Attached files
file | filename |
---|---|
EX-32.1 - Castle Brands Inc | v191729_ex32-1.htm |
EX-31.1 - Castle Brands Inc | v191729_ex31-1.htm |
EX-31.2 - Castle Brands Inc | v191729_ex31-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
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 MARCH 31, 2010
Castle
Brands Inc.
(Exact
name of registrant as specified in its charter)
Florida
|
001-32849
|
41-2103550
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Commission
File Number)
|
(I.R.S.
Employer
Identification
No.)
|
122
East 42nd
Street, Suite 4700
|
||
New
York, New York
|
10168
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code (646) 356-0200
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Each Class
|
Name
of Each Exchange on Which Registered
|
|
Common
stock, $0.01 par value
|
NYSE
Amex
|
Securities
registered pursuant to Section 12(g) of the Act:
None.
Indicate
by check mark whether the registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act. Yes ¨ No x
Indicate
by check mark whether the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes ¨ No x
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes x No ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files). Yes ¨ No ¨
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. x
Indicate
by check mark whether the registrant is a large accelerated filer, 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.
¨ Large accelerated filer
|
o Accelerated filer
|
¨ Non-accelerated filer
|
x Smaller reporting company
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes ¨ No x
The
aggregate market value of the registrant’s common stock held by non-affiliates
of the registrant based on the September 30, 2009 closing price was
approximately $7,100,000 based on the closing price per share as
reported on the NYSE Amex on such date. The registrant had 107,202,145 shares of
common stock outstanding at July 23, 2010.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
EXPLANATORY
NOTE
Castle
Brands Inc. is filing this Amendment No. 1 on Form 10-K/A (“Amendment”) to amend
its Annual Report on Form 10-K for the year ended March 31, 2010, filed with the
Securities and Exchange Commission (“SEC”) on June 29, 2010 (“Original
10-K”).
This
Amendment is being filed to amend the Original 10-K to include the information
required by Items 10 through 14 of Part III of Form 10-K. Also, this
Amendment amends the cover page of the Original 10-K to (i) delete the reference
in the Original 10-K to the incorporation by reference of the definitive Proxy
Statement for its 2010 Annual Meeting of Shareholders and (ii) update the number
of outstanding common shares. Item 15 of this report is amended to include the
certifications specified in Rule 13a-14(a) under the Securities Exchange Act of
1934, as amended, required to be filed with this Amendment. Except
for the addition of the Part III information, the updates to the cover page
and the filing of related certifications, no other changes have been made to the
Original 10-K. This Amendment does not reflect events occurring after
the filing of the Original 10-K or modify or update those disclosures affected
by subsequent events.
2
CASTLE
BRANDS INC.
FORM
10-K
TABLE OF
CONTENTS
Page
|
|||
PART
III
|
|||
Item
10.
|
Directors,
Executive Officers and Corporate Governance
|
4
|
|
Item
11.
|
Executive
Compensation
|
9
|
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
16
|
|
Item
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
19
|
|
Item
14.
|
Principal
Accounting Fees and Services
|
23
|
|
PART
IV
|
|||
Item
15.
|
Exhibits,
Financial Statement Schedules
|
23
|
|
SIGNATURES
|
28
|
3
PART III
Item 10.
|
Directors,
Executive Officers and Corporate
Governance
|
Directors
We
believe that the combination of the various qualifications, skills and
experiences of our directors contribute to an effective and well-functioning
board and that, individually and as a whole, our directors possess the necessary
qualifications to provide effective oversight of our business and quality advice
to our management. Listed below are the names, ages and biographies of our
current directors and executive officers. Our directors are elected annually and
serve until the next annual meeting of shareholders and until their successors
are duly elected and appointed.
Mark Andrews, 60, our
chairman of the board, founded our predecessor company, Great Spirits Company
LLC, in 1998 and served as its chairman of the board, president and chief
executive officer from its inception until December 2003. Mr. Andrews has served
as our chairman of the board since December 2003 and served as our president
from December 2003 until November 2005. Mr. Andrews served as our chief
executive officer from December 2003 until November 2008. Prior to founding our
predecessor, Mr. Andrews founded American Exploration Company, a company engaged
in the exploration and production of oil and natural gas, in 1980. Mr. Andrews
oversaw that company becoming publicly traded in 1983 and served as its chairman
and chief executive officer until its merger with Louis Dreyfus Natural Gas
Corp. in October 1997. From 1987 until January 2006, Mr. Andrews served as a
director of IVAX Corporation, a pharmaceutical company. He also serves as a life
trustee of The New York Presbyterian Hospital in New York City. Mr. Andrews' pertinent
experience, qualifications, attributes and skills include financial literacy and
expertise, managerial experience, industry experience and the knowledge and
experience he has attained through his service as a director of ours and other
publicly-traded corporations.
John F. Beaudette, 52, has
served as a director of our company since January 2004. Since 1995, Mr.
Beaudette has been the president of MHW, Ltd. (formerly named Monsieur Henri
Wines Ltd.), a national alcoholic beverage importer, distributor and service
company. From 1985 to 1994, Mr. Beaudette worked with PepsiCo Inc. and its
affiliate company Monsieur Henri Wines in the distribution of Stolichnaya Vodka
and other imported wine and spirit brands. During this period, Mr. Beaudette
held positions such as director of planning for PepsiCo Wines & Spirits
International and vice president of finance and chief financial officer of
Monsieur Henri Wines. Mr. Beaudette is a director of The National Association of
Beverage Importers Inc. (NABI) and serves on its executive committee. Mr.
Beaudette's pertinent experience, qualifications, attributes and skills include
financial literacy and expertise, managerial experience and extensive industry
experience.
Henry C. Beinstein, 67, has
served as a director of our company since January 2009. He has been a partner of
Gagnon Securities, LLC, a broker-dealer and a FINRA member firm, since January
2005 and has been a money manager and an analyst and registered representative
of such firm since August 2002. Mr. Beinstein has been a director of Vector
Group Ltd., a New York Stock Exchange listed holding company, since 2004. Vector
Group is engaged principally in the tobacco business through its Liggett Group
LLC subsidiary and in the real estate and investment business through its New
Valley LLC subsidiary. New Valley owns 50% of Douglas Elliman Realty, LLC, which
operates the largest residential brokerage company in the New York metropolitan
area. He also served as a director of New Valley from March 1994 to December
2005. Mr. Beinstein has served as a director of Ladenburg Thalmann Financial
Services Inc., the parent of the investment banking firm of Ladenburg Thalmann
& Co. Inc., since May 2001. He retired in August 2002 as the executive
director of Schulte Roth & Zabel LLP, a New York-based law firm, a position
he had held since August 1997. Before that, Mr. Beinstein had served as the
managing director of Milbank, Tweed, Hadley & McCloy LLP, a New York-based
law firm, commencing in November 1995. From April 1985 through October 1995, Mr.
Beinstein was the executive director of Proskauer Rose LLP, a New York-based law
firm. Mr. Beinstein is a certified public accountant in New York and New Jersey
and prior to joining Proskauer was a partner and national director of finance
and administration at Coopers & Lybrand. Mr. Beinstein’s pertinent
experience, qualifications, attributes and skills include financial literacy and
expertise, managerial experience through his years at Coopers & Lybrand,
Proskauer Rose LLP, Milbank, Tweed, Hadley & McCloy LLP and Schulte Roth
& Zabel LLP, and the knowledge and experience he has attained through his
service as a director of ours and other publicly-traded
corporations.
4
Harvey P. Eisen, 67, has
served as a director of our company since January 2009. Mr. Eisen has
served as a director of Five Star Products Inc., a wholesale distributor of home
decorating products, since November 2007. Mr. Eisen has served as
chairman of the board and chief executive officer of National Patent Development
Corporation, the parent company of Five Star Products Inc., since June 2007
and also served as its president since July 2007. He has been a director of
National Patent Development Corporation since 2004. He has served as chairman
and managing member of Bedford Oak Advisors, LLC, an investment partnership,
since 1998. Prior thereto, Mr. Eisen served as senior vice president of
Travelers, Inc. and of Primerica, each a financial services company, prior to
its merger with Travelers in 1993. Mr. Eisen also has appeared and
currently appears regularly on such television networks as CNN and CNBC.
Mr. Eisen has also been a director of GP Strategies Corporation, a provider
of customized training solutions, since 2002 and has served as its chairman of
the board since 2005. Mr. Eisen's pertinent experience,
qualifications, attributes and skills include financial literacy and expertise,
managerial experience, and the experience he has attained through his service as
a director of publicly-traded corporations.
Phillip Frost, M.D., 73, has
served as a director of our company since October 2008 and previously served as
a director of our company from September 2005 to August 2007. Dr. Frost has
served as the chief executive officer and chairman of the board of directors of
OPKO Health, Inc., a specialty healthcare company with emphasis on products for
use in ophthalmology, since March 2007. Since July 2006, Dr. Frost has served as
the chairman of the board of directors of Ladenburg Thalmann Financial Services
Inc. Dr. Frost has been a director of Ladenburg Thalmann Financial Services Inc.
since March 2005. In March 2010, Dr. Frost was named chairman of the board of
Teva Pharmaceutical Industries Ltd., a pharmaceutical company, and had
previously served as vice chairman of the board of directors since January 2006.
From 1972 to 1990, Dr. Frost was the chairman of the Department of Dermatology
at Mt. Sinai Medical Center of Greater Miami, Miami Beach, Florida. From 1972 to
1986, Dr. Frost was chairman of the board of directors of Key Pharmaceuticals,
Inc., and from 1987 to January 2006, he served as chairman of the board of
directors and chief executive officer of IVAX Corporation. Dr. Frost also serves
as chairman of the board of directors of PROLOR Biotech, Inc., a development
stage biopharmaceutical company. Dr. Frost is currently a director of
Continucare Corporation, a provider of outpatient healthcare services. He also
serves as Chairman of Temple Emanu-El, as a member of the Board of Regents of
the Smithsonian Institution, as a director of the Florida Council of 100 and as
a trustee of each of the University of Miami, the Scripps Research Institute,
the Miami Jewish Home for the Aged, and the Mount Sinai Medical Center. Dr.
