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As filed with the Securities and Exchange Commission on October 23, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BEAUTICONTROL COSMETICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2036343
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2121 MIDWAY ROAD
CARROLLTON, TEXAS 75006
(972) 458-0601
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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RICHARD W. HEATH
2121 MIDWAY ROAD
CARROLLTON, TEXAS 75006
TELEPHONE: (972) 458-0601
FAX: (972) 490-7359
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPY TO:
DAVID H. ODEN
HAYNES AND BOONE, LLP
SUITE 3100
901 MAIN STREET
DALLAS, TEXAS 75202-3789
TELEPHONE: (214) 651-5000
FAX: (214) 651-5940
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED SHARE (1) PRICE (1) REGISTRATION FEE
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Common Stock, par value $0.10 per share....... 1,200,000 shares $5.75 $6,900,000 $1,919.00
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) based on the average of the high and low prices reported on
the Nasdaq National Market on October 22, 1998.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
Subject to Completion Dated October 23, 1998
BEAUTICONTROL COSMETICS, INC.
1,200,000 SHARES OF COMMON STOCK
This prospectus relates to Common Stock of BeautiControl Cosmetics,
Inc., a Delaware corporation, to be sold by from time to time Jim Sowell
Construction Co., Inc., the selling stockholder. BeautiControl Cosmetics, Inc.
will not receive any of the proceeds from the sale of the shares of Common
Stock.
The selling stockholder may sell the shares of Common Stock covered by
this prospectus to or through one or more underwriters. The selling stockholder
may also sell shares of Common Stock directly to other purchasers or through
agents, on the Nasdaq National Market in ordinary brokerage transactions, in
negotiated transactions, or otherwise, at market prices prevailing at the time
of sale, at prices related to the then prevailing market price, or at negotiated
prices.
The Common Stock of BeautiControl Cosmetics, Inc. is traded in the
over-the-counter market and is quoted on the Nasdaq National Market under the
symbol "BUTI."
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 7.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THESE CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this prospectus is , 1998
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NO ONE (INCLUDING ANY SALESMAN OR BROKER) IS AUTHORIZED TO PROVIDE ORAL
OR WRITTEN INFORMATION ABOUT THIS OFFERING THAT IS NOT INCLUDED IN THIS
PROSPECTUS.
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TABLE OF CONTENTS
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Page
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Additional Information.........................................................2
Incorporation Of Certain Documents By Reference................................2
The Company....................................................................3
Risk Factors...................................................................7
Forward-Looking Statements.....................................................8
Recent Developments............................................................9
Use of Proceeds................................................................9
Selling Stockholder............................................................9
Description of Capital Stock..................................................10
Plan of Distribution..........................................................12
Legal Matters.................................................................13
Experts ..................................................................13
Disclosure of SEC Position on Indemnification for Securities Act Liabilities..13
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ADDITIONAL INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any document that we file with the SEC at the SEC's public
reference rooms at Judiciary Building, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the SEC's regional offices located at 7 World
Trade Center, 13th Floor, New York City, New York 10048 and Suite 1400, 500 West
Madison Street, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our filings with the SEC
are also available to the public from the SEC's web site at http:// www.sec.gov.
In addition, you may read and copy these documents at the offices of the
National Association of Securities Dealers, Inc., located at 1735 K Street,
N.W., Washington, D.C. 20006.
This prospectus is part of a registration statement that we filed with
the SEC. The registration statement contains more information than this
prospectus regarding BeautiControl Cosmetics, Inc. and its Common Stock,
including certain exhibits. You can get a copy of the registration statement
from the SEC at one of the addresses listed above or from its web site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") until the selling stockholder sells all of
the shares.
o Annual Report on Form 10-K for the fiscal year ended November 30,
1997;
o Quarterly Reports on Form 10-Q for the quarters ended February 28,
1998, May 31, 1998 and August 31, 1998; and
o Current Report on Form 8-K dated August 3, 1998.
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You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
BeautiControl Cosmetics, Inc.
2121 Midway Road
Carrollton, Texas 75006
(972) 458-0601
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement to the prospectus. We have not
authorized anyone else to provide you with different information. The selling
stockholder will not make an offer of these shares in any state where the offer
is not permitted. You should not assume that the information in this prospectus
or any supplement to the prospectus is accurate as of any date other than the
date on the front of those documents.
THE COMPANY
GENERAL
BeautiControl Cosmetics, Inc. ("BeautiControl" and, collectively with
its subsidiaries, the "Company") is a leading manufacturer and direct seller of
skin care, cosmetics, nail care, toiletries, health and beauty supplements and
related products for women. The Company sells its products through independent
sales persons, called Skin Care and Image Consultants ("Consultants"), who
purchase the products from BeautiControl and then sell them directly to
consumers in the home or workplace.
The Company offers a "Total Skin Care and Image Solution" to women
through its many value added services. These services include Skin Condition
Analysis, Color Analysis, Image Analysis and Makeup/Fashion Personality Analysis
and are typically offered to the consumer at no charge.
Skin Condition Analysis utilizes the patented product "Skin Sensors" to
assist the Consultant in analyzing the customer's skin condition. This enables
the Consultant to recommend the specific customized skin care regimen required
to meet the individual needs of each consumer.
Color analysis, an image-enhancing service, allows the matching of
color-coded cosmetics with a customer's natural coloring, helping customers
select the most flattering color choices. A computer-assisted head-to-toe image
analysis referred to as the Personal Image Profile is used to provide women with
specific recommendations on makeup, fashion and accessory styles to create each
individual's best image.
These services, combined with products that are fragrance free,
dermatologist, sensitivity, allergy and ophthalmologist tested, and which are
also certified as non-comedogenic, constitute the total skin care and image
solution offered by the Company.
The Company is incorporated under the laws of the State of Delaware and
maintains its principal executive offices at 2121 Midway Road, Carrollton, Texas
75006.
PRODUCTS
The Company's products consist of skin care products, cosmetic makeup
products, nail care products, fragrances, health and beauty supplements and
color and image analysis accessories.
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The Company believes that skin care and cosmetic products sold at
retail may generally be grouped in three price categories: the least expensive
are generally sold in drug stores and supermarkets; moderately priced and
premium priced products are generally sold in leading department stores and
specialty shops. Although the Company's skin care products and cosmetic makeup
products are considered by the Company to be comparable in quality and image to
premium priced products, the Company suggests that Consultants sell the
Company's products at retail prices which the Company believes are equivalent to
those moderately priced products sold in leading department stores and specialty
shops.
Cosmetic, color analysis and image analysis accessories sold by the
Company to its Consultants include sales demonstration kits and literature,
sample size products, Skin Condition Analysis supplies, books of color swatches
which are used by customers to help select appropriate colors and shades, and
the Personal Image Profile questionnaire packet and related supplies. These
accessories are used primarily as hostess gifts, gifts with purchase, business
supplies or sales aids, and in some cases are for sale to customers.
The Company also has a health and beauty supplements line, WITHIN
BEAUTY. This product line includes hair and nail supplements, skin condition
supplements and supplements designed for the different stages of a woman's life.
The Company also provides SlenderGenics, a weight management system, and PMS
Support Complex to its health and beauty product line. The SlenderGenics system
includes a metabolic booster supplement and appetite satisfying wafers. PMS
Support Complex contains beneficial vitamins, minerals and herbs to help reduce
the negative physical and emotional symptoms of pre-menstrual syndrome.
During 1997, the Company extended its REGENERATION product line to
include REGENERATION GOLD and REGENERATION GOLD eye repair. Other product
offerings included Sheer Breeze fragrance collections, Color Freeze eye pencils
and liquid makeup and SpectacuLash Thickening Mascara.
MARKETING AND DISTRIBUTION
The Company's skin care, cosmetics, health and beauty supplements and
related products are sold through Consultants who are independent contractors,
not employees of the Company. As of November 30, 1997, the total Consultant
count was 49,413 with 536 of these being Directors.
Consultants may sell the Company's products through home demonstrations
called Skin Care and Color Clinics ("Clinics"). Consultants also make individual
sales to customers previously introduced to the Company's products at a Clinic.
Additionally, Consultants are encouraged to market the products through personal
consultations and product brochure sales in order to utilize multiple selling
opportunities.
In order to provide immediate product delivery, Consultants generally
maintain a small inventory of products. Consultants make their own payment
arrangements with their customers. The Company clears credit card payments to
Consultants for selected credit cards, presently MasterCard, Visa,
Novus/Discover Card and American Express.
The Company sells its products to its Consultants generally on a
payment-in-advance basis. Consultants pay for the Company's products by wire
transfer, Western Union Quick Collect, money order or credit card. Additionally,
beginning in 1996 and throughout 1997, the Company offered specific product
programs on credit terms of approximately 45 days to approved Consultants.
Consultants are offered the Company's products at wholesale discounts
from suggested retail prices for resale to their customers. These wholesale
discounts range from 25% to 55% based upon the timing and dollar amount of the
Consultant's order. Sales taxes are generally prepaid to the Company by
Consultants for transmittal to taxing authorities.
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The Company maintains inventory which generally permits the Company to
ship goods in response to an order within 72 hours of the Company's receipt of
the order.
The Company relies primarily upon United Parcel Service and United
States parcel post and mail to ship products from its distribution facility in
Dallas, Texas.
Under the Client Connection Program, direct mailings to consumers are
made by the Company a minimum of six times a year. This direct mailing program
allows the Company to communicate directly with the consumer and encourages the
consumer to contact her Consultant to reorder the Company's products.
The consumer may order cosmetics either from the Consultant or directly
from the Company by mail or by dialing a toll-free "800" number. The Consultant
earns a sales commission regardless of the purchase method.
The sales efforts of Consultants are also supported through
Company-sponsored seminars and sales conferences held several times each year in
various locations.
The Company discontinues its relationship with Consultants who fail to
maintain a certain level of sales activity on a regular basis.
The above marketing and distribution descriptions are specific to the
U.S. and Canada business. Taiwan operations opened January 8, 1998 with
comparable business features.
MANUFACTURING
The Company's manufacturing facility is located in Carrollton, Texas at
which it manufactures or assembles the majority of products sold.
During fiscal 1997 and for the first nine months of fiscal 1998,
approximately 24% and 19%, respectively, of the Company's sales were comprised
of items produced by various unaffiliated manufacturers. Such outside
manufacturers are used when the Company believes that such firms are able to
manufacture products according to Company specifications less expensively than
the Company.
Materials used in the Company's skin care, cosmetic and health and
beauty supplements products consist chiefly of readily available ingredients,
containers and packaging materials. Such raw materials and components used in
goods manufactured and assembled by the Company are available from a number of
sources. To date, the Company has been able to secure an adequate supply of raw
materials and components for its manufacturing facility. The Company endeavors
to maintain relationships with backup suppliers in an effort to ensure that no
interruptions in the Company's operations are likely to occur.
The Company's manufacturing facility includes microbiology/quality
control and product development laboratories. These laboratories are intended to
facilitate and expedite quality control and to continue the development of new
products for the Company. The Company continually engages in research and
development activities to improve its existing products and to develop new
products. However, during the fiscal years ended November 30, 1995, 1996 and
1997, and during the first nine months of fiscal 1998, such activities have not
required the expenditure of material amounts.
EMPLOYEES
At August 31, 1998, the Company employed 289 persons in North America,
41 of which were engaged in the manufacture and assembly of the Company's
products. Also, the Taiwan branch, which opened on January 8, 1998 employed 42
persons. None of the Company's employees are represented by a union and the
Company considers its employee relations to be good. All key employees are
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required to enter into an agreement with the Company whereby each employee
agrees to maintain the confidentiality of customer lists and other sensitive
information.
TRADEMARKS AND PATENTS
The Company has registered all its trademarks in the United States and
has registered or is in the process of registering its principal trademarks in
Canada, Taiwan and many other countries. The Company has the exclusive right to
distribute the Skin Condition Analysis product "Skin Sensors" worldwide with the
option to renew this exclusive right each year. The Company is licensed to use
the following trademarks: "Skinlogics", "Sunlogics" and "Nailogics." The Company
has a patent on the formulas for its "REGENERATION" and "REGENERATION2",
alpha-hydroxy acid based products.
COMPETITION
The cosmetics industry is a highly fragmented and competitive market
which is sensitive to changing consumer preferences and demands. There are many
large and well known cosmetics companies that manufacture and sell broad lines
of skin care products and cosmetics through retail establishments. The Company
competes with a number of direct sales companies who market skin care and
cosmetic products and health and beauty supplements. The Company also competes,
to an extent, with other direct sales companies in attracting new Consultants.
Many cosmetics companies market products which are better known than the
Company's products and many cosmetics companies are larger and have
substantially greater resources than the Company.
The principal bases of competition in the cosmetic business generally
are marketing, price, quality and newness of products. The Company has attempted
to differentiate itself and its products from the industry in general through
the use of a number of value-added services previously described and by being
technologically at the forefront of the industry. There can be no assurance that
similar marketing techniques and products will not be adopted by competitors in
the future.
