Mr. May was elected a director of the Corporation (term expires 1998) by the Board of Directors on July 22,1997. Mr. May has been Chairman and Chief Executive Officer of May Management, Inc., an investment management firm, since prior to 1993. PAGE Joseph L. Mullen (52) Mr. Mullen has served as a director of the (term expires 1998) Corporation since 1995. Since January 1994, Mr. Mullen has served as Managing Partner of Li Moran International, a management consulting company and has functioned as a senior officer overseeing the merchandise and marketing departments for such companies as Leewards Creative Crafts Inc., Office Depot of Warsaw, Poland and Rose's Stores, Inc. From January 1994 to July 1994, Mr. Mullen served as Senior Vice President for Leewards Creative Crafts Inc., a national retail chain specializing in crafts. Prior to January 1994, Mr. Mullen was employed by Hills Department Stores, Inc. ("Hills") for approximately 23 years and held a variety of positions, including Vice President Hardlines. Hills filed for protection under Chapter 11, Title 11 of the United States Code on February 4, 1991, while Mr. Mullen was employed by Hills. J. David Rosenberg (49) Mr. Rosenberg has served as a director of the (term expires 2000) Corporation since 1995. Mr. Rosenberg has been a partner of Keating, Muething & Klekamp, a law firm, since prior to 1993. Harold Smith (74) Mr. Smith has served as a director of the (term expires 1999) Corporation since 1995. Since 1990, Mr. Smith has been President of Funding & Merchandising Resources Corp., a retail consulting firm, and was formerly President and Chief Operating Officer of Woolco, a division of F. W. Woolworth and President and Chief Executive Officer of Goldblatt's. N. Hunter Wyche, Jr. (46) Mr. Wyche has served as a director of the (term expires 1999) Corporation since 1995. Mr. Wyche is a founding partner of Wyche & Story, a law firm.
Compliance with Section 16(a) of the Securities Exchange Act of 1934 Under the Securities Exchange Act of 1934 (the "Exchange Act"), the Corporation's directors, executive officers and any persons holding more than 10% of any class of the Corporation's equity securities registered pursuant to Section 12 of the Exchange Act are required to report their ownership of such equity securities and any changes in that ownership, on a timely basis to the Securities and Exchange Commission. The Corporation believes that all such reports required to be filed during the fiscal year ended January 31, 1998 ("Fiscal 1997") were filed on a timely basis except for Messrs. Howard, Lichtenstein, May and Rosenberg who inadvertently did not file a report on a timely basis relating to stock options or stock granted in lieu of cash payment of director fees. Upon discovery, the reports were filed. The Corporation's belief is based solely on its review of Forms 3, 4 and 5 and amendments thereto furnished to the Corporation during, and with respect to, Fiscal 1997 by persons known to be subject to Section 16 of the Exchange Act. PAGE Item 11. Executive Compensation. Cash and Other Compensation The following table sets forth all the cash compensation paid or to be paid by the Corporation, as well as certain other compensation paid or accrued, during the fiscal years indicated, to the Chief Executive Officer and the four other highest paid executive officers of the Corporation (collectively, the "Named Executives") for Fiscal 1997 in all capacities in which they served:
Summary Compensation Table Long-Term Compensation Annual Compensation Awards Payouts (a) (b) (c) (d) (e) (f) (g) (h) (i) Other Name and Annual Restricted Options/ All Other Principal Salary Bonus Compen- Stock SARs LTIP Compen- Position Year ($) ($)(1) sation (2) Awards ($) (#)(3) Payouts($) sation(4) R. Edward 1997 375,962 88,600 8,956 - - - 1,005,464 Anderson 1996 424,523 - 5,094 - - - 6,198 President and 1995 407,692 - 4,518 - 137,500 - 6,198 Chief Executive Officer Bobby L. Sasser 1997 180,000 - 13,342 - - - 6,089 Senior Vice 1996 15,385(5) 20,000 - - - - - President 1995 - - - - - - - Merchandising & Marketing Robert 1997 144,615 15,000 7,485 - - - 5,345 Greenwald 1996 - - 1,641 - - - 5,528 Vice President 1995 - - 2,097 - 50,000 - 5,528 GMM Softlines Jeanette 1997 141,539 