Frost previously served as a director for Northrop Grumman Corp., Ideation
Acquisition Corp. (now Searchmedia Holdings Ltd.), Protalix Bio Therapeutics,
Inc., and Cellular Technical Services Company, Inc. (now SafeStitch Medical,
Inc.), as chairman of Ivax Diagnostics, Inc. and as governor and
co-vice-chairman of the American Stock Exchange (now NYSE Amex). Dr. Frost's
pertinent experience, qualifications, attributes and skills include financial
literacy and expertise, managerial experience and the knowledge and experience
he has attained through his services as a director of publicly-traded
corporations.
5
Glenn L. Halpryn, 49, has
served as a director of our company since October 2008. Since
June 2001, Mr. Halpryn has served as chief executive officer and a director of
Transworld Investment Corporation, a private investment company.
Mr. Halpryn has been a director of Sorrento Therapeutics, Inc., a
biopharmaceutical company, since the September 2009 merger of QuikByte Software,
Inc. and Sorrento Therapeutics, Inc., and served as the chairman of the board,
chief executive officer and president of QuickByte Software from July 2008 to
August 2009. Mr. Halpryn was chairman of the board and chief executive
officer of Orthodontix, Inc., a publicly held corporation, from April 2001
until Orthodontix merged with Protalix BioTherapeutics, Inc. in
December 2006. Mr. Halpryn served as a director of Winston
Pharmaceuticals, Inc., a publicly-held manufacturer of skin creams and
prescription medications for the treatment of pain from the September 2008
merger of Winston Pharmaceuticals and Getting Ready Corporation until May
2010. From December 2006 until such merger, Mr. Halpryn served
as the chairman of the board and chief executive officer of Getting Ready.
Mr. Halpryn served as the chairman of the board, chief executive officer
and president of clickNsettle.com, Inc., a publicly-held shell corporation, from
October 2007 until September 2008, following its merger with Cardo
Medical, LLC. Mr. Halpryn was the president and secretary and a director of
Longfoot Communications Corp., a publicly-held corporation, from March 2008
until its merger with Kidville Holdings, LLC in August 2008.
Mr. Halpryn served as a director of Ivax Diagnostics, Inc., a publicly-held
corporation from October 2002 until October 10, 2008. Since April
2010, Mr. Halpryn has served as a director of CDSI Holdings Inc., an affiliate
of New Valley LLC seeking acquisition or investment
opportunities. Since May 2010, Mr. Halpryn has served as a director
of ChromaDex Corp., a developer of phytochemical and botanical reference
standards and related intellectual property. Since December 2008, Mr. Halpryn
has served as a director of SearchMedia Holdings Ltd. (formerly Ideation
Acquisition Corp.), a China-based billboard and in-elevator advertising company.
Since 2000, Mr. Halpryn has been an investor and the managing member of
investor groups that were joint venture partners in 26 land acquisition and
development projects with one of the largest home builders in the country. In
addition, since 1984, Mr. Halpryn has been engaged in real estate
investment and development activities. From April 1988 to June 1998,
Mr. Halpryn was vice chairman of Central Bank, a Florida state-chartered
bank. Since June 1987, Mr. Halpryn has been the president of, and
beneficial holder of stock of, United Security Corporation, a broker-dealer
registered with FINRA. Mr. Halpryn's pertinent experience, qualifications,
attributes and skills include financial literacy and expertise, managerial
experience and the knowledge and experience he has attained through his services
as a director of publicly-traded corporations.
Richard J. Lampen, 56, has
served as our president and chief executive officer and as a director of our
company since October 2008. Mr. Lampen has served as executive vice
president of Vector Group Ltd. since July 1996. From October 1995 to
December 2005, Mr. Lampen served as the executive vice president and
general counsel and a director of New Valley LLC, now a subsidiary of Vector
Group Ltd. Since September 2006, he has served as president and chief
executive officer of Ladenburg Thalmann Financial Services Inc., the parent of
Ladenburg Thalmann & Co. Inc. Mr. Lampen has served as a director of
Ladenburg Thalmann Financial Services Inc. since January 2002. Since
November 1998, he has served as president and chief executive officer of
CDSI Holdings Inc. Mr. Lampen has served as a director of CDSI Holdings
since January 1997. From May 1992 to September 1995, Mr. Lampen
was a partner at the law firm of Steel Hector & Davis in Miami, Florida.
From January 1991 to April 1992, Mr. Lampen was a Managing
Director at Salomon Brothers Inc, an investment bank, and was an employee at
Salomon Brothers Inc from 1986 to April 1992. Mr. Lampen’s
pertinent experience, qualifications, attributes and skills include his
knowledge and experience in our company attained through his service as a
director and as president and chief executive officer since 2008, his managerial
experience and the knowledge and experience he has attained through his service
as a director of publicly-traded corporations.
Micaela Pallini, Ph.D., 40,
has served as a director of our company since October 2008.
Ms. Pallini has served since May 1997 as a director and the head of
production of I.L.A.R. S.p.A., a producer of alcoholic beverages located in
Rome, Italy and a supplier to the Company under an exclusive marketing
agreement. Ms. Pallini is the daughter of Virgilio Pallini, the President
of I.L.A.R. S.p.A. Ms. Pallini is also a member of the board of directors
of Unione Industriali di Roma, an association of Roman industrial entrepreneurs;
a member of the board of directors and the audit committee of Federvini, the
national association of Italian wine, spirit and liqueur providers; and a Vice
President of B52, a national association for the promotion of women in business
in Italy. Ms. Pallini was engaged in research activities before assuming
her position with I.L.A.R. S.p.A. Ms. Pallini's pertinent experience,
qualifications, attributes and skills include financial expertise and managerial
and industry experience.
Steven D. Rubin, 50, has
served as a director of our company since January 2009. Mr. Rubin has
served as executive vice president — administration since May 2007 and a
director of Opko Health, Inc. since February 2007. Mr. Rubin served as
the senior vice president, general counsel and secretary of IVAX Corporation
from August 2001 until September 2006. Mr. Rubin currently serves
on the board of directors of Dreams, Inc., a vertically integrated sports
licensing and products company, Safestitch Medical, Inc., a medical device
company, SearchMedia Holdings Ltd., PROLOR Biotech, Inc., Neovasc, Inc., a
medical device company, Kidville, Inc., an operator of upscale learning and play
facilities for children, Cardo Medical, LLC, a producer and distributor of
orthopedic and spinal medical devices, and Non-Invasive Monitoring Systems,
Inc., a medical device company. Mr. Rubin's pertinent experience,
qualifications, attributes and skills include his experience as a practicing
lawyer, general counsel and board member to multiple publicly-traded
corporations.
6
Dennis Scholl, 54, has served
as a director of our company since September 2009. Since
September 2003, Mr. Scholl has served as co-founder and managing
member of Betts & Scholl, LLC, a premium wine maker; we acquired the assets
of Betts & Scholl in September 2009. Since April 2010, Mr. Scholl
has served as Vice President of Arts of the John S. and James L. Knight
Foundation, a charitable foundation, and served as Miami Program Director of the
Knight Foundation from February 2009 until April 2010. Since
September 1987, Mr. Scholl has been founder and vice president of
Morada Ventures, a firm engaged in real estate development and venture capital
investment in the technology and pharmaceutical industries. Mr. Scholl's
pertinent experience, qualifications, attributes and skills include financial
expertise and managerial and industry experience.
Executive
Officers
Our
executive officers serve until the appointment and qualification of their
successors or until their earlier death, resignation or removal by our board of
directors. The following table lists the name, age and position of our executive
officers:
Name
|
Age
|
Position
|
||
Richard
J. Lampen
|
56
|
President
and Chief Executive Officer
|
||
John
S. Glover
|
55
|
Chief
Operating Officer
|
||
T.
Kelley Spillane
|
47
|
Senior
Vice President — U.S. Sales
|
||
Alfred
J. Small
|
41
|
Senior
Vice President, Chief Financial Officer, Treasurer &
Secretary
|
Listed
below are biographical descriptions of our current executive officers. For Mr.
Lampen’s information, see the description under "Directors"
above.
John S.
Glover, our chief operating officer, joined us in February 2008.
From February 20, 2008 to October 11, 2008, Mr. Glover served as
our senior vice president — marketing. From June 2006 to
February 2008, Mr. Glover served as senior vice president - commercial
management of Remy Cointreau USA. From January 2001 to June 2006,
Mr. Glover served in various management positions at Remy Cointreau in the
United States and France. From January 1999 to January 2001, he was a
managing director and chief marketing officer for Bols Royal Distilleries in the
Netherlands.
T. Kelley
Spillane, our senior vice president — U.S. sales, joined us in
April 2000. From April 2000 to December 2003, Mr. Spillane
served as vice president-sales of Great Spirits Company, and was appointed
executive vice president — U.S. sales in December 2003. Prior to joining
us, Mr. Spillane worked at Carillon Importers Limited, a division of Grand
Metropolitan PLC. Carillon developed and launched Absolut Vodka and Bombay
Sapphire Gin. At Carillon, Mr. Spillane served as assistant manager for its
control states and duty free divisions and was promoted to director of special
accounts, focusing on expanding sales in national accounts.
Alfred J.
Small, our senior vice president, chief financial officer, secretary and
treasurer assumed his current position in January 2009. From
November 2007 until January 2009, Mr. Small served as senior vice president
and chief financial officer and previously had served as our vice
president-controller since March 2007 and our principal accounting officer since
October 2006. Mr. Small joined us in October 2004. From
February 1999 until October 2004, Mr. Small served in various
accounting roles, including senior accountant at Grodsky Caporrino &
Kaufman, CPA PC. Mr. Small is a certified public accountant.
Section 16(a) Beneficial
Ownership Reporting Compliance
Section 16(a)
of the Securities Exchange Act of 1934, as amended, requires our officers,
directors and persons who beneficially own more than ten percent of our common
stock to file reports of ownership and changes in ownership with the SEC. These
reporting persons are also required to furnish us with copies of all Section
16(a) forms they file. To our knowledge, based solely on our review of the
copies of these forms furnished to us and representations made to us that no
other reports were required, we are not aware of any late or delinquent filings
required under Section 16(a) with respect to the fiscal year ended
March 31, 2010.
