Robert Margolis is walking away from Cherokee Inc. after two decades, but he’s hardly doing so empty-handed.
His separation agreement and private sales of stock to the company and his two successors, chief executive officer Henry Stupp and non-executive chairman Jess Ravich, stand to add more than $10.5 million to his worth, according to documents filed with the Securities and Exchange Commission Monday.
Margolis has stepped down as executive chairman and a director of Cherokee. He relinquished the post of ceo in August and was succeeded in that role by Stupp. Ravich, a managing director at investment banking firm Houlihan Lokey and a Cherokee director since 1995, will replace him as chairman but on a non-executive basis.
The separation agreement with Margolis calls for him to receive $2.26 million, the sum of his base salary and the performance bonus to which he would have been entitled had he served with the company through next January. Options to purchase up to 100,000 shares of Cherokee common stock will become fully vested and exercisable.
Additionally, Cherokee will repurchase 400,000 shares of common stock from Margolis at a price of $18.15 a share, its closing price on Friday, for $7.26 million.
To fund the stock repurchase and separation costs, Cherokee has negotiated a term loan of $10 million from U.S. Bank secured by the firm’s assets.
Margolis will also sell 10,000 shares to Stupp and 50,000 shares to Ravich for $18.15 a share, or a total of about $1.1 million.
According to a Dec. 9 filing with the SEC, Margolis owns more than 743,000 shares of Cherokee in addition to 135,000 held indirectly through The Wilstar Group. The repurchase and sale of the shares to Cherokee, Stupp and Ravich would reduce his holdings to about 418,000 shares, about 4.7 percent of those outstanding.
Also Monday, Cherokee cut its quarterly dividend to 20 cents a share. It was reduced to 38 cents from 50 cents a year ago.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
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Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast