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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 6, 1998
REGISTRATION NO. _________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BOLLE INC.
(Exact name of registrant as specified in its charter)
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<CAPTION>
<S> <C>
DELAWARE 13-393-4135
(State or other jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
</TABLE>
555 THEODORE FREMD AVENUE
SUITE B-302
RYE, NEW YORK 10580
(Address of Principal Executive Offices and Zip Code)
1998 STOCK INCENTIVE PLAN
(Full Title of Plan)
MARTIN E. FRANKLIN
CHAIRMAN OF THE BOARD OF DIRECTORS
BOLLE INC.
555 THEODORE FREMD AVENUE
SUITE B-302
RYE, NEW YORK 10580
(914) 967-9475
(Name, address and telephone number, including area code, of agent for service)
With a copy to:
KANE KESSLER, P.C.
1350 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 541-6222
ATTN: ROBERT L. LAWRENCE, ESQ.
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes
effective.
<PAGE>
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<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 860,330 shares $1.64 $ 1,410,941.20 $ 416.23
================================================================================================================================
Common Stock, par
value $0.1 per share 1,639,670 shares $5.312 $ 8,710,746.80 $2,569.67
================================================================================================================================
TOTAL 2,500,000 SHARES --- $10,121,688.00 $2,985.90
================================================================================================================================
</TABLE>
- --------
(1) The 1998 Stock Incentive Plan (the "Plan") authorizes the issuance
of a maximum of 2,500,000 shares of Common Stock which are reserved for
issuance pursuant to the grant of stock based awards under the Plan.
(2) Estimated solely for the purpose of calculating the registration
fee. Pursuant to Rule 457(h), the proposed maximum offering price per share is
based upon (i) the average exercise price relating to approximately 860,330
outstanding options granted under the Plan which is $1.64 and (ii) with respect
to 1,639,670 shares available for grant under the Plan, a price of $5 5/16 (the
average of the high and low price of the Registrant's Common Stock as reported
on the Nasdaq National Market on July 1, 1998.
<PAGE>
EXPLANATORY NOTE
This Registration Statement has been prepared in accordance with the
requirements of Form S-8 and Form S-3 pursuant to the Securities Act of 1933,
as amended (the "Securities Act"). The Form S-8 portion of this Registration
Statement will be used for offers of shares of Common Stock (the "Common
Stock") of Bolle Inc., a Delaware corporation (the "Company" or the
"Registrant"), pursuant to the Plan. In accordance with the Note to Part I of
Form S-8, the information specified by Part I for Form S-8 has been omitted
from this Registration Statement. Shares of the Company's Common Stock covered
by this Registration Statement also may be sold pursuant to Rule 144 under the
Securities Act rather than pursuant to this Registration Statement. The
Prospectus filed as a part of this Registration Statement has been prepared in
accordance with the requirements of Part I of Form S-3 and will be used for
reofferings or resales of shares of the Common Stock of the Company which are
deemed to be control securities, which have been acquired or will be acquired
by control persons, pursuant to the Plan. A Cross Reference Sheet is provided
for such Prospectus.
<PAGE>
<TABLE>
<CAPTION>
BOLLE INC.
CROSS REFERENCE SHEET PURSUANT TO REGULATION S-K, ITEM 501(B)
Form S-3 Item Number and Caption Location in Prospectus
<S> <C> <C>
1. Forepart of Registration Statement and Outside
Front Cover of Prospectus......................................... Outside Front Cover
2. Inside Front and Outside Back Cover Pages of Inside Front and Outside
Prospectus........................................................ Back Cover Page
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges......................................... Risk Factors
4. Use of Proceeds................................................... Use of Proceeds
5. Determination of Offering Price *
6. Dilution.......................................................... *
7. Selling Security Holders.......................................... Selling Stockholders
Front Cover Page; Plan of
8. Plan of Distribution.............................................. Distribution
9. Description of Securities to be registered........................ *
10. Interests of Named Experts and Counsel............................ *
11. Material Changes.................................................. The Company
12. Incorporation of Certain Information Incorporation of
by Reference...................................................... Documents by Reference
13. Disclosure of Commission Position of
Indemnification for Securities Act
Liabilities....................................................... *
</TABLE>
- ----------------------------
* Not applicable or answer is in the negative.
<PAGE>
REOFFER PROSPECTUS
BOLLE INC.
2,500,000 SHARES OF COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
This Prospectus may be used by certain persons (the "Selling
Stockholders") who may be deemed to be affiliates of Bolle Inc., a Delaware
corporation (the "Company" or the Registrant"), to sell a maximum of 2,500,000
shares of the Company's Common Stock (the "Common Stock"), $0.01 par value per
share (the "Shares"), which will be purchased or acquired by the Selling
Stockholders pursuant to the Company's 1998 Stock Incentive Plan (the "Plan").
All or a portion of the Shares offered hereby may be offered for sale,
from time to time, on the NASDAQ National Market or otherwise, at prices and
terms then obtainable. All brokers' commissions or discounts will be paid by
the Selling Stockholders. However, any securities covered by this Prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act of 1933,
as amended (the "Securities Act"), may be sold under Rule 144 rather than
pursuant to this Prospectus. See "Plan of Distribution." The Company will
receive none of the proceeds of this offering, although the Company will
receive cash upon the sale of stock to the Selling Stockholders under the Plan.
See "Use of Proceeds." All expenses incurred in connection with the preparation
and filing of this Prospectus and the related Registration Statement are being
borne by the Company. See "Expenses."
SEE "RISK FACTORS" ON PAGE 7 HEREOF FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CAREFULLY CONSIDERED BY PROSPECTIVE PURCHASERS.
The Company's Common Stock is listed on the NASDAQ National Market. On
July 1, 1998, the closing price of the Company's Common Stock was $5 5/16 per
share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is July 6, 1998
<PAGE>
No person is authorized to give any information or to make any
representation other than as contained in this Prospectus in connection with
the offer made hereby, and, if given or made, such information or
representation must not be relied upon as having been authorized by the
Company. The delivery of this Prospectus at any time does not imply that the
information herein is correct as of any time subsequent to its date. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, any securities other than the specific registered securities to which
it relates or an offer or solicitation with respect to those securities in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith is required to file periodic reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, as well as the Regional Offices of the SEC at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of such materials can be
obtained from the Public Reference Section of the Commission at its principal
office at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 at the
prescribed rates. In addition, similar information can be inspected at NASDAQ
National Market at 1735 K Street, N.W., Washington, D.C. 20006. The Commission
also maintains a site on the World Wide Web that contains reports, proxy and
information statements and other information regarding registrants that file
electronically. The address of such site is http://www.sec.gov.
This Prospectus omits certain of the information contained in the
Registration Statement of which this Prospectus is a part (the "Registration
Statement"), covering the Common Stock, which pursuant to the Securities Act is
on file with the Commission. For further information with respect to the
Company and the Common Stock, reference is made to the Registration Statement
including the exhibits incorporated therein by reference or filed therewith.
Statements herein contained concerning the provisions of any document are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit or incorporated by reference to the
Registration Statement. The Registration Statement and the Exhibits may be
inspected without charge at the offices of the Commission or copies thereof
obtained at prescribed rates from the public reference section of the
Commission at the addresses set forth above.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference,
except as superseded or modified herein:
1. The Company's Registration Statement on Form S-1 (the
"Registration Statement"), declared effective by the
Commission June 19, 1998.
2. The description of the Company's common Stock contained in
the Company's Registration Statement including any amendments
or reports filed for the purpose of updating such
description.
3. Description of the Company's common Stock contained in the
Company's Registration statement on Form 8-A filed with the
Commission on March 11, 1998 pursuant to Section 12 of the
Exchange Act, including any amendments or reports filed for
the purpose of updating such description.
4. The Company's Annual Report on Form 10-KA for the fiscal year
ended December 31, 1997.
5. The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1998.
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of Common Stock shall
be deemed to be incorporated in and made a part of this Prospectus by reference
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
that is also incorporated by reference herein modifies or replaces such
statement. Any statements so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each
person, including any beneficial owner of the Common Stock, to whom this
Prospectus is delivered, on written or oral request of any such person, a copy
of any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents). Written or oral requests for such
copies should be directed to Attention: Investor Relations, Bolle Inc., 555
Theodore Fremd Avenue, Suite B-302, Rye, New York 10580, telephone (914)
967-9475.