7
Corporate Governance
Guidelines
Our board
of directors has adopted a code of business conduct, which applies to all of our
directors, executive officers and employees. The code of business conduct sets
forth our commitment to conduct our business in accordance with the highest
standards of business ethics and to promote the highest standards of honesty and
ethical conduct by our directors, executive officers and
employees. Our code of conduct is posted on our investor relations
web site at http:/investor.castlebrandsinc.com. We
intend to post amendments to, or waivers from a provision of, our code of
business conduct that apply to our principal executive officer, principal
financial officer or persons performing similar functions on our web
site.
Shareholder
Nominations
There
have been no material changes to the procedures by which security holders may
recommend nominees to our board of directors.
Audit
Committee Information
Our board
has a separately-designated standing audit committee established in accordance
with section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended.
Messrs. Beinstein (Chair), Halpryn and Rubin comprise our audit committee.
Our board of directors has determined that each member of the audit committee is
an independent director and is financially literate as required by the
applicable rules of NYSE Amex and the SEC. The audit committee is responsible
for, among other things:
•
|
appointing,
replacing overseeing and compensating the work of our independent
registered public accounting
firm;
|
•
|
reviewing
and discussing with management and our independent registered public
accounting firm our quarterly financial statements and discussing with
management our earnings
releases;
|
•
|
pre-approving
all auditing services and permissible non-audit services provided by our
independent registered public accounting
firm;
|
•
|
engaging
in a dialogue with our independent registered public accounting firm
regarding relationships that may adversely affect the independence of the
independent registered public accounting firm and, based on such review,
assessing the independence of our independent registered public accounting
firm;
|
•
|
providing
the audit committee report to be filed with the SEC in our annual proxy
statement;
|
•
|
reviewing
with our independent registered public accounting firm the adequacy and
effectiveness of the internal controls over our financial
reporting;
|
•
|
establishing
procedures for the receipt, retention and treatment of complaints
regarding accounting, internal accounting controls or auditing matters,
including the confidential anonymous submission by our employees of
anonymous concerns regarding questionable accounting or auditing
matters;
|
•
|
reviewing
and pre-approving related-party
transactions;
|
•
|
reviewing
and discussing with management and our independent registered public
accounting firm management’s annual assessment of the effectiveness of the
internal controls and our independent registered public accounting firm’s
attestation and report about management’s assessment as required by the
SEC, when applicable;
|
•
|
reviewing
and discussing with management and our independent registered public
accounting firm the adequacy and effectiveness of our internal controls
including any significant deficiencies in the design or operation of our
internal controls or material weaknesses and any fraud, whether or not
material, that involves our management or other employees who have a
significant role in our internal controls and the adequacy and
effectiveness of our disclosure controls and procedures;
and
|
8
•
|
reviewing
and assessing annually the adequacy of the audit committee
charter.
|
Our audit
committee charter is posted on our investor relations website at http://investor.castlebrandsinc.com.
Financial
Expert on Audit Committee
Our board
of directors has determined that Henry C. Beinstein is our “audit committee
financial expert” (as defined in Item 407(d)(5) of Regulation S-K) and is
an “independent” director under applicable NYSE Amex rules.
Item 11.
|
Executive
Compensation
|
Compensation
Overview
Introduction
We are a
“smaller reporting company” as such term is defined in Rule 405 of the
Securities Act and Item 10 of Regulation S-K. Accordingly, and in
accordance with relevant SEC rules and guidance, we have elected, with respect
to the disclosures required by Item 402 (Executive Compensation) of
Regulation S-K, to comply with the disclosure requirements applicable to
smaller reporting companies.
Summary
Compensation Table
The
following table shows the compensation paid to our officers listed below ("Named
Executive Officers") for our 2010 and 2009 fiscal years.
Name
and Principal Position
|
Year
|
Salary ($)
|
Bonus($)
|
Stock
Awards(1)($)
|
Option
Awards(1)($)
|
All
Other
Compensation
($)
|
Total($)
|
||||||||||||
Richard J. Lampen
(2)
|
2010
|
—
|
—
|
—
|
29,979
|
—
|
29,979
|
||||||||||||
President
and chief executive officer
|
2009
|
—
|
—
|
—
|
5,667
|
—
|
5,667
|
||||||||||||
John
Glover
|
2010
|
262,500
|
35,000
|
35,714
|
936
|
334,150
|
|||||||||||||
Chief
operating officer
|
2009
|
255,871
|
35,000
|
6,696
|
51,052
|
192(3)
|
348,811
|
||||||||||||
|
|||||||||||||||||||
T.
Kelley Spillane
|
2010
|
252,537
|
30,000
|
(4)
|
35,714
|
655
|
1,415(4)
|
320,321
|
|||||||||||
Senior
vice president – U.S.
Sales
|
2009
|
252,537
|
61,296
|
6,696
|
34,493
|
2,922(5)
|
357,944
|
(1)
|
Represents
the aggregate grant date fair value of stock-based compensation granted
for fiscal 2010 and 2009 as determined in accordance with FASB ASC Topic
718, rather than an amount paid to or realized by the named executive
officer. Assumptions used in the calculation of such amount are included
in note 13 to our audited financial statements for the year ended
March 31, 2010 included in our Original
10-K.
|
(2)
|
Mr.
Lampen was appointed president and chief executive office in October
2008. Mr. Lampen does not receive a salary of benefits from us
in connection with his service. Instead, we are party to a
management services agreement with Vector Group Ltd., a more than 5%
shareholder, under which Vector Group agreed to make available to us Mr.
Lampen's services. For a discussion of this agreement, see
"Item 13 -Certain
Relationships and Related Transactions, and Director Independence –
Agreement with Vector Group
Ltd."
|
9
(3)
|
Represents
interest on the promissory note issued in lieu of a cash bonus payment
which bore interest at an annual rate of 4.5%, and accrued from
June 19, 2008 through the October 2008 payment date following
the closing of the sale of the series A convertible preferred
stock.
|
(4)
|
Represents
life insurance premiums paid by us for the benefit of Mr.
Spillane.
|
(5)
|
Represents
life insurance premiums paid by us for the benefit of Mr. Spillane and
interest on the promissory note issued in lieu of a cash bonus payment as
described in note 3 to this table.
|
Narrative Disclosure to Summary
Compensation Table
Material Terms of
Named Executive Officers’ Employment Agreements
The
material terms of Messrs. Glover's and Spillane's employment agreements are
described in the table below. Mr. Lampen, our president and chief
executive officer, does not receive a salary or benefits from us in connection
with his service. Instead, we are party to a management services
agreement with Vector Group Ltd., a more than 5% shareholder, under which Vector
Group agreed to make available to us Mr. Lampen's services. For a
discussion of this agreement, see "Item 13 - Certain Relationships and Related
Transactions, and Director Independence – Agreement with Vector Group
Ltd."
Certain Material Terms of Employment
Agreements with Named Executive Officers
Named Executive Officers
|
Date of
Agreement
|
Current
Annual
Base Salary
(1)
|
Performance
Bonus
(as
Percentage
of
Annual
Base
Salary
Unless
Otherwise
Indicated)
|
Number
of
Options
Granted
upon
Execution
of
Agreement
|
Duration of
Severance
Payments(2)
|
|||||||||
Richard
J. Lampen
|
—
|
—
|
—
|
—
|
—
|
|||||||||
John
Glover
|
1/24/2008
|
$
|
265,000
|
Up
to 60%
|
60,000
|
(3)
|
12
months
|
|||||||
T.
Kelley Spillane
|
5/6/2010
|
252,537
|
(4)
|
—
|
12
months
|
(1)
|
Increases
are at the compensation committee’s
discretion.
|
(2)
|
Please
see "-Potential
Payments Upon Termination or Change in Control" below for a full
description of these severance
obligations.
|
(3)
|
Stock
options granted in fiscal 2008 with an exercise price of $1.90 per
share.
|
(4)
|
Mr.
Spillane’s employment contract calls for him to receive performance
bonuses at the discretion of our Compensation Committee, with no specific
percentage.
|
Annual
Incentives to Named Executive Officers
We paid
Mr. Glover and Mr. Spillane aggregate cash bonuses of $35,000 and $30,000 for
fiscal 2010. Mr. Spillane received a retention payment under an
outstanding retention agreement in fiscal 2009 of $61,296. In fiscal 2009, we
redeemed promissory notes that we issued to Messrs. Glover and Spillane in lieu
of fiscal 2008 cash bonus payments. Theses bonus and retention
payments are included in the summary compensation table above under the heading
"Bonus." Interest under the notes issued in lieu of fiscal 2008 cash
bonus payments is included in such table under the heading "All Other
Compensation."
10
Long-Term
Equity-Based Incentive Awards
Outstanding Equity Awards at 2010
Fiscal Year-End
Option
Awards
|
Stock
Awards
|
||||||||||||||||||||
Name
and Principal Position
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Equity
Incentive
Plan
Awards:
Number
of
shares
or
units
of
stock
that
have
not
vested
(#)
|
Equity
Incentive Plan
Awards:
Market
value
of
shares
or
units
of
stock
that
have
not
vested
($)
|
|||||||||||||||
Richard
J. Lampen
|
250,000
|
750,000(1)
|
0.35
|
11/3/2018
|
—
|
—
|
|||||||||||||||
John
Glover
|
60,000
|
—
|
1.90
|
1/24/2018
|
107,143(2)
|
25,714
|
|||||||||||||||
15,400
|
—
|
0.21
|
6/9/2018
|
—
|
—
|
||||||||||||||||
—
|
50,000(3)
|
0.35
|
6/22/2019
|
—
|
—
|
||||||||||||||||
T.
Kelley Spillane
|
60,000
|
—
|
6.00
|
1/9/2014
|
107,143(2)
|
25,714
|
|||||||||||||||
5,000
|
—
|
8.00
|
1/27/2015
|
—
|
—
|
||||||||||||||||
7,500
|
—
|
7.23
|
6/12/2016
|
—
|
—
|
||||||||||||||||
33,900
|
—
|
0.21
|
6/9/2018
|
—
|
—
|
||||||||||||||||
—
|
35,000(3)
|
0.35
|
6/22/2019
|
—
|
—
|
(1)
|
This
option vests in three equal annual installments beginning on January 21,
2011.
|
(2)
|
This
restricted stock grant vests on February 11,
2011.
|
(3)
|
This
option vests in four equal annual installments with the first installment
vesting on June 22, 2011.
|
Timing of Equity
Grants
For all
of our employees, including our named executive officers, grants of equity-based
compensation are effective on the date that our compensation committee approves
them. All stock option grants to employees, including named executive officers,
are made with an exercise price at least equal to the fair market value of the
underlying stock on the grant date. Our compensation committee does not grant
equity compensation awards in anticipation of the release of material nonpublic
information. Similarly, we do not time the release of material nonpublic
information based on equity award grant dates.
