<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.)
Filed by registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, For Use of the
Commission Only (as permitted by
Rule 14a - 6(e)(2)
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Bolle Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
<PAGE>
1) Amount previously paid:
- --------------------------------------------------------------------------------
2) Form, schedule or registration statement No.:
- --------------------------------------------------------------------------------
3) Filing party:
- --------------------------------------------------------------------------------
4) Date filed:
- --------------------------------------------------------------------------------
<PAGE>
BOLLE INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 24, 1999
To our Stockholders:
You are cordially invited to attend the annual meeting of the
stockholders, or any adjournments or postponements thereof (the "Meeting"), of
Bolle Inc. (the "Company"), which will be held on June 24, 1999 at 10:00 A.M.
local time, at 9500 West 49th Avenue, Suite B-102, Wheat Ridge, Colorado for the
following purposes:
1. To elect seven directors to serve until the next annual meeting of
stockholders and until their successors are duly elected and qualified (Proposal
1);
2. To consider and vote upon a proposal to ratify and approve the 1999
Employee Stock Purchase Plan of the Company (Proposal 2);
3. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1999 (Proposal 3);
and
4. To transact such other business as may properly be brought before
the Meeting.
Stockholders of record at the close of business on May 21, 1999 shall
be entitled to notice of and to vote at the Meeting. A copy of the Annual Report
of the Company for the fiscal year ended December 31, 1998 is being mailed to
stockholders simultaneously herewith.
YOU ARE INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO BE
PRESENT, KINDLY COMPLETE AND SIGN THE ENCLOSED PROXY EXACTLY AS YOUR NAME
APPEARS ON YOUR STOCK CERTIFICATES, AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN
ENVELOPE SO THAT YOUR VOTE CAN BE RECORDED.
By order of the Board of Directors
GARY A. KIEDAISCH
CHIEF EXECUTIVE OFFICER
MAY 24, 1999
RYE, NEW YORK
<PAGE>
BOLLE INC.
555 THEODORE FREMD AVENUE
RYE, NEW YORK 10580
PROXY STATEMENT
Your proxy is solicited by the Board of Directors (the "Board" or
"Board of Directors") of Bolle Inc. (the "Company") for use at the annual
meeting of stockholders, or any adjournment or postponement thereof, to be held
on Thursday, June 24, 1999 (the "Meeting") at 10:00 A.M. local time, in 9500
West 49th Avenue, Suite B-102, Wheat Ridge, Colorado for the purposes set forth
in the attached Notice of Meeting. This Proxy Statement and form of proxy are
being mailed to stockholders on or about May 28, 1999.
Any stockholder giving a proxy may revoke it at any time prior to its
use at the Meeting by giving written notice of revocation to the Secretary of
the Company; mere attendance at the Meeting, without such notice, will not
revoke the proxy. Properly executed proxies will be voted in the manner directed
by a stockholder and, if no direction is made, will be voted FOR the election of
each of the seven management nominees as directors (Proposal 1), FOR the
ratification and approval of the 1999 Employee Stock Purchase Plan (the "1999
Plan") of the Company (Proposal 2) and FOR the ratification of the appointment
of Ernst & Young LLP as the Company's independent auditors (Proposal 3).
The Board of Directors does not intend to present at the Meeting any
matters other than those set forth in this Proxy Statement, nor does the Board
of Directors know of any other matters which may come before the Meeting.
However, if any other matters properly come before the Meeting, it is the
intention of the persons named in the enclosed form of proxy to vote on those
matters in accordance with their judgment.
As of May 21, 1999, the record date fixed for the determination of
stockholders entitled to notice of and to vote at the Meeting, there were
outstanding 6,895,329 shares of the Company's common stock, par value $.01 per
share (the "Common Stock") which is the only outstanding class of voting
securities of the Company. Each outstanding share of Common Stock is entitled to
one vote on each matter to be voted upon.
The By-laws of the Company provide that stockholders holding a majority
of the shares of Common Stock shall constitute a quorum at meetings of the
stockholders. Shares represented in person or by proxy as to any matter will be
counted toward the fulfillment of a quorum. The affirmative vote of a plurality
of the votes cast in person or by proxy is necessary for the election of
directors (Proposal 1). The affirmative vote of a majority of the votes cast in
person or by proxy is necessary for the ratification and approval of the 1999
Plan (Proposal 2) and the ratification of the appointment of independent
auditors (Proposal 3).
Votes at the Meeting will be tabulated by an inspector of election
appointed by the Company or the Company's transfer agent. Since the affirmative
vote of a plurality of votes cast is required
<PAGE>
for the election of directors, abstentions and "broker non-votes" will have no
effect on the outcome of such election. Since the affirmative vote of a majority
of the votes cast is necessary for the ratification and approval of the 1999
Plan (Proposal 2) and ratification of the appointment of independent auditors
(Proposal 3), an abstention will have the same effect as a negative vote, but
"broker non-votes" will have no effect on the outcome of the vote.
Brokers holding shares for beneficial owners must vote those shares
according to the specific instructions they receive from beneficial owners. If
specific instructions are not received, brokers may be precluded from exercising
their discretion, depending on the type of proposal involved. Shares as to which
brokers have not exercised discretionary authority or received instructions from
beneficial owners are considered "broker non-votes."
Only stockholders of record at the close of business on May 21, 1999
will be entitled to vote at the Meeting or any adjournment or postponement
thereof.
IT IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE
STOCKHOLDERS' INTERESTS BE REPRESENTED AT THE MEETING BY PROXY OR IN PERSON.
THEREFORE, EVEN IF YOU INTEND TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO
SIGN AND RETURN THE ENCLOSED PROXY TO ENSURE THAT YOUR STOCK WILL BE
REPRESENTED. IF YOU ARE PRESENT AT THE MEETING AND DESIRE TO DO SO, YOU MAY
WITHDRAW YOUR PROXY AND VOTE IN PERSON BY GIVING WRITTEN NOTICE TO THE SECRETARY
OF THE COMPANY. PLEASE RETURN YOUR EXECUTED PROXY PROMPTLY.
- 2 -
<PAGE>
STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of May 21, 1999 (i) the name, address
and holdings as to each person (including any "group" as defined in Section
13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
known by the Company to be the beneficial owner of more than five percent of the
Common Stock, and (ii) the beneficial ownership of Common Stock of each of the
executive officers and directors of the Company and all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER Amount and Nature of Percentage of Class
Beneficial Ownership (1) Owned
<S> <C> <C>
Martin E. Franklin (2)
555 Theodore Fremd Avenue
Suite B-302
Rye, New York 10580.......................... 737,212 10.3%
Gary A. Kiedaisch.............................. 43,666 *
Ian G.H. Ashken (3)............................ 166,666 2.4%
Nora A. Bailey................................. 11,666 *
Franck Bolle................................... 195,144 2.8%
Patricia Bolle Passaquay....................... 195,144 2.8%
David L. Moore................................. 5,949 *
David S. Moross................................ 833 *
Thomas Reed................................... 4,187 *
All Executive Officers and Directors
as a group (9 persons)........................ 1,360,467 17.8%
Millbrook Partners, L.P.(4)
2102 Sawgrass Village Drive
Ponte Vedra Beach, Florida 32082............. 1,020,865 15.4%
Marvin Schwartz(5)
605 Third Avenue
New York, New York 10158..................... 463,157 7%
OZ Management, L.L.C. (6)
153 East 53rd Street
New York, New York 10022..................... 1,821,388 22.1%
</TABLE>
- ---------------
*Less than 1%.
(1) 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.
(2) 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) 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.
(4) Based on Schedule 13D filing, dated June 11, 1998. 991,199 of these shares,
or 8.7% of the Common Stock are beneficially held by Millbrook Partners,
L.P. ("Millbrook"), and the remaining 29,666 shares are beneficially held
by Millbrook's general partner, Mark M. Mathes.
(5) In a Schedule 13D filing dated March 26, 1998, Marvin Schwartz, acting in
his personal capacity and not as a principal of Neuberger & Berman,
reported beneficial ownership of such shares.
(6) 1,333,333 shares issuable at any time at the option of OZ Master Fund, Ltd.
upon conversion of $7,000,000 aggregate principal amount of the Convertible
Notes, subject to the provisions of the Convertible Note Purchase
Agreement. Includes 248,055 additional shares held by OZ Master Fund, Ltd.
and 240,000 shares held by its affiliate Och-Ziff Capital Management, L.P.,
over which OZ Management, L.L.C., the investment manager to the foregoing
entities, may be deemed to have investment power.
- 3 -
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The By-laws of the Company provide that the Company shall have between
two and twelve directors, with such number to be fixed by the Board of
Directors. Effective at the time and for the purposes of the Meeting, the
number of directors of the Company, as fixed by the Board of Directors pursuant
to the By-laws of the Company is seven.
Unless otherwise specified, each proxy received will be voted for the
election as directors of the seven nominees named below to serve until the 2000
annual meeting of stockholders and until their successors shall have been duly
elected and qualified. Each of the nominees has consented to be named a nominee
in the Proxy Statement and to serve as a director if elected. Nora A. Bailey
has declined to stand for re-election as a director of the Company. Should any
nominee become unable or unwilling to accept a nomination or election, the
persons named in the enclosed proxy will vote for the election of a nominee
designated by the Board of Directors or will vote for such lesser number of
directors as may be prescribed by the Board of Directors in accordance with the
By-laws of the Company.
The following table sets forth the names, ages and positions of the
persons that have been nominated as directors of the Company's Board of
Directors. Their respective backgrounds are described following the table.
