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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)/1/
GARGOYLES, INC.
________________________________________________________________________________
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
________________________________________________________________________________
(Title of Class of Securities)
366033-10-8
________________________________________________________________________________
(CUSIP Number)
CYNTHIA POPE
20121 48TH AVENUE WEST, LYNNWOOD, WA 98036
(206) 872-6100
________________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
August 14, 1998
_______________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
(Continued on following pages)
(Page 1 of 8 Pages)
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/1/ The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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SCHEDULE 13D
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CUSIP NO. 366033-10-8 PAGE 2 OF 8 PAGES
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TRILLIUM CORPORATION, 91-0913168
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
WC, OO
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
WASHINGTON STATE
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SOLE VOTING POWER
7
NUMBER OF 2,505,313
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY
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EACH SOLE DISPOSITIVE POWER
9
REPORTING 2,505,313
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,505,313
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
32%
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TYPE OF REPORTING PERSON*
14
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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This Amendment No. 1 amends the Schedule 13D filed with the Securities and
Exchange Commission on July 16, 1998 by Trillium Corporation, a Washington
corporation (the "Schedule 13D"). This Amendment No. 1 is filed to reflect
information required by Rule 13d-2 under the Securities Exchange Act of 1934, as
amended, relating to the Common Stock, no par value, of Gargoyles, Inc., a
Washington corporation. This Amendment No. 1 amends and restates Items 3, 4,
5(c), 5(d), and 6 of the Schedule 13D and does not amend any other Items not
mentioned herein. Capitalized terms used herein without definitions have the
meaning set forth in the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration
Item 3 is amended and restated in its entirety as follows:
At the date of this report, Trillium beneficially owned 2,505,313 shares of
Common Stock, comprising 1,505,994 shares held as of July 6, 1998 and 999,319
shares purchased on August 14, 1998 from Douglas B. Hauff and a related
partnership (the latter being referred to herein as the "Hauff Shares") as more
fully described below.
In the case of the 1,505,994 shares held as of July 6, 1998, on November 7,
1997, Trillium acquired 1,490,994 shares upon distribution by Trillium Investors
II, LLC, which had acquired those shares prior to the Issuer's initial public
offering (the "Pre-IPO Shares"). The Pre-IPO Shares do not include 567,704
shares pledged by Douglas Hauff to Trillium. Trillium acquired an additional
15,000 shares in the NASDAQ market for a total price of $70,635 in the fall of
1997 (the "Open Market Shares").
In the case of the Hauff Shares, on July 6, 1998, Trillium entered into a
Stock Purchase Agreement (the "Agreement") between Trillium and Douglas B. Hauff
("Hauff"), a principal shareholder and past President/CEO of the Issuer, and
Tracy L. Hauff and The Hauff Family Partnership (Mr. Hauff, Ms. Hauff and the
Hauff Family Partnership are collectively referred to herein as the "Sellers")
wherein Trillium agreed to purchase 999,319 shares of Common Stock held by
Sellers (the "Hauff Shares"), for a purchase price of $2,256,330. The purchase
price was paid by (1) the conveyance of certain real property to the Sellers
(valued at $844,000), (2) satisfaction of debt owed by Hauff to Trillium
($1,092,330 including interest through August 14, 1998 of $103,876), (3) cash in
the amount of $150,000, and (4) the balance of $170,000 pursuant to a non-
interest bearing promissory note which is partly payable in 1999, with the
remainder payable in 2000. This is only a summary of the Agreement, which was
attached to the Schedule 13D and is incorporated herein by this reference.
Purchase of the Hauff Shares closed on August 14, 1998, at which time the Hauff
Shares were transferred to Trillium.
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The source of Trillium's consideration under the Agreement is real property
and notes receivable owned by Trillium and Trillium's working capital. Trillium
did not acquire any of the Common Stock with borrowed funds.
Steven R. Brinn received 189,514 shares upon distribution by Trillium
Investments II, LLC.
The source of funds for Kenneth D. Hertz' purchase of Common Stock was cash
from personal funds. Hertz purchased the Common Stock for approximately $20,000.
Timothy C. Potts received 97,560 shares upon distribution by Trillium
Investments II, LLC.
The source of funds for Paula Kurtz' purchase of Common Stock was cash from
personal funds. Kurtz purchased the Common Stock for approximately $10,000.
The source of funds for Teri Treat's purchase of Common Stock was cash from
personal funds. Treat purchased the Common Stock for approximately $8,000.
Item 4. Purpose of Transaction
Item 4 is amended and restated in its entirety as follows:
The Pre-IPO Shares and the Open Market Shares were acquired by Trillium for
investment purposes. The shares held by all other Reporting Persons were
acquired for investment purposes.