Severance and
Change in Control Benefits
We
provide certain severance and change in control benefits to our named executive
officers. You can find detailed information about these benefits
below.
Perquisites and
Other Benefits
We
generally provide the same health and welfare benefits to all of our full-time
employees, including our named executive officers, including health and dental
coverage, disability insurance, and paid holidays and other paid time
off.
11
We
maintain a 401(k) retirement savings plan for the benefit of all of our
full-time employees, including our named executive officers.
Indemnification
Our
articles of incorporation and bylaws require us to indemnify our directors and
officers to the fullest extent permitted by Florida law. We also have entered
into indemnity agreements with each of our directors and named executive
officers.
Risk Considerations in
our Compensation Programs
We have
reviewed our compensation structures and policies as they pertain to risk and
have determined that our compensation programs do not create or encourage the
taking of risks that are reasonably likely to have a material adverse effect on
our company.
Material Tax
Implications of Our Compensation Policy
Section 162(m)
of the Internal Revenue Code of 1986, as amended, limits the deductibility on
our tax return of compensation over $1 million to any of our named
executive officers unless, in general, the compensation is paid under a plan
which is performance-related, non-discretionary and has been approved by our
shareholders. Our compensation committee’s policy with respect to section 162(m)
is to make every reasonable effort to ensure that compensation is deductible to
the extent permitted while simultaneously providing our executives with
appropriate compensation for their performance. We did not pay any compensation
during fiscal 2010 that would be subject to the limitations set forth in section
162(m).
Potential Payments Upon Termination
or Change in Control
The
following describes the potential payments upon termination or a change in
control for our named executive officers.
Retention
Arrangements
In
January 2008, our compensation committee agreed to pay specified retention
payments to various named executive officers on April 30, 2008 (later
amended to May 1, 2008) and September 30, 2008. The retention payments
were based on the continued employment of such executive officers. Under these
agreements, Mr. Spillane received an aggregate retention payment of
$61,296.
On
July 15, 2008, we entered into written retention agreements with various
named executive officers to incentivize such executive officers to remain in our
employment up to and following a “control event” as defined in the retention
agreements. The retention agreements provide that if, on the 60th calendar day
following the first “control event” following July 15, 2008, we continue to
employ the executive officer in any capacity, then we will pay to the executive
officer certain amounts. The October 20, 2008 closing of the series A
convertible preferred stock transaction constituted a “control event” under the
retention agreements as it was a financing with gross proceeds to us of at least
$10,000,000. In December 2008, we entered into agreements with certain
executive officers to provide for payment of these retention amounts in the form
of restricted common stock instead of cash. Under their respective agreements,
Messrs. Glover and Spillane each received 214,286 shares of restricted
common stock.
Termination
Without Cause
Under
employment agreements with each of Messrs. Glover and Spillane, if we
terminate the executive’s employment without “cause,” we have agreed to pay the
executive his annual base salary and a pro-rated bonus, and provide benefits to
maintain medical insurance, for 12 months following
termination.
12
Also, if
we terminate Mr. Glover's or Mr. Spillane's employment without “cause,”
then such officer is entitled to accelerated vesting or other treatment of some
or all of the stock options granted to such executive under the terms of such
executive’s employment agreement.
For
Mr. Glover, the vesting of any options held accelerates with respect to the
number of shares of our common stock that equals (x) the number of shares
that would have vested during the 12 months following termination,
multiplied by (y) a fraction, the numerator of which is the number of full
calendar months that have elapsed since the last vesting date or the original
issue date (if a vesting date has not occurred) and the denominator of which is
the number of full calendar months from the last vesting date or the original
issue date (if a vesting date has not occurred) to the vesting date during the
12 months following termination. For Mr. Spillane, any unvested
options that would have become vested if his employment continued during the 12
month period following his termination will become vested at the end of such 12
month period and will be exercisable for a period of two years after
termination.
For
Mr. Glover, “cause” is defined as (i) personal dishonesty,
(ii) willful misconduct, (iii) breach of fiduciary duty,
(iv) failure to substantially perform assigned duties relating to his
performance under his agreement, (v) conviction or entry of any plea of
guilty or nolo contendre to any felony or other lesser crime that would require
removal from his position with us (e.g. any alcohol or drug related misdemeanor)
or (vi) material breach of any provision of his employment agreement for a
period of 15 days after written demand by us.
For
Mr. Spillane, “cause” is defined as (i) personal dishonesty,
(ii) willful misconduct, (iii) breach of fiduciary duty,
(iv) failure to substantially perform assigned duties relating to his
performance under his agreement (other than due to becoming disabled) as
reasonably determined by our board or (v) any willful violation of any law, rule
or regulation (other than traffic violations or similar offenses) or material
breach of his employment agreement as reasonably determined by our
board.
Non-Renewal of
Employment Agreement
If we do
not renew either Mr. Glover's or Mr. Spillane’s employment agreement, each is
entitled to receive his annual base salary and medical benefits for six months
and a pro-rata share of his annual incentive bonus.
Termination Due
to Disability
The
employment agreements of Messrs. Glover and Spillane each provide that, in each
case, if we terminate such executive due to a “disability,” we must pay such
executive his annual base salary for a period of one year following the date of
termination, minus any other disability benefits provided by us to the executive
during this period, plus a pro-rated bonus for the year in which the termination
occurs. For each of Messrs. Glover and Spillane, a “disability” is
defined in his employment agreement as a failure, because of illness or
incapacity, to perform the duties of his employment for six months.
Termination by
Employee with Good Reason
Each of
Messrs. Glover's and Spillane's employment agreements provides that if he
terminates his employment for “good reason,” we must pay the executive his
annual base salary for a period of one year following the date of
termination.
For
Mr. Glover, “good reason” means a termination of his employment within 30
days after (i) a material diminution in nature, title or status of his
responsibilities, (ii) dissolution or divestiture of all or a significant
portion of our assets or another material change to us that would materially
adversely diminish the nature, title or status of his job responsibilities,
(iii) a relocation of his principal place of work to a location of more than 50
miles from our current office or (iv) our failure to perform any obligation
under his employment agreement for a period of 15 days following written
notice by him. For Mr. Spillane, "good reason" means a termination of
his employment within 30 days after (i) a material diminution in nature or
status of his responsibilities, (ii) dissolution or divestiture of all or a
significant portion of our assets or another material change to us that would
materially adversely diminish the nature or status of his job responsibilities
or (iii) our material breach of any provision under his employment agreement
which is not cured within 15 business days following written notice by
him.
13
Any
severance payments described above under “Termination Without Cause,”
“Non-Renewal of Employment
Agreement,” “Termination of Employment Due to
Disability” and “Termination by Employee with Good
Reason” are in consideration of the non-compete provisions contained in
each named executive officer’s employment agreement.
Each of
Messrs. Glover and Spillane is prohibited from, during the term of his
employment and for 12 months thereafter, (1) competing with us,
(2) soliciting our employees and (3) soliciting our
customers.
Change in
Control
If there
is a “change of control” during the term of a named executive officer’s
employment agreement, then such named executive officer is entitled to immediate
vesting and settlement of all stock options granted to the named executive
officer under our 2003 Stock Incentive Plan, as amended.
If Mr.
Glover is terminated following or in connection with a “change of control” of
our company (as defined for each executive below), then he will continue to be
paid an amount equal to his base salary for a period of two years and is
entitled to continue his benefits for 24 months following a termination of
employment following, or in connection with, a “change of control.”
For
Messrs. Glover and Spillane, a “change of control” is defined as
(i) any person becoming the beneficial owner of 35% or more of our
outstanding voting stock, other than directly from us; (ii) a merger or
consolidation of our company where 49% or more of the voting stock of the
surviving company is held by persons other than our former shareholders;
(iii) during any period of two consecutive years, individuals who at the
beginning of such period were members of our board of directors cease to
constitute at least a majority thereof (unless the appointment, election, or the
nomination for election by our shareholders, of each new director was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period); or (iv) a sale or disposal of
substantially all of our assets to an outside entity or
entities. Subclause (i) of the prior sentence will not apply to any
acquisition of our securities by Dr. Phillip Frost, any member of his immediate
family, any "person" or "group" (as used in Section 13(d)(3) of the Exchange
Act) that is controlled by Dr. Frost or any member of his immediate family, any
beneficiary of the estate of Dr. Frost, or any trust, partnership; corporate or
other entity controlled by any of the foregoing.
The
closing of the October 2008 series A convertible preferred stock
transaction did not constitute a “change of control” under any employment
agreement with a named executive officer.
The
following table lists for each named executive officer the estimated potential
severance payments and benefits that would be provided, if each listed
termination circumstance occurred on March 31, 2009.
14
Benefit
of
|
||||||||||||
Acceleration
|
||||||||||||
Estimated
|
of
Vesting
|
|||||||||||
Severance
|
Value
of
|
of
Stock
|
||||||||||
Named Executive Officer
|
Payment
|
Benefits(1)
|
Awards(2)
|
|||||||||
Richard
J. Lampen
|
||||||||||||
Termination
without cause/for good reason
|
—
|
—
|
—
|
|||||||||
Non-renewal
of employment agreement
|
—
|
—
|
—
|
|||||||||
Termination
due to disability
|
—
|
—
|
—
|
|||||||||
Change
in control
|
—
|
—
|
—
|
|||||||||
John
Glover
|
||||||||||||
Termination
without cause/for good reason
|
$
|
262,500
|
(3)
|
$
|
12,534
|
$ |
25,714
|
|||||
Non-renewal
of employment agreement
|
$
|
131,250
|
(3)
|
$
|
6,267
|
N/A
|
||||||
Termination
due to disability
|
$
|
262,500
|
(3)
|
N/A
|
$ |
25,714
|
||||||
Change
in control
|
$
|
525,000
|
(3)(4)
|
$
|
25,068
|
$ |
25,714
|
|||||
T.
