<PAGE>
As filed with the Securities and Exchange Commission on January 11, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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THE NORTH FACE, INC.
(Exact name of Registrant as specified in its charter)
---------------
<TABLE>
<S> <C>
Delaware 94-3204082
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
2013 Farallon Drive
San Leandro, California 94577
(510) 618-3500
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------
JAMES FIFIELD
Chief Executive Officer
The North Face, Inc.
2013 Farallon Drive
San Leandro, California 94577
(510) 618-3500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Copies to:
Jeffrey D. Saper, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are offered pursuant to
dividend or interest reinvestment plans, check the following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed
Maximum Proposed
Title of Each Class of Amount Offering Price Maximum Amount of
Securities to be Per Security Aggregate Registration
to be Registered Registered (1) Offering Price Fee
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<S> <C> <C> <C> <C>
Common Stock, $0.0025
par value............. 206,188 $12.125 $2,500,029.50 $695.01
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</TABLE>
(1) The price of $12.125 per share, which was the average of the high and low
prices of the Registrant's Common Stock on the Nasdaq National Market on
January 5, 1999, is set forth solely for the purposes of calculating the
registration fee in accordance with Rule 457(c) of the Securities Act of
1933, as amended.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
PROSPECTUS
206,188 Shares
[LOGO OF NORTH FACE APPEARS HERE]
Common Stock
----------------
This prospectus relates to the public offering, which is not being
underwritten, of up to 206,188 shares of our Common Stock which is held by some
of our current stockholders.
The prices at which such stockholders may sell the shares will be determined
by the prevailing market price for the shares or in negotiated transactions. We
will not receive any of the proceeds from the sale of the shares.
Our Common Stock is listed on the Nasdaq National Market under the symbol
"TNFI." On January 5, 1999, the average of the high and low price for the
Common Stock was $12.125 per share.
----------------
Investing in The North Face common stock involves certain risks. See "Risk
Factors" beginning on page 5.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
----------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
----------------
The date of this Prospectus is January , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information........................................ 3
The North Face............................................................. 4
Forward-Looking statements................................................. 4
Risk Factors............................................................... 5
Use of Proceeds............................................................ 9
Selling Stockholders....................................................... 9
Plan of Distribution....................................................... 10
Legal Matters.............................................................. 11
Experts.................................................................... 11
</TABLE>
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy shares of The North Face Common Stock only in jurisdictions where offers
and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of The North Face Common Stock. In
this prospectus, the "Company," "The North Face," "we ," and "our" refer to The
North Face, Inc.
2
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public conference rooms. Our SEC filings are also available
to the public from the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
our offering is completed.
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1997, filed with the Commission on March 6, 1998;
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998, filed with the Commission on May 15, 1998;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1998, filed with the Commission on August 14, 1998;
(4) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, filed with the Commission on November 13, 1998;
(5) The Company's Current Report on Form 8-K filed with the Commission on
July 7, 1998 and the Company's Current Report on Form 8-K/A filed with the
Commission on July 21, 1998;
(6) The description of the Company's Common Stock contained in its
Registration Statements on Form 8-A filed with the Commission on June 24, 1996
and July 7, 1998, including any amendments or reports filed for the purpose of
updating such descriptions.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Christopher F. Crawford
Chief Financial Officer
The North Face, Inc.
2013 Farallon Drive
San Leandro, California 94572
(510) 618-3500
You should rely only on the information incorporated by reference or
provided in this Prospectus or the prospectus supplement. We have authorized
no one to provide you with different information. We are not making an offer
of these securities in any state where the offer is not permitted. You should
not assume that the information in this Prospectus or the prospectus
supplement is accurate as of any date other than the date on the front of the
document.
3
<PAGE>
THE NORTH FACE
The North Face, together with its consolidated subsidiaries, designs and
distributes technically sophisticated outerwear, skiwear, functional
sportswear, tents, sleeping bags, backpacks and daypacks under The North
Face(TM) name. We believe that The North Face(TM) is the world's premier brand
of high-performance outdoor apparel and equipment.
The North Face offers a broad range of high-performance technically-oriented
outerwear, skiwear, outdoor equipment and functional sportswear, which we call
"Tekware," designed for extreme uses, such as high altitude mountaineering, ice
climbing, rock climbing, backpacking, skiing, snowboarding, hiking, training
and adventure travel. We characterize our apparel-related products as
"equipment for the body." As a result of the experience our company has gained
over thirty years as the brand of choice for many of the world's most
challenging high altitude and polar expeditions, we believe that The North
Face(TM) has achieved a unique level of authenticity. We believe that our broad
product line and our manifesto ("For over thirty years, individuals whose lives
depend on the performance of their gear consistently chose The North Face.")
truly differentiate The North Face from other companies. The North Face(TM)
products are original designs. We provide the original owner with a lifetime
warranty against defects in materials and workmanship.