REGULATIONS
The Company is subject to regulation by the United States Food and Drug
Administration and the Bureau of Alcohol, Tobacco and Firearms of the Treasury
Department and comparable government agencies in Taiwan, as are other
manufacturers of cosmetic products.
The Company's advertising and sales practices are subject to the
jurisdiction of the Federal Trade Commission. In addition, the Company is
subject to numerous federal, state, and local laws relating to marketing and to
the content, labeling and packaging of its products. Various governmental
agencies regulate direct selling activities, and the Company has occasionally
been requested to supply information regarding its marketing plan to certain of
such agencies. Although the Company believes that its method of distribution is
in compliance with laws and regulations relating to direct selling activities,
there is no assurance that legislation and regulations adopted in particular
jurisdictions in the future will not affect the Company's operations.
In connection with its manufacturing processes, the Company is subject
to various governmental regulations governing the discharge of materials into
the environment. Compliance with these regulations has not had, and is not
anticipated to have, any material impact upon the Company's capital
expenditures, earnings or competitive position.
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RISK FACTORS
An investment in the shares offered by this prospectus involves a high
degree of risk. You should carefully consider the following factors and other
information in this prospectus before deciding to invest in shares of Common
Stock.
DEPENDENCE ON KEY PERSONNEL. The Company's performance is substantially
dependent on the continued services of certain members of its senior management,
including Jinger L. Heath, the Company's Chairman, and Richard W. Heath, the
Company's President and Chief Executive Officer. If Mrs. Heath, Mr. Heath or
other key personnel become unable or unwilling to continue in their present
positions, the Company's business and its prospects could be materially
adversely affected.
SEASONALITY. Historically, the Company's sales and profit margins during the
first fiscal quarter, which includes the December holiday season, have been
lower than during other quarters of the fiscal year. The Company expects that
this seasonal fluctuation will continue in the foreseeable future.
EXPANSION INTO PACIFIC RIM. The Company has recently expanded its operations
into Taiwan. In addition, the Company is currently planning to expand its
operations into Hong Kong before the end of 1999, and subsequently into Japan.
Geographical expansion into new markets may adversely affect the Company's
performance in the short term due to capital investment and start-up costs
associated with such expansion. There can be no assurance that the Company's
operations in the Pacific Rim will be successful.
FOREIGN OPERATIONS AND FOREIGN CURRENCY RISKS. In connection with its foreign
operations (which constituted 7% of the Company's revenues during the first nine
months of fiscal 1998), the Company is subject to risks inherent in foreign
operations, including unexpected changes in regulatory requirements, dramatic
changes in the local or regional business climate, political instability,
foreign taxation, foreign currency fluctuations and difficulties in staffing and
managing foreign operations. The Company expects that in the future an
increasing percentage of its total revenues will be derived from foreign
operations.
CONTROL BY CERTAIN STOCKHOLDERS. Richard W. Heath and Jinger L. Heath own an
aggregate of 2,707,774 shares of Common Stock (37.5% of the total outstanding
shares of Common Stock of the Company). In addition, Mr. Heath has been given a
proxy to vote the 1,200,000 shares of Common Stock offered by this prospectus
(such proxy will automatically terminate with respect to any shares sold under
this prospectus). As a result, the Heaths effectively control the voting of
3,907,774 shares of Common Stock (54.1% of the total outstanding shares).
Therefore, the Heaths have a significant influence on all matters requiring
stockholder approval, including the election of directors and the approval of
significant corporate transactions. Such control may have the effect of delaying
or preventing a change in control of the Company.
YEAR 2000 COMPLIANCE. There is significant uncertainty regarding the costs and
effects associated with the "Year 2000" problem. This problem arises because,
beginning in the year 2000, computer systems that do not properly recognize
date-sensitive information could generate erroneous data or cause a computer
system to completely fail. The Company is in the process of working with its
software vendors to assure that the Company is prepared for the year 2000. The
Company is currently in the process of verifying that companies doing business
with it are year 2000 compliant. The Company does not anticipate that it will
incur significant operating expenses or be required to invest heavily in
computer systems improvements to be year 2000 compliant. Any year 2000
compliance problem of the Company or its vendors could have a material adverse
effect on the Company's business, results of operations and financial condition.
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GOVERNMENT REGULATION. Various governmental agencies regulate direct selling
activities. Although the Company believes that its method of distribution is in
compliance with laws and regulations relating to direct selling activities,
there is no assurance that legislation and regulations adopted in particular
jurisdictions will not affect the Company's operations.