<TABLE>
<CAPTION>
NAME Age Position
- ---- --- --------
<S> <C> <C>
Martin E. Franklin(1)(2)..... 34 Chairman of the Board of Directors
Gary A. Kiedaisch(1)......... 52 President, Chief Executive Officer and
Director
Ian G. H. Ashken(1)(2)....... 38 Vice Chairman, Secretary and Director
Franck Bolle(1).............. 41 Director
Patricia Bolle Passaquay(1).. 42 Director
David L. Moore(2)(3)(4)...... 43 Director
David S. Moross(3)(4)........ 40 Director
</TABLE>
- ---------------------
(1) Member of Executive Committee
(2) Member of Nominating Committee
(3) Member of Audit Committee
(4) Member of Compensation/Stock Option Committee
Directors of the Company are elected at each annual meeting of
stockholders. The next annual meeting of stockholders is currently intended to
be held during June 2000. All of the officers identified above serve at the
discretion of the Board of Directors of the Company. Other than Franck Bolle
and Patricia Bolle Passaquay, who are cousins, there are no family
relationships between any persons identified above.
The following are brief biographies of persons identified above.
- 4 -
<PAGE>
Martin E. Franklin was elected Chairman of the Board of Directors of
Bolle Inc. in February 1997. Mr. Franklin has been Chairman and Chief Executive
Officer of Marlin Holdings, Inc., the general partner of Marlin Capital, L.P., a
private investment partnership since October 1996. From May 1996 until March
1998, Mr. Franklin served as Chairman and Chief Executive Officer of Lumen
Technologies, Inc., a NYSE Company ("Lumen"), and served as Executive Chairman
from March 1998 until December 1998. Mr. Franklin was Chairman of the Board and
Chief Executive Officer of Lumen's predecessor, Benson Eyecare Corporation from
October 1992 to May 1996 and President from November 1993 until May 1996. Mr.
Franklin was non-executive Chairman and a director of Eyecare Products plc, a
London Stock Exchange Company, from December 1993 until February 1999. In
addition, Mr Franklin has served as a director of Specialty Catalog Corp., a
NASDAQ National Exchange listed company, since 1994. Mr. Franklin also serves on
the boards of a number of privately held companies and charitable organizations.
Mr. Franklin received a B.A. in Political Science from the University of
Pennsylvania in 1986.
Gary A. Kiedaisch was appointed President, Chief Executive Officer and
a member of the Board of Directors of the Company in July 1997. From 1989 until
his appointment as the Chief Executive Officer of the Company, Mr. Kiedaisch had
been President and Chief Executive Officer of the Mt. Mansfield Company d/b/a
Stowe Mountain Resort, a wholly owned subsidiary of multi-national insurance and
financial services conglomerate American International Group. Prior to his
tenure in Stowe, he held executive positions with several high visibility
companies in the winter sports industry including AMF Head Ski Worldwide,
Raichle Monitor USA, Blizzard North America and Hart Ski Manufacturing Company,
where he had responsibility for worldwide marketing, coordinating and
consolidating distributor networks and unifying worldwide brand identification.
Ian G.H. Ashken, A.C.A. was elected Vice-Chairman and Secretary of the
Company in December 1998. From February 1997 until his appointment as
Vice-Chairman, Mr. Ashken was Executive Vice President, Chief Financial Officer,
Assistant Secretary and a Director of the Company. Mr. Ashken was elected
Executive Vice President, Chief Financial Officer, Assistant Secretary and a
Director of Lumen from December 1995 until he resigned from these positions in
December 1998. Mr. Ashken was Chief Financial Officer of Benson and a director
of Benson from October 1992 to May 1996. Mr. Ashken also served as Benson's
Executive Vice President from October 1994 to May 1996; Secretary from October
1992 to December 1993; and, Assistant Secretary from December 1993 to May 1996.
Since October 1996, Mr. Ashken has been Vice Chairman of Marlin Holdings, Inc.,
the general partner of Marlin Capital, L.P. Mr. Ashken was a director of Eyecare
Products plc from August 1994 until he resigned this position in February 1999.
Mr. Ashken received his B.A. (Hons) in Economics and Accounting from the
University of Newcastle in England.
Franck Bolle has been a member of the Board of Directors of the Company
since July 1997. Mr. Bolle was appointed President and Director of International
Operations of Bolle France in July 1997. Mr. Bolle has been a member of the
executive management of Bolle France since 1984 and as such has shared
responsibility with Ms. Passaquay for the day-to-day operations of Bolle France.
Prior to joining Bolle France, Mr. Bolle served as Sales Manager of a home
improvement supplies
- 5 -
<PAGE>
manufacturer. Mr. Bolle holds a degree in business administration with a
concentration in marketing from Ecole Libre des Sciences Commerciales
Appliquees of Paris, France.
Patricia Bolle Passaquay has been a member of the Board of Directors
of the Company and Director of Export Sales since July 1997. Ms. Passaquay has
been a member of the executive management of Bolle France since 1981 and as
such has shared responsibility with Mr. Franck Bolle for the day-to-day
operations of Bolle France. Ms. Passaquay holds a degree in business
administration with a concentration in marketing from Ecole Libre des Sciences
Commerciales Appliquees of Paris, France.
David L. Moore has been President and Chief Executive Officer of
Century 21 Home Improvements, and for more than fifteen years has been
President and Chief Executive Officer of Garden State Brickface, Inc., a
leading New York metropolitan area residential and commercial remodeling firm.
Mr. Moore received his B.A. in Economics from Amherst College and his M.B.A.
from Harvard University.
David S. Moross became a member of the Company's Board of Directors in
March 1998. Mr. Moross is the Managing Partner of IMG/Chase Sports Capital,
L.P., a global private equity investment fund. Prior to establishing this
fund, Mr. Moross was Vice Chairman of Whitehall Financial Group, where he was
actively involved in direct equity investments and debt financings. Mr. Moross
was also Chairman of Insco, Inc., a Whitehall affiliate which provided
management consulting services. In addition, he served as Chief Executive
Officer of Kalvin-Miller International, Inc., a national insurance broker. He
currently is a member of Whitehall's Board of Directors and serves as a
Governor of the Dana-Farber Cancer Institute. Mr. Moross received his B.A. in
economics from the University of Texas at Austin.
The Company has established (i) an Audit Committee which reviews the
services provided by the Company's independent auditors, consults with the
independent auditors on audits and proposed audits of the Company and reviews
the need for internal auditing procedures and the adequacy of internal
controls; (ii) a Compensation Committee which determines executive compensation
and stock option awards; (iii) an Executive Committee which exercises, to the
maximum extent permitted by law, all powers of the Board of Directors between
board meetings, except those functions assigned to specific committees; and
(iv) a Nominating Committee which selects nominees for election as members of
the Board of Directors of the Company. The Board of Directors may establish
additional committees from time to time.
- 6 -
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
NAME POSITION WITH THE COMPANY
---- -------------------------
Martin E. Franklin Chairman of the Board of Directors
Gary A. Kiedaisch President, Chief Executive Officer and Director
Thomas Reed Chief Financial Officer and Assistant Secretary
See the table of nominees for election as directors for biographical data
with respect to Messrs. Franklin and Kiedaisch.
Thomas Reed, 38, was appointed Chief Financial Officer of the Company in
January 1999. From June 1997 until his appointment as Chief Financial Officer of
the Company, Mr. Reed was Chief Financial Officer and Chief Operating Officer of
Bolle America, Inc. Mr. Reed was Vice President of Finance and Administration of
Bolle America, Inc. from November 1996 until his appointment as Chief Financial
Officer and Chief Operating Officer of Bolle America, Inc. From December 1994
until his appointment as Vice President of Finance and Administration of Bolle
America Mr. Reed was the Controller of Bolle America, Inc. Mr. Reed was with the
accounting firm of Ernst & Young from September 1989 through November 1994,
where he specialized in the areas of manufacturing and distribution. Mr. Reed
received his B.A., MBA, and MaCC from the University of Denver in Denver,
Colorado.
- 7 -
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth information
concerning compensation earned by the Company's Chief Executive Officer and its
other executive officers in the fiscal years ended December 31, 1998 and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Awards
Number Of
Securities
Underlying All Other
Salary Bonus Option/ Compensation
Name And Principal Position Year ($) ($) Sars ($)
<S> <C> <C> <C> <C> <C>
Gary A. Kiedaisch 1998 223,077 -- 100,000 --
Chief Executive Officer.......... 1997(1) 103,846 37,500 166,667 --
Martin E. Franklin(2) 1998 -- -- -- --
Executive Chairman............... 1997 -- -- -- --
</TABLE>
- ------------
(1) FROM HIS DATE OF HIRE IN JULY 1997.
(2) MR. FRANKLIN IS NOT PAID A SALARY BY THE COMPANY. HE IS PARTY TO THE
COMPANY'S MANAGEMENT SERVICES AGREEMENT. SEE "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS."
OPTION GRANTS IN 1998
The following table sets forth information regarding new Bolle Options
currently held by the executive officers which were granted by the Company in
1998, other than Company options issued in conjunction with Lumen Technologies,
Inc. ("Lumen") pro rata distribution to its stockholders of record as of March
11, 1998 of all of its equity interest the Company (the "Spinoff") for Lumen
options held. In accordance with the rules of the Commission, the table sets
forth the hypothetical gains or "option spreads" that would exist for the
options at the end of their terms. These gains are based on assumed rates of
annual compound stock price appreciation of Company common stock of 5% and 10%
from the date the options were granted to the end of the option terms.
- 8 -
<PAGE>
OPTION GRANTS IN FISCAL 1998
<TABLE>
<CAPTION>
Individual Grants
-----------------
Potential Realizable
Value at
Assumed Annual
Number of Percent of Total Rates of
Securities Options Stock Price
Underlying Granted To Exercise Appreciation for
Options Employees in Price Expiration Option Term
Name GRANTED FISCAL 1998 PER SHARE DATE 5% 10%
- ---- ------- ----------- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Gary A. Kiedaisch(1)(2).... 100,000 26% $3.75 Sept. 23, 2005 $127,628 $161,051
Martin E. Franklin(3)...... -- -- -- -- -- --
</TABLE>
- ---------------
(1) 25,000 OF MR. KIEDAISCH'S OPTIONS WILL VEST ON EACH OF SEPTEMBER 23, 1999,
2000, 2001 AND 2002.