3
<PAGE>
Unless the context otherwise requires, the term the "Company" or
"Bolle" refers to Bolle Inc., a Delaware Corporation, and its consolidated
subsidiaries; the term "Bolle America" refers to Bolle America, Inc., a
Delaware corporation and a wholly owned subsidiary of the Company; the term
"Bolle France" refers to Bolle International S.A., a French corporation and a
wholly owned subsidiary of the Company, and its consolidated subsidiaries and
the term "Bolle Australia" refers to Bill Bass Optical Pty. Ltd. and its
affiliate Parkhurst Oaks Pty. Ltd." Lumen" refers to Lumen Technologies, Inc.
and its predecessor BEC Group, Inc., the former parent company of Bolle Inc.
The symbol "$" refers to U.S. Dollars.
THE COMPANY
The Company designs, manufactures and markets premium sunglasses and
sport shields, goggles and safety and tactical eyewear under the
Bolle(Registered Trademark) brand. Bolle(Registered Trademark) products enjoy
worldwide recognition and a high quality image in the sport and active
lifestyle markets, particularly skiing, golf and cycling, as well as a growing
reputation in the larger, fashion driven recreational sunglass market. The
Company's safety and tactical business, which accounts for approximately half
of the Company's aggregate unit sales, serves the specialty segment of the
safety eyewear market, including laser protection products and military
applications.
The recent creation of Bolle Inc. through the combination of Bolle
America and Bolle France consolidates the Company's ownership of the worldwide
rights to the Bolle(Registered Trademark) trademark for the Company's products
with its international manufacturing and distribution capabilities into one
organization. For the first time, the Company is positioned to develop and
execute a unified marketing strategy targeted at promoting the company's
competitive advantages. The Company believes that these advantages include its
strong brand name, integrated design, production and marketing capabilities,
superior technology, specialized product offerings, established international
distributors in over 40 countries and a one hundred year long heritage of
producing quality products. The Company intends to integrate its international
distributors into a cohesive worldwide network and to add new distributors
through acquisitions or distributorship agreements.
In recent years, the retail sunglass market has experienced the
emergence of a specific premium market, reflected by increased sales of higher
priced and quality oriented products. The Company competes in the premium
sunglass market. Based on available industry data, the Company believes that
sales of premium sunglasses grew from $825 million in 1989 to $1.6 billion in
1996. The factors which contribute to the growth of this market include
advancements in product technology, growing demand for specialized sunglasses,
increased health concerns and greater fashion and image consciousness, all of
which encourage multiple purchases. The Company also competes in the special
purpose safety and tactical eyewear market. The factors which may contribute to
the potential growth of this market include increasing regulation of safety
eyewear, new special purpose applications, advancements in product technology
and
4
<PAGE>
growing demand for more style oriented products. The Company believes that both
its sunglass and safety and tactical eyewear products, with their increased
user-specific characteristics and proven reputation for style and high
performance, reflect consumer preferences in their respective markets.
The Company has recently announced the following corporate
developments, which constitute a significant start to its growth strategy:
Worldwide Marketing Initiative. The Company has launched a worldwide
marketing initiative to promote a consistent brand image through (i)
coordinated advertising campaigns in major international and local media and at
retail locations, (iii) focused sponsorship of athletes attracting
international interest, and (iii) for the first time, a single marketing and
product brochure for distributors worldwide. Through a sport-specific marketing
approach the Company plans to emphasize the technological , style and
performance characteristics of Bolle(Registered Trademark) products. In March,
1998 Sunglass Hut International,Inc. ("Sunglass Hut") identified Bolle as one
of a select number of preferred Vendors. The Company intends to grow its
business with Sunglass Hut through prime store locations, cooperative marketing
and chain wide distribution of products.
Significant Endorsement Advertising. As part of its strategy of
building a unified global marketing program, the Company has entered into
agreements with several world famous athletes to endorse Bolle products. Such
athletes include Martina Hingis, the youngest number one ranked player in the
history of women's tennis, Jacques Villeneuve, the current formula one racing
world champion; Picabo Street, 1998 Olympic super G gold medalist; Jean-Luc
Cretier, 1998 Olympic downhill gold medalist, and Steve Jones, winner of the
1996 U.S. Open golf championship. In addition, Bolle has sponsorship programs
with over a thousand athletes worldwide who wear Bolle(Registered Trademark)
products in competition.
Focused Product Offerings. The market for premium sunglasses has
showna trend towards consumer preference for sport-specific eyewear. In 1992,
the Company was the first to introduce a line of sunglasses specifically
designed for golfers. The Company is in the process of focusing its sunglasses
and sport glasses based on their use rather than their design, style or other
defining criteria. For instance, the Company recently introduced its
Competivision(Registered Trademark) sunglasses, a model of sunglasses
specifically suited to the needs of tennis players with a high performance
selective light filtration system designed to enhance the clarity of yellow
tennis balls. The Company has a tradition of designing and manufacturing
eyewear for sporting activities in consultation with its sponsored athletes.
Supply Agreement for Metal Eyewear. Consistent with its traditional
focus on technological innovation, in October 1997, the Company entered into a
three-year exclusive supply agreement (the "Alyn Supply Agreement") with Alyn
Corporation ("Alyn"), a manufacturer of specialized metal frames, to create
premium sunglass frames using Boralyn(Registered Trademark),
5
<PAGE>
a special patented metal matrix providing greater strength and stiffness to
weight ratios than titanium, which is currently considered the leading metal
for advanced metal eyewear. Development work on the Boralyn (Registered
Trademark) line is in progress with launch planned for 1999.
Acquisition of Distributors. As part of its strategy of consolidating
its distributors, the Company acquired in March 1998 Bolle (Canada) Inc. (Bolle
Canada"). Additionally, pursuant to a Share Sale Agreement, dated May 28, 1998
(the "Share Sale Agreement") among the Company and each of Keith Archibald
Collicoat, Eric Henry Collicoat and Roger Howard Gibbons as trustees of the
Bill Bass Trust (the "Bill Bass Trust"), the Company has agreed to purchase 75%
of Bolle Australia, which constitutes the largest independent distributor of
the Company's products and the sole distributor of the Company's products in
Australia, where the Company believes it commands a leading market share. The
Bolle Australia acquisition, if consummated, would also give the Company
control of 100% of Bolle Sunglasses Ltd. ("Bolle Sunglasses") and Bolle Asia
United Kingdom and Southeast Asia, respectively. Bolle Australia sold over
$10,000,000 of Bolle(Registered Trademark) products in 1997. The Company also
is negotiating to acquire 75% of Bolle (U.K.) Limited U.K."), the sole
distributor of Bolle(Registered Trademark) safety products in the United
Kingdom (the "U.K.").
Private Placement. The Company completed on July 1, 1998 the sale of
$7,000,000 aggregate principal amount of its Zero Coupon Convertible
Subordinated Notes due 2002 (the "Convertible Notes") to OZ Master Fund, Ltd.
("Och Ziff Fund"), an affiliate of Och-Ziff Capital, pursuant to the terms of a
Convertible Note Purchase Agreement, dated May 29, 1998, between the Company
and Och Ziff Fund (the "Convertible Note Purchase Agreement") and an exemption
from registration under the Securities Act. The Convertible Notes are
convertible at anytime at the option of the holder(s) thereof and, under
certain circumstances, of the Company into a maximum of 1,333,333 Shares of
Common Stock. Certain circumstances including if the Company fails to convert
or redeem any Convertible Notes when due, the Company becomes obligated to
repay the principal amount of such Convertible Notes (up to a maximum of
$7,000,000) in cash and to issue up to a maximum of 360,000 Shares to the
holder(s) of such Convertible Notes.
The Company became a publicly-held company on March 11, 1998,
following the spinoff by Lumen to its stockholders of all of its equity
interest in the Company (the "Spinoff"). In connection with the Spinoff, a Bill
of Sale and Assignment Agreement (the "contribution Agreement") and an
Indemnification Agreement (the "Indemnification Agreement") entered into
between the Company and Lumen on March 11, 1998. Lumen assigned to the Company,
and the Company assumed, all of Lumen's assets and liabilities prior to the
Spinoff other than those related to Lumen's ORC Business (as defined in the
Contribution Agreement).
The Company is incorporated in Delaware. Its principal executive
offices are located at 555 Theodore Fremd Avenue, Suite B-302, Rye, New York
108580, and its telephone number is (914) 967-9475.
