As filed with the United States Securities and Exchange Commission on
November 17, 1997.September 14, 2015Registration No.
333-38711 ================================================================================333-UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549
---------- AMENDMENT NO. 1 TOFORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------- SYMS CORP (ExactTrinity Place Holdings Inc.
(Exact name of
Registrantregistrant as specified in its charter)---------- NEW JERSEY (State
Delaware | 22-2465228 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
717 Fifth Avenue
Suite 1303
New York, New York 10022
(212) 235-2190
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Richard Pyontek
Chief Financial Officer
Trinity Place Holdings Inc.
717 Fifth Avenue
New York, New York 10022
(212) 235-2190
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
John Bessonette, Esq.
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
(212) 715-9100
Approximate date of commencement of proposed sale to the public: From time to time on or other jurisdictionafter the effective date of incorporation or organization)
----------
22-2465228
(I.R.S. Employer Identification No.)
----------
SYMS WAY
SECAUCUS, NEW JERSEY 07094
(201) 902-9600
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
----------
SY SYMS
SYMS WAY
SECAUCUS, NEW JERSEY 07094
(201) 902-9600
(Name, Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent for Service)
Copy to:
MATTHEW J. MALLOW, ESQ. STEPHEN H. COOPER, ESQ.
SKADDEN, ARPS, SLATE, WEIL, GOTSHAL & MANGES LLP
MEAGHER & FLOM LLP 767 FIFTH AVENUE
919 THIRD AVENUE NEW YORK, NEW YORK 10153
NEW YORK, NEW YORK 10022 (212) 310-8000
(212) 735-3000
----------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
Statement.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ]
¨
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"), other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [ ]
x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
¨
If delivery ofthis Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434,
please462(e) under the Securities Act, check the following box. [ ]
----------
¨
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ¨ | Accelerated filer | x | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
CALCULATION OF REGISTRATION FEE
================================================================================
PROPOSED MAXIMUM AMOUNT OF
TITLE OF AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED PRICE (1)(2) FEE
- --------------------------------------------------------------------------------
Common Stock, $.05 par value ............... $51,439,500 $15,588
================================================================================
(1) Estimated
Title of Each Class of Securities to be Registered(1) | Amount to be Registered | Proposed Maximum Offering Price Per Share | Proposed Maximum Aggregate Offering Price | Amount of Registration Fee | ||||||||||||
Subscription rights to purchase common stock | (2) | N/A | N/A | (3) | ||||||||||||
Common stock, par value $0.01 per share | 5,000,000 | $ | 6.00 | $ | 30,000,000 (4) | $ | 3,486 |
(1) | This registration statement relates to (a) subscription rights to purchase common stock of the Registrant to be distributed to holders of the Registrant’s common stock; and (b) the shares of common stock deliverable upon the exercise of the subscription rights pursuant to the rights offering. This registration statement also covers any additional shares of common stock of the Registrant that may become issuable due to adjustments for changes resulting from stock dividends, stock splits, recapitalizations, mergers, reorganizations, combinations or exchanges or other similar events. |
(2) | Evidencing the subscription rights to subscribe for up to 5,000,000 shares of common stock, par value $0.01 per share. |
(3) | The subscription rights are being distributed without consideration. Pursuant to Rule 457(g), no separate registration fee is payable with respect to the subscription rights being offered hereby since the subscription rights are being registered in the same registration statement as the securities to be offered pursuant thereto. |
(4) | Represents the gross proceeds from the assumed exercise of all non-transferable subscription rights to be distributed. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the sole purposeRegistrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of computingthe Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration fee.
(2) Calculatedstatement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated September 14, 2015
PROSPECTUS
Common Stock
Subscription Rights to Purchase up to
5,000,000 Shares of Common Stock
We are conducting a rights offering pursuant to Rule 457(c) basedwhich we are distributing to holders of our common stock, at no charge, non-transferable subscription rights to purchase shares of our common stock. You will receive 0.248362 subscription rights for each share of common stock held of record as of 5:00 p.m., New York time on , 2015. We are distributing subscription rights exercisable for up to 5,000,000 shares of our common stock.
The total number of subscription rights issued to each stockholder will be rounded down to the nearest whole number. Each whole subscription right will entitle you to purchase one share of our common stock at a subscription price equal to $6.00 per share, which we refer to as the basic subscription privilege. Stockholders as of the record date will also have oversubscription rights, other than the Standby Purchaser (as defined below), which has waived its oversubscription right, pursuant to which they may be able to purchase additional shares at the subscription price to the extent that not all subscription rights are exercised.
The subscription rights may be exercised at any time during the subscription period, which will commence on , 2015. The subscription rights will expire if they are not exercised by 5:00 p.m., New York time, on , 2015, unless we extend the rights offering period. We reserve the right to extend the rights offering period at our sole discretion, subject to the consent rights of the Standby Purchaser and Third Avenue (as defined below). You should carefully consider whether to exercise your subscription rights before the expiration of the rights offering period. All exercises of subscription rights are irrevocable. Our board of directors is making no recommendation regarding your exercise of the subscription rights. The subscription rights may not be sold, transferred or assigned to anyone else and will not be listed for trading on any stock exchange or market or on the averageOTC Markets.
We reserve the right to cancel the rights offering at any time for any reason. If we cancel this offering, all subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable.
The shares of common stock are being offered directly by us without the services of an underwriter or selling agent.
We have entered into an Investment Agreement with MFP Partners, L.P., which we refer to as the Standby Purchaser. Pursuant to the Investment Agreement, the Standby Purchaser has agreed to purchase from us, subject to the satisfaction or waiver of certain conditions, including the timely completion of the high and
low prices of the Common Stock on the New York Stock Exchange on October
21, 1997.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
================================================================================
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 17, 1997
PROSPECTUS
3,500,000 SHARES
SYMS CORP
COMMON STOCK
All ofrights offering, the shares of Common Stockcommon stock not subscribed for in the rights offering, up to a maximum of Syms Corp (the "Company") offered
hereby will be sold3,333,333 shares less the number of shares purchased by the Sy Syms Foundation and Sy Syms. See "Principal and
Selling Stockholders." The Company will not receive any proceeds fromStandby Purchaser in the sale
ofrights offering, at a price per share equal to the Common Stock offered hereby.
The Common Stock is listed on the New York Stock Exchange under the symbol
"SYM." On October 23, 1997 the last salesubscription price of the Common Stock as reported
on rights offering. Ifthe New York Stock Exchange Composite Tape was $13.06. See "Price Rangenumber of Common Stockunsubscribed shares of common stock purchased by the Standby Purchaser pursuant to the Investment Agreement is less than 1,666,667 shares, or the Minimum Allocation, we will issue and Dividend Policy."
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND SELLING
PUBLIC COMMISSIONS(1) STOCKHOLDERS(2)
- --------------------------------------------------------------------------------
Per Share ..................... $ $ $
Total(3) ...................... $ $ $
================================================================================
(1)sell to the Standby Purchaser a number of shares of common stock equal to the excess of the Minimum Allocation over the number of shares purchased by the Standby Purchaser pursuant to the Investment Agreement, or the Additional Shares. The Companyunsubscribed shares sold to the Standby Purchaser and the Selling StockholdersAdditional Shares, if any, are being offered and sold to the Standby Purchaser in a private placement, referred to as the Standby Purchaser Private Placement. In addition to the investment pursuant to the Investment Agreement, as a stockholder as of the record date, the Standby Purchaser will have agreedthe right to indemnifysubscribe for and purchase shares of our common stock under its basic subscription privilege, but it has waived its right to exercise its oversubscription privilege. The purchase of any shares by the several Underwriters against certain liabilities, including liabilities
underStandby Purchaser would be effected in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting estimated expensesamended, and, accordingly, would not be registered pursuant to the registration statement of $__________ payablewhich this prospectus forms a part.The chairman of our board of directors, Alexander Matina, is a representative of the Standby Purchaser. Mr. Matina recused himself from the deliberations by the Selling
Stockholders.board of directors regarding the approval of the Investment Agreement.
We have also entered into an agreement with Third Avenue Trust, on behalf of Third Avenue Real Estate Value Fund, or Third Avenue, pursuant to which Third Avenue has agreed to exercise all of its rights under its basic subscription privilege in the rights offering, representing 836,841 shares. Third Avenue will also have the right to exercise its oversubscription privilege in its sole discretion.
In order to preserve our ability to utilize certain of our tax benefits, our certificate of incorporation contains restrictions on transfers to prohibit any person, entity or group from becoming a holder of 4.75% or more of our common stock, or a 4.75% holder, the increase in ownership of any existing stockholder who is a 4.75% holder, or transfers or sales by a 4.75% holder, in each case without the prior written consent of our board of directors. As a result, there are limitations on the exercise of subscription rights by stockholders as described in this prospectus. The Company's expenses in connection with this offering are
estimated at $__________.
(3) Certain Selling Stockholders have grantedextent of any such limitations, and therefore the total number of shares sold pursuant to the Underwriters a 30-day
optionrights offering and the Standby Purchaser Private Placement and the resulting proceeds to purchase up to 525,000 additional sharesthe Company, will not be determinable until the rights offering has expired.
Shares of Common Stock solely
to cover over-allotments, if any. Ifour common stock are quoted on the option is exercised in full,OTCQB under the total Price to Public, Underwriting Discounts and Commissions and Proceeds
to Selling Stockholders will be $__________, $__________ and $__________ ,
respectively. See "Underwriting."
----------symbol “TPHS.” On September 10, 2015, the last reported sale price for our common stock was $6.10 per share. The shares of Common Stock are offered bycommon stock issued in the several Underwriters, subject
to prior sale, when, as and if delivered to and accepted by them, and subject to
certain other conditions. rights offering will also be quoted on the OTCQB under the same symbol.
The Underwriters reserve the right to withdraw, cancel
or modify the offer and to reject orders in whole or in part. It is expected
that deliveryexercise of your subscription rights for shares of our common stock involves risks. You should carefully consider all of the shares will be made against payment thereofinformation set forth in this prospectus, including the risk factors beginning on or about
__________________, 1997, at the offices of Bear, Stearns & Co. Inc., 245 Park
Avenue, New York, New York.
----------
BEAR, STEARNS & CO. INC. SALOMON BROTHERS INC
----------
The datepage 18 of this Prospectus is __________________, 1997
[GRAPHICS PAGE]
AN EDUCATED CONSUMER IS OUR BEST CUSTOMER(R) [SYMS LOGO]
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS AND THE
IMPOSITION OF PENALTY BIDS. SEE "UNDERWRITING."
AVAILABLE INFORMATION
The Company is subject toprospectus as well as the reporting requirements of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reportsrisk factors and other information within any documents we incorporate by reference into this prospectus before exercising your subscription rights. See “Incorporation by Reference.”
Subscription Price | Net Proceeds to Us (1) | |||||||
Per Share | $ | 6.00 | $ | 5.915 | ||||
Total | $ | 30,000,000.00 | $ | 29,575,000.00 |
(1) | Assumes total estimated offering expenses of $425,000. |
Neither the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other
information filed bynor any state securities commission has approved or disapproved of these securities or passed upon the Company can be inspected and copied at the public
reference facilities maintained by the Commission at the officesadequacy or accuracy of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's regional offices at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7
World Trade Center, New York, New York 10048. Copies of such materials can also
be obtained by written requestthis prospectus. Any representation to the Public Reference Sectioncontrary is a criminal offense.
The date of this prospectus is , 2015.
TABLE OF CONTENTS
You should rely only on the Commission
at Judiciary Plaza, 450 Fifth Street, N.W.information contained or incorporated by reference in this prospectus or in any prospectus supplement we may authorize to be delivered to you, including any free writing prospectus that we use in connection with this offering. We have not, and neither our subscription agent, American Stock Transfer & Trust Company LLC, nor our information agent, D.F. King & Co., Washington, D.C. 20549, at
prescribed rates, and can be inspected at the officesInc., has authorized anyone to provide you with additional or different information from that contained or incorporated by reference in this prospectus. We are not making an offer of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
The Company has filed a Registration Statement under the Securities Act
with the Commission with respect to the Common Stock offered hereby. This
Prospectus, which constitutes part of the Registration Statement, omits certain
ofsecurities in any state or other jurisdiction where it is not permitted. You should not assume that the information contained in the Registration Statement and the exhibits
thereto on file with the Commission pursuantthis prospectus is accurate as of any date subsequent to the Securities Act anddate set forth on the rules
and regulationsfront cover of the Commission. Statements contained in this Prospectus such
as the contents ofdocument or that any contract or other document referred to are not
necessarily complete and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. A copy of
the Registration Statement, including the exhibits thereto, may be inspected
without charge at the Commission's principal office at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549, and copies of all or any part thereof
may be obtained from the Commission upon the payment of certain fees prescribed
by the Commission. The Commission also maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants, such as the Company, that file electronically with the
Commission. The address of the site is http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are herebywe have incorporated herein by reference:
1. The Company's Annual Reportreference is correct on Form 10-K for the fiscal year ended
March 1, 1997.
2. The Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended May 31, 1997 and August 30, 1997.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Actany date subsequent to the date of this
Prospectus and prior to the termination of this offering shall be deemed to beprospectus incorporated by reference, herein andregardless of the time of delivery of this prospectus or any exercise of rights. Further, you should not consider any information in this prospectus to be a part hereof frominvestment, legal or tax advice. We encourage you to consult your own counsel, accountant and other advisors for legal, tax, business, financial and related advice regarding an investment in our securities. For further information, please see the date of filing
of such reports and documents. Any statement incorporated herein shall be deemed
to be modified or superseded for purposessection of this Prospectus to the extent that
a statement contained hereinprospectus entitled “Where You Can Find More Information.”
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including information included or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus. The Company hereby undertakes to provide without charge to each
person, including any beneficial owner, to whom a copy of this Prospectus has
been delivered, upon written or oral request of such person, a copy of any or
all of the foregoing documents incorporated herein by reference (other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into such documents). Requests for such documents should be
submitted to the Chief Financial Officer of the Company, at the Company's
principal executive offices, which are located at Syms Way, Secaucus, New Jersey
07094 (telephone: (201) 902-9600).
3
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND THE FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE
IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE REQUIRES, THE "COMPANY" AND
"SYMS" REFER TO SYMS CORP AND ITS SUBSIDIARIES. REFERENCES HEREIN TO "COMMON
STOCK" ARE TO THE COMMON STOCK, $.05 PAR VALUE, OF THE COMPANY.
THE COMPANY
Syms operates a chain of forty "off-price" retail apparel stores located
throughout the Northeastern and middle Atlantic regions and in the Midwest,
Southeast and Southwest. The Company's stores feature a wide selection of first
quality, in-season merchandise, bearing nationally-recognized designer or brand
name labels, all of which is offered at prices substantially below those
generally found in department and specialty stores. The Company's merchandise
consists principally of men's tailored clothing and haberdashery and women's
dresses, suits, separates and accessories. For the fiscal year ended March 1,
1997, the Company had net income of approximately $19.1 million on net sales of
approximately $346.8 million, of which over 99% was generated by the sale of
designer and brand name merchandise.
Syms merchandising is predominantly directed toward middle- and
upper-income, fashion-minded and price conscious shoppers and is symbolized by
its widely-recognized slogan: "An Educated Consumer is Our Best Customer." The
Company's stores have a "no frills" atmosphere in order to emphasize Syms focus
on everyday low prices and exceptional value, although the Company's
merchandising approach is to be the off-price equivalent of an upscale specialty
store. For example, the Company is unique among off-price retailers in offering
its customers a relatively high degree of service, including sales associates
(called "Educators") to assist with merchandise selection and sizing and the
convenience of in-store alterations.
The Company is able to consistently offer merchandise at prices
substantially below those found at traditional department and specialty stores
as a result of its substantial purchasing volume and opportunistic and
disciplined buying practices. The Company always seeks the lowest possible price
from its vendors, rather than the special allowances, return privileges and
delayed delivery terms sought by most traditional retailers. Syms ability to
purchase at discounted prices is aided, in many cases, by the Company's
longstanding relationships with its vendors, many of whom have come to view the
Company as an effective and dependable channel for reducing their excess
inventories without compromising brand image.
Syms continues to expand the breadth of its merchandise selection and the
number of designer labels and brand names (currently more than 200) carried in
its stores. Men's and women's apparel accounted for 54% and 31%, respectively,
of the Company's net sales in fiscal 1997. The Company makes a special effort to
consistently carry a wide range of sizes in menswear and women's apparel, with
no pricing differential for special sizes. The Company's stores also carry
children's apparel, accessories (such as hosiery, underwear and sleepwear),
men's, women's and children's shoes, and luggage and smaller leather goods. The
Company believes it offers a wider range and quantity of merchandise in more
styles and sizes than any other off-price retailer.
In 1959, Syms opened its first store, containing 1,600 square feet, in
downtown New York City. Today, the Company's forty stores average 38,400 square
feet of selling space and are found in 28 cities in 16 states, representing 22
radio and television advertising markets. The Company has recently embarked on a
five-year, 19 store expansion program intended to increase its penetration of
various markets in which it currently has a retailing presence and to enter new
markets in Los Angeles, San Francisco, Seattle and Toronto that it does not
currently serve. It is the Company's goal to have at least two stores in each
market that it currently serves with a population greater than two million.
Accordingly, the Company plans to open a second store in suburban Atlanta in
November 1997 and a second store in suburban Detroit in June 1998. Additional
suburban stores are planned for Baltimore, Houston, Miami and New York. The
Company also plans to open center-city stores in Boston, Chicago and Washington,
D.C., where it currently has only a suburban presence.
4
THE OFFERING
Common Stock to be offered ................ 3,500,000 shares, all of which will
be sold by the Sy Syms Foundation
and Sy Syms.
Common Stock to be outstanding after the
offering ................................ 17,807,890 shares, of which
8,760,136 shares will be held by
the public and 9,044,054 shares
will be held by Sy Syms and members
of the Syms family. (See "Principal
and Selling Stockholders.")(1)
New York Stock Exchange symbol ............ SYM
- ----------
(1) Assumes that the over-allotment option granted to the Underwriters is not
exercised.
5
SUMMARY FINANCIAL DATA
In 1995, the Company changed its fiscal year end to the Saturday nearest to
the end of February. Prior thereto, the Company's financial statements were
prepared on the basis of a 52-week or 53-week fiscal year ending on the Saturday
closest to the end of December. The following summary income statement and
balance sheet data, other than the data for the interim periods ended August 31,
1996 and August 30, 1997, are derived from the Company's audited financial
statements. All of the financial data presented below should be read in
conjunction with the consolidated financial statements and related notes, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," appearing elsewhere in this Prospectus.
TWENTY-SIX
FISCAL YEAR ENDED WEEKS ENDED
---------------------------------------------------------------- ---------------------
(UNAUDITED)
JANUARY 2, JANUARY 1, DECEMBER 31, MARCH 2, MARCH 1, AUGUST 31, AUGUST 30,
1993 1994 1994 1996(1) 1997 1996 1997
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Net sales ............................ $319,623 $318,939 $326,651 $334,750 $346,792 $158,505 $164,239
Gross profit ......................... 105,161 103,423 108,739 117,189 133,679 56,589 64,444
Income from operations ............... 25,635 18,839 14,429 17,938 33,839 8,570 12,948
Income before income taxes ........... 25,176 19,082 14,370 17,645 33,742 8,534 12,707
Net income ........................... 15,148 10,847 8,491 10,411 19,065 4,822 7,496
Net income per share ................. $0.86 $0.61 $0.48 $0.59 $1.08 $0.27 $0.42
Weighted average shares
outstanding ......................... 17,690 17,690 17,694 17,694 17,694 17,694 17,739
OTHER DATA:
Gross profit margin .................. 32.9% 32.4% 33.3% 35.0% 38.5% 35.7% 39.2%
Operating income margin .............. 8.0 5.9 4.4 5.4 9.8 5.4 7.9
Depreciation and amortization ........ $ 7,747 $ 7,446 $ 8,854 $ 7,751 $ 7,971 $ 3,830 $ 4,290
Capital expenditures ................. 6,713 17,508 14,591 4,777 21,709 12,716 6,792
Number of stores at end
of period ........................... 29 34 39 38 40 39 40
BALANCE SHEET DATA:
Working capital ...................... $ 61,338 $ 59,871 $ 59,918 $ 75,521 $ 78,228 $ 70,425 $ 84,102
Total assets ......................... 204,071 221,152 245,385 260,144 284,018 289,102 306,114
Long-term debt (including
capitalized leases) (2) ............. 2,209 1,974 1,696 1,304 900 1,111 670
Stockholders' equity ................. 180,625 190,605 197,341 207,369 226,434 212,191 234,657
- ----------
(1) Fiscal year 1996 was comprised of fifty-three weeks.
(2) Excludes current maturities.
6
FORWARD-LOOKING STATEMENTS
This Prospectus includes "forward-looking statements"prospectus or any supplement to this prospectus, may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act and Section 21E of the Securities Exchange Act. All
statements herein other than statementsAct of historical fact, including, without
limitation,1934, as amended, or the statements under "Prospectus Summary--TheExchange Act, and information relating to the Company"
"Management's Discussion that are based on the beliefs of management of the Company as well as assumptions made by and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" and "Business--Expansion Program"
regarding the Company's expansion plans, liquidity and capital requirements, are
forward-looking statements. Although management believes that the expectations
reflected in suchinformation currently available to management. These forward-looking statements include, but are reasonable, itnot limited to, statements about our plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “may,” “will,” “expects,” believes,” “plans,” “estimates,” “potential,” or “continue,” or the negative thereof or other and similar expressions. In addition, in some cases, you can give no
assurance that those expectations will proveidentify forward-looking statements by words or phrases such as “trend,” “potential,” “opportunity,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions. Such statements reflect the current views of the Company with respect to have been correct. Important
factorsfuture events, the outcome of which is subject to certain risks, including among others:
· | the Company’s limited operating history; |
· | the Company’s ability to execute its business plan, including as it relates to the development or sale of the Company’s current principal asset, a property located at 28-42 Trinity Place in Lower Manhattan, referred to as the Trinity Place Property; |
· | the ability of the Company to enter into new leases and renew existing leases; |
· | the Company’s ability to obtain required permits, site plan approvals and/or other governmental approvals in connection with the development and/or redevelopment of its properties; |
· | the ability of the Company to obtain additional financing; |
· | the influence of certain majority stockholders; |
· | certain conflicts of interest as a result of certain of our directors having affiliations with certain of our stockholders; |
· | the restrictions contained in the Modified Second Amended Joint Chapter 11 Plan of Reorganization of Syms Corp. and its Subsidiaries, or the Plan, and our certificate of incorporation, including restrictions that may be imposed as a result of certain voting and approval rights of the holder of our Series A preferred stock; |
· | limitations in our certificate of incorporation on acquisitions and dispositions of our common stock designed to protect our ability to utilize our net operating loss carryforwards, or NOLs, and certain other tax attributes, which may not succeed in protecting our ability to utilize such tax attributes, and/or may limit the liquidity of our common stock; |
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· | the failure of the Company’s wholly-owned subsidiary to repay outstanding indebtedness; |
· | the Company’s ability to utilize its NOLs to offset future taxable income for U.S. federal income tax purposes; |
· | the adequacy of reserves for Company operating expenses; |
· | risks associated with investments in owned and leased real estate generally; |
· | risks associated with partnerships or joint ventures; |
· | stock price volatility; |
· | general economic and business conditions, including with respect to real estate; |
· | competition; |
· | loss of key personnel; |
· | certain provisions in our charter documents and Delaware law may have the effect of making more difficult or otherwise discouraging, delaying or deterring a takeover or other change of control of us; |
· | unanticipated difficulties which may arise with respect to the Company and other factors which may be outside the Company’s control or that are not currently known to the Company or which the Company believes are not material. |
In evaluating such statements, you should specifically consider the risks identified under the section entitled “Risk Factors” in this prospectus and in any prospectus supplement, any of which could cause actual results to differ materially from management's
expectations ("Cautionary Statements") are disclosed in this Prospectus,
including, without limitation, under "Investment Considerations" below. Allthe anticipated results. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those contemplated by any forward looking statements. Subsequent written and oral forward-looking statements by or attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements in this paragraph and elsewhere described in this prospectus and other reports filed with the Securities and Exchange Commission, or the SEC. All forward-looking statements speak only as of the date of this prospectus or, in the case of any documents incorporated by reference in this prospectus, the date of such document, in each case based on information available to us as of such date, and we assume no obligation to update any forward-looking statements, except as required by law.
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QUESTIONS AND ANSWERS RELATING TO THE RIGHTS OFFERING
What is being offered in this rights offering?
We are distributing at no charge to holders of our common stock non-transferable subscription rights to purchase shares of our common stock. You will receive 0.248362 subscription rights for each share of common stock you owned as of 5:00 p.m., New York time on , 2015, the record date. The subscription rights will be evidenced by subscription rights certificates.
The total number of subscription rights issued to each stockholder will be rounded down to the nearest whole number. Each whole subscription right will entitle you to purchase one share of our common stock at a subscription price equal to $6.00 per share. Because the total number of subscription rights issued to each stockholder will be rounded down to the nearest whole number, we may not issue the full number of shares authorized for issuance in connection with this rights offering. Any excess subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable.
What is the subscription privilege?
For each whole right that you own, you will have a subscription privilege to buy from us one share of our common stock at the subscription price. You may exercise your subscription privilege for some or all of your subscription rights, or you may choose not to exercise any subscription rights.
For example, if you owned 10,000 shares of our common stock as of 5:00 p.m., New York time, on the record date, you would receive subscription rights representing the right to purchase 2,483.62 shares of common stock (rounded down to 2,483 shares) for $6.00 per share.
What is the oversubscription privilege?
If all of our stockholders do not exercise all of the subscription rights issued to them in this rights offering, then each holder who has exercised subscription rights in full will have the opportunity to purchase additional shares of our common stock at the subscription price of $6.00 per share under the oversubscription right, other than the Standby Purchaser, which has waived its oversubscription right. By extending oversubscription rights to our stockholders, we are providing those Cautionary Statements.
INVESTMENT CONSIDERATIONS
holders who have exercised all of their subscription rights with an opportunity to purchase shares that are not purchased by other stockholders in this rights offering.
If sufficient shares of common stock are available, we will seek to honor your oversubscription request in full, subject to right of the board of directors to reduce the number of shares that would be otherwise issuable under validly exercised rights pursuant to the oversubscription privilege, if the board of directors determines such reduction is advisable to protect the Company’s ability to utilize its NOLs; as discussed in more detail in “The Rights Offering—Limitations on the Purchase of Shares of Common Stock” and “Description of Capital Stock - Restrictions on Transfers Related to Preservation of Certain Tax Benefits Associated with NOLs.”
If, however, there are not enough shares available to fully satisfy all oversubscription right requests, we will allocate the available shares of common stock pro rata among those stockholders exercising their oversubscription privilege in proportion to the product (rounded to the nearest whole number so that the subscription price multiplied by the aggregate number of shares does not exceed the aggregate offering amount) obtained by multiplying the number of shares such stockholder subscribed for under the oversubscription privilege by a fraction the numerator of which is the number of unsubscribed shares and the denominator of which is the total number of shares sought to be subscribed for under the oversubscription privilege by all holders participating in such oversubscription. The subscription agent will return any excess payments by mail without interest or deduction as soon as reasonably practical after the expiration date.
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Why are we conducting the rights offering?
We are conducting the rights offering in order to raise additional capital and to improve and strengthen our financial position. We intend to use the net proceeds from the rights offering for the redevelopment, predevelopment and repositioning and development of existing properties, for investments in new opportunities, to make payments contemplated by the Plan and for general corporate purposes.
In evaluatingauthorizing the proposedrights offering, our board of directors considered and evaluated a number of factors, including:
· | our current capital resources and our future need for additional liquidity and capital; | |
· | our need for increased financial flexibility in order to enable us to achieve our business plan; |
· | the size and timing of the rights offering; | |
· | the potential dilution to our current stockholders if they choose not to participate in the offering; | |
· | alternatives available for raising capital, including debt and other forms of equity raises; | |
· | the impact of potential alternatives for raising equity capital on the Company’s ability to utilize its NOLs; | |
· | the potential impact of the rights offering on the public float for our common stock; and |
· | the fact that existing stockholders would have the opportunity to participate on a pro rata basis to purchase additional shares of common stock, subject to the restrictions in the Company’s certificate of incorporation. |
The chairman of our board of directors, Alexander Matina, is also a representative of the Standby Purchaser. Mr. Matina recused himself from the determination by the board of directors to proceed with the rights offering.
How was the subscription price for the rights offering determined?
Our board of directors considered a number of factors in determining the price for the rights offering, including:
· | theprice per share at which the Standby Purchaser was willing to serve as the Standby Purchaser; |
· | a range of likely values attributable to the Company’s assets in different scenarios; |
· | the price at which our stockholders might be willing to participate in the rights offering; |
· | historical and current trading prices for our common stock, which is generally thinly traded, including on a volume weighted average share price basis over certain periods; and |
· | the desire to provide an opportunity to our stockholders to participate in the rights offering on a pro rata basis. |
Because we do not generate significant revenues, have negative income, our value is based principally on assets that are hard to value, and we are aware of no comparable publicly traded “peer” companies, comparisons to companies on such traditional metrics as discounted cash flow, multiples of EBITDA and/or publicly traded comparable companies or similar calculations are not as relevant for us as for some companies. See “Risk Factors—The subscription price determined for the rights offering is not an indication of the fair value of our common stock.”
The chairman of our board of directors, Alexander Matina, is also a representative of the Standby Purchaser. Mr. Matina recused himself from the determination by the board of the subscription price.
What is the role of the Standby Purchaser in this offering?
In connection with the rights offering, we have entered into an Investment Agreement with MFP Partners, L.P., which we refer to as the Standby Purchaser. Pursuant to the Investment Agreement, the Standby Purchaser has agreed to purchase from us, subject to the satisfaction or waiver of certain conditions, including the timely completion of the rights offering, the shares of common stock not subscribed for in the rights offering, up to a maximum of 3,333,333 shares less the number of shares purchased by the Standby Purchaser in the rights offering, at a price per share equal to the subscription price of the rights offering. Ifthe number of unsubscribed shares of common stock purchased by the Standby Purchaser pursuant to the Investment Agreement is less than 1,666,667 shares, or the Minimum Allocation, we will issue and sell to the Standby Purchaser a number of shares of common stock equal to the excess of the Minimum Allocation over the number of shares purchased by the Standby Purchaser pursuant to the Investment Agreement, or the Additional Shares. The unsubscribed shares sold to the Standby Purchaser and the Additional Shares, if any, are being offered and sold to the Standby Purchaser in a private placement.
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In addition to the investment pursuant to the Investment Agreement, as a stockholder as of the record date, the Standby Purchaser will have the right to subscribe for and purchase shares of our common stock under its basic subscription privilege, but it has waived the right to exercise its oversubscription privilege.The chairman of our board of directors, Alexander Matina, is a representative of the Standby Purchaser. Mr. Matina recused himself from the deliberations by the board of directors regarding the approval of the Investment Agreement. See “Investment Agreement” for more information regarding the terms of the Investment Agreement and the role of the Standby Purchaser.
Will the Standby Purchaser receive a fee for providing the Standby Purchaser Commitment?
No.
Am I required to exercise the rights I receive in the rights offering?
No. You may exercise any number of your subscription rights, or you may choose not to exercise any subscription rights. However, if you choose not to fully exercise your subscription privilege and other stockholders fully exercise their subscription privilege and/or the Standby Purchaser acquires shares of common stock pursuant to the Investment Agreement, the percentage of our common stock owned by other stockholders will increase, the relative percentage of our common stock that you own will decrease, and your voting and other rights will be diluted.
Has our board of directors made a recommendation to our stockholders regarding the rights offering?
Our board of directors is making no recommendations regarding your exercise of the subscription rights. Stockholders who exercise subscription rights risk investment loss on new money invested. We cannot assure you that the trading price for our common stock will be above the subscription price at the time of exercise or at the expiration of the rights offering period or that anyone purchasing shares at the subscription price will be able to sell those shares in the future at the same price or a higher price. You are urged to make your own decision whether or not to exercise your subscription rights based on your own assessment of our business and the rights offering. See “Risk Factors” in this prospectus and in the documents incorporated by reference into this prospectus.
Will our directors, executive officers or significant stockholders participate in the rights offering?
Our directors and executive officers who own shares of common stock, as well as other significant stockholders, are permitted, but not required, to participate in the rights offering on the same terms and conditions applicable to all stockholders. Certain of our directors, executive officers and significant stockholders have indicated their current intention to participate in the rights offering. However, only the Standby Purchaser and Third Avenue have committed to purchase shares, pursuant to the terms of their respective agreements with the Company, and each director, executive officer and other significant stockholder reserves the right, in his, her or its sole discretion, to participate or not to participate in the rights offering, and if they do participate, they may do so at any level. The chairman of the board of directors of the Company, Alexander Matina, is also a representative of the Standby Purchaser.
How soon must I act to exercise my subscription rights?
The subscription rights may be exercised at any time during the subscription period, which commences on , 2015, through the expiration date for the rights offering, which is 5:00 p.m., New York time, on , 2015. If you elect to exercise any subscription rights, the subscription agent must actually receive all required documents and payments from you at or prior to the expiration date. Although we have the option of extending the expiration date of the subscription period at our sole discretion (subject to the consent rights of the Standby Purchaser and Third Avenue), we currently do not intend to do so.
May I transfer my subscription rights?
No, the rights are exercisable only by stockholders of record on the record date, and you may not sell, transfer or assign your subscription rights to anyone else.
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Are there any limits on the number of shares of common stock I may own as a result of the exercise of subscription rights under the rights offering?
Yes. Subject to your ability to exercise the oversubscription privilege, you may only purchase the number of whole shares of common stock purchasable upon exercise of the basic subscription privilege included in the subscription rights distributed to you in the rights offering. Accordingly, the number of shares of common stock that you may purchase in the rights offering is limited by the number of our shares of common stock you held on the record date. Although stockholders that fully and properly exercise their basic subscription privilege have the right to exercise the oversubscription privilege, there can be no assurances of the number of shares that a holder will be able to acquire through the exercise of the oversubscription privilege. We reserve the right to reject any or all subscriptions not properly submitted or the acceptance of which would, in the opinion of our counsel, be unlawful.
In addition, in order to help preserve our ability to utilize certain tax benefits primarily associated with the Company’s NOLs, our certificate of incorporation generally prohibits transfers or sales of stock that would result in a person or group of persons becoming a 4.75% holder, or that would result in the increase or decrease by a person or group of persons that is an existing 4.75% holder of its percentage ownership interest in the Company, unless the transferor or the transferee obtains the prior written approval of the board of directors. As a result, there are limitations on the exercise of basic subscription rights and oversubscription rights by stockholders to the extent such exercise would otherwise be prohibited by these provisions in our certificate of incorporation.
Any stockholder that (X) wishes to exercise its basic subscription privilege in this rights offering and (Y) either (i) currently holds 956,265 or more shares of the Company’s common stock (i.e. approximately 4.75% of the Company’s outstanding shares of capital stock as of the date of this prospectus), or (ii) currently holds less than 956,265 shares of the Company’s common stock, but is subscribing for a number of shares through the exercise of its basic subscription privilege and, if applicable, oversubscription privilege, that would, if accepted by the Company, result in such stockholder holding 1,154,300 or more shares of Company’s common stock following closing of the rights offering (i.e. approximately 4.75% of the Company’s outstanding shares of capital stock as of the date of this prospectus on a pro forma basis giving effect to the minimum number of shares that will be issued in this rights offering, assuming no stockholder other than Third Avenue exercises its subscription privilege and as a result the Standby Purchaser purchases 3,333,333 shares of common stock), must submit additional information to the Company in connection with the exercise of such stockholder’s basic subscription privilege, and, if applicable, such stockholder’s oversubscription privilege, as provided in the subscription exercise materials, so that the board of directors may determine to what extent the exercise of the basic and, if applicable, oversubscription privilege by such stockholder would result in a change in such stockholder’s percentage ownership interest in the Company.
The board of directors intends to waive the applicability of the foregoing provisions of the Company’s certificate of incorporation in connection with the exercise by any holder of its basic and, if applicable, oversubscription rights, to the extent that the exercise of such rights is not expected to have a material impact on the Company’s ability to utilize its NOLs. Such determination will be made by the board of directors, in its discretion, as promptly as practicable following the expiration of the rights offering and the Company’s receipt of all requested information related to the exercise by each holder of its basic and, if applicable, oversubscription privilege, and the effect of such exercise on the Company’s ability to utilize its NOLs, and may result in some or all of a holder’s subscription being reduced or rejected. If some or all of a holder’s subscription is reduced or rejected, then the applicable subscription payment will be returned to the holder as promptly as practicable.
In addition, although the Company currently believes this is unlikely to occur, the board of directors reserves the right to reduce the size of the rights offering and/or the number of shares issuable pursuant to the Investment Agreement with the Standby Purchaser, subject to the terms and conditions of the Investment Agreement, if the board of directors determines such reduction is advisable to protect the Company’s ability to utilize its NOLs.
See “The Rights Offering—Limitations on the Purchase of Shares of Common Stock” and “Description of Capital Stock - Restrictions on Transfers Related to Preservation of Certain Tax Benefits Associated with NOLs” for a further discussion regarding the provisions of the Company’s certificate of incorporation relating to certain prohibitions on transfers or sales of stock by certain of our substantial stockholders.
Are we requiring a minimum subscription to complete the rights offering?
No.
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Are there any other conditions to the completion of the rights offering?
Yes. The completion of the rights offering is subject to the conditions described under “The Rights Offering—Amendment, Withdrawal and Termination.”
Can the rights offering be cancelled?
Yes. We reserve the right to cancel the rights offering at any time for any reason. If the rights offering is cancelled, all subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable to those persons who subscribed for shares in the rights offering.
How do I exercise my subscription rights if I am a record holder of shares of common stock?
If you wish to participate in the rights offering, you must properly complete the enclosed subscription rights certificate and deliver it, along with the full subscription price, to the subscription agent before 5:00 p.m., New York time, on , 2015. If you use the mail, we recommend that you use insured, registered mail, return receipt requested.
If you send a payment that is insufficient to purchase the number of shares you requested, or if the number of shares you requested is not specified in the forms, the payment received will be applied to exercise your subscription rights to the fullest extent possible based on the amount of the payment received. If the payment exceeds the subscription price for the full exercise of your subscription rights, then the excess will be returned to you as soon as practicable. You will not receive interest on any payments refunded to you under the rights offering.
What should I do if I want to participate in the rights offering, but my shares are held in the name of my broker, dealer, custodian bank or other nominee?
If you hold your shares of common stock in "street name" through a broker, dealer, custodian bank or other nominee, you will not receive an actual subscription rights certificate. Instead, as described in this prospectus, you must instruct your broker, dealer, custodian bank or other nominee whether or not to exercise rights on your behalf. We will ask your broker, dealer, custodian bank or other nominee to notify you of the rights offering.
If you wish to participate in the rights offering, you should complete and return to your nominee the form entitled “Beneficial Owner Election Form.” You should receive this form from your nominee with the other rights offering materials. If your shares are held in the name of a broker, dealer or other nominee, then you should send your subscription payment to that nominee as well pursuant to their instructions. You must act timely to ensure that your broker, dealer, custodian bank or other nominee acts for you and that all required forms and payments are actually received by the subscription agent prior to the expiration of the rights offering period.
If the rights offering is not completed, will my subscription payment be refunded to me?
Yes. The subscription agent will hold all funds it receives in a segregated bank account until completion of the rights offering. If the rights offering is not completed, the subscription agent will return, without interest or penalty, as soon as practicable, all subscription payments. If you own shares in “street name,” it may take longer for you to receive payment because the payments will be returned through your nominee.
Must I pay the subscription price in cash?
Yes. You must timely pay the full subscription price for the full number of shares of common stock you wish to acquire under the subscription privilege by wire, bank draft drawn on a U.S. bank, U.S. postal money order or personal check that clears before the expiration date of the rights offering.
Will the shares of common stock I acquire in the rights offering be subject to any stockholder agreement restricting my ability to sell or transfer my new shares of common stock?
No. You will not be subject to any stockholder agreement that restricts your ability to sell or transfer any new shares of common stock acquired by you in the rights offering. However, under federal securities laws, affiliates of the Company will be subject to restrictions on their ability to transfer shares of the Company by virtue of their status as “affiliates” of the Company. An “affiliate” is generally defined as a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Company,
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In addition, as discussed above, in order to protect the Company’s ability to utilize its NOLs, the Company’s certificate of incorporation generally prohibits transfers or sales of stock that would result in a person or group of persons becoming a 4.75% holder, or that would result in the increase or decrease by a person or group of persons that is an existing 4.75% holder of its percentage ownership interest. See “The Rights Offering—Limitations on the Purchase of Shares of Common Stock” for a further discussion regarding the limitations in the Company’s certificate of incorporation.
After I exercise my subscription rights, can I change my mind?
No. All exercises of subscription rights are irrevocable by the stockholders, even if you later learn information about us that you consider unfavorable. You should not exercise your subscription rights unless you are certain that you wish to purchase the shares of common stock offered pursuant to this rights offering. However, we may cancel, extend or otherwise amend the rights offering at any time prior to the expiration date.
Does exercising my subscription rights involve risk?
Yes. The exercise of your subscription rights involves risks. Exercising your subscription rights involves the purchase of Common Stock, investorsadditional shares of our common stock and should be considered as carefully as you would consider other equity investments. Among other things, you should carefully consider the risks described under the heading “Risk Factors” in this prospectus and the documents incorporated by reference into this prospectus.
What fees or charges apply if I exercise my subscription rights?
We are not charging any fees or sales commissions to issue subscription rights to you or to issue shares to you if you exercise your subscription rights. If you exercise your subscription rights through a broker or other record holder of your shares, you are responsible for paying any fees that person may charge.
How do I exercise my subscription rights if I am a record holder of shares of common stock and I live outside of the United States or have an army post office or foreign post office address?
The subscription agent will hold subscription rights certificates for stockholders having addresses outside the United States or who have an army post office or foreign post office address. In order to exercise subscription rights, our foreign stockholders and stockholders with an army post office or foreign post office address must notify the subscription agent and timely follow other procedures described in the section of this prospectus entitled “The Rights Offering—Foreign and Other Stockholders.”
When will I receive my new shares of common stock?
All shares that you purchase in the rights offering will be issued in book-entry, or uncertificated, form. When issued, the shares will be registered in the name of the subscription rights holder of record. As soon as practicable after the expiration of the rights offering, the subscription agent will arrange for the issuance of the shares of common stock purchased pursuant to the subscription privilege. Subject to state securities laws and regulations, we have the discretion to delay distribution of any shares you may have elected to purchase by exercise of your subscription rights in order to comply with state securities laws.
What are the material U.S. federal income tax consequences of exercising my subscription rights?
The receipt and exercise of your subscription rights generally should not be taxable under U.S. federal income tax laws. You should, however, seek specific tax advice from your own tax advisor in light of your own tax situation, including as to the applicability and effect of any other tax laws. See “Certain Material U.S. Federal Income Tax Consequences.”
What happens if I choose not to exercise my subscription rights?
You are not required to exercise your subscription rights or otherwise take any action in response to this rights offering. If you do not exercise your subscription privilege and the rights offering is completed, the number of shares of our common stock you own will not change but, due to the fact that shares will be purchased by other stockholders in the rights offering and by the Standby Purchaser, your percentage ownership of our total outstanding common stock will decrease.
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How many shares of common stock will be outstanding after the rights offering and the Standby Purchaser Private Placement?
As of September 10, 2015, there were 20,131,928 shares of our common stock issued and outstanding (excluding 4,596,543 shares held in treasury). We will issue up to a maximum of 6,666,667 shares of common stock in the rights offering and pursuant to the Investment Agreement, depending on the number of subscription rights that are exercised and the number of shares purchased by the Standby Purchaser pursuant to the Investment Agreement. Based on the number of shares issued and outstanding as of September 10, 2015, if we issue all 5,000,000 shares of common stock available in this rights offering and as a result issue 1,666,667 Additional Shares to the Standby Purchaser pursuant to the Investment Agreement, we would have 26,798,595 shares of common stock issued and outstanding following the completion of the rights offering, excluding shares held in treasury. The actual number of shares of common stock that will be outstanding following the rights offering will depend on the extent to which the rights offering is subscribed by existing stockholders and the extent to which the board of directors waives the protective provisions of the Company’s certificate of incorporation described above with respect to certain significant stockholders that exercise their subscription rights.
How much money will the Company receive from the rights offering?
If we issue all 5,000,000 shares of common stock available in this rights offering and we therefore issue the full Minimum Allocation of 1,666,667 Additional Shares to the Standby Purchaser pursuant to the Investment Agreement, the net proceeds to us, after deducting estimated offering expenses, will be approximately $39,575,000. However, depending on the extent to which the rights offering is actually subscribed, the extent to which the board of directors waives the protective provisions of the Company’s certificate of incorporation with respect to certain significant stockholders and the number of shares actually issued pursuant to the Standby Purchaser Private Placement, net proceeds may be less than this amount. We estimate that the expenses of the rights offering will be approximately $425,000. We intend to use the net proceeds in connection with the redevelopment, predevelopment and repositioning and development of existing properties, investments in new opportunities, to make payments contemplated by the Plan and general corporate purposes. See “Use of Proceeds.”
Who should I contact if I have more questions?
If you have more questions about the rights offering or need additional copies of the rights offering documents, please contact the information agent, D.F. King & Co., Inc., at (866) 796-7180.
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This summary highlights the information contained elsewhere in or incorporated by reference into this prospectus. This summary does not contain all of the information that you should consider before deciding whether to exercise your subscription rights. You should carefully read this entire prospectus, including the information under the heading “Risk Factors,” and the documents incorporated by reference into this prospectus, which are described under the heading “Incorporation by Reference.” In this prospectus, all references to the “Company,” “Trinity,” “we,” “us” and “our” refer to Trinity Place Holdings Inc., a Delaware corporation, and its subsidiaries and predecessors, unless the context otherwise requires or where otherwise indicated.
Company Overview
Trinity Place Holdings Inc. is a real estate holding, investment and asset management company. Our business is primarily to own, invest in, this Prospectusmanage, develop and/or redevelop real estate assets and/or real estate related securities. Currently, our principal asset is a property located at 28-42 Trinity Place in Lower Manhattan, referred to as the Trinity Place Property. We also own a shopping center located in West Palm Beach, Florida and retail boxes in particular,Westbury, New York and Paramus, New Jersey and we control a variety of intellectual property assets focused on the following factors:
CHANGING NATURE OF THE APPAREL RETAILING INDUSTRY
consumer sector.
The apparel retailing industry has undergone substantial contraction in
recent years, withpredecessor to Trinity is Syms Corp., or Syms. Syms and its subsidiaries, or the closingDebtors, filed voluntary petitions for relief under Chapter 11 of more than thirty major retail chains and
significant consolidation among remaining retailers. According to Dun &
Bradstreet's Business Failure Record, over 9,500 retail apparel and accessories
stores closedTitle 11 of the United States Bankruptcy Code, or failedChapter 11 in the United States between 1991Bankruptcy Court for the District of Delaware, or the Bankruptcy Court, on November 2, 2011. On August 30, 2012, the Court entered an order confirming the Plan. On September 14, 2012, the Plan became effective and 1995. This period
was characterizedthe Debtors consummated their reorganization under Chapter 11 through a series of transactions contemplated by intensified competition, reduced consumer spendingthe Plan and price deflation, allemerged from bankruptcy. As part of which resulted in severe pressure on retailers'
operating margins, including those transactions, reorganized Syms merged with and into Trinity, with Trinity as the surviving corporation and successor issuer pursuant to Rule 12g-3 under the Exchange Act.
Since the effective date of the Company. AlthoughPlan, Trinity’s business plan has been focused on the monetization of its commercial real estate properties, including the development or sale of the Trinity Place Property, a vacant building in downtown Manhattan, and related development rights, and the payment of approved claims, all in accordance with the Plan and as described in greater detail below.
Throughout this period, the Company undertook a review of various strategic, developmental and other value-enhancing alternatives for certain of its commercial real estate properties, including the Trinity Place Property, and retained advisors, including architects, construction experts and attorneys to assist it in its evaluation and review of cost estimates and monetization strategies. The Company has also explored and continues to explore monetizing its intellectual property assets, including its rights to the Filene’s Basement® trademark and the Stanley Blacker® brand, and the intellectual property associated with the Running of the Brides® event and An Educated Consumer is Our Best Customer® slogan.
Following a General Unsecured Claim Satisfaction and the final payment to the former Majority Shareholder, as defined under the Plan, the Company will have satisfied its remaining obligations under the Plan and will no longer operate under the terms and restrictions of the Plan.
As of July 9, 2015, the Company believes that the remaining estimated aggregate allowed amount and cash distributions of creditor claims ($0.2 million), excluding claims covered by insurance, together with the net amount due to the former Majority Shareholder ($7.1 million) and the multiemployer pension plan ($3.8 million payable through 2019) under the Plan is approximately $11.1 million.
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Company Information
Trinity Place Holdings Inc. was incorporated in Delaware immediately prior to the effective date of the Plan. Our principal executive offices are located at 717 Fifth Avenue, Suite 1303, New York, New York 10022. The Company’s telephone number at such address is (212) 235-2190. Our corporate website address iswww.trinityplaceholdings.com. Our current and future annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC are available, free of charge, through our website as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. Our SEC filings can be accessed through the “Financials” tab on our website. The information contained on, or accessible through, our website is not intended to be part of this prospectus or any report we file with, or furnish to, the SEC and incorporated by reference herein. Our common stock is quoted on the OTCQB under the symbol “TPHS.”
The Rights Offering
The following summary describes the principal terms of the rights offering, but is not intended to be complete. See “The Rights Offering” for a more detailed description of the terms and conditions of the rights offering.
Securities Offered | We are distributing at no charge 0.248362 non-transferable subscription rights for each share of common stock that you owned as of 5:00 p.m., New York time, on the record date, , 2015, either as a holder of record or, in the case of shares held through brokers, dealers, custodian banks or other nominees on your behalf, as beneficial owner of the shares. The total number of subscription rights issued to each holder will be rounded down to the nearest whole number. As a result, we may not issue the full number of shares authorized for issuance in connection with this rights offering. | |
Subscription Privilege | We will distribute 0.248362 subscription rights to each holder of record of common stock for each share of common stock held by such holder. The total number of subscription rights issued to you will be rounded down to the nearest whole number. Each whole subscription right will entitle you to purchase one share of common stock at the subscription price. You may exercise your subscription privilege for some or all of your subscription rights, or you may choose not to exercise your subscription rights. | |
Oversubscription Privilege | If you exercise your basic subscription privilege in full, you may also subscribe to purchase a portion of our shares of common stock that are not purchased by our other stockholders through the exercise of their respective basic subscription privileges. If sufficient shares of common stock are available, we will seek to honor your oversubscription request in full, subject to right of the board of directors to reduce the number of shares that would be otherwise issuable under validly exercised rights pursuant to the oversubscription privilege, if the board of directors determines such reduction is advisable to protect the Company’s ability to utilize its NOLs; as discussed in more detail in “The Rights Offering—Limitations on the Purchase of Shares of Common Stock” and “Description of Capital Stock - Restrictions on Transfers Related to Preservation of Certain Tax Benefits Associated with NOLs.” If, however, there are not enough shares available to fully satisfy all oversubscription right requests, we will allocate the available shares of common stock pro rata among those stockholders exercising their oversubscription privilege in proportion to the product (rounded to the nearest whole number so that the subscription price multiplied by the aggregate number of shares does not exceed the aggregate offering amount) obtained by multiplying the number of shares such stockholder subscribed for under the oversubscription privilege by a fraction the numerator of which is the number of unsubscribed shares and the denominator of which is the total number of shares sought to be subscribed for under the oversubscription privilege by all holders participating in such oversubscription. The subscription agent will return any excess payments by mail without interest or deduction as soon as reasonably practical after the expiration date. |
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Subscription Price | The subscription price per share of common stock is $6.00. To be effective, any payment related to the exercise of a subscription right must clear prior to the expiration of the rights offering period. | |
Record Date | , 2015 | |
Expiration Date | The subscription rights will expire at 5:00 p.m., New York time, on , 2015, unless the expiration date is extended. We reserve the right to extend the subscription rights period at our sole discretion, subject to the consent rights of the Standby Purchaser and Third Avenue. We will notify you of any extension of the expiration date by issuing a press release. | |
Procedure for Exercising Subscription Rights | The subscription rights may be exercised at any time during the subscription period, which commences on , 2015. To exercise your subscription rights, you must properly complete the enclosed subscription rights certificate and deliver it, along with the full subscription price (including any amounts in respect of your oversubscription privilege), to the subscription agent, American Stock Transfer & Trust Company LLC. before 5:00 p.m., New York time, on , 2015, unless the expiration date is extended. | |
If you use the mail, we recommend that you use insured, registered mail, return receipt requested. If you hold your shares of common stock in "street name" through a broker, dealer, custodian bank or other nominee, you will not receive an actual subscription rights certificate. Instead, as described in this prospectus, you must instruct your broker, dealer, custodian bank or other nominee whether or not to exercise rights on your behalf. We will ask your broker, dealer, custodian bank or other nominee to notify you of the rights offering. If you wish to participate in the rights offering, you should complete and return to your nominee the form entitled “Beneficial Owner Election Form.” You should receive this form from your nominee with the other rights offering materials. If your shares are held in the name of a broker, dealer or other nominee, then you should send your subscription payment to that nominee as well pursuant to their instructions. You must act timely to ensure that your broker, dealer, custodian bank or other nominee acts for you and that all required forms and payments are actually received by the subscription agent prior to the expiration of the rights offering period. |
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Payment Adjustments | If you send a payment that is insufficient to purchase the number of shares requested, or if the number of shares requested is not specified in the rights certificate, the payment received will be applied to exercise your subscription rights to the extent of the payment. If the payment exceeds the amount necessary for the full exercise of your subscription rights, including any oversubscription rights exercised and permitted, the excess will be returned to you as soon as practicable. You will not receive interest or a deduction on any payments refunded to you under the rights offering. | |
Shares of Common Stock Issued and Outstanding Before the Rights Offering and After Completion of the Rights Offering and Standby Purchaser Private Placement | As of September 10, 2015, 20,131,928 shares of our common stock were issued and outstanding (excluding 4,596,543 shares held in treasury). We will issue up to a maximum of 6,666,667 shares of common stock in the rights offering and Standby Purchaser Private Placement, depending on the number of subscription rights that are exercised and the number of shares purchased by the Standby Purchaser. Based on the number of shares issued and outstanding as of September 10, 2015, if we issue all 6,666,667 shares of common stock available in this rights offering and Standby Purchaser Private Placement (assuming the rights offering is fully subscribed by existing stockholders and the Standby Purchaser therefore acquires the full Minimum Allocation of 1,666,667 Additional Shares issuable pursuant to the Investment Agreement), we would have 26,798,595 shares of common stock issued and outstanding following the completion of the rights offering and the Standby Purchaser Private Placement. The actual number of shares of common stock that will be outstanding following the rights offering will depend on the extent to which the rights offering is actually subscribed, the extent to which the board of directors waives the protective provisions of the Company’s certificate of incorporation with respect to certain significant stockholders and the number of shares actually issued pursuant to the Standby Purchaser Private Placement. | |
Use of Proceeds | The net proceeds to us, after deducting estimated offering expenses, will be approximately $39,575,000 if the rights offering is fully subscribed and the full Minimum Allocation of 1,666,667 Additional Shares are issued to the Standby Purchaser pursuant to the Investment Agreement. However, the actual amount of net proceeds will depend on the extent to which the rights offering is actually subscribed, the extent to which the board of directors waives the protective provisions of the Company’s certificate of incorporation with respect to certain significant stockholders and the number of shares actually issued pursuant to the Standby Purchaser Private Placement, and it is possible that net proceeds to us will be less than this amount. We estimate that the expenses of the rights offering will be approximately $425,000. We intend to use the net proceeds in connection with the redevelopment, predevelopment and repositioning and development of existing properties, investments in new opportunities, to make payments contemplated by the Plan and general corporate purposes. See “Use of Proceeds.” |
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Non-Transferability of Subscription Rights | The subscription rights may not be sold, transferred or assigned to anyone else. | |
Investment Agreements | The rights offering is backstopped by the Standby Purchaser. We have entered into an Investment Agreement with the Standby Purchaser. Pursuant to the Investment Agreement, the Standby Purchaser has agreed to purchase from us, subject to the satisfaction or waiver of certain conditions, including the timely completion of the rights offering, the shares of common stock not subscribed for in the rights offering, up to a maximum of 3,333,333 shares less the number of shares purchased by the Standby Purchaser in the rights offering, at a price per share equal to the subscription price of the rights offering. Ifthe number of unsubscribed shares of common stock purchased by the Standby Purchaser pursuant to the Investment Agreement is less than 1,666,667 shares, or the Minimum Allocation, we will issue and sell to the Standby Purchaser a number of shares of common stock equal to the excess of the Minimum Allocation over the number of shares purchased by the Standby Purchaser pursuant to the Investment Agreement, or the Additional Shares. The unsubscribed shares sold to the Standby Purchaser and the Additional Shares, if any, are being offered and sold to the Standby Purchaser in a private placement. The chairman of our board of directors, Alexander Matina, is a representative of the Standby Purchaser. Mr. Matina recused himself from the deliberations by the board of directors regarding the approval of the Investment Agreement. All of our shares of common stock issued to the Standby Purchaser pursuant to the Standby Purchaser Private Placement will be restricted shares and will bear a restrictive legend. Pursuant to the Investment Agreement, the Standby Purchaser will receive certain customary registration rights with respect to the shares of common stock that are acquired in the Standby Purchaser Private Placement and the rights offering. Pursuant to the Investment Agreement, the Standby Purchaser will also receive registration rights with respect to the 1,000,000 shares currently held by the Standby Purchaser. If we cancel the rights offering, the Standby Purchaser Private Placement will be cancelled as well. The Standby Purchaser will not receive a fee for providing the Standby Purchaser commitment. We have also entered into an agreement with Third Avenue pursuant to which Third Avenue has agreed to exercise all of its rights under its basic subscription privilege in the rights offering, representing 836,841 shares. Third Avenue will also have the right to exercise its oversubscription privilege in its sole discretion. Pursuant to the agreement with Third Avenue, Third Avenue will receive certain customary registration rights with respect to the shares of common stock that are acquired in the rights offering. See “Investment Agreements” for a discussion of the material terms of the agreements described above. |
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Certificate of Incorporation Protective Amendment Related to Preservation of Our Ability to Utilize Our NOLs | In order to help preserve our ability to utilize certain tax benefits primarily associated with the Company’s NOLs, the Company’s certificate of incorporation generally prohibits transfers or sales of stock that would result in a person or group of persons becoming a 4.75% holder, or that would result in the increase or decrease by a person or group of persons that is an existing 4.75% holder of its percentage ownership interest. Any direct or indirect transfer attempted in violation of the certificate of incorporation will be void. The restrictions on transfer under the certificate of incorporation will not apply if the transferor or the transferee obtains the prior written approval of the board of directors. As a result, there are limitations on the exercise of basic subscription rights and oversubscription rights by stockholders to the extent such exercise would otherwise be prohibited by these provisions in our certificate of incorporation. Any stockholder that (X) wishes to exercise its basic subscription privilege in this rights offering and (Y) either (i) currently holds 956,265 or more shares of the Company’s common stock (i.e. approximately 4.75% of the Company’s outstanding shares of capital stock as of the date of this prospectus), or (ii) currently holds less than 956,265 shares of the Company’s common stock, but is subscribing for a number of shares through the exercise of its basic subscription privilege and, if applicable, oversubscription privilege, that would, if accepted by the Company, result in such stockholder holding 1,154,300 or more shares of Company’s common stock following closing of the rights offering (i.e. approximately 4.75% of the Company’s outstanding shares of capital stock as of the date of this prospectus on a pro forma basis giving effect to the minimum number of shares that will be issued in this rights offering, assuming no stockholder other than Third Avenue exercises its subscription privilege and as a result the Standby Purchaser purchases 3,333,333 shares of common stock), must submit additional information to the Company in connection with the exercise of such stockholder’s basic subscription privilege, and, if applicable, such stockholder’s oversubscription privilege, as provided in the subscription exercise materials, so that the board of directors may determine to what extent the exercise of the basic and, if applicable, oversubscription privilege by such stockholder would result in a change in such stockholder’s percentage ownership interest in the Company. The board of directors intends to waive the applicability of the foregoing provisions of the Company’s certificate of incorporation in connection with the exercise by any holder of its basic and, if applicable, oversubscription rights, to the extent that the exercise of such rights is not expected to have a material impact on the Company’s ability to utilize its NOLs. Such determination will be made by the board of directors, in its discretion, as promptly as practicable following the expiration of the rights offering and the Company’s receipt of all requested information related to the exercise by each holder of its basic and, if applicable, oversubscription privilege, and the effect of such exercise on the Company’s ability to utilize its NOLs, and may result in some or all of a holder’s subscription being reduced or rejected. If some or all of a holder’s subscription is reduced or rejected, then the applicable subscription payment will be returned to the holder as promptly as practicable. See “The Rights Offering—Limitations on the Purchase of Shares of Common Stock”. |
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Reduction in Size of Rights Offering or Standby Purchaser Private Placement to Preserve Tax Benefits | Although the Company currently believes this is unlikely to occur, the board of directors reserves the right to reduce the size of the rights offering and/or the number of shares issuable pursuant to the Investment Agreement, subject to the terms and conditions of the Investment Agreement, if the board of directors determines such reduction is reasonably necessary in order to preserve the Company’s ability to utilize the full benefits of its NOLs and related tax benefits. See “The Rights Offering—Limitations on the Purchase of Shares of Common Stock”. | |
No Revocation of Exercise by Stockholders | All exercises of subscription rights are irrevocable, even if you later learn information about us that you consider unfavorable. You should not exercise your subscription rights unless you are certain that you wish to purchase the shares of common stock offered pursuant to this rights offering. | |
Conditions to the Rights Offering | The completion of the rights offering is subject to the conditions described under “The Rights Offering— Amendment, Withdrawal and Termination.” | |
Amendment; Cancellation | We may amend the terms of the rights offering or extend the rights offering period. We also reserve the right to cancel the rights offering at any time prior to the expiration date for any reason. If the rights offering is cancelled, all subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable to those persons who subscribed for shares in the rights offering. We will notify you of any amendments or modifications to the terms of the rights offering, or if the rights offering is cancelled, by issuing a press release. | |
No Board Recommendation | Our board of directors is making no recommendations regarding your exercise of the subscription rights. You are urged to make your own decision whether or not to exercise your subscription rights based on your own assessment of our business and the rights offering. See “Risk Factors.” | |
Issuance of Common Stock | All shares that you purchase in the rights offering will be issued in book-entry, or uncertificated, form. When issued, the shares will be registered in the name of the subscription rights holder of record. As soon as practicable after the expiration of the rights offering, the subscription agent will arrange for the issuance of the shares of common stock purchased pursuant to the subscription privilege. Subject to state securities laws and regulations, we have the discretion to delay distribution of any shares you may have elected to purchase by exercise of your subscription rights in order to comply with state securities laws. |
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Quotation of Common Stock | Our common stock is quoted on the OTCQB under the symbol “TPHS.” | |
Certain Material U.S. Federal Income Tax Consequences | The receipt and exercise of your subscription rights generally should not be taxable under U.S. federal income tax laws. You should, however, seek specific tax advice from own personal tax advisor in light of own personal tax situation, including as to the applicability and effect of any other tax laws. See “Certain Material U.S. Federal Income Tax Consequences.” | |
Subscription Agent | American Stock Transfer & Trust Company, LLC | |
Information Agent | D.F. King and Co., Inc. | |
Risk Factors | Stockholders considering making an investment by exercising subscription rights in the rights offering should carefully read and consider the information set forth in “Risk Factors” beginning on page 18 of this prospectus, together with the other information contained in or incorporated by reference into this prospectus, before making a decision to invest in our common stock. |
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An investment in our common stock involves a high degree of risk. You should carefully read and consider the risks described below, together with the other information contained in or incorporated by reference into this prospectus, including under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended February 28, 2015, or 2014 Annual Report, before making a decision to invest in our common stock. The risks described below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business operations. If any of the following risks actually occurs, our business, results of operations and financial condition could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.
Risks Related to the Rights Offering
The price of our common stock is volatile and may decline before or after the subscription rights expire.
The market price of our common stock is subject to wide fluctuations in response to numerous factors, including factors that have improvedlittle or nothing to do with us or our performance, and these fluctuations could materially reduce our stock price. These factors include, among other things, the fact that our stock is thinly traded, and as a result trades of small numbers of our shares can have a significant impact on the trading price of our stock, business conditions in our markets and the general state of the securities markets and the market for other real estate stocks, changes in capital markets that affect the perceived availability of capital to companies in our industry, governmental legislation or regulation, and general economic and market conditions, such as recessions and downturns in the United States or global economy. In addition, the stock market historically has experienced significant price and volume fluctuations, as happened in late August 2015 and at various other times in recent years. These fluctuations are often unrelated to the operating performance of particular companies. These broad market fluctuations may cause declines in the market price of our common stock, which may make it difficult for you to resell shares of our common stock owned by you at times or at prices that you find attractive.
If you do not fully exercise your subscription privilege, your interest in us may be significantly diluted, and to the extent the subscription price is less than the fair value of our common stock, you would experience an immediate dilution of the aggregate fair value of your shares, which could be substantial.
Up to a maximum of 5,000,000 shares are issuable in the rights offering. Accordingly, if you do not exercise your subscription privilege in full, your interest in us will be significantly diluted. In addition, pursuant to the Investment Agreement, the Company is required to issue to the Standby Purchaser a minimum of 1,666,667 shares of common stock in the Standby Purchaser Private Placement, excluding any shares the Standby Purchaser would be able to acquire upon the exercise of its subscription privilege. As a result, if more than 3,333,333 shares are issued to stockholders upon the exercise of their subscription privilege, the Company will issue Additional Shares to the Standby Purchaser, up to a maximum of 1,666,667 shares if all stockholders fully exercise their subscription privileges for the full 5,000,000 shares offered in the rights offering. To the extent the Company issues Additional Shares to the Standby Purchaser, even if you exercise your subscription privilege in full, you will experience dilution as a result of the issuance of such Additional Shares. In addition, if the subscription price is less than the fair value of our common stock, you would experience immediate dilution of the value of your shares relative to what your value would have been had our common stock been issued at fair value. This dilution could be substantial.
The subscription price determined for the rights offering is not an indication of the fair value of our common stock.
Our board of directors considered a number of factors in determining the price for the rights offering, including:
· | theprice per share at which the Standby Purchaser was willing to serve as the Standby Purchaser; |
· | a range of likely values attributable to the Company’s assets in different scenarios; |
· | the price at which our stockholders might be willing to participate in the rights offering; |
· | historical and current trading prices for our common stock, which is generally thinly traded, including on a volume weighted average share price basis over certain periods; and |
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· | the desire to provide an opportunity to our stockholders to participate in the rights offering on a pro rata basis. |
Because we do not generate significant revenues, have negative income, our value is based principally on assets that are hard to value, and we are aware of no comparable publicly traded “peer” companies, comparisons to companies on such traditional metrics as discounted cash flow, multiples of EBITDA and/or publicly traded comparable companies or similar calculations are not as relevant for us as for some companies. The subscription price is not necessarily related to our book value, results of operations, cash flows, financial condition or net worth or any other established criteria of value and may or may not be considered the fair value of our common stock at the time the rights offering was approved by our board of directors or during the past two years, during which the
Company's net income improved following three years of decline, there can be no
assurancerights offering period. We cannot assure you that the Companytrading price of our common stock will not decline during or after the rights offering. We also cannot assure you that you will be able to sustainsell shares purchased in this rights offering at a price equal to or greater than the levelssubscription price. We do not intend to change the subscription price in response to changes in the trading price of our common stock prior to the closing of the rights offering.
The chairman of our board of directors, Alexander Matina, is also a representative of the Standby Purchaser. Mr. Matina recused himself from the determination by the board of the subscription price.
Our board of directors is not making any recommendations regarding your exercise of the subscription rights and we did not receive a fairness opinion from a financial advisor in determining the subscription price or the terms of the offering.
Our board of directors is not making any recommendations regarding your exercise of the subscription rights. In addition, we did not receive a fairness opinion from a financial advisor in determining the subscription price or the terms of the offering. Stockholders who exercise subscription rights risk investment loss on new money invested. We cannot assure you that the trading price for our common stock will be above the subscription price at the time of exercise or at the expiration of the rights offering period or that anyone purchasing shares at the subscription price will be able to sell those shares in the future at the same price or a higher price. You are urged to make your own decision whether or not to exercise your subscription rights based on your own assessment of our business and the rights offering.
The rights offering may cause the price of our common stock to decline.
The announcement of the rights offering and its terms, including the subscription price, together with the number of shares of common stock we could issue if this rights offering is completed, may result in an immediate decrease in the trading price of our common stock. This decrease may continue after the completion of the rights offering. If that occurs, your purchase of shares of our common stock in the rights offering may be at a price greater than the prevailing trading price. Further, if the holders of the shares received upon exercise of the subscription rights choose to sell some or all of their shares, the resulting sales could also depress the trading price of our common stock.
Because you may not revoke or change your exercise of the subscription rights, you could be committed to buying shares above the prevailing trading price at the time the rights offering is completed.
Once you exercise your subscription rights, you may not revoke or change the exercise. The trading price of our common stock may decline before the subscription rights expire. If you exercise your subscription rights, and, operating marginsafterwards, the trading price of our common stock decreases below the $6.00 per share subscription price, you will have committed to buying shares of our common stock at a price above the prevailing trading price and could have an immediate unrealized loss. Our common stock is quoted on the OTCQB under the symbol “TPHS,” and the last reported sale price of our common stock on the OTCQB on September 10, 2015 was $6.10 per share. There can be no assurances that the trading price of our common stock will equal or exceed the subscription price at the time of exercise or at the expiration of the subscription rights offering period.
We may cancel the rights offering at any time prior to the expiration of the rights offering period, and neither we nor the subscription agent will have any obligation to you except to return your subscription payment.
We may at our sole discretion cancel this rights offering at any time prior to the expiration of the rights offering period. If we elect to cancel the rights offering, neither we nor the subscription agent will have any obligation with respect to the subscription rights except to return to you, without interest or penalty, as soon as practicable any subscription payments. In addition, we may suffer reputational harm if the rights offering is cancelled prior to the expiration date.
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You may not be able to resell any shares of our common stock that you purchase pursuant to the exercise of subscription rights immediately upon expiration of the subscription rights offering period.
If you exercise subscription rights, you may not be able to resell the common stock purchased by exercising your subscription rights until you, or your broker, custodian bank or other nominee, if applicable, have received those shares. Moreover, you will have no rights as a stockholder of the shares you purchased in the rights offering until we issue the shares to you. Although we will endeavor to issue the shares as soon as practicable after completion of the rights offering, including after all necessary calculations have been completed, there may be a delay between the expiration date of the rights offering and the time that the shares are issued.
Because we will have broad discretion over the use of the net proceeds from the rights offering, you may not agree with how we use the proceeds.
We intend to use the net proceeds in connection with the redevelopment, predevelopment and repositioning and development of existing properties, investments in new opportunities, to make payments contemplated by the Plan and general corporate purposes. However, we may allocate the proceeds among these purposes as we determine is appropriate. In addition, economic and financial market conditions may require us to allocate portions of the net proceeds for continuing growth.
RELATIONSHIPS WITH VENDORS
The Companyother purposes. Accordingly, you will be relying on the judgment of our management with regard to the use of proceeds from the rights offering, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used in a manner that you consider appropriate.
Our ability to utilize our NOLs to reduce future tax payments may be limited as a result of this rights offering and future transactions.
Section 382 of the Internal Revenue Code, or the Code, contains rules that limit the ability of a company that undergoes an ownership change, which is currently purchasing first-quality, in-season designer and
brand name merchandise fromgenerally any change in ownership by certain stockholders of more than 1,200 vendors at prices below those50% of its stock over a three-year period, to utilize its NOLs after the ownership change. These rules generally availableoperate by focusing on ownership changes involving stockholders who directly or indirectly own 5% or more of the stock of a company and any change in ownership arising from a new issuance of stock by the Company. Generally, if an ownership change occurs, the annual taxable income limitation on the use of NOLs is equal to major departmentthe product of the applicable long term tax exempt rate and specialty stores. the value of the Company's stock immediately before the ownership change.
It is possible that this rights offering when combined with prior and future transactions (including issuances of new shares of our common stock and sales of shares of our common stock) will cause us to undergo an ownership change. In that event, we generally would not be able to use our pre-change losses prior to such ownership change to offset future taxable income in excess of the annual limitations imposed by Section 382.
In order to protect our ability to utilize our NOLs and certain other tax attributes, our certificate of incorporation includes certain transfer restrictions with respect to our stock, which may limit the liquidity of our common stock.
To reduce the risk of a potential adverse effect on our ability to use our NOLs and certain other tax attributes for U.S. federal income tax purposes, our certificate of incorporation contains certain transfer restrictions with respect to our stock by substantial stockholders. These restrictions may adversely affect the ability of certain holders of our common stock to dispose of or acquire shares of our common stock and may have an adverse impact on the liquidity of our stock generally.
Our certificate of incorporation may require certain holders of subscription rights to seek approval from our board of directors to exercise some of theirsubscription rights.
In order to help preserve our ability to utilize certain tax benefits primarily associated with the Company’s NOLs, our certificate of incorporation generally prohibits transfers or sales of stock that would result in a person or group of persons becoming a 4.75% stockholder, or that would result in the increase or decrease by a person or group of persons that is an existing 4.75% stockholder of its percentage ownership interest, unless the transferor or the transferee obtains the prior written approval of the board of directors. As a result, there are limitations on the exercise of basic subscription rights and oversubscription rights by stockholders to the extent such exercise would otherwise be prohibited by these provisions in our certificate of incorporation.
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The board of directors intends to waive the applicability of the foregoing provisions of the Company’s certificate of incorporation in connection with the exercise by any holder of its basic and, if applicable, oversubscription rights, to the extent that the exercise of such rights is not expected to have a material impact on the Company’s ability to utilize its NOLs. Such determination will be made by the board of directors, in its discretion, as promptly as practicable following the expiration of the rights offering and the Company’s receipt of all requested information related to the exercise by each holder of its basic and, if applicable, oversubscription privilege, and the effect of such exercise on the Company’s ability to utilize its NOLs, and may result in some or all of a holder’s subscription being reduced or rejected. If some or all of a holder’s subscription is reduced or rejected, then the applicable subscription price will be returned to the holder as promptly as practicable.
The net proceeds we receive from the rights offering and the Standby Purchaser Private Placement may be less than currently anticipated because we have reserved the right to reduce the size of the rights offering and/or the Standby Purchaser Private Placement if we determine that such reduction is necessary or advisable to preserve our ability to utilize the full benefits of our NOLs and related tax benefits.
Although the Company has maintained long-termcurrently believes this is unlikely to occur, we have reserved the right to reduce the size of the rights offering and/or the number of shares issuable pursuant to the Investment Agreement, subject to the terms and conditions of the Investment Agreement, if we determine that such reduction is necessary or advisable to preserve our ability to utilize the full benefits of our NOLs and related tax benefits, and as a result the net proceeds we receive from the rights offering and the Standby Purchaser Private Placement may be lower than currently anticipated.
If you do not act timely and follow the subscription instructions, your exercise of subscription rights will be rejected.
Stockholders that desire to purchase shares in the rights offering must act promptly to ensure that all required forms and payments are actually received by the subscription agent prior to the expiration date of the rights offering. If you are a beneficial owner of shares, you must act timely to ensure that your broker, dealer, custodian bank or other nominee acts for you and that all required forms and payments are actually received by the subscription agent prior to the expiration of the rights offering period. We are not responsible if your broker, dealer, custodian bank or nominee fails to ensure that all required forms and payments are actually received by the subscription agent prior to the expiration of the rights offering period. If you fail to complete and sign the required subscription forms, send an incorrect payment amount or otherwise fail to follow the subscription procedures that apply to your exercise in the rights offering prior to the expiration of the rights offering period, the subscription agent may, depending on the circumstances, reject your subscription or accept it only to the extent of the payment received. Neither we nor the subscription agent undertakes to contact you concerning, or attempt to correct, an incomplete or incorrect subscription form. We have the sole discretion to determine whether the exercise of your subscription rights properly and timely follows the subscription procedures.
If you make payment of the subscription price by uncertified personal check, your check may not clear in sufficient time to enable you to purchase shares in the rights offering.
Any uncertified personal check used to pay the subscription price in the rights offering must clear prior to the expiration date of the rights offering, and the clearing process may require five or more business relationshipsdays. As a result, if you choose to use an uncertified personal check to pay the subscription price, it may not clear prior to the expiration date, in which event you would not be eligible to exercise your subscription rights. You may eliminate this risk by paying the subscription price by wire or bank draft drawn on a U.S. bank or a U.S. postal money order.
Because the subscription rights are non-transferable, there is no market for the subscription rights.
You may not sell, transfer or assign your subscription rights to anyone else. Because the subscription rights are non-transferable, there is no market or other means for you to directly realize any value associated with manythe subscription rights. You must exercise the subscription rights and acquire additional shares of these
vendors, there canour common stock to realize any value that may be no assuranceembedded in the subscription rights.
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Additional Risks Related to our Common Stock
Our common stock is thinly traded and the price of our common stock may fluctuate significantly.
Our common stock is thinly traded. We cannot assure stockholders that an active market for our common stock will develop in the foreseeable future or, if developed, that it will be sustained. As a result stockholders may not be able to continue to purchase
first-quality, in-season merchandise from these vendorsresell their common stock. Our common stock is currently quoted for trading on the OTC Markets. For companies whose securities are traded in the same breadthOTC Markets, it is often more difficult to obtain accurate quotations, to obtain coverage for significant news events because major wire services generally do not publish press releases about such companies, and to obtain needed capital.
Because our common stock is thinly traded, even small trades can have a significant impact on the market price of styles and sizes,our common stock. Volatility in the samemarket price of our common stock may prevent stockholders from being able to sell their shares at or greater volumesabove the price paid for such shares. The market price could fluctuate significantly for various reasons, many of which are beyond our control, including:
• | volatility in global and/or U.S. equities markets; |
• | changes in the real estate markets in which we operate; |
• | our ability to develop, re-develop or sell the Trinity Place Property and our other properties; |
• | changes in general conditions in the United States and global economies or financial markets, including those resulting from war, incidents of terrorism or responses to such events; |
• | the potential issuance of additional shares of common stock; |
A sale of a nearly 50% increasesubstantial number of shares of our common stock may cause the price of our common stock to decline and may impair our ability to raise capital in the numberfuture.
Finance transactions resulting in a large amount of its stores as well as entry into new markets. When entering new
markets,newly issued shares that become readily tradable, including the Company will be requiredrights offering, or other events that cause current stockholders to obtain suitable store sites, hire
personnel and establish distribution systems in geographic areas in which it has
no prior experience.sell shares, could place downward pressure on the trading price of our stock. In addition, the Company must advertiselack of a robust resale market may require a stockholder who desires to sell a large number of shares of common stock to sell the "Syms" nameshares in increments over time to mitigate any adverse impact of the sales on the market price of our stock.
If our stockholders sell, or the market perceives that our stockholders intend to sell for various reasons, including the ending of restrictions on resale of substantial amounts of our common stock in the public market, including shares issued upon the exercise of outstanding options, the market price of our common stock could fall. Sales of a substantial number of shares of our common stock may make it more difficult for us to sell equity or equity-related securities in the future at a time and its distinguishing characteristicsprice that we deem reasonable or appropriate. In addition, until our common stock is more widely held and actively traded small sales or purchases will likely cause the price of our common stock to fluctuate dramatically up or down without regard to our financial health or business prospects.
22 |
Stockholders may experience dilution of their ownership interests because of the future issuance of additional shares of our common stock.
In the future, we may issue additional equity securities in capital raising transactions or otherwise, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 120,000,000 shares of capital stock consisting of 79,999,997 shares of common stock, one share of Series A preferred stock, one share of Series B preferred stock, one share of a class of special stock and 40,000,000 shares of blank-check preferred stock. As of September 10, 2015, there were 20,131,928 shares of our common stock, one share of our Series A preferred stock, one share of Series B preferred stock and one share of special stock outstanding.
If we issue all 6,666,667 shares of common stock available in this rights offering and Standby Purchaser Private Placement (assuming the rights offering is fully subscribed by existing stockholders and the Standby Purchaser therefore acquires the full Minimum Allocation of 1,666,667 Additional Shares issuable pursuant to the Investment Agreement), we would have 26,798,595 shares of common stock issued and outstanding following the completion of the rights offering and the Standby Purchaser Private Placement.
Any future issuance of our equity securities may dilute then-current stockholders’ ownership percentages and could also result in a decrease in the fair market value of our equity securities, because our assets would be owned by a larger pool of outstanding equity. We may need to raise additional capital through public or private offerings of our common stock or other securities that are convertible into or exercisable for our common stock. We may also issue such securities in connection with hiring or retaining employees and consultants, as payment to providers of goods and services, in connection with future acquisitions and investments, development, redevelopment and repositioning of assets, or for other business purposes. Our board of directors may at any time authorize the issuance of additional common stock without stockholder approval, unless the approval of our common stockholders or the holder of our Series A preferred stock is required by applicable law, rule or regulation or our certificate of incorporation. The terms of preferred equity securities issued by us in future transactions may be more favorable to new markets whereinvestors, and may include dividend and/or liquidation preferences, superior voting rights and the Companyissuance of warrants or other derivative securities, which may not be
known.have a further dilutive effect. Also, the future issuance of any such additional shares of common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that any such future issuances will not be at a price or have exercise prices below the price at which shares of the common stock are then traded.
The holder of our Series A preferred stock has certain voting rights and the holders of our Series A preferred stock and special stock have the right to appoint members to our board of directors and, consequently, the ability to exert significant influence over us.
Our certificate of incorporation provides for certain rights in favor of the holder of the Series A preferred stock until such time as the General Unsecured Claim Satisfaction has occurred, including substantial voting rights and the right to elect two individuals to our board of directors (one of whom is the “independent director” nominated by the directors elected by the holders of common stock, with the reasonable consent of the holder of the Series A preferred stock). In addition, in connection with the investment in the Company by Third Avenue, a beneficial holder of over 16% of the Company’s common stock, Third Avenue was issued one share of a class of special stock and the Company’s certificate of incorporation was amended to provide that, subject to the other terms and conditions of the Company’s certificate of incorporation, from the issuance of the one share of special stock and until the “Special Stock Ownership Threshold” (which is 2,345,000 out of the 3,369,444 shares of common stock purchased by Third Avenue) is no longer satisfied, Third Avenue has the right to elect one director to the board of directors, and the total number of directors that constitute the board of directors elected by the holders of common stock was reduced from three to two. As a result of these voting rights and the right to elect members of our board of directors, these stockholders are expected to be able to exert significant influence over our policies and management, potentially in a manner which may not be in our best interests or the best interests of the other stockholders, until such time as a General Unsecured Claim Satisfaction has occurred and the Special Stock Ownership Threshold is no longer satisfied, as applicable.
23 |
Over 50% of our shares of common stock are currently controlled by three of our stockholders who may have the ability to influence the election of directors and the outcome of matters submitted to our stockholders.
Over 50% of our shares of common stock are controlled by three of our stockholders, prior to the rights offering. As a result, these stockholders may have the ability to significantly influence the outcome of issues submitted to our stockholders. The interests of these stockholders may not always coincide with our interests or the interests of other stockholders, and they may act in a manner that advances their best interests and not necessarily those of other stockholders. The concentration of ownership could also deter unsolicited takeovers, including transactions in which stockholders might otherwise receive a premium for their shares over then current market prices.
In addition, if no stockholders other than Third Avenue exercise their subscription rights in the rights offering, the Standby Purchaser will own 4,333,333 shares of common stock (after giving effect to the sale of 3,333,333 shares of common stock in the Standby Purchaser Private Placement), representing approximately 17.83% of our outstanding shares of common stock.
We have not paid dividends on our common stock in the past and do not expect to pay dividends on our common stock for the foreseeable future. Any return on investment may be limited to the value of our common stock.
No cash dividends have been paid on our common stock. We expect that any income received from operations will be devoted to our future operations and growth. We do not expect to pay cash dividends on our common stock in the near future. The payment of any dividends on the common stock is currently strictly limited by the terms of our certificate of incorporation, which provides that dividends (other than in common stock and in other limited circumstances) are not payable until after payment required to be made to the former Majority Shareholder are made in full. Accordingly, the Company has no intention of and is unable to pay dividends to the holders of common stock until at least such time as the Company’s distribution obligations under the Plan have been satisfied. Payment of dividends would depend upon our profitability at the time, cash available for those dividends, and such other factors as our board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on an investor’s investment will only occur if our stock price appreciates.
Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock.
Our certificate of incorporation and bylaws and Delaware law contain provisions that could delay or prevent a change in control of our company. These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions. In addition to the matters identified in the risk factors above relating to the provisions of our certificate of incorporation, these provisions include:
• | rights of the holders of the Series A preferred stock and special stock to appoint a majority of the members of our board of directors; |
• | limitations in our certificate of incorporation on acquisitions and dispositions of our common stock designed to protect our NOLs and certain other tax attributes; |
• | vacancies in the two directorships elected by the holders of our common stock, or the EC Directors, may be filled only by a majority of the remaining EC Directors then in office or, if there are no such EC Directors in office, by a majority of the remaining members of the board of directors; and |
In addition, until the occurrence of a General Unsecured Claim Satisfaction the final payment to the former Majority Shareholder, the Company will remain under the jurisdiction of the Bankruptcy Court and continue to operate under the terms and restrictions of the Plan, which allows the Company to take certain actions by order of the Bankruptcy Court without first obtaining stockholder approval.
24 |
These and other provisions in our certificate of incorporation and bylaws and under Delaware law could discourage potential takeover attempts, reduce the price that investors might be willing to pay in the future for shares of common stock and result in the market price of the common stock being lower than it would be without these provisions.
Risks Related to Our Business
We have a limited operating history and have not generated a profit and consequently our business plan is difficult to evaluate and our long term viability cannot be assured.
Our prospects for financial success are difficult to assess because we have a limited operating history since emergence from bankruptcy and, more recently, as a going concern. The predecessor to the Company filed for Chapter 11 relief on November 2, 2011, and the Company emerged from bankruptcy on September 14, 2012. The Company resumed reporting on the going concern basis of accounting on February 10, 2015. Since emergence from bankruptcy, we have generated limited revenues and had negative cash flow from operations and the development of our business plan will require substantial capital expenditures. Our business could be subject to any or all of the problems, expenses, delays and risks inherent in the establishment of a new business enterprise, including, but not limited to capital resources. There can be no assurance that our business will be successful, that we will be able to openachieve or maintain a profitable operation, or that we will not encounter unforeseen difficulties that may deplete our capital resources more rapidly than anticipated. There can be no assurance that we will achieve or sustain profitability or positive cash flows from our operating activities.
Much of our current business plan is focused on the development or sale of the Trinity Place Property, and operatean inability to execute this business plan could have a material adverse effect on our results of operations.
Our business plan includes the development, redevelopment and/or sale of our remaining commercial real estate properties and in particular the development or sale of the Trinity Place Property. The Trinity Place Property currently makes up a majority of our assets. As a result, our revenues and future growth are heavily dependent on the success of implementing our business plan to develop or sell the Trinity Place Property, which is currently in pre-development. An inability to successfully execute our business plan with respect to the Trinity Place Property could have a material adverse effect on our results of operations.
Our revenues and the value of our portfolio are affected by a number of factors that affect investments in leased real estate generally.
We are subject to the general risks of investing in and owning leased real estate. These include the ability to secure leases with new stores on a timely and profitable basis,tenants, the non-performance of lease obligations by tenants, leasehold improvements that the Company will be ablecostly or difficult to obtain sufficient merchandise from its vendorsremove or certain upgrades that may be needed should it become necessary to adequately stock itsre-rent the leased space for other uses, rights of termination of leases due to events of casualty or condemnation affecting the leased space or the property or due to interruption of the tenant’s quiet enjoyment of the leased premises, and obligations of a landlord to restore the leased premises or the property following events of casualty or condemnation. The occurrence of any of these events could adversely impact our results of operations, liquidity and financial condition. In addition, if our competitors offer space at rental rates below our current rates or the market rates, we may lose current or potential tenants to other properties in our markets. Additionally, we may need to reduce rental rates below our current rates in order to retain tenants upon expiration of their leases or to attract new storestenants. Our results of operations and cash flow may be adversely affected as a result of these factors.
We may be unable to lease vacant space, renew our current leases, or re-lease space as our current leases expire.
We cannot assure you that leases at our properties will be renewed or that such properties will be re-leased at favorable rental rates. If the costs associated with opening such stores willrental rates for our properties decrease, our tenants do not renew their leases or we do not re-lease a significant portion of our available space, including vacant space resulting from tenant defaults or space that is currently unoccupied, and space for which leases are scheduled to expire, our financial condition, results of operations and cash flows could be materially adversely affectaffected. In addition, if we are unable to renew leases or re-lease a property, the Company's profitability.
DEPENDENCE ON KEY MANAGEMENT
The successresale value of that property could be diminished because the Company's business has depended, tomarket value of a large extent, on
the contributions of its founder, Chairman and Chief Executive Officer, Sy Syms.
Mr. Syms is 71 years old and, in recent years, has turned over increasing
responsibility for the management of the Company's operations to his daughter,
Marcy Syms, who serves as the Company's President and Chief Operating Officer.
Although Ms. Syms and the other members of the Company's management team have
substantial experience in the off-price apparel retailing industry, the
Company's expansion program and future successparticular property will depend in part upon the Company'svalue of the leases of such property.
25 |
Competition may adversely affect our ability to attract and retain tenants and motivate additional qualified
management personnel.
7
COMPETITION
The retail apparel business is highly competitive,to purchase properties.
There are numerous commercial developers, real estate companies, financial institutions and the Company accounts
for only a small fraction of the total market for men's, women's and children's
apparel. The Company's storesother investors with greater financial resources than we have that compete with off-price stores, as well as apparel
specialty stores, department storesus in seeking tenants who will lease space in our properties and manufacturer-owned factoryproperties for acquisition. Our competitors include real estate investment trusts, financial institutions, private funds, insurance companies, pension funds, private companies, family offices, sovereign wealth funds and individuals. This competition may result in a higher cost for properties than we wish to pay. In addition, retailers at our properties face increasing competition from outlet stores. Many ofmalls, discount shopping clubs, e-commerce, direct mail and telemarketing, which could reduce rents payable to us and reduce our ability to attract and retain tenants at our properties leading to increased vacancy rates at our properties.
We may become subject to the storesrisks associated with whichpartnerships and joint ventures.
Although we do not currently have joint ventures, we may become involved in partnerships and/or joint ventures in the Company competes are units of large
national or regional chains that have substantially greater resources than the
Company, some of which have indicated their intention to enter the off-price
apparel business. The off-price apparel business itself has become increasingly
competitive, especiallyfuture with respect to current or future properties. Partnerships and joint venture investments may involve risks not otherwise present for investments made or owned solely by us, including the increased usepossibility that our partner or co-venturer might become bankrupt, or may take action contrary to our instructions, requests, policies or objectives. Other risks of joint venture investments include impasse on decisions, such as a sale, because neither we nor a joint venture partner would have full control over the joint venture, activities conducted by manufacturers of
their own factory outlets. At various times of the year, department stores and
specialty stores offer brand name merchandise at substantial markdowns.
LACK OF ACTIVE TRADING MARKET FOR THE COMMON STOCK
Although the Common Stock has been listeda partner that have a negative impact on the New York Stock Exchange
since September 1983, trading in the Common Stock has been limited. In major
part, this has been a result of the relatively small percentage of the
outstanding stock in public hands. Although a principal purpose of this offeringjoint venture or us, and disputes with our partner. Also, there is no limitation under our organizational documents as to increase the amount of Common Stock availableour funds that may be invested in joint ventures.
Our ability to develop and/or redevelop our properties and enter into new leases with tenants will depend on our obtaining certain permits, site plan approvals and other governmental approvals from local municipalities, which we may not be able to obtain on a timely basis or at all.
In order to develop and/or redevelop our properties, we will be required to obtain certain permits, site plan approvals or other governmental approvals from local municipalities. We may not be able to secure all the necessary permits or approvals on a timely basis or at all, which may prevent us from developing and/or redeveloping our properties according to our business plan. The specific permit and approval requirements are set by the state and the various local jurisdictions, including but not limited to city, town, county, township and state agencies having control over the specific properties. Lack of permits and approvals to develop and/or redevelop our properties could severely and adversely affect our business.
We have generated minimal revenues from operations and have limited cash resources, and may be reliant on external sources of financing to fund operations in the future.
Our revenue generating activities have not yet produced sufficient funds for public trading, Mr. Symsprofitable operations. Our continued operation will be dependent upon the success of future operations and members of his family will likely require raising additional financing on acceptable terms. We have relied and may continue to own approximately 50.8% (47.8% if the
Underwriters' over-allotment option is exercised) of the outstanding stock
following this offeringrely substantially upon equity and theredebt financing to fund our ongoing operations. There can be no assurance that additional sources of financing would be available to the Company on commercially favorable terms should our capital requirements exceed cash available from operations and existing cash and cash equivalents.
The loss of key personnel upon whom we depend to operate our business or the inability to attract additional qualified personnel could adversely affect our business.
We believe that our future success will depend in large part on our ability to retain or attract highly qualified management and other personnel, including in particular our Chief Executive Officer, Matthew Messinger. We may not be successful in retaining key personnel or in attracting other highly qualified personnel. Any inability to retain or attract qualified management and other personnel would have a more active trading
market formaterial adverse effect on our business, results of operations and financial condition.
26 |
The failure of our wholly-owned subsidiary to repay the Common Stock will develop.
USE OF PROCEEDS
Theoutstanding mortgage loan and any liability the Company will not receive any proceeds from the saleincurs as a result of the Common Stock
offered hereby. The purpose of this offering is to provide the Selling
Stockholders with greater liquidityfinancing arrangements and to increase the amount of Common Stock
available for public trading.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Common Stock is quoted on the New York Stock Exchange under the symbol
"SYM." The following table sets forth for the periods indicated the high and low
sales prices per share of the Common Stock as reported on the New York Stock
Exchange Composite Tape. At October 22, 1997, the Company had approximately 206
stockholders of record.
HIGH LOW
---- ---
Fiscal Third Quarter
1998 (through October 23, 1997) .......... $14.94 $12.63
Second Quarter ....................... 14.00 9.38
First Quarter ........................ 10.00 9.00
Fiscal Fourth Quarter ....................... $10.25 $ 8.75
1997 Third Quarter ........................ 8.88 8.13
Second Quarter ....................... 8.50 7.13
First Quarter ........................ 8.38 7.63
Fiscal Fourth Quarter ....................... $ 8.25 $ 7.13
1996 Third Quarter ........................ 9.50 7.13
Second Quarter ....................... 8.38 6.75
First Quarter ........................ 7.88 6.88
On October 23, 1997 the last sale price of the Common Stock as reported on
the New York Stock Exchange Composite Tape was $13.06 per share.
Payment of dividends is within the discretion of the Company's Board of
Directors and depends upon various factors, including the earnings, capital
requirements and financial condition of the Company. The Company does not
currently pay dividends on its Common Stock and its policy is to retain earnings
to support the growth of its business.
8
CAPITALIZATION
The following table sets forth the capitalizationguarantees of the Company asrequired by that loan could have a material and adverse impact on our financial condition, results of operations and cash flows.
The failure by our wholly-owned subsidiary to make scheduled repayments under the date indicated:
AUGUST 30, 1997
---------------
Long-term debt:
Obligationsloan agreement entered into in February 2015, or the default of any of its obligations under capital leases (1) ................ $ 670,000
------------
Stockholders' equity:
Preferred stock, par value $100 per share,
authorized 1,000,000 shares; none outstanding ...... --
Common stock, par value $.05 per share,
authorized 30,000,000 shares; 17,776,000 shares
issued and outstanding(2) .......................... 889,000
Additional paid-in capital .......................... 12,432,000
Retained earnings ................................... 221,336,000
------------
Total stockholders' equity ....................... 234,657,000
------------
Total capitalization ............................. $235,327,000
============
- ----------
(1) Exclusive of current portion, aggregating $441,000.
(2) Exclusive of 512,725 shares issuable upon the exercise of outstanding stock
options.
9
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
In 1995, the Company changed its fiscal year end to the Saturday nearest to
the end of February. Prior thereto, the Company's financial statements were
preparedloan, may have an adverse impact on the basisCompany’s financial condition, results of a 52-week or 53-week fiscal year endingoperations and cash flows. Upon the occurrence of an event of default, our subsidiary may be required to immediately repay all amounts outstanding under the loan and the lenders may exercise other remedies available to them, including foreclosing on the Saturday
closest to the end of December. The following summary income statement and
balance sheet data, other than the data for the interim periods ended August 31,
1996 and August 30, 1997, are derived from the Company's audited financial
statements. All of the financial data presented below should be read in
conjunction with the consolidated financial statements and related notes, and
"Management'sTrinity Place Property. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations," appearing elsewhereOperations—Liquidity and Capital Resources and Note 10 to the Company’s consolidated financial statements (Loan Payable) in this Prospectus.