(2) MR. KIEDAISCH WAS ISSUED COMPANY OPTIONS DURING 1998 IN CONNECTION WITH THE
REPLACEMENT OF HIS PREVIOUSLY ISSUED LUMEN OPTIONS HELD AT THE TIME OF THE
SPINOFF. MR. KIEDAISCH WAS THEREBY ISSUED 166,667 OPTIONS AT AN AVERAGE
EXERCISE PRICE OF $.76 WITH EXPIRATION DATES FROM JULY 1998 THROUGH
JULY 20, 2001.
(3) MR. FRANKLIN WAS NOT ISSUED ANY NEW COMPANY OPTIONS DURING 1998. MR.
FRANKLIN WAS ISSUED COMPANY OPTIONS DURING 1998 FOR THE EQUIVALENT VALUE OF
HIS LUMEN OPTIONS HELD AT THE TIME OF THE SPINOFF. LUMEN WAS REQUIRED TO
TAKE A COMPENSATION CHARGE FOR THIS ISSUANCE. MR. FRANKLIN WAS THEREBY
ISSUED 339,167 OPTIONS AT AN AVERAGE EXERCISE PRICE $1.81 WITH EXPIRATION
DATES FROM MAY 3, 2003 THROUGH MARCH 25, 2004.
OPTIONS EXERCISED IN LAST FISCAL YEAR;
FISCAL YEAR ENDED OPTION VALUES
The following table summarizes certain information regarding certain
year end option values of Bolle Options currently held by the named executive
officers.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at FY-End In-The-Money Options At FY-End
($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- ----
<S> <C> <C>
Gary A. Kiedaisch........... 41,666/225,001 $51,665/$155,001
Martin E. Franklin.......... 261,249/77,918 $274,082/$11,918
</TABLE>
DIRECTORS' COMPENSATION
Members of the Company's Board of Directors other than those who are
officers or employees of the Company and the Chairman and Vice Chairman of the
Board, will receive for 1998 an annual fee of $15,000 for their services as
directors and as members of any committees of the Company's Board of Directors
on which they serve. Thereafter, members of the Company's Board of Directors
other than those who are officers or employees of the Company and the
- 9 -
<PAGE>
Chairman of the Board, will receive an annual retainer fee in an amount to be
determined. Directors who are not officers or employees of the Company
("Non-Employee Directors") also receive automatic stock option grants under the
Plan. See "Certain Relationships and Related Transactions".
Ms. Nora Bailey, a member of the Company's Board of Directors since
March 1998, is an attorney specializing in federal tax law. In her professional
capacity she has rendered legal advice and related services to both the Company
and to Lumen. Ms. Bailey has rendered such services both prior to and subsequent
to her appointment to the Company Board of Directors, and it is anticipated that
from time to time in the future she will be engaged to provide similar legal
services to the Company. All fees paid to Ms. Bailey in connection with such
services have been agreed in arms' length negotiations and are in accordance
with Ms. Bailey's usual and customary billing practices. Fees paid to Ms. Bailey
by the Company in connection with such services are not paid in consideration of
her services as a director. Aggregate fees paid by the Company to Ms. Bailey
during 1998 were approximately $8,000.
EMPLOYMENT AGREEMENTS
Mr. Kiedaisch is employed full time pursuant to an employment agreement
with the Company, which as amended during 1998 provides for a term ending on
December 31, 2001, unless earlier terminated by either party. At that time, the
agreement will automatically extend for additional one year terms unless either
party gives six months written notice prior to the end of the initial term or 90
days written notice prior to the end of any renewal term. Mr. Kiedaisch's
employment agreement provides for annual base compensation of $275,000 and
entitles Mr. Kiedaisch to a bonus each year which varies based on the Company's
annual earnings reaching certain milestones. Mr. Kiedaisch also received a grant
of Lumen options which were exchanged upon the completion of the Spinoff for
166,667 options to purchase shares of Common Stock. During 1998, Mr. Kiedaisch
received a grant of 100,000 Company Options. Pursuant to a separate Memorandum
of Understanding, Mr. Kiedaisch will be entitled to a cash payment from the
Company if the value of the nominal gains on the options (the "Nominal Gain") at
the close of business on July 6, 2001 falls below certain levels as follows: if
Mr. Kiedaisch is still employed on July 6, 2001 or his employment has been
terminated prior to that date without cause, and the Nominal Gain is less than
$500,000, the Company shall pay to Mr. Kiedaisch the difference between $500,000
and the Nominal Gain. If Mr. Kiedaisch's employment has been terminated prior to
July 6, 2001 other than without cause, and the Nominal Gain is less than
$338,000, the Company shall pay to Mr. Kiedaisch the difference between $338,000
and the Nominal Gain. The employment agreement restricts Mr. Kiedaisch from
competing against the Company and its affiliates in the United States or any
other territory where the Company does business or in which the Company's
products are marketed for a period of one year following the expiration of the
employment agreement and further contains certain anti-solicitation and
confidentiality provisions. The Company may terminate the employment agreement
without compensation in the event Mr. Kiedaisch commits a material breach not
cured after receiving notice thereof, is grossly or willfully negligent or
commits fraud or a misappropriation. The Company may terminate the employment
agreement without cause upon paying Mr. Kiedaisch a severance
- 10 -
<PAGE>
indemnity equal to one year's base compensation or all remaining base
compensation due thereunder for the remainder of the term, whichever is greater,
plus the pro rata portion of his bonus for the then current year. In the event
of any termination without cause, all options granted to Mr. Kiedaisch which are
not then vested will vest automatically.
BOLLE 1998 STOCK INCENTIVE PLAN
In January 1998, the Company's Board of Directors adopted the 1998
Stock Incentive Plan (the "Plan") under which 2,500,000 shares of Common Stock
are reserved for issuance pursuant to the grant of stock-based awards under the
Plan. Pursuant to the Plan, employees, officers, directors and consultants of
the Company and its subsidiaries and affiliates (other than employees subject to
a collective bargaining agreement) are eligible to be selected by the
Compensation Committee as participants to receive discretionary awards of
various forms of equity-based incentive compensation, including stock options,
stock appreciation rights, restricted stock awards, performance share unit
awards and phantom stock unit awards, and awards consisting of any combination
of such equity-based incentives as set forth below.
The Plan is administered by the full Board of Directors of the Company
or a committee thereof, including the Compensation Committee (the entity
administering the Plan, hereafter referred to as the "Committee"). The
Committee, in its sole discretion, will determine which eligible officers,
employees and consultants of the Company and its subsidiaries may participate in
the Plan and the type, extent and terms of the equity-based awards to be granted
to them. Members of the Committee who are Non-Employee Directors will receive
automatic non-discretionary annual grants of stock options pursuant to the Plan.
Each Non-Employee Director has been granted an option to purchase 3,333
shares of Common Stock in connection with the Spinoff. On the date that a person
first becomes a Non-Employee Director, he or she will automatically be granted
an option to purchase 3,333 shares of Common Stock. Thereafter, beginning in
1999, on the date of each annual meeting of stockholders of the Company, each
Non-Employee Director will automatically be granted an option to purchase 1,000
shares of Common Stock. All such automatic grants to Non-Employee Directors are
hereafter called "Director Options." Each Director Option has an exercise price
per share equal to the fair market value of one share of Common Stock on the
date of grant and vests and becomes exercisable over a four year period
beginning on the first anniversary of the date of grant at the rate of 25% of
each Director Option on each of the four years immediately following the date of
grant. All Director Options will be NQSO's (as defined below).
Stock options granted by the Committee under the Plan may be "incentive
stock options" ("ISOs"), within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, or "non qualified stock options" ("NQSO's").
The exercise price of the options will be determined by the Committee when the
options are granted, subject to a minimum price of the fair market value of the
Common Stock on the date of grant in the case of ISOs and the par value in the
case of NQSOs. The option exercise price for all options granted under the Plan
may be paid in cash or in shares of Common Stock having a fair market value on
the date of exercise equal to the
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exercise price or, in the discretion of the Committee, by delivery to the
Company of (i) other property having a fair market value on the date of exercise
equal to the option exercise price, or (ii) a copy of irrevocable instructions
to a stockbroker to deliver promptly to the Company an amount of sale or loan
proceeds sufficient to pay the exercise price.
A stock appreciation right (a "SAR"), may be granted by the Committee
as a supplement to a related stock option or may be granted independently of any
option. SARs granted in connection with an option will become exercisable and
lapse according to the same vesting schedule and lapse rules that are
established for the corresponding option. SARs granted independently of any
option will vest and lapse according to the terms and conditions set by the
Committee. A SAR will entitle its holder to be paid an amount equal to the
excess of the fair market value of the Common Stock subject to the SAR on the
date of exercise over the exercise price of the related stock options, in the
case of a SAR granted in connection with an option, or the fair market value of
Common Stock on the date of grant in the case of a SAR granted independently of
an option.
Shares of Common Stock covered by a restricted stock award may, in the
discretion of the Committee, be issued to the recipient at the time the award is
granted or may be deposited with an escrow agent until the end of the restricted
period set by the Committee. During the restricted period, restricted stock will
be subject to transfer restrictions and forfeiture in the event of termination
of employment with the Company or a subsidiary and other restrictions and
conditions established by the Committee at the time the award is granted.
A phantom stock unit award will provide for the future payment of cash
or the issuance of shares Common Stock to the recipient if continued employment
or other conditions established by the Committee at the time of grant are
attained.
A performance share unit award will provide for the future payment of
cash or the issuance of shares of the Common Stock to the recipient upon the
attainment of certain corporate performance goals established by the Committee
over performance award periods. At the end of each performance award period, the
Committee decides the extent to which the corporate performance goals have been
attained and the amount of cash or Common Stock to be distributed to the
participant.
During the year ended December 31, 1998, the Company granted 385,500
options under the Plan, and also granted 829,164 replacement options of
equivalent Lumen options which were cancelled in connections with the Spinoff.
Of the new options granted 28% were granted to named executive officers and
directors of the Company.
OTHER
The Company does not maintain a pension plan or other actuarial
retirement plan for its named executive officers. The Company does not maintain
any long term incentive plans. The Company's named executive officers are
eligible to participate in benefit plans maintained by
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Lumen which are generally available to the Company's employees, including a
401(k) savings plan and the health and life insurance programs.
REPORT ON EXECUTIVE COMPENSATION
BY THE COMPENSATION COMMITTEE
This report is made by the Compensation Committee of the Board of
Directors (the "Committee"). The Committee is currently composed of David L.
Moore (Chairman), David S. Moross and Nora A. Bailey. The Committee is
responsible for setting and administering the Company's policies governing
annual compensation of key employees, managers, officers and executive officers,
including setting individual annual base salaries or salary guidelines, annual
bonus plans and individual participation levels, and participation in the Plan.
See "Information Concerning Meetings of the Board of Directors and Board
Committees" and "Director Compensation". Compensation of executive officers,
including compensation of the Chief Executive Officer, is subject to approval of
the Board of Directors. The proposed compensation of any member of the Committee
who also is an executive officer would be subject to ratification by the
disinterested members of the Board of Directors; none of the present members of
the committee are or have been executive officers of the Company, and it is the
Company's policy to appoint only disinterested directors as members of the
Committee.
COMPLIANCE WITH FEDERAL TAX LAW
The Committee has considered the potential impact of Section 162(m)
(the "Section") of the Internal Revenue Code, as amended. The Section disallows
a tax deduction for any publicly-held corporation for individual compensation
exceeding $1 million in any tax year for any executive officer, unless
compensation is based on performance. The Company maintains executive cash
compensation significantly below the $1 million threshold, and the Company
believes that any options granted under the Plan to any of its executive
officers will qualify as performance-based compensation, to the extent that any
of the same may result in compensation in excess of the threshold. Consequently,
the Committee does not believe that the Section will have any impact on the
deductibility to the Company of any compensation paid to executive officers.
OVERVIEW
The Company's executive compensation program currently includes the
following key elements: base salary, cash bonuses and awards of stock options.
The Company's general executive officer compensation policy is intended to: (i)
support achievement of the Company's strategic goals; (ii) retain and reward
sufficiently committed and talented individuals prepared to invest their talents
for long term rather than short term gain and, (iii) tie executive officers'
interests to Stockholder interests.
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The Committee determines base salaries for new executive officers and
base salary adjustments for current executive officers by evaluating the
responsibilities of the position held, the experience of the individual and
individual performance. It determines stock option awards based on the same
factors. In reviewing executive compensation matters, the committee may consult
with the Company's human resources professionals and/or independent compensation
consultants. The Committee also may make use of independently available
compensation survey data and other publicly available information, including
publicly-disclosed compensation information of other companies of comparable
size engaged in similar industries, as well as information gained through their
experience as directors of other publicly and privately held corporations. The
Committee's determinations also are made with reference to the Company's
available financial resources.
While the Company may make use of publicly available data and other
surveys in setting its general compensation policies, the Company is relatively
young and has experiences a period of rapid change. Consequently, it is not
possible to compare the Company or its compensation policies directly with more
established companies, and the Company's executive officer compensation is not
rigidly dominated by a lock-step approach to keeping executive compensation
competitive with compensation levels of companies of similar size or in
comparable industries. Additionally, the Company's brief history has rendered
financial results difficult to compare from one period to another. Therefore,
achievement of financial goals set by the Board on an annual basis is only one
of the factors considered in setting the Company's compensation policy;
successful implementation of the Company's more broadly-based strategic goals
also is considered an important factor. Moreover, the Company's focus on rapid
internal growth and expansion through acquisitions further affects its executive
compensation policy by causing the Company carefully to husband its resources.
The Committee believes that annual cash compensation of its executive officers
is below that which executives of comparable ability and talent could receive
competitively elsewhere.
It is the policy of the Committee and the Company that a portion of an
executive officer's compensation be composed of long-term performance-based
compensation. In this way, the Company can conserve its financial resources
while aligning the executive group's interests more strongly with the interests
of the Company's Stockholders; at the same time, the Company thereby attracts
executives of proven skill and ability who are prepared to invest their talents
over the long term. In furtherance of this policy, the Company adopted, and the
Committee has made awards and grants pursuant to, the Company's "Plan". In
determining the number of stock options granted during 1998, the Committee
considered the same criteria discussed above with respect to base salaries.
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CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Kiedaisch, the Company's Chief Executive Officer, has entered into
an employment agreement, under which he received an annual base salary for 1998
in the amount of $223,077. Since July 1, 1998, Mr. Kiedaisch's base salary has
been set at $275,000. Mr. Kiedaisch is eligible to participate in the bonus
program for executive officers. See "Executive Compensation- Employment
Agreements." No bonus was paid to Mr. Kiedaisch for services rendered in 1998.
The Committee believes that Mr. Kiedaisch's compensation under employment
agreement is consistent with the general policies described above. Mr.
Kiedaisch's compensation has been determined in recognition of his
accomplishments and efforts in building the Company's world wide organization.
COMPENSATION COMMITTEE
David L. Moore
David S. Moross
Nora A. Bailey
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Committee was comprised of the following members during fiscal year
1998: David L. Moore, David S. Moross and Nora A. Bailey.
PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Common Stock since the Spinoff of the Common Stock with the cumulative total
return on the Russell 1000 Index and the Wilshire Small Cap Index over the same
period (assuming the investment of $100 in the Common Stock, the Russell 1000
Index and the Wilshire Small Cap on March 11, 1998, and the reinvestment of all
dividends).
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<PAGE>
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]
[GRAPHIC OMITTED]
CUMULATIVE TOTAL RETURN
- -------------------------------------- --------------------------------------
3/11/98 12/31/98
Bolle Inc. $100 $ 25.00
Russell 1000 Index $100 $113.95
Wilshire Small Cap Index $100 $ 88.59
====================================== ================== ===================
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INFORMATION CONCERNING MEETINGS OF THE BOARD OF
DIRECTORS AND BOARD COMMITTEES AND DIRECTOR COMPENSATION
The Company has an Audit Committee currently composed of Messrs.
David L. Moore, David S. Moross and Nora A. Bailey. During the fiscal year
ended December 31, 1998, the Audit Committee met on two occasions for the
purpose of selecting the Company's independent auditors for the year ended
December 31, 1999.
The Company has a Compensation Committee currently composed of Messrs.
David L. Moore, David S. Moross and Nora A. Bailey. During the fiscal year
ended December 31, 1998, the Compensation Committee met on three occasions for
the purpose of determining participation in the Company's 1998 Stock Incentive
Plan.
The Company has an Executive Committee composed of Messrs. Martin E.
Franklin, Gary A. Kiedaisch, Ian G.H. Ashken, Franck Bolle and Patricia Bolle
Passaquay. The Executive Committee did not meet during the fiscal year ended
December 31, 1998.
The Company has a Nominating Committee composed of Messrs. Martin E.
Franklin, Ian G.H. Ashken, and David L. Moore. The Nominating Committee did
not meet during the fiscal year ended December 31, 1998.
The Board of Directors of the Company held six meetings and executed
three unanimous written consents in lieu of a meeting during the fiscal year
ended December 31, 1998. In 1998, all of the directors attended and executed
75% or more of the aggregate meetings and written consents of the Board and all
committees thereof on which they served.
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SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, (the "Exchange
Act") requires the Company's directors and executive officers, and persons who
own more than ten percent (10%) of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission ("SEC") and the
stock exchange upon which the Company's stock is listed, initial reports of
ownership and reports of changes in ownership of common stock and other equity
securities of the Company. Officers, directors and greater than ten-percent
shareholders are required to furnish the Company with copies of all Section
16(a) forms they file. The Company's securities did not trade publicly until
March 12, 1998; consequently, no persons described above were subject to Section
16(a) reporting requirements prior to that date. To the Company's knowledge,
based solely on review of the copies of such reports furnished to the Company,
during the Fiscal year ended December 31, 1998, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten percent
(10%) beneficial owners were complied with.
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
MANAGEMENT SERVICES AGREEMENT
In connection with the Spinoff, the Company entered into a Management
Services Agreement with Lumen (the "Management Services Agreement"). Pursuant to
the Management Services Agreement, Lumen agreed to provide certain management
services to the Company, including services relating to strategic planning and
direction, banking negotiations, treasury functions, investor relations,
securities regulatory compliance, insurance programs and asset acquisitions and
sales. Pursuant to the Management Services Agreement, Lumen also agreed to make
available to the Company the services of Mr. Martin E. Franklin and Mr. Ian G.
H. Ashken. As compensation for its services, Lumen was entitled to receive a
monthly fee of $60,000 and reimbursement for its identifiable reasonable
out-of-pocket expenses incurred in connection with the performance of services
under the Management Services Agreement. On September 23, 1998, the Company
entered into Amendment No. 1 to Management Services Agreement, among the
Company, Lumen and Marlin Holdings, Inc. ("Marlin"), of which Mr. Franklin is
the Chairman, Chief Executive Officer and a principal stockholder and Mr. Ashken
is the Vice Chairman and a principal stockholder, pursuant to which, in effect,
Lumen assigned its rights and obligations under the Management Services
Agreement to Marlin, which assumed Lumen's obligation thereunder, and the
monthly management fee payable by the Company was reduced from $60,000 to
$50,000. The Management Services Agreement was also amended to have an initial
term of four years, and will thereafter be automatically renewed for successive
one-year periods until terminated by either party upon 90 days' written notice.
In connection with entering into such amendment, the Company consented to the
assignment and released
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<PAGE>
Lumen from its obligations pursuant to the Management Services Agreement arising
from October 1998 through the remainder of the term.
CONTRIBUTION AGREEMENT AND INDEMNIFICATION AGREEMENT
In connection with the Spinoff, Lumen assigned to the Company all of
Lumen's assets other than those related to the ORC Business (as defined in the
Contribution Agreement) and certain other specified assets retained by Lumen,
and the Company assumed all of Lumen's liabilities prior to the Spinoff other
than those related to the ORC Business. In addition, pursuant to an
Indemnification Agreement between Lumen, ILC Technology, Inc. and the Company
(the "Bolle Indemnification Agreement") the Company is required to indemnify
Lumen against all of Lumen's liabilities prior to the Spinoff other than
substantially all liabilities related to the ORC Business. In October 1998, the
Company entered into Amendment No. 1 to the Bolle Indemnification Agreement
pursuant to which, among other things, the Bolle Indemnification Agreement was
amended to clarify that the Company was not required to indemnify and hold Lumen
harmless from and against losses incurred or arising from any environmental laws
relating to Voltarc Technologies, Inc.
RELATIONSHIPS WITH DIRECTORS
Employment Agreements.
Each of Mr. Franck Bolle and Ms. Patricia Bolle Passaquay, both
directors of the Company, is employed by Societe Bolle SNC ("Bolle SNC"), an
indirectly wholly owned subsidiary of the Company, as Director of International
Operations and Director of Export Sales, respectively, pursuant to employment
agreements with Bolle SNC. These agreements were originally entered into in July
1997. During 1998, the Company was committed to pay basic annual gross base
remuneration in the French Franc equivalent of approximately $280,000, to be
increased by a minimum of 3% annually after the first year. In addition, each of
Mr. Franck Bolle and Ms. Patricia Bolle Passaquay is entitled to bonuses for the
years 1997, 1998 and 1999 of 25% to 50% of his or her annual salary if the
Company meets or exceeds its annual budgetary objectives. Each agreement shall
continue until terminated by either party upon three-months prior written
notice, provided, however, that if the Company terminates either agreement
before July 9, 2000 for any reason other than gross or willful misconduct, the
employee will be entitled to compensation equal to the salary that he or she
would have received from the date of termination to July 9, 2000. Each agreement
provides that if the employee terminates his or her employment, he or she will
be restricted from competing against Bolle SNC for a period of up to three years
following such termination and will be entitled to an additional monthly
compensation equal to eight to ten percent of his or her last monthly salary
during such period. Mr. Frank Bolle employment agreement was amended effective
January 1, 1999, reducing his annual salary to a level commensurate with his
current duties of approximately $168,000 per year leaving the other terms of the
agreements the same. The difference between the originally agreed salary level
and the new salary for the remainder of the term of the agreement will be paid
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in cash in 1999. Ms. Patricia Bolle Passaquay's employment is currently under
review for possible amendment.
Mr. Kiedaisch, the Chief Executive Officer and a director of the
Company, is employed full time pursuant to an employment agreement with the
Company.
Bolle Preferred Stock and Warrants. Each of Mr. Franck Bolle and Ms.
Patricia Bolle Passaquay holds 12,614 shares of Series A Preferred Stock and
1,975 shares of Series B Preferred Stock, and Bolle Warrants for the purchase of
up to 132,724 shares of Common Stock. Mr. Bolle and Ms. Bolle Passaquay may not
sell their Series B Preferred Stock without the prior written consent of at
least 90% of the then outstanding shares of the Series B Preferred Stock until
the Company has redeemed all the shares of the Series B Preferred Stock or the
Subordinated Debt (as defined below). For a description of the rights and
preferences of the Bolle Series A and Series B Preferred Stock and a description
of the Bolle Warrants.
CERTAIN TRANSACTIONS
Bolle France Acquisition. On July 10, 1997, Lumen acquired and
contributed to the Company all of the issued and outstanding share capital of
Bolle France, pursuant to the terms of the Share Purchase Agreement. Pursuant to
the terms of the Share Purchase Agreement, Bolle acquired from the Sellers all
of the issued and outstanding share capital of Bolle France, Bolle Diffusion
Sarl and the related land, in exchange for approximately $54,700,000 consisting
of the following, not including transaction expenses of approximately
$3,600,000: (a) $31,000,000 in cash (the "Cash Consideration"); (b) warrants to
the Sellers to purchase Lumen common stock which have since been exchanged for
Bolle Warrants to purchase an aggregate of 663,618 shares of Common Stock with
an exercise price of $9.95 per share; (c) ten thousand (10,000) shares of Lumen
Series A Preferred Stock having an aggregate liquidation preference of
approximately $9,300,000 issued pursuant to the terms of the Certificate of
Designations of Lumen Series A Preferred Stock; (d) one hundred (100) shares of
Common Stock valued at approximately $3,300,000, being the minimum value of the
Common Stock to be issued to the Sellers pursuant to the Share Purchase
Agreement; and (e) sixty-four thousand one hundred twenty (64,120) shares of
Series A Preferred Stock having an aggregate liquidation preference of
approximately $11,100,000 issued pursuant to the terms of the Certificate of
Designations of the Series A Preferred Stock of the Company. On July 10, 1997,
Lumen borrowed approximately $32,000,000, for the purpose of paying the Cash
Consideration and certain transaction expenses in connection with the purchase
of Bolle France, pursuant to the terms of the Credit Agreement.
The Share Purchase Agreement provides that none of the Sellers may
dispose of their shares of Common Stock until July 9, 2000. If, on that date,
the closing market price of the total number of shares then held by the Sellers
is less than $3,301,500 (the "Minimum Value"), the Company shall pay on such
date in cash or freely tradable stock the difference between the actual value of
the shares and the Minimum Value. In addition, pursuant to letters dated July 9,
1997 and December 4, 1997 from Martin Franklin to the Sellers, including Mr.
Franck Bolle and Ms. Patricia Bolle Passaquay, Mr. Franklin will refrain from
selling any shares of Common Stock
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<PAGE>
which he received pursuant to the Spinoff for so long as the Series B Preferred
Stock shall not have been redeemed in full by the Company. In connection with
the Spinoff, each of Mr. Franck Bolle, Ms. Patricia Bolle Passaquay, Ms.
Christelle Roche and Ms. Brigitte Bolle were issued approximately 55,000 shares
of Common Stock and each of Mr. Robert Bolle and Mr. Maurice Bolle were issued
approximately 27,500 shares of Common Stock. All of the shares of Common Stock
received by the Sellers, including Mr. Franck Bolle and Ms. Patricia Bolle
Passaquay, pursuant to the Share Purchase Agreement and this dividend will bear
the rights and obligations described above.
Under the Share Purchase Agreement, each of the Sellers on the one
hand, and the Company and Lumen on the other hand, are liable to fully reimburse
and indemnify the other for any expense, damage, loss or liability arising from
any breach of the terms of the Share Purchase Agreement by the indemnifying
party, subject to certain minimum claim amounts which must be met for the
indemnification provisions to take effect. In connection with the Spinoff, the
Company agreed to assume all obligations and liabilities of Lumen to each
Seller, including Mr. Franck Bolle and Ms. Patricia Bolle Passaquay, incurred by
Lumen in connection with the purchase of Bolle France and Lumen shall then be
released from all such obligations and liabilities. As a result, the Company
became solely responsible for Lumen's indemnification obligations for breach of
its representations and warranties made to the Sellers, including Mr. Franck
Bolle and Ms. Patricia Bolle Passaquay, in the Share Purchase Agreement.
Consulting and Non-Compete Agreement. In connection with the
Spinoff, pursuant to the transfers made from Lumen to the Company under the
Contribution Agreement, the Company became party to the consulting and
non-compete agreement entered into with Steve N. Haber, the former Chairman of
the Board, Chief Executive Officer and President of Bolle America in November
1995. The following description refers to the parties' respective duties giving
effect to the assignment of the consulting agreement to the Company. Pursuant to
the agreement, as of January 1, 1997, Mr. Haber was hired as a consultant to the
Company for annual compensation of $155,000 plus health and life insurance
benefits for a period ending on December 31, 2000, extendible for an additional
five years by mutual agreement of the parties. Such consulting agreement was
terminated as of December 31, 1998 and during the first quarter of 1999, the
Company paid the remaining amount due under the agreement to Mr. Haber. Mr.
Haber also agreed, commencing on the effective date of the consulting agreement
and continuing through December 31, 2005, not to compete against the Company in
the eyewear or optical, opthalmic or optometric businesses in any geographic
area in which the Company does business. As compensation for this noncompete
agreement, Mr. Haber received an initial payment of $800,000 and will receive a
payment of $100,000 per year commencing January 1, 1997 through December 31,
2005. Mr. Haber furthermore agreed not to disclose any of the Company's
confidential information. The non-compete agreement remains in effect.
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PROPOSAL 2
APPROVAL OF THE 1999 EMPLOYEE STOCK PURCHASE PLAN
Your Board of Directors recommends that you approve the Bolle Inc. 1999
Employee Stock Purchase Plan (the "Purchase Plan"). The Purchase Plan is a broad
based plan intended to provide eligible employees of the Company and certain
subsidiaries with a convenient method of becoming stockholders of the Company.