The North Face is a Delaware corporation originally incorporated on May 16,
1994.
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated herein by reference contain
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates," variations of
such words and similar expressions are intended to identify such forward-
looking statements. These statements are not guarantees of future performance
and are subject to certain risks, uncertainties and assumptions that are
difficult to predict. Therefore, actual results could differ materially from
those expressed or forecasted in any such forward-looking statements as a
result of certain factors, including those set forth in "Risk Factors," as well
as those noted in the documents incorporated herein by reference. In connection
with forward-looking statements which appear in these disclosures, investors
should carefully review the factors set forth in this Prospectus under "Risk
Factors."
4
<PAGE>
RISK FACTORS
The shares offered hereby are speculative in nature and involve a high
degree of risk. The following risk factors should be considered carefully. The
risks described below are not the only ones facing The North Face. Many factors
could cause our results to be different, including the following risk factors
and other risks described in this document or in the documents incorporated by
reference in this document. If any of the following risks occur, our business
would likely be adversely affected and the trading price of our common stock
could decline. This could result in a loss of all or part of your investment.
Consumer Preferences
Our future success depends on consumer demand for our products. If consumer
interest in outdoor activities declines or does not grow, demand for our
products could be adversely affected. If we are not able to respond
successfully to changes in consumer preferences, or if consumer preferences
shift toward competing products or completely away from the types of products
that we sell, our business would be adversely affected. We cannot assure you
that consumer demand for our products will grow.
Management of Growth; Relocation
Our future profitability will depend in significant part on our ability to
grow our business and manage our growth effectively. If our business grows, we
may face increased difficulties in managing our product design process, hiring
and retaining additional personnel and marketing and distributing our products.
We may also face difficulties in obtaining supplies of our products and
managing our supply levels, manufacturing services and working capital
requirements.
In August 1998, we relocated a portion of our company headquarters to
Carbondale, Colorado. In connection with this relocation and related
activities, we have recorded relocation and realignment expenses of
approximately $3.8 million through December 31, 1998. We may incur additional
expenses in connection with the relocation process. We cannot assure you that
we will successfully complete the relocation process and related activities.
Stock Market Risks
The trading price of our common stock has fluctuated significantly since our
initial public offering in July 1996. For example, in the third quarter of
1998, the trading price of our common stock declined significantly. The price
at which our common stock will trade in the future will depend on a number of
factors including:
. Our operating results;
. New products introduced by our company or our competitors;
. Market conditions, such as consumer demand, for our products;
. Changes in earnings estimates by analysts;
. Operating results that are more or less than estimates by analysts; and
. Speculation in the trade or business press regarding our company and our
products.
Factors unrelated to our performance, such as general conditions in the
retail industry, overall stock market price and volume fluctuations and other
economic conditions, may also affect the trading price of our common stock in
the future. In addition, future sales of substantial amounts of common stock by
our existing stockholders could adversely affect trading prices. Declining
trading prices could impair our ability to raise additional equity capital in
the future, which could materially adversely affect our business.
5
<PAGE>
Wholesale Strategy
Most of our wholesale customers are specialty outdoor product retailers. We
cannot assure you that our existing customers will continue or increase their
purchases of our products. Our preseason orders may not increase, and we may
not be able to fill reorders from our wholesale customers during each season.
We expect that sales of our products to wholesale customers will constitute an
increasing percentage of our total sales in the future. Because our gross
margins are lower on product sales to wholesale customers as compared to sales
by our retail stores, our overall gross margins may decline in the future.
Our wholesale strategy also depends in part on our ability to achieve
increased sales through our Summit Shop program. We face certain risks
associated with the Summit Shop program, including sourcing and managing higher
inventory levels, funding costs of fixtures without assurance of additional
sales or profits and supplying products that maintain consumer demand on a year
round basis. Additional Summit Shops may not open on a timely basis and their
financial performance may not meet our expectations. If the Summit Shop program
is not successful and we have to write off the costs of inventory and fixtures,
our business could be adversely affected.
International Operations
We sell our products internationally. Our business is subject to the risks
generally associated with doing business abroad, such as:
. Fluctuations in currency exchange rates;
. Tariffs and other trade barriers;
. Political and economic instability; and
. Potentially adverse tax consequences.
In particular, recent decreases in sales of our products in Asia have
affected our gross margins. We cannot assure you that sales of our products in
Asia will not continue to decline and thus further erode our gross margins.