TWENTY-SIX WEEKS ENDED
FISCAL YEAR ENDED (UNAUDITED)
------------------------------------------------------------ -----------------------------
JANUARY 2, JANUARY 1, DECEMBER 31, MARCH 2, MARCH 1, AUGUST 31, AUGUST 30,
1993 1994 1994 1996(1) 1997 1996 1997
-------- -------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA:
Net sales ..................... $319,623 $318,939 $326,651 $334,750 $346,792 $158,505 $164,239
Gross profit .................. 105,161 103,423 108,739 117,189 133,679 56,589 64,444
Income from operations ........ 25,635 18,839 14,429 17,938 33,839 8,570 12,948
Income before income taxes .... 25,176 19,082 14,370 17,645 33,742 8,534 12,707
Net income .................... 15,148 10,847 8,491 10,411 19,065 4,822 7,496
Net income per share .......... $0.86 $0.61 $0.48 $0.59 $1.08 $0.27 $0.42
Weighted average shares
outstanding .................. 17,690 17,690 17,694 17,694 17,694 17,694 17,739
OTHER DATA:
Gross profit margin ........... 32.9% 32.4% 33.3% 35.0% 38.5% 35.7% 39.2%
Operating income margin ....... 8.0 5.9 4.4 5.4 9.8 5.4 7.9
Depreciation and
amortization ................. $ 7,747 $ 7,446 $ 8,854 $ 7,751 $ 7,971 $ 3,830 $ 4,290
Capital expenditures .......... 6,713 17,508 14,591 4,777 21,709 12,716 6,792
Number of stores at end
of period .................... 29 34 39 38 40 39 40
BALANCE SHEET DATA:
Working capital ............... $ 61,338 $ 59,871 $ 59,918 $ 75,521 $ 78,228 $ 70,425 $ 84,102
Total assets .................. 204,071 221,152 245,385 260,144 284,018 289,102 306,114
Long-term debt (including
capitalized leases)(2) ....... 2,209 1,974 1,696 1,304 900 1,111 670
Stockholders' equity .......... 180,625 190,605 197,341 207,369 226,434 212,191 234,657
- ----------
(1) Fiscal year 1996 was comprisedthe Company’s 2014 Annual Report, for further discussion regarding the loan transaction.
If certain of fifty-three weeks.
(2) Excludes current maturities.
10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
In 1995,our obligations are not satisfied by specific dates, the Plan and our certificate of incorporation provide for certain changes in control.
As of July 9, 2015, the Company changed its fiscal year endbelieves that the remaining estimated aggregate allowed amount and cash distributions of creditor claims ($0.2 million), excluding claims covered by insurance, together with the net amount due to the Saturday nearestformer Majority Shareholder ($7.1 million) and the multiemployer pension plan ($3.8 million payable through 2019) under the Plan is approximately $11.1 million. If there has not been a General Unsecured Claim Satisfaction by October 1, 2016, then the Company’s certificate of incorporation provides for the board of directors to automatically increase to nine members, seven of which are to be elected by the holder of the Series A preferred stock. Also, if a General Unsecured Claim Satisfaction has occurred but the required payment to the endformer Majority Shareholder has not been made by October 16, 2016, then the board of February. Priordirectors will automatically be adjusted to this change,have four members, three of whom are to be elected by the former Majority Shareholder. In each case, the board of directors will remain controlled by the holder of the Series A preferred stock or the former Majority Shareholder, as applicable, until the required payments are made. Although the Company maintained its recordscurrently anticipates that all required payments will be made prior to the requisite dates, there can be no assurance as to the precise timing of these payments.
Proceeds from the monetization of the Company’s assets, after the payment of budgeted costs and transaction expenses, generally must be used to pay the Company’s obligations under the Plan until such time as a General Unsecured Claim Satisfaction has occurred and the required payments to the former Majority Shareholder are made.
Under the Plan, any proceeds generated from the monetization of the Company’s assets are generally first used to pay transaction expenses and to fund the Company’s operating budget. All net proceeds must then be used to satisfy Allowed Claims under the Plan and the Majority Shareholder redemption payment. As of July 9, 2015, the Company believes that the remaining estimated aggregate allowed amount and cash distributions of creditor claims ($0.2 million), excluding claims covered by insurance, together with the net amount due to the former Majority Shareholder ($7.1 million) and the multiemployer pension plan ($3.8 million payable through 2019) under the Plan is approximately $11.1 million. Only if there are proceeds remaining after the satisfaction of such obligations under the Plan can they be used in the business of the Company or distributed to stockholders.
27 |
We estimate that the net proceeds to us from the sale of our common stock offered in the rights offering and the issuance of Additional Shares in the Standby Purchaser Private Placement, after deducting estimated offering expenses, will be approximately $39,575,000 if the rights offering is fully subscribed. However, depending on the basisextent to which the rights offering is actually subscribed, the extent to which the board of a 52-53 week fiscal year endingdirectors waives the Saturday closestprotective provisions of the Company’s certificate of incorporation with respect to December
31. The following discussion comparescertain significant stockholders and the 26 weeks ended August 30, 1997number of shares actually issued pursuant to the 26 weeks ended August 31, 1996,Standby Purchaser Private Placement, net proceeds may be less than this amount. We estimate that the fiscal year ended March 1, 1997 ("fiscal
1997")expenses of the rights offering, including matters related to the fiscal year ended March 2, 1996 ("fiscal 1996")Investment Agreement, will be approximately $425,000.
We intend to use the net proceeds in connection with the redevelopment, predevelopment and repositioning and development of existing properties, investments in new opportunities, to make payments contemplated by the fiscal
year ended March 2, 1996 toPlan and general corporate purposes. Until we use the fiscal year ended December 31, 1994 ("fiscal
1994"). The fiscal years ended December 31, 1994 and March 1, 1997 were
comprised of 52 weeks. The fiscal year ended March 2, 1996 was comprised of 53
weeks.
RESULTSnet proceeds, we may invest them temporarily in liquid short-term securities.
PRICE RANGE OF OPERATIONSCOMMON STOCK
Our common stock is quoted on the OTCQB under the symbol “TPHS.” The following table sets forth the high and low bid quotations for our common stock for the periods indicated as reported by the respective
percentagesOTCQB.
High | Low | |||||||
Fiscal Year Ended February 27, 2016: | ||||||||
Third Quarter (through September 10, 2015) | $ | 6.30 | $ | 6.10 | ||||
Second Quarter | $ | 8.01 | $ | 6.00 | ||||
First Quarter | $ | 8.40 | $ | 6.50 | ||||
Fiscal Year Ended February 28, 2015: | ||||||||
Fourth Quarter | $ | 7.25 | $ | 6.25 | ||||
Third Quarter | 6.60 | 5.75 | ||||||
Second Quarter | 6.10 | 5.76 | ||||||
First Quarter | 8.20 | 5.52 | ||||||
Fiscal Year Ended March 1, 2014: | ||||||||
Fourth Quarter | $ | 5.75 | $ | 4.15 | ||||
Third Quarter | 5.50 | 4.15 | ||||||
Second Quarter | 5.75 | 3.62 | ||||||
First Quarter | 7.20 | 5.25 |
As of September 10, 2015, there were 225 stockholders of record of our common stock.
28 |
The following table sets forth our cash and cash equivalents and capitalization as of May 30, 2015 (i) on an actual basis and (ii) as adjusted to give effect to the sale of all 6,666,667 shares available in the rights offering and pursuant to the Investment Agreement (assuming the rights offering is fully subscribed by existing stockholders and the Standby Purchaser is issued the full Minimum Allocation of 1,666,667 Additional Shares pursuant to the Investment Agreement) at a subscription price of $6.00 per share, before deducting estimated offering expenses. The following information should be read in conjunction with our consolidated financial statements and the notes thereto incorporated by reference in this prospectus.
As of May 30, 2015 | ||||||||
Actual | As Adjusted(1) | |||||||
(unaudited) | ||||||||
(in thousands, except share amounts) | ||||||||
Cash and cash equivalents | $ | 19,453 | $ | 59,453 | ||||
Restricted cash | 6,987 | 6,987 | ||||||
Total Cash | $ | 26,440 | $ | 66,440 | ||||
Loan payable, including current portion | $ | 40,000 | $ | 40,000 | ||||
Stockholders’ equity: | ||||||||
Common stock, $0.01 par value—authorized, 79,999,997 shares; issued and outstanding, 20,121,619 shares actual, 26,788,286 shares as adjusted. | 247 | 314 | ||||||
Preferred stock, $0.01 par value—authorized, 2 shares; issued and outstanding, 2 shares (actual and as adjusted). | - | - | ||||||
Special stock, $0.01 par value—authorized, 1 share; issued and outstanding , 1 share (actual and as adjusted). | - | - | ||||||
Designation preferred stock, $0.01 par value—authorized, 40,000,000 shares; zero shares issued and outstanding (actual and as adjusted) | - | - | ||||||
Additional paid-in capital | 42,895 | 82,828 | ||||||
Treasury stock, at cost; 4,590,185 shares of common stock | (48,230 | ) | (48,230 | ) | ||||
Retained earnings | 6,208 | 6,208 | ||||||
Accumulated other comprehensive income (loss) | (1,476 | ) | (1,476 | ) | ||||
Total stockholders’ (deficit) equity | (356 | ) | 39,644 | |||||
Total capitalization | $ | 39,644 | $ | 79,644 |
(1) Assumes the rights offering is fully subscribed and the full Minimum Allocation of 1,666,667 Additional Shares are issued to the Standby Purchaser pursuant to the Investment Agreement. Depending on the extent to which the rights offering is actually subscribed, the extent to which the board of directors waives the protective provisions of the Company's net sales attributableCompany’s certificate of incorporation with respect to various componentscertain significant stockholders and the number of its
income statement:
29 |
Before deciding whether to $164,239,000 as compared to net sales of $158,505,000exercise your subscription rights, you should carefully read this prospectus, including the information set forth under the heading “Risk Factors” and the information that is incorporated by reference into this prospectus, including our Quarterly Report on Form 10-Q for the twenty-six weeksquarter ended August 31, 1996. Comparable store sales decreased
2.2%May 30, 2015 and our 2014 Annual Report.
The Subscription Rights Generally
We are distributing to holders of our common stock as of 5:00 p.m., New York time, on , 2015, which is the record date for this rights offering, at no charge, non-transferable subscription rights to purchase shares of our common stock. You will receive 0.248362 subscription rights for each share of common stock you owned as of 5:00 p.m., New York time, on the record date. The total number of subscription rights issued to each holder will be rounded down to the nearest whole number.
The subscription rights will be evidenced by subscription rights certificates. Each subscription right includes a basic subscription privilege and an oversubscription privilege which are described in greater detail below. Subscription rights may be exercised at any time during the subscription period, which commences on , 2015, through the expiration date for the twenty-six weeks ended August 30, 1997rights offering, which is 5:00 p.m., New York time, on , 2015. You are not required to exercise any of your subscription rights.
Subscription Privilege
We will distribute 0.248362 subscription rights to each holder of record of common stock for each share of common stock held by such holder. The total number of subscription rights issued to each holder will be rounded down to the nearest whole number. Each whole subscription right will entitle you to purchase one share of common stock at a subscription price of $6.00 per share. You may exercise any number of your subscription rights, or you may choose not to exercise any subscription rights.
Oversubscription Privilege
If all of our stockholders do not exercise all of the subscription rights issued to them in this rights offering, then each holder who has exercised subscription rights in full, other than the Standby Purchaser, which has waived its oversubscription right, will have the opportunity to purchase additional shares of our common stock at the subscription price of $6.00 per share under the oversubscription right. By extending oversubscription rights to our stockholders, we are providing those holders who have exercised all of their subscription rights with an opportunity to purchase shares that are not purchased by other stockholders in this rights offering.
If sufficient shares of common stock are available, we will seek to honor your oversubscription request in full. If, however, there are not enough shares available to fully satisfy all oversubscription right requests, we will allocate the available shares of common stock pro rata among those stockholders exercising their oversubscription privilege in proportion to the product (rounded to the nearest whole number so that the subscription price multiplied by the aggregate number of shares does not exceed the aggregate offering amount) obtained by multiplying the number of shares such stockholder subscribed for under the oversubscription privilege by a fraction the numerator of which is the number of unsubscribed shares and the denominator of which is the total number of shares sought to be subscribed for under the oversubscription privilege by all holders participating in such oversubscription. The subscription agent will return any excess payments by mail without interest or deduction as soon as reasonably practical after the expiration date.
In order to properly exercise your oversubscription privilege, you must deliver the subscription payment related to your oversubscription privilege prior to the expiration of the rights offering. Because we will not know the total number of unsubscribed shares prior to the expiration of the rights offering, if you wish to maximize the number of shares you purchase pursuant to your oversubscription privilege, you will need to deliver payment in an amount equal to the aggregate subscription price for the maximum number of shares of our common stock that may be available to you (i.e., for the maximum number of shares of common stock available to you, assuming you fully exercise your basic subscription privilege and are allotted the full amount of your oversubscription as elected by you).
30 |
We can provide no assurance that you will actually be entitled to purchase the number of shares issuable upon the exercise of your oversubscription privilege in full at the expiration of the rights offering. We will not be able to satisfy your exercise of the oversubscription privilege if all of our stockholders exercise their basic subscription privileges in full, and we will only honor an oversubscription privilege to the extent a sufficient amount of shares of our common stock are available following the exercise of subscription rights under the basic subscription privileges.
To the extent the aggregate subscription price of the maximum number of unsubscribed shares available to you pursuant to the oversubscription privilege is less than the amount you actually paid in connection with the exercise of the oversubscription privilege, you will be allocated only the number of unsubscribed shares available to you, and any excess subscription payments received by the subscription agent will be returned promptly, without interest or penalty. To the extent the amount you actually paid in connection with the exercise of the oversubscription privilege is less than the aggregate subscription price of the maximum number of unsubscribed shares available to you pursuant to the oversubscription privilege, you will be allocated the number of unsubscribed shares for which you actually paid in connection with the oversubscription privilege.
Subscription Price
Our board of directors considered a number of factors in determining the price for the rights offering, including:
· | theprice per share at which the Standby Purchaser was willing to serve as the Standby Purchaser; |
· | a range of likely values attributable to the Company’s assets in different scenarios; |
· | the price at which our stockholders might be willing to participate in the rights offering; |
· | historical and current trading prices for our common stock, which is generally thinly traded, including on a volume weighted average share price basis over certain periods; and |
· | the desire to provide an opportunity to our stockholders to participate in the rights offering on a pro rata basis. |
Because we do not generate significant revenues, have negative income, our value is based principally on assets that are hard to value, and we are aware of no comparable publicly traded “peer” companies, comparisons to companies on such traditional metrics as discounted cash flow, multiples of EBITDA and/or publicly traded comparable companies or similar calculations are not as relevant for us as for some companies. See “Risk Factors—The subscription price determined for the rights offering is not an indication of the fair value of our common stock.”
The chairman of our board of directors, Alexander Matina, is also a representative of the Standby Purchaser. Mr. Matina recused himself from the 1996 period. determination by the board of the subscription price.
Expiration Time and Date
The 3.6% increasesubscription rights will expire at 5:00 p.m., New York time, on , 2015, unless we extend it. We reserve the right to extend the subscription period at our sole discretion, subject to the consent rights of the Standby Purchaser and Third Avenue. If the expiration date of the rights offering is so extended, we will give oral or written notice to the subscription and information agent on or before the scheduled expiration date and we will issue a press release announcing such extension no later than 9:00 a.m., New York City time, on the next business day after the most recently announced expiration of the rights offering. You must properly complete the enclosed subscription rights certificate and deliver it, along with the full subscription price, to the subscription agent prior to 5:00 p.m., New York time, on , 2015, unless the expiration date is extended. After the expiration of the rights offering period, all unexercised subscription rights will be null and void. We will not be obligated to honor any purported exercise of subscription rights which the subscription agent receives after the expiration of the offering, regardless of when you sent the documents regarding that exercise. Shares purchased in the rights offering will be issued, and any subscription payments for shares not allocated or validly purchased will be sent, as soon as practicable following the expiration date of the rights offering.
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Shares of Common Stock Outstanding After the Rights Offering
As of September 10, 2015, there were 20,131,928 shares of our common stock issued and outstanding (excluding 4,596,543 shares held in treasury). We will issue up to a maximum of 6,666,667 shares of common stock in the rights offering and pursuant to the Investment Agreement with the Standby Purchaser. Based on the number of shares issued and outstanding as of September 10, 2015, if we issue all 5,000,000 shares of common stock available in this rights offering and 1,666,667 Additional Shares to the Standby Purchaser pursuant to the Investment Agreement, we would have 26,798,595 shares of common stock issued and outstanding following the completion of the rights offering, excluding shares held in treasury. The actual number of shares of common stock that will be outstanding following the rights offering will depend on the extent to which the rights offering is subscribed by existing stockholders and the extent to which the board of directors waives the protective provisions of the Company’s certificate of incorporation described above with respect to certain significant stockholders that exercise their subscription rights.
The shares of our common stock are quoted on the OTCQB under the symbol “TPHS.”
Reasons for the twenty-six week period was,Rights Offering
We are conducting the rights offering in order to raise additional capital and to improve and strengthen our financial position. We intend to use the net proceeds in connection with the redevelopment, predevelopment and repositioning and development of existing properties, for investments in new opportunities, to make payments contemplated by the most part,Plan and for general corporate purposes.
In authorizing the resultrights offering, our board of directors considered and evaluated a number of factors, including:
The chairman of our board of directors, Alexander Matina, is also a representative of the Standby Purchaser. Mr. Matina recused himself from the determination by the board of directors to $56,589,000 forproceed with the fiscal period ended August 31, 1996. This increase resulted mainly from
increasedrights offering.
The net sales of $5,734,000proceeds to us, after deducting estimated offering expenses, will be $39,575,000 assuming all 5,000,000 shares are issued in the rights offering and the Company's gross margin increasingfull Minimum Allocation of 1,666,667 Additional Shares are issued to 39.2% from 35.7%. The 3.5% improvement in gross margin resulted primarily from
increased levelsthe Standby Purchaser pursuant to the Investment Agreement. However, depending on the extent to which the rights offering is actually subscribed, the extent to which the board of opportunisticdirectors waives the protective provisions of the Company’s certificate of incorporation with respect to certain significant stockholders and in-season purchases which created better
values for the Company's customers and lower markdowns.
11
Selling, general and administrative expense increased $753,000number of shares actually issued pursuant to $35,376,000 (21.5% as a percentagethe Standby Purchaser Private Placement, net proceeds may be less than this amount. We estimate that the expenses of net sales) for the twenty-six weeks ended
August 30, 1997 as comparedrights offering will be approximately $425,000.
Limitations on the Purchase of Shares of Common Stock
Subject to $34,623,000 (21.8% as a percentageyour ability to exercise the oversubscription privilege, you may only purchase the number of net sales)
forwhole shares of common stock purchasable upon exercise of the twenty-six weeks ended August 31, 1996.
Advertising expense for the twenty-six weeks ended August 30, 1997
increased to $3,900,000 (2.4% as a percentage of net sales), as compared to
$2,883,000 (1.8% as a percentage of net sales)basic subscription privilege included in the twenty-six week period
ended August 31, 1996, resulting fromsubscription rights distributed to you in the rights offering. Accordingly, the number of shares of common stock that you may purchase in the rights offering is limited by the number of our shares of common stock you held on the record date. Although stockholders that fully and properly exercise their basic subscription privilege have the right to exercise the oversubscription privilege, there can be no assurances of the number of shares that a commitmentholder will be able to expandacquire through the Company's
advertising effort through radio and direct mail advertising duringexercise of the thirteen
weeks ended August 30, 1997 and an increaseoversubscription privilege. We reserve the right to reject any or all subscriptions not properly submitted or the acceptance of television advertisingwhich would, in single
store markets during the first thirteen weeksopinion of this fiscal period. our counsel, be unlawful.
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In addition, in August 1997order to help preserve our ability to utilize certain tax benefits primarily associated with the Company’s NOLs, our certificate of incorporation generally prohibits transfers or sales of stock that would result in a person or group of persons becoming a 4.75% holder, or that would result in the increase or decrease by a person or group of persons that is an existing 4.75% holder of its percentage ownership interest, unless the transferor or the transferee obtains the prior written approval of the board of directors. As a result, there are limitations on the exercise of basic subscription rights and oversubscription rights by stockholders to the extent such exercise would otherwise be prohibited by these provisions in our certificate of incorporation.
Any stockholder that (X) wishes to exercise its basic subscription privilege in this rights offering and (Y) either (i) currently holds 956,265 or more shares of the Company’s common stock (i.e. approximately 4.75% of the Company’s outstanding shares of capital stock as of the date of this prospectus), or (ii) currently holds less than 956,265 shares of the Company’s common stock, but is subscribing for a number of shares through the exercise of its basic subscription privilege and, if applicable, oversubscription privilege, that would, if accepted by the Company, advertised its semi-annual sales event
("bash")result in the newspaper for the first time.
Occupancy costs were $7,930,000 (4.8% as a percentagesuch stockholder holding 1,154,300 or more shares of net sales) for the
twenty-six week period ended August 30, 1997, up from $6,683,000 (4.2% as a
percentage of net sales) for the period ended August 31, 1996. This increase in
the twenty-six week period resulted mainly from the additionCompany’s common stock following closing of the Park Avenue
store.
Depreciation and amortization for the twenty-six weeks ended August 30,
1997 amounted to $4,290,000, an increase of $460,000 as compared to $3,830,000
for the twenty-six weeks ended August 31, 1996. This increase in the twenty-six
week period resulted mainly from the additionrights offering (i.e. approximately 4.75% of the Park Avenue store.
Income before income taxes forCompany’s outstanding shares of capital stock as of the twenty-six weeks ended August 30, 1997date of $12,707,000 increased $4,173,000 as comparedthis prospectus on a pro forma basis giving effect to $8,534,000 for the twenty-six
weeks ended August 31, 1996. As discussed above, the increase in income before
income taxes reflects for the most part higher gross profit, offset somewhat by
increased selling, general and administrative, advertising and occupancy
expense.
For the twenty-six week period ended August 30, 1997 the effective income
tax rate was 41.0% as compared to 43.5% last year. Last year's rate was
adversely affected by additional tax provisions for certain states.
FISCAL YEAR ENDED MARCH 1, 1997 COMPARED TO MARCH 2, 1996
Net sales of $346,792,000 for the fiscal year ended March 1, 1997 increased
$12,042,000 (3.6%) as compared to net sales of $334,750,000 for the fiscal year
ended March 2, 1996. The increase was, for the most part, the result of an
increase in theminimum number of storesshares that will be issued in the year ended March 1, 1997. Comparable
store sales decreased by $736,000 (0.2%), caused mainly by fiscal 1996 being
comprised of 53 weeks versus 52 weeks in fiscal 1997. The Company estimates that
the extra week added approximately $5,100,000 in net sales to the 1996 fiscal
year.
Gross profit for the fiscal year ended March 1, 1997 was $133,679,000, an
increase of $16,490,000 (14.1%), as compared to $117,189,000 for the fiscal year
ended March 2, 1996. This increase resulted mainly from increased net sales of
$12,042,000this rights offering, assuming no stockholder other than Third Avenue exercises its subscription privilege and the Company's gross margin increasing to 38.5% from 35.0%. The
3.5% improvement in gross margin resulted primarily from increased levels of
opportunistic and in-season purchases which created better values for the
Company's customers.
Selling, general and administrative expense was $71,028,000 (20.5% as a
percentage of net sales) for the period ended March 1, 1997 as compared to
$70,579,000 (21.1% as a percentage of net sales) for the fiscal year ended March
2, 1996. The increase of $449,000 resulted from three additional stores in
fiscal 1997. As a percentage of sales, SG&A expense decreased in fiscal 1997,
due to a continued effort by management to control store and corporate
operational expenses.
Advertising expense for fiscal 1997 increased to $6,626,000 (1.9% as a
percentage of net sales), as compared to $5,905,000 (1.8% as a percentage of net
sales) for the fiscal year ended March 2, 1996, resulting from a continued
commitment to expand the Company's advertising effort.
Occupancy costs were $14,215,000 (4.1% as a percentage of net sales) for
the period ended March 1, 1997, up from $12,330,000 (3.7% as a percentage of net
sales) for the fiscal year ended March 2, 1996. This increase was the result of
three additional leased locations in fiscal 1997.
Depreciation and amortization in fiscal 1997 amounted to $7,971,000, an
increase of $220,000 as compared to $7,751,000 for the fiscal year ended March
2, 1996, resulting from the opening of new stores and a 40,000 square-foot
addition to the Secaucus, New Jersey distribution center.
The provision for contractor advance and special charges for the fiscal
year ended March 2, 1996 includes a $2,200,000 provision made in the fourth
quarter in recognition of then current information that a contractor advance
12
might not be fully recoverable, a charge in the first quarter of $1,200,000 for
costs associated with closing the store in Sterling Heights, Michigan, offset by
a $714,000 adjustment to the $2,935,000 special charges taken in the two month
period ended February 25, 1995, part of which relates to the write-off of costs
associated with a lease in Cincinnati, Ohio, in which the Company had initially
decided not to open a store. The $714,000 adjustment arose when the Company,
based on subsequent experience with the real estate market in Cincinnati, Ohio,
concluded in November 1995 that the property would not be subleased in a
reasonable time frame and at an acceptable rate. The Company then decided to
open the store in February 1996, operating with a reduced expense structure.
Income before income taxes of $33,742,000 increased $16,097,000 (91.2%) in
fiscal 1997, as compared to $17,645,000 for the fiscal year ended March 2, 1996.
This increase for the most part reflects higher gross profit and no special
charge in the current period, offset by increased selling, general and
administrative expense, advertising, and occupancy expense.
For the fiscal year ended March 1, 1997 the effective income tax rate was
43.5% as compared to 41.0% last year. The increase was the result of additional
tax provisions provided for certain states.
FISCAL YEAR ENDED MARCH 2, 1996 COMPARED TO DECEMBER 31, 1994
For the fiscal year ended March 2, 1996, net sales were $334,750,000, an
increase of $8,099,000 or 2.5% from fiscal 1994. The increase was mainly a
result of fiscal 1996 being 53 weeks compared to 52 weeks in the fiscal year
ended December 31, 1994. The extra week added approximately $5,100,000 in net
sales to the 1996 fiscal year.
For the fiscal year ended March 2, 1996, the Company's gross margin
increased to 35.0% from 33.3% in fiscal 1994. The increase was the result of a
higher initial markup partially offset by additional markdowns.
For the fiscal year ended December 31, 1994, the Company's interim gross
margin was estimated based principally upon historical experience. The
determination of cost of sales for that fiscal year was based on a physical
inventory at the end of the fiscal year ended December 31, 1994. Using estimated
gross margins for the first three quarters resulted in upward adjustments to
gross margin in the fourth quarter. In fiscal 1994, the adjustment was due
primarily to a higher initial markup. These adjustments resulted in an increase
to gross profit of approximately $1,787,000 for the fourth quarter ended
December 31, 1994. In January 1995, Syms began utilizing the retail inventory
method for quarterly inventory valuation.
As a percentage of net sales, selling, general and administrative expenses
(excluding occupancy, depreciation and amortization) were 21.1% in fiscal 1996
and 20.9% in fiscal 1994. The increase in the 1996 fiscal year selling, general
and administrative expenses and advertising (excluding occupancy, depreciation
and amortization) was principally due to the added week (53 weeks versus 52
weeks) of payroll and payroll related expenses and higher legal and professional
fees as a result the Standby Purchaser purchases 3,333,333 shares of common stock), must submit additional information to the Company in connection with the exercise of such stockholder’s basic subscription privilege, and, if applicable, oversubscription privilege, as provided in the subscription exercise materials, so that the board of directors may determine to what extent the exercise of the basic and, if applicable, oversubscription privilege by such stockholder would result in a change in such stockholder’s percentage ownership interest in the fiscal year andCompany.
As of May 30, 2015, we had U.S. federal NOLs, totaling approximately $208.7 million. The benefit of our NOLs can be reduced or eliminated under Section 382 of the proposed, but
subsequently abandoned, "Going Private" transaction.
Advertising expense for fiscal 1996 increasedUnited States Internal Revenue Code, as amended, or the Code, if we experience an “ownership change,” as defined in Section 382 of the Code. An ownership change can occur through one or more acquisitions of our stock by which certain stockholders or groups of stockholders increase their ownership of our stock, within the meaning of Section 382, by more than 50 percentage points in the aggregate within a three-year period.
The board of directors intends to $5,905,000 (1.8% as a
percentagewaive the applicability of net sales), as compared to $5,069,000 (1.6% as a percentagethe foregoing provisions of net
sales) for fiscal 1994, resulting from an additional expenditure for direct
marketing.
As a percentagethe Company’s certificate of net sales, occupancy expenses were 3.7%incorporation in fiscal 1996
and fiscal 1994.
Income before income taxes for fiscal 1996 was $17,645,000 (5.3% as a
percentage of net sales), as compared to $14,370,000 (4.4% as a percentage of
net sales) for fiscal 1994. This increase reflects higher gross profit, offset
by an increase in selling, general and administrative expenses as well as
occupancy expenses and the special charges as discussed above.
In the fiscal year ended March 2, 1996 the effective income tax rate
increased to 41.0% from 40.9% in fiscal 1994.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at August 30, 1997 was $84,102,000, an increase of
$13,677,000 from $70,425,000 at August 31, 1996, and the ratio of current assets
to current liabilities improved to 2.20 to 1 as compared to 1.94 to 1 at August
31, 1996.
Working capital at March 1, 1997 was $78,228,000, an increase of $2,707,000
from March 2, 1996, and the ratio of current assets to current liabilities
decreased to 2.40 to 1 as compared to 2.48 to 1 at March 2, 1996.
13
Working capital at March 2, 1996 was $75,521,000, an increase of
$15,603,000 from December 31, 1994. The ratio of current assets to current
liabilities improved to 2.48 to 1 at March 2, 1996 as compared to 2.32 to 1 at
December 31, 1994.
Net cash used by operating activities totaled $2,343,000 for the twenty-six
weeks ended August 30, 1997, a decrease of $10,217,000, as compared to
$7,874,000 provided by operating activities for the twenty-six weeks ended
August 31, 1996. Net income for 1997 amounted to $7,496,000 as compared to
$4,822,000 in 1996, an increase of $2,674,000. In the twenty-six week period
ended August 30, 1997, net cash used in operating activities was mainly used to
increase inventory by $16,528,000, offset by an increase in accounts payable of
$8,432,000.
Net cash provided by operating activities totaled $15,573,000 for the
fiscal year ended March 1, 1997 and increased by $4,437,000 compared to
$11,136,000 for the fiscal year ended March 2, 1996. Net income for fiscal 1997
amounted to $19,065,000 compared to $10,411,000 in fiscal 1996, an increase of
$8,654,000. In the period ended March 1, 1997, cash provided by operating
activities was mainly used to increase inventory by $9,586,000.
Net cash provided by operating activities totaled $11,136,000 in fiscal
1996 compared to $12,936,000 in fiscal 1994. Net income for fiscal 1996 amounted
to $10,411,000 compared to $8,491,000 in fiscal 1994, an increase of $1,920,000.
In fiscal 1996, merchandise inventories increased by $2,694,000 and accounts
payable decreased $4,721,000.
Net cash used in investing activities was $6,781,000 and $12,672,000 for
the twenty-six weeks ended August 30, 1997 and August 31, 1996, respectively.
The higher expenditures in 1996 were the result of costs associatedconnection with the openingexercise by any holder of the Company's store on Park Avenue in New York Cityits basic and, with the
40,000 square-foot additionif applicable, oversubscription rights, to the Company's distribution center in Secaucus,
New Jersey.
Net cash used in investing activities was $21,644,000 forextent that the fiscal year
ended March 1, 1997. Net cash used in investing activities was $4,452,000 in
fiscal 1996 compared to $14,488,000 in fiscal 1994. Purchasesexercise of property and
equipment totaled $21,709,000, $4,777,000 and $14,591,000 for the fiscal years
ended March 1, 1997, March 2, 1996 and December 31, 1994, respectively.
Net cash provided by financing activities was $8,983,000 for the twenty-six
weeks ended August 30, 1997, compared to $6,738,000 in fiscal 1996. Both
increases resulted from an increase in revolving line of credit borrowings
amounting to $8,450,000 in 1997 and $6,900,000 in fiscal 1996. At August 30,
1997 and August 31, 1996, the Company had net borrowings of $13,400,000 and
$6,900,000, respectively, under its revolving credit agreement.
Net cash provided by financing activities was $4,611,000 for the fiscal
year ended March 1, 1997, resulting for the most part from the $4,950,000 in
short term borrowings. Net cash used in financing activities was $2,337,000 in
fiscal 1996. Net cash provided by financing activities was $911,000 in fiscal
1994. The Company paid cash dividends of $0.10 per share in fiscal 1994, which
totaled $1,769,000. The Company had net borrowings of $2,900,000 in fiscal 1994.
The Company has a revolving credit agreement with a bank for a line of
credit not to exceed $40,000,000 through December 1, 1997. At December 1, 1997
the Company has the option to reduce this commitment to zero or convert the
revolving credit agreement to a term loan with a maturity date of December 1,
2000. The Company anticipates it will renew this facility for another three
years for the same amount and the same terms, conditions and covenants. Except
for funds provided from this credit agreement, the Company has satisfied its
operating and capital expenditure requirements, including those for the opening
and expansion of stores, from internally generated funds. For the twenty-six
weeks ended August 30, 1997, average borrowings under the revolving credit
agreement were $3,818,000 with a weighted average interest rate of 6.26%. For
the twenty-six weeks ended August 31, 1996, average borrowings under the
revolving credit agreement were $1,214,000 with a weighted average interest rate
of 6.40%. For the fiscal year ended March 1, 1997, under the revolving credit
agreement, the borrowings peaked at $21,450,000 and the average amount of
borrowings was $4,122,000 with a weighted average interest rate of 5.97%. For
the fiscal year ended March 2, 1996, under the revolving credit agreement, the
average amount of borrowings was $3,500,000 with a weighted average interest
rate of 7.3%. For the fiscal year ending December 31, 1994, under the revolving
credit agreement, the average amount of borrowings was $6,800,000 with a
weighted average interest rate of 5.2%.