6
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The Company believes that its competitive position in enhanced through
(i) its broad array of distribution channels, which reduces its reliance on any
one channel, (ii) its target markets due to its use of local subcontractors to
manufacture certain products, (iii) its internal design capabilities, and (iv)
the diversity of its safety and tactical product lines. The Company believes
that its flexible manufacturing and design capabilities allow the Company to
maintain a valuable costs structure and minimal inventories and to respond
quickly to shifting trends in the industry.
7
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* * * *
The Company's principal executive offices are located at 555 Theodore
Fremd Avenue, Suite B-302, Rye, New York, 10580. Its telephone number is (914)
967-9475.
8
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RISK FACTORS
An investment in the shares of Common Stock offered hereby involves a
high degree of risk. Prospective investors should carefully consider the
following risk factors in addition to the other information set forth in this
Prospectus in connection with an investment in the Common Stock offered hereby.
This Prospectus contains statements which constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act which can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should," "could" or
"anticipates" or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy that involve risks and
uncertainties. Forward-looking statements, such as the Company's plans to
expand its product line, brands and marketing activities and other statements
contained herein regarding matters that are not historical facts, are only
predictions. No assurance can be given that the future results will be
achieved; actual events or results may differ materially as a result of risks
facing the Company. Such risks include, but are not limited to, the Company's
ability to successfully market its products to current and new customers,
identify, finance and complete suitable acquisitions and design and manufacture
new products, all in a timely manner, at reasonable costs and on satisfactory
terms and conditions that could cause actual results to differ materially from
the future results indicated, expressed or implied, in such forward-looking
statements.
POSSIBLE INABILITY TO SUSTAIN AND MANAGE GROWTH. There are significant
risks associated with the Company's growth. The Company expanded its operations
significantly with the acquisition of Bolle France in June 1997. The Company
intends to grow through brand extension and possible strategic acquisitions,
including acquisitions of distributors of its products around the world. There
can be no assurance that the Company's efforts in managing its internal growth
or pursuing those acquisitions will be successful.
To manage growth effectively, the Company will be required to continue
to implement changes in various aspects of its business at a rapid pace,
continuously develop new designs and features, expand its information systems
and operations, and train and manage an increasing number of management-level
and other employees. If management is unable to anticipate or manage these
changes effectively, the Company's operating results could be materially
adversely affected.
To pursue external growth, the Company will need to identify
acquisition candidates the operations of which can be integrated effectively
and profitably into the Company on acceptable terms. There can be no assurance
that the Company will succeed in finding such candidates or obtaining such
terms or, where required, receive consent from its lenders. Future acquisitions
by the Company could result in the incurrence of debt, the potentially dilutive
issuance of equity securities and the incurrence of contingent liabilities and
amortization expenses related to
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goodwill and other intangible assets, which could materially adversely affect
the Company's business, operating results and financial condition.
The success of the Bolle France and Bolle Canada acquisitions and the
pending Bolle Australia acquisitions or any other future acquisition by the
Company depends on its ability to integrate effectively the acquired
businesses. There is no assurance that the Bolle Australia acquisition will
close or that the Company will enter into a definitive agreement to purchase
Bolle U.K. The process of integrating acquired businesses may involve numerous
risks, including difficulties in the assimilation of operations and products,
the diversion of management's attention from other business concerns, risks of
entering markets in which the Company has limited or no direct prior experience
and the potential loss of key employees of the acquired businesses.
Additionally, there can be no assurance that any future acquisitions will not
have a material adverse effect on the Company's operating results particularly
during the period immediately following such acquisitions. Prior to the
acquisition by Lumen, Bolle France has not been in compliance with certain
government-related requirements. The Company is currently in the process of
reorganizing Bolle France to improve administration and compliance.
Approximately $1,000,000 has been accrued on Bolle France's Financial
Statements to cover costs and expenses which the Company expects to incur in
connection with this reorganization. This financial exposure arises in
connection with the Company's transition from a private company to a
publicly-held company. The costs and expenses incurred in bringing Bolle France
or other future acquisitions into compliance with applicable regulatory
requirements may have a material adverse effect on the Company's business,
financial condition and results of operations. Except as disclosed herein, the
Company has no present understandings, commitments or agreements with respect
to any material acquisition.
DEPENDENCE UPON NEW PRODUCT INTRODUCTIONS. The Company's historical
success, including that of Bolle France, is attributable, in substantial part,
to its timely introduction of products which are perceived to be an improvement
in performance or fashion over products available in the market. The Company's
future success will depend, in substantial part, upon its continued ability to
develop and introduce such innovative products, and there can be no assurance
as to the Company's ability to do so. In recent years the Company has
introduced a number of new product offerings within existing product
collections and a number of new collections. The success of any product line is
dependent upon various factors, including product demand, production capacity
and the availability of raw materials and critical manufacturing equipment. In
addition, competitors may follow the Company's introduction of successful
products with similar product offerings. The uncertainty associated with all
the above factors, and any change in such factors from the Company's
expectations, could result in cost increases and/or delays or cancellation of
such new products or product lines and may also cause actual results to differ
materially from those projected.
Innovative designs are often not successful, and successful product
designs can be displaced by other product designs introduced by competitors
which shift market preferences in
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their favor. There is no assurance that the Company will be able to create
innovative products and designs which are also popular with customers. In
addition, although the Company seeks to protect its products through patents
and other proprietary rights, there can be no assurance that such protection
will prevent competitors from offering similar products. As a result of these
and other factors, there can be no assurance that the Company will successfully
maintain or increase its market share.
ASSUMPTION OF LIABILITIES AND INDEMNIFICATION OF LUMEN BY THE COMPANY.
Under the terms of the Contribution Agreement and the Indemnification Agreement
entered into between Lumen and the Company in connection with the Spinoff, the
Company assumed all of Lumen's liabilities prior to the Spinoff other than
those related to Lumen's ORC Business (as defined in the Contribution
Agreement) and has agreed to indemnify Lumen against all of Lumen's liabilities
prior to the Spinoff other than substantially all liabilities related to the
ORC Business. Potential liabilities which the Company has assumed and/or
against which the Company will indemnify Lumen pursuant to the Contribution
Agreement include, without limitation, (a) potential liabilities arising in
connection with the sale of businesses previously owned by Lumen or its
predecessor, Benson Eyecare Corporation ("Benson"), including: the merger of
Essilor Acquisition Corporation ("Essilor") with and into Benson; the sale of
the Foster Grant Group, L.P. ("Foster Grant") by Lumen; the sale of the Orolite
division to Monsanto Company ("Monsanto Company"), and (b) potential
liabilities of Lumen under applicable environmental laws, including any such
liabilities related to the ORC Business to the extent such liabilities arose
before the Spinoff. For a detailed description of the potential liabilities of
Lumen assumed by the Company and the Company's indemnification obligations to
Lumen under the Contribution Agreement and the Indemnification Agreement.
Pursuant to the Contribution Agreement and the Indemnification Agreement, the
Company may bear the burden of obligations and losses not directly related to
the business of the Company if the Company is called upon to discharge and pay
these obligations and liabilities.
In connection with the Spinoff, the Company also agreed to assume all
obligations and liabilities of Lumen incurred by Lumen in connection with the
purchase of Bolle France. In addition to Lumen's indemnification obligations to
the sellers of Bolle France under the Amended and Restated Share Purchase
Agreement (the "Share Purchase Agreement") dated June 9, 1997 among Lumen, the
Company and each of Maurice Bolle, Robert Bolle, Franck Bolle, Patricia Bolle
Passaquay, Brigitte Bolle and Christelle Roche (collectively, the "Sellers,"
and each, a "Seller") which became the sole responsibility of the Company, the
remainder of Lumen's liabilities and obligations to the Sellers were assumed by
the Company through the issuance of shares of its Series B Preferred Stock (the
"Series B Preferred Stock") and options to purchase shares of Common Stock
("Bolle Options") and the exchange of outstanding warrants to purchase common
stock of Lumen for Warrants to purchase Common Stock of Bolle ("Bolle
Warrants"). Should the Company be required to discharge its liabilities
pursuant to the foregoing arrangements, including the Contribution Agreement
and the Indemnification Agreement, or to redeem under certain circumstances the
shares of its Series A Preferred Stock
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(the "Series A Preferred Stock") or Series B Preferred Stock prior to maturity,
such payments could have a material adverse effect upon the Company.
INVESTMENTS IN AFFILIATES AND OTHER ASSETS. The Company holds,
directly or indirectly, investments aggregating approximately $5,500,000 in
debt and equity securities of various unconsolidated entities which are not
controlled by the Company, including investments in Eyecare Products, plc
("Eyecare Products") and Accessories Associates International, Inc. ("AAi").