ENVIRONMENTAL MATTERS. In connection with its manufacturing processes, the
Company is subject to various governmental regulations governing the discharge
of materials into the environment. Though compliance with these regulations has
not had, and is not anticipated to have, any material impact upon the Company's
capital expenditures, earnings or competitive position, such compliance may have
a material impact upon the Company in the future.
INDEBTEDNESS. The Company has a $15,000,000 line of credit to use for expansion
in Asia and for operating cash when needed for the business. The Company has
experienced a financial covenant default under the loan agreement associated
with the line of credit. Though the Company has good bank relations and expects
to have long-term funding in place in the future, there is no assurance that the
bank will not end the line of credit, accelerate repayments of the loan or limit
further borrowings. See "Recent Developments- Line of Credit."
FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Exchange Act, which can be identified
by the use of forward-looking terminology such as, "may," "believe," "expect,"
"intend," "plan," "seek," "anticipate," "estimate" or "continue" or the negative
thereof or other variations thereon or comparable terminology. All statements
other than statements of historical fact included or incorporated by reference
in this prospectus, including without limitation, statements regarding the
financial position and liquidity and year 2000 issues of the Company are
forward-looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Important
factors with respect to any such forward-looking statements, including certain
risks and uncertainties that could cause actual results to differ materially
from the Company's expectations ("Cautionary Statements") are disclosed in this
prospectus, including, without limitation, in conjunction with the
forward-looking statements included in this prospectus. The following factors,
among others, could cause materially different results from those anticipated or
projected:
o Consultants' sales activity levels;
o recruiting of new Consultants;
o the continuing services of certain members of senior management;
o new product introductions;
o protection of intellectual property rights and third party
infringement;
o changes in U.S. or international economic conditions;
o results of international operations including governmental,
regulatory, political and foreign exchange rate impacts;
o global and domestic expansion efforts;
o capital resources and the Company's ability to obtain necessary
financing; and
o risks and costs related to the Year 2000.
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All subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements.
RECENT DEVELOPMENTS
STOCK PURCHASE AGREEMENT
On August 3, 1998, the Company entered into a Stock Purchase Agreement
(the "Purchase Agreement") among Richard W. Heath (the Company's Chief Executive
Officer), Jinger L. Heath (the Company's Chairman), and Jim Sowell Construction
Co., Inc ("Sowell"). Under the Purchase Agreement, the Company issued Sowell
1,200,000 shares of Common Stock in consideration for $9,912,000 cash. Such
shares were issued to Sowell in a "private placement" without registration with
the SEC or state securities authorities. The terms of the Purchase Agreement
require the Company to register for resale the shares of Common Stock purchased
by Sowell, and such shares are the shares of Common Stock offered by this
prospectus.
The terms of the Purchase Agreement require that, for so long as Sowell
owns at least 1,200,000 shares of Common Stock, the Company and Richard W. Heath
will use their best efforts to cause the election of James E. Sowell to the
Board of Directors of the Company. As of October 15, 1998, Mr. Sowell has not
enforced this contractual right and Mr. Sowell is not currently serving as a
director of the Company.
LINE OF CREDIT
During the quarter ended August 31, 1998, the Company had a $15,000,000
line of credit with Bank One available to use for expansion into Asia and for
operating cash when needed for the business. The interest rate is based on a
LIBOR rate plus a spread that adjusts with the debt ratio. A commitment fee of
.25% is paid quarterly based on the unused portion of this line of credit. The
weighted average interest rate for the first nine months of 1998 was 7.12%; for
1997 the average was 6.85%.
Under the terms of this line of credit, the Company has covenants
related to certain financial ratios. In the quarter ended August 31, 1998, the
Company was not in compliance with one of the financial ratios, due primarily to
the Company's expansion strategy and a onetime non-cash write-down of inventory.
As of September 30, 1998, the Company had $7,600,000 outstanding on this line of
credit. With this occurrence, the bank may be able to end and/or limit this line
of credit arrangement or declare outstanding principal and interest amounts due
and payable, or limit further borrowings. The Company anticipates having
long-term funding in place during the fourth quarter of 1998; however, at
September 30, 1998, the Company had $10,824,000 in cash and short-term U.S.
Treasury bills. The Company does not expect the timing of its expansion plans to
be affected.