The Company has planned capital expenditures of approximately $12,000,000
for the fiscal year ended February 28, 1998, which includes plans to open one
new store, and to relocate one store from a leased location to a Company built
store. Through the twenty-six week period ended August 30, 1997, the Company has
incurred $6,792,000 of capital expenditures relating to the $12,000,000.
14
Management believes that existing cash, internally generated funds, trade
credit and funds available from the revolving credit agreement will be
sufficient for working capital and capital expenditure requirements for the
fiscal year ending March 1, 1999.
SEASONALITY
Like most retailers, the Company's business is subject to seasonal
fluctuations. Historically, over 28% of the Company's net sales and
approximately 45% of its net earnings have been generated during the third
quarter. Because of the seasonality of the Company's business, results for any
quarter are not necessarily indicative of the results that may be achieved for
the full fiscal year.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No.
128"), which is effective for the Company for its current fiscal year, which
will end February 28, 1998. SFAS No. 128 simplifies the standards for computing
earnings per share previously found in Accounting Principles Board Opinion No.
15 and establishes new standards for computing and presenting earnings per
share. Application of SFAS No. 128such rights is not expected to have a significant effectmaterial impact on the Company's earnings per share.
IMPACT OF INFLATION AND CHANGING PRICES
Although the Company cannot accurately determine the precise effect of
inflation onCompany’s ability to utilize its operations, it does not believe inflation has had a material
effect on sales or results of operations.
15
BUSINESS
GENERAL
Syms operates a chain of forty off-price retail apparel stores located
throughout the Northeastern and middle Atlantic regions and in the Midwest,
Southeast and Southwest. The Company's stores feature a wide selection of first
quality, in-season merchandise, bearing nationally-recognized designer or brand
name labels, all of which is offered at prices substantially below those
generally found in department and specialty stores. The Company's merchandise
consists principally of men's tailored clothing and haberdashery and women's
dresses, suits, separates and accessories.
MERCHANDISING
The Company believes that it offers more designer and brand name
merchandise in more styles, sizes and price points than any other off-price
retailer. At present, more than 99% of the Company's net sales are generated by
the sale of designer and brand name merchandise. Syms merchandising focus is
predominantly directed toward middle- and upper-income, fashion-minded and price
conscious shoppers and is symbolized by its widely-recognized slogan: "An
Educated Consumer is Our Best Customer." For the year ended March 1, 1997 and
the twenty-six weeks ended August 30, 1997, net sales were generated by the
following principal merchandise categories:
TWENTY-SIX
YEAR ENDED WEEKS ENDED
MARCH 1, 1997 AUGUST 30, 1997
------------- ---------------
(PERCENTAGE OF NET SALES)
Men's tailored clothing and haberdashery ... 54% 55%
Women's dresses, suits, separates and
accessories .............................. 31 30
Shoes ...................................... 7 8
Children's wear ............................ 6 5
Luggage .................................... 2 2
--- ---
100% 100%
=== ===
The Company's merchandise assortment for men's tailored clothing and
haberdashery features a wide selection of business attire (suits, jackets,
shirts and ties), casual wear (slacks, shorts, polo-style shirts, sweaters and
activewear), formal wear (tuxedos and related furnishings), accessories
(underwear, socks, belts, gloves and scarves), outerwear and shoes. Men's
tailored clothing (suits, tuxedos, sportscoats and dress slacks) represents the
largest percentage of the Company's net sales. The Company maintains between
4,500 and 10,000 suits in each store, depending on store size, in a full array
of sizes. The Company believes that the typical Syms store offers a greater
number and assortment of men's suits, in a wider range of sizes, than any other
store in the United States. Recognizing the trend toward casual dressing in the
workplace, the Company has expanded its selection of men's casual sportswear and
carries a broad selection of designer and brand name sportswear.
Women's clothing is the Company's second largest merchandise category. The
Company's selection of women's apparel includes dresses (evening and day),
suits, pantsuits, separates, corporate casual, weekend wear, activewear,
loungewear, intimate apparel, shoes and accessories. The Company makes a special
effort to carry a broad range of sizes, including both petites up to size 12 and
womens up to size 24.
The Company's line of children's merchandise ranges from infant through
early teens and includes tailored clothing, casual apparel, shoes and sneakers.
In addition, the Company offers designer and brand name luggage, as well as
wallets, handbags and briefcases.
VENDOR RELATIONSHIPS AND PURCHASING
The Company purchases first-quality, in-season, designer and brand name
merchandise directly from manufacturers at prices below those generally paid by
department and specialty stores. Syms estimates that approximately 200 brand
names and designer labels are represented in its stores at any time. During
fiscal 1997, the Company purchased merchandise from approximately 1,200 vendors,
and no single brand name or designer label accounted for more than 4.3% of total
purchases. The Company has enjoyed longstanding relationships with many of its
vendors, some of which have been selling merchandise to the Company for as long
as 30 years. The Company believes that these relationships have contributed to a
continuity of buying opportunities for first-quality, in-season merchandise.
Syms is able to obtain its merchandise at advantageous prices because it is
viewed by its vendors as an
16
effective and dependable channel for reducing their excess inventories without
compromising brand image. The Company does not request advertising allowances,
avoids merchandise returns (except for damaged or nonconforming goods) and buys
in large volumes. Except for purchase order contracts, the Company has no
written agreements with its vendors. Although Syms typically does not maintain
large out-of-season inventories, the Company occasionally makes opportunistic
purchases of certain items of basic clothing, which do not change in style from
year to year, for storage until the next appropriate selling season.
Purchasing is performed by a staff of twelve buyers and seven assistant
buyers in conjunction with various merchandise managers. Individual store
allocations areNOLs. Such determination will be made by the Company's buying staff. Buyers are typically former
store employees withboard of directors, in its discretion, as promptly as practicable following the expiration of the rights offering and the Company’s receipt of all requested information related to the exercise by each holder of its basic and, if applicable, oversubscription privilege, and the effect of such exercise on the Company’s ability to utilize its NOLs, and may result in some or all of a strong understandingholder’s subscription being reduced or rejected. If some or all of Syms customers' needs and are
highly disciplined with respecta holder’s subscription is reduced or rejected, then the applicable subscription price will be returned to margin requirements and quantity limitations.
The Company's buying staff has, on average, 15 years of experience in the apparel industry and seven years with the Company. holder as promptly as practicable.
In addition, to the buying
staff,although the Company has two representatives in Europe who are responsible for
identifying European buying opportunities. The Company's buyers make buying
tripscurrently believes this is unlikely to Europe twice a year.
PRICING
The Company's pricing strategy isoccur, the board of directors reserves the right to enhance customer value by offering
everyday low prices, which are generally 40% to 60% below those offered at
department and specialty stores. In addition,reduce the Company also offers "dividend"
(in-store, unadvertised promotion) prices that reflect further reductions on
various types of merchandise. Merchandise is offered over a wide range of price
points, which contrasts distinctly with the merchandising approach of many
department and specialty stores.
The Company affixes a ticket to each item displaying Syms selling price as
well as the price the Company believes to be the nationally advertised price
(typically double thatsize of the true wholesale price) of that item at department
rights offering and/or specialty stores. All garments carry the manufacturer's brand name or
designer label. Because women's dresses are subject to considerable style
fluctuation, Syms has long utilized a ten-day automatic markdown pricing policy
to promote sales of certain dresses. Women's dresses represent approximately
4.8% of net sales.
The Company's ability to offer its merchandise at everyday low prices is
strengthened by its attention to minimizing operating costs. Syms stores are low
maintenance, functional facilities that are designed to maximize selling space
and contain overhead. The Company's ownership of 21 of its forty stores enables
it to reduce its overall occupancy costs. The Company's incentive compensation
program encourages store managers to maintain low payrolls. The efficient
implementation and management of the Company's advertising program, primarily
radio and television, has resulted in a ratio of advertising expenditures to net
sales that is below that of the industry as a whole.
MARKETING AND ADVERTISING
In 1974, the Company became one of the first clothing retailers to
advertise on television. The original commercials featured the Company's
founder, Sy Syms. In 1979, Mr. Syms' daughter, Marcy, currently President and
Chief Operating Officer, joined her father in the Company's television
commercials. In 1997, Mr. Syms' son, Stephen, a Vice President of the Company
and its Merchandise Manager -- Men's Tailored Clothing and Shoes, also began
appearing in Syms television commercials. The Company believes that the
appearance of members of the Syms family in the Company's commercials has been
an effective marketing practice and personalizes the Company to its customers.
As a result of the Company's extensive use of television advertising, its slogan
- -- "An Educated Consumer is our Best Customer" -- is one of the best known in
the retail apparel industry. In addition to television, the Company has
historically advertised on radio and, more recently, has begun advertising in
print media as well as by direct mail to its Syms credit card customer base. The
Company occasionally makes special offers in mailings to holders of the Syms
credit card and to others who have used national credit cards at Syms stores
within the previous six months. As part of its marketing and advertising effort,
Syms has historically sponsored programs on public television and charitable
events in the communities in which it does business.
The Company generally budgets approximately 1.9% of net sales (equal to
$6.6 million in fiscal 1997), for advertising, but allocates as much as 4.0% of
net sales to advertising for stores in new markets and second stores in existing
markets. The Company does not advertise the brand names of its merchandise.
Management believes that the Company enjoys substantial word-of-mouth publicity
from its customer base, and that this publicity accounts for a significant
portion of the Company's new customers in markets where the Company has existing
stores.
The Company accepts as a form of payment from its customers cash, checks,
national credit cards and its own Syms credit card. At September 30, 1997 there
were approximately 324,000 holders of the Syms credit card.
17
During fiscal 1997, the Syms credit card accounted for approximately $60.3
million, or 17.4%, of the Company's net sales. Syms credit card receivables are
sold on a non-recourse basis to a third party at a negotiated discount. In lieu
of cash refunds, the Company issues credits toward the Syms credit card or store
credits that may be used toward the purchase of other merchandise. Merchandise
purchased from the Company may be returned within a reasonable amount of time.
CUSTOMER SERVICE
The Company believes that it is distinguished among off-price retailers for
its attentive customer service. The Company's sales associates assist customers
with merchandise selection, including correct sizing. The Company's sales
associates are called "Educators" because their role is to educate customers
about the merchandise. Upon joining the Company, each Educator participates in a
Company-developed training program. In addition to a higher level of customer
service, the Company also offers certain other amenities not typically found in
off-price stores, such as individual fitting rooms for women and in-store
alterations for both men and women. The Company also offers Syms credit card
customers a 10% discount on their initial purchase using the card and a more
favorable return policy than it offers to holders of other credit cards. The
Company believes that, as discounting has become more common, the Company's
customer service and other amenities have become increasingly important factors
in distinguishing the Company from its off-price competitors.
STORE LAYOUT AND OPERATIONS
The Company's store format and merchandise presentation are designed to
emphasize its focus on everyday low prices and exceptional value. However, the
Company seeks to project itself as the off-price equivalent of an upscale
specialty store. In general, Syms stores are designed to convey the impression
of three specialty stores in one building: a men's specialty store, a women's
specialty store and a children's specialty store. The Company has designed its
stores to allow customers to select and purchase apparel with ease and
convenience. Each merchandise category is clearly displayed and organized by
type and size on conveniently arranged racks or counters. Large tickets, each
with a color corresponding to a specific size (for example, yellow always
indicates women's size 8), are attached to each piece of merchandise, allowing
customers to determine sizes from a distance. Unlike other off-price retailers,
the Company does not use printed price tags on its men's suits, relying instead
on handwritten price tickets, which it believes are a more personalized way of
presenting its suits to its customers. In general, no emphasis is placed on any
particular brand or label.
All Syms stores are low maintenance, simple and functional facilities
designed to maximize selling space and contain overhead costs. Store layouts are
flexible so that product groupings can be easily moved or expanded. As the
Company is committed to maintaining virtually all of its in-store inventory on
the selling floor, its stores do not require significant storage space. The
Company considers the ideal selling space of its stores to range from 35,000 to
55,000 square feet. More than 70% of Syms suburban stores are "free standing."
Syms stores are usually located near a major highway or thoroughfare in suburban
areas populated by at least one million people and are readily accessible to
customers by automobile.
Approximately 30 to 100 persons, consisting mostly of Educators, are
employed at each Syms store, depending upon store size and season. All Syms
stores are directly managed and operated by the Company. Each store has a
management team that consists of a store manager, two first assistant store
managers, two second assistant store managers and three department managers, and
is staffed by a core group of Educators during non-peak hours, with additional
Educators added as needed at peak hours. The various managers and Educators
perform all store operations, from receiving and processing merchandise and
arranging it for display to assisting customers. Each store manager reports to a
District Manager who, in turn, reports directly to the Company's senior
management. The Company currently employs five District Managers. District
Managers typically visit each store at least once every ten days to review
merchandise quantities and presentation, staff training and personnel
performance, expense control, security, cleanliness and adherence to Company
operating procedures. District Managers are also responsible for monitoring
store payrolls. Under the Company's "Management by Objective" program, members
of each store's management team are evaluated and are eligible to receive
additional compensation based upon the store's success in meeting certain gross
sales and payroll budgeting goals.
A typical Syms store is open seven days a week, eleven hours on weekdays,
nine hours on Saturdays and six hours on Sundays. Each store has security
personnel on premises during business hours and uses an electronic security
system after business hours. The Company has installed electronic sensor devices
in each store to detect and deter theft of merchandise.
18
STORE LOCATIONS
The following table sets forth, as of the date hereof, the location,
selling square footage and ownership status of each of the Company's forty
stores:
SELLING SELLING
SQUARE SQUARE
LOCATION FOOTAGE OWNERSHIP LOCATION FOOTAGE OWNERSHIP
-------- ------- --------- -------- ------- ---------
Connecticut New York
Fairfield 32,000 Owned Buffalo 39,000 Owned
Hartford 31,000 Leased Long Island (Commack) 36,000 Owned
Long Island (Westbury) 72,000 Owned
Florida New York City 39,000 Leased
Fort Lauderdale 44,000 Owned (Manhattan/Park Avenue)
Miami 45,000 Owned New York City 40,000 Owned
Tampa 38,000 Owned (Manhattan/Trinity Place)
West Palm Beach 36,000 Leased Rochester 32,000 Owned
Westchester 50,000 Leased
Georgia
Atlanta (Norcross) 51,000 Owned North Carolina
Charlotte 30,000 Leased
Illinois
Chicago (Addison) 47,000 Owned Ohio
Chicago (Gurnee Mills Mall) 33,000 Leased Cincinnati (Sharonville) 31,000 Leased
Chicago (Niles) 32,000 Leased Cleveland (Highland Heights) 36,000 Leased
Maryland Pennsylvania
Baltimore 43,000 Leased Philadelphia (Franklin Mills 22,000 Leased
Washington, D.C. (Rockville) 56,000 Owned Mall)
Philadelphia (King of Prussia) 41,000 Owned
Massachusetts Pittsburgh 40,000 Leased
Boston (Norwood) 36,000 Leased Pittsburgh (Monroeville) 31,000 Owned
Boston (Peabody) 39,000 Leased
Rhode Island
Michigan Providence (N. Cranston) 27,000 Leased
Detroit (Southfield) 46,000 Owned
Texas
Missouri Dallas 42,000 Owned
St. Louis 33,000 Leased Dallas (Hurst) 38,000 Owned
Houston 34,000 Owned
New Jersey
New York City (Paramus) 56,000 Owned Virginia
New York City (Woodbridge) 32,000 Leased Washington, D.C. (Falls 28,000 Leased
Philadelphia (Cherry Hill) 40,000 Owned Church)
Secaucus 25,000 Owned Washington, D.C. (Potomac 33,000 Leased
Mills Mall)
In addition to the selling space indicated, each store contains between
approximately 2,000 and 14,000 square feet for receiving, inspecting, holding
and ticketing merchandise and other personnel and administrative functions.
Store leases provide for a base rental of between approximately $2.50 and $34.00
per square foot. In addition, under the "net" terms of all of the leases, the
Company pays maintenance expenses, real estate taxes and other charges. Four of
the Company's leased stores have a percentage of sales rental as well as a fixed
minimum rent. Rental payments for Syms leased stores aggregated $5,868,000 for
the fiscal year ended March 1, 1997.
The Company owns a distribution center, located in Secaucus, New Jersey.
The facility contains approximately 277,000 square feet of warehouse and
distribution space, 34,000 square feet of office space and 29,000 square feet of
retail selling space.
19
EXPANSION PROGRAM
The Company has recently embarked on a five-year, 19 store expansion
program intended to increase its penetration of certain markets in which it
currently has a retailing presence and to enter new markets in Los Angeles, San
Francisco, Seattle and Toronto that it does not currently serve. Each of these
new markets includes a population of more than two million persons, high income
demographics and significant consumer awareness of designer and brand name
labels. In addition, the Company believes that it possesses a high level of name
recognition in Toronto because it has advertised for twenty years in nearby
Buffalo. It is the Company's goal to have at least two stores in each market
that it currently serves with a population greater than two million.
Accordingly, the Company plans to open a second store in suburban Atlanta in
November 1997 and a second store in suburban Detroit in June 1998. Additional
suburban stores are planned for Baltimore, Houston, Miami and New York. The
Company also plans to open center-city stores in Boston, Chicago and Washington,
D.C., where it currently has only a suburban presence.
MANAGEMENT INFORMATION SYSTEMS
The Company has implemented a merchandise control system that tracks
product inventory in approximately 750 categories from its arrival at the
distribution center to its ultimate sale at the Company's stores. Information is
electronically transmitted daily to the Company's database at its headquarters,
where executives can obtain detailed reports on demand regarding sales and
inventory levels (in units and dollars) on a store-by-store basis.
The Company's merchandise control system enhances management's ability to
make informed buying decisions and to respond to unexpected increases or
decreases in demand for a particular item. The inventory management system is
capable of reporting product information, such as style, fabric, vendor lot,
model number, size and color, and enables management to distribute merchandise
on a store-by-store basis, utilizing geographical selling trends.
The Company believes that its present management information systems can
support substantially expanded operations without significant additional capital
investment.
20
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company are as follows:
NAME AGE TITLE
---- --- -----
Sy Syms 71 Chairman of the Board, Chief Executive
Officer and a Director of the Company
Marcy Syms 46 President, Chief Operating Officer and
a Director of the Company
Antone F. Moreira 61 Vice President, Treasurer, Chief Financial
Officer and a Director of the Company
Stephen A. Merns 44 Vice President, Secretary, Merchandise
Manager--Men's Tailored Clothing and Shoes
and a Director of the Company
Wilbur L. Ross, Jr. 59 Director of the Company
Harvey A. Weinberg 60 Director of the Company
Philip G. Barach 67 Director of the Company
David A. Messer 36 Director of the Company
The members of the Company's Board of Directors hold office until the next
annual meeting of stockholders and until their successors are duly elected and
qualified. Executive officers are elected annually by the Board of Directors of
the Company and serve at the pleasure of the Board. Marcy Syms and Stephen A.
Merns are the children of Sy Syms. There are no other family relationships
between any directors or executive officers of the Company.
SY SYMS has been Chairman of the Board, Chief Executive Officer and a
Director of the Company (including its predecessors) since 1959. Mr. Syms has
been a Director of Israel Discount Bank of New York since December 1991.
MARCY SYMS has been President and a Director of the Company since 1983,
Chief Operating Officer of the Company (including its predecessors) since 1984.
ANTONE F. MOREIRA has been Vice President, Treasurer and Chief Financial
Officer of the Company since May 1997. From 1996 to May 1997 Mr. Moreira was a
financial consultant with Equitable Life Assurance Society of the United States,
a financial services organization. From 1990 to 1995, Mr. Moreira was Executive
Vice President, Chief Financial Officer of Stuarts Department Stores, Inc., a
regional discount department store chain operating in New England.
STEPHEN A. MERNS has been Vice President, Secretary and Merchandise Manager
- -- Men's Tailored Clothing and Shoes of the Company since January 1, 1986. He
was Vice President and a buyer of men's haberdashery of Syms Inc. from 1980
through 1985 and Secretary of Syms Inc. from 1983 through 1985. He has been a
Director of the Company since July 1996.
WILBUR L. ROSS, JR. has been a Managing Director of Rothschild Inc. since
1976. He is a member of the Board of Directors of Mego Corp. He has been a
director of the Company since 1983.
HARVEY A. WEINBERG has been a consultant since April 1994. From April 1992
to April 1994 he was President and Chief Executive Officer of HSSI, Inc., a
retailer of men's and women's apparel. From 1987 to September 1990 he was Chief
Executive Officer and Vice Chairman of the Board of Directors of Hartmarx
Corporation and from 1990 to September 1992 served as Chairman of the Board of
Hartmarx Corporation. He is a trustee of Glimcher Realty Trust (a real estate
investment trust). He has been a Director of the Company since December 1992.
During 1994 HSSI, Inc. filed a voluntary petition for relief under Chapter 11 of
the United States Bankruptcy Code in the United States Bankruptcy Court for the
Northern District of Illinois, Eastern Division.
21
PHILIP G. BARACH has been a consultant since March 1993. From 1968 to March
1993 he was Chairman of the Board or Chairman of the Board, President and Chief
Executive Officer of the United States Shoe Corp. (manufacturer and retailer of
footwear, apparel and eyewear). He is a member of the Board of Directors of
Bernard Chaus, Inc. (manufacturer of women's apparel), Glimcher Realty Trust (a
real estate investment trust), R.G. Barry Corp. (manufacturer of foldable
slippers and heat/cold preservation products) and Union Central Insurance Co.
(life insurance). He has been a Director of the Company since July 1996.
DAVID A. MESSER has been President of AIG Trading Corporation, a subsidiary
of American International Group, Inc. (New York Stock Exchange: AIG), since
January 1994. Prior to January 1994, Mr. Messer was a Senior Vice President of
AIG Trading Corporation, where he has been employed since March 1990. He has
been a Director of the Company since July 1996.
PRINCIPAL AND SELLING STOCKHOLDERS
Of the 3,500,000 shares of Common Stock offered hereby, 2,500,000 shares
will be sold by the Sy Syms Foundation and 1,000,000 shares will be sold by Mr.
Syms. In addition, Mr. Syms, Marcy Syms and Stephen A. Merns have granted to the
Underwriters an option to purchase an aggregate of up to 525,000 additional
shares of Common Stock solely to cover over-allotments. (See "Underwriting.")
As of the date hereof, the Sy Syms Foundation owned 2,500,000 shares of
Common Stock, Mr. Syms owned 7,052,145 shares and other members of the Syms
family, including Marcy Syms and Stephen A. Merns, owned 2,991,909 shares,
representing in the aggregate approximately 70.4% of the outstanding Common
Stock. In addition, certain members of the Syms family have currently
exercisable options to purchase up to 129,000 shares of the Company's Common
Stock. After completion of this offering (assuming the Underwriters'
over-allotment option is not exercised), Mr. Syms will own 6,052,145 shares,
representing, together with shares owned by other members of the Syms family,
approximately 50.8% of the outstanding Common Stock. If the Underwriters'
over-allotment option is exercised in full, Mr. Syms will own 5,707,145 shares,
and the percentage of the Company's outstanding Common Stock owned in the
aggregate by the Syms family will be reduced to 47.8%. In addition, at October
22, 1997, 1,226,647 shares (representing 6.9% of the outstanding Common Stock)
were owned by Tweedy, Browne Company, L.P., a private investment partnership.
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company is authorized to issue 30,000,000 shares of Common Stock.
Subject to any preferences, limitations and relative rights that may be fixed
for any series of Preferred Stock that may be issued as described below, the
holders of Common Stock of the Company are entitled, among other things, (1) to
share ratably in dividends if, when, and as declared by the Board of Directors
out of funds legally available therefor (see "Dividends"), (2) to one vote per
share at all meetings of stockholders, and (3) in the event of liquidation, to
share ratably in the distribution of assets remaining after payment of debts,
expenses and the liquidation preference of any outstanding shares of Preferred
Stock. Holders of shares of Common Stock have no cumulative voting rights or
pre-emptive rights to subscribe for or purchase any additional shares of capital
stock issued by the Company. The Company's Certificate of Incorporation provides
that the affirmative vote of holders of 70% of the outstanding shares of Common
Stock are required to effect or validate any merger or consolidation of the
Company with or into any other corporation, any sale or lease of all or any
substantial part of the assets of the Company or any sale or lease to the
Company of assets (having an aggregate fair market value in excess of
$1,000,000) in exchange for voting securities (or rights to acquire voting
securities or securities convertible into voting securities) of the Company,
except where the merger or similar transaction with another corporation has been
approved by a 75% vote of the entire Board of Directors of the Company or where
the Company owns a majority of every class of voting stock of such other
corporation. The affirmative vote of a majority of the outstanding shares of
Common Stock is required to amend the foregoing provisions of the Certificate of
Incorporation. The Company's Certificate of Incorporation provides that the
affirmative vote of a majority of the outstanding shares of Common Stock is
sufficient to effect the removal of a director with or without cause, and
similar action by a majority of the Board of Directors is sufficient to effect
the
22
removal of a director with cause. Such provisions could be utilized, under
certain circumstances, as a method of preventing a takeover of the Company.
American Stock Transfer & Trust Company is the Transfer Agent and Registrar
for the Common Stock.
PREFERRED STOCK
The Board of Directors is authorized to issue 1,000,000 shares of Preferred
Stock, par value $100, without further action by the stockholders, in one or
more series and to fix as to any such series the dividend rate, redemption
prices, preferences on liquidation or dissolution, sinking fund terms, if any,
conversion rights, voting rights and any other preference or special rights and
qualifications. Shares of Preferred Stock issued by the Board of Directors could
be utilized, under certain circumstances, as a method of preventing a takeover
of the Company. As of the date of this Prospectus, the Board of Directors has
not authorized any series of Preferred Stock. There are no agreements or
understandings for the issuances of any shares of Preferred Stock.
ANTI-TAKEOVER PROVISIONS
The Company is governed by the provisions of Section 14A: 10A-1 et seq.,
the New Jersey Shareholders Protection Act (the "New Jersey Act"), of the New
Jersey Business Corporation Act, an anti-takeover law. In general, the statute
prohibits a publicly-held New Jersey corporation from engaging in a "business
combination" with an "interested shareholder" for a period of five years after
the date of the transaction in which the person became an interested
shareholder, unless the business combination is approved in a prescribed manner.
A "business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested shareholder. An "interested
shareholder" is a person who, together with affiliates and associates, owns (or
within three years, did own) 10% or more of the corporation's voting stock.
After the five-year waiting period has elapsed, a business combination between a
corporation and an interested shareholder will be prohibited unless the business
combination is approved by the holders of at least two-thirds of the voting
stock not beneficially owned by the interested shareholder, or unless the
business combination satisfies the New Jersey Act. The New Jersey Act's fair
price provision is intended to provide that all shareholders (other than the
interested shareholders) receive a fair price for their shares.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company will have 17,807,890 shares
of Common Stock outstanding. All of the shares to be sold in the offering will
be freely tradeable without restrictions or further registration under the
Securities Act, unless purchased by an "affiliate" of the Company (as that term
is defined in Rule 144 adopted under the Securities Act ("Rule 144")), in which
case such shares would be subject to the resale limitations of Rule 144. None of
the outstanding shares of Common Stock to be beneficially owned by the Syms
family following this offering may be publicly sold in the absence of an
effective registration statement under the Securities Act, other than in
accordance with Rule 144 or another exemption from registration.
In general, under Rule 144, a person (or persons whose shares are required
to be aggregated) who has beneficially owned shares of Common Stock for at least
one year, including a person who may be deemed an "affiliate," is entitled to
sell, within any three-month period, a number of shares that does not exceed the
greater of one percent of the total number of shares of the class of stock sold
or the average weekly reported trading volume of the class of stock being sold
or the average weekly reported trading volume of the class of stock being sold
during the four calendar weeks preceding such sale. A person who is not deemed
an "affiliate" of the Company at any time during the three months preceding a
sale and who has beneficially owned shares for at least two years is entitled to
sell such shares under Rule 144 without regard to the volume limitations
described above. As defined in Rule 144, an "affiliate" of an issuer is a person
that directly or indirectly through the use of one or more intermediaries
controls, is controlled by, or is under common control with, such issuer. The
foregoing summary of Rule 144 is not intended to be a complete description
thereof.
Although the Common Stock has been listed on the New York Stock Exchange
since September 1983, trading in the Common Stock has been limited. In major
part, this has been a result of the relatively small percentage of the
outstanding stock in public hands. The Company is unable to predict the effect
that sales made under Rule 144, pursuant to future registration statements, or
otherwise, may have on the market price of the Common Stock prevailing from time
to time. Nevertheless, sales of a substantial amount of Common Stock by the Syms
family in the public market, or the
23
perception that such sales could occur, could adversely affect prevailing market
prices. See "Underwriting" for a discussion of certain contractual restrictions
on resales of the Common Stock by the Syms family.
The Company has granted options to purchase 381,500 shares of Common Stock
to certain officers, directors and employees of the Companyissuable pursuant to the Company's stock option plan and an additional 458,000shares are available for
future grant thereunder. As of October 17, 1997, options with respect to
approximately 301,500 shares were exercisable and options with respect to 80,000
shares were subject to vesting provisions.
UNDERWRITING
The Underwriters named below, acting through their representatives, Bear,
Stearns & Co. Inc. and Salomon Brothers Inc (the "Representatives"), have
severally agreed,Investment Agreement, subject to the terms and conditions of the UnderwritingInvestment Agreement, (the formif the board of which has been fileddirectors determines such reduction is advisable to protect the Company’s ability to utilize its NOLs. In making such determination, the board of directors and the Company’s tax advisors will evaluate such factors as they deem reasonable and appropriate, including, among others, the need for the Company to maintain an exhibitappropriate “cushion”, determined by the Company at its discretion in consultation with its tax advisors, to protect against experiencing an “ownership change” within the meaning of Section 382 of the Code. If the Company determines to reduce the number of shares issued and sold pursuant to the Registration
Statementrights offering and/or the Investment Agreement, it will attempt to do so, as nearly as may be practicable, in the following order of which this Prospectus is a part),priority: (A)first, to purchase fromreduce the Sy Syms
Foundation and Sy Syms (collectively, with Marcy Syms and Stephen A. Merns, the
"Selling Stockholders") the numbersnumber of shares of Common Stock set forth opposite
their respective names below:
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
Bear, Stearns & Co. Inc. ..........................
Salomon Brothers Inc ..............................
---------
Total .......................................... 3,500,000
=========
The nature ofthat would be otherwise issuable under validly exercised rights pursuant to the obligations ofoversubscription privilege;provided, that the Underwriters is such that they must
purchase allapplication of such shares if any are purchased. Those obligations are subject,
however,reduction may be different with respect to various conditions, including the approvaldifferent holders of certain matters by
counsel.
The Representatives have advised the Company and the Selling Stockholders
that the Underwriters propose to offer the Common Stock to the public initially
at the offering price set forthrights, depending on the cover pagecircumstances; (B)second,to reduce the number of this Prospectus andshares purchased by the Standby Purchaser pursuant to certain dealers at such price less a concession not to exceed $____ per share.
The Underwriters may allow, and such dealers may reallow, a concession to
certain other dealers not to exceed $___ per share. After the commencement of
the offering, the public offering price and concessions may be changed.
Sy Syms, Marcy Syms and Stephen A. Merns have granted to the Underwriters
an optionits backstop commitment to purchase up to an aggregatea maximum of 525,000 additional3,333,333 shares less the number of shares purchased by the Standby Purchaser in the rights offering, but not below the Minimum Allocation; (C)third, to reduce the number of shares that would be otherwise issuable under validly exercised rights pursuant to the basic subscription privilege;provided, that the application of such reduction may be different with respect to different holders of rights, depending on the circumstances; and (D)fourth, to reduce the number of shares that would be otherwise issuable pursuant to the Minimum Allocation;provided, that prior to any such reduction with respect to shares issuable to the Standby Purchaser, the Company will consult with the Standby Purchaser and consider any reasonable suggestions from the Standby Purchaser regarding the reduction of such shares otherwise issuable to the Standby Purchaser.
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In addition, we will not be required to issue to you shares of Common
Stockour common stock pursuant to the rights offering if, in our opinion, you are required to obtain prior clearance or approval from any state or federal regulatory authorities to own or control the shares and if, at the publictime the rights offering priceexpires, you have not obtained this clearance or approval.