We currently import more than 60% of our merchandise from contract
manufacturers located outside of the United States and primarily in the Far
East. A significant portion of our products are produced in China. From time to
time, the U.S. government has considered imposing punitive tariffs on apparel
and other exports from China. If the U.S. government imposes any such tariff,
the supply of products could be disrupted and their cost could substantially
increase, either of which could materially adversely affect our operating
results.
In addition, during the fourth quarter of 1998, we finalized a licensing and
royalty agreement for the sale of our products in China and Nepal. Uncertain
economic conditions in China, Nepal and elsewhere in Asia could result in
reduced, delayed or terminated orders for our products.
Dependence on New Products
In order to continue to grow our business, we must successfully introduce
new products and improve our existing products on an ongoing basis. We face
certain risks associated with the introduction of new products, such as:
. Targeting new markets, such as those for more casual outdoor uses;
. Offering products in wider price ranges;
. Product obsolescence;
. Increased product costs;
6
<PAGE>
. Increased pressure from competitors;
. Potential consumer rejection of new products or styles; and
. Potential dilution of our product image.
In May 1998, we announced our intention to design and contract for the
manufacturing of a line of outdoor performance footwear. We have scheduled the
launch of these new products in spring 1999. We cannot assure the timely
introduction of these products or the success of our effort in this market.
Reliance on Unaffiliated Manufacturers
We currently rely on approximately 50 unaffiliated manufacturers to produce
nearly all of our products. Ten of these manufacturers produced approximately
75% of our products in 1997 and 1998. We do not have long-term contracts with
our manufacturers, and we face competition from other companies for production
facilities and import quota capacity. None of the manufacturers we use produces
our products exclusively. We occasionally have received, and we may in the
future receive, shipments of products that do not conform to our quality
control standards. Any disruption in our ability to obtain quality
manufacturing services for our products could materially adversely affect our
business.
We seek to require that our independent manufacturers operate their
businesses in compliance with the laws and regulations that apply to them. Our
sourcing personnel periodically visit and monitor the operations of our
independent manufacturers, but we cannot control their business and labor
practices. If an independent manufacturer violates labor laws or other
applicable regulations, or if such a manufacturer engages in labor practices
that diverge from those typically acceptable in the United States, our company
could in turn experience negative publicity. Negative publicity regarding the
production of our products could materially adversely affect sales of our
products and our business.
Key Suppliers
Certain important materials used in our products are only available from one
or a limited number of independent suppliers. Our future success may depend in
part on our continued ability to purchase supplies of certain technically
advanced textile products developed by third parties. We may not be able to
obtain adequate supplies of such materials on acceptable terms, if at all, in
the future. In addition, we have benefitted from development support and joint
advertising arrangements with certain suppliers. We cannot ensure that these
arrangements will continue.
Fluctuation in Sales
Sales of our products historically have fluctuated for reasons unrelated to
our business, such as weather conditions or recessions or other economic
conditions which result in reduced consumer spending. We cannot control these
external factors that may adversely affect our business.
Competition and Trademarks
We face intense competition from major brand name apparel companies, other
large companies and smaller companies specializing in outdoor products. We own
and use a number of trademarks, some of which may be important in our efforts
to develop and maintain our competitive advantage and consumer demand for our
products. Certain of our competitors, both in the United States and abroad,
have copied and may in the future copy our trademarks and designs. We also are
aware of counterfeiting of our products. We may not be able to stop or
eliminate the copying of our trademarks or the counterfeiting of our products,
and we may unknowingly infringe on the proprietary rights of others. If we do
not avoid or successfully defend challenges to our trademarks or other
intellectual property rights in the U.S. and abroad, our business could be
materially adversely affected.
7
<PAGE>
Key Personnel
Our future success depends in part on the continued efforts of our key
executive officers and other key personnel, as well as our ability to retain
other current personnel and to recruit and retain new personnel. We cannot
assure you that our key executive officers or other key personnel will continue
with the company in the future. If we unexpectedly lost one or more of our
current senior executives or key employees, or if we were unable to replace
adequately any departed executive or key employee on a timely basis, our
business could be materially adversely affected. In addition, we cannot assure
you that any newly-hired executive or key employee will successfully manage our
operations.
Product and Warranty Liability
Consumers often use our products in severe weather conditions. Our insurance
may not adequately cover possible future losses from product liability claims.
We maintain a warranty reserve for the lifetime warranty offered on our
products, but future claims may exceed this reserve. In addition, if we
experience problems related to the quality or reliability of our products, our
reputation as a provider of high-quality products could suffer and our business
could be materially adversely affected.
Year 2000 Compliance
Many currently installed computer systems and software products are coded to
accept only [six] digit entries in the date code field. These date code fields
will need to accept [eight] digit entries to distinguish 21st century dates
from 20th century dates. As a result, during the next year, computer systems
and software used by many companies may need to be upgraded to comply with such
"Year 2000" requirements.