19,931 7,345 - - - 4,884 Peters 1996 159,575 - 1,641 - - - 5,528 Senior Vice 1995 156,346 - 2,097 - 50,000 - 5,528 President, Chief Financial Officer and Treasurer Barry L. 1997 123,846 10,000 2,258 - - - 4,530 Gouge 1996 7,692(6) - - - - - - Vice President 1995 - - - - - - - GMM Hardlines _____________ (1) 1997 bonuses for Mr. Anderson and Ms. Peters represent the value of Common Stock awarded upon the successful emergence from the Corporation's Chapter 11 reorganization in 1995. All restrictions on the use and enjoyment of the stock lapsed during 1997. (2) "Other Annual Compensation" consists of tax gross-ups on medical and moving expense reimbursements. (3) All of the above named officers resigned their positions with the Corporation effective December 2, 1997 upon sale of the Corporation's subsidiary and all Options/SARs listed in column (g) expired on such date. (4) "All Other Compensation" consists of automobile allowance and severance payments ($1,000,100 in the case of Mr. Anderson, and $100 in the case of each of the other officers) relating to their resignation of the Corporation upon the sale by the Corporation of its subsidiary, Rose's Stores, Inc., on December 2, 1997. (5) Represents Mr. Sasser's compensation from December 16, 1996, the date of commencement of his employment with the Corporation. (6) Represents Mr. Gouge's compensation from January 16, 1997, the date of commencement of his employment with the Corporation.
PAGE Stock Options Granted During Fiscal Year During Fiscal 1997, no options were granted to any of the Named Executives. Stock Options Exercised During Fiscal Year and Year End Values of Unexercised Options None of the Named Executives owns any stock options or stock appreciation rights or, during Fiscal 1997, exercised any options. Employment Agreements, Termination of Employment and Change-In-Control Arrangements Effective May 27, 1995, the Board of Directors approved a new employment agreement with R. Edward Anderson, President and Chief Executive Officer of the Corporation, which provided for his employment for an initial three-year term. In contemplation of the sale of the Corporation's subsidiary, and in order to facilitate the sale, Mr. Anderson agreed to amendments to the employment agreement at the request of the Board of Directors. Under the terms of the agreement as amended, Mr. Anderson received a base salary of $425,000 and was further entitled to participate in all bonus, incentive and equity plans and all pension, health, insurance and fringe benefit plans, as well as perquisites, established by the Corporation. The agreement as amended also included a change of control allowance under which Mr. Anderson had the right to terminate the employment agreement and to be paid a severance payment of $1.0 million. Upon the consummation of the sale of Rose's Stores, Inc. to Variety Wholesalers, Inc. on December 2, 1997, Mr. Anderson terminated the agreement and his employment with the Corporation and resigned from the Board of Directors of the Corpora- tion, and the Corporation paid Mr. Anderson such $1.0 million severance payment. Prior to consummation of the sale of Rose's Stores, Inc. to Variety Wholesalers, Inc. on December 2, 1997, the Corporation maintained a severance program for employees of Rose's Stores, Inc. providing for the payment of cer- tain benefits upon the cessation of employment of the executive officers of the Corporation, including the Named Executives other than the Chief Executive Officer. By reason of the sale of all of the outstanding stock of Rose's Stores, Inc. to Variety Wholesalers, Inc., the Corporation's obligations under the severance program were terminated. No benefits were paid under the severance program prior to or incident to the sale of Rose's Stores, Inc. to Variety Wholesalers, Inc. Director Compensation Effective July 22, 1997, the compensation of the Directors of the Corporation was reduced by the Board of Directors by twenty-five percent to pro- vide for an annual retainer fee (the "Retainer Fee") of $18,000 per year, plus a meeting fee (a "Meeting Fee") for each meeting (i) of the Board of Directors (in the amount of $1,125 per meeting for attendance in person or $562.50 for attendance by telephone), (ii) of a