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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(MARK ONE)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
/X/ SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED JULY 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
/ / THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM TO
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Commission File Number:0-11434
ALFIN, INC.
(Exact name of Registrant as specified in its charter)
NEW YORK 13-3032734
-------- ----------
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
720 Fifth Avenue, New York, New York 10019
- - ------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,including area code: (212) 333-7700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
- - ------------------- -----------------------
Common Stock, $.01 par on which registered
value per share -------------------
American Stock Exchange
The purpose of this Filing is to make the following amendments pursuant to Rule
12b-15.
Item 10. Directors and Executive Officers of the Company
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions
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(PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the names of the directors of the Company as of
November 30, 1995, all of whom are expected to be nominated for reelection at
the next Annual Meeting of the Shareholders which will be scheduled for early
1996.
NAME AGE DIRECTOR SINCE POSITION IN COMPANY
- - ---- --- -------------- -------------------
Jean Farat 44 June 1995 Chairman of the Board
and Chief Executive
Officer
Jacques Desjardins 62 November 1992 Director
Elisabeth Fayer 49 November 1992 Director
Steven Korda 55 November 1992 Director
Suzanne Langlois 42 November 1992 Director
JEAN FARAT, a French citizen, was elected as Chairman of the Board and Chief
Executive Officer in June 1995. For the past three (3) years Mr. Farat has
acted as Vice Chairman of a private investment Company in France. For more than
five (5) years prior thereto, Mr. Farat was the Chief Executive Officer of
Sopagri, S.A. a publicly traded French investment company.
JACQUES DESJARDINS, a Canadian citizen, was elected director of the Company in
November 1992 and has for more than the past five (5) years been engaged in
private practice as a general legal advisor (a notary and title attorney) in
Montreal, Quebec, Canada.
ELISABETH FAYER, a Canadian citizen, was elected a director of the Company in
November 1992 and for more than the past five (5) years through various
privately owned holding corporations controlled by herself and her late
husband, Erich Fayer, has owned and operated various commercial properties
situated in Canada, as well as various perfume producing and distributing
corporations in France, including the French designer, Pierre Balmain.
SUZANNE LANGLOIS, a Canadian citizen, was elected a director of the Company in
November 1992 and has been legal counsel to Zanimob Distributions Inc., a
privately owned Canadian holding corporation affiliated with Elisabeth Fayer
and the late Erich Fayer from January 1981 to present.
STEVEN KORDA, a Canadian citizen, was elected a director of the Company in
November 1992 and has for more than the past five (5) years been the principal
of Korda & Associates, a law firm located in Montreal, Quebec, Canada, engaged
in the general and commercial practice of law.
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EXECUTIVE OFFICERS
Set forth below is certain information, as of November 30, 1995 regarding the
executive officers of the Company:
NAME AGE POSITION WITH EXECUTIVE OFFICER
- - ---- --- ------------- -----------------
THE COMPANY SINCE
----------- -----
Jean Farat 44 Chairman of the Board,
Chief Executive Officer June 1995
Adrienne Newman 53 Executive Vice President
President and Chief
Executive Officer of
Adrien Arpel, Inc. April 1990
Michael D. Ficke 40 Vice President, Chief
Financial Officer,
Secretary July 1989
=======================================================================================
Information with respect to Jean Farat is set forth under "Directors."
ADRIENNE NEWMAN joined the Company as an Executive Vice President in April 1990
and has served in this capacity since that time. Since April 1990, Ms. Newman
has also served as President and Chief Executive Officer of the Company's
Adrien Arpel, Inc. subsidiary. For more than five years prior thereto, Ms.
Newman served as Chairman of the Board and Chief Executive Officer of Adrien
Arpel Inc.
MICHAEL D. FICKE joined the Company in July 1989. Mr. Ficke served Alfin, Inc.
as Corporate Controller until his promotion to Vice President and Chief
Financial Officer in November, 1993. Mr. Ficke is a C.P.A. and prior to his
joining the Company served as Assistant Controller of Chanel Inc., a
manufacturer and distributor of fragrance and cosmetic products.