We have conducted an internal review of our information systems and we are
involved in an enterprise-wide project to upgrade or modify portions of our
software so that our computer systems will meet Year 2000 requirements. We have
been using both external and internal resources to reprogram or upgrade our
software. We plan to complete the modifications and upgrades, including
testing, of all systems by July 1999. We plan to complete the modifications and
upgrades, including testing, of our European systems by April 1999.
Through September 30, 1998, we had spent $62,000 to address Year 2000
compliance issues. The total cost of addressing Year 2000 compliance, currently
estimated at $400,000 by our management, is not expected to be material to our
operations. We believe that the modifications and upgrades to our software will
mitigate any problems associated with Year 2000 issues. However, if we do not
complete the process of modifying and upgrading our software in a timely
manner, or at all, the Year 2000 issue could have a material impact on our
operations.
We have surveyed our significant vendors and other third parties on whom we
rely to ensure that they will convert their systems in a timely manner. We
currently are in the process of analyzing third party responses to our survey.
We cannot be sure that other companies will convert their systems effectively
or in a timely manner. If third parties, such as suppliers, manufacturers and
other vendors, fail to meet Year 2000 requirements, our business could be
materially adversely affected.
8
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All proceeds from the sale of the Shares will be for the account of the
Selling Stockholders, as described below. See "Selling Stockholders" and "Plan
of Distribution." Notwithstanding the foregoing, in the event the aggregate net
proceeds (including broker's commissions) from the sale of all the Common Stock
offered hereby exceeds $2,500,029.50, the Selling Stockholders have agreed to
remit such excess to the Company. In the event the Company receives any of such
proceeds, the Company intends to use such proceeds for general corporate
purposes.
SELLING STOCKHOLDERS
The following table sets forth as of the date of this Prospectus, the name
of each of the Selling Stockholders, the number of shares of Common Stock that
each such Selling Stockholder owns as of such date, the number of shares of
Common Stock owned by each Selling Stockholder that may be offered for sale
from time to time by this Prospectus, and the number of shares of Common Stock
to be held by each such Selling Stockholder assuming the sale of all the Common
Stock offered hereby.
The Shares being offered by the Selling Stockholders were acquired from The
North Face in connection with our acquisition of a certain parcel of land in
Carbondale, Colorado. The Company may amend or supplement this Prospectus from
time to time to update the disclosure set forth herein.
<TABLE>
<CAPTION>
Shares Shares
Beneficially Beneficially
Owned Owned
Prior to After
Offering(1) Number of Offering(1)
--------------- Shares Being --------------
Name of Selling Stockholder Number Percent Offered Number Percent
--------------------------- ------- ------- ------------ ------ -------
<S> <C> <C> <C> <C> <C>
Pitkin Exchange, Inc. in Trust for
Gianinetti Investment
Corporation...................... 68,729 * 68,729 * *
Pitkin Exchange, Inc. in Trust for
R.P. Sewell & Company............ 68,729 * 68,729 * *
Pitkin Exchange, Inc. in Trust for
Richard L. Bradley............... 41,238 * 41,238 * *
Pitkin Exchange, Inc. in Trust for
David F. Baggerman............... 27,492 * 27,492 * *
Total........................... 206,188 1.6% 206,188 * *
</TABLE>
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* Less than 1%
(1) Based upon 12,699,311 shares of Company Common Stock outstanding as of the
close of business on January 5, 1999 and including the shares to be sold
hereunder.
9
<PAGE>
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be offered and sold from time to
time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The Selling Stockholders may sell the Shares
being offered hereby on the Nasdaq National Market, or otherwise, at prices and
under terms then prevailing or at prices related to the then current market
price, at varying prices or at negotiated prices. The Shares may be sold,
without limitation, by one or more of the following means of distribution: (a)
a block trade in which the broker-dealer so engaged will attempt to sell Shares
as agent, but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker-dealer as principal and
resale by such broker-dealer for its own account pursuant to this Prospectus;
(c) an over-the-counter distribution in accordance with the rules of the Nasdaq
National Market; (d) ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and (e) in privately negotiated transactions.
To the extent required, this Prospectus may be amended and supplemented from
time to time to describe a specific plan of distribution.
In connection with distributions of the Shares or otherwise, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with such transactions, broker-dealers or
other financial institutions may engage in short sales of the Company's Common
Stock in the course of hedging the positions they assume with Selling
Stockholders. The Selling Stockholders may also sell the Company's Common Stock
short and deliver the Shares offered hereby to close out such short positions.
The Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealer or other financial institution of Shares offered hereby,
which Shares such broker-dealer or other financial institution may resell
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). The Selling Stockholders may also pledge Shares to a broker-
dealer or other financial institution, and, upon a default, such broker-dealer
or other financial institution, may effect sales of the pledged Shares pursuant
to this Prospectus (as supplemented or amended to reflect such transaction). In
addition, any Shares that qualify for sale pursuant to Rule 144 may, at the
option of the holder thereof, be sold under Rule 144 rather than pursuant to
this Prospectus.
Any broker-dealer participating in such transactions as agent may receive
commissions from the Selling Stockholder and/or purchasers of the shares
offered hereby (and, if it acts as agent for the purchaser of such shares, from
such purchaser). Usual and customary brokerage fees will be paid by the Selling
Stockholder. Broker-dealers may agree with the Selling Stockholder to sell a
specified number of shares at a stipulated price per share, and, to the extent
such a broker-dealer is unable to do so acting as agent for the Selling
Stockholder, to purchase as principal any unsold shares at the price required
to fulfill the broker-dealer commitment to the Selling Stockholder. Broker-
dealers who acquire shares as principal may thereafter resell such shares from
time to time in transactions (which may involve cross and block transactions
and which may involve sales to and through other broker-dealers, including
transactions of the nature described above) in the over-the-counter market, in
negotiated transactions or otherwise at market prices prevailing at the time of
sale or at negotiated prices, and in connection with such resales, may pay to
or receive from the purchasers of such shares commissions computed as described
above.
To comply with the securities laws of certain states, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the Shares may not be sold
unless they have been registered or qualified for sale in the applicable state
or an exemption from the registration or qualification requirement is available
and is complied with.
The Company has advised the Selling Stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of Shares in
the market and to the activities of the Selling Stockholders and their
affiliates. In addition, the Company will make copies of this Prospectus
available to the Selling Stockholders and has informed them of the need for
delivery of copies of this Prospectus to purchasers at or prior to the time of
any sale of the Shares offered hereby. The Selling Stockholders may indemnify
any broker-
10
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dealer than participates in transactions involving the sale of the shares
against certain liabilities, including liabilities arising under the Securities
Act.
At the time a particular offer of Shares is made, if required, a Prospectus
supplement will be distributed that will set forth the number of Shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission
or concession allowed or reallowed or paid to any dealer, and the proposed
selling price to the public.
LEGAL MATTERS
Certain legal matters relating to the validity of the securities offered
hereby will be passed upon for the Company by Wilson Sonsini Goodrich & Rosati,
Professional Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements incorporated in the Prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
11
<PAGE>
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206,188 Shares
[LOGO OF NORTH FACE APPEARS HERE]
Common Stock
----------------
PROSPECTUS
----------------
January , 1999
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The fees and expenses incurred by the Company in connection with the
offering are payable by the Company and, other than filing fees, are estimated
as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $ 695.01
NASDAQ Filing Fee................................................ $ 4,123.76
Legal Fees and Expenses.......................................... $10,000.00
Accounting Fees.................................................. $ 2,000.00
Miscellaneous.................................................... $ 2,500.00
----------
Total.......................................................... $19,318.77
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Delaware General Corporation Law provides that directors of a
corporation will not be personally liable for monetary damages for breach of
their fiduciary duties as directors, except for liability (i) for any breach of
their duty of loyalty to the corporation or its stockholders; (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law; (iii) for unlawful payments of dividends or unlawful stock
repurchases or redemptions as provided in Section 174 of the Delaware General
Corporation Law; or (iv) for any transaction from which the director derived an
improper personal benefit. In accordance with Delaware law, the Company's
Amended and Restated Certificate of Incorporation (the "Restated Certificate")
contains a provision to limit the personal liability of directors for
violations of their fiduciary duty. This provision eliminates the personal
liability of directors for monetary damages for actions involving a breach of
their fiduciary duty of care, including any such actions involving gross
negligence.
The Restated Certificate and the Company's Amended and Restated Bylaws
provide that the Company shall indemnify its officers and directors to the
fullest extent permitted by law. The Company has entered into indemnification
agreements with each of its directors and executive officers. These agreements
provide indemnification under certain circumstances for acts or omissions that
may not be covered by directors' and officers' liability insurance
ITEM 16. EXHIBITS.
The following exhibits are filed with this Registration Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
4.1 First Amendment to Purchase Agreement dated June 15, 1998 by and
among The North Face, Inc., Gianinetti Investment Corporation, R.P.
Sewell & Company, Richard L. Bradley and David F. Baggerman.
4.2 Agreement to Amend/Extend Contract dated December 24, 1998 by and
among The North Face, Inc., Gianinetti Investment Corporation, R.P.