Investment Agreements
We have entered into an Investment Agreement with the Standby Purchaser. Pursuant to the Investment Agreement, the Standby Purchaser has agreed to purchase from us, subject to the satisfaction or waiver of certain conditions, including the timely completion of the rights offering, the shares of common stock not subscribed for in the rights offering, up to a maximum of 3,333,333 shares less the underwriting discountnumber of shares purchased by the Standby Purchaser in the rights offering, at a price per share equal to the subscription price of the rights offering. If the number of unsubscribed shares of common stock purchased by the Standby Purchaser pursuant to the Investment Agreement is less than 1,666,667 shares, or the Minimum Allocation, we will issue and sell to the Standby Purchaser a number of shares of common stock equal to the excess of the Minimum Allocation over the number of shares purchased by the Standby Purchaser pursuant to the Investment Agreement, or the Additional Shares. The unsubscribed shares sold to the Standby Purchaser and the Additional Shares, if any, are being offered and sold to the Standby Purchaser in a private placement. The chairman of our board of directors, Alexander Matina, is a representative of the Standby Purchaser. Mr. Matina recused himself from the deliberations by the board of directors regarding the approval of the Investment Agreement.
We have also entered into an agreement with Third Avenue pursuant to which Third Avenue has agreed to exercise all of its rights under its basic subscription privilege in the rights offering, representing 836,841 shares. Third Avenue will also have the right to exercise its oversubscription privilege in its sole discretion.
For more information, see the section entitled “Investment Agreements” of this prospectus.
Method of Exercising Subscription Rights
The exercise of subscription rights is irrevocable and may not be cancelled or modified. You may exercise your subscription rights as follows:
Subscription by Registered Holders
To exercise your subscription privilege, you must properly complete and execute the subscription rights certificate, together with any required signature guarantees, and forward it, together with payment in full of the subscription price for each share of our common stock you are subscribing for, to the subscription agent at the address set forth under “—Subscription Agent” below, on or prior to the cover pageexpiration date.
Subscription by Beneficial Owners
If you are a beneficial owner of shares that holds your shares through a broker, custodian bank or other nominee, we will ask your broker, custodian bank or other nominee to notify you of the rights offering. If you wish to exercise your subscription rights, you will need to have your broker, custodian bank or other nominee act for you and exercise your subscription rights and deliver all documents and payment on your behalf prior to 5:00 p.m., New York time, on , 2015. If you hold certificates of our common stock directly and would prefer to have your broker, custodian bank or other nominee act for you, you should contact your nominee and request it to effect the transactions for you.
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To indicate your decision with respect to your subscription rights, you should complete and return to your broker, custodian bank or other nominee, the form entitled “Beneficial Owners Election Form.” You should receive this Prospectus, solelyform from your broker, custodian bank or other nominee with the other subscription rights offering materials. You should contact your broker, custodian bank or other nominee if you do not receive this form, but you believe you are entitled to cover over-allotments,participate in the rights offering. We are not responsible if any.you do not receive the form from your broker, custodian bank or nominee or if you receive it without sufficient time to respond.
Medallion Guarantee May Be Required
Your signature on each subscription rights certificate must be guaranteed by an eligible institution, such as a member firm of a registered national securities exchange or a member of the Financial Industry Regulatory Authority, or a commercial bank or trust company having an office or correspondent in the United States, subject to standards and procedures adopted by the subscription agent, unless:
Instructions for Completing Your Subscription Rights Certificate
You should read the instruction letter accompanying the subscription rights certificate carefully and strictly follow it.Do not send subscription rights certificates or payments to us. We will not consider your subscription received until the subscription agent has received delivery of a properly completed and duly executed subscription rights certificate and payment of the full subscription amount. The optionrisk of delivery of all documents and payments is borne by you or your nominee, not us or the subscription agent.
The method of delivery of subscription rights certificates and payment of the subscription amount to the subscription agent will be at the risk of the holders of subscription rights. If sent by mail, we recommend that you send those certificates and payments by overnight courier or by registered mail, properly insured, with return receipt requested, and that a sufficient number of days be allowed to ensure delivery to the subscription agent and clearance of payment before the expiration of the subscription period for the rights offering.
Validity of Subscriptions
We will resolve all questions regarding the validity and form of the exercise of your subscription privileges, including time of receipt and eligibility to participate in the rights offering. Our determination will be final and binding. Once made, subscriptions and directions are irrevocable, and we will not accept any alternative, conditional or contingent subscriptions or directions. We reserve the absolute right to reject any subscriptions or directions not properly submitted or the acceptance of which would be unlawful. You must resolve any irregularities in connection with your subscriptions before the subscription period expires, unless waived by us at our sole discretion. Neither the subscription agent nor we shall be under any duty to notify you or your representative of defects in your subscriptions. A subscription will be considered accepted, subject to our right to cancel the rights offering, only when a properly completed and duly executed subscription rights certificate and any other required documents and payment of the full subscription amount have been received by the subscription agent. Our interpretations of the terms and conditions of the rights offering will be final and binding.
No Revocation or Change
Once you submit the form of subscription rights certificate to exercise any subscription rights, you are not allowed to revoke or change the exercise or request a refund of monies paid. All exercises of subscription rights are irrevocable, even if you learn information about us that you consider to be unfavorable. You should not exercise your subscription rights unless you are certain that you wish to purchase the shares of common stock offered pursuant to this rights offering.
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Payment for Shares
Method of Payment
Your payment of the subscription price must be made in U.S. dollars for the full number of shares of common stock you wish to acquire under the subscription privilege by either:
· | wire transfer of immediately available funds to accounts maintained by the subscription agent; |
· | uncertified check payable to “American Stock Transfer & Trust Company, LLC (acting as subscription agent for Trinity Place Holdings Inc.)”; |
· | bank draft drawn upon a U.S. bank and payable to “American Stock Transfer & Trust Company, LLC (acting as subscription agent for Trinity Place Holdings Inc.)”; or |
· | U.S. postal money order payable to “American Stock Transfer & Trust Company, LLC (acting as subscription agent for Trinity Place Holdings Inc.)”. |
If you hold your rights through a broker, dealer, custodian bank or other nominee, you must deliver the applicable subscription payment and a completed form entitled "Beneficial Owner Election Form (or such other appropriate documents as are provided by your nominee related to your subscription rights) to your nominee in each case, prior to the expiration of the rights offering.
Segregated Account; Return of Funds
The subscription agent will hold funds received in payment for shares of the common stock in a segregated account pending completion of the rights offering. The subscription agent will hold this money until the rights offering is completed or is cancelled. If the rights offering is cancelled for any reason, we will return this money to subscribers, without interest or penalty, as soon as practicable.
Receipt of Payment
Your payment will be considered received by the subscription agent only upon:
· | clearance of any uncertified check deposited by the subscription agent; or |
· | receipt by the subscription agent of any wire or bank draft drawn upon a U.S. bank or any U.S. postal money order. |
Payment received after the expiration of the rights offering period will not be honored, and, in that case, the subscription agent will return your payment to you, without interest or penalty, as soon as practicable.
Clearance of Uncertified Checks
If you are paying by uncertified personal check, please note that payment will not be deemed to have been received by the subscription agent until the check has cleared, which could take at least five or more business days to clear. If you wish to pay the subscription price by uncertified personal check, we urge you to make payment sufficiently in advance of the time the rights offering expires to ensure that your payment is received by the subscription agent and clears by the rights offering expiration date. We urge you to consider using a bank draft or U.S. postal money order.
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Missing or Incomplete Subscription Information
If you do not indicate the number of basic and, if applicable, oversubscription rights being exercised or complete the other required information, or do not forward full payment of the total subscription price payment for the number of subscription rights that you indicate are being exercised, then you will be deemed to have exercised your subscription rights with respect to the maximum number of subscription rights that may be exercised at any time withinwith the aggregate subscription price payment you delivered to the subscription agent. If we do not apply your full subscription price payment to your purchase of shares of our common stock, we or the subscription agent will return the excess amount to you by mail, without interest or penalty, as soon as practicable after the expiration date of the rights offering.
Amendment, Withdrawal and Termination
Generally, we may not cancel or terminate the rights offering, nor may we amend the terms of the rights offering without the consent of the Standby Purchaser or Third Avenue. However, the period for exercising your subscription rights may be extended by our board of directors in its reasonable discretion; provided that, pursuant to the Investment Agreement, the expiration date of the rights offering may not be extended by more than 30 days after the date of this
Prospectus. To the extent that the option is exercised, the Underwriters will be
severally committed, subject to certain conditions, to purchase the additional
shares in proportion to their respective purchase commitments as indicated in
the preceding table. Of the shares subject to such option, 345,000 are owned by
Sy Syms, 50,000 are owned by Marcy Syms and 130,000 are owned by Stephen A.
Merns.
The Company, the Selling Stockholders and the Company's directors and
executive officers have agreed that, for a period of 90 days following the date
of this Prospectus, they will not, without the prior written consent of Bear,
Stearns & Co. Inc., directlythe Standby Purchaser or indirectly offerThird Avenue. Our board of directors does not currently intend to extend the expiration of the rights offering.
If we cancel the rights offering, in whole or agreein part, all affected subscription rights will expire without value, and all subscription payments received by the subscription agent will be returned, without interest or penalty, as soon as practicable. If we cancel the rights offering, we will issue a press release notifying stockholders of the cancellation.
Notice To Brokers and Nominees
If you are a broker, custodian bank or other nominee holder that holds shares of our common stock for the account of others on the rights offering record date, you should notify the respective beneficial owners of such shares of the rights offering as soon as possible to learn their intentions with respect to exercising their subscription rights. You should obtain instructions from the beneficial owner with respect to their subscription rights, as set forth in the instructions we have provided to you for your distribution to beneficial owners. If the beneficial owner so instructs, you should complete the appropriate subscription rights certificates and submit them to the subscription agent with the proper payment. If you hold shares of our common stock for the account(s) of more than one beneficial owner, you may exercise the number of subscription rights to which all such beneficial owners in the aggregate otherwise would have been entitled had they been direct record holders of our common stock on the subscription rights offering record date, provided that you, as a nominee record holder, make a proper showing to the subscription agent by submitting the form entitled “Nominee Holder Certification” that we will provide to you with your subscription rights offering materials. If you did not receive this form, you should contact the subscription agent to request a copy.
Transferability of Subscription Rights
The subscription rights granted to you are non-transferable and, therefore, you may not sell, selltransfer or otherwise disposeassign your subscription rights to anyone else.
Delivery of Shares of Common Stock
All shares that you purchase in the rights offering will be issued in book-entry, or uncertificated, form. When issued, the shares will be registered in the name of the subscription rights holder of record. As soon as practicable after the expiration of the rights offering, the subscription agent will arrange for the issuance of the shares of common stock purchased pursuant to the subscription privilege. Subject to state securities laws and regulations, we have the discretion to delay distribution of any shares you may have elected to purchase by exercise of Common Stock (oryour subscription rights in order to comply with state securities convertible into,
exchangeable forlaws.
Rights of Subscribers
You will have no rights as a stockholder of our common stock until your account, or evidencingyour account at your broker, custodian bank or other nominee is credited with the shares of our common stock purchased in the rights offering. You will have no right to purchaserevoke your subscriptions after you deliver your completed subscription rights certificate, payment and any other required documents to the subscription agent.
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Foreign and Other Stockholders
We will not mail subscription rights certificates to stockholders whose addresses are outside the United States or who have an army post office or foreign post office address. The subscription agent will hold these subscription rights certificates for their account. To exercise subscription rights, our foreign stockholders and stockholders with an army post office or foreign post office address must notify the subscription agent prior to 11:00 a.m., New York time, at least three business days prior to the expiration date of the rights offering by completing an international holder subscription form which will be delivered to those holders in lieu of a subscription rights certificate and sending it by mail or telecopy to the subscription agent at the address and telecopy number set forth under “—Subscription Agent.”
No Recommendation to Subscription Rights Holders
Our board of directors is making no recommendations regarding your exercise of the subscription rights. You are urged to make your own decision whether or not to exercise your subscription rights based on your own assessment of our business and the rights offering. See “Risk Factors” in this prospectus and in any document incorporated by reference into this prospectus.
Miscellaneous
No Brokers, Dealers or Underwriters
We have not employed any brokers, dealers or underwriters in connection with the solicitation of exercise of rights, and, except as described herein, no other commissions, underwriting fees or discounts will be paid in connection with this rights offering.
Subscription Agent
American Stock Transfer & Trust Company, LLC is acting as the subscription agent for the rights offering under an agreement with us. All subscription rights certificates, payments of the subscription price (other than wire transfers) and nominee holder certifications, to the extent applicable to your exercise of subscription rights, must be delivered to American Stock Transfer & Trust Company, LLC as follows:
By mail: | By overnight courier: | |
American Stock Transfer & Trust Company, LLC | American Stock Transfer & Trust Company, LLC | |
Operations Center | Operations Center | |
Attn: Reorganization Department | Attn: Reorganization Department | |
P.O. Box 2042 | 6201 15th Avenue | |
New York, New York 10272-2042 | Brooklyn, New York 11219 |
You should confirm receipt of all facsimile transmissions by calling the subscription agent at (718) 921-8200. You should direct any questions or requests for assistance concerning the method of subscribing for the shares of Common Stock)common stock or for additional copies of this prospectus to D.F. King & Co., Inc. at (866) 796-7180.
We will pay the fees and expenses of American Stock Transfer & Trust Company, LLC. We have also agreed to indemnify American Stock Transfer & Trust Company, LLC against certain liabilities in connection with the rights offering.
If you deliver subscription documents or subscription rights certificates in a manner different than that described in this prospectus, then we may not honor the exercise of your subscription privilege.
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Other Matters
We are not making the rights offering in any state or other than,jurisdiction in which it is unlawful to do so, nor are we distributing or accepting any offers to purchase any shares of our common stock from subscription rights holders who are residents of those states or other jurisdictions or who are otherwise prohibited by federal or state laws or regulations from accepting or exercising the subscription rights. We may delay the commencement of the rights offering in those states or other jurisdictions, or change the terms of the rights offering, in whole or in part, in order to comply with the securities laws or other legal requirements of those states or other jurisdictions. Subject to state securities laws and regulations, we also have the discretion to delay allocation and distribution of any shares you may elect to purchase by exercise of your subscription privileges in order to comply with state securities laws. We may decline to make modifications to the terms of the rights offering requested by those states or other jurisdictions, in which case, if you are a resident in those states or jurisdictions or if you are otherwise prohibited by federal or state laws or regulations from accepting or exercising the subscription rights you will not be eligible to participate in the caserights offering. However, we are not currently aware of any states or jurisdictions that would preclude participation in the rights offering.
Questions About Exercising Subscription Rights
If you have any questions or require assistance regarding the method of exercising your subscription rights or requests for additional copies of this document or the Instructions as to the Use of Trinity Place Holdings Inc. Subscription Rights Certificates, you should contact the information agent, D.F. King & Co., Inc. at (866) 796-7180.
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The Standby Purchaser has executed the Investment Agreement with us. We have also entered into an agreement with Third Avenue. The descriptions of the Selling Stockholders,Investment Agreement and the agreement with Third Avenue in this section and elsewhere in this prospectus are qualified in their entirety by reference to the complete text of the Investment Agreement and the agreement with Third Avenue, which are incorporated by reference into this prospectus.
Standby Purchaser Investment Agreement
Standby Purchaser Commitment
Pursuant to the Investment Agreement, the Standby Purchaser has agreed to purchase from us, subject to the satisfaction or waiver of certain conditions, including the timely completion of the rights offering, the shares of common stock not subscribed for in the rights offering, up to a maximum of 3,333,333 shares less the number of shares purchased by the Standby Purchaser in the rights offering, at a price per share equal to the subscription price of the rights offering. Ifthe number of unsubscribed shares of common stock purchased by the Standby Purchaserpursuant to the Investment Agreement is less than 1,666,667 shares, or the Minimum Allocation, we will issue and sell to the Standby Purchaser a number of shares of common stock equal to the excess of the Minimum Allocation over the number of shares purchased by the Standby Purchaser pursuant to the Investment Agreement, or the Additional Shares. The unsubscribed shares sold to the Standby Purchaser and the Additional Shares, if any, are being offered and sold to the Standby Purchaser in a private placement. Pursuant to the Investment Agreement, the Standby Purchaser has waived its oversubscription right.
The number of shares to be issued and sold by
thempursuant to the Underwriters,Investment Agreement may be reduced by the board of directors if it determines that such reduction is reasonably necessary in order to preserve the Company’s ability to utilize the full benefits of its NOLs and related tax benefits, subject to the terms and conditions of the Investment Agreement. In making such determination, the board of directors and the Company’s tax advisors will evaluate such factors as they deem reasonable and appropriate, including, among others, the need for the Company to maintain an appropriate “cushion”, determined by the Company at its discretion in consultation with its tax advisors, to protect against experiencing an “ownership change” within the meaning of Section 382 of the Code. If the Company determines to reduce the number of shares issued and sold pursuant to the rights offering and/or the Investment Agreement, it will attempt to do so, as nearly as may be practicable, in the casefollowing order of priority: (A)first, to reduce the number of shares that would be otherwise issuable under validly exercised rights pursuant to the oversubscription privilege;provided, that the application of such reduction may be different with respect to different holders of rights, depending on the circumstances; (B)second,to reduce the number of shares purchased by the Standby Purchaser pursuant to its backstop commitment to purchase up to a maximum of 3,333,333 shares less the number of shares purchased by the Standby Purchaser in the rights offering, but not below the Minimum Allocation; (C)third, to reduce the number of shares that would be otherwise issuable under validly exercised rights pursuant to the basic subscription privilege;provided, that the application of such reduction may be different with respect to different holders of rights, depending on the circumstances; and (D)fourth, to reduce the number of shares that would be otherwise issuable pursuant to the Minimum Allocation;provided, that prior to any such reduction with respect to shares issuable to the Standby Purchaser, the Company will consult with the Standby Purchaser and consider any reasonable suggestions from the Standby Purchaser regarding the reduction of such shares otherwise issuable to the Standby Purchaser.
Standby Purchaser Ownership
As of , the record date for the rights offering, the Standby Purchaser owned 1,000,000 shares of common stock, representing approximately 4.97% of our issued and outstanding shares of common stock as of such date. If no stockholders other than Third Avenue exercise their subscription rights in the rights offering, the Standby Purchaser will own 4,333,333 shares of common stock (after giving effect to the sale of 3,333,333 shares of common stock in the Standby Purchaser Private Placement), representing approximately 17.83% of our issued and outstanding shares of common stock. The chairman of our board of directors, Alexander Matina, is a representative of the Standby Purchaser. Mr. Matina recused himself from the deliberations by the board of directors regarding the approval of the Investment Agreement.
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Conditions to Standby Purchaser’s Obligations
The Standby Purchaser’s obligations under the Investment Agreement are subject to customary conditions, including, but not limited to, the following: (i) the effectiveness of the registration statement of which this prospectus is a part; (ii) the rights offering being conducted in accordance with the terms and conditions of the Investment Agreement and this prospectus; (iii) the Standby Purchaser having received certain notices from us; (iv) all governmental and third party notifications, filings, consents, waivers and approvals required for the consummation of the transactions contemplated by the Investment Agreement having been made or received; (v) no legal impediment to the issuance of share pursuant to the rights offering or to the Standby Purchaser pursuant to the Standby Purchaser commitment; (vi) the Company being in good standing as of the closing date of the rights offering and the other transactions contemplated by the Investment Agreement; (vii) the accuracy of the representations and warranties of the Company pursuant to the grant of options
(andInvestment Agreement in all material respects, except for the representations and warranties relating to the issuance of shares to the Standby Purchaser, which representations and warranties must be true and correct in all respects; (viii) compliance by the Company in all material respects with its covenants pursuant to the Investment Agreement and in any other document delivered pursuant to the Investment Agreement; (ix) delivery by the Company of an officer's certificate to the Standby Purchaser confirming certain matters; (x) the payment by the Company of all fees, costs and expenses payable to the Standby Purchaser pursuant to the Investment Agreement; (xi) the absence of any changes or events that, individually or in the aggregate, would reasonably be expected to result in a material adverse effect (as defined in the Investment Agreement); and (xii) the absence of certain adverse market events.
Termination
The Investment Agreement may be terminated at any time prior to the closing of the rights offering and the issuances contemplated by the Investment Agreement:
· | by mutual written agreement of us and the Standby Purchaser; |
· | by the Standby Purchaser, under the following circumstances: (i) if there is a breach by us of any covenant or representation or warranty that would cause the failure to satisfy a closing condition and is not capable of being cured by February 12, 2016; (ii) if any event results in a failure to satisfy a closing condition that is not capable of being cured by February 12, 2016; (iii) if the closing has not occurred by February 12, 2016; or |
· | by us under the following circumstances: (i) if there is a breach by the Standby Purchaser of any covenant or representation or warranty that would cause the failure to satisfy a closing condition and is not capable of cure by February 12, 2016; or (ii) if any event results in a failure to satisfy a closing condition that is not capable of being cured by February 12, 2016. |
Third Avenue Investment Agreement
Third Avenue Commitment
We have entered into an agreement with Third Avenue pursuant to which Third Avenue has agreed to exercise all of its rights under its basic subscription privilege in the rights offering, representing 836,841 shares. Third Avenue will also have the right to exercise its oversubscription privilege in its sole discretion.
The number of shares to be issued and sold to Third Avenue in the rights offering may be reduced by the board of directors if it determines that such reduction is reasonably necessary in order to preserve the Company’s ability to utilize the full benefits of its NOLs and related tax benefits, subject to the terms and conditions of the agreement with Third Avenue.
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Third Avenue Ownership
As of , the record date for the rights offering, the Third Avenue owned 3,369,444 shares of common stock, representing approximately 16.7% of our issued and outstanding shares of common stock as of such date. If no stockholders other than Third Avenue exercise their subscription rights in the rights offering, Third Avenue will own 4,206,284 shares of common stock (without giving effect to any shares that may be purchased by Third Avenue upon the exercise of its oversubscription right, in its discretion), representing approximately 17.3% of our issued and outstanding options) undershares of common stock (after giving effect to the Company's existingsale of 3,333,3333 shares of common stock option plan.
to the Standby Purchaser in the Standby Purchaser Private Placement). None of the members of our board of directors is a representative of Third Avenue (Ms. Minieri was appointed by Third Avenue but is not a representative of Third Avenue).
Termination
The Companyagreement with Third Avenue may be terminated at any time prior to the closing of the rights offering:
· | by mutual written agreement of us and Third Avenue; or |
· | by either Third Avenue or us, if the closing of the rights offering has not occurred by February 12, 2016 or upon the occurrence of certain adverse market events. |
Indemnification by Standby Purchaser and the Selling StockholdersThird Avenue
We have agreed to indemnify the Underwriters against certain liabilities, including liabilities under the
Securities Act,Standby Purchaser and where such indemnification is unavailable, to contribute to
payments that the Underwriters may be required to make in respect of such
liabilities.
In order to facilitate the offering, certainThird Avenue and their respective affiliates and their respective officers, directors, members, partners, employees, agents and controlling persons participating in the
offering may engage in transactions that stabilize, maintain or otherwise affect
the pricefor losses arising out of the Common Stock duringrights offering, the Investment Agreement and after the offering. Specifically, the
Underwriters may over-allotagreement with Third Avenue, respectively, or otherwise create a short position in the Common
Stock for their own account by
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selling more shares than have been sold to them by the Company. The Underwriters
may elect to cover any such short position by purchasing shares in the open
market or by exercising the over-allotment option granted to them. In addition,
the Representatives, on behalf of the Underwriters, may stabilize or maintaintransactions contemplated by such agreements, subject to limited exceptions.
Expense Reimbursement for Standby Purchaser and Third Avenue
We have agreed to pay the pricereasonable transaction expenses of the Common Stock by bidding for or purchasing shares in the open
market and may impose penalty bids, under which selling concessions allowed to
syndicate members or other broker-dealers participating in the offering are
reclaimed if shares previously distributed in the offering are repurchased in
connection with stabilization transactions or otherwise. The effect of these
transactions may be to stabilize or maintain the market price of the Common
Stock at a level above that which might otherwise prevail in the open market.
The imposition of a penalty bid may also affect the price of the Common Stock to
the extent that it discourages resales thereof. No representation is made as to
the magnitude or effect of any such stabilization or other transactions. Such
transactions may be effected on the New York Stock Exchange or otherwise and, if
commenced, may be discontinued at any time.
Bear, Stearns & Co. Inc. acted as one of the representatives of the
underwriters of the initial public offering of the Company's Common Stock in
September 1983.
Rothschild Inc. has been retained by Sy Syms as his personal financial
advisor in connection with this offering, and will be paid a fee for its
services not to exceed $50,000. Wilbur L. Ross, Jr., a director of the Company,
is a Managing Director of Rothschild Inc.
LEGAL MATTERS
The validity of the Common Stock being offered hereby will be passed upon
for the Company by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.
Certain legal matters in connection with this offering will be passed upon for
the Underwriters by Weil, Gotshal & Manges LLP, New York, New York.
EXPERTS
The consolidated balance sheets of the Company and its subsidiaries as of
March 2, 1996 and March 1, 1997 and the related consolidated statements of
income, stockholders' equity and cash flows for each of the three fiscal years
ended December 31, 1994, March 2, 1996Standby Purchaser and March 1, 1997, and the two month
period ended February 25, 1995, included herein and in the Company's Annual
Report on Form 10-K for the year ended March 1, 1997 which is incorporated by
reference into this Prospectus, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is included and
incorporated herein by reference, and have been so included and incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
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INDEX TO FINANCIAL STATEMENTS
PAGE
----
Report of Independent Public Accountants ................................. F-1
Consolidated Balance Sheets as of March 2, 1996 and March 1, 1997 ........ F-2
Consolidated Statements of Income for each of the three fiscal
years ended December 31, 1994, March 2, 1996 and March 1, 1997
and the two months ended February 26, 1994 and February 25, 1995 ....... F-3
Consolidated Statements of Stockholders' Equity for each of the
three fiscal years ended December 31, 1994, March 2, 1996 and
March 1, 1997 .......................................................... F-4
Consolidated Statements of Cash Flows for each of the three
fiscal years ended December 31, 1994, March 2, 1996 and
March 1, 1997 and the two months ended February 26, 1994 and
February 25, 1995 ...................................................... F-5
Notes to Consolidated Financial Statements ............................... F-6
Condensed Consolidated Balance Sheets as of August 31, 1996,
March 1, 1997 and August 30, 1997 ...................................... F-16
Condensed Consolidated Statements of Income for the twenty-six
weeks ended August 31, 1996 and August 30, 1997 ........................ F-17
Consolidated Statements of Cash Flows for the twenty-six
weeks ended August 31, 1996 and August 30, 1997 ........................ F-18
Notes to Condensed Consolidated Financial Statements ..................... F-19
26
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of Syms Corp
Secaucus, New Jersey
We have audited the accompanying consolidated balance sheets of Syms Corp and
its subsidiaries as of March 2, 1996 and March 1, 1997, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the three fiscal years ended December 31, 1994, March 2, 1996 and March 1,
1997 and the two month period ended February 25, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Syms Corp and subsidiaries as of
March 2, 1996 and March 1, 1997 and the results of their operations and their
cash flows for each of the three fiscal years ended December 31, 1994, March 2,
1996 and March 1, 1997 and the two month period ended February 25, 1995 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
April 28, 1997
F-1
SYMS CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MARCH 2, MARCH 1,
1996 1997
-------- --------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................... $ 4,804 $ 3,344
Merchandise inventories ................................. 112,954 122,540
Deferred income taxes ................................... 5,221 6,639
Prepaid expenses and other current assets ............... 3,521 1,756
-------- --------
Total current assets ................................. 126,500 134,279
PROPERTY AND EQUIPMENT--Net of accumulated depreciation
and amortization ........................................ 129,235 142,741
DEFERRED INCOME TAXES .................................... -- 197
OTHER ASSETS ............................................. 4,409 6,801
-------- --------
TOTAL ASSETS ............................................. $260,144 $284,018
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ........................................ $ 30,900 $ 28,723
Accrued expenses ........................................ 9,918 11,055
Obligations to customers ................................ 4,490 5,085
Income taxes payable .................................... 5,331 5,833
Short term borrowings ................................... -- 4,950
Current portion of obligations under capital lease ...... 340 405
-------- --------
Total current liabilities ............................ 50,979 56,051
-------- --------
OBLIGATIONS UNDER CAPITAL LEASE .......................... 1,304 900
-------- --------
DEFERRED INCOME TAXES .................................... 255 --
-------- --------
OTHER LONG TERM LIABILITIES .............................. 237 633
-------- --------
COMMITMENTS (Note 7) ..................................... -- --
STOCKHOLDERS' EQUITY
Preferred stock, par value $100 per share
authorized 1,000 shares; none outstanding .............. -- --
Common stock, par value $0.05 per share
authorized 30,000 shares; 17,694 shares issued and
outstanding as of March 2, 1996 and March 1, 1997 ...... 885 885
Additional paid-in capital .............................. 11,709 11,709
Retained earnings ....................................... 194,775 213,840
-------- --------
Total stockholders' equity ........................... 207,369 226,434
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............... $260,144 $284,018
======== ========
F-2
SYMS CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FISCAL YEAR ENDED TWO MONTHS ENDED
----------------------------------------- ---------------------------
DECEMBER 31, MARCH 2, MARCH 1, FEBRUARY 26, FEBRUARY 25,
1994 1996 1997 1994 1995
-------- -------- -------- ------- --------
(UNAUDITED)
NET SALES .......................................... $326,651 $334,750 $346,792 $41,642 $ 46,632
Cost of goods sold ................................. 217,912 217,561 213,113 28,108 29,776
-------- -------- -------- ------- --------
Gross profit ....................................... 108,739 117,189 133,679 13,534 16,856
EXPENSES
Selling, general and administrative ................ 68,370 70,579 71,028 10,133 10,652
Advertising ........................................ 5,069 5,905 6,626 364 576
Occupancy .......................................... 12,017 12,330 14,215 1,702 1,841
Depreciation and amortization ...................... 8,854 7,751 7,971 1,190 1,359
Provision for contractor advance
and special charges ............................... -- 2,686 -- -- 2,935
-------- -------- -------- ------- --------
Income (loss) from operations ...................... 14,429 17,938 33,839 145 (507)
Interest expense (income)--net ..................... 59 293 97 61 60
-------- -------- -------- ------- --------
Income (loss) before income taxes .................. 14,370 17,645 33,742 84 (567)
Provision (benefit) for income taxes .............. 5,879 7,234 14,677 34 (184)
-------- -------- -------- ------- --------
NET INCOME (LOSS) .................................. $ 8,491 $ 10,411 $ 19,065 $ 50 $ (383)
======== ======== ======== ======= ========
Net income (loss) per share ........................ $ 0.48 $ 0.59 $ 1.08 $ -- $ (0.02)
======== ======== ======== ======= ========
Weighted average shares
outstanding ....................................... 17,694 17,694 17,694 17,692 17,694
======== ======== ======== ======= ========
Cash dividends per share ........................... $ 0.10 $ -- $ -- $ -- $ --
======== ======== ======== ======= ========
F-3
SYMS CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
PREFERRED STOCK, COMMON STOCK,
1,000 SHARES; 30,000 SHARES;
$100 PAR VALUE $0.05 PAR VALUE ADDITIONAL
---------------- ----------------- PAID-IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS TOTAL
------ ------ ------ ------ ------- -------- -----
BALANCE JANUARY 1, 1994 .......................... -- -- 17,692 $885 $11,695 $178,025 $190,605
Exercise of stock options ........................ -- -- 2 -- 14 -- 14
Cash dividend .................................... -- -- -- -- -- (1,769) (1,769)
Net income ....................................... -- -- -- -- -- 8,491 8,491
------ ----- ------ ---- ------- -------- --------
BALANCE DECEMBER 31, 1994 ........................ -- -- 17,694 885 11,709 184,747 197,341
Net loss for the two months ended--
February 25, 1995 ............................... -- -- -- -- -- (383) (383)
Net income for the fiscal year ended--
March 2, 1996 ................................... -- -- -- -- -- 10,411 10,411
------ ----- ------ ---- ------- -------- --------
BALANCE MARCH 2, 1996 ............................ -- -- 17,694 885 11,709 194,775 207,369
Net income ....................................... -- -- -- -- -- 19,065 19,065
------ ----- ------ ---- ------- -------- --------
BALANCE MARCH 1, 1997 ............................ -- -- 17,694 $885 $11,709 $213,840 $226,434
====== ===== ====== ==== ======= ======== ========
F-4
SYMS CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
FISCAL YEAR ENDED TWO MONTHS ENDED
---------------------------------- -----------------------------
DECEMBER 31, MARCH 2, MARCH 1, FEBRUARY 26, FEBRUARY 25,
1994 1996 1997 1994 1995
------- ------- ------- ------- --------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ........................................... $ 8,491 $10,411 $19,065 $ 50 $ (383)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization .............................. 8,854 7,751 7,971 1,190 1,359
Deferred income taxes ...................................... (1,484) (3,539) (1,870) -- 47
(Gain) loss on sale of property and equipment .............. (73) 10 (52) -- (16)
Loss on disposal of assets ................................. -- 1,142 244 -- 1,360
(Increase) decrease in operating assets:
Merchandising inventories .................................. (17,389) (2,694) (9,586) (9,000) (13,453)
Prepaid expenses and other current assets .................. (418) 2,158 1,765 2,403 (404)
Other assets ............................................... (290) (306) (2,417) (2) 4
Increase (decrease) in operating liabilities:
Accounts payable ........................................... 8,535 (4,721) (2,177) 14,573 12,222
Accrued expenses ........................................... 4,164 1,203 1,137 (2,596) 133
Obligations to customers ................................... 805 (271) 595 (166) 456
Other long term liabilities ................................ -- 237 396 -- --
Income taxes ............................................... 1,741 (245) 502 (3,036) (306)
------- ------- ------- ------- --------
Net cash provided by operating activities ............... 12,936 11,136 15,573 3,416 1,019
------- ------- ------- ------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment .......................... (14,591) (4,777) (21,709) (1,910) (388)
Proceeds from sale of property and equipment ................ 103 325 65 -- 13
------- ------- ------- ------- --------
Net cash used in investing activities ................... (14,488) (4,452) (21,644) (1,910) (375)
------- ------- ------- ------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends ........................................ (1,769) -- -- -- --
Repayments of obligations under capital lease ............... (234) (287) (339) (36) (43)
Revolving line of credit (repayments) borrowings ............ 2,900 (2,050) 4,950 -- (850)
Exercise of options ......................................... 14 -- -- -- --
------- ------- ------- ------- --------
Net cash provided by (used in) financing activities ..... 911 (2,337) 4,611 (36) (893)
------- ------- ------- ------- --------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS ........................................... (641) 4,347 (1,460) 1,470 (249)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD ........................................ 1,347 457 4,804 1,347 706
------- ------- ------- ------- --------
CASH AND CASH EQUIVALENTS,
END OF PERIOD .............................................. $ 706 $ 4,804 $ 3,344 $ 2,817 $ 457
======= ======= ======= ======= ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) ....................... $ 253 $ 399 $ 291 $ -- $ --
======= ======= ======= ======= ========
Income taxes paid (refunds received)--net .................. $ 5,106 $11,026 $16,041 $ -- $ (33)
======= ======= ======= ======= ========
See notes to consolidated financial statements.