Kelley Spillane
|
||||||||||||
Termination
without cause/for good reason
|
$
|
252,537
|
(3)
|
N/A
|
$ |
25,714
|
||||||
Non-renewal
of employment agreement
|
$
|
126,269
|
$
|
9,242
|
N/A
|
|||||||
Termination
due to disability
|
$
|
252,537
|
(3)
|
N/A
|
$ |
25,714
|
||||||
Change
in control
|
N/A
|
N/A
|
$ |
25,714
|
(1)
|
Estimated
using the value of COBRA payments at the rates in effect on March 31,
2010.
|
(2)
|
The
estimated amount of benefit was calculated by multiplying the number of
options that would accelerate vesting upon the termination circumstance
indicated by the difference between the closing price of our common stock
on March 31, 2010, which was $0.24 and the exercise price of the
stock option or the par value of the restricted stock, as
applicable. This column shows no benefit for Mr. Lampen since
the exercise price for his stock options was above the closing price of
our common stock at March 31, 2010. This column shows a benefit
for each of Messrs. Glover and Spillane due to the accelerated vesting of
restricted stock awards granted to each such executive
officer.
|
(3)
|
Severance
payments would be paid out over the duration of the severance
period.
|
(4)
|
Severance
and benefits paid only if a change in control is followed by Mr. Glover’s
termination.
|
DIRECTOR
COMPENSATION
The
following table summarizes compensation paid to directors during our 2010 fiscal
year.
Fiscal 2010 Director
Compensation
Fees
|
Option
|
|||||||||||
Earned
|
Awards($)(1)
|
|||||||||||
or Paid
in
|
(Includes
Prior
|
|||||||||||
Name
|
Cash ($)
|
Fiscal
Years)
|
Total ($)
|
|||||||||
Mark
Andrews (2)
|
— | — | — | |||||||||
John
Beaudette (3)
|
12,500 | 1,180 | (3) | 13,680 | ||||||||
Henry
C. Beinstein (4)
|
17,500 | 3,578 | (4) | 21,078 | ||||||||
Harvey
P. Eisen (5)
|
15,000 | 3,578 | (5) | 18,578 | ||||||||
Phillip
Frost, M.D.
(6)
|
10,000 | 4,178 | (6) | 14,178 | ||||||||
Glenn
L. Halpryn(7)
|
17,500 | 4,178 | (7) | 21,678 | ||||||||
Richard
J. Lampen(8)
|
— | — | (8) | — | ||||||||
Micaela
Pallini(9)
|
10,000 | 4,178 | (9) | 14,178 | ||||||||
Steven
D. Rubin(10)
|
20,000 | 3,578 | (10) | 23,578 | ||||||||
Dennis
Scholl(11)
|
5,222 | 2,698 | (11) | 7,920 |
(1)
|
Represents
aggregate grant date fair value of stock options granted for 2010 fiscal
year as determined in accordance with FASB ASC Topic 718, rather than an
amount paid to or realized by the director. Assumptions used in the
calculation of such amount are included in note 13 to our audited
financial statements for the year ended March 31, 2010 included in
our Original 10-K.
|
(2)
|
Mr. Mark
Andrews, our chairman, receives an annual salary of
$100,000. We do not pay any additional compensation for his
services as a director.
|
(
(3)
|
As
of March 31, 2010, Mr. Beaudette held options to purchase 71,500 shares of
our common stock.
|
(4)
|
As
of March 31, 2010, Mr. Beinstein held options to purchase 120,000 shares
of our common stock.
|
15
(5)
|
As
of March 31, 2010, Mr. Eisen held options to purchase 120,000 shares of
our common stock.
|
(6)
|
As
of March 31, 2010, Dr. Frost held options to purchase 140,000 shares of
our common stock.
|
(7)
|
As
of March 31, 2010, Mr. Halpryn held options to purchase 140,000 shares of
our common stock.
|
(8)
|
Mr. Lampen,
our president and chief executive officer, receives no additional
compensation for his services as a director. For a description
of equity compensation granted to Mr. Lampen, please see the "Summary
Compensation Table" above.
|
(9)
|
As
of March 31, 2010, Ms. Pallini held options to purchase 140,000 shares of
our common stock.
|
(10)
|
As
of March 31, 2010, Mr. Rubin held options to purchase 120,000 shares of
our common stock.
|
(11)
|
As
of March 31, 2010, Mr. Scholl held options to purchase 120,000 shares of
our common stock.
|
Our
board of directors believes that compensation for our non-employee directors
should be a combination of cash and equity-based compensation. Employee
directors are not paid for their service on the board of directors in addition
to their compensation as employees.
In
December 2008, effective with the 2008 annual meeting, our board of
directors approved the payment of annual compensation of our non-employee
directors comprised of cash and options granted under the 2003 Stock Incentive
Plan, as amended, as set forth in the following table:
Type of Compensation
|
Amount
|
|||
Annual
director retainer (paid quarterly)
|
$ |
10,000
|
||
Additional
annual retainer for committee participants, except chairs (paid
quarterly)
|
$ |
2,500
|
||
Additional
annual retainer for committee chairs (paid quarterly)
|
$ |
5,000
|
||
Option
to purchase shares of our common stock upon initial
election
|
100,000
shares
|
|||
Additional
options to purchase shares of our common stock for board service (per
director, per year)
|
20,000
shares
|
|||
Reimbursement
of expenses related to board attendance
|
Reasonable
expenses
reimbursed
as incurred
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
Share
Ownership
The table
below shows the number of common shares beneficially owned as of July 23, 2010
by (i) those persons or groups known to beneficially own more than 5% of
our common stock, (ii) each of our directors, (iii) each executive
officer named in the Summary Compensation Table above and (iv) all
directors and executive officers as a group. Percentage of beneficial
ownership is based on 107,202,145 shares of common stock outstanding as of July
23, 2010.
16
Beneficial ownership of our common stock
|
||||||
Shares
of
|
||||||
Common
|
||||||
Stock
|
Percentage
|
|||||
Beneficially
|
Beneficially
|
|||||
Name and Address of Beneficial
Owner
|
Owned
|
Owned
|
||||
Phillip
Frost, M.D. and related entities (1)
|
||||||
4400
Biscayne Blvd., 15th
Floor
|
||||||
Miami,
FL 33137
|
33,249,921
|
31.0
|
%
|
|||
Vector
Group Ltd. (2)
|
||||||
100
S.E. Second Street
|
||||||
Miami,
FL 33131
|
11,428,576
|
10.7
|
%
|
|||
I.L.A.R.
S.p.A (3)
|
||||||
via
Tiburtina, 1314,
|
||||||
00131
Roma, Italy
|
8,571,432
|
8.0
|
%
|
|||
Lafferty
Limited (4)
|
||||||
c/o
Mr. Warren Roiter
|
||||||
Woodberry
Associates Ltd.
|
||||||
3rd
Floor
|
||||||
52
Conduit Street
|
||||||
London
W1S 2YX, England
|
6,499,815
|
6.1
|
%
|
|||
Mark
Andrews (5)
|
3,050,237
|
2.8
|
%
|
|||
John
Beaudette (6)
|
50,746
|
*
|
||||
Henry
C. Beinstein (7)
|
25,000
|
*
|
||||
Harvey
P. Eisen (8)
|
25,000
|
*
|
||||
John
S. Glover (9)
|
195,043
|
0.2
|
%
|
|||
Glenn
L. Halpryn (10)
|
2,887,144
|
2.7
|
%
|
|||
Richard
J. Lampen (11)
|
511,501
|
0.5
|
%
|
|||
Micaela
Pallini (12)
|
30,000
|
*
|
||||
Steven
D. Rubin (13)
|
26,000
|
*
|
||||
Dennis
Scholl
|
3,571,429
|
3.3
|
%
|
|||
T.
Kelley Spillane (14)
|
251,570
|
0.2
|
%
|
|||
All
directors and executive officers as a group (13 persons) (15)
|
43,999,941
|
41.04
|
%
|
*
|
Less
than one percent
|
|
(1)
|
This
information has been derived from a Schedule 13D, as amended, filed
with the SEC on July 6, 2010. Includes 207,000 shares of common stock
issuable upon exercise of options and warrants exercisable within
60 days of July 23, 2010, including 137,000 shares of common stock
issuable upon exercise of warrants exercisable within 60 days as of
July 23, 2010 that are held by the Frost Nevada Investments Trust, an
entity of which Dr. Frost is the trustee. Frost-Nevada L.P. is the
sole and exclusive beneficiary of Frost Nevada Investments Trust.
Dr. Frost is one of five limited partners of Frost-Nevada L.P. and
the sole shareholder of Frost-Nevada Corporation, the sole general partner
of Frost Nevada L.P. Also includes 9,370,790 shares of common stock held
by Frost Nevada Investments Trust. Dr. Frost disclaims beneficial
ownership of the shares underlying the warrants and the shares held by the
Frost Nevada Investments Trust except to the extent of his pecuniary
interest. Includes 23,072,355 shares of common stock held by Frost Gamma
Investments Trust, of which Dr. Frost is the trustee. Frost Gamma
Limited Partnership is the sole and exclusive beneficiary of Frost Gamma
Investments Trust. Dr. Frost is one of two limited partners of Frost
Gamma Limited Partnership. The general partner of Frost Gamma Limited
Partnership is Frost Gamma, Inc., and the sole shareholder of Frost Gamma,
Inc. is Frost-Nevada Corporation. Dr. Frost is also the sole
shareholder of Frost- Nevada Corporation. Dr. Frost disclaims
beneficial ownership of these shares except to the extent of his pecuniary
interest.
|
|
(2)
|
This
information has been derived from a Schedule 13D filed with the SEC
on October 23, 2008. Excludes 260,501 shares of common stock
beneficially owned by Richard J. Lampen, the executive vice president of
Vector Group, and a director and the president and chief executive officer
of our company, and 250,000 shares of common stock issuable upon exercise
of options held by Mr. Lampen that are exercisable within 60 days of
July 23, 2010. Also excludes 25,000 shares of common stock issuable upon
the exercise of options held by Henry C. Beinstein, a director of our
company, who is a director of Vector
Group.
|
17
(3)
|
This
information has been derived from a Schedule 13D filed with the SEC
on October 23, 2008. Includes 8,571,432 shares of common stock held
by I.L.A.R. S.p.A. Excludes 214,412 shares of common stock owned by
Virgilio Pallini, an officer and director of, and holder of shareholder
voting rights in, I.L.A.R. S.p.A., as to which I.L.A.R. S.p.A. disclaims
beneficial ownership pursuant to Rule 13d-4.
|
|
(4)
|
This
information has been derived from a Schedule 13D filed with the SEC
on November 3, 2008. Includes 5,808,574 shares of common stock held
by Lafferty Limited. Includes 32,500 shares of common stock issuable upon
exercise of warrants exercisable within 60 days of July 24, 2009.