Sewell & Company, Richard L. Bradley and David F. Baggerman.
5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP
24.1 Power of Attorney (included on pg. II-4 of this Registration
Statement under the caption "Signatures").
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: (i) to include any
prospectus required by section 10(a)(3) of the Securities Act; (ii) to
reflect in the prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) (Section 230, 424(b) of this chapter) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and (iii)
to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that (i) and (ii) do not apply if the Registration
Statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by (i) and (ii) is
contained in periodic reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. Undertaking Regarding Filings Incorporating Subsequent Exchange Act
Documents by Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Undertaking Regarding Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against liabilities (other than the payment of the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-2
<PAGE>
D. Undertaking Regarding Registration Statement Permitted by Rule 430A.
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable cause to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Leandro, State of California on January 11,
1999.
The North Face, Inc.
/s/ Christopher F. Crawford
By: _________________________________
Christopher F. Crawford
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Marsden
S. Cason and Christopher F. Crawford and each of them, as attorneys-in-fact,
each with the power of substitution, for him or her in any and all capacities,
to sign any amendment to this Registration Statement and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting to said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities indicated on January 11, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Marsden S. Cason Chairman
____________________________________
Marsden S. Cason
/s/ Christopher F. Crawford Chief Financial Officer and Secretary
____________________________________
Christopher F. Crawford
/s/ James Fifield President, Chief Executive Officer and Director
____________________________________
James Fifield
/s/ Michael F. Doyle Director
____________________________________
Michael F. Doyle
/s/ Robert P. Bunje Director
____________________________________
Robert P. Bunje
/s/ William N. Simon Vice Chairman
____________________________________
William N. Simon
/s/ Michael J. Solomon Director
____________________________________
Michael J. Solomon
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
4.1 First Amendment to Purchase Agreement dated June 15, 1998 by and
among The North Face, Inc., Gianinetti Investment Corporation, R.P.
Sewell & Company, Richard L. Bradley and David F. Baggerman.
4.2 Agreement to Amend/Extend Contract dated December 24, 1998 by and
among The North Face, Inc., Gianinetti Investment Corporation, R.P.
Sewell & Company, Richard L. Bradley and David F. Baggerman.
5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation
23.1 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP
24.1 Power of Attorney (included on pg. II-4 of this Registration
Statement under the caption "Signatures").
</TABLE>
<PAGE>
EXHIBIT 4.1
FIRST AMENDMENT TO PURCHASE AGREEMENT
This First Amendment is dated June 15, 1998 for reference purposes only and
is made to that Purchase Agreement dated as of May 29, 1998 between the
undersigned identified as "Seller" and "Buyer" regarding the purchase of
approximately 36.55 acres commonly known as the Smith Ranch, TBD Highway 133,
Carbondale, Colorado, as amended by that letter agreement dated June 1, 1998
(the "Purchase Agreement").
1. The purpose of this First Amendment is to implement the provisions of
Paragraph 15 entitled "Use of Unrestricted Stock as Cash at Closing" of Exhibit
C to the Purchase Agreement.
2. Buyer shall have the option to pay up to $2,500,000 of the Purchase
Price in the form of common stock of Buyer, whose stock is traded on NASDAQ
under the symbol of TNFI. This First Amendment shall apply if, at any time
prior to close of escrow, Buyer notifies Seller in writing of Buyer's election
to pay a portion of the Purchase Price with common stock of TNFI. The amount of
Purchase Price that Buyer elects to pay with TNFI common stock is referred to
herein as the "Purchase Price Balance."
3. The parties acknowledge that: (i) the common stock that Buyer intends
to use to pay the Purchase Price Balance must be registered with the Securities
and Exchange Commission on Form S-3; (ii) the form S-3 registration statement
cannot be effective until the Seller has rights in the shares (i.e., the
----
registration statement may not become effective, and the stock may not be
traded, before close of escrow); and (iii) Buyer agrees to use reasonable
efforts to cause the registration statement to be filed on or immediately after
the closing date and to diligently manage the SEC registration process. If, for
any reason, Buyer cannot cause a registration statement to be filed on or
immediately after close of escrow, Buyer may pay the Purchase Price entirely in
cash. If a registration statement for such stock does not become effective so
such stock can be freely traded within thirty (30) days after close of escrow,
then (i) Buyer shall pay to Seller through escrow, the balance of the Purchase
Price in cash (with interest thereon at 6% per annum from close of escrow date
of payment to Seller), and (ii) all TNFI stock shall be returned to Buyer.