The Company received these assets from Lumen as part of the Spinoff. The
Company's management is not involved in the day-to-day operations of these
entities. There can be no assurance that fluctuations in the value of these
assets will not have a material adverse impact on the Company.
LIMITED OPERATING HISTORY. The Company was formed on February 3, 1997.
Although the financial statements and pro forma financial statements of the
Company include the results of its subsidiaries Bolle America, Bolle France and
Bolle Australia, which were operated as separate companies for many years, the
Company itself, as a consolidated entity, has a limited operating history upon
which potential investors may base an evaluation of its performance. Limited
actual historical financial information upon which to base an evaluation of the
Company's performance and an investment in the Common Stock is available.
MARKET CYCLES AND RECENT DECLINES IN SALES GROWTH IN THE SUNGLASS
MARKET. Suppliers of premium sunglasses have experienced declining sales and
excess inventory since the last quarter of 1996. The results of the Company and
its competitors were affected by this market trend and the operating
difficulties (including excess inventory) experienced throughout the year 1997
by the largest sunglass specialty retail chain. There can be no assurance that
the Company will be able to maintain or increase its sales, and should it fail
to do so, the Company's financial condition and results of operations could be
adversely affected.
SUSCEPTIBILITY TO CHANGING CONSUMER PREFERENCES. The eyewear industry
is subject to rapidly changing consumer preferences. The Company's sunglasses,
particularly its recreational sunglasses, are susceptible to fashion trends.
Unanticipated shifts in consumer preferences may adversely affect the Company's
sales, resulting in excess inventory and underutilized manufacturing capacity.
While the Company has a limited ability to modify slow-moving models to better
satisfy consumer preferences and otherwise utilize excess inventory and
manufacturing capacity, the Company cannot ensure that any such actions will be
sufficient to redress a market misjudgment. Accordingly, an unanticipated
change in consumer preferences could adversely affect the Company's results of
operations and financial condition.
HIGHLY COMPETITIVE MARKETS. Both the sunglass and personal safety
eyewear markets are highly competitive. Certain companies that engage in these
markets have significantly greater financial, distribution and marketing
resources than the Company, and certain of the
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<PAGE>
Company's competitors have significantly greater brand awareness than the
Company in certain important markets.
Within various niches of the sports segment of the premium eyewear
market, the Company competes with mostly smaller sunglass and goggle companies
and a limited number of larger competitors. In order to retain its market
share, the Company must continue to be competitive in the areas of quality,
technology, method of distribution, style, brand image, intellectual property
protection and customer service. The purchasing decisions of athletes, sports
enthusiasts and recreational wearers with respect to high performance eyewear
often reflect highly subjective preferences which can be influenced by many
factors, including advertising, media, product endorsements, product
improvements and changing styles. The Company could therefore face competition
from existing or new competitors that introduce and promote eyewear which is
perceived by consumers to offer performance advantages over, or greater
aesthetic appeal than, the Company's products. These competitors include
established branded consumer products companies that have greater financial and
other resources than the Company. No assurance exists that new developments by
the Company's competitors will not render some or all of the Company's
potential products obsolete or non-competitive, which would have a material
adverse effect on the Company's business, financial condition and results of
operations.
The Company also competes in the broader, recreational segment of the
premium sunglass market. This segment is fragmented and highly competitive and
is generally more fashion-oriented. A number of established companies compete
in this wider market, several of which have greater financial and other
resources than the Company. This size advantage may enable these competitors to
negotiate exclusive supply contracts with certain retailers. In certain
geographic markets, such as the U.S., certain of the Company's competitors have
achieved greater brand awareness among consumers than has the Company.
The personal safety eyewear market is also highly fragmented.
Competitors range from small manufacturers offering single product lines to a
limited number of large competitors offering multiple product lines, some of
which have greater financial or other resources than the Company. There can be
no assurance that the Company will be able to compete successfully against
current and future competitors or that the competitive pressures faced by the
Company will not adversely affect its financial performance. Company has
recently entered the safety eyewear business in the U.S. There can be no
assurance that this endeavor will be successful.
RISKS ASSOCIATED WITH ADVERTISING STRATEGY. Although the Company will
seek to increase its visibility in the premium sunglass and sport eyewear world
markets through significantly increased and focused advertising campaigns, the
Company's advertising strategy may be unsuccessful at channeling consumer
preferences toward the Company's products, and the Company could be adversely
affected by such a failure while having incurred substantially increased
advertising and marketing costs.
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<PAGE>
DEPENDENCE UPON ENDORSEMENT CONTRACTS. As part of its marketing
strategy, the Company has retained a number of world-class athletes, including
tennis champion Martina Hingis, formula one champion Jacques Villeneuve, 1998
Olympic skiing gold medalists Picabo Street and Jean-Luc Cretier and U.S. Open
golf champion Steve Jones for the purpose of promoting the Company's products.
The Company intends to establish additional contacts with, and obtain
endorsements from, prominent athletes and public personalities. These
endorsement contracts generally have two-to three-year terms and include terms
and conditions specifically negotiated with each athlete. There can be no
assurance that the Company will be able to attract and retain athletes or
personalities to wear or endorse its products. If the Company were to lose the
benefit of its existing endorsements arrangements or were unable to arrange
additional endorsements of its products by athletes and/or public personalities
on terms it deems reasonable, it could be required to modify its marketing
plans and could be forced to rely more heavily on other forms of advertising
and promotion, which might not prove to be as effective as endorsements.
FOREIGN CURRENCY EXPOSURE; RISKS RELATING TO INTERNATIONAL SALES. As a
substantial amount of the Company's sales are currently invoiced in French
Francs and operating expenses are incurred in France, the Company's operating
results are affected by currency fluctuation, particularly between the U.S.
dollar and the French Franc. Since 1996, the French Franc has depreciated by
over 20% against the U.S. dollar which has had a material adverse impact on the
translation of Bolle France's operating results. As the Company's international
operations grow, future movements of the exchange rate of the U.S. Dollar
against the French Franc and other currencies may have an adverse impact on the
reported results of the Company.
Sales outside the United States accounted for approximately 40% of the
Company's net sales for the years ended December 31, 1997. While the Company
expects international sales to continue to account for a significant portion of
its sales, there can be no assurance that the Company will be able to maintain
or increase its international sales. The Company's international business may
be adversely affected by changing economic conditions in foreign countries and
fluctuations in currency exchange rates. The Company's international sales are
also subject to risks associated with tariff regulations, "local content" laws
requiring that certain products contain a specified minimum percentage of
domestically-produced components, political and social instability, labor
stoppages and trade restrictions. In addition, there can be no assurance that
the Company's brands and products will be popular in the various countries in
which the Company's products are or will be offered, or that the Company will
be successful in preventing competitors from producing and selling eyewear
products using the same or substantially similar design and manufacturing
process as the Company.
VARIABLE INTEREST RATE EXPOSURE. As a substantial amount of the
Company's indebtedness denominated in Dollars is currently incurred at a
variable interest rate under the Credit Agreement, the Company's operating
results could be adversely affected if interest rates were to rise
significantly above current levels. Interest expense on the Convertible Notes
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<PAGE>
recognized in the Company's statement of operations will fluctuate with the
market value of the Common Stock.
RELIANCE ON SUPPLIERS, SUBCONTRACTORS AND DISTRIBUTORS. The Company
relies on a variety of subcontractors in France for the supply of several
components of its products and part of its manufacturing process. Although to
date the Company has not experienced any significant difficulty in obtaining
these components, there can be no assurance that shortages will not arise in
the future. The effect of the loss of any such sources or a disruption in their
business will depend primarily upon the availability of, and access to,
suitable alternative sources. The failure by the Company to meet the minimum
purchase requirements set forth in the Alyn Supply Agreement would result in
the loss of the Company's exclusive supply of Boralyn(Registered Trademark)
metal frames. The loss of the Company's sources for lens blanks or metal frames
(for instance, as a result of the termination of the Alyn Supply Agreement), or
any disruption in such sources' business or failure by them to meet the
Company's product needs on a timely basis could cause, at a minimum, temporary
shortages in needed materials and could have a material adverse effect on the
Company's results of operations. There can be no assurance that precautions
taken by the Company will be adequate or that, if it should become necessary,
an alternative source of supply could be identified in a timely manner.
The Company relies for a significant part of its business on third
parties to ensure the worldwide marketing and distribution of its products.
