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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
Amendment No. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 1999 Commission file number 000-05531
GERALD STEVENS, INC.
Incorporated under the Laws of the I.R.S. Employer Identification No.
State of Delaware 41-0719035
301 East Las Olas Boulevard, Suite 300, Ft. Lauderdale, Florida 33301
954/713-5000
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in the Proxy Statement incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. _X_
The aggregate market value of Gerald Stevens, Inc. voting stock held by
nonaffiliates was approximately $362 million on November 15, 1999.
On November 15, 1999, 44,734,010 shares of Gerald Stevens, Inc. Common
Stock, par value $.01 per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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Explanatory Note
This Amendment is being filed to provide the information called for by
Items 10, 11, 12 and 13 of the Annual Report on Form 10-K of Gerald Stevens,
Inc. for the year ended August 31, 1999.
Item 10. Directors and Executive Officers of the Registrant.
Our executive officers and directors are as follows:
Name Age Position
- ---- --- --------
Steven R. Berrard 44 Chairman of the Board
Gerald R. Geddis 49 Chief Executive Officer, President and Director
Eleanor Marcus Callison 45 Senior Vice President and Chief Marketing Officer
Albert J. Detz 51 Senior Vice President and Chief Financial Officer
Steven J. Nevill 35 Senior Vice President and Chief Information Officer
Adam D. Phillips 36 Senior Vice President, Chief Administrative Officer,
Secretary and Director
Thomas C. Byrne 37 Director
Robert L. Johnson 53 Director
Ruth M. Owades 51 Director
Kenneth G. Puttick 52 Director
Kenneth Royer 68 Director
Andrew W. Williams 47 Director
Steven R. Berrard has served as a member of our board of directors
since April 1999, and as Chairman of the Board since October 1999. In 1997, Mr.
Berrard co-founded, with Mr. Byrne, New River Capital Partners, a private equity
firm with an investment strategy focused on branded specialty retail, e-commerce
and education, and he controls New River Capital's managing general partner. Mr.
Berrard served as Co-Chief Executive Officer of AutoNation, Inc. from October
1996 until September 1999. During his tenure, AutoNation became the world's
largest automotive retailer with over 380 dealerships throughout the United
States and also owned and operated the Alamo Rent-A-Car, National Car Rental
System and CarTemps USA auto rental businesses. From September 1994 through
March 1996, Mr. Berrard served as President and Chief Executive Officer of
Blockbuster Entertainment Group, a division of Viacom, Inc., the world's largest
video store operator. From January 1993 to September 1994, Mr. Berrard served as
President and Chief Operating Officer of Blockbuster. Mr. Berrard joined
Blockbuster in June 1987 as Senior Vice President, Treasurer and Chief Financial
Officer, and he became a director of Blockbuster in May 1989. In addition, Mr.
Berrard served as President and Chief Executive Officer and as a director of
Spelling Entertainment Group Inc., a televised and filmed entertainment producer
and distributor, from March 1993 through March 1996, and served as a director of
Viacom from September 1994 until March 1996. Mr. Berrard presently serves as a
director of Boca Resorts, Inc., which owns and operates luxury resorts, arena
and entertainment facilities and a professional sports franchise.
Gerald R. Geddis has served as a member of our board of directors and
as our Chief Executive Officer and President since April 1999. He co-founded
Gerald Stevens Retail with Mr. Berrard in May 1998 and served as its Chief
Executive Officer and President until its merger with us on April 30, 1999. From
1988 to 1996, Mr. Geddis served in various executive positions at Blockbuster.
He served Blockbuster as President from 1995 to 1996 and as Chief Operating
Officer in 1996. During his tenure at Blockbuster, Mr. Geddis was involved in
all facets of the company's operations, including worldwide store operations,
merchandising, marketing and training. For the 17 years prior to 1988, Mr.
Geddis served in various positions with Tandy Corporation, the owner and
operator of Radio Shack stores.
Eleanor Marcus Callison has served as our Senior Vice President and
Chief Marketing Officer since September 1999. From September 1997 until joining
Gerald Stevens, she was Vice President -
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Advertising for Hallmark Cards, Inc., where she was responsible for the
planning, development, and execution of all Hallmark consumer communications,
brand advertising, database marketing and consumer affairs. In the 16 years
before she joined Hallmark, Ms. Callison held various positions, most recently
senior vice president, at Leo Burnett Advertising USA, where she had
responsibility for numerous large retail accounts, including McDonald's, Disney
and Kraft Foods.