4. If Buyer deposits TNFI common stock in escrow for the purpose of
paying the Purchase Price Balance, then (i) the value of such shares may not
exceed $2,500,000, and (ii) Buyer shall deposit into escrow such additional
amount of cash as is necessary, when added to the value of such shares, to pay
the Purchase Price and all closing costs to be paid by Buyer (taking into
account the deposits previously made by Buyer which are to be credited to the
Purchase Price). For purposes of this paragraph only, the value of the shares
deposited in escrow will be based upon the closing trading price of the common
stock of TNFI on the business day immediately preceding the closing date.
5. TNFI common stock placed in escrow to pay the Purchase Price may not
be released to Seller from escrow, or traded or sold by anyone, until a
registration statement for such shares becomes effective. As soon as a
registration statement for such TNFI common stock becomes
1
<PAGE>
effective, Seller shall have the right to receive, retain, and sell for its
own account such shares in full satisfaction of Buyer's obligation to pay the
Purchase Price Balance, provided however, that the provisions of Paragraph 6
----------------
hereof (including Buyer's share price guaranty) shall apply if Seller notifies
Buyer in writing of Seller's election to be governed by Paragraph 6 prior to
the later to occur of the date of close of escrow or the effective date of the
registration statement for such TNFI common stock.
6. If Seller timely elects to be governed by this Paragraph 6, the
following provisions shall apply:
A. Upon close of escrow, the TNFI common stock shall immediately be
transferred to an account in Seller's name with BT Alex Brown (or such other
national stock broker as is selected by Buyer). Such broker shall be instructed
to sell all of such TNFI common stock during the first five (5) trading days
immediately following the effective date of such registration statement, in such
amounts and at such times as that broker determines, in its sole discretion, are
appropriate to maximize net stock sale proceeds.
B. Stock sale proceeds shall be distributed to Seller upon
completion of sales of all stock and otherwise in accordance with the broker's
customary practice.
C. If the sale of all of such TNFI common stock has been made in
accordance with the foregoing, the following adjusting payment shall be made by
Seller or Buyer, as appropriate:
(i) For purposes of the following, the term "Adjusted Purchase
Price Balance" shall mean an amount equal to the Purchase Price Balance with
interest thereon at the rate of 6% per annum from close of escrow until the
payment required by this paragraph has been made.
(ii) If the Adjusted Purchase Price Balance exceeds the amount
of net proceeds (after commissions) paid to Seller from the sale of TNFI
common stock, Buyer shall immediately pay such excess to Seller in cash.
(iii) If the amount of net proceeds (after commissions) paid
to Seller from the sale of TNFI common stock exceeds the Adjusted Purchase Price
Balance, Seller shall immediately pay such excess to Buyer in cash.
(iv) Any payment required by Buyer or Seller pursuant to this
subparagraph 6C shall, if not paid when due, bear interest at 12% per annum from
its due date until paid.
D. The obligation of Buyer to make an additional payment of cash
toward the Purchase Price Balance pursuant to Paragraph 6C(ii) hereof shall be
secured by a first lien deed of trust encumbering the Property in form
reasonably acceptable to Buyer and Seller, which deed of trust shall be executed
by Buyer in recordable form and recorded immediately following recordation of
the Warranty Deed at Close of Escrow. Upon satisfaction of Buyer's obligations
to make an additional payment of cash toward the Purchase Price Balance pursuant
to Paragraph 6C(ii) of this First Amendment, such deed of trust shall be
reconveyed. Buyer shall cause the title insurer to
2
<PAGE>
provide to Seller a lender's policy of title insurance with coverage in the
estimated amount of 10% of the value of common stock in TNFI deposited in
escrow (using the method of valuation described in Paragraph 4 hereof),
showing the lien of such deed of trust subject only to the same exceptions to
title that are shown in the policy of title insurance to be obtained by Buyer
at the closing. The cost of such title insurance shall be paid by Buyer.
E. If Seller elects to engage in a real property tax deferred
exchange transaction involving the Property through the use of a qualified
intermediary designated by Seller (the "Intermediary"), then all references in
subparagraphs 6A, B, C, and D to "Seller" shall refer to the Intermediary.
Notwithstanding the foregoing, Seller shall remain personally liable for the
obligations of Seller under the Purchase Agreement, including without limitation
the obligation set forth in subparagraph 6C(iii).
7. Any real property exchange transaction in which Seller elects to
engage which requires the cooperation or participation of Buyer shall not in any
way affect or alter the right of Buyer to cause the Purchase Price Balance to
paid with common stock of TNFI in accordance with the provisions of this First
Amendment. However, Seller may cause Buyer to have cash and common stock of
TNFI delivered to an accommodation party selected by Seller who is assisting
Seller in the implementation of a tax deferred exchange, and Buyer shall
cooperate with Seller to the extent described in the June 1, 1998 letter
amendment and in a manner consistent with the provisions of this First
Amendment.