The following description of the material elements of the Purchase Plan is
necessarily brief and general. A copy of the Purchase Plan is attached hereto as
Annex A and the summary description that follows is qualified in its entirety by
reference to that annex.
SUMMARY DESCRIPTION
The Purchase Plan, if approved by the stockholders, provides eligible
employees with the opportunity to purchase shares of Common Stock pursuant to a
payroll deduction program. The Purchase Plan provides for offering periods of
six months ("Offering Periods"), unless the Compensation Committee of the Board
of Directors otherwise determines, during which contributions may be made to
purchase shares of our common stock. At the end of each Offering Period, shares
of common stock are purchased automatically at a price equal to the lesser of
85% of the market price of shares of common stock at the beginning of the
Offering Period or 85% of the market value of shares of common stock on the last
day of the Offering Period. There currently are approximately 250 employees
eligible to participate in the Purchase Plan. The closing price of a share of
common stock on May 20, 1999 was $2.84. The Purchase Plan will continue in
effect until all shares of common stock available for issuance under the
Purchase Plan have been issued, unless terminated earlier in the discretion of
the Board of Directors or upon the occurrence of certain types of corporate
transactions.
An employee may elect to have up to fifteen percent (15%) of his or her
compensation withheld and applied to the purchase of shares of common stock
under the Purchase Plan. Compensation for this purpose means the participant's
total compensation, which includes regular base earnings paid by the Company or
a Participating Company (defined below), sales commissions, overtime, bonuses
and incentive payments, and elective contributions that are not inculdible in
income under the Internal Revenue Code. However, during any calendar year, no
employee is entitled to purchase shares of common stock under the Purchase Plan
having a value of more than $25,000.
Each participant will be granted a separate purchase right for each
Offering Period in which the individual participates. The purchase right will be
granted on the first day of such Offering Period and will be automatically
exercised on the last day of the Offering Period.
There will be 500,000 shares of Common Stock available for issuance
under the Purchase Plan. In the event of any change in our common stock subject
to the Purchase Plan, or subject
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to any purchase right granted under the Purchase Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, split-up,
combination of shares, exchange of shares, change incorporate structure, or
otherwise), the Compensation Committee will make appropriate adjustments to (i)
the class and maximum number of shares of common stock subject to the Purchase
Plan, (ii) the class and maximum number of shares of common stock purchasable by
each participant per Offering Period and (iii)the class and number of shares of
common stock and price per share of common stock subject to outstanding purchase
rights, in order to prevent the dilution or enlargement of benefits under the
Purchase Plan.
Each employee of the Company, and of such subsidiaries ("Participating
Companies") as the Board of Directors of the Company or the Compensation
Committee shall from time to time designate, may participate in the Purchase
Plan. However, employees whose customary employment with the Company or any
Participating Company is less than twenty (20) hours per week or more five
months per calendar year will not be eligible to participate in the Purchase
Plan. Further, an employee will not be eligible to participate if such
individual would, immediately after the grant of purchase rights, own or hold
outstanding options or other rights to purchase stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of stock
of the Company.
An eligible employee may enroll in the Purchase Plan at the beginning of
any Offering Period. Payment for common stock under the Purchase Plan shall be
effected by means of the participant's authorized payroll deductions or such
other means as the Compensation Committee may authorize. Payroll deductions will
begin with the first pay day following the commencement of an Offering Period
and will (unless sooner terminated by the participant) remain in effect for
successive Offering Periods. Interest will not accrue on amounts withheld from a
participant's compensation or otherwise held in an account established for a
participant.
A participant may withdraw from the Purchase Plan, effective on the
first day of the next payroll period, by filing the appropriate form with the
Compensation Committee. Any payroll deductions previously collected from the
participant and not previously applied to the purchase of common stock will, at
the participant's election, be refunded or held for the purchase of shares of
common stock on the next purchase date immediately following such termination.
If no such election is made, then such funds will be refunded. An employee who
has withdrawn from an Offering Period may not again participate in the Purchase
Plan until the next Offering Period.
Fractional shares of Common Stock will not be issued under the Purchase
Plan. Any accumulated payroll deductions which would have been used to purchase
fractional shares, unless refunded pursuant to the terms of the Purchase Plan,
will be held for the purchase of Common Stock in the next following Offering
Period, without interest.
Because the purchase of shares of common stock under the Purchase Plan
is discretionary with all eligible employees, it would not be meaningful to
include information as to the number of shares of common stock which would have
been distributable during fiscal 1998 to all
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employees, or to groups of employees, or to any particular employee of the
Company or any Participating Company had the Purchase Plan been in effect during
the year.
The Board of Directors may amend, suspend, or discontinue the Purchase
Plan with respect to any shares of common stock at any time not subject to
purchase rights. However, no such action may, without the approval of
stockholders of the Company, increase the number of shares of Common Stock
subject to the Purchase Plan (other than for the permitted adjustments described
above), or cause the Purchase Plan to fail to meet the requirements of an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code.
ADMINISTRATION
The Purchase Plan will be administered by the Compensation Committee.
The Compensation Committee will have full authority to interpret and construe
any provision of the Purchase Plan and to adopt such rules and regulations for
administering the Purchase Plan as it may deem necessary. Decisions of the
Compensation Committee will be final and binding on all parties who have an
interest therein.
FEDERAL INCOME TAX CONSEQUENCES
The Purchase Plan and the right of eligible employees to make purchases
thereunder are intended to qualify under the provisions of Sections 421 and 423
of the Internal Revenue Code. Under these provisions, no income will be taxable
to a participant at the time of grant of a purchase right or upon the purchase
of shares of the Company's common stock at the end of an Offering Period. As
summarized below, a participant may be taxed upon the sale of other disposition
of shares of common stock acquired under the Purchase Plan. The consequences
will depend upon how long the participant has held the shares of common stock
prior to disposition.
If the shares of common stock are disposed of at least two years after
the date of granting of the purchase right and at least one year after the
shares of common stock are purchased under the Purchase Plan, the following
federal income tax consequences will apply. The lesser of (a) the excess of the
fair market value of the shares of common stock at the time granted over the
purchase price of the shares of common stock or (b) the excess of the fair
market value of the shares of common stock at the time such shares are disposed
of over the purchase price of the shares of common stock will be treated as
ordinary income. Any further gain upon such sale will be treated as a capital
gain. If the shares of common stock are sold and the sale price is less than the
purchase price, there is no ordinary income and the employee has a capital loss
equal to the difference. If a participant holds the shares of common stock for
this period, no deduction in respect of the disposition of such shares of common
stock will be allowed to the Company.
If the shares of common stock are disposed of before the expiration of
either the two year or the one year holding periods described above
(a"Disqualifying Disposition"), the following federal income tax consequences
will apply. The excess of the fair market value of the shares
- 24 -
<PAGE>
of common stock at the date the shares are purchased over the purchase price
will be treated as ordinary income to the employee. This excess will constitute
ordinary income in the year of sale or other disposition even if no gain is
realized on the sale. Any further gain upon such sale will be treated as capital
gain. If the shares of common stock are sold for less than their fair market
value on the date of purchase, the same amount of ordinary income is attributed
to the employee and a capital loss will be recognized equal to the difference
between the sale price and the fair market value of the shares of common stock
on such purchase date. To the extent the employee recognizes ordinary income by
reason of a Disqualifying Disposition, the Company will be entitled to a
corresponding tax deduction for compensation in the tax year in which the
disposition occurs.
The foregoing discussion is merely a summary of the more significant
effects of the federal income tax on an employee of the Company or a
Participating Company with respect to shares of common stock purchased under the
Purchase Plan and does not purport to be a complete analysis of the tax laws
dealing with this subject. Reference should be made to the applicable provisions
of the Internal Revenue Code and the regulations promulgated thereunder. In
addition, this summary does not discuss the provisions of the income tax laws of
any state or foreign country in which an employee may reside. Each employee
should consult his or her own tax advisor concerning the federal, state, local
and foreign income tax consequences of participation in the Purchase Plan.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE ADOPTION OF THE
1999 EMPLOYEE PURCHASE PLAN.
- 25 -
<PAGE>
PROPOSAL 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The firm of Ernst & Young LLP has audited the financial statements of the
Company for the fiscal year ended December 31, 1998. The Board of Directors
desires to continue the services of Ernst & Young LLP for the current fiscal
year ending December 31, 1999. Accordingly, the Board of Directors will
recommend to the Meeting that the stockholders ratify the appointment by the
Board of Directors of the firm of Ernst & Young LLP to audit the financial
statements of the Company for the current fiscal year. Representatives of that
firm are expected to be present at the Meeting, shall have the opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions. In the event the stockholders do not ratify
the appointment of Ernst & Young LLP, the appointment will be reconsidered by
the Audit Committee and the Board of Directors.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE APPOINTMENT OF
ERNST & YOUNG LLP.
MISCELLANEOUS
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended December 31, 1998 is being
mailed to stockholders contemporaneously with this Proxy Statement.
FORM 10-K
UPON THE WRITTEN REQUEST OF A RECORD HOLDER OR BENEFICIAL OWNER OF COMMON STOCK
ENTITLED TO VOTE AT THE MEETING, THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY
OF ITS ANNUAL REPORT ON FORM 10-K FILED WITH THE COMMISSION FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1998. REQUESTS SHOULD BE MAILED TO SECRETARY, BOLLE INC., 555
THEODORE FREMD AVENUE, RYE, NEW YORK 10580.
