Kid Brands Announces Appointment of Raphael Benaroya as President and Chief
EAST RUTHERFORD, NJ -- (Marketwire) -- 03/15/13 -- Kid Brands, Inc.
(NYSE: KID) today announced the appointment of Raphael Benaroya as
President and Chief Executive Officer, effective immediately. The
Company intends to appoint a non-executive Chairman of the Board,
although Mr. Benaroya will continue to serve as Chairman until his
successor is appointed, and is expected to continue to serve as a
Board member thereafter.
Mr. Benaroya has served as Executive Chairman of the Board since
September 12, 2011, during which time he has held all
responsibilities of the Chief Executive Officer. He has served as Kid
Brands' Chairman of the Board since January 31, 2008 and has been a
member of the Board since 1993.
Mr. Benaroya commented, "At the time I transitioned into the role of
Executive Chairman, becoming actively involved in the business, Kids
Brands was challenged by operational and financial issues, as well as
shifting market dynamics. Our team has engaged diligently to enhance
the Company's financial disciplines, trim expenses, and improve
working capital management by reducing the quantity and improving the
quality of inventory. Further, we recently completed a refinancing
intended to strengthen the Company's financial position. We have
rationalized our collection of brands and product lines, shifting our
focus toward our own and meaningful licensed brands, and eliminated
non-core, unprofitable product lines. At the same time, we have
bolstered our management team -- appointing a Chief Operating
Officer, who has already made strong contributions to further build
our operational and executional capabilities, and adding to our
business unit leadership in the areas of merchandising, finance and
operations. Benefits of the corrective actions we have been taking
are starting to take hold, and we believe will become even more
apparent in the coming year."
Mr. Benaroya continued, "We are now focused even more intently on
product development and strengthening our sales organization. We have
begun developing innovative new products and are working to increase
our penetration across distribution channels that we believe present
the greatest opportunit
y, spanning web, mass merchants and specialty.
We will also continue to examine and improve our global sourcing,
with several initiatives underway in the area of logistics. Overall,
our team remains confident in the long-term prospects for Kid Brands,
despite challenges in the marketplace. I am looking forward to
meeting the challenge of leading our efforts in a more permanent
role, as the Company continues to build a solid platform for future
Mario Ciampi, a Board member representing the Company's largest
shareholder, stated, "Kid Brands has experienced a great deal of
positive change in the recent period under Raphael's leadership, with
an emphasis on delivering results through an intensified focus on all
areas of the business. We are very pleased that he has taken on this
new leadership role."
The terms of the employment agreement between the Company and Mr.
Benaroya will be described in a Current Report on Form 8-K to be
filed by the Company today (the "8-K").
Inducement Equity Awards
In connection with the appointment of Mr. Benaroya as President and
Chief Executive Officer, he and the Company executed an employment
agreement dated March 14, 2013. Pursuant to such employment
agreement, Mr. Benaroya will be issued 200,000 Incentive Stock
Options under the Company's Equity Incentive Plan (the "EIP"), and
600,000 stock appreciation rights under the EIP (currently
exercisable solely for cash), which stock appreciation rights will be
converted into Non-qualified Stock Options under the EIP upon
approval of the Company's shareholders (as described in detail in the
8-K). In addition, as a material inducement to Mr. Benaroya's
employment, among other things, the Compensation Committee of the
Board has approved the grant to Mr. Benaroya, at the close of trading
today, of 200,000 non-qualified stock options (the "Inducement
Options") outside of the EIP. The Inducement Options will have an
exercise price equal to the closing price of the Company's common
stock on the New York Stock Exchange on the date of grant, will be
immediately exercisable on the date of grant and will generally be
exercisable for a period of ten years.
If the employment of Mr. Benaroya is terminated by the Company for
Cause (as defined in the employment agreement), any unexercised
Inducement Options shall generally remain exercisable for a period of
30 open trading window days following such termination (subject to
extension to the extent the Company's insider trading policy or
applicable law prohibits their exercise or the sale of the underlying
shares at the end of such period). If the employment of Mr. Benaroya
is terminated by Mr. Benaroya without Good Reason (as defined in the
employment agreement), any unexercised Inducement Options shall be
exercisable for a period of six months following the termination, or,
if later, until the 30th open trading window day following such
termination (subject to extension as described above).