Although to date the Company has not experienced any significant difficulty in
the distribution of its products, there can be no assurance that such
independent distributors will meet the Company's sales expectations or that the
Company will be able to continue to maintain or expand its existing
distribution network.
RELIANCE ON MANAGEMENT SERVICES AGREEMENT. In connection with the
Spinoff, the Company entered into a Management Services Agreement with Lumen
(the "Management Services Agreement"), pursuant to which certain executives of
Lumen provide key management services to the Company in return for the payment
by the Company of a $60,000 monthly fee. The Management Services Agreement has
an initial term of three years, and will thereafter be automatically renewed
for successive one-year periods until terminated by either party upon ninety
days' written notice. There is no assurance that Lumen will not terminate the
Management Services Agreement before or after its initial term. The loss of the
services provided under the Management Services Agreement by certain executives
of Lumen to the Company could have a material adverse effect on the Company's
operations. The Company plans to renegotiate the Management Services Agreement
to reduce its reliance on Lumen and to reduce its monthly fee paid for Lumen's
services to $50,000. The Company plans to use the savings generated by such
renegotiation to retain an executive who shall act as the Company's own
full-time Chief Financial Officer. There can be no assurance that the Company
will be able to renegotiate the Management Services Agreement or to identify
and hire a new Chief Financial Officer.
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<PAGE>
Pursuant to the Management Services Agreement, Lumen also makes
available to the Company the services of Martin E. Franklin, as Chairman of the
Board of Directors of the Company, and Mr. Ian G. H. Ashken, as Executive Vice
President of Finance and Administration, Chief Financial Officer and Assistant
Secretary. The loss of the services that are provided by Mr. Franklin or Mr.
Ashken to the Company could have a material adverse effect on the Company.
There is no assurance that Lumen or the Company will be able to retain the
services of Mr. Franklin or Mr. Ashken in the future.
DEPENDENCE ON KEY PERSONNEL. The Company's success depends, in
substantial part, on the efforts and abilities of Martin E. Franklin, the
Company's Chairman of the Board, Gary Kiedaisch, the Company's Chief Executive
Officer, and Ian G. H. Ashken, the Company's Executive Vice President of
Finance and Administration, Chief Financial Officer and Assistant Secretary.
The Company does not maintain key management life insurance policies on its key
personnel. The loss of the service of any of the foregoing key personnel could
have a material adverse effect on the Company's business, financial condition
and results of operations. Mr. Kiedaisch has entered into an employment
agreement with the Company which continues until August 2000 unless earlier
terminated by either party with or without cause. There is no assurance that,
if Mr. Kiedaisch's employment with the Company were terminated, the Company
would be able to retain the services of a person qualified to fill his
position. Messrs. Franklin and Ashken also hold senior executive positions at
Lumen and will therefore devote such time and efforts to the business of the
Company as may be reasonably requested by the Company under the Management
Services Agreement. However, a substantial portion of their time will be spent
in connection with their positions at Lumen and other entities at which they
are employees or directors. The Company believes that its future success will
depend in large part on its ability to attract and retain directly or through
the Management Services Agreement the services of highly skilled and qualified
personnel. Although the Company to date has been successful in attracting and
retaining qualified personnel, there can be no assurance that the Company will
not experience a shortage of qualified personnel in the future.
CONFLICTS OF INTEREST; BENEFITS TO CERTAIN INSIDERS. The executive
officers of Bolle, who (except Mr. Kiedaisch) are also executive officers of
Lumen, and Messrs. Franklin, Ashken and Moore and Ms. Bailey, who are members
of the Board of Directors of Bolle and are also directors of Lumen, may have
potential conflicts of interest with respect to material transactions involving
Lumen and the Company. These potential conflicts of interest may adversely
affect the future value of the Company's shares.
INFORMATION SYSTEMS; YEAR 2000 COMPLIANCE. The Company is in the
process of upgrading its information systems to adequately support the
implementation of its worldwide marketing strategy. The upgraded systems are
expected to include a number of integrated applications, including order entry,
billing and labeling which function properly with respect to dates in the year
2000 and thereafter and the single currency which is scheduled to be introduced
in the European Union beginning in 1999. This upgrading process will
significantly affect many
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<PAGE>
aspects of the Company's business, including its manufacturing, sales and
marketing functions. The successful implementation and integration of the new
applications will be important to facilitate future growth. The Company could
experience unanticipated delays in the upgrading of its information systems and
such upgrading could cause significant disruption in operations. If the Company
is not successful in upgrading its information systems, fails to train its
personnel in their use in a timely manner or if the Company experiences
difficulties in the upgrading process, the Company could experience problems
with the delivery of its products or its ability to access timely and accurate
financial and operating information could be adversely affected. In addition,
delays in implementing the new systems could require additional expenditures by
the Company to modify or replace portions of its existing information systems
so that they will function properly with respect to dates in the year 2000 and
thereafter and the new European currency. There can be no assurance that the
Company will be able to correct any problems with respect to such dates or the
new currency in a timely manner. The Company could also be adversely affected
by year 2000 non-compliance of the computer systems of the entities with which
the Company interacts, including suppliers, customers and financial service
organizations. Any failure by the Company to respond properly to these problems
or any other difficulties which the Company may face with its information
systems could have a material adverse effect on the Company's business and
financial results.
ACCOUNTING TREATMENT OF INTANGIBLE ASSETS. The Company's total
goodwill and intangible assets as of December 31, 1997 was approximately
$64,000,000. These assets are currently being amortized at a rate of
approximately $1,600,000 a year. This amortization expense will decrease the
Company's income over the life of the assets being amortized. The carrying
value of long lived assets will be reviewed regularly and there is no guarantee
that the Company will not suffer a significant charge in the future from the
impairment of long lived assets. The Company may acquire businesses using
purchase accounting which may create more intangible assets and goodwill
amortization. While the Company believes its accounting treatment for goodwill
and intangible assets has been and will continue to be appropriate, there can
be no assurance that additional goodwill and intangible amortization or
write-offs will not have a material adverse effect on the Company's result of
operations.
UNCERTAIN PROTECTION OF PROPRIETARY RIGHTS. The Company relies in part
on patent, trade secret, unfair competition, trade dress, trademark and
copyright law to protect its rights to certain aspects of its products,
including product designs, proprietary manufacturing processes and
technologies, product research and concepts and recognized trademarks, all of
which the Company believes are important to the success of its products and its
competitive position. There can be no assurance that any pending trademark or
patent application will result in the issuance of a registered trademark or
patent, or that any trademark or patent granted will be effective in thwarting
competition or be held valid if subsequently challenged. In addition, there can
be no assurance that the actions taken by the Company to protect its
proprietary rights will be adequate to prevent imitation of its products, that
the Company's proprietary information will not become known to competitors,
that the Company can meaningfully protect its rights to unpatented
17
<PAGE>
proprietary information or that others will not independently develop
substantially equivalent or better products that do not infringe on the
Company's intellectual property rights. No assurance can be given that others
will not assert rights in, and ownership of, the patents and other proprietary
rights of the Company. In addition, the laws of certain foreign countries do
not protect proprietary rights to the same extent as the laws of the United
States.
The Company's strategy is to assert vigorously its intellectual
property rights, and, if required, to devote reasonable efforts and resources
to the processing of trademark applications, the enforcement of patents issued
and trademark registrations granted to the Company, to the protection of trade
secrets, trade dress or other intellectual property rights owned by the Company
and to the determination of the scope of validity of the proprietary rights of
others that might be asserted against the Company. A substantial increase in
the level of potentially infringing activities by others could require the
Company to increase significantly above past levels the resources devoted to
such efforts. In addition, an adverse determination in any future litigation
could subject the Company to the loss of its rights to a particular patent,
trademark, copyright or trade secret, could require the Company to grant
licenses to third parties, could prevent the Company from manufacturing,
selling or using certain aspects of its products or could subject the Company
to substantial liability, any of which could have a material adverse effect on
the Company's results of operations.
PRODUCT LIABILITY. The Company may be subject to product liability
claims which generally would seek damages for personal injuries allegedly
sustained as a result of defects in the Company's products. A successful
product liability claim brought against the Company could have a material
adverse effect upon the Company's business, operating results and financial
condition. This risk, which is faced by any manufacturer of eyewear products,
may be greater for the Company as a result of its focus on eyewear products
used in activities associated with greater physical risks, such as activities
requiring the use of safety eyewear, sports and other activities involving
special or extreme situations. Although the Company has not been subject to a
significant product liability claim to date, the growth of the Company's
business in the United States (where litigation is more prevalent) or elsewhere
could result in greater exposure to such risk.