- 26 -
<PAGE>
COST OF SOLICITATION
The cost of soliciting proxies has been or will be paid by the Company. In
addition to solicitation by mail, arrangements will be made with brokerage
houses and other custodians, nominees and fiduciaries to send proxy material to
beneficial owners, and the Company will, upon request, reimburse them for their
reasonable expenses in doing so. To the extent necessary in order to assure
sufficient representation, officers and regular employees of the Company and a
commercial proxy solicitation firm may be engaged to assist in the solicitation
of proxies. Whether either measure will be necessary depends entirely upon how
promptly proxies are received. No outside proxy solicitation firm has been
selected or employed by the Company in respect of the Meeting as of the date of
this Proxy Statement, and the Company is unable to estimate the costs to it of
any such services.
PROPOSALS OF SECURITY HOLDERS
Stockholder Proposals for the 2000 Annual Meeting. Stockholders interested in
presenting a proposal for consideration at the Company's annual meeting of
stockholders in 2000 may do so by following the procedures prescribed in Rule
14a-8 under the Securities Exchange Act of 1934 and the Company's by-laws. To be
eligible for inclusion, stockholder proposals must be received by the Company's
Corporate Secretary no later than January 26, 2000.
Stockholders are urged to send in their proxies without delay.
GARY A. KIEDAISCH
CHIEF EXECUTIVE OFFICER
DATED: MAY 24 , 1999
- 27 -
<PAGE>
ANNEX A
BOLLE INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The Bolle Inc. 1999 Employee Stock Purchase Plan (the"Plan") is intended
to provide eligible employees of Bolle Inc. (the "Company") and such other
companies, whether or not currently in existence or currently affiliated with
the Company ("Participating Companies"), as the Board of Directors of the
Company (the "Board") or the Committee (as defined below) shall from time to
time designate, with a convenient method of becoming shareholders of the
Company; provided that each such Participating Company shall qualify as a
"parent corporation" or "subsidiary corporation" (a "Corporate Affiliate"), as
defined in Section 424(e) and (f) of the Internal Revenue Code of 1986, as
amended (the "Code"), on the first day of the relevant Offering Period (as such
term is defined in Article 5). It is further intended that the Plan shall
qualify as an "employee stock purchase plan" as defined in Section 423 of the
Code.
2. ADMINISTRATION
(a) Administrative Body. The Plan shall be administered by the
Compensation Committee (the "Committee") of the Board. The Committee shall have
full authority to interpret and construe any provision of the Plan and to adopt
such rules and regulations for administering the Plan as it may deem necessary.
Decisions of the Committee shall be final and binding on all parties who have an
interest in the Plan. The Committee may delegate any of its duties and
responsibilities under the Plan.
(b) Rule 16b-3 Limitations. Notwithstanding the provisions of Subsection
2(a), in the event that Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended, or any successor provision ("Rule 16b-3") provides specific
requirements for the administrators of plans of this type, the Plan shall only
be administered by such a body and in such a manner as shall comply with the
applicable requirements of Rule 16b-3. Unless permitted by Rule 16b-3, no
discretion concerning decisions regarding the Plan shall be afforded to any
committee or person that is not "disinterested" as that term is used in Rule
16b-3.
3. EFFECTIVE DATE AND TERM OF PLAN
(a) Effective Date; Approval of Shareholders. The Plan shall become
effective as of June 24, 1999, subject to approval by a vote of the holders of a
majority of the total number of outstanding shares of the common stock of the
Company ("Common Stock") present in person or by proxy at the Company's 1999
Annual Meeting of Stockholders. If the Plan is not so approved, the Plan shall
not become effective.
(b) Termination of Plan. The Plan shall continue in effect until the
date on which all shares of Common Stock available for issuance under the Plan
shall have been issued unless earlier terminated pursuant to Article 9 or 10.
A-1
<PAGE>
4. STOCK SUBJECT TO THE PLAN
(a) Number of Shares. The stock subject to the Plan shall be shares of
Common Stock (the "Common Stock"), par value $0.01 par value per share, of the
Company which are authorized but unissued or which have been reacquired by the
Company. In connection with the sale of shares of Common Stock under the Plan,
the Company may repurchase shares of Common Stock in the open market. The
aggregate number of shares of Common Stock which may be issued pursuant to the
Plan shall not exceed 500,000 shares (subject to further adjustment thereafter
as provided in Section 4(b)).
(b) Adjustment. If any change is made in the Common Stock subject to the
Plan, or subject to any purchase right granted under the Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, split-up,
spin-off, combination of shares, exchange of shares, change in corporate
structure, or otherwise), the Committee shall make appropriate adjustments as to
(i) the class and maximum number of shares subject to the Plan, (ii) the class
and maximum number of shares purchasable by each participant per Offering Period
and (iii) the class and number of shares and price per share of stock subject to
outstanding purchase rights, in order to prevent the dilution or enlargement of
benefits thereunder.
5. OFFERING PERIODS
(a) Terms of Offering Period. Common Stock shall be offered for purchase
under the Plan through a series of successive offering periods ("Offering
Periods") until such time as (i) the maximum number of shares of Common Stock
available for issuance under the Plan shall have been issued pursuant to
purchase rights granted under the Plan or (ii) the Plan shall have been sooner
terminated in accordance with Article 9 or 10. The Committee shall determine, in
its discretion, the length of each Offering Period, provided that no Offering
Period shall have a term exceeding 27 months.
(b) Initial Offering Periods. The Committee shall determine, in its sole
discretion, the first and last day of the initial Offering Period under the
Plan. Unless the Committee otherwise determines, subsequent Offering Periods
shall be for a period of six calendar months, commencing on each January 1 and
July 1 during the term of the Plan.
(c) Purchase Rights. Each participant shall be granted a separate
purchase right for each Offering Period in which the individual participates.
The purchase right shall be granted on the first day of such Offering Period and
shall be automatically exercised on the last day of the Offering Period.
A-2
<PAGE>
6. ELIGIBILITY AND PARTICIPATION
(a) General Rules. Each employee of the Company or any of the
Participating Companies whose customary employment with the Company or any
Participating Company is at least twenty (20) hours per week or more than five
months per calendar year and who has not less than one year of service with the
Company and any Participating Company shall be an eligible employee. An employee
may participate in an Offering Period if the employee (i) has become an eligible
employee before the first day of the Offering Period, (ii) has completed any
minimum service requirement that may be specified by the Committee for such
Offering Period, not to exceed two years and (iii) remains an eligible employee
on the first day of the Offering Period. Eligible employees may become
participants with respect to an Offering Period by executing such instruments as
the Committee may specify and delivering them to such persons and at such time
prior to the first day of that Offering Period as the Committee may specify.
(b) Five Percent Owner. Under no circumstances shall purchase rights be
granted under the Plan to any employee if such individual would, immediately
after the grant, own (within the meaning of Code Section 424(d)), or hold
outstanding options or other rights to purchase, stock possessing five
percent(5%) or more of the total combined voting power or value of all classes
of stock of the Company or any Corporate Affiliate.
7. PURCHASE RIGHTS
Purchase rights shall be evidenced by instruments in such form as the
Committee may from time to time approve, and shall conform to the following
terms and conditions:
(a) Purchase Price. The purchase price ("Purchase Price") per share of
each share of Common Stock purchased on any date within an Offering Period shall
be the lower of (i) eighty-five percent (85%) of the fair market value per share
of the Company's Common Stock on the first day of the Offering Period and
(ii)eighty-five percent (85%) of the fair market value per share of the
Company's Common Stock on the purchase date.
(b) Fair Market Value. For purposes of the Plan, the fair market value
per share of the Company's Common Stock shall mean, as of any date, the value of
Common Stock on such day, or the nearest prior business day on which trading
occurred on national stock exchanges and NASDAQ, determined as follows: (1) if
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), its Fair Market Value shall be the average of the high and low sale
price for the Common Stock (or the average of the closing bid and asked prices,
if no sales were reported), as quoted on such exchange (or the exchange with the
greatest volume of trading in Common Stock) or system on the date of such
determination, as reported in The Wall Street Journal or such other source as
the Committee deems reliable; or (2) if the Common Stock is quoted on NASDAQ
(but not on the National Market System thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the average of the closing bid and asked prices for the
Common Stock on the date of such determination, as reported in The Wall Street
Journal or such other source as the Committee deems reliable;
A-3
<PAGE>
or (3) in the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in good faith by the Committee.
(c) Payroll Deductions. Payment for Common Stock under the Plan shall be
effected by means of the participant's authorized payroll deductions or such
other means as the Committee may authorize. Such deductions shall begin with the
first pay day following the commencement of the Offering Period and shall
(unless sooner terminated by the participant) remain in effect for successive
Offering Periods. No interest shall accrue on any amounts withheld from a
participant's compensation or otherwise held in an account established for a
participant. A participant may elect a percentage of the participant's
compensation paid during the Offering Period, in one percent (1%) increments
(not to exceed fifteen percent (15%)), to be contributed to the Plan.
Compensation for this purpose means the participant's total compensation, which
includes regular base earnings paid by the Company or a Participating Company,
sales commissions, overtime, bonuses and incentive payments, and elective
contributions that are not includible in income under Sections 125 and 401(k) of
the Code, or any other definition of compensation that complies with the
requirements of Section 423(b)(5) of the Code.
(d) Number of Shares. On the first day of any Offering Period, the
Company shall be deemed to have granted under this Plan to the participant an
option for as many full shares of Common Stock as he or she will be able to
purchase with the payroll deductions and other amounts credited to his or her
account during the Offering Period.
(e) Termination of or Changes to Payroll Deductions. The participant may
terminate payroll deductions at any time by filing the appropriate form with the
Committee. Such termination shall become effective as soon as administratively
practicable following the receipt of such form. Any payroll deductions
previously collected from the participant and not previously applied to the
purchase of Common Stock during that Offering Period shall, at the participant's
election, immediately be refunded or held for the purchase of shares of Common
Stock on the next purchase date immediately following such termination. If no
such election is made, then such funds shall be refunded as soon as
administratively practicable after the purchase date. Prior to the commencement
of any new Offering Period, a participant may resume, increase or decrease
payroll deductions by filing the appropriate form with the Committee. The new
payroll deduction shall become effective on the first day of the first Offering
Period following the receipt of such form. Distribution of Common Stock held in
a participant's account shall be distributed pursuant to Section 7(g).