Except as modified by this First Amendment, the Purchase Agreement shall
continue in full force and effect in accordance with its terms.
3
<PAGE>
BUYER:
- -----
THE NORTH FACE, INC.
By:______________________________
SELLER:
- ------
GIANINETTI INVESTMENT CORPORATION
By:______________________________
Ernest Gianinetti, President
R. P. SEWELL & COMPANY, a Colorado Partnership
By:______________________________
Susan B. Sewell
______________________________
Richard L. Bradley
______________________________
David F. Baggerman
4
<PAGE>
EXHIBIT 4.2
PRUDENTIAL TOWN & COUNTRY REALTY, INC.
0326 HIGHWAY 133, SUITE 200
CARBONDALE, CO 81623
PHONE: (970) 963-5151, FAX: (970) 963-8010
THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL
AND TAX OR OTHER COUNSEL BEFORE SIGNING
AGREEMENT TO AMEND/EXTEND CONTRACT
December 24, 1998
----------- --
RE: Contract dated May 29, 1998 between
------ --
The North Face, Inc. and/or assigns,
(Buyer) and
Ernest Gianinetti
Susan B. Sewell
Richard L. Bradley
David F. Baggerman
(Seller),
relating to the sale and purchase of the following described real estate in the
County of Garfield, Colorado:
--------
the Smith Ranch consisting of 36.55 acres and more definitively described on
Exhibit A.1, and A.2, attached hereto, also
Known as No. TBD Highway 133 Carbondale CO 81623 (Property)
------------------------- ------------------ ---- ------
Street Address City State Zip
Buyer and Seller hereby agree to amend the aforesaid contract as follows:
1. The date for closing and delivery of deed is changed to Wed. January 06,
---------------
1999.
--
2. The date for furnishing commitment for title insurance policy or abstract
of title is changed to n/a, 19n/a .
--- ---
3. The date for delivering possession of Property is changed to Wed.
---
January 06, 1999.
---------- --
4. The date for approval of new loan is changed to n/a, 19n/a.
--- ---
5. The date for lender's consent to loan assumption or transfer of Property
is changed to n/a, 19n/a.
--- ---
6. Other dates set forth in said contract shall be changed as follows:
Refer to 7. below.
7. Additional amendments: (The language of these additional amendments has
not been approved by the Colorado Real Estate Commission).
Paragraph 3. of the First Amendment to Purchase Agreement shall be amended to
allow the Buyer an additional (31) thirty-one days in which to make its
registration statement effective and its shares freely tradeable. In the
event Buyer's registration statement is not yet effective and its shares not
yet freely tradeable on the dates set forth below:
Monday February 15, 1999;
Monday February 22, 1999;
Monday March 01, 1999; and,
Monday March 08, 1999,
then Buyer agrees to pay additional consideration of $5,000.00 for the delay
of the effectiveness of the registration statement and the passage of each
above date. Any such payments shall be in addition to the Purchase Price and
due and payable on the earlier of the effective date of the registration
statement or March 08, 1999.
All other terms and conditions of said contract shall remain the same.
1
<PAGE>
SELLER_______________________________________________ DATE 12/24/98
-------------
Ernest Gianinetti
SELLER_______________________________________________ DATE 12/27/98
-------------
Susan B. Sewell
SELLER_______________________________________________ DATE 12/27/98
-------------
Richard L. Bradley
SELLER_______________________________________________ DATE 12/27/98
-------------
David F. Baggerman
The North Face, Inc., and/or assigns,
BUYER________________________________________________ DATE 12/24/98
-------------
By: Paul Williams
2
<PAGE>
Exhibit 5.1
January 11, 1999
The North Face, Inc.
2013 Farallon Drive
San Leandro, CA 94577
RE: REGISTRATION STATEMENT ON FORM S-3
----------------------------------
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by
you with the Securities and Exchange Commission on or about January 11, 1999
(the "Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended, of a total of 206,188 shares of your
Common Stock (the "Shares"). We understand that the Shares are to be sold from
time to time on the NASDAQ National Market at prevailing prices or as
otherwise described in the Registration Statement. As legal counsel for The
North Face, Inc., we have examined the proceedings taken by you in connection
with the sale of the Shares.
It is our opinion that the Shares are legally and validly issued, fully
paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments to it.
Very truly yours,
/s/ WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
1
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of The North Face, Inc. on Form S-3 of our report dated February 6, 1998,
appearing in the Annual Report on Form 10-K of The North Face, Inc. for the
year ended December 31, 1997 and to the reference to us under the heading
"Experts" in the Prospectus, which is a part of the Registration Statement.
/s/ Deloitte & Touche LLP
San Francisco, California
January 8, 1999