USE OF PROCEEDS
The Company will not receive any proceeds from any sale of shares of
Common Stock by the selling stockholder.
SELLING STOCKHOLDER
This prospectus covers offers and sales from time to time by the
selling stockholder of the Common Stock owned by such person. The selling
stockholder currently holds 1,620,033 shares of Common Stock.
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The following table lists the name of the selling stockholder, the
number of shares of Common Stock owned by the selling stockholder before this
Offering, the number of shares of Common Stock that may be offered by the
selling stockholder under this prospectus, and the number of shares of Common
Stock to be owned by the selling stockholder upon completion of the Offering if
all shares registered by this prospectus are sold. The selling stockholder has
not held any position or office or had any other material relationship with the
Company or any of its predecessors or affiliates in the last three years. The
information below is as of the date of this prospectus and has been furnished by
the selling stockholder.
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NUMBER OF NUMBER OF NUMBER OF
SHARES OWNED SHARES BEING SHARES OWNED
NAME OF BEFORE THIS REGISTERED FOR AFTER THIS
SELLING STOCKHOLDER OFFERING RESALE OFFERING (1)
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Jim Sowell Construction Co., Inc........... 1,620,033 1,200,000 420,033
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TOTAL 1,620,033 1,200,000 420,033
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(1) Assumes all shares acquired by such holder under the Purchase Agreement
will be offered and sold.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.10 par value per share, 7,220,198 of which are
outstanding as of August 31, 1998, and 1,000,000 shares of Preferred Stock, $.10
par value per share, issuable in series, none of which is outstanding. The
following statements are brief summaries of certain provisions relating to the
Company's capital stock contained in its Restated Certificate of Incorporation,
as amended (the "Certificate of Incorporation").
COMMON STOCK
Each outstanding share of Common Stock is entitled to one vote on all
matters submitted to a vote of stockholders, including the election of
directors. The holders of Common Stock do not have cumulative voting rights.
Dividends may be paid to holders of Common Stock when and if declared by the
Board of Directors out of funds legally available therefor.
Holders of Common Stock have no conversion, redemption or preemptive
rights. All outstanding shares of Common Stock are, and the shares offered
hereby will be, fully paid and non-assessable. In the event of any liquidation,
dissolution or winding-up of the affairs of the Company, holders of Common Stock
will be entitled to share ratably in the assets of the Company remaining after
provision for payment of creditors and after the liquidation preference, if any,
of Preferred Stock outstanding at the time.
PREFERRED STOCK
No shares of Preferred Stock have been issued. The Company's Board of
Directors may, without further action by the Company's stockholders, from time
to time direct the issuance of Preferred Stock in series and may, at the time of
issuance, determine the rights, preferences and limitations of each series.
Satisfaction of any dividend preferences of outstanding Preferred Stock would
reduce the amount of funds available for the payment of dividends on Common
Stock. Also, holders of Preferred Stock would normally be entitled to receive a
preference payment in the event of any liquidation, dissolution or winding-up of
the Company before any payment is made to the holders of Common Stock. In
addition, under certain circumstances, the issuance of such Preferred Stock may
render more difficult or tend to discourage a merger, tender offer or proxy
contest, the assumption of control by a holder of a large block of the Company's
securities, or the removal of incumbent management. The Board of Directors of
the Company, without stockholder approval, may issue
10
<PAGE> 12
Preferred Stock with voting and conversion rights which could adversely affect
the Common Stockholders.
SPECIAL VOTING PROVISIONS
The Company's Certificate of Incorporation and Bylaws contain
provisions which may discourage certain types of transactions involving an
actual or threatened change of control of the Company. These provisions are
designed to make it more time-consuming to change majority control of the Board
of Directors without its consent, and thus to reduce the vulnerability of the
Company to an unsolicited takeover proposal or to an unsolicited proposal to the
restructuring or sale of all or part of the Company. The Board believes that
these provisions serve to encourage any person intending to attempt such a
takeover to negotiate with the Board, and that the Board will therefore be
better able to protect the interests of the stockholders. These provisions
include the following:
Classification of the Board of Directors. The Board of Directors is
classified into three classes having staggered terms of three years each, with
each class to be as nearly equal in number as possible. The classification of
directors has the effect of making it more difficult to effect an immediate
change in, and otherwise to affect, through the voting power of the capital
stock of the Company entitled to vote in the election of directors (the "Voting
Stock"), the composition of the Board of Directors. At least two annual
stockholders' meetings, instead of one, will be required to effect a change in
the majority of the Board of Directors.