SPECIFIC RISKS ASSOCIATED WITH THE COMPANY'S SAFETY AND TACTICAL
EYEWEAR BUSINESS. The Company's safety and tactical eyewear business, which
represented more than 50% of the Company's total unit sales in 1997, is subject
to specific risks in addition to all the risks described herein. The primary
users of the Company's safety eyewear products are industrial workers. As a
result, decreases in general employment levels of industrial workers may have
an adverse effect on the Company's sales. The Company's sales may also be
adversely affected by changes in safety regulations covering industrial workers
and in the level of enforcement of such regulations. Changes in regulations
could reduce the need for and the utility of certain products manufactured by
the Company. A substantial portion of the sales of tactical eyewear products by
the Company is made pursuant to procurement contracts with the
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defense forces of various countries. Such contracts typically include specific
termination and modification provisions and are subject to laws and regulations
pursuant to which the governmental party is granted significantly greater
rights than under regular commercial supply contracts.
QUARTERLY FLUCTUATIONS OF RESULTS; SEASONALITY OF BUSINESS. The
Company's business is affected by economic factors and seasonal consumer buying
patterns. The Company's quarterly results of operations have fluctuated and may
continue to fluctuate as a result of a number of factors, including the timing
of the introduction of new products, the mix of product sales and weather
patterns. Historically, the Company's sales, in the aggregate, generally have
been higher in the period from March to September than during the rest of the
year.
UNPREDICTABILITY OF DISCRETIONARY CONSUMER SPENDING. The success of
the Company's business depends to a significant extent upon a number of factors
relating to discretionary consumer spending, including general economic
conditions affecting disposable consumer income, such as employment, business
conditions, interest rates and taxation. Any significant decline in such
general economic conditions or uncertainties regarding future economic
prospects that adversely affect discretionary consumer spending generally, or
purchasers of discretionary optical products specifically, could have a
material adverse effect on the Company's results of operations.
RECENT TRADING MARKET; VOLATILITY OF STOCK PRICE. Prior to the Spinoff
which occurred on March 11, 1998, there was no trading market for the Common
Stock and the Company has only a limited trading history. The stock of new and
relatively small issuers in immature or developing markets is frequently
subject to sharp increases and decreases in market value, and trading prices of
the Common Stock could vary significantly over relatively short periods of
time. The market price of the Common Stock may be subject to significant
fluctuations in response to variations in quarterly operating results and other
factors. Fluctuations in the market price of the Common Stock will directly
affect the interest expense related to the Convertible Notes recorded in the
Company's Statement of Operations. In addition, the securities markets have
experienced significant price and volume fluctuations from time to time in
recent years that have often been unrelated or disproportionate to the
operating performance of particular companies. These broad fluctuations may
adversely affect the market price of the Common Stock. There can be no
assurance that an active trading market will be sustained after the sale of any
of the Shares offered hereby.
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SHARES ELIGIBLE FOR FUTURE SALE; FUTURES SALES BY SIGNIFICANT
STOCKHOLDERS. Sales of a substantial number of shares of Common Stock in the
public market or the prospect of such sales could adversely affect prevailing
market prices for the Common Stock. In addition to the 2,500,000 Shares which
may be sold hereunder by the Selling Stockholders the Company has recently
filed a registration statement registering an additional 1,850,000 shares held
by certain Stockholders of the Company. In addition, of the 6,636,261 shares of
the Common Stock distributed pursuant to the Spinoff, approximately 5,843,261
shares are freely tradable without restriction or the requirement of future
registration under the Securities Act. All of the remaining 793,000 shares are
restricted securities ("Restricted Shares") as that term is defined by Rule 144
promulgated under the Securities Act and are eligible for resale pursuant to
Rule 144 under the Securities Act subject to manner of sale, volume, notice and
information requirements and applicable contractual restrictions.
Following the expiration in July 2000 of certain contractual
restrictions on resale, a maximum of 1,850,000 shares of Bolle Common Stock
held by the Och Ziff fund, the Bill Bass Trust and the seller of Bolle U.K.
shares, (if this transaction is completed), representing approximately 4% of
the Bolle common Stock outstanding will be eligible for sale pursuant to the
provisions of Rule 144 under the Securities Act. Upon the redemption in full
of all the shares outstanding of the Bolle Series B Preferred Stock, all the
shares of Bolle Common Stock received by Mr. Franklin pursuant to the Spinoff,
or approximately 10% of the total number of shares of Bolle Common Stock
outstanding, will be eligible for sale by Mr. Franklin in accordance with
applicable law. No assurance can be given that such holders of the Company's
Common Stock will not decide, based upon prevailing market conditions, to
dispose of all or a portion of their investment in the Company after the
expiration of applicable restrictions. The future sale of a substantial number
of shares of Common Stock may have an adverse impact on the market price of the
common Stock.
Under the Warrant Agreement dated March 11, 1998 among the Company and
each of the Sellers (the "Warrant Agreement"), 663,618 shares of Common Stock
issuable upon exercise of the Bolle Warrants are subject to demand registration
rights vesting on the date a Warrant is first exercised, which may be as early
as June 1999. The Company has agreed to register such shares for resale under
the Securities Act. During the term of such options and warrants and any
additional stock, warrants and/or options which the Company may issue to raise
capital in the future, the holders thereof are given the opportunity to profit
from a rise in the market price of the Common Stock. The exercise of such
options and warrants may have an adverse effect on the market value of the
Common Stock. The existence of such options and warrants may adversely affect
the terms on which the Company can obtain additional equity financing. To the
extent the exercise prices of such options and warrants are less than the net
tangible book value of the Common Stock at the time such options are exercised,
the Company's stockholders will experience an immediate dilution in the net
tangible book value of their investment.
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RESTRICTED DIVIDEND POLICY. The Company does not currently intend to
declare or pay any dividends on the Common Stock. The payment of cash dividends
in the future will depend on the Company's earnings, financial condition,
capital needs and other factors deemed relevant by the Company's Board of
Directors including corporate law restrictions on the availability of capital
for the payment of dividends, the rights of holders of any series of preferred
stock in issue and the limitations, if any, on the payment of dividends under
any then-existing credit facility or other indebtedness. Under the terms of the
Credit Agreement dated March 11, 1998 among the Company and the lenders party
thereto (the "Credit Agreement") and the Convertible Notes the Company's
ability to pay cash dividends on the Common Stock is restricted and the Company
expects that any other bank revolving credit facility or other indebtedness, if
any, that the Company may incur in the future will contain similar
restrictions. Pursuant to the Indemnification Agreement, the Company is further
restricted from paying dividends on shares of Common Stock unless certain
minimum net worth requirements are met until, at the latest, the end of the
year 2003, except that the Company may declare dividends payable solely in
shares of capital stock which do not carry mandatory redemption or other
repayment rights. Furthermore, for so long as shares of the Series B Preferred
Stock are outstanding, the Company may not, without the consent of the holders
of at least 90% of such shares, declare or pay a dividend or otherwise make a
distribution on any security issued by the Company which is junior to the
Series B Preferred Stock with respect to dividends or upon liquidation,
including the Series A Preferred Stock.
POTENTIAL ANTITAKEOVER EFFECT OF THE INDEMNIFICATION AGREEMENT AND
CERTAIN CHARTER PROVISIONS. Pursuant to the Indemnification Agreement, the
Company and its subsidiaries may not enter into certain business combinations,
including a consolidation or merger or transfer of all or substantially all of
its assets, unless the resulting entity is either the Company or a U.S.
corporation which expressly assumes all of the Company's obligations and
restrictions under the Indemnification Agreement. Furthermore, the resulting
entity must have a consolidated tangible net worth equal to or greater than
that of the Company prior to the combination. These limitations could remain
applicable until, at the latest, the end of the year 2003. In addition, the
Series B Preferred Stock is redeemable in full upon a change of control
resulting in the Company's payment in full of all amounts due with respect to
the Credit Agreement. These restrictions could have the effect of deterring a
potential acquirer.
The Company has in excess of 20,000,000 and 125,000 shares of
authorized and unissued Common Stock and preferred stock, respectively, which
could be issued to a third party selected by management or used as the basis
for a stockholders' rights plan. This stock could have the effect of deterring
a potential acquiror. The ability of the Board of Directors of the Company to
establish the terms and provisions of different series of preferred stock could
discourage unsolicited takeover bids from third parties.
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SELLING STOCKHOLDERS
The Shares of Common Stock covered by this Prospectus will be offered
by an undetermined number of officers and directors of the Company who are
deemed affiliates of the Company and who have or may acquire Shares under the
Plan. The names of the Selling Stockholders currently known and the amount of
Shares that they will offer for sale, are set forth below. The names of
additional selling stockholders and the amount of Shares to be offered by sale
by such additional Selling Stockholders, will be added by a Post-Effective
Amendment to this Prospectus. There is no assurance that any of such Selling
Stockholders will offer for sale or sell any or all of the Company's Common
Stock offered by them pursuant to this Prospectus.
<TABLE>
<CAPTION>
NUMBER PERCENTAGE PERCENTAGE
NUMBER OF OF OF
OF SHARES SHARES COMMON COMMON
OWNED NUMBER TO BE STOCK TO STOCK TO
PRIOR TO OF SHARES OWNED BE OWNED BE OWNED
THE TO BE AFTER THE BEFORE THE AFTER THE
NAME OF SELLER OFFERING(1) OFFERED OFFERING OFFERING OFFERING
- -------------- ----------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Martin E. Franklin 712,003(2) 366,667 441,171 10.0% 6.4%
Chairman of the Board
Gary A. Kiedasich 43,666(3) 166,667 2,000 * *
President, Chief Executive
Officer and Director
Ian G.H. Ashken 143,749(4) 125,000 66,667 2.1% 1.0%
Executive Vice President of Finance
and Administration
Chief Financial Officer
and Assistant Secretary
Franck Bolle 64,080(5) 33,333 55,686 * *
Director
Patricia Bolle Passaquay 64,080(5) 33,333 55,686 * *
Director
David L. Moore 5,116 3,333 5,116 * *
Director
Nora Bailey 10,833 3,333 10,833 * *
Director
David Moross 0 0 0 * *
Director
</TABLE>
- ----------------------
(1) Except as otherwise noted, Shares not outstanding but deemed
beneficially owned by virtue of the right of an individual to acquire
them within sixty (60) days upon the exercise of an option are treated
as outstanding for purposes of determining beneficial ownership and
the percent beneficially owned by such individual and for the
executive officers and directors as a group.
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(2) Includes a presently exercisable option to purchase 270,832 shares of
Common Stock. Excludes 5,127 shares of Common Stock held in trust for
Mr. Franklin's minor children, as to which shares, Mr. Franklin
disclaims beneficial ownership.
(3) Includes a presently exercisable option to purchase 41,666 shares of
Common Stock.
(4) Includes a presently exercisable option to purchase 77,082 shares of
Common Stock. Excludes 8,333 shares of Common Stock held in trust for
Mr. Ashken's minor children, as to which shares Mr. Ashken disclaims
beneficial ownership.
(5) Includes a presently exercisable option to purchase 8,333 shares of
Common Stock.
* Less than 2.
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PLAN OF DISTRIBUTION
The Selling Stockholders (or their pledgees, donees, transferees, or
other successors in interest) from time to time may sell all or a portion of
the Shares "at the market" to or through a marketmaker or into an existing
trading market, in private sales, including direct sales to purchasers, or
otherwise at prevailing market prices or at negotiated or fixed prices. By way
of example, and not by way of limitation, the Shares may be sold by one or more
of the following methods: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the Shares as agent but may purchase and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account pursuant to this Prospectus; (c) an exchange distribution in accordance
with the rules of such exchange; and (d) ordinary brokerage transactions and
transactions in which the broker solicits purchasers. In effecting sales,
brokers or dealers engaged by the seller may arrange for other brokers or
dealers to participate. Brokers or dealers will receive commissions or
discounts from the seller in amounts to be negotiated immediately prior to the
sale. Such brokers or dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. In addition, any securities covered by this
Prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather than pursuant to this Prospectus.
The Selling Stockholders may agree to indemnify any agent, dealer or
broker-dealer that participates in transactions involving sales of the Shares
against certain liabilities, including liabilities arising under the Securities
Act. Any commissions paid or any discounts or concessions allowed to any such
broker-dealer which purchases Shares as principal or any profits received on
the resale of such Shares may be deemed to be underwriting discounts and
commissions under the Securities Act.
In order to comply with certain state securities law, if applicable,
the Common Stock will not be sold in a particular state unless the Common Stock
has been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
Each Selling Stockholder will deliver a Prospectus in connection with
the sale of the Shares.
EXPENSES
All expenses of this Offering, including the expenses of the
registration of the Shares of Common Stock offered hereby, will be borne by the
Company. It is estimated that the total amount of such expenses will not exceed
$30,000.
24
<PAGE>
USE OF PROCEEDS
The Company will receive no proceeds from the sale of the Shares of
Common Stock by the Selling Stockholders, but will receive funds from the sale
of stock to the Selling Stockholders, which funds will be used by the Company
for working capital.
LEGALITY
Certain legal matters in connection with the securities offered
hereunder will be passed upon for the Company by Kane Kessler, P.C., 1350
Avenue of the Americas, New York, New York 10019.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Company's Annual Report on Form 10-K have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in accounting and auditing.
+
25
<PAGE>
This Prospectus contains information concerning the Company, but does
not contain all of the information set forth in the Registration Statement and
the Exhibits relating thereto, which the Company has filed with the Securities
and Exchange Commission, Washington, D.C., under the Securities Act of 1933, as
amended, and to which reference is hereby made.
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION...................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 3
THE COMPANY................................................................ 4
RISK FACTORS............................................................... 9
SELLING STOCKHOLDERS...................................................... 22
PLAN OF DISTRIBUTION....................................................... 24
EXPENSES................................................................... 24
USE OF PROCEEDS............................................................ 25
LEGALITY................................................................... 25
EXPERTS.................................................................... 25
No dealer, salesman or other person has been authorized to given any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any of the securities
offered hereby in any jurisdiction to any person to whom it is unlawful to make
such offer in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall under any circumstances create any implication
that there have been no changes in the affairs of the Company since the date
hereof.
26
<PAGE>
PART II
Item 3. Incorporation of Documents by Reference
The following documents filed with the Securities and Exchange
Commission (the "Commission") by the Company are incorporated as of their
respective dates in this Registration Statement by reference:
1. The Company's Registration Statement on Form S-1 (the
"Registration Statement"), declared effective by the
Commission June 19, 1998.
2. The description of the Company's common Stock contained in
the Company's Registration Statement including any amendments
or reports filed for the purpose of updating such
description.
3. Description of the Company's common Stock contained in the
Company's Registration statement on Form 8-A filed with the
Commission on March 11, 1998 pursuant to Section 12 of the
Exchange Act, including any amendments or reports filed for
the purpose of updating such description.
4. The Company's Annual Report on Form 10-KA for the fiscal year
ended December 31, 1997.
5. The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, subsequent to the date of
this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, are incorporated by reference
in this registration statement and are a part hereof from the date of filing
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
Item 4. Description of Securities.
II-1
<PAGE>
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL")
empowers a Delaware corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation or
enterprise. A corporation may, in advance of the final disposition of any
civil, criminal, administrative or investigative action, suit or proceeding,
pay the expenses (including attorneys' fees) incurred by any officer, director,
employee or agent in defending such action, provided that the director or
officer undertakes to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the corporation. A corporation may
indemnify such person against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe his conduct was unlawful.
A Delaware corporation may indemnify officers and directors in an
action by or in the right of the corporation to procure a judgment in its favor
under the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses (including attorneys' fees) which he
actually and reasonably incurred in connection therewith. The indemnification
provided is not deemed to be exclusive of any other rights to which an officer
or director may be entitled under any corporation's by-law, agreement, vote or
otherwise. In accordance with Section 145 of the DGCL and the Company's
Restated Certificate of Incorporation, as amended (the "Restated Certificate")
and Article IX of the Company's By-laws (the "By-laws"), the Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit, proceeding or claim by
or in the right of the Company to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit
II-2
<PAGE>
plan or other enterprises against expenses (including attorney's fees and
expenses) actually and reasonably incurred by him and to the extent permitted
by applicable law in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Company unless
and only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnification for such
expenses and amounts which the Court of Chancery or such other court shall deem
proper.
Any indemnification under the By-laws Article IX (unless ordered by a
court) shall be made by the Company only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances because he has met the applicable standard
of conduct set forth in the By-laws. Such determination and other
determinations under the By-laws shall be made (i) by the Board of Directors of
the Company by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders. To the extent, however, that a director or officer, employee or
agent of the Company has been successful on the merits or otherwise in defense
of any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees and expenses) actually and reasonably incurred by
him in connection therewith, without the necessity of authorization in the
specific case.
Section 9 of Article IX of the By-laws provides that the Company may
purchase and maintain insurance on behalf of its directors, officers, employees
and agents against any liabilities asserted against such persons arising out of
such capacities.
The Company has entered into indemnification agreements with each of
its current directors and certain of its officers and other key personnel,
pursuant to which the Company has agreed to indemnify each indemnitee to the
fullest extent authorized by law, against any and all damages, judgments,
settlements and fines ("losses") in connection with any action, suit,
arbitration or proceedings, or any inquiry or investigation, whether brought by
or in the right of the Company or otherwise, whether civil, criminal,
administrative, investigative or other, or any appeal therefrom, by reason of
an indemnitee's serving as a director of the Company. An indemnitee is not
entitled to indemnification for any losses that are (i) based or attributable
to the indemnitee gaining in fact any personal profit or advantage to which the
indemnitee is not entitled, (ii) for the return by the indemnitee of any
remuneration paid to the indemnitee without the previous approval of the
stockholders of the Company which is illegal, (iii) for violations of Section
16 of the Securities Exchange Act of 1934 or similar provisions of state law,
(iv) based upon knowingly fraudulent, dishonest or willful misconduct and (v)
not permitted to be covered by applicable law. The agreements provide that the
indemnification under the agreement is not exclusive of any other rights
II-3
<PAGE>
the indemnitee may have under the Restated Certificate, the By-Laws, the DGCL
or any agreement or vote of shareholders.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Number Description
- ------ -----------
4.2 1998 Stock Incentive Plan of the Company*
5.1 Opinion of Kane Kessler, P.C.**
23.1 Consent of Kane Kessler, P.C. (included in Exhibit 5.1)**
23.2 Consent of Price Waterhouse LLP**
24.1 Power of Attorney (contained on signature page)**
- -----------------------------------
* Incorporated by reference to the Company's Registration Statement on
Form S-1 declared effective by the Securities and Exchange Commission
on February 13, 1998 (No. 333-40279).
** File herewith.
II-4
<PAGE>
Item 9. 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 of
1933;
(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;
(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 paragraphs A(1)(i) and A(1)(ii) do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or 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) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) 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.
II-5
<PAGE>
(C) The undersigned registrant hereby undertakes to deliver or cause
to be delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act;
and, where interim financial information required to be presented by Article 3
of Regulation S-X are not set forth in the prospectus, to deliver or cause to
be delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(D) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, 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 such liabilities (other than the payment by 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-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on the 6th day of
July, 1998.
BOLLE INC.
By: /s/ Martin E. Franklin
---------------------------------------
Martin E. Franklin,
Chairman of the Board of Directors
We, the undersigned officers and directors of Bolle Inc., and each of
us, do hereby constitute and appoint Martin E. Franklin and Ian G.H. Ashken, or
any of them, our true and lawful attorneys and agents, each with full power of
substitution, to do any and all acts and things in our name and behalf in our
capacities as directors or officers and to execute any and all instruments for
us and in our names in the capacities listed below, which attorneys and agents,
or any of them, may deem necessary or advisable to enable said corporation to
comply with the Securities Act, as amended, and any rules, regulations, and
requirements of the Securities and Exchange Commission, in connection with the
Registration Statement, including specifically, but without limitation, power
and authority to sign for us or any of us in our names in the capacities
indicated below, any and all amendments (including post-effective amendments)
hereto; and we do hereby ratify and confirm all that said attorneys and agents,
or their substitute or substitutes, or any of them, shall do or cause to be
done by virtue thereof.
II-7
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Martin E. Franklin Chairman of the Board of July 6, 1998
- ---------------------------- Directors (Principal Executive
Martin E. Franklin Officer)
/s/ Gary A. Kiedaisch President, Chief Executive Officer and July 6, 1998
- ---------------------------- Director
Gary A. Kiedaisch
/s/ Ian G.H. Ashken Chief Financial Officer July 6, 1998
- ---------------------------- (Principal Financial and
Ian G.H. Ashken Accounting Officer),
Assistant Secretary and Director
/s/ Frank Bolle Director July 6, 1998
- ----------------------------
Franck Bolle
/s/ Patricia Bolle Passaquay Director July 6, 1998
- ----------------------------
Patricia Bolle Passaquay
/s/ David Moore Director July 6, 1998
- ----------------------------
David Moore
II-8
<PAGE>
/s/ Nora Bailey Director July 6, 1998
- -----------------------------
Nora Bailey
/s/ David Moross Director July 6, 1998
- -----------------------------
David Moross
</TABLE>
II-9
<PAGE>
EXHIBIT INDEX
DESCRIPTION
THE FOLLOWING DOCUMENTS ARE INCORPORATED BY REFERENCE:
4.2 1998 Stock Incentive Plan of the Company incorporated by reference to
the Company's Registration Statement on Form S-1, declared effective
by the Commission on February 13, 1998 (Reg. No. 333-40279).
THE FOLLOWING DOCUMENTS ARE FILED HEREWITH:
PAGE
5.1* Opinion of Kane Kessler, P.C.
23.1* Consent of Kane Kessler, P.C. (included in Exhibit 5.1)
23.2* Consent of Price Waterhouse LLP
24.1* Power of Attorney (contained on signature page)
- ------------------------------------
* Filed herewith.
<PAGE>
EXHIBIT 5.1
KANE KESSLER, P.C.
1350 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-4896
(212) 541-6222
July 6, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Bolle Inc.
Registration Statement on Form S-8
Gentlemen:
We have acted as special counsel to Bolle Inc. a Delaware
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") pertaining to
the registration by the Company under the Securities Act of 1933, as amended,
of an offering of up to an aggregate of 2,500,000 shares of the Company's
Common Stock, $.01 par value per share (the "Shares"), pursuant to the
Company's 1998 Stock Incentive Plan (the "Plan").
We have made such legal and factual examinations and
inquiries, including an examination of originals or copies certified or
otherwise identified to our satisfaction of such documents, corporate records
and instruments, as we have deemed necessary or appropriate for purposes of
this opinion. In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity to authentic original documents of all documents submitted to us
as copies.
<PAGE>
Securities and Exchange Commission
July 6, 1998
Page 2
We have assumed that the Company will cause certificates
representing Shares issued in the future to be properly executed and delivered
and will take all other actions appropriate for the due and proper issuance of
such Shares. We have assumed for purposes of this opinion that options issued
under the Plan and the Shares issuable upon exercise of such options have been
duly authorized by all necessary corporate action on the part of the Company
and such options have been duly authorized and granted under the Plan. We
express no opinion regarding any shares reacquired by the Company after initial
issuance.
We are members of the Bar of the State of New York and are
not admitted to practice law in any other jurisdiction. We do not hold
ourselves out as being conversant with, and express no opinion as to, the laws
of any jurisdiction other than the laws of the State of New York and the
General Corporation Law of the State of Delaware.
Subject to the limitations stated in this letter, and subject
further to the following limitations, it is our opinion that the Shares issued
by the Company, upon due exercise of any option under and in accordance with
the Plan pursuant to which such option was granted, will, upon delivery thereof
and receipt by the Company of all and adequate consideration owed to the
Company under the terms of such option and the Plan, be validly issued, fully
paid and nonassessable.
The foregoing assumes that the aforesaid Registration
Statement will become and remain effective under the Securities Act of 1933, as
amended, prior to any offering of the Shares pursuant to the terms thereof and
will be amended, as appropriate, and that there will be compliance with all
applicable state securities laws in connection with the offering of such
securities, as well as compliance with the terms of the offering set forth in
the Registration Statement.
<PAGE>
Securities and Exchange Commission
July 6, 1998
Page 3
This opinion is rendered solely for your benefit and may not
be relied upon by any other person or entity. This opinion is provided to you
as of the date hereof. We undertake no, and hereby disclaim any obligation to
advise you of any change in any matter set forth herein. Without our prior
written consent, this opinion may not be quoted in whole or in part or
otherwise referred to in any report or document furnished to any person or
entity.
We consent to the filing of this letter as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Kane Kessler
-----------------
Kane Kessler, P.C.
*
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-8 of our report
dated April 15, 1998 appearing on page 16 of Bolle Inc's Annual Report for the
year ended December 31, 1997 for the year ended December 31, 1997. We also
consent to the reference to us under the heading "Experts" in such Propesctus.
PRICE WATERHOUSECOOPERS LLP
Dallas, Texas
July 6, 1998