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ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information for the fiscal years ended July 31,
1995, 1994 and 1993 respecting all compensation awarded to, earned by or paid
to the two Chief Executive Officers in fiscal 1995 and all other executive
officers of the Company who earned in excess of $100,000 for fiscal 1995 (the
"Named Executive Officers") in all capacities in which such officers served.
Two other officers of Adrien Arpel, Inc. are not included as named executive
officers because they do not perform policy making functions for the Company.
Annual Compensation Long Term Compensation
------------------------------------------ ---------------------------------------------------
Name and Principal Position Year Salary Bonus Other Stock Long Term All Other
Annual Option Incentive Compen-
Compen- Awards Plan Pay- sation
sation Outs
Jean Farat, 1995 $ 33,750 $ -0- -0-(1) -0- -0- -0-
Chairman and Chief
Executive Officer
Mayer D. Moyal, 1995 222,131 -0- -0-(1) -0- -0- -0-
Chairman and Chief 1994 116,900 -0- -0-(1) 300,000 -0- -0-
Executive Officer (2)
Adrienne Newman 1995 250,000 3,374,990(3) 65,000(4) -0- -0- -0-
President and Chief 1994 250,000 986,488(3) 65,000(4) 1,000,000 -0- -0-
Executive Officer 1993 250,000 -0- 65,000(4) -0- -0- -0-
of Adrien Arpel, Inc.
Michael D. Ficke 1995 93,000 -0- -0-(1) -0- -0- -0-
Vice President, 1994 88,167 -0- -0-(1) -0- -0- -0-
Chief Financial Officer, 1993 81,083 -0- -0-(1) -0- -0- -0-
Secretary
(1) Excludes personal benefits which did not exceed the lesser of $50,000 or
10%, on an annual basis, of such other officers salary and bonus.
(2) Terminated as of June 19, 1995.
(3) Commissions paid based on 1/3 of the revenues net of direct expenses derived
from television shopping sales of cosmetics.
(4) Represents a non-accountable expense allowance of $65,000.
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STOCK OPTION GRANTS IN LAST FISCAL YEAR
YEAR-END OPTION VALUES TABLE
The following table sets forth information at July 31, 1995, respecting
exercisable and non-exercisable options held by the Named Executive Officers.
During fiscal 1995, none of the Named Executive Officers exercised options. The
table also includes the value of "in-the-money" options which represents the
spread between the exercise price of the existing stock option and the year-end
price of the Common Stock.
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE MONEY OPTIONS
OPTIONS HELD AT HELD AT
JULY 31, 1995 JULY 31, 1995 (3)
------------- -----------------
NOT NOT
NAME EXERCISABLE EXERCISABLE EXERCISABLE EXERCISABLE
- - ---- ----------- ----------- ----------- -----------
Adrienne Newman (1) 100,000 -0- $ -0- $ -0-
Adrienne Newman (2) 500,000 500,000 $ -0- $ -0-
(1) 100,000 Warrants granted 4/4/90 @ 1.625
(2) 1,000,000 Warrants granted 11/19/93 @ $1.25
(3) Based on a July 31, 1995 closing price of 1-1/4 or $1.25
EMPLOYMENT AGREEMENTS
Ms. Newman is employed pursuant to an employment agreement with the Company
dated as of April 4, 1990 as amended November 18, 1991 and November 19, 1993.
This agreement terminates on the earliest to occur of (i) April 4, 1998, (ii)
the last day of any month in which Ms. Newman dies, (iii) the last day of the
month in which the Company elects to terminate Ms. Newman's employment due to
physical or mental disability, (iv) the termination by the Company of Ms.