F-5
SYMS CORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FISCAL YEARS ENDED DECEMBER 31, 1994, MARCH 2, 1996, MARCH 1, 1997
AND THE TWO MONTHS ENDED FEBRUARY 25, 1995
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Principal Business
Syms Corp and subsidiaries (the "Company") operates a chain of forty
"off-price" retail stores (thirty-eight in 1996) located throughout the
Northeastern and Middle Atlantic regions and in the Midwest, Southeast and
Southwest. Each Syms store offers a broad range of first quality, in season
merchandise bearing nationally recognized designer or brand-name labels for men,
women and children.
b. Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the two months ended February 26, 1994 are not
necessarily indicative of the results that may be expected for the entire fiscal
year ended December 31, 1994.
c. Accounting Period
The Company changed its fiscal year end to the Saturday nearest to the end
of February. This change was reported on March 17, 1995. The fiscal years ended
December 31, 1994 and March 1, 1997 were comprised of 52 weeks. The fiscal year
ended March 2, 1996 was comprised of 53 weeks.
d. Merchandise Inventories
Merchandise inventories are stated at the lower of cost or market on a
first-in-first-out (FIFO) basis, as determined by the retail inventory method.
During the fiscal year ended December 31, 1994, the Company changed its method
of valuing inventory by computing separate cost complements for each department
within its five merchandise categories. In the past, the Company computed a
single cost complement for each of its five merchandise categories. Management
believes the change results in a more accurate inventory valuation. This change
resulted in a total increase to gross margin of $780,000 of which approximately
one half relates to prior years. The Company considers that the effect on fiscal
year end 1994 and prior years is not material.
e. Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization
are provided by the straight-line method over the following estimated useful
lives:
Buildings and improvements 15-30 years
Machinery and equipment 5 years
Furniture and fixtures 5 years
Leasehold improvements Lesser of life of the asset or life of lease
Facilities leases (Note 7) having the substance of financing transactions
have been capitalized. The related lease obligations have been included as
obligations under capital lease. The leased assets are being amortized as
described above.
f. Income Taxes
Deferred income taxes reflect the future tax consequences of differences
between the tax basis of assets and liabilities and their financial reporting
amounts at year end.
g. Earnings Per Share
Net income per share is computed by dividing net income by the weighted
average number of common shares and common stock equivalents outstanding during
each period. The Company's common stock equivalents consist of
F-6
SYMS CORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
FISCAL YEARS ENDED DECEMBER 31, 1994, MARCH 2, 1996, MARCH 1, 1997
AND THE TWO MONTHS ENDED FEBRUARY 25, 1995
outstanding stock options and for the periods ended December 31, 1994, March 2,
1996 and March 1, 1997, the effect of outstanding common stock options was not
dilutive.
h. Cash and Cash Equivalents
Syms Corp considers credit card receivables and all short term investments
with a maturity of three months or less as cash equivalents.
i. Pre-Opening Costs
Store pre-opening costs are deferred until the store's opening, at which
time they are expensed over the first 12 months of store operation.
j. Closed Store Expense
Closed store costs, such as future rent and real estate taxes net of
expected sublease recovery, are accrued when management makes the determination
that no future economic benefit from operations exists and are recorded in
selling, general and administrative expenses.
k. Obligation to Customers
Obligations to customers represent credits issued for returned merchandise
as well as gift certificates. The Company's policy is to allow customers to
exchange credits issued for other merchandise or credit to the Syms charge card.
l. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
m. Recent Accounting Pronouncement
In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of." SFAS No. 121 requires that long-lived assets and
certain identifiable intangibles to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable, and is effective for fiscal
years beginning after December 15, 1995. The Company evaluated its investment in
long-lived assets to be held and used in operations on an individual store basis
and determined that, based upon its history of operating results and operating
projections, the adoption of SFAS No. 121 did not have an effect on the
Company's financial position or results of operations.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No.
128"), which is effective for the Company for the year ended February 28, 1998.
SFAS No. 128 simplifies the standards for computing earnings per share
previously found in Accounting Principles Board Opinion No. 15 and establishes
new standards for computing and presenting earnings per share. Application of
SFAS No. 128 is not expected to have a significant effect on the Company's
earnings per share.
n. Reclassification
Certain items in prior years in specific captions of the accompanying
consolidated financial statements and notes to consolidated financial statements
have been reclassified for comparative purposes.
F-7
SYMS CORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
FISCAL YEARS ENDED DECEMBER 31, 1994, MARCH 2, 1996, MARCH 1, 1997
AND THE TWO MONTHS ENDED FEBRUARY 25, 1995
NOTE 2--PROPERTY AND EQUIPMENT
Property and equipment consists of:
MARCH 2, MARCH 1,
1996 1997
-------- --------
(IN THOUSANDS)
Land ............................................ $ 34,060 $ 40,061
Buildings and building improvements ............. 102,244 105,511
Leasehold and leasehold improvements ............ 20,365 32,142
Machinery and equipment ......................... 14,893 16,747
Furniture and fixtures .......................... 15,547 15,661
Capital lease ................................... 3,763 3,763
Construction in progress ........................ 2,774 692
-------- --------
193,646 214,577
Less accumulated depreciation and amortization .. 64,411 71,836
-------- --------
$129,235 $142,741
======== ========
NOTE 3--INCOME TAXES
The provision for income taxes is as follows:
FISCAL YEAR ENDED
-------------------------------- TWO MONTHS ENDED
DECEMBER 31, MARCH 2, MARCH 1, FEBRUARY 25,
1994 1996 1997 1995
----------- -------- -------- -----------------
(IN THOUSANDS)
Current:
Federal $5,956 $ 9,109 $13,799 $(223)
State 1,407 1,664 2,748 (8)
------ ------- ------- -----
7,363 10,773 16,547 (231)
------ ------- ------- -----
Deferred:
Federal (1,202) (2,622) (1,560) 43
State (282) (917) (310) 4
------ ------- ------- -----
(1,484) (3,539) (1,870) 47
------ ------- ------- -----
$5,879 $ 7,234 $14,677 $(184)
====== ======= ======= =====
F-8
SYMS CORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
FISCAL YEARS ENDED DECEMBER 31, 1994, MARCH 2, 1996, MARCH 1, 1997
AND THE TWO MONTHS ENDED FEBRUARY 25, 1995
The following is a reconciliation of income taxes computed at the U.S.
Federal statutory rate to the provision for income taxes:
FISCAL YEAR ENDED
----------------------------------- TWO MONTHS ENDED
DECEMBER 31, MARCH 2, MARCH 1, February 25,
1994 1996 1997 1995
------------ -------- -------- ----------------
Statutory Federal income tax rate .......... 35.0% 35.0% 35.0% (35.0)%
State taxes, net of Federal income
tax benefits .............................. 5.5 5.3 8.4 (3.2)
Officers' life insurance ................... 0.4 0.7 0.1 5.2
Other, net ................................. -- -- -- 0.6
---- ---- ---- -----
Effective income tax rate .................. 40.9% 41.0% 43.5% (32.4)
==== ==== ==== =====
The composition of the Company's deferred tax assets and liabilities is as
follows:
MARCH 2, MARCH 1,
1996 1997
-------- --------
(IN THOUSANDS)
Deferred tax assets:
Capitalization of inventory costs ................................... $3,800 $4,085
Capital lease ....................................................... 333 404
Accounts receivable ................................................. 1,018 1,143
Other ............................................................... 650 2,645
------ ------
Total deferred tax assets .......................................... 5,801 8,277
------ ------
Deferred tax liability:
Depreciation method and different estimated lives ................... (835) (425)
Other ............................................................... -- (1,016)
------ ------
Total deferred tax liabilities ...................................... (835) (1,441)
------ ------
Net .................................................................. ($4,966) $6,836
Classified in balance sheet as follows:
Current deferred tax asset .......................................... $5,221 $6,639
Long term deferred tax asset (net of non-current
deferred tax liability) ............................................ -- 197
Long term deferred tax liability (net of non-current tax asset) ..... (255) --
------ ------
Net ................................................................. $4,966 $6,836
====== ======
NOTE 4--BANK CREDIT FACILITIES
The Company has an unsecured revolving credit agreement with a bank for a
line of credit not to exceed $40,000,000 through December 1, 1997. Interest on
individual advances is payable quarterly at 1-1/2% per annum below the bank's
base rate, except that at the time of advance, the Company has the option to
select an interest rate based upon one of two other alternative calculations,
with such rate to be fixed for a period not to exceed 90 days. The average daily
unused portion is subject to a commitment fee of 1/8 of 1% per annum. The
interest rate on short term borrowings was 6.75% at March 1, 1997. At March 2,
1996 there were no outstanding borrowings, and at March 1, 1997 there was
$4,905,000 in outstanding borrowings.
The agreement contains financial covenants, with respect to consolidated
tangible net worth, as defined, working capital and maximum capital
expenditures, including dividends, as well as other financial ratios.
Total interest charges incurred for the years ended December 31, 1994,
March 2, 1996 and March 1, 1997 including amounts related to capital leases,
were $865,000, $623,000 and $586,000, respectively, of which $612,000, $105,000
and $152,000 were capitalized in fiscals 1994, 1996 and 1997, respectively,Third Avenue in connection with the purchase and construction of new facilities.
F-9
SYMS CORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
FISCAL YEARS ENDED DECEMBER 31, 1994, MARCH 2, 1996, MARCH 1, 1997
AND THE TWO MONTHS ENDED FEBRUARY 25, 1995
In addition, the Company has a separate $10,000,000 credit facility with
another bank available for the issuance of letters of credit for the purchase of
merchandise. This agreement may be cancelled at any time by either party. At
March 2, 1996 and at March 1, 1997, the Company had $3,786,000 and $6,094,000,
respectively, in outstanding letters of credit.
NOTE 5--FAIR VALUE DISCLOSURES
The estimated fair values of financial instruments which are presented
herein have been determinedtransactions contemplated by the Company using available market informationInvestment Agreement and appropriate valuation methodologies. However, considerable judgement is
requiredthe agreement with Third Avenue, respectively, including, in interpreting market data to develop estimates of fair value.
Accordingly, the estimates presented hereincertain circumstances, if such agreements are terminated. We are not necessarily indicative of
amounts the Company could realize inpaying a current market exchange.
The fair value of the Company's cash and cash equivalents, accounts
receivable and short-term borrowings approximates their carrying values at March
2, 1996 and at March 1, 1997 duefee to the short-term maturities of these
instruments.
NOTE 6--PENSION AND PROFIT SHARING PLANS
a. PENSION PLAN--The Company has a defined benefit pension plan for all
employees other than those coveredStandby Purchaser or to Third Avenue in connection with their commitments under collective bargaining agreements.
The benefits are based on years of servicetheir respective agreements with the Company.
Registration Rights
Pursuant to the Investment Agreement and the employee's highest
average pay during any five consecutive years within the ten-year period prior
to retirement. Pension plan costs are funded annually. Contributions are
intended to provide not only for benefits attributed to service to date, but
also for those expected to be earned in the future.
The following table sets forth the Plan's funded status and amounts
recognized in the Company's consolidated balance sheet:
42 |
General
Our authorized capital stock consists of return79,999,997 shares of common stock with par value of $.01 per share, one share of Series A preferred stock, one share of Series B preferred stock, each with a par value of $.01 per share, one share of a class of special stock, par value $.01 per share and 40,000,000 shares of a class of designation preferred stock, par value $0.01 per share.
The following summary description of our capital stock is based on plan assets was 8.5% during eachthe provisions of our certificate of incorporation and bylaws and the applicable provisions of the years ended December 31, 1994, March
2, 1996Delaware General Corporation Law. This information is qualified entirely by reference to the applicable provisions of our certificate of incorporation, bylaws and March 1, 1997.
b. PROFIT-SHARING AND 401(K) PLAN--The Companythe Delaware General Corporation Law. For information on how to obtain copies of our certificate of incorporation and bylaws, which are exhibits to the registration statement of which this prospectus is a part, see “Where You Can Find More Information” and “Incorporation by Reference.”
Common Stock
As of September 10, 2015, there were 20,131,928 shares of common stock issued and outstanding (excludes 4,596,543 shares held in treasury) held by 225 holders of record. Except as set forth below or otherwise required by law or as otherwise provided in any preferred stock or special stock that may be authorized in the future, the holders of the common stock exclusively possess all voting power, and each share of common stock has one vote.
General. The common stock is subject to the express terms of the special stock and any series of preferred stock and any series of designation preferred stock. Until such time as there has been a profit-sharingGeneral Unsecured Claim Satisfaction and 401(K) plan for all employees other than those coveredthe final payment is made to the former Majority Shareholder (as defined under collective
bargaining agreements. In 1995,the Plan), the Company established a defined contribution
savings plan 401(K) for substantially all of its eligible employees. Employees
may contribute a percentage of their salarynot (whether by merger, consolidation or otherwise), directly or indirectly, (A) declare or pay any dividends on, or make or pay any distributions to the plan subject to statutory
limits. The Company hasholders of, the common stock (provided that the foregoing does not made any matching contributions to this plan.
However, profit-sharing contributions were maderestrict the declaration or payment or making of dividends or distributions on the common stock solely in the amountsform of $130,000 for
each of the years ended December 31, 1994 and March 2, 1996, $200,000 for year
ended March 1, 1997 and $39,000 for the two months ended February 25, 1995.
NOTE 7--COMMITMENTS
a. LEASES--The Company has various operating leases and one capital lease
for its retail stores, with terms expiring between 1997 and 2016. The Company
also has a ground lease that expires in 2276. Under most lease agreements, the
Company pays real estate taxes, maintenance and other operating expenses.
Certain store leases also provide for additional contingent rentals based upon a
percentage of sales in excess of certain minimum amounts.
F-11
SYMS CORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
FISCAL YEARS ENDED DECEMBER 31, 1994, MARCH 2, 1996, MARCH 1, 1997
AND THE TWO MONTHS ENDED FEBRUARY 25, 1995
Future minimum lease payments at March 1, 1997 are as follows:
CAPITAL
LEASE
REAL OPERATING
ESTATE LEASES
-------- ----------
(IN THOUSANDS)
1998 ................................................. $ 600 $ 6,974
1999 ................................................. 600 6,158
2000 ................................................. 450 5,442
2001 ................................................. -- 5,062
2002 ................................................. -- 5,171
2003 and thereafter--cumulative ...................... -- 39,785
----- -------
Total minimum payments ............................... 1,650 $68,592
=======
Less amount representing interest .................... 345
------
Present value of net minimum lease payments .......... 1,305
Less current maturities .............................. 405
------
$ 900
======
Payments under the real estate capital lease, which expires in 1999, are
payable to the Company's principal shareholder. Rental payments were $600,000
during each of the years ended December 31, 1994, March 2, 1996, and March 1,
1997 and $100,000 for the two months ended February 25, 1995.
Rent expense for operating leases is as follows:
FISCAL YEAR ENDED TWO MONTHS
-------------------------------- ENDED
DECEMBER 31, MARCH 2, MARCH 1, FEBRUARY 25,
1994 1996 1997 1995
----------- -------- -------- -----------
(IN THOUSANDS)
Minimum rentals ................. $4,030 $4,308 $5,832 $ 698
Escalation rentals .............. 9 24 413 28
Contingent rentals .............. 25 40 36 4
Sublease rentals ................ (192) (386) (743) (32)
------ ------ ------ ------
$3,872 $3,986 $5,538 $ 698
====== ====== ====== ======
b. EMPLOYMENT AGREEMENT--At March 1, 1997 the Company had an employment
agreement with its General Merchandising Manager, expiring 2009, pursuant to
which annual compensation of approximately $300,000 is required. In addition,
that employee is entitled to additional compensation upon occurrence of certain
events.
c. LEGAL PROCEEDINGS--The Company is a party to routine litigation incident
to its business. Management(1) common stock of the Company, believes, based upon its assessment(2) rights to acquire common stock of the actions and claims outstanding againstCompany, or (3) any rights declared or paid or distributed to any class or series of capital stock in connection with the Company, and after discussionadoption of any stockholder rights plan to preserve the Company’s loss carryforwards or otherwise limit ownership in the Company), or (B) repurchase or redeem any shares of common stock, in each case other than in accordance with counsel, that there are no legal proceedings that will have a material
adverse effect on the financial statementsPlan, or (C) without the written consent of the Company. Someformer Majority Shareholder, amend, alter or repeal the certificate of incorporation or by-laws if such amendment would amend, alter or repeal any rights, privileges or terms applicable to the Series B preferred stock, or if such amendment would impair the rights of the lawsuitsformer Majority Shareholder as delineated in the Plan.
Certain Amendments to which the Company is a partyCertificate of Incorporation. Except as otherwise required by law, holders of common stock are covered by insurance and are being defended
bynot entitled to vote on any amendment to the Company's insurance carriers.
F-12
SYMS CORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
FISCAL YEARS ENDED DECEMBER 31, 1994, MARCH 2, 1996, MARCH 1, 1997
AND THE TWO MONTHS ENDED FEBRUARY 25, 1995
NOTE 8--PREFERRED STOCK
The Company is authorizedcertificate of incorporation that relates solely to issue up to 1,000,000 sharesthe alteration or change of the powers, preferences, rights or other terms of one or more outstanding series of preferred stock or series of designation preferred stock (or of special stock, as applicable) if the holders of such affected series of preferred stock or designation preferred stock (or the special stock, as applicable) are entitled, either separately or, in the case of one or more series of preferred stock or designation preferred stock, together with the holders of one or more other series of preferred stock or designation preferred stock, to vote thereon as a separate class pursuant to the certificate of incorporation or pursuant to the Delaware General Corporation Law as currently in effect or as may be amended in the future.
Preferred Stock
Our preferred stock is issued in two series, of which one such series is designated the Series A preferred stock, and the other such series is designated the Series B preferred stock. The BoardSeries A preferred stock consists of Directorsone (1) authorized share, and the Series B preferred stock consists of one (1) authorized share. The Series B preferred stock is held by an escrow agent as security for certain stockholder payments as outlined in the Plan. Except as provided in the Company’s certificate of incorporation or as otherwise required by law, the Series B preferred stock is not entitled to vote on any matters submitted to a vote of stockholders of the Company, including any amendment to our certificate of incorporation.
43 |
As of the date of this prospectus, there is one share of Series A preferred stock and one share of Series B preferred stock outstanding.
Dividends. No dividends or distributions may be declared, paid or made on the Series A preferred stock or Series B preferred stock.
Liquidation Rights. In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, the holder of the Series A preferred stock and the holder of the Series B preferred stock are entitled to receive for its share of Series A preferred stock or Series B preferred stock, as applicable, out of the assets of the Company or proceeds thereof available for distribution to stockholders of the Company, and after satisfaction of all liabilities and obligations to creditors of the Company, on par with each share of equally ranked stock, other than Series A preferred stock or Series B preferred stock, or parity stock, but before any distribution of such assets or proceeds is made to or set aside for the holders of junior ranked stock, an amount equal to the par value of such share of Series A preferred stock or such share of Series B preferred stock, as applicable. To the extent such amount is paid in full to the holder of the Series A preferred stock, the holder of the Series B preferred stock and all holders of parity stock, the holders of junior ranked stock of the Company will be entitled to receive all remaining assets of the Company (or proceeds thereof) according to their respective rights and preferences.
Redemption. The Series A preferred stock will, subject to lawfully available funds, be automatically redeemed at such time as the General Unsecured Claim Satisfaction has occurred (as outlined in the Plan), at a per share redemption price equal to the par value of one share of Series A preferred stock. The Series B preferred stock will, subject to lawfully available funds, be automatically redeemed at such time as the former Majority Shareholder is paid the initial majority stockholder payment and the subsequent majority stockholder payment (as outlined in the Plan), at a per share redemption price equal to the par value of one share of Series B preferred stock.
Voting Rights. Except as expressly provided in the certificate of incorporation or as otherwise required by applicable law, the holder of the Series A preferred stock and the holder of the Series B preferred stock will not be entitled to vote on any matters submitted to a vote of stockholders of the Company.
Special Voting Rights of the Holder of the Series A Preferred Stock. For so long as the Series A preferred stock is outstanding, certain Company actions, as outlined in the Plan, may not be taken, directly or indirectly, without the affirmative vote of the holder of the Series A preferred stock, including, but not limited to: (i) amending, altering or repealing any provision of the certificate of incorporation or bylaws, (ii) establishing any committee of the board of directors that does not include the director then in office that was appointed to the board of directors by the holder of the Series A preferred stock, or the Series A Director; (iii) remove the Series A Director; or (iv) issue, sell or grant any common stock or common stock equivalents (subject to certain limited exceptions as set forth in the certificate of incorporation).
Special Voting Rights of the Series A Director. For so long as the Series A preferred stock is outstanding, certain Company actions, as outlined in the Plan, may not be taken, directly or indirectly, without the affirmative vote of the Series A Director, including, but not limited to, the entering into of any transaction with an insider or an affiliate (subject to certain limited exceptions as set forth in the certificate of incorporation).
Special Stock
In connection with the investment by Third Avenue in the Company in October 2013, the Company amended its certificate of incorporation to provide for the authorization of one share of special stock, par value $.01 per share. The sole purpose of the share of special stock is to enable Third Avenue to elect one member of the board of directors. No dividends or distributions may be declared, paid or made on the special stock. The special stock ranks junior to the Series A preferred stock and Series B preferred stock, and senior to the common stock, as to distributions of assets on any liquidation, dissolution or winding up of the Company, but only in an amount equal to the par value of such share. The special stock will, subject to lawfully available funds, be automatically redeemed at such time as the “Special Stock Ownership Threshold” (which is 2,345,000 out of the 3,369,444 shares of common stock purchased by Third Avenue) is no longer satisfied, at a per share redemption price equal to its par value. Except as expressly provided in the certificate of incorporation or as otherwise required by applicable law, the holder of the special stock is not entitled to vote such share on any matters submitted to a vote of stockholders of the Company.
44 |
Designation Preferred Stock
Subject to the rights of the holders of the Series A preferred stock, the Series B preferred stock and the special stock, and subject to the limitations prescribed by law, the board of directors is authorized, subject to any limitations prescribed by law or expressly set forth in the Certificate of Incorporation, to provide for the issuance of shares of designation preferred stock in series, and by filing a certificate pursuant to the applicable law of the State of Delaware (such certificate being hereinafter referred to as a “Preferred Stock Designation”), to establish from time to time the number of shares to be included in each such series, and to fix the designation, relativepowers, preferences, and rights preferences, qualifications and
limitations of the shares of each such series.
NOTE 9--STOCK OPTION PLAN
series and any qualifications, limitations or restrictions thereof.
The Company'snumber of authorized shares of designation preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of capital stock of the Company entitled to vote thereon, without a vote of the holders of the designation preferred stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock Option Plan allowsDesignation.
As of the date of this prospectus, no designation preferred stock has been issued.
Ranking.The designation preferred stock must rank junior to the Series A preferred stock and Series B preferred stock as to distributions of assets on any liquidation, dissolution or winding up of the Company.
Dividends.Until such time as the Series A preferred stock and Series B preferred stock have been redeemed in accordance with the certificate of incorporation, no dividends or distributions of cash or other property of the Company may be declared, paid or made on the designation preferred stock (provided that the foregoing shall not restrict the declaration or payment or making of dividends or distributions on the designation preferred stock solely in the form of (1) capital stock of the Company, (2) rights to acquire capital stock of the Company, or (3) any rights declared or paid or distributed to any class or series of capital stock in connection with the adoption of any stockholder rights plan to preserve the Company’s loss carryforwards or otherwise limit ownership in the Company).
Board of Directors
Generally. Except as set forth below, for so long as the Series A preferred stock is outstanding, the board of directors will be comprised of five directors, as follows:
(i) two directors who are elected by the holders of common stock pursuant to the Company’s by-laws, such director referred to herein as the EC Directors;
(ii) one director who is elected by the holder of the Series A preferred stock, voting as a separate class to the exclusion of the holders of common stock, the special stock, the designation preferred stock and any other preferred stock, such director referred to herein as the Series A Director;
(iii) from and after the issuance of special stock and until the first date that the Special Stock Ownership Threshold is no longer satisfied, one director who is elected by the holder of the special stock, voting as a separate class to the exclusion of the holders of common stock, designation preferred stock and any preferred stock, such director referred to herein as the Special Stock Director; and
(iv) one director who is nominated by the EC Directors with the reasonable consent of the holder of the Series A preferred stock and, following such nomination, is elected by the holder of the Series A preferred stock, voting as a separate class to the exclusion of the holders of common stock, the special stock, the designation preferred stock and any other preferred stock, such director, the Independent Director. Such director must (I) meet the requirements of an independent director under the standards of the NASDAQ Stock Market and (II) not be an affiliate of (v) any holder of the special stock, (w) any unsecured creditor that holds a claim in an amount that is greater than $50,000, (x) any holder of two percent or more of the Company’s common stock, (y) any backstop party (as defined in the certificate of incorporation) or (z) a former Majority Shareholder.
45 |
The composition of the board of directors described above changes upon the happening of certain events. These events include:
On the first date that the Special Stock Ownership Threshold is no longer satisfied, the term of the Special Stock Director will automatically terminate, the person formerly holding such directorship will cease to be a director of the Company and the size of the board of directors will be automatically reduced by one directorship. Immediately following such reduction, the size of the board of directors will automatically be increased by one directorship, which will be an EC Director.
If the Company is unable to satisfy all of its general unsecured claims by October 1, 2016, then the Company’s certificate of incorporation provides that (i) the terms of the EC Director(s) in office, except the oldest EC Director in age in office, shall automatically terminate and the terms of the Independent Director and Special Stock Director shall automatically terminate, (ii) immediately following such termination of directorships and the resultant automatic reduction in the size of the board of directors to two directors, the size of the board of directors will automatically increase to nine members and (iii) the seven directorships created thereby are to be elected by the holder of the Series A Preferred Stock. Also, if the general unsecured claims have been satisfied but the required payment to the former Majority Shareholder has not been made by October 16, 2016, then (i) the terms of all directors in office except for the grantingoldest EC Director in age shall automatically terminate, (ii) immediately following such termination of incentivedirectorships and the resultant automatic reduction in the size of the board of directors to one director, the size of the board of directors will automatically increase to four members and (iii) the three directorships created thereby are to be elected by the holder of the Series B Preferred Stock (the Company’s former Majority Shareholder). In each case, a majority of the members of the board of directors will be elected by the holder of the Series A Preferred Stock or the former Majority Shareholder, as applicable, until the required payments are made.
Staggered Board. The board of directors is divided into two classes, as nearly equal in number as possible, designated Class I and Class II. Subject to the provisions of our certificate of incorporation, each director serves for a term ending at the second annual meeting following the annual meeting at which such director was elected and until his or her successor is elected and qualified or his or her earlier resignation or removal. The Series A Director and the Independent Director are Class I directors and the EC Directors and the Special Stock Director are Class II directors. The Class II directors terms were due to expire at the 2014 annual meeting of stockholders, but the Company did not hold an annual meeting in 2014. Therefore, the Class II directors whose terms were due to expire at the 2014 annual meeting remained in office. As a result, at the Company’s 2015 annual meeting, nominees for election as Class I directors (whose terms were due to expire at the 2015 annual meeting) and nominees for election as Class II directors were both proposed to the stockholders. At the 2015 annual meeting, (i) nominees for election as Class I directors were elected by the stockholders to serve for a term ending at the second annual meeting following the 2015 annual meeting and (ii) nominees for election as Class II directors were elected by the stockholders to serve for a term ending at the first annual meeting following the 2015 annual meeting, and in each case to serve until such director’s respective successor is elected and qualified or until his or her earlier resignation or removal. In case of any increase or decrease, from time to time, in the number of directors, the number of directors in each class will be apportioned as nearly equal as possible. Any director may be removed from office at any time, with or without cause, by the affirmative vote of the holders of a majority in voting power of the shares of capital stock options,of the Company entitled to elect such director.
46 |
Restrictions on Transfers Related to Preservation of the Ability to Utilize Certain Tax Benefits Associated with NOLs
In order to help preserve its ability to utilize certain tax benefits primarily associated with the Company’s NOLs, the Company’s certificate of incorporation generally prohibits transfers or sales of stock that would result in a person or group of persons becoming a 4.75% stockholder, or that would result in the increase or decrease by a person or group of persons that is an existing 4.75% stockholder of its percentage ownership interest in the Company. Any direct or indirect transfer attempted in violation of the certificate of incorporation will be void. The restrictions on transfer under the certificate of incorporation will not apply if the transferor or the transferee obtains the prior written approval of the board of directors. Any person who desires to effect an otherwise prohibited transaction may, prior to the date of the proposed transaction, submit a request in writing that the board of directors review and authorize the transaction, following the procedures set forth in the certificate of incorporation. These restrictive provisions in the certificate of incorporation will expire by their terms on the earliest to occur of, among other things, February 12, 2025; the date selected by the board of directors, if the board of directors determines that it is in the best interests of the Company’s stockholders for the restrictions set forth in the certificate of incorporation to be removed or released; and the date selected by the holders of a majority of the voting power of the Company, approved at an annual or special meeting of stockholders or by written consent.
Anti-Takeover Effects of Certain Provisions in Our Certificate of Incorporation and Bylaws
Our certificate of incorporation and bylaws contain some provisions which may have the effect of delaying, deferring or preventing a change in control of the Company.
Special Meetings
Our bylaws provide that a special meeting of the stockholders for any purpose or purposes shall be called pursuant to a resolution approved by the board of directors and may not be called by any other person or persons.
Chapter 11 Plan
In addition to the provisions regarding the election of directors to the board of directors, as defineddescribed above, the Plan also provides that Syms creditors holding Allowed Claims are entitled to payment of those claims in Section 422Afull. The Plan also provides for Filene’s, LLC creditors to receive recoveries from the monetization of certain of Trinity’s assets. Filene’s, LLC Short-Term creditors are entitled to payment in full on their Allowed Claims and Filene’s, LLC Long-Term creditors with Allowed Claims are entitled to a recovery of 75% on their claims. As of July 9, 2015, the Company believes that the remaining estimated aggregate allowed amount and cash distributions of creditor claims ($0.2 million), excluding claims covered by insurance, together with the net amount due to the former Majority Shareholder ($7.1 million) and the multiemployer pension plan ($3.8 million payable through 2019) under the Plan is approximately $11.1 million.
In order to protect the right of the former Majority Shareholder to receive the payments as specified by the Plan, the Plan provides that no distributions, dividends or redemptions may be made by the Company until the final payment is made to the former Majority Shareholder. This rights offering is being effected through a non-cash distribution of rights, which the Company believes is consistent with the Plan, and is intended to raise funds for the Company to, among other things, help the Company meet its remaining obligations under the Plan, including to the former Majority Shareholder.
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is American Stock Transfer & Trust Company, LLC. Its address is 6201 15th Avenue, Brooklyn, New York 11219 and its telephone number is (718) 921-8200.
Quotation of Common Stock
Our common stock is quoted on the OTCQB under the symbol “TPHS.”