Trillium acquired the Hauff Shares in part for the purpose of providing for
satisfaction of sums owed by Mr. Hauff to Trillium and certain other
shareholders of the Issuer (the "Hauff Debt") in the amounts of $1,035,888 and
$176,094, respectively (which sums include accrued interest through August 14,
1998). This indebtedness had been incurred by Mr. Hauff as of March 7, 1997 in
connection with his purchase of an aggregate of 664,209 shares of Common Stock
from Trillium and certain other shareholders of the Issuer, of which 567,704
shares had been acquired from Trillium. The collectability of the Hauff Debt had
come into question following Mr. Hauff's resignation as an officer and director
of the Issuer in January 1998. Trillium owns approximately 32% (2,505,313
shares) of the Issuer's Common Stock following the closing of the Hauff
transaction.
Trillium also has had discussions with certain minority shareholders of the
Issuer, including certain former officers and employees of the Issuer, for the
purpose of possibly acquiring additional shares of Common Stock from such
individuals. Trillium also from time to time may purchase additional shares of
Common Stock in the open market or in other privately negotiated transactions.
Trillium might seek to increase its percentage ownership of the Issuer's Common
Stock to greater than one-third of outstanding shares. Also, Trillium might
elect to sell shares of Common Stock.
In addition to providing for satisfaction of the Hauff Debt, the purchase
of the Hauff Shares and, potentially, additional shares of Common Stock is also
motivated in part by the desire of Trillium to increase its voting power in
order to gain a more
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influential position in the management of the Company and the pursuit or
selection of strategic alternatives by the Company, such as a merger, sale of
control or sale of assets. Also, by increasing its ownership of Common Stock to
greater than one-third of all outstanding voting securities of the Company,
Trillium has the ability to disapprove mergers, consolidations or sales of
substantial amounts of assets which would (if not otherwise approved by a
majority of continuing directors of the Company, as defined in the Company's
Articles of Incorporation) require a two-thirds vote.
Except as generally stated in this Item 4, Trillium and the other Reporting
Persons have no present plans or proposals that relate to or would result in:
(i) the acquisition by any person of additional securities of the issuer, or the
disposition of securities of the Issuer; (ii) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Issuer or any of its subsidiaries; (iii) a sale or transfer of a material amount
of assets of the Issuer or any of its subsidiaries; (iv) any change in the
present Board of Directors or management of the Issuer, including any plans or
proposals to change the number or term of Directors or to fill any vacancies on
the Board; (v) any material change in the present capitalization or dividend
policy of the Issuer; (vi) any other material change in the Issuer's business or
corporate structure; (vii) changes in the Issuer's Articles of Incorporation,
Bylaws, or instruments corresponding thereto or other actions which may impede
the acquisition of control of the Issuer by any person; (viii) causing a class
of securities to be delisted from a national securities exchange or to cease to
be authorized to be quoted in an inter-dealer quotation system of a registered
national securities association; (ix) a class of equity securities of the Issuer
becoming eligible for termination of registration pursuant to Section 12(g) (4)
of the Exchange Act; or (x) any action similar to those enumerated above.
The Reporting Persons reserve the right to determine in the future whether
to change the purpose or purposes described above, to adopt plans or proposals
of the type specified above, or to purchase or sell shares of Common Stock.
Item 5. Interest in Securities of the Issuer.
Items 5(c) and (d) are amended and restated in their entirety as follows:
5(c) On July 6, 1998, Trillium and Hauff entered into the Agreement,
whereby Trillium had the right to acquire the Hauff Shares. On August 14, 1998,
the Hauff transaction closed, and Trillium acquired the Hauff Shares. See Item 3
above for the type and amount of consideration paid by Trillium. None of the
other Reporting Persons has been a party to any transaction in the Common Stock
of the Issuer since the filing of the Schedule 13D.
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5(d) The Reporting Persons know of no other person that has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the subject Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Item 6 is amended and restated in its entirety as follows:
On August 14, 1998, Trillium acquired the Hauff Shares pursuant to the
Agreement. See Item 5 above. Other than the acquisition of the Hauff Shares,
Trillium has no contracts, arrangements, understandings, or relationships (legal
or otherwise) with any person with respect to any securities of the Issuer,
including transfer or voting thereof, finder's fees, joint ventures, loan or
option arrangements, put or calls, guarantees of profits, divisions of profits
or loss, or the giving or withholding of proxies.
Signature
The undersigned hereby agree that this Schedule is filed on behalf of each
of them and, after reasonable inquiry and to the best of their knowledge and
belief, hereby certify that the information set forth in this statement is true,
complete, and correct.
Dated this 25th day of August, 1998.
TRILLIUM CORPORATION
By: /s/ Timothy Potts
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Its: Senior Vice President
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