Newman's employment for "good cause" as defined, and (v) the termination of
television marketing efforts after April 4, 1995. Pursuant to this agreement,
Ms. Newman serves as Executive Vice President of the Company and President and
Chief Executive Officer of the Company's Adrien Arpel, Inc. Subsidiary at an
annual base salary of $250,000. Ms. Newman's employment agreement also
provides for a non-accountable expense allowance of $65,000 per year. In
addition, this agreement prohibits Ms. Newman, during its terms, from "engaging
or being interested in," as defined, any business which operates leased beauty
cosmetics departments or concessions in stores, or which acts as a direct
vendor of or advisor with respect to cosmetics or facial services to any store
which is a member of a retail group which the Company does business at the time
Ms. Newman's employment terminates, or which is competitive with the business
activities of a business which is using the "Adrien Arpel" name and trademark
under license from Adrien Arpel, Inc. at the time Ms. Newman's employment with
the
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Company terminates. In September, 1991, the Company entered into an incentive
compensation plan agreement with Ms. Newman pursuant to which she is paid an
annual bonus based on 11% of the annual pre-tax profits (as defined in the
agreement) of Adrien Arpel, Inc., for each fiscal year during her employment
commencing with the fiscal year August 1, 1991 through July 31, 1992. No bonus
compensation was earned for fiscal 1993, 1994 or 1995 since there were no
pre-tax profits as calculated. Ms. Newman is entitled to receive 1/3 of the
revenues from television sale of cosmetics after deducting direct expenses.
For fiscal 1995 she received $3,374,990 from such revenues.
Ms. Langlois has been providing consulting services to the Company at a rate of
$9,600 per annum, commencing in December 1992. This was increased to $16,800
per annum effective November 1, 1994. These services consist of legal advice
on contract matters as requested by the Company, are not full time and may be
terminated by the Company at will. There is no written agreement between the
Company and Ms. Langlois.
Ms. Fayer was retained to provide consulting services to the Company and Adrien
Arpel, Inc. Commencing November 1, 1994 at an annual rate of $84,000. This was
increased to $290,000 per annum effective May 1, 1995. Ms. Fayer will be
responsible for assisting in the purchase of package components and premium
items for the Company and Adrien Arpel, Inc. There is no written agreement
between the Company and Ms. Fayer.
Mr. Farat has been providing financial services to the Company since June 1995
at a rate of $270,000 per annum, plus certain benefits which do not exceed 10%
of his compensation.
Mr. Ficke is currently earning less than $100,000 per annum. There is no
written employment agreement between the Company and Mr. Ficke.
COMPENSATION FOR SERVICE AS DIRECTOR
Each Director who was not also an officer or employee of the Company (Messrs.
Desjardins and Korda for fiscal 1995) received $650 per meeting and $200 for
telephonic participation. Directors who are officers or employees of the
Company receive no additional compensation for attendance at Board of Directors
or Committee meetings.
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REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Board of Directors is responsible for matters pertaining to compensation of
officers, including the named Executive Officers and key employees, as well as
stock awards for all employees. The Board is advised on these matters by the
Stock Option Committee. The following report is presented by the Board.
The Board of Directors executive compensation program is designed to attract,
reward and retain executives who are important to the Company's long term
viability and success and to provide compensation that is competitive with that
of companies of comparable size and stature in the cosmetics and fragrance
industries. These comparable companies are not included on the Dow Jones
Cosmetics/Consumer Care Index, and generally have sales in the $20,000,000 to
$50,000,000 range, are engaged in the fragrance and/or cosmetics industry and
are primarily privately owned. The Board of Directors has access to
compensation professionals, such as executive recruiters, in determining
executive compensation.
With respect to all employees other than Adrienne Newman, the basic component of
executive compensation was salary. Ms. Newman's compensation was continued at
a base of $250,000 plus a non-accountable expense allowance of $65,000 in
extending the term through 1998 of her employment agreement. In addition she
was granted a 1/3 share of television sales of cosmetics after deducting direct
expenses. The large compensation received by Ms. Newman and the extension of
the employment contract, directly reflect her vital role in generating the
substantial part of the Company's revenues.