Azure Limited, as the sole director of Lafferty Limited, determines the
manner in which the securities held by Lafferty Limited are voted and
disposed of by Lafferty Limited.
|
|
(5)
|
Includes
1,183,079 shares of common stock held by Knappogue Corp. Knappogue Corp.
is controlled by Mr. Andrews and his family. Mr. Andrews
disclaims beneficial ownership of these shares, except to the extent of
his pecuniary interest. Also includes 150,000 shares of common stock
issuable upon exercise of options exercisable within 60 days of July
24, 2009, 811,644 shares of common stock held by Mr. Andrews, 750,626
shares of common stock held jointly by Mr. Andrews’ with his
wife.
|
|
(6)
|
Includes
9,246 shares of common stock held by BPW Holdings LLC, an entity of which
Mr. Beaudette is a principal stockholder. Mr. Beaudette disclaims
beneficial ownership of these shares except to the extent of his pecuniary
interest. Also includes 41,500 shares of common stock issuable upon
exercise of options exercisable within 60 days of July 23,
2010.
|
|
(7)
|
Includes
25,000 shares of common stock issuable upon exercise of options
exercisable within 60 days of July 23, 2010.
|
|
(8)
|
Includes
25,000 shares of common stock issuable upon exercise of options
exercisable within 60 days of July 23, 2010.
|
|
(9)
|
Includes
87,900 shares of common stock issuable upon exercise of options
exercisable within 60 days of July 23, 2010.
|
|
(10)
|
Includes
2,857,144 shares of common stock held by Halpryn Group IV, LLC, of which
Mr. Halpryn is a member. Mr. Halpryn disclaims beneficial ownership
of these securities, except to the extent of any pecuniary interest
therein. Also includes 30,000 shares of common stock issuable upon
exercise of options exercisable within 60 days of July 23,
2010.
|
|
(11)
|
Includes
261,501 shares of common stock held by Richard J. Lampen and 250,000
shares of common stock issuable upon exercise of options exercisable
within 60 days of July 23, 2010. Excludes 30,036 shares of common
stock issuable upon exercise of warrants held by Ladenburg Thalmann &
Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc., of
which Mr. Lampen is a director and executive officer.
|
|
(12)
|
Includes
30,000 shares of common stock issuable upon exercise of options
exercisable within 60 days of July 23, 2010. Excludes
(i) 8,571,432 shares of common stock held by I.L.A.R. S.p.A, of which
Ms. Pallini is an officer, and (ii) 214,412 shares of common
stock owned by Virgilio Pallini, Ms. Pallini’s father, as to which
she disclaims beneficial ownership pursuant to
Rule 13d-4.
|
18
(13)
|
Includes
25,000 shares of common stock issuable upon exercise of options
exercisable within 60 days of July 23, 2010.
|
|
(14)
|
Includes
115,150 shares of common stock issuable upon exercise of options
exercisable within 60 days of July 23, 2010.
|
|
(15)
|
Includes
860,900 shares of common stock issuable upon exercise of options, and
177,000 shares of common stock issuable upon exercise of warrants, in each
case exercisable within 60 days of July 23,
2010.
|
Equity
Compensation Plan Information
The
following table sets forth information at March 31, 2010 regarding
compensation plans under which our equity securities are authorized for
issuance.
Plan category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants, restricted
stock and rights
|
Weighted-average
exercise price of
outstanding options,
warrants, restricted
stock and rights
|
Number of securities
remaining available for future
issuance under equity
compensation plans
|
|||||||||
Equity
compensation plans approved by security holders
|
5,685,286 | $ | 3.08 | 8,331,528 | ||||||||
Equity
compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
5,685,286 | $ | 3.08 | 8,331,528 |
Item 13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
Series A Preferred Stock
Purchase Agreement
Phillip
Frost, M.D., one of our directors and our principal shareholder, controls Frost
Gamma Investments Trust, which purchased $4,965,000 of our series A convertible
preferred stock in October 2008, and advanced $2,000,000 to us under a
promissory note we issued to Frost Gamma Investments Trust, as described in
"Loans from Certain Executive
Officers, Directors and Stockholders" section of this Item 13. Prior to
the execution of the series A preferred stock purchase agreement,
affiliates of Dr. Frost beneficially owned in excess of 5% of our outstanding
shares of common stock, and, effective upon the execution of such agreement,
Dr. Frost was appointed as a member of our board of
directors.
Mr. Halpryn
is a member of Halpryn Group IV, LLC, which purchased $1,000,000 of the series A
convertible preferred stock under the series A preferred stock purchase
agreement, and, effective upon the execution of such agreement, Mr. Halpryn
was appointed as a member of our board of directors.
Mr. Lampen
purchased $17,500 of the series A convertible preferred stock under the
Series A Preferred Stock Purchase Agreement. Mr. Lampen is also the
executive vice president of Vector Group Ltd., which purchased $4,000,000 of the
series A convertible preferred stock under the Series A Preferred Stock Purchase
Agreement, and the president and chief executive officer of Ladenburg Thalmann
Financial Services Inc., the parent company of Ladenburg Thalmann & Co.
Inc., which acted as financial adviser to the purchasers under the Series A
Preferred Stock Purchase Agreement. Effective upon the execution of the
Series A Preferred Stock Purchase Agreement, Mr. Lampen was appointed
as a member of our board of directors and elected our president and chief
executive officer. Mr. Beinstein, a director, is also a director of Vector
Group Ltd.
19
Ms. Pallini
is a director and the head of production of I.L.A.R. S.p.A., which purchased
$3,000,000 of the series A convertible preferred stock under the Series A
Preferred Stock Purchase Agreement and is a supplier to our company under an
exclusive import agreement. Effective upon the execution of the Series A
Preferred Stock Purchase Agreement, Ms. Pallini was appointed as a member of our
board of directors.
December
2009 Credit Facility
In
December 2009, we entered into a $2,500,000 revolving credit agreement (the
“Credit Agreement”) with, among others, Frost Gamma Investments Trust, Vector
Group Ltd., a principal shareholder of ours, Lafferty Ltd., a principal
shareholder of ours, IVC Investors, LLLP, an entity affiliated with Glenn L.
Halpryn, a director of ours, Mark Andrews, our Chairman, and Richard J. Lampen,
our president and chief executive officer. Under the Credit Agreement, we may
borrow from time to time up to $2,500,000 to be used for working capital or
general corporate purposes. Borrowings under the Credit Agreement mature on
April 1, 2013 and bear interest at a rate of 11% per annum, payable
quarterly. The Credit Agreement provides for the payment of an aggregate
commitment fee of $75,000 payable to the lenders over the three-year period.
Amounts may be repaid and reborrowed under the Credit Agreement without penalty.
In April 2010, we borrowed $1,000,000 under this Credit Agreement. The note
issued under the Credit Agreement contains customary events of default, which if
uncured, entitle the holders to accelerate the due date of the unpaid principal
amount of, and all accrued and unpaid interest on, such note. As of March 31,
2010, the note was secured by $7,400,000 of inventory and $4,400,000 in trade
accounts receivable of Castle Brands (USA) Corp., our wholly-owned subsidiary,
which we refer to as CB-USA, under a security agreement.
Promissory
Note with Frost Gamma Investments Trust
In June
2010, we issued a $2,000,000 promissory note to Frost Gamma Investments Trust
(“Frost Note”). Borrowings under the Frost Note mature on June 21, 2012 and bear
interest at a rate of 11% per annum. Interest is accrued quarterly and due at
maturity. The Frost Note may be prepaid in whole or in part at any time prior to
maturity without penalty, but with payment of accrued interest to the date of
prepayment. The Frost Note does not contain any financial
covenants.
Relationship with I.L.A.R.
S.p.A.
Since
August 2004, we have had an agreement with I.L.A.R. S.p.A., which became a
more than 5% shareholder in October 2008, under which we are the exclusive
U.S. importer for Pallini Limoncello and its flavor extensions.
Ms. Pallini, one of our directors, is the head of production of I.L.A.R.
S.p.A. For fiscal 2010 and 2009, we purchased $2,590,646 and $3,639,394 of goods
from I.L.A.R. S.p.A., respectively. Also, as of March 31, 2010 and
2009, we had a trade payable of $32,215 and $1,089,951, respectively due to an
affiliate of I.L.A.R. S.p.A. under our import agreement.
Agreement with MHW
Ltd.
Since
April 1998, we and our predecessor have had an agreement with MHW Ltd.,
through which MHW acted as importer of record and distributor for our products
in the United States, and provides accounting, inventory, payment,
transportation and storage services for us. Mr. John Beaudette, one of our
directors, is the president and a principal stockholder of MHW and MHW has a 10%
ownership interest in our Celtic Crossing brand. For the 2010 and 2009 fiscal
years, we incurred fees for services rendered by MHW in the amounts of
$291,262and $302,353, respectively.
Agreement
with BPW, Ltd.
We
contracted with BPW, Ltd., for business development services including providing
introductions for us to agency brands that would enhance our portfolio of
products and assisting us in successfully negotiating agency agreements with
targeted brands. BPW, Ltd. is controlled by Mr. John Beaudette, one of our
directors. The contract provided for a various payments to BPW, Ltd., including
a bonus payable to BPW Ltd. in equal quarterly installments upon the
finalization of an agency brand agreement based upon estimated annual case sales
by the us during the first year of operations at the rate of $1 per 9-liter case
of volume, less any retainer previously paid, and a commission based upon actual
future sales of the agency brand while under our management through December 31,
2009, when the commitment expired. For fiscal 2010 and 2009, we paid $58,288 and
$65,563, respectively, to BPW, Ltd. under this contract.