Albert J. Detz has served as our Senior Vice President and Chief
Financial Officer since April 1999. Prior to joining Gerald Stevens Retail in
July 1998 as its Senior Vice President and Chief Financial Officer, Mr. Detz
worked at Blockbuster from 1991 to 1997, having most recently served as Senior
Vice President and Chief Financial Officer from October 1994 to June 1997. Prior
to Blockbuster, Mr. Detz served in various finance-related positions, including
Vice President, Corporate Controller, for 11 years within the Computer Systems
Division of Gould Electronics, Inc., and at Encore Computer Corporation. Prior
to these experiences, Mr. Detz worked in the audit department of Coopers &
Lybrand. Additionally, Mr. Detz provides consulting services to Data Core
Software Corporation, a development stage business.
Steven J. Nevill has served as our Senior Vice President and Chief
Information Officer since April 1999. From March 1996 until joining Gerald
Stevens Retail as Senior Vice President in February 1999, Mr. Nevill was a
principal at Kurt Salmon Associates where he was responsible for a wide variety
of projects, including information systems strategy, systems development,
logistics assessment and re-engineering. From 1991 until March 1996, Mr. Nevill
was Director of Strategic Services for the American Retail Group where he was
involved in the creation of strategic plans, development and implementation of
new systems and technology platforms for all functions, and a variety of special
systems initiatives.
Adam D. Phillips, a member of our board of directors since October
1999, has served as our Senior Vice President, Chief Administrative Officer and
Secretary since April 1999. Mr. Phillips also served as our General Counsel from
April 1999 until November 1999. From January 1998 until joining Gerald Stevens
Retail as Senior Vice President in July 1998, Mr. Phillips was a shareholder of
the law firm of Akerman, Senterfitt & Eidson, P.A. in Fort Lauderdale, Florida.
From 1993 through 1997, Mr. Phillips served in various capacities at
Blockbuster, having most recently served as Executive Vice President, Chief
Administrative Officer and General Counsel in 1996 and 1997. While at
Blockbuster, Mr. Phillips was responsible for the company's legal, human
resources and communications departments. Prior to joining Blockbuster, Mr.
Phillips was associated with the law firm of Kirkland & Ellis in Chicago,
Illinois.
Thomas C. Byrne has served as a member of our board of directors since
April 1999. Currently, Mr. Byrne is a limited partner of New River Capital
Partners and controls an administrative partner of New River Capital Partners.
Prior to co-founding New River Capital Partners with Mr. Berrard in 1997, Mr.
Byrne served in various executive positions at Blockbuster from 1989 to 1997,
most recently as Vice Chairman in 1997 where his responsibilities included
Business Development, Technology and Online Operations. Additionally, Mr. Byrne
led the development of several new retail concepts. Mr. Byrne is a certified
public accountant and prior to joining Blockbuster was employed with KPMG Peat
Marwick.
Robert L. Johnson has served as a member of our board of directors
since October 1999. In 1980, Mr. Johnson founded BET Holdings, Inc., a
diversified media holding company that owns Black Entertainment Television. He
has served as BET's Chairman and Chief Executive Officer since March 1996, and
prior to that, also as its President. Mr. Johnson is also Chairman and President
of District Cablevision, Inc., a cable operator in the District of Columbia. He
is a director of U.S. Airways Group, Inc., Hilton Hotels Corp. and General
Mills, Inc.
Ruth M. Owades has served as a member of our board of directors since
August 1999 following our acquisition of Calyx & Corolla, Inc. Ms. Owades
founded Calyx & Corolla in 1988 and has served as its Chief Executive Officer
since that time. Ms. Owades has served as a director of Providian Financial
Corp. from May 1998 until present and of J. Jill Group, Inc. from June 1997
until present.
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Kenneth G. Puttick has served as a member of our board of directors
since January 1995. Mr. Puttick is President and owner of Tiffany Scott Cadillac
in Vero Beach, Florida. Mr. Puttick has been in the retail automobile business
since 1968. Mr. Puttick also has owned and operated several retail and real
estate businesses.
Kenneth Royer has served as a member of our board of directors since
April 1999. Prior to joining Gerald Stevens Retail in October 1998, Mr. Royer
was a consultant in the floral industry. For over 40 years, Mr. Royer was
Chairman of the Board of Directors of Royer's Flowers, a privately owned floral
retailer. Founded in 1945, Royer's Flowers, by 1998, had become one of the five
largest florists in the United States with 35 locations in central Pennsylvania.