THE BOARD OF DIRECTORS
Jacques Desjardins
Jean Farat
Elisabeth Fayer
Steven Korda
Suzanne Langlois
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Ms. Fayer and Mr. Farat participated on the Board of Directors in the making of
compensation discussions although each abstained in the consideration of their
respective compensation as a consultant and the Chief Executive Officer
respectively.
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FIVE-YEAR SHAREHOLDER RETURN COMPENSATION
The graph below compares the cumulative total return of the Company against the
American Stock Exchange Composite Index and the Standard and Poors
Cosmetics/Consumer Goods Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG AMERICAN STOCK EXCHANGE COMPOSITE INDEX,
STANDARD AND POORS/COSMETICS CONSUMER GOODS INDEX
AND ALFIN, INC. (1)
JULY 31,
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
American Stock Exchange
Composite Index 100 104 111 124 124 161
Standard & Poors\
Consumer Goods Index 100 148 188 193 242 284
Alfin, Inc. 100 50 50 50 48 50
(1) Total return assumes reinvestment of dividends. The Company did not declare
dividends in its Common Stock during the period set forth above.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Following table sets forth certain information as of November 30, 1995,
regarding, (i) the share ownership of the Company by each person who is known
to the Company to be the beneficial owner of more than five percent (5%) of the
Company's outstanding Common Stock. (ii) the share ownership of the Company of
each director, (iii) the shares ownership of the Company of all directors and
executive officers of the Company as a group, (iv) the share ownership of the
Named Executives.
Name and Address Amount of Common Stock Percent
of Beneficial Owner Beneficially Owned of Class (1)
------------------- ---------------------- ------------
Elisabeth Fayer,
3143040 Canada Inc., 7,188,935 62.4
Fine Fragrances
Distribution, Inc. ("FFD")
3420 rue Drummond
Jacques Desjardins 100,000 0.8
Elisabeth Fayer 100,000 0.8
Steven Korda 100,000 0.8
Suzanne Langlois 100,000 0.8
Adrienne Newman 600,000 5.2
All Directors and Executive Officers
as a Group (6 Persons) 8,188,935 71.0
(1) For purposes of computing these percentages, shares not outstanding but
beneficially held through contract rights, stock options or warrants
exercisable within 60 days from the date hereof are deemed outstanding
with respect to such individuals. Based upon 11,519,311 shares of Common
Stock outstanding on November 30, 1995.
(2) Consists of 7,188,935 shares of Common Stock which are owned of record by
FFD a wholly-owned subsidiary of 3143040 Canada, Inc., of which
Elisabeth Fayer is the sole owner. Elisabeth Fayer, through 3143040
Canada Inc. has investment and voting discretion with FFD with respect
to all of such shares.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to certain relationships and related transactions is
incorporated herein by reference to the Proxy Statement.
The Company's Adrien Arpel, Inc. Subsidiary periodically retains Display
Creations, Inc., a promotional display creator, to supply Adrien Arpel, Inc.
with point of purchase displays. Mr. Ronald Newman, husband of Ms. Adrienne
Newman, Executive Vice President of the Company and President and Chief
Executive Officer of the Company's Adrien Arpel, Inc. subsidiary, is the sole
owner of Display Creations, Inc. For the fiscal year 1995, Adrien Arpel, Inc.
paid Display Creations, Inc. $0 for services rendered. Adrien Arpel, Inc.
intends to retain Display Creations, Inc. from time to time throughout fiscal
1995 to supply point of purchase displays. It is anticipated that payments by
Adrien Arpel, Inc. to Display Creations, Inc. during fiscal 1996 will exceed
$60,000 in the aggregate.
The Company purchased inventory from vendors related to FFD. for the year
ended July 31, 1995, the Company made inventory purchased from vendors related
to FFD of $211,033.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ALFIN, INC.
(Registrant)
Dated: November 30, 1995 /s/ Jean Farat
-----------------------------------
Jean Farat
Chairman, Chief Executive Officer
Dated: November 30, 1995 /s/ Michael D. Ficke
-----------------------------------
Michael D. Ficke
Secretary, Chief Financial Officer
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