Notwithstanding the foregoing, in no event shall any Inducement
Options be exercisable after the expiration of their term.
If the Company terminates the employment of Mr. Benaroya without
Cause or he terminates his employment for Good Reason, or if the
termination of the employment of Mr. Benaroya occurs as a result of
the expiration of his employment agreement at the end of its term,
any unexercised Inducement Options will remain exercisable in
accordance with their terms.
If the employment of Mr. Benaroya is terminated as a result of his
death or Disability (as defined in the employment agreement), any
unexercised Inducement Options will remain exercisable for the
shorter of one year following the date of termination and the
remainder of their terms.
If Mr. Benaroya's employment is terminated by the Company without
Cause or by Mr. Benaroya for Good Reason at any time on or after, or
within six months before the occurrence of a Change of Control (as
defined in the employment agreement), and if any unexercised
Inducement Options are not assumed or converted into comparable
awards with respect to the stock of the acquiring or successor
company (or parent thereof), then immediately prior to such Change of
Control, any unexercised Inducement Options will be converted into
the right to receive cash or, at the election of Mr. Benaroya,
consideration in a form that is pari passu with the form of the
consideration payable to the Company's shareholders in exchange for
their shares, in an amount or having a value equal to the product of:
(i) the per share fair market value of the Company's common stock
(based upon the consideration payable to the Company's shareholders),
less, if applicable, the per share exercise price of such Inducement
Options, multiplied by (ii) the number of shares of the Company's
common stock covered by the unexercised Inducement Options. Any
Inducement Options not assumed or converted (as described above) may
be canceled at the time of the Change of Control for no consideration
if the relevant per share exercise price is greater than the per
share fair market value of the Company's common stock (determined
with regard to all per share consideration, including the value of
any contingent and/or deferred consideration payable in the Change of
Kid Brands, Inc.
Kid Brands, Inc. and its subsidiaries are leaders in the design,
development and distribution of infant and juvenile branded products.
Its design-led products are primarily distributed through mass
market, baby super stores, specialty, food, drug, independent and
e-commerce retailers worldwide.
The Company's current operating subsidiaries consist of: Kids Line,
LLC; LaJobi, Inc; Sassy, Inc.; and CoCaLo, Inc. Through these
wholly-owned subsidiaries, the Company designs, manufactures (through
third parties) and markets branded infant and juvenile products in a
number of complementary categories including, among others: infant
bedding and related nursery accessories and decor, nursery
appliances, and diaper bags (Kids Line(R) and CoCaLo(R)); nursery
furniture and related products (LaJobi(R)); and developmental toys
and feeding, bath and baby care items with features that address the
various stages of an infant's early years (Sassy(R)). In addition to
the Company's branded products, the Company also markets certain
categories of products under various licenses, including Carter's(R),
Disney(R), Graco(R) and Serta(R). Additional information about the
Company is available at www.kidbrands.com.
Note: This press release contains certain forward-looking statements.
Additional written and oral forward-looking statements may be made by
the Company from time to time in Securities and Exchange Commission
(SEC) filings and otherwise. The Private Securities Litigation Reform
Act of 1995 provides a safe-harbor for forward-looking statements.
These statements may be identified by the use of forward-looking
words or phrases including, but not limited to, "anticipate",
"believe", "expect", "project", "intend", "may", "planned",
"potential", "should", "will" or "would". The Company cautions
readers that results predicted by forward-looking statements,
including, without limitation, those relating to the Company's future
business prospects, revenues, working capital, liquidity, capital
needs, order backlog, interest costs and income are subject to
certain risks and uncertainties that could cause actual results to
differ materially from those indicated in the forward-looking
statements. Specific risks and uncertainties include, but are not
limited to those set forth under Item 1A, "Risk Factors", of the
Company's most recent Annual Report on Form 10-K and any subsequent
Quarterly Reports on Form 10-Q, each as filed with the SEC. The
Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
AT THE COMPANY
Marc S. Goldfarb
Senior Vice President & General Counsel
AT FTI CONSULTING
Jennifer Milan / Daniel Haykin
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