Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_____________________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report:
(Date
of
earliest event reported)
September
21, 2007
____________________________
Blue
Holdings, Inc.
(Exact
name of registrant as specified in charter)
Nevada
(State
or
other Jurisdiction of Incorporation or Organization)
|
000-33297
(Commission
File Number)
|
|
88-0450923
(IRS
Employer Identification No.)
|
| |
5804
E. Slauson Ave., Commerce, CA 90040
(Address
of Principal Executive Offices and zip code)
|
|
(323)
725-5555
(Registrant’s
telephone
number,
including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material
pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment
of Certain Officers; Compensatory Arrangements of Certain
Officers.
On September 21, 2007, the Registrant elected Glenn S. Palmer as a new member
of
its board of directors. Prior to his appointment as a member of the Registrant’s
board of directors, Mr. Palmer was appointed as the Registrant’s Chief Executive
Officer and President on July 24, 2007. Mr. Palmer has no
family
relationships with any of the Registrant’s other directors or executive
officers.
On
September 21, 2007, the
compensation committee of the Registrant’s Board of Directors approved the
Registrant’s entry into a revised Employment Agreement with Mr. Palmer and
revisions to the termination provisions of the option previously granted to
Mr.
Palmer on July 24, 2007.
The
revised Employment Agreement is effective as of July 1, 2007, has an initial
term through December 31, 2010, and is subject to automatic renewal thereafter
for one-year terms unless either party gives the other party written notice
of
its intention to terminate the Employment Agreement at least 90 days prior
to
the expiration of the initial term or any renewal term. Under the terms of
the
Employment Agreement, Mr. Palmer will receive base
compensation for each of the third and fourth quarters of fiscal 2007 of $87,500
and minimum annual compensation for each of fiscal 2008 through 2010 of
$400,000. Mr. Palmer is also entitled to receive an annual bonus equivalent
to
2.5% of the Registrant’s earnings before interest, taxes, depreciation and
amortization for each of the years ended December 31, 2008 through 2010, and
is
eligible to receive a bonus for the period ended December 31, 2007, if any,
as
determined by the Compensation Committee of the Registrant’s Board of Directors.
Mr. Palmer is also entitled to four weeks paid vacation and reimbursement of
expenses, including up to $2,000 per month for all expenses incurred by Mr.
Palmer with respect to his personal automobile. The Registrant has also agreed
to provide Mr. Palmer with a furnished apartment or comparable living space
in
Los Angeles, California suitable to his position for the initial twelve months
of the term of the Employment Agreement. Additionally, the Registrant has agreed
to pay for no more than two coach or economy class round trip tickets per month
from Los Angeles to New Jersey for Mr. Palmer to visit with his family. Mr.
Palmer has agreed to establish a permanent residence within twenty miles of
Los
Angeles, California no later than July 1, 2008. Upon the termination of Mr.
Palmer’s employment under the Employment Agreement before the expiration of its
stated term by Mr. Palmer for good reason or by the Registrant for any reason
other than death, disability or cause, the Registrant has agreed to pay Mr.
Palmer 12 months base salary plus a pro-rated bonus for the year during which
such termination occurs as severance.
As
an
inducement material to Mr. Palmer’s decision to enter into employment with the
Registrant, the Registrant previously granted to Mr. Palmer an option to
purchase 625,000 shares of the Registrant’s common stock. The option has a term
of 10 years, a per share exercise price of $1.40 and will vest over a period
of
two years, with 125,000 shares vesting on the date of grant and 125,000 shares
vesting on each subsequent six-month anniversary of the date of grant. The
revised option provides that upon
the
termination of Mr. Palmer’s employment with the Registrant, the
option
remains exercisable for various periods based on the circumstances under which
Mr. Palmer’s employment was terminated.
Prior
to
joining the Registrant, Mr. Palmer was at Cerberus Capital Management, a leading
private investment firm, where he served as Chief Executive Officer and
President of Rafaella Apparel Group, a $250 million apparel manufacturing
company. In this position, he led a $172 million debt financing and effectively
managed the company through the Federated/May Company acquisition. Previously,
Mr. Palmer was Chief Executive Officer and President of Amerex Group, Inc.,
where he implemented a turnaround plan to position the outerwear and apparel
manufacturing company for growth by reorganizing and rightsizing the company.
In
addition, Mr. Palmer also successfully launched a $10 million licensed urban
business and a $15 million corporate/image business for the company. Prior
to
joining Amerex Group, Inc., Mr. Palmer held senior management positions with
various apparel companies including Best Manufacturing Group, LLC, Liz
Claiborne, Bonaventure Textiles USA, Ellen Tracy, Foxmoor Specialty Stores
Corp.
and Bloomingdales. Mr. Palmer began his career at Macy's New York from
1978-1988, where he held various merchandising positions including buyer and
division merchandise vice president. Mr. Palmer graduated from the University
of
Rhode Island in 1975 with a degree in Organizational Management and Industrial
Relations.
On
September 24, 2007, the Registrant issued a press release providing an update
to
previously discussed strategic initiatives. The Registrant announced the
discontinuation of its joint venture with Life & Death LLC, a reduction in
approximately 25% of its workforce and its plans to exit its two retail stores.
The announcement followed a thorough and careful review of the business and
was
in-line with the Registrant’s ongoing commitment to improve its financial
performance. A copy of the press release is being furnished as Exhibit 99.1
to
this report and is incorporated herein by reference.
Item
9.01
Financial Statements and Exhibits.
(a)
Financial statements of business acquired. Not
applicable.
99.1
Press Release issued by the Registrant on September 24, 2007.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, Blue Holdings,
Inc.
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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Blue
Holdings, Inc.
|
|
|
|
|
Date:
September 27, 2007
|
By: |
/s/
Larry Jacobs
|
| |
Larry
Jacobs |
| |
Chief
Financial Officer and Secretary
|
EXHIBIT
INDEX
| Exhibit
Number |
|
Description
of
Exhibit
|
| 10.1 |
|
Employment Agreement effective July
1, 2007,
between the Registrant and Glenn S. Palmer. |
| |
|
|
| 99.1 |
|
Press Release issued by the Registrant
on
September 24, 2007. |