Removal of Directors. The Company's Certificate of Incorporation
provides that a director may be removed from office, with or without cause, only
upon the vote of the holders of at least two-thirds of the Voting Stock.
Limitations on Calling Special Meetings. The Company's Certificate of
Incorporation provides that special meetings of stockholders may be called only
by the Chief Executive Officer or by the Board of Directors, under a resolution
adopted by a majority of the entire Board of Directors. This provision
eliminates the stockholders' ability under Delaware law to call special
meetings.
Prohibition against Stockholder Action by Written Consent. The
Company's Certificate of Incorporation contains a provision which requires that
stockholder action be taken at an annual or special meeting of stockholders and
prohibits stockholder action by written consent, which is otherwise permitted by
Delaware law. This provision gives the stockholders of the Company the
opportunity to participate in determining any proposed action and prevents the
holders of a majority of the Voting Stock from using the written consent
procedure to take stockholder action without such action being fully considered
by all stockholders.
Advance Notice of Intention to Nominate a Director. The Company's
Bylaws contain a provision which requires that a stockholder may nominate a
person for election as a director only if written notice of such stockholder's
intent to make such nomination has been given to the Secretary of the Company
not later than sixty days prior to an annual meeting and, with regard to special
meetings, not later than ten days after the date on which notice of the special
meeting was first sent to stockholders. This provision also requires that the
notice set forth, among other things, a description of all arrangements or
understandings between the nominating stockholder and the nominee under which
the nomination is to be made or the nominee is to be elected, and such notice
must also contain such other information regarding the nominee as would be
required to be included in a proxy statement filed under the proxy rules of the
SEC had the nominee been nominated by the Board of Directors of the Company.
This provision is intended to give the Company the opportunity to obtain all
relevant information regarding persons nominated for director. The Board of
Directors may disqualify any nominee who fails to provide the Company with
complete and accurate information as required by this provision.
Certain Business Combinations. The Company's Certificate of
Incorporation contains a provision that in the case of certain mergers, sales or
other dispositions of assets, issuances of
11
<PAGE> 13
securities, liquidations or dissolutions, or reclassifications or
recapitalizations, such transaction be approved by the holders of at least
two-thirds of the Voting Stock, unless such transaction is approved by the Board
of Directors. This provision is intended to prevent any of the foregoing
transactions which the Board of Directors deem to be not in the best interest of
all of the stockholders of the Company. This provision would prohibit any of
these transactions which are opposed by the incumbent Board of Directors, even
if such transaction is supported by a majority of the Company's stockholders.
Amendments. Certain provisions of the Company's Certificate of
Incorporation and Bylaws contain provisions that any amendment to such
provisions, including those provisions discussed above, be approved by the
holders of at least two-thirds of the Voting Stock. The requirement of such
stockholder vote gives minority stockholders a veto power over any changes to
these provisions even if the Board of Directors or a majority of the
stockholders favor such amendment. However, such requirement will prevent a
stockholder with a majority of the Voting Stock from avoiding the requirements
of the provisions discussed above by simply repealing them.
It is possible that these provisions will discourage certain other
companies from making any tender offer for the Company's shares. This could have
the incidental effect of inhibiting certain changes in management and may also
prevent temporary fluctuations in the market price of the Company's shares,
which often result from actual or rumored take-over attempts. It is also
possible that such provisions could make it more difficult to accomplish a
transaction favorable to the interests of stockholders but which is opposed by
the Board of Directors.
PLAN OF DISTRIBUTION
The shares of Common Stock covered by this prospectus may be offered
and sold from time to time by the selling stockholder, its pledgees, donees,
transferees or other successors-in-interest. The selling stockholder will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made in the over-the-counter
market (or other market on which the Common Stock is listed or otherwise
qualified for trading), at market prices prevailing at the time of the sale, at
prices related to the then prevailing market price or in negotiated
transactions, including under an underwritten offering or under one or more of
the following methods: (i) purchases by a broker-dealer as principal and resale
by such broker or dealer for its account under this prospectus; (ii) ordinary
brokerage transactions and transactions in which a broker solicits purchasers;
and (iii) block trades in which a broker-dealer so engaged will attempt to sell
the shares as agent but may take a position and resell a portion of the block as
principal to facilitate the transaction. Such shares may also be used to cover
short sales or in connection with options or other derivative transactions. In
effecting sales, broker-dealers engaged by the selling stockholder may arrange
for other broker-dealers to participate. Broker-dealers may receive commissions
or discounts from the selling stockholder in amounts to be negotiated
immediately prior to the sale.