Mr. Royer has served as Chairman of the Retail Council of the Society of
American Florists, and also has served as director of the Society of American
Florists. Mr. Royer also has served as Chairman of the American Florists
Marketing Council and recently completed a term as Treasurer of the American
Florists Endowment. A regular speaker at national florist conventions, Mr. Royer
writes a regular column for The Florist Review entitled "Royer on Retailing" and
in 1998 authored a book on the floral industry entitled Retailing Flowers
Profitably.
Andrew W. Williams has served as a member of our board of directors
since December 1988. Mr. Williams served as Chairman of the Board of Directors
from November 1992 until April 1999 and as Chief Executive Officer from
September 1994 until April 1999. Since 1978 Mr. Williams has been a certified
public accountant practicing principally in Vero Beach, Florida. He has served
as President and Director of Confidential Investment Services, Inc., a privately
held investment company, since April 1999.
Item 11. Executive Compensation
Summary Compensation Table. The following Summary Compensation
Table contains information concerning the compensation of (a) Andrew W.
Williams, who served as Chief Executive Officer through April 30, 1999; (b)
Gerald R. Geddis, who has served as Chief Executive Officer since April 30,
1999; and (c) our other three executive officers who were serving as such at the
end of our 1999 fiscal year. Information that is not applicable or not required
under the rules of the Securities and Exchange Commission ("SEC") has been
omitted from the Summary Compensation Table.
Annual Compensation Long-Term Compensation
- ----------------------------------------------------------------- --------------------------------
No. of Shares
Other Underlying All
Name and Principal Fiscal Annual Options Other
Position Year Salary Bonus Compensation Granted Compensation
-------- ---- ------ ----- ------------ ------- ------------
Gerald R. Geddis (a) 1999 $50,000 $0 $0 0 $0
President, Chief 1998 -- -- -- -- --
Executive Officer 1997 -- -- -- -- --
And Director
Andrew W. Williams 1999 81,729 53,818 3,200(d) 0 2,042(e)
(b) 1998 127,042 20,000 4,800(d) 0 2,042(e)
Director and Former 1997 105,241 67,500 4,800(d) 150,000 2,856(e)
Chief Executive
Officer
Albert J. Detz(c) 1999 33,333 0 0 0 0
Senior Vice 1998 -- -- -- -- --
President and Chief 1997 -- -- -- -- --
Financial Officer
Steven J. Nevill(c) 1999 50,000 25,000 0 0 29,983(f)
Senior Vice 1998 -- -- -- -- --
President and 1997 -- -- -- -- --
Chief Information
Officer
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Adam D. Phillips(c) 1999 33,333 0 0 0 0
Senior Vice 1998 -- -- -- -- --
President, 1997 -- -- -- -- --
Chief Administrative
Officer, Secretary
and Director
(a) Mr. Geddis became President and Chief Executive Officer on May 1, 1999
upon completion of the merger with Gerald Stevens Retail. No
information is provided for periods prior to May 1, 1999, because Mr.
Geddis was not employed by Gerald Stevens prior to such date.
(b) Mr. Williams served as President and Chief Executive Officer through
April 30, 1999.
(c) Messrs. Detz, Nevill and Phillips became executive officers on May 1,
1999. No information is provided for periods prior to May 1, 1999,
because Messrs. Detz, Nevill and Phillips were not employed by Gerald
Stevens prior to such date.
(d) Represents payments made for a company-provided vehicle.
(e) Represents company-matching contributions under a 401(k) plan.
(f) Represents reimbursement of moving expenses in connection with the
hiring of Mr. Nevill.
Stock Options. We granted no options to the executive officers named in
the Summary Compensation Table in our 1999 fiscal year.
The following table contains information concerning stock options
exercised in the 1999 fiscal year, including the "value realized" upon exercise
(the difference between the total purchase price of the options exercised and
the market value, on the date of exercise, of the shares acquired), and the
value of unexercised "in-the-money" options held on August 31, 1999 (the
difference between the aggregate purchase price of all such options held and the
market value of the shares covered by such options on August 31, 1999).