47 |
Certain MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of certain material U.S. federal income tax consequences of the receipt, lapse, and exercise of the subscription rights distributed to holders of our common stock pursuant to the rights offering. This discussion assumes that the holders of our common stock hold such common stock as a capital asset for U.S. federal income tax purposes. This discussion is based on the Internal Revenue Code of 1986, as amended, or the Code. Treasury Regulations promulgated thereunder, rulings and pronouncements of the Internal Revenue Service, or the Service, and judicial decisions in effect on the date hereof, all of which are subject to change (possibly with retroactive effect) and to differing interpretations. The following summary does not purport to be a complete analysis of all U.S. federal income tax consequences of the receipt, lapse and exercise of the subscription rights, applies only to holders that are United States persons (as amended), non-qualifieddefined in Section 7701(a)(30) of the Code) and does not address all aspects of U.S. federal income taxation that may be relevant to such holders in light of their particular circumstances or to holders who may be subject to special tax treatment under the Code, including, without limitation, holders who are dealers in securities or foreign currency, insurance companies, tax-exempt organizations, banks, financial institutions, regulated investment companies, real estate investment trusts, partnerships and other flow-through entities, traders in securities that elect to use a mark-to market method of accounting for their securities, broker-dealers, and holders who hold our common stock or subscription rights as part of a hedge, straddle, conversion or other risk-reduction transaction, or who acquired our common stock pursuant to the exercise of compensatory stock options or stock appreciation rights.otherwise as compensation. The plan
requires that incentive stock options be granted at an exercise pricefollowing summary also does not less
thanaddress the fair market valuetax consequences of the common shares on the date the optionrights offering under foreign, state, or local tax laws.
This summary is granted. The exercise priceof a general nature only and is not intended to constitute a complete analysis of all U.S. federal income tax consequences of the option for holders of more than 10%receipt, lapse and exercise of the voting rightssubscription rights. There can be no assurance that the Service will agree with the tax consequences described below. We have not sought, and will not seek a ruling from the Service regarding the U.S. federal income tax consequences of the Company mustrights offering.Accordingly, each holder of our common stock should consult its tax advisor with respect to the tax consequences of the rights offering to it in light of its particular circumstances.
A distribution of subscription rights with respect to common stock is generally treated as a non-taxable distribution for U.S. federal income tax purposes under Section 305(a) of the Code. However, if the receipt of subscription rights is treated as a distribution described in Section 305(b) of the Code, the receipt would first be not less than 110%treated as a taxable dividend in an amount equal to the lesser of the fair market value of the subscription rights and the recipient stockholder’s allocable share of the current or accumulated earnings and profits, or E&P, of the issuing corporation. Any excess of the fair market value of the subscription rights over the share of E&P would then be treated as a tax-free return of capital to the extent of the stockholder’s adjusted tax basis in its common stock, and then as capital gain. A distribution of subscription rights with respect to common stock will generally be a taxable distribution under Section 305(b) if it is a “disproportionate distribution.” A disproportionate distribution is a distribution or part of a series of distributions, including deemed distributions, that has the effect of the receipt of cash or other property by some stockholders and an increase in the proportionate interests of other stockholders in the issuing corporation’s assets or E&P. For example, a distribution of the subscription rights will not qualify as tax-free under Section 305(a) of the Code if, within the 36-month period following the distribution of the subscription rights, the Company were to distribute cash in redemption of its shares onheld by some but not all of its stockholders, and any such redemption was not an isolated redemption or in complete termination of the dateshares held by the redeeming stockholder. This distribution of grant. Non-qualified options and stock
appreciationthe subscription rights also may be granted at any exercise price.not qualify as tax-free if, within the 36-month period following the distribution of the subscription rights, the Company issues convertible securities. The Company has reserved 1,000,000no current plans to make any such redemptions or issue convertible securities, but there is no guarantee that it will not do so.
Provided that the receipt of the subscription rights distributed pursuant to the rights offering is a non-taxable distribution for U.S. federal income tax purposes, the U.S. federal income tax consequences to a holder of our common stock of the receipt, lapse and exercise of subscription rights distributed pursuant to the rights offering will be as follows:
· | A holder will not recognize taxable income for U.S. federal income tax purposes as a result of the receipt of subscription rights in the rights offering. |
48 |
· | Except as otherwise provided below, a holder’s tax basis in its subscription rights will depend on the relative fair market value of the subscription rights received by such holder and the common stock owned by such holder at the time the subscription rights are distributed. If either (i) the fair market value of the subscription rights on the date such subscription rights are distributed is equal to at least 15% of the fair market value on such date of the common stock with respect to which the subscription rights are received or (ii) the holder elects, in a statement attached to its U.S. federal income tax return for the taxable year in which the subscription rights are received, to allocate part of its tax basis in such common stock to the subscription rights, then the holder’s tax basis in the common stock will be allocated between the common stock and the subscription rights in proportion to their respective fair market values on the date the subscription rights are distributed. If the subscription rights received by a holder have a fair market value that is less than 15% of the fair market value of the common stock owned by such holder on the date the subscription rights are distributed, the holder’s tax basis in its subscription rights will be zero unless the holder elects to allocate its adjusted tax basis in the common stock owned by such holder in the manner described in the previous sentence. A holder’s tax basis in the common stock will be reduced to the extent any such tax basis is allocated to the subscription rights. The Company has not obtained, and does not currently intend to obtain, an appraisal of the fair market value of the subscription rights on the date the subscription rights are distributed. |
· | A holder that allows the subscription rights received in the rights offering to expire will not recognize any gain or loss, and no portion of the tax basis in the common stock owned by such holder with respect to which such subscription rights were distributed will be allocated to the unexercised subscription rights. If the subscription rights received in the rights offering expire without exercise after the holder disposes of the shares of the common stock with respect to which the subscription rights were received, then the tax consequences are unclear and the holder should consult its tax advisor. |
· | A holder will not recognize any gain or loss upon the exercise of the subscription rights received in the rights offering. The tax basis in the common stock acquired through exercise of the subscription rights will equal the sum of the subscription price for the common stock and the holder’s tax basis, if any, in the rights as described above. The holding period for the common stock acquired through exercise of the subscription rights will begin with and include the date the subscription rights are exercised in the manner set forth in this prospectus. |
49 |
We will distribute the subscription rights, subscription rights certificates and copies of this prospectus to individuals who owned shares of common stock of record as of 5:00 p.m., New York time, on , 2015, the record date for issuance thereunder.
No optionthe rights offering. If you wish to exercise your subscription rights and purchase shares of common stock, you should complete the subscription rights certificate and return it with payment for the shares, to the subscription agent, American Stock Transfer & Trust Company, LLC. See “The Rights Offering—Method of Exercising Subscription Rights.” If you have any questions, you should contact the information agent, D.F. King & Co., Inc., at (866) 796-7180. The subscription rights will not be listed on any stock exchange or market or on the OTC Markets. Our shares of common stock appreciation rights may be grantedare quoted on the OTCQB under the stock
option plan after July 2003. symbol “TPHS.”
We have agreed to pay the subscription agent and information agent customary fees plus certain expenses in connection with the rights offering. We have not employed any brokers, dealers or underwriters in connection with the solicitation of exercise of subscription rights. Except as described in this section, we are not paying any other commissions, underwriting fees or discounts in connection with the rights offering. Some of our employees may solicit responses from you as a holder of subscription rights, but we will not pay our employees any commissions or compensation for these services other than their normal employment compensation. We estimate that our total expenses in connection with the rights offering will be approximately $425,000.
The maximum exercise period for any option or stock
appreciation right under the plan is ten years from the date the option is
granted (five years for any optionee who holds more than 10%validity of the votingsubscription rights and the common stock issuable upon exercise of the Company).
Statement of Financial Accounting Standards No. 123, "Accountingsubscription rights will be passed upon for Stock-Based Compensation" ("SFAS No. 123"), was effective for the Company for
fiscal 1997. SFAS No. 123 encourages (but does not require) compensation expense
to be measured based on the fair value of the equity instrument awarded. In
accordance with APB No. 25, no compensation cost has been recognized in the
Consolidated Statements of Income for the Company's stock option plans. If
compensation cost for the Company's stock option plans had been determined in
accordance with the fair value method prescribedus by SFAS No. 123, the Company's
net income would have been $10,411,000 and $19,042,000 for 1996 and 1997,
respectively, and the earnings per share would have been $0.59 and $1.08 for
1996 and 1997, respectively. This pro forma information may not be
representative of the amounts to be expected in future years as the fair value
method of accounting prescribed by SFAS No. 123 has not been applied to options
granted prior to 1997.
Stock option transactions are summarized below:
The loan is evidenced by the Trust's note, which is guaranteed by Ms.
Syms, and is secured by a first priority mortgage on the real estate purchased.
The note bears interest at the rate of 6.6% per annum (the then Federal Mid-Term
Rate) payable annually, and the principal of the note is due November 22, 2001.
NOTE 11--UNAUDITED SELECTED QUARTERLY FINANCIAL DATA
QUARTER
-------------------------------------------
FIRST SECOND THIRD FOURTH
------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
YEAR ENDED MARCH 2, 1996
Net sales ....................... $79,252 $72,814 $93,439 $89,245
Gross profit .................... $27,174 $24,535 $34,577 $30,903
Net income ...................... $ 1,036 $ 741 $ 5,561 $ 3,073
Net income per share ............ $ 0.06 $ 0.04 $ 0.32 $ 0.17
YEAR ENDED MARCH 1, 1997
Net Sales ....................... $83,377 $75,128 $96,225 $92,062
Gross profit .................... $30,456 $26,133 $41,494 $35,596
Net income ...................... $ 3,381 $ 1,441 $ 8,637 $ 5,606
Net income per share ............ $ 0.19 $ 0.08 $ 0.49 $ 0.32
F-15
SYMS CORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
AUGUST 31, MARCH 1, AUGUST 30,
1996 1997 1997
-------- -------- --------
(UNAUDITED) (NOTE) (UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ................................. $ 6,744 $ 3,344 $ 3,203
Merchandise inventories ................................... 128,867 122,540 139,068
Deferred income taxes ..................................... 5,977 6,639 5,170
Prepaid expenses and other current assets ................. 3,501 1,756 6,647
-------- -------- --------
TOTAL CURRENT ASSETS .................................... 145,089 134,279 154,088
PROPERTY AND EQUIPMENT--
Net of accumulated depreciation and amortization .......... 137,870 142,741 145,266
DEFERRED INCOME TAXES ...................................... 686 197 222
OTHER ASSETS--Net of accumulated amortization .............. 5,457 6,801 6,538
-------- -------- --------
TOTAL ASSETS ............................................. $289,102 $284,018 $306,114
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable .......................................... $ 49,748 $ 28,723 $ 37,155
Accrued expenses .......................................... 9,734 11,055 11,508
Obligations to customers .................................. 4,313 5,085 4,174
Income taxes payable ...................................... 3,598 5,833 3,308
Short term borrowings ..................................... 6,900 4,950 13,400
Current portion of obligations under capital lease ........ 371 405 441
-------- -------- --------
Total current liabilities ................................ 74,664 56,051 69,986
-------- -------- --------
OBLIGATIONS UNDER CAPITAL LEASE ............................ 1,111 900 670
-------- -------- --------
DEFERRED INCOME TAXES ...................................... 667 -- --
-------- -------- --------
OTHER LONG TERM LIABILITIES ................................ 469 633 801
-------- -------- --------
COMMITMENTS ................................................ -- -- --
STOCKHOLDERS' EQUITY
Preferred stock, par value; $100 per share
authorized 1,000 shares; none outstanding ................ -- -- --
Common stock, par value; $0.05 per share
authorized 30,000 shares; 17,776 issued and
outstanding as of August 31, 1996, March1,1997
and August 30, 1997 ...................................... 885 885 889
Additional paid-in capital ................................ 11,709 11,709 12,432
Retained earnings ......................................... 199,597 213,840 221,336
-------- -------- --------
Total Stockholders' Equity ............................... 212,191 226,434 234,657
-------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ................................... $289,102 $284,018 $306,114
======== ======== ========
Note: The balance sheet at March 1, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
F-16
SYMS CORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
TWENTY-SIX WEEKS ENDED
----------------------
AUGUST 31, AUGUST 30,
1996 1997
-------- --------
(UNAUDITED)
NET SALES .......................................... $158,505 $164,239
Cost of goods sold ................................. 101,916 99,795
-------- --------
Gross profit ....................................... 56,589 64,444
EXPENSES
Selling, general and administrative ................ 34,623 35,376
Advertising ........................................ 2,883 3,900
Occupancy .......................................... 6,683 7,930
Depreciation and amortization ...................... 3,830 4,290
-------- --------
Income from operations ............................. 8,570 12,948
Interest expense--net .............................. 36 241
Income before income taxes ......................... 8,534 12,707
Provision for income taxes ......................... 3,712 5,211
-------- --------
NET INCOME ......................................... $ 4,822 $ 7,496
======= =======
Net income per shares .............................. $ 0.27 $ 0.42
======= =======
Weighted average shares outstanding ................ 17,694 17,739
======= =======
F-17
SYMS CORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
TWENTY-SIX WEEKS ENDED
-----------------------------
AUGUST 31, AUGUST 30,
1996 1997
---------- ----------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME .......................................................... $ 4,822 $ 7,496
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization ....................................... 3,830 4,290
Deferred income taxes ............................................... (710) 1,444
(Gain) on sale of property and equipment ............................ (37) (8)
Loss on disposal of assets .......................................... 244 --
(Increase) decrease in operating assets:
Merchandise inventories ............................................ (15,913) (16,528)
Prepaid expenses and other current assets .......................... 20 (4,891)
Other assets ....................................................... (1,048) 237
Increase (decrease) in operating liabilities:
Accounts payable ................................................... 18,848 8,432
Accrued expenses ................................................... (184) 453
Obligations to customers ........................................... (177) (911)
Other long term liabilities ........................................ 232 168
Income taxes ....................................................... (2,053) (2,525)
------- -------
Net cash (used in) provided by operating activities ............... 7,874 (2,343)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment ............................. (12,716) (6,792)
Proceeds from sale of property and equipment ........................ 44 11
------- -------
Net cash used in investing activities ............................. (12,672) (6,781)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of obligations under capital lease ....................... (162) (194)
Revolving line of credit borrowings--net ............................ 6,900 8,450
Proceeds from exercise of stock options ............................. -- 727
------- -------
Net cash provided by financing activities ......................... 6,738 8,983
------- -------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ................. 1,940 (141)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ....................... 4,804 3,344
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD ............................. $ 6,744 $ 3,203
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) ............................... $ 57 $ 169
======= =======
Income taxes paid--net ............................................. $ 3,977 $10,846
======= =======
F-18
SYMS CORP AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THIRTEEN AND TWENTY-SIX WEEKS ENDED AUGUST 30, 1997 AND AUGUST 31, 1996
(Unaudited)
NOTE 1--THE COMPANY
Syms Corp (the "Company") operates a chain of forty "off-price" retail
stores located throughout the Northeastern and Middle Atlantic regions and in
the Midwest, Southeast and Southwest. Each store offers a broad range of first
quality, in-season merchandise bearing nationally recognized designer or
brand-name labels for men, women and children.
NOTE 2--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for annual
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the thirteen and twenty-six week periods
ended August 30, 1997 are not necessarily indicative of the results that may be
expected for the entire fiscal year ending February 28, 1998. For further
information, refer to the consolidated financial statements and footnotes
thereto includedschedule as of February 28, 2015, the financial statements as of March 1, 2014, the changes in net assets for the Company's annualperiod from March 2, 2013 to February 28, 2015 and management's assessment of the effectiveness of internal control over financial reporting as of February 28, 2015 incorporated by reference in this Prospectus have been so incorporated in reliance on the reports of BDO USA, LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. The report on the financial statements contains an explanatory paragraph regarding the shareholders’ approval of a plan of liquidation on November 1, 2011 and that as a result the Company changed from a going concern basis of accounting to liquidation basis effective October 30, 2011. The paragraph further explains that the Company changed its basis of accounting back to the going concern basis of accounting on February 10, 2015.
The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to those documents instead of having to repeat the information in this prospectus. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below that we have filed with the SEC:
• | our Current Reports on Form 8-K, filed on August 20, 2015 and September 14, 2015; | ||
• | our definitive proxy statement on Schedule 14A, filed on June 26, 2015; and |
50 |
We also incorporate by reference into this prospectus all documents (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items) that are filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (i) after the date of the initial filing of the registration statement of which this prospectus is a part and prior to effectiveness of the registration statement, or (ii) after the date of this prospectus until we sell all of the shares covered by this prospectus or the sale of shares by us pursuant to this prospectus is terminated.
You may access our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to any of these reports, free of charge on the basisSEC’s website. You may also access the documents incorporated by reference on our website atwww.trinityplaceholdings.com. Other than the foregoing documents incorporated by reference, the information contained in, or that can be accessed through, our website is not part of this prospectus.
In addition, we will furnish without charge to each person, including any beneficial owner, to whom a prospectus is delivered, on written or oral request of such person, a copy of any or all of the documents incorporated by reference in this prospectus (not including exhibits to such documents, unless such exhibits are specifically incorporated by reference in this prospectus or into such documents). Such requests may be directed to Chief Financial Officer, Trinity Place Holdings Inc., 717 Fifth Avenue, Suite 1303, New York, New York 10022, (212) 235-2190.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a 52-53 week fiscal year
endingregistration statement that we have filed with the Saturday closest toSEC. Certain information in the endregistration statement has been omitted from this prospectus in accordance with the rules of February.the SEC. We are a public company and file proxy statements, annual, quarterly and special reports and other information with the SEC. The fiscal year ending
February 28, 1998registration statement, such reports and March 1, 1997 are both comprised of 52 weeks.
NOTE 4--MERCHANDISE INVENTORIES
Merchandise inventories are statedother information can be inspected and copied at the lowerPublic Reference Room of cost (first in, first
out)the SEC located at 100 F Street, N.E., Washington D.C. 20549. Copies of such materials, including copies of all or market, as determinedany portion of the registration statement, can be obtained from the Public Reference Room of the SEC at prescribed rates. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room. Such materials may also be accessed electronically by means of the retail inventory method.
NOTE 5--BANK CREDIT FACILITIES
The Company has an unsecured revolving credit agreement with a bank for a
line of credit not to exceed $40,000,000 through December 1, 1997. InterestSEC’s home page on individual advances is payable quarterly at 1 1/2% per annum below the bank's
base rate, except that at the time of advance, the Company has the option to
select an interest rate based upon one of two other alternative calculations,
with such rate to be fixed for a period not to exceed 90 days. The Company
anticipates it will renew this facility for another three years for the same
amount and the same terms, conditions and covenants. The average interest rate
on short term borrowings was 6.13% at August 30, 1997. The average daily unused
portion is subject to a commitment fee of 1/8 of 1% per annum. The Company had
outstanding borrowings of $13,400,000, $4,950,000, and $6,900,000 as of August
30, 1997, March 1, 1997 and August 31, 1996, respectively.
The agreement contains financial covenants, with respect to consolidated
tangible net worth, as defined, working capital and maximum capital
expenditures, including dividends, as well as other financial ratios.
In addition, the Company has a separate $10,000,000 credit facility with
another bank available for the issuance of letters of credit for the purchase of
merchandise. This agreement may be cancelled at any time by either party. At
August 30, 1997, March 1, 1997 and August 31, 1996 the Company had $7,436,000,
$6,094,000 and $7,896,000, respectively, in outstanding letters of credit.
F-19
[GRAPHICS PAGE]
AN EDUCATED CONSUMER
IS OUR BEST CUSTOMER(R)
[SYMS LOGO]
================================================================================
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
----------
TABLE OF CONTENTS
PAGE
----
Available Information ..................................................... 3
Incorporation of Certain Documents by Reference ........................... 3
Prospectus Summary ........................................................ 4
Forward-Looking Statements ................................................ 7
Investment Considerations ................................................. 7
Use of Proceeds ........................................................... 8
Price Range of Common Stock and Dividend Policy ........................... 8
Capitalization ............................................................ 9
Selected Consolidated Financial and Operating Data ........................ 10
Management's Discussion and Analysis of Financial
Condition and Results of Operations ...................................... 11
Business .................................................................. 16
Management ................................................................ 21
Principal and Selling Stockholders ........................................ 22
Description of Capital Stock .............................................. 22
Shares Eligible for Future Sale ........................................... 23
Underwriting .............................................................. 24
Legal Matters ............................................................. 25
Experts ................................................................... 25
Index to Financial Statements ............................................. 26
Report of Independent Accountants ......................................... F-1
================================================================================
================================================================================
3,500,000 SHARES
SYMS CORP
COMMON STOCK
----------
PROSPECTUS
----------
BEAR, STEARNS & CO. INC.
SALOMON BROTHERS INC
________________, 1997
================================================================================
51 |
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Item 14. | Other Expenses of Issuance and Distribution |
The following table sets forth the costs and expenses to be borneincurred by the Companyus in connection with the offering described in this Registration Statement. All such
expenses other thanissuance and distribution of the Securities and Exchange Commissionsecurities being registered hereby. With the exception of the SEC registration fee, all fees and expenses set forth below are estimates. The Selling Stockholders shall bear__________portion
SEC registration fee | $ | 3,486 | ||
Accounting fees and expenses | $ | * | ||
Legal fees and expenses | $ | * | ||
Printing and engraving expenses | $ | * | ||
Miscellaneous expenses | $ | * | ||
Total | $ | 425,000 |
* | To be provided by amendment. |
Item 15. | Indemnification of Directors and Officers |
Section 102(b)(7) of the following
expenses:
Securities and Exchange Commission Registration Fee .....
Transfer Agents Fees and Expenses .......................
Printing Fees and Expenses ..............................
Accounting Fees and Expenses ............................
Legal Fees and Expenses .................................
Miscellaneous ...........................................
Total ................................................
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article SevenDelaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the Company's Certificatecorporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of Incorporation and Article 10fiduciary duty as a director, except for liability for any breach of the Company's By-Laws each requiredirector’s duty of loyalty to the Companycorporation or its stockholders, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, for unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions, or for any transaction from which the director derived an improper personal benefit.
Article Eighth of our certificate of incorporation provides:
“To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to indemnify,the Corporation or to its stockholders for monetary damages for any breach of fiduciary duty as a director. No amendment to, modification of or repeal of this Article shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment, modification or repeal.”
Our certificate of incorporation provides indemnification rights to certain persons to the fullest extent permitted by law. These indemnification rights are set forth in Article Ninth of our certificate of incorporation, the text of which is set forth below.
Section 14A:3-5145 of the BusinessDelaware General Corporation ActLaw concerning indemnification of New
Jersey, as the same may be amended or supplemented, anyofficers, directors, employees and all persons whom itagents is set forth below.
“Section 145. Indemnification of officers, directors, employees and agents; insurance.
(a) A corporation shall have power to indemnify under such Section from and against any and all of
the expenses, liabilitiesperson who was or other matters referredis a party or is threatened to inbe made a party to any threatened, pending or covered by such
Section.
Section 14A:3-5 of the Business Corporation Act of New Jersey permits a
corporation to indemnify all corporate agents, defined to include (among other
persons) current and former officers and directors of the indemnifying
corporation, against proceedingscompleted action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if such
corporate agentthe person acted in good faith and in a manner hethe person reasonably believed to be in or not opposed to the best interests of the corporation. Withcorporation, and, with respect to proceedings other than thoseany criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
II-1 |
(b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which are criminalsuch person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in nature,which such rightaction or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnifyindemnity for such expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is further conditioned onproper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer of the corporation at the time of such corporate
agent's having had no reasonable belief that his conduct was unlawful.
Eachdetermination: (1) By a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum; or (2) By a committee of such directors designated by majority vote of such directors, even though less than a quorum; or (3) If there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion; or (4) By the stockholders.
(e) Expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or the bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has entered intooccurred.
II-2 |
(g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
(h) For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).”
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the Company that
provides thatsecurities being registered, we will, unless in the Companyopinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Article Ninth of our certificate of incorporation provides:
“(i) The Corporation shall indemnify such directorand hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the Businessfact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation Actor, while a director or officer of New Jersey.the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise, nonprofit entity or other entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in paragraph (iii) of this Article with respect to an action brought by a Covered Person to recover an unpaid indemnification or advancement claim to which such Covered Person is entitled, the Corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized in the specific case by the board of directors of the Corporation.
II-3 |
(ii) The Company maintains
directors and officers liability insuranceCorporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending any proceeding in advance of its final disposition; provided, however, that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Article or otherwise.
(iii) If a claim for indemnification under this Article (following the final disposition of such proceeding) is not paid in full within sixty days after the Corporation has received a claim therefor by the Covered Person, or if a claim for any advancement of expenses under this Article is not paid in full within thirty days after the Corporation has received a statement or statements requesting such amounts to be advanced, the Covered Person shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of such claim. If successful in whole or in part, the Covered Person shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by law. In any such action, the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.
(iv) The rights conferred on any Covered Person by this Article shall not be exclusive of any other rights which insures against liabilities
thatsuch Covered Person may have or hereafter acquire under any statute, provision of the certificate of incorporation, the Corporation’s by-laws, agreement, vote of stockholders or disinterested directors or officersotherwise.
(v) The Corporation’s obligation, if any, to indemnify or to advance expenses to any Covered Person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise, nonprofit entity or other entity shall be reduced by any amount such Covered Person may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise, non-profit entity or other entity.
(vi) Any repeal or modification of the Company may incurprovisions of this Article shall not adversely affect any right or protection hereunder of any Covered Person in respect of any proceeding (regardless of when such capacities.
ITEM 16. EXHIBITS
The followingproceeding is afirst threatened, commenced or completed) arising out of, or related to, any act or omission occurring prior to the time of such repeal or modification.
(vii) This Article shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Covered Persons when and as authorized by appropriate corporate action.
Item 16. | Exhibits |
The list of all exhibits filed as a part ofin the Exhibit Index to this Registration Statement on Form S-3, including thoseregistration statement is incorporated herein by reference.
Exhibit
Number Description
Item 17. | Undertakings |
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of Exhibits
- ------- -----------------------
1.1 Formthe Securities Act of Underwriting Agreement*
4.1 Specimen Certificate1933;
II-4 |
(ii) To reflect in the prospectus any facts or events arising after the effective date of Common Stock (incorporatedthe registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent, no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
Provided, however, that paragraphs (1)(i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the Company's Registration Statement on Form S-1registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, (Registration No. 2-85554)each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed August 2, 1983pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and declared
effective September 23, 1983)**
5.1 Opinionincluded in the registration statement as of Skadden, Arps, Slate, Meagher & Flom LLP*
23.1 Consentthe date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of Skadden, Arps, Slate, Meagher & Flom LLP (includedthe registration statement or made in Exhibit
5.1)
23.2 Consenta document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of Deloitte & Touche LLP**
24.1 Powerthe registration statement will, as to a purchaser with a time of Attorney (includedcontract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any free writing prospectus relating to the offering prepared by or on signature page)**
- ----------
* Filed herewith.
** Previously filed.
II-1
ITEM 17. UNDERTAKINGS
behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
The Registrantundersigned registrant hereby further undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant'sregistrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered herein,therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDEbona fide offering thereof.
II-5 |
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrantregistrant pursuant to the provisions set forthdescribed in Item 15,“Item 15. Indemnification of Directors and Officers” above, or otherwise, the Registrantregistrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against, such liabilities (other than the payment by the Registrantregistrant of expenses incurred or paid by a director, officer or controlling person of the Registrantregistrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrantregistrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.
II-2
II-6 |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrantregistrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, in the State of New York, on November 17, 1997.
SYMS CORP
By /s/ SY SYMS
----------------------------
Name: Sy Syms
Title: Chairman & Chief Executive Officer
the 14th day of September, 2015.
TRINITY PLACE HOLDINGS INC. | ||
By: | /s/ Matthew Messinger | |
Name: | Matthew Messinger | |
Title: | President and Chief Executive Officer |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby severally constitutes and appoints each of Richard Pyontek and Matthew Messinger, or either of them, as his true and lawful attorney in fact and agent, with full power of substitution and resubstitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments (including post effective amendments, exhibits thereto and other documents in connection therewith) to this registration statement and any subsequent registration statement filed by the registrant pursuant to Rule 462(b) of the Securities Act of 1933, as amended, which relates to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney in fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney in fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ SY SYMS Chairman of the Board, Chief Executive November 17, 1997
- -------------------- Officer and a Director of the Company
Sy Syms
* President, Chief Operating Officer and November 17, 1997
- -------------------- a Director of the Company
Marcy Syms
* Vice President, Treasurer, Chief November 17, 1997
- -------------------- Financial Officer and a Director
Antone F. Moreira of the Company
* Vice President, Secretary, November 17, 1997
- -------------------- Merchandise Manager Men's Tailored
Stephen A. Merns Clothing and Shoes, and a Director of
the Company
* Director of the Company November 17, 1997
- --------------------
Wilbur L. Ross, Jr.
* Director of the Company November 17, 1997
- --------------------
Philip G. Barach
Director of the Company November __, 1997
- --------------------
David A. Messer
Director of the Company November __, 1997
- --------------------
Harvey A. Weinberg
*By: /s/ SY SYMS
----------------
Attorney-in-Fact
II-3
EXHIBIT INDEX
Signatures | Title | Date | ||
/s/ Matthew Messinger | President and Chief Executive Officer | September 14, 2015 | ||
Matthew Messinger | (Principal Executive Officer) | |||
/s/ Richard G. Pyontek | Chief Financial Officer (Principal Financial | September 14, 2015 | ||
Richard G. Pyontek | Officer, Principal Accounting Officer) | |||
/s/ Alexander C. Matina | Director | September 14, 2015 | ||
Alexander C. Matina | ||||
/s/ Alan Cohen | Director | September 14, 2015 | ||
Alan Cohen | ||||
/s/ Joanne M. Minieri | Director | September 14, 2015 | ||
Joanne M. Minieri | ||||
/s/ Keith M. Pattiz | Director | September 14, 2015 | ||
Keith M. Pattiz | ||||
/s/ Marina Shevrytalova | Director | September 14, 2015 | ||
Marina Shevyrtalova |
Exhibit Number Description of Exhibits
- ------ -----------------------
1.1 Form of Underwriting Agreement*
4.1 Specimen Certificate of Common Stock (incorporated by reference to the
Company's Registration Statement on Form S-1 under the Securities Act
of 1933 (Registration No. 2-85554) filed August 2, 1983 and declared
effective September 23, 1983)**
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP*
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP**
24.1 Power of Attorney (included on signature page)**
- ----------
* Filed herewith.
** Previously filed.
II-4Index
Exhibit No. | Description | |
2.1 | Modified Second Amended Joint Chapter 11 Plan of Reorganization of Syms Corp. and its Subsidiaries (incorporated by reference to Exhibit 99.1 of the Form 8-K filed by the Company on September 6, 2012) (Commission File No. 001-08546) | |
2.2 | Agreement and Plan of Merger by and between Syms Corp. and Trinity Place Holdings Inc. dated September 14, 2012 (incorporated by reference to Exhibit 2.1 of the Form 8-K12G3 filed by the Company on September 19, 2012) (Commission File No. 001-54805) | |
4.1 | Amended and Restated Certificate of Incorporation of Trinity Place Holdings Inc. (incorporated by reference to Exhibit 3.1 of the Form 8-K filed by the Company on February 13, 2015) (Commission File No. 001-08546) | |
4.2 | Bylaws of Trinity Place Holdings Inc. (incorporated by reference to Exhibit 3.2 of the Form 8-K filed by the Company on September 19, 2012) (Commission File No. 001-08546) | |
4.3 | Form of the Company’s Common Stock Certificate | |
4.4* | Form of Subscription Rights Certificate | |
4.5* | Form of Subscription Agent Agreement | |
4.6* | Form of Information Agent Agreement | |
4.7 | Investment Agreement, dated September 11, 2015, by and among Trinity Place Holdings Inc. and MFP Partners, L.P. (incorporated by reference to Exhibit 10.1 of the Form 8-K filed by the Company on September 14, 2015) (Commission File No. 001-08546) | |
4.8 | Investment Agreement, dated September 11, 2015, by and among Trinity Place Holdings Inc. and Third Avenue Trust, on behalf of Third Avenue Real Estate Value Fund (incorporated by reference to Exhibit 10.2 of the Form 8-K filed by the Company on September 14, 2015) (Commission File No. 001-08546) | |
5.1* | Opinion of Kramer Levin Naftalis & Frankel LLP | |
23.1 | Consent of BDO USA, LLP | |
23.2* | Consent of Kramer Levin Naftalis & Frankel LLP (included in Exhibit 5.1) | |
24.1 | Powers of Attorney (included on signature page) | |
99.1* | Form of Instructions for Use of Trinity Place Holdings Inc. Subscription Rights Certificates | |
99.2* | Form of Letter to Stockholders who are Record Holders | |
99.3* | Form of Letter to Stockholders who are Beneficial Holders | |
99.4* | Form of Letter to Clients | |
99.5* | Form of Beneficial Owner Election Form | |
99.6* | Form of Nominee Holder Certification | |
* | To be filed by amendment. |