In connection with the sale of shares of Common Stock covered by this
prospectus, underwriters or agents may receive compensation from the selling
stockholder or from purchasers of the shares of Common Stock covered by this
prospectus for whom they may act as agents, in the form of discounts,
concessions or commissions. Underwriters may sell shares of Common Stock to or
through dealers and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they act as agents. Underwriters, dealers and
agents that participate in the distribution of shares of Common Stock covered by
this prospectus may be deemed to be underwriters, and any discounts or
commissions received by them from the selling stockholder and any profit on the
resale of shares of Common Stock by them may be deemed to be underwriting
discounts and commissions under the Securities Act. Neither the Company nor the
selling stockholder can presently estimate the amount of such compensation. The
Company knows of no existing arrangements between the selling stockholder, any
other stockholder, broker, dealer, underwriter or agent relating to the sale or
distribution of the Shares.
12
<PAGE> 14
To the extent required by applicable law on regulations, the Company
will file, during any period in which offers or sales are being made, a
supplement to this prospectus which sets forth, with respect to a particular
offering, the specific number of shares to be sold, the name of the selling
stockholder, the sales price, the name of any participating broker, dealer,
underwriter or agent, any applicable commission or discount and any other
material information with respect to the plan of distribution not previously
disclosed.
In the event that the selling stockholder elects to sell any of its
shares of Common Stock under an underwritten offering, the Company would
thereupon prepare a post-effective amendment to the Registration Statement
containing all required information, including names of underwriters,
underwriting terms and so forth.
The Purchase Agreement provides that the Company will pay all of the
expenses incident to the registration, offering and sale of the shares to the
public. The Purchase Agreement also provides that the Company will indemnify the
selling stockholder against certain liabilities, including liabilities under the
Securities Act.
In order to comply with certain states' securities laws, if applicable,
the shares will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the Common Stock may
not be sold unless the Common Stock has been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
is satisfied.
LEGAL MATTERS
The validity of the shares of Common Stock offered by this prospectus
will be passed upon for the Company by its counsel, Haynes and Boone, LLP,
Dallas, Texas.
EXPERTS
The consolidated balance sheet of the Company as of November 30, 1997
and 1996, and the related consolidated statements of income, stockholders'
equity and cash flows for the years ended November 30, 1997 and 1996, appearing
in the Company's Annual Report on Form 10-K for the year ended November 30,
1997, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated in this prospectus by
reference. Such financial statements are incorporated in this prospectus by
reference in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
The consolidated balance sheet of the Company as of November 30, 1995,
and the related consolidated statements of income, stockholders' equity and cash
flows for the year ended November 30, 1995, appearing in the Company's Annual
Report on Form 10-K for the year ended November 30, 1997, have been audited by
Grant Thornton LLP, independent certified public accountants, as set forth in
their report thereon included therein and incorporated in this prospectus by
reference. Such financial statements are incorporated in this prospectus by
reference in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.
DISCLOSURE OF SEC POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Under the Purchase Agreement between the Company and the selling
stockholder, the Company has agreed to indemnify the selling stockholder against
any losses, claims, damages, liabilities and expenses arising out of or relating
to (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any prospectus or preliminary
prospectus, including any amendments or supplements thereto, or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein (in the case of any
prospectus or form of prospectus or supplement thereto, in light of the
13
<PAGE> 15
circumstances under which they were made) not misleading, except to the extent
that such liabilities (i) arise out of or are based upon and in conformity with
any information furnished in writing to the Company by the selling stockholder
expressly for use in the Registration Statement or an amendment or supplement
thereto, or (ii) are caused by the failure to deliver a copy of any prospectus
or any amendments or supplements thereto included in the Registration Statement
after the Company has furnished the selling stockholder with a sufficient number
of copies of the same. In addition, the selling stockholder, under the Purchase
Agreement has agreed to indemnify the Company and its officers, directors,
employees, agents and any person who controls the Company against any losses,
claims, damages, liabilities or expenses arising out of or based upon and in
conformity with information furnished by the selling stockholder for use in the
Registration Statement, or any prospectus or preliminary prospectus or an
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus or preliminary prospectus, in
light of the circumstances under which they were made) not misleading.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
issuer under the foregoing provisions, or otherwise, the issuer has been advised