Option Exercises in FY 1999 and Option Values at 8/31/99
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No. of Shares Underlying Value of Unexercised
No. of Shares Unexercised Options on In-the-Money Options on
Acquired on 8/31/99 8/31/99
Name Exercise Value Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ---------------------------------------------------------------------------------------------
Gerald R. Geddis 0 $ 0 0 / 13,500 $0 / $111,125
Andrew W. Williams 150,000 1,532,475 175,000 / 0 1,389,750 / 0
Albert J. Detz 0 0 8,437 / 72,563 93,073 / 593,178
Steven J. Nevill 0 0 0 / 54,000 0 /369,500
Adam D. Phillips 0 0 8,437 / 113,063 93,073 / 814,053
Management Incentive Stock Plan. Our board of directors adopted the
Management Incentive Stock Plan on October 26, 1995. The stockholders approved
this plan on January 30, 1996. Under the Management Incentive Stock Plan, we may
periodically grant employees market-based awards, including nonqualified stock
options, incentive stock options, stock appreciation rights, restricted stock
and performance share awards. We grant these awards to those individuals whose
judgment, initiative and efforts contribute to our success. Each individual
award is established by an award agreement with the participant that sets forth
the terms and conditions applicable to the award. The exercise price of an
option is determined at the time of grant. The exercise price may not be less
than the fair market value of the shares of our common stock subject to the
award on the date of grant. We did not grant options to any executive officer
during our fiscal year ended August 31, 1999. On December 13, 1999, 389,355
shares of our common stock subject to options under the Management Incentive
Stock Plan were outstanding. Also on such date, 1,584,206 shares of our common
stock subject to options assumed in connection with acquisitions, 180,000 shares
of our common stock subject to options granted under our former Nonemployee
Directors Plan and 30,000 shares of our common stock subject to non-plan options
were outstanding.
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We have no long-term incentive plan, pension plan or other plan as
defined by the rules and regulations of the SEC except for the Management
Incentive Stock Plan.
Employment Agreements. We have employment agreements with each of our
executive officers. Each agreement provides that the executive officer will
receive an annual base salary of $150,000. In addition, each executive officer
will be eligible for an annual bonus of up to 20% of base salary, based on the
achievement of certain corporate goals and objectives. If any executive officer
is terminated "without cause" or if the executive officer elects to terminate
employment for "good reason," in each case as defined in the employment
agreement, then the executive officer will be entitled to continue to receive
the base salary and bonus through the end of the employment term, and all
unvested stock options will automatically vest on the date of termination and
will be exercisable in full. In addition, following a change of control, all
unvested stock options held by Messrs. Detz and Phillips will automatically vest
and will be exercisable in full. Each of our executive officers is also subject
to confidentiality obligations as well as to non-compete and non-solicitation
covenants during the term of employment and for two years thereafter. The
employment agreements with Messrs. Geddis, Detz and Phillips terminate on
December 31, 2000, the employment agreement with Mr. Nevill terminates on
February 2, 2001, and the employment agreement with Eleanor Callison terminates
on September 27, 2001.
We also have an employment agreement with Ms. Owades on substantially
the same terms as those described above except that the annual base salary is
$185,000. Ms. Owades' employment agreement terminates on July 30, 2001.
Directors' Compensation. Under the compensation program for nonemployee
directors, each nonemployee director receives (a) an annual retainer of $20,000;
(b) an additional $1,000 for each board meeting in excess of four meetings per
year; (c) $750 for each committee meeting attended (except that committee chairs
receive $1,000 per committee meeting); and (d) an annual grant of options to
purchase up to 2,500 shares of common stock at the fair market value of the
stock on the date of grant.
Nonemployee directors are reimbursed for expenses they incur in
attending board of directors and committee meetings.
Ownership and Transactions Reports. Under Section 16 of the Securities
Exchange Act of 1934, our directors, certain officers, and beneficial owners of
more than 10% of our outstanding common stock are required to file reports with
the SEC concerning their ownership of and transactions in our common stock; such
persons are also required to furnish us with copies of such reports. Based
solely upon the reports and related information furnished to us, we believe that
all such filing requirements were complied with in a timely manner during and
with respect to our 1999 fiscal year.
Item 12. Security Ownership of Management and Others
The following table sets forth the shares of our common stock
beneficially owned, directly or indirectly, on December 1, 1999, by (1) each
person that we know to beneficially own more than 5% of our outstanding common
stock, (2) each current director and nominee, (3) each of the executive officers
named in the Summary Compensation Table and (4) all directors, nominees and
executive officers as a group. The table also includes shares that the
individuals have the right to acquire within 60 days pursuant to outstanding
options. Unless otherwise indicated, the address of each party is 301 East Las
Olas Boulevard, Suite 300, Fort Lauderdale, Florida 33301, our principal
business address.