committee of the Board of Directors that does not meet on the same day as a meeting of the Board of Directors (in the amount of $1,125 per meeting), and (iii) of a committee of the Board of Direc- tors that meets on the same day as the Board of Directors (in the amount of $375 per meeting). Pursuant to the 1997 Long-Term Incentive Stock Plan, approved by the stockholders at the 1997 annual meeting, beginning with the 1997 Fiscal Year the Retainer Fee and Meeting Fees were payable, at the election of each direc- tor, in the form of cash, grants ("Stock Awards") of shares of the Corporation's common stock, no par value ("Common Stock"), and options to purchase Common Stock ("Options"), provided that a director electing to receive Stock Awards or Options had to elect to receive his Retainer Fee in such forms and could elect to receive his Meeting Fees in such forms. On January 15, 1998, the compensation of the Directors of the Corporation for Fiscal 1998 was set as follows: a Retainer Fee of $24,000 per year which is paid in the form of Options pursuant to the 1997 Long-Term Incentive Stock Plan; plus Meeting Fees, in the form of cash, for each meeting (i) of the Board of Directors (in the amount of $1,125 per meeting), (ii) of a committee of the Board of Directors that does not meet on the same day as a meeting of the Board of Directors (in the amount of $1,125 per meeting), and (iii) of a committee of the Board of Directors that meets on the same day as the Board of Directors (in the amount of $375 per meeting). Directors are reimbursed for their actual travel and other expenses. Pursuant to the 1997 Long-Term Incentive Stock Plan, (i) Options are valued using the Black-Scholes option pricing model and such assumptions as the Corporation, in its sole discretion, deems reasonable; (ii) the exercise price of the Options will be, and Stock Awards will be valued using, the closing price of the Common Stock on the date of grant or issuance or deemed date of grant or issuance; (iii) a director's entitlement to receive Options will vest, and will be granted or issued, or deemed to be issued or granted, on the first day of the quarter as to which the Retainer Fee is payable; and (iv) options will terminate on the fifth anniversary of the date of issuance and will survive termination of membership on the Board of Directors of the Corporation. Compensation Committee Interlocks and Insider Participation During Fiscal 1997, the Compensation Committee consisted of Messrs. Wyche (Chairman), Howard, Rosenberg and Smith. None of such members were officers or employees of the Corporation during the 1997 Fiscal Year or in prior fiscal years. None of the executive officers of the Corporation served as a member of the board of directors of another entity or as a member of the compensation committee of another entity during Fiscal 1997. PAGE Item 12. Security Ownership of Certain Beneficial Owners and Management. Principal Stockholders The only persons known by the Corporation to be the beneficial owner of more than five percent of the outstanding shares of Common Stock as of May 1, 1998, are shown below: Amount and Nature of Beneficial Name and Address Ownership Percent of Class Warren G. Lichtenstein 2,021,479(1) 23.2% 150 East 52nd Street, 21st Floor New York, New York 10022 Steel Partners II, L.P. 1,961,559(2) 22.7% 150 East 52nd Street, 21st Floor New York, New York 10022 Earle C. May 1,464,991(3) 17.0% 4550 Kruse Way #345 Lake Oswego, Oregon 97035 May Management, Inc. 1,430,975 16.6% 4550 Kruse Way #345 Lake Oswego, Oregon 97035 ____________ (1) Includes: (a) 5,000 shares of Common Stock owned by Mr. Lichtenstein; (b) 54,920 shares of Common Stock issuable upon the exercise of options owned by Mr. Lichtenstein; (c) 1,918,190 shares of Common Stock owned by Steel Partners II, L.P. and (d) 43,369 shares of Common Stock issuable upon the exercise of war- rants owned by Steel Partners II, L.P. Mr. Lichtenstein is Chief Executive Officer of the general partner of Steel Partners II, L.P. Mr. Lichtenstein dis- claims beneficial ownership of the shares of Common Stock owned by Steel Part- ners II, L.P. except to the extent of his pecuniary interest in such shares of Common Stock, which is less than the amount disclosed. (2) Represents 