(f) Termination of Employment. If a participant ceases to be employed by
the Company or a Participating Company for any reason, including death or
disability, prior to the end of an Offering Period, the participant's purchase
right shall terminate, and any payroll deductions previously collected from the
participant and not previously applied to the purchase of Common Stock during
that Offering Period shall be paid to the participant or the participant's
personal representative as soon as practicable. The Committee may provide, on a
uniform basis with respect to any Offering Period, that an employee who is on a
leave of absence shall be deemed to have terminated employment after a specified
period.
(g) Evidence of Stock Ownership; Transfer Restrictions on Shares and
Escrow; Dividends.
A-4
<PAGE>
(i) Promptly following the end of each Offering Period, the
Company will deliver to each participant, as appropriate, the shares of Common
Stock purchased during that Offering Period upon exercise of such participant's
option. The Company may deliver such shares in certificated or book entry form,
at the Company's sole election. The Company may require a participant to
dispose of the shares of Common Stock acquired pursuant to the Plan through one
or more brokers designated by the Company.
(ii) The Plan is intended to satisfy the requirements of ss.
423 of the Code. A participant will not obtain the benefits of this provision
if such participant disposes of shares of Common Stock acquired pursuant to
the Plan within two (2) years from the first day of any applicable Offering
Period.
(h) Proration of Purchase Rights. If the total number of shares of
Common Stock for which purchase rights are to be granted on any date in
accordance with the terms of the Plan exceed the number of shares of Common
Stock then remaining available under the Plan (after deduction of all shares of
Common Stock for which purchase rights have been exercised or are then
outstanding), the Committee shall make a pro rata allocation of the shares of
Common Stock remaining available in as near as uniform a manner as shall be
practicable and as it shall deem equitable. The Committee shall give written
notice of such allocation to each participant affected thereby.
(i) Exercise. Each purchase right shall be exercised automatically on
the purchase date for the number of purchasable shares of Common Stock, unless
the purchase right has been previously terminated pursuant to Section 7(e) or
7(f).
(j) Assignment. Neither payroll deductions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 8 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 7 hereof.
(k) Rights as Stockholder. A participant shall have no rights as a
stockholder with respect to shares of Common Stock covered by any purchase
right granted under the Plan until the purchase right is exercised. No
adjustments shall be made for dividends or other rights for which the record
date is prior to the date of exercise.
(l) Accrual Limitations. No purchase right shall permit the rights of a
participant to purchase stock under all "employee stock purchase plans" (as
defined in Section 423 of the Code) of the Company or a Corporate Affiliate to
accrue at a rate that exceeds $25,000 of fair market value of such stock
(determined at the time such purchase right is granted) for each calendar year
in which such purchase right is outstanding at any time. For Offering Periods
of less than one year, the Committee may, by uniform rule applicable to each
participant, limit the accrual rate to a pro-rata portion of such $25,000.
This limitation shall be applied in a manner consistent with Section 423(b)(8)
of the Code.
A-5
<PAGE>
(m) Regulatory Approval. The implementation of the Plan, the granting of
any purchase right under the Plan, and the issuance of Common Stock upon the
exercise of any such purchase right shall be subject to the Company's compliance
with all applicable requirements of the Securities Act of 1933, all applicable
listing requirements of any securities exchange on which the Common Stock is
listed and all other applicable requirements established by law or regulation.
(n) Other Provisions. Instruments evidencing purchase rights may contain
such other provisions, not inconsistent with the Plan, as the Committee deems
advisable.
(o) Fractional Shares. Fractional shares of Common Stock will not be
issued under the Plan. Any accumulated payroll deductions which would have been
used to purchase fractional shares, unless refunded pursuant to this Article 7,
will be held for the purchase of Common Stock in the next following Offering
Period, without interest.
(p) No Interest. No interest or other increment shall accrue or be
payable with respect to any of the payroll deductions of a participant in the
Plan.
8 . DESIGNATION OF BENEFICIARY
A participant may file a written designation of a beneficiary who is to
receive shares of Common Stock and cash, if any, credited on behalf of the
participant under the Plan in the event of such participant's death. Such
designation of beneficiary may be changed by the participant at any time by
filing the appropriate form with the Committee. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares of Common Stock and/or cash to the executor or administrator
of the estate of the participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company shall deliver such
shares of Common Stock and/or cash to the participant's spouse or if no spouse
is living, to the children of the participant in equal shares.
9. CORPORATE TRANSACTIONS
(a) Termination. In the event of the disposition of all or substantially
all of the assets or outstanding capital stock of the issuer of the Common Stock
by means of a sale, merger, reorganization, or liquidation (a "Corporate
Transaction"), each purchase right under this Plan, unless assumed pursuant to a
written agreement by the successor corporation or a parent or subsidiary
thereof, shall automatically be exercised immediately prior to the consummation
of the Corporate Transaction as if such date were the last purchase date of the
Offering Period. Any payroll deductions or other amounts held in a participant's
account that are not applied to such purchase shall be promptly refunded to the
participant.
(b) Corporate Structure. The grant of purchase rights under this Plan
shall in no way affect the right of the Company to adjust, reclassify,
reorganize, or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
A-6
<PAGE>
10. AMENDMENT AND TERMINATION
The Board may from time to time alter, amend, suspend, or discontinue
the Plan with respect to any shares of Common Stock at any time not subject to
purchase rights; provided, however, that no such action of the Board may,
without the approval of stockholders of the Company, (i) increase the number of
shares of Common Stock subject to the Plan (unless necessary to effect the
adjustments required under Section 4(b)), or (ii) make any other change with
respect to which the Board determines that stockholder approval is required by
applicable law or regulatory standards or with respect to which stockholder
approval is required in order to maintain the Plan's status as an "employee
stock purchase plan" under Section 423 of the Code.
11. STOCK
(a) Registration of Stock. Shares of Common Stock purchased by a
participant under the Plan will be recorded in the books and records of the
Company in the name of the participant.
(b) Restrictions on Exercise. The Committee may, in its discretion,
require as conditions to the exercise of any option that the shares of Common
Stock reserved for issuance upon the exercise of such option shall have been
duly listed, upon official notice of issuance, upon a stock exchange or market,
and that either:
(a) a registration statement under the Securities Act of
1933, as amended, with respect to said shares be
effective or,
(b) the participant shall have represented at the time of
purchase, in form and substance satisfactory to the
Company, that it is his or her intention to purchase
the shares for investment and not for resale or
distribution.
(c) Certain Conditions. As a condition to the exercise of an option, the
Committee may require the person exercising such option to represent and warrant
at the time of any such exercise that the shares are being purchased only for
investment and without present intention to sell or distribute such shares if,
upon advice of counsel for the Company, such a representation is or may be
required by any applicable provision of law.
12. USE OF FUNDS
All payroll deductions received or held by the Company under the Plan
may be used by the Company for any corporate purpose. The Company shall not be
obligated to segregate such payroll deductions.
13. EFFECT OF PLAN
The provisions of the Plan shall, in accordance with its terms, be
binding upon, and inure to the benefit of, all successors of each employee
participating in the Plan, including, without limitation, such employee's estate
and the executors, administrators or trustees thereof, heirs and legatees, and
any receiver, trustee in bankruptcy or representative of creditors of such
Employee.
A-7
<PAGE>
14. GOVERNING LAW
The law of the State of Delaware will govern all matters relating to
this Plan except to the extent superseded by the federal laws of the United
States.
15. NOTICES
All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.
A-8
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
BOLLE INC.
ANNUAL MEETING
JUNE 24, 1999
The undersigned hereby appoints Martin E. Franklin and Gary A. Kiedaisch as
proxies to represent the undersigned, with full power of substitution, at the
Annual Meeting of Stockholders of Bolle Inc., to be held on June 24, 1999 at
10:00 A.M., local time, at 9500 West 49th Avenue, Suite B-102, Wheat Ridge,
Colorado and any adjournments and postponements thereof:
THIS BALLOT, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED, THE SHARES
WILL BE VOTED "FOR" EACH PROPOSAL.
[X] Please mark your votes as in this example.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR ALL NOMINEES LISTED WITHHOLD AUTHORITY
AT RIGHT (EXCEPT AS MARKED TO VOTE FOR ALL NOMINEES Nominees: Martin E. Franklin, Gary A. Kiedaisch,
TO THE CONTRARY BELOW) LISTED AT RIGHT Ian G.H. Ashken, Franck Bolle,
Patricia Bolle Passaquay,
David L. Moore, David S. Moross
1. ELECTION OF
DIRECTORS [ ] [ ]
</TABLE>
- --------------------------------------------------------------------------------
PROPOSAL(S)
2. APPROVAL OF 1999 EMPLOYEE PURCHASE PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. RATIFICATION OF INDEPENDENT AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(TO BE SIGNED ON REVERSE SIDE)
<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
BOLLE INC.
JUNE 24, 1999
In their discretion, the Proxies are authorized to vote upon such other business
that may properly come before the meeting.
PLEASE DATE, SIGN AND RETURN THIS PROXY.
THANK YOU.
DATED:
---------------------------------
---------------------------------------
SIGNATURE OF STOCKHOLDER(S)
---------------------------------------
NOTE: Signature should agree with name
on stock certificate as printed thereon.
Executors, administrators, trustees and
other fiduciaries should so indicate
when signing.
PLEASE DATE, SIGN AND MAIL YOUR PROXY
CARD BACK AS SOON AS POSSIBLE!