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Shares of Common Stock
Beneficial Owner Beneficially Owned Percent
---------------- ------------------ -------
New River Capital Partners, L.P. .......................... 7,977,104 17.8%
100 S.E. Third Avenue
Ft. Lauderdale, Florida 33394
Gerald R. Geddis (1) ..................................... 3,455,380 7.7%
Albert J. Detz (2) ........................................ 354,375 *
Steven J. Nevill (3) ..................................... 13,500 *
Adam D. Phillips (4) ..................................... 502,625 1.1%
Steven R. Berrard (5) ..................................... 7,977,104 17.8%
Thomas C. Byrne (1)(6) .................................... 193,893 *
Robert L. Johnson ......................................... 0 *
Ruth M. Owades (7) ........................................ 361,474 *
Kenneth G. Puttick (8) .................................... 1,155,000 2.6%
Kenneth Royer (9) ......................................... 51,997 *
Andrew W. Williams (10) .................................. 1,056,559 2.4%
All Directors and Executive Officers as a Group (11)....... 15,215,151 33.8%
* Indicates less than 1%
(1) Includes 3,375 shares of our common stock subject to options that are
exercisable within 60 days.
(2) Includes 20,250 shares of our common stock subject to options that are
exercisable within 60 days.
(3) Consists of 13,500 shares of our common stock subject to options that
are exercisable within 60 days.
(4) Includes 30,375 shares of our common stock subject to options that are
exercisable within 60 days. Mr. Phillips owns his shares of common
stock jointly with his wife.
(5) The aggregate amount of our common stock deemed beneficially owned by
Mr. Berrard consists of 7,977,104 shares owned by New River Capital
Partners. Mr. Berrard controls and beneficially owns his interests in
New River Capital Partners indirectly through other entities.
(6) The aggregate amount of our common stock deemed beneficially owned by
Mr. Byrne consists of 190,518 shares owned directly by him, but does
not include any shares owned by New River Capital Partners. Mr. Byrne
has a non-controlling interest in New River Capital Partners.
(7) Includes 8,500 shares of our common stock that Ms. Owades owns jointly
with her husband and 7,340 shares of our common stock subject to
options owned by her husband that are exercisable within 60 days.
(8) Includes 637,000 shares held by Puttick Enterprises, of which Mr.
Puttick is President, director and owner. Includes 60,000 shares of our
common stock subject to options that are exercisable within 60 days.
(9) Includes 4,966 shares of our common stock subject to options that are
exercisable within 60 days.
(10) Includes 383,453 shares of our common stock that Mr. Williams owns
jointly with his wife; 85,883 shares of our common stock held for the
benefit of Mr. Williams' children; 39,285 shares of our common stock
owned by Mr. Williams' wife; 2,160 shares of our common stock owned by
Mr. Williams' son; 47,378 shares of our common stock owned by Equity
Resource Group of Indian River County, Inc., of which Mr. Williams is
president, director and majority owner; and 77,000 shares of our common
stock owned by Confidential Investment Services, Inc., of which Mr.
Williams is sole owner. Also includes 25,000 shares of our common stock
subject to options that are exercisable within 60 days.
(11) Includes 168,181 shares of our common stock subject to options that are
exercisable within 60 days.
Item 13. Certain Relationships and Related Transactions
In connection with our acquisition of Royer's Flower Shops, we assumed
five leases that were entered into in July 1994 between Royer's Flower Shops, as
tenant, and Kenneth Royer and his spouse, as
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landlord. The leases are for retail flower shops we own and operate in central
Pennsylvania. The aggregate annual rent payable by us to Mr. and Mrs. Royer for
the leases is approximately $260,000. We believe that each of the leases is on
terms no less favorable than could be obtained from third parties for comparable
retail space in the same markets.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
GERALD STEVENS, INC.
By /s/ A. Detz
-----------------
A. Detz
(Senior Vice President and
Chief Financial Officer)
Date: December 29, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Amendment has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on December 29, 1999.
Signature Title
--------- -----
/s/ G. Geddis President, Chief Executive Officer and
Director
(Principal Executive Officer)
S. Berrard* }
T. Byrne* }
R. Johnson* }
R. Owades* }
/s/ A. Phillips } Directors
K. Puttick* }
K. Royer* }
A. Williams* }
/s/ A. Detz Senior Vice President
----------------- (Principal Financial Officer)
A. Detz
/s/ E. Baker Vice President and Controller
----------------- (Principal Accounting Officer)
(E. Baker)
- -------
* By signing his name hereto, Albert J. Detz is signing this document on
behalf of each of the persons indicated above pursuant to powers of attorney
duly executed by such persons and filed with the Securities and Exchange
Commission.
By /s/ A. Detz
----------------
A. Detz
(Attorney-in-Fact)
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