1,918,190 shares of Common Stock and 43,369 shares of Common Stock issuable upon exercise of warrants. (3) Includes: (a) 11,730 shares of Common Stock owned by Mr. May; (b) 22,291 shares of Common Stock issuable upon the exercise of options owned by Mr. May; (c) 100,595 shares owned by May Management, Inc.; and (d) 1,330,375 shares of Common Stock held in customer accounts as to which May Management, Inc. has shared dispositive power. Mr. May is Chief Executive Officer and a principal stockholder of May Management, Inc. and may be deemed to be the beneficial owner of shares owned by May Management, Inc. or as to which May Management, Inc. has shared dispositive power. PAGE Beneficial Ownership of Directors and Management Set forth below is certain information concerning the beneficial ownership of Common Stock as of May 1, 1998 by (a) the Corporation's directors, (b) the executive officers named in the Summary Compensation Table in Item 11 above and (c) all directors and executive officers as a group. Amount and Name of Nature of Beneficial Beneficial Owner Ownership (1) Percent of Class R. Edward Anderson 67,284 * Jack L. Howard 114,368 1.3% Warren G. Lichtenstein 2,021,479(2) 23.2% Earle C. May 1,464,991(3) 17.0% Joseph L. Mullen 22,291 * J. David Rosenberg 147,274 1.7% Harold Smith 22,291 * N. Hunter Wyche, Jr. 22,291 * Barry L. Gouge 0 * Jeanette Peters 13,865 * Robert Greenwald 0 * Bobby L. Sasser 0 * All directors and executive 3,814,985(4) 42.5% officers as a group (seven persons) * Less than 1% of the outstanding Common Stock (1) Includes shares subject to warrants and options that are exercisable within 60 days as follows: Mr. Howard - 57,068 shares; Mr. Lichtenstein - 54,920 shares; Mr. May - 22,291 shares; Mr. Mullen - 22,291 shares; Mr. Rosenberg - 111,774 shares; Mr. Smith - 22,291 shares; Mr. Wyche - 22,291 shares; and all directors and executive officers as a group - 312,926 shares. (2) Includes 1,918,190 shares of Common Stock and 43,369 shares subject to warrants that are exercisable within 60 days that are owned by Steel Partners II, L.P. Mr. Lichtenstein is Chief Executive Officer of the General Partner of Steel Partners II, L.P. Mr. Lichtenstein disclaims beneficial ownership of the shares of Common Stock by Steel Partners II, L.P., except to the extent of his pecuniary interest in such shares of Common Stock, which is less than the amount disclosed. (3) Includes 100,595 shares of Common Stock owned by May Management, Inc. and 1,330,375 shares of Common Stock held in customer accounts as to which May Management, Inc. has shared dispositive power. Mr. May is Chief Executive Officer and a principal stockholder of May Management, Inc. and may be deemed to be the beneficial owner of shares owned by May Management, Inc. or as to which May Management, Inc. has shared dispositive power. (4) Mr. Anderson, Mr. Gouge, Mr. Greenwald, Ms. Peters and Mr. Sasser resigned on December 2, 1997 upon the sale by the Corporation of its subsidiary. The shares owned by such officers are, accordingly, not included in the aggregate number for all directors and executive officers as a group. Item 13. Certain Relationships and Related Transactions As of March 31, 1998, the Corporation sub-sub-leased from Gateway Industries, Inc. office space on a non-exclusive basis for use as corporate headquarters or for other corporate uses. Under terms of this sub-sub-lease, the Corporation is obligated to pay one-third of all amounts payable, as billed to Gateway under the Master Sub-Lease. Gateway Industries, Inc.'s sub-lease for the space is with Steel Partners II, L.P. as sub-landlord. Warren Lichtenstein, a director and the President and Chief Executive Officer of the Corporation, beneficially owns more than 10% of the outstanding voting stock of Gateway Industries, Inc. and is the chief executive officer of the general partner of Steel Partners II, L.P. The rent payable by the Corporation is approximately $2,700 per month. The sub-lease runs through March 30, 2001, but may be terminated by either party on 30 days' notice. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ROSE'S HOLDINGS, INC. Date: May 26, 1998 /s/ Jack L. Howard Jack L. Howard Vice President -----END PRIVACY-ENHANCED MESSAGE-----