20
Betts
& Scholl Note
In
connection with the September 2009 Betts & Scholl acquisition, we issued a
secured promissory note in the aggregate principal amount of approximately
$1,100,000. Dennis Scholl, one of our directors, is a managing member of Betts
& Scholl, LLC, the holder of the note. The note is secured under a security
agreement by the Betts & Scholl inventory acquired. The note provides for an
initial payment of $300,000, paid at closing, and for eight equal quarterly
payments of principal and interest, with the final payment due on September 21,
2011. Interest under the note accrues at an annual rate of 0.84%, compounded
quarterly. The note contains customary events of default, which if uncured,
entitle the holder to accelerate the due date of the unpaid principal amount of,
and all accrued and unpaid interest on, the note. For fiscal 2010, we paid
$464,708 to Betts & Scholl, LLC under the note.
Agreements with Carbery Group and its
Affiliates
Mr. Colm
Leen, a former director, is the financial director of the Carbery Group, which
previously held more than 5% of our stock. We were party to a supply agreement
with Carbery Milk Products Limited, which is a member of the Carbery Group,
under which it acted as our sole distiller for Boru vodka in Ireland and the
supplier of natural flavors for our products. This agreement expired in December
2008. For fiscal 2009, we purchased approximately €208,753 (recorded
as $273,047 in our consolidated financial statements for such fiscal year) of
goods from Carbery Milk Products.
Agreements with Ladenburg Thalmann
& Co. Inc. and
Ladenburg Thalmann Financial Services Inc.
In
October 2008, we paid a $250,000 fee (plus out-of-pocket expenses of
$23,986) to Ladenburg Thalmann & Co. Inc. for services it provided as
financial advisor to the purchasers of the series A convertible preferred stock.
Mr. Lampen, our president and chief executive officer and a director, is
the president and chief executive officer and a director of Ladenburg Thalmann
Financial Services Inc., the parent of Ladenburg Thalmann & Co.
Inc. Dr. Frost, one of our directors, is a principal shareholder
and chairman of the board of Ladenburg Thalmann Financial Services Inc. Also
Henry C. Beinstein, one of our directors, is a director of Ladenburg Thalmann
Financial Services Inc. In November 2008, we entered into an agreement to
reimburse Ladenburg Thalmann Financial Services Inc. for its costs in providing
certain administrative, legal and financial services to us. For fiscal 2010 and
2009, we paid Ladenburg Thalmann Financial Services Inc. $200,055 and $43,051,
respectively, under this agreement.
Transactions with Irish Distillers
Group and its Affiliates
Until his
retirement in 2006, Gill Jefferson, a former director, was employed in various
capacities by Irish Distillers Group. Since January 1, 2005, we have had a
supply agreement with Irish Distillers Limited, which is a member of Irish
Distillers Group, under which it acts as our supplier of Irish whiskey. During
fiscal 2009, we purchased from Irish Distillers Limited approximately €858,032
($1,133,254) of goods.
Issuance of 6% Subordinated
Convertible Notes
We paid
total interest on our 6% subordinated convertible notes during fiscal 2009 of
$180,000 to FURSA SPV LLC, which was formerly a more than 5% shareholder which
held an aggregate of $6,000,000 principal amount of these 6% notes, and $91,000
to Black River Global Credit Fund Ltd., which was formerly a more than 5%
shareholder and held an aggregate of $3,000,000 principal amount of these 6%
notes.
21
On
October 20, 2008, all of our 6% convertible notes, in the principal amount
of $9,000,000, due March 1, 2010, plus $45,000 of accrued but unpaid
interest, were converted into shares of series A convertible preferred stock at
a per share price of $23.21 (which is, in effect upon conversion, $0.65 per
share of common stock).
Loans from Certain Executive
Officers, Directors and Shareholders
On
October 15, 2008, Dr. Frost advanced $2,000,000 to us under a
promissory note we issued to Frost Gamma Investments Trust. The entire amount of
this advance and $2,778 of accrued interest thereon was offset against the
portion of the purchase price payable by Frost Gamma Investments Trust at the
closing of the Series A Preferred Stock Purchase Agreement. The note bore
interest at a rate of 10% per annum, calculated on the basis of a 360-day year
based on the number of days elapsed including the first day.
Certain
of our directors and principal shareholders (including Dr. Frost and related
entities, Mr. Andrews and Lafferty Limited) held 9% senior secured notes of our
subsidiary, Castle Brands (USA) Corp. The total interest paid to
these noteholders during fiscal 2009 was $237,375.
Upon the
closing of the series A preferred stock transaction in October 2008,
substantially all of the outstanding principal of our 9% senior secured notes,
in the principal amount of $9,700,000, due May 31, 2009, plus $320,000 of
accrued but unpaid interest, were converted into shares of series A convertible
preferred stock at a per share price of $12.50 (which is, in effect upon
conversion, $0.35 per share of common stock). The remaining
unconverted notes, in the principal amount of $300,000, were amended, and later
repurchased by us through the issuance of 200,000 shares of common
stock.
Agreement
with Vector Group Ltd.
In
November 2008, we entered into a management services agreement with Vector
Group Ltd., a more than 5% shareholder, under which Vector Group agreed to make
available to us the services of Richard J. Lampen, Vector Group’s executive vice
president, effective October 11, 2008 to serve as our president and chief
executive officer and to provide certain other financial and accounting
services, including assistance with complying with Section 404 of the
Sarbanes-Oxley Act of 2002. In consideration for such services, we agreed to pay
Vector Group an annual fee of $100,000, plus any direct, out-of-pocket costs,
fees and other expenses incurred by Vector Group or Mr. Lampen in
connection with providing such services, and to indemnify Vector Group for any
liabilities arising out of the provision of the services. The agreement is
terminable by either party upon 30 days’ prior written notice. For fiscal
2010 and 2009, Vector Group was paid $128,510 and $47,011, respectively, under
this agreement. Mr. Beinstein, a director, is also a director of Vector
Group Ltd.
Independence
of Directors
We follow
the NYSE Amex rules in determining if a director is independent. Our board also
consults with our counsel to ensure that the board's determination is consistent
with those rules and other relevant laws and regulations regarding director
independence. In making its independence determinations, our board considered
that in the ordinary course of business we may engage in transactions in the
ordinary course of business with some of the independent directors and to
business organizations and individuals associated with them. Our
board determined that, based on available information, none of these
relationships were material or affected the independence of any
director. Consistent with these considerations, our board of
directors has determined that Messrs. Beaudette, Beinstein, Eisen, Halpryn
and Rubin are independent directors. The other remaining directors may not be
deemed independent under the NYSE Amex rules because we currently employ them or
they have other relationships with us that may result in them being deemed not
“independent.” All members of our audit, compensation and nominating and
corporate governance committees are independent.
22
Item 14.
|
Principal
Accounting Fees and Services
|
Fees Paid to Eisner
LLP
The
following table sets forth the fees that we paid or accrued for the audit and
other services provided by Eisner LLP, our independent auditors, in fiscal years
2010 and 2009:
2010
|
2009
|
|||||||
Audit
Fees
|
$ | 229,400 | $ | 311,500 | ||||
Audit-Related
Fees
|
4,845 | — | ||||||
Tax
Fees
|
— | — | ||||||
All
Other Fees
|
— | — | ||||||
Total
|
$ | 234,245 | $ | 311,500 |
Audit Fees
This
category includes the audit of our annual financial statements, reviews of
financial statements included in our quarterly reports on Form 10-Q, and
services that are normally provided by the independent registered public
accounting firm in connection with statutory and regulatory filings or
engagements. This category also includes fees for advice on accounting matters
that arose during, or as a result of, the annual audit or the reviews of interim
financial statements.
Audit-Related
Fees
This
category consists of assurance and related services provided by Eisner that are
reasonably related to the performance of the audit or review of our financial
statements and are not reported above under “Audit Fees.” The services for the
fees disclosed under this category include consulting and due diligence services
rendered in connection with acquisitions.
Tax Fees
This
category would consist of professional services rendered by Eisner, primarily in
connection with strategic planning with respect to possible
acquisitions.
All
Other Fees
This
category would consist of fees for subscriptions and other miscellaneous
items.
Pre-Approval Policies and
Procedures
In
accordance with its charter, our audit committee reviews and approves in advance
on a case-by-case basis each engagement (including the fees and terms thereof)
by us of accounting firms that will perform permissible non-audit services or
audit, review or attest services for us. Our audit committee is authorized to
establish detailed pre-approval policies and procedures for pre-approval of such
engagements without a meeting of the audit committee, but our audit committee
has not established any such pre-approval procedures at this time.
Our audit
committee pre-approved all fees of our principal accounting firm for fiscal
2010.
PART IV
Item 15.
|
Exhibits,
Financial Statement Schedules
|
|
(a)
|
The
following documents are filed as part of this
Report:
|
1.
|
Financial
Statements – See Index to Consolidated Financial Statements and
Financial Statement Schedule at Item 8 of the Original
10-K.
|
2.
|
Financial
Statement Schedules – Omitted because they are not applicable or not
required.
|
23
3.
|
Exhibits –
The following exhibits are filed as part of, or incorporated by reference
into, this annual report on
Form 10-K:
|
(b)
Exhibit
Number
|
Exhibit
|
|
2.1
|
Asset
Purchase Agreement, dated as of September 21, 2009, by and between Castle
Brands Inc. and Betts & Scholl, LLC (incorporated by reference to
Exhibit 2.1 to our current report on Form 8-K filed with the SEC on
September 22, 2009)
|
|
2.2
|
Agreement
and Plan of Merger dated February 9, 2010 between Castle Brands Inc., a
Delaware corporation, and Castle Brands (Florida) Inc., a Florida
corporation (incorporated by reference to Exhibit 2.1 to our current
report on Form 8-K filed with the SEC on February 12,
2010)
|
|
3.1
|
Composite
Articles of Incorporation of the Company (incorporated by reference to
Exhibit 4.1 to our Post-Effective Amendment No. 1 to Form S-8 (File No.
333-160380) filed with the SEC on March 10, 2010)
|
|
3.2
|
Bylaws
of the Company (incorporated by reference to Appendix E to our definitive
proxy statement on Schedule 14A filed with the SEC on December 30,
2009)
|
|
4.1
|
Form
of Common Stock Certificate (incorporated by reference to Exhibit 4.3 to
our Post-Effective Amendment No. 1 to Form S-8 (File No. 333-160380) filed
with the SEC on March 10, 2010)
|
|
4.2
|
Secured
Non-negotiable Promissory Note, dated as of September 21, 2009, made by
Castle Brands Inc. in favor of Betts & Scholl, LLC (incorporated by
reference to Exhibit 4.1 to our current report on Form 8-K filed with the
SEC on September 22, 2009)
|
|
4.3
|
Security
Agreement, dated as of September 21, 2009, by and between Castle Brands
Inc. and Betts & Scholl, LLC (incorporated by reference to Exhibit 4.2
to our current report on Form 8-K filed with the SEC on September 22,
2009)
|
|
4.4
|
Credit
Agreement, dated as of December 30, 2009, by and among Castle Brands Inc.,
Frost Gamma Investments Trust, Vector Group Ltd., Lafferty Ltd., Mark E.
Andrews, III, IVC Investors, LLLP, Jacqueline Simkin Trust As Amended and
Restated 12/16/2003, and Richard J. Lampen, including the note to be
issued there under (incorporated by reference to Exhibit 4.1 to our
current report on Form 8-K filed with the SEC on December 30,
2009)
|
|
4.5
|
Security
Agreement, dated as of December 30, 2009 by and among Castle Brands Inc.,
Frost Gamma Investments Trust, Vector Group Ltd., Lafferty Ltd., Mark E.
Andrews, III, IVC Investors, LLLP, Jacqueline Simkin Trust As Amended and
Restated 12/16/2003, and Richard J. Lampen, including the note to be
issued there under (incorporated by reference to Exhibit 4.2 to our
current report on Form 8-K filed with the SEC on December 30,
2009)
|
|
4.6
|
Note,
dated as of June 21, 2010, made by the Company in favor of Frost Gamma
Investments Trust (incorporated by reference to Exhibit 4.1 to our current
report on Form 8-K filed with the SEC on June 21, 2010)
|
|
10.1
|
Export
Agreement, dated as of February 14, 2005 between Gosling Partners Inc. and
Gosling’s Export (Bermuda) Limited(1)(2)
|
|
10.2
|
Amendment
No. 1 to Export Agreement, dated as of February 18, 2005, by and among
Gosling-Castle Partners Inc. and Gosling’s Export (Bermuda)
Limited(1)(2)
|
|
10.3
|
National
Distribution Agreement, dated as of September 3, 2004, by and between
Castle Brands (USA) Corp. and Gosling’s Export (Bermuda)
Limited(1)(2)
|
24
10.4
|
Subscription
Agreement, dated as of February 18, 2005, by and between Castle
Brands Inc. and Gosling-Castle Partners Inc.(1)
|
|
10.5
|
Stockholders'
Agreement, dated February 18, 2005, by and among Gosling-Castle
Partners Inc. and the persons listed on Schedule I thereto
(1)
|
|
10.6
|
Agreement,
dated as of August 27, 2004, between I.L.A.R. S.p.A. and Castle
Brands (USA) Corp.(1)(2)
|
|
10.7
|
Supply
Agreement, dated as of January 1, 2005, between Irish Distillers
Limited and Castle Brands Spirits Group Limited and Castle Brands (USA)
Corp.(1)(2)
|
|
10.8
|
Amendment
No. 1 to Supply Agreement, dated as of September 20, 2005, to
the Supply Agreement, dated as of January 1, 2005, among Irish
Distillers Limited and Castle Brands Spirits Group Limited and Castle
Brands (USA) Corp.(1)
|
|
10.9
|
Amended
and Restated Worldwide Distribution Agreement, dated as of April 16, 2001,
by and between Great Spirits Company LLC and Gaelic Heritage Corporation
Limited(1)
|
|
10.10
|
Letter
Agreement, dated November 7, 2008, between Castle Brands Inc. and
Vector Group Ltd. (incorporated by reference to Exhibit 10.1 to our
current report on Form 8-K filed with the SEC on November 12,
2008)
|
|
10.11
|
Form
of Indemnification Agreement to be entered into with directors
(incorporated by reference to Exhibit 10.3 to our current report on
Form 8-K filed with the SEC on October 14, 2008)
|
|
10.12
|
Form
of Indemnification Agreement to be entered into with directors
(incorporated by reference to Exhibit 10.54 to our Registration
Statement on Form S-1 (File No. 333-128676), which was declared
effective on April 5, 2006 (“2006 Form S-1”)
|
|
10.13
|
Form
of Castle Brands Inc. Stock Option Grant Agreement (incorporated by
reference to Exhibit 10.1 to our current report on Form 8-K
filed with the SEC on June 16, 2006)#
|
|
10.14
|
Stock
Purchase Agreement, dated as of October 12, 2006, among Chester F.
Zoeller III, Brittany Lynn Zoeller Carlson and Beth Allison Zoeller Willis
and the Company (incorporated herein by reference to Exhibit 10.1 to
our current report on Form 8-K filed with the SEC on October 16,
2006)
|
|
10.15
|
Form
of Warrant (incorporated herein by reference to Exhibit 10.65 to our
quarterly report on Form 10-Q filed with the SEC on November 14,
2006)
|
|
10.16
|
Amended
and Restated Employment Agreement, dated as of November 13, 2007,
between Castle Brands Inc. and Alfred J. Small (incorporated herein by
reference to Exhibit 10.2 to our current report on Form 8-K
filed with the SEC on November 13, 2007)#
|
|
10.17
|
Third
Amended and Restated Employment Agreement, effective as of February 26,
2010, by and between Castle Brands Inc. and Mark Andrews (incorporated by
reference to Exhibit 10.1 to our current report on Form 8-K
filed with the SEC on March 1, 2010)#
|
|
10.18
|
Amended
and Restated Employment Agreement, effective as of May 2, 2005, by
and between Castle Brands Inc. and T. Kelley
Spillane(1)#
|
|
10.19
|
Amendment
to Amended and Restated Employment Agreement, dated as of May 6, 2010,
between Castle Brands Inc. and Alfred J. Small (incorporated herein by
reference to Exhibit 10.2 to our current report on Form 8-K
filed with the SEC on May 7,
2010)#
|
25
10.20
|
Amendment
to Amended and Restated Employment Agreement, dated as of May 6,
2010, by and between Castle Brands Inc. and T. Kelley Spillane
(incorporated herein by reference to Exhibit 10.1 to our current
report on Form 8-K filed with the SEC on May 7,
2010)#
|
|
10.21
|
Form
of Warrant issued by Castle Brands Inc. to the investors in connection
with the April 2007 private offering (incorporated herein by
reference to Exhibit 10.1 to our current report on Form 8-K
filed with the SEC on April 20, 2007)
|
|
10.22
|
Agreement,
dated as of February 4, 2008, by and between Autentica Tequilera S.A.
de C.V. and Castle Brands (USA) Corp. (incorporated by reference to
Exhibit 10.74 to our quarterly report on Form 10-Q filed with
the SEC on February 14, 2008)(2)
|
|
10.23
|
Castle
Brands Inc. 2003 Stock Incentive Plan, as amended, incorporated by
reference to Exhibit 10.29 to our 2006
Form S-1)#
|
|
10.24
|
Amendment
to Castle Brands Inc. 2003 Stock Incentive Plan (incorporated by reference
to Exhibit 10.30 to our 2006 Form S-1)#
|
|
10.25
|
Amendment
No. 2 to Castle Brands Inc. 2003 Stock Incentive Plan (incorporated by
reference to Exhibit 10.24 to our annual report on Form 10-K for the
fiscal year ended March 30, 2009 filed with the SEC on June 29,
2009)#
|
|
10.26
|
Contract,
dated as of April 1, 2005, by and between Castle Brands Inc. and BPW
LLC (incorporated by reference to Exhibit 10.51 to our 2006
Form S-1)
|
|
10.27
|
Amended
and Restated Warrant Agreement, dated September 27, 2005, by and
between Castle Brands Inc. and Keltic Financial Partners, LP (incorporated
by reference to Exhibit 10.52 to our 2006
Form S-1)
|
|
10.28
|
Form
of Restricted Stock Agreement (incorporated by reference to Exhibit 10.5
to our quarterly report on Form 10-Q filed with the SEC on
February 17, 2009)#
|
|
10.29
|
Form
of Indemnification Agreement (incorporated by reference to Exhibit 10.3
to our current report on Form 8-K filed with the SEC on October 14,
2008)
|
|
10.30
|
Amendment
No. 2 to Bottling and Services Agreement, dated as of July 23, 2009, by
and between Terra Limited and Castle Brands Spirits Company Limited
(incorporated by reference to Exhibit 10.1 to our current report on
Form 8-K filed on July 29, 2009)(2)
|
|
10.31
|
Employment
Agreement, made as of January 24, 2008, by and between Castle Brands Inc.
and John S. Glover (incorporated by reference to Exhibit 10.28 to
Amendment No. 1 to our annual report on Form 10-K filed with the SEC on
July 29, 2009)#
|
|
21.1
|
List
of Subsidiaries(3)
|
|
23.1
|
Consent
of Eisner LLP(3)
|
|
31.1
|
Certification
of CEO Pursuant to Rule 13a-14(a), as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002*
|
|
31.2
|
Certification
of CFO Pursuant to Rule 13a-14(a), as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002*
|
|
32.1
|
Certification
of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002*
|
26
*
|
Filed
herewith
|
#
|
Management
Compensation Contract
|
(1)
|
Incorporated
herein by reference to the exhibit with the same number to our 2006 Form
S-1.
|
(2)
|
Confidential
portions of this document are omitted pursuant to a request for
confidential treatment that has been granted by the Commission, and have
been filed separately with the
Commission.
|
(3)
|
Incorporated
herein by reference to the exhibit with the same number to our Original
10-K.
|
27
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on July 29,
2010.
CASTLE
BRANDS INC.
|
||
By:
|
/s/
Richard
J. Lampen
|
|
Richard
J. Lampen
President
and Chief Executive Officer (Principal
Executive
Office)
|
||
By:
|
/s/
Alfred
J. Small
|
|
Alfred
J. Small
Senior
Vice President, Chief Financial Officer,
Secretary
and Treasurer (Principal Financial Officer
and
Principal Accounting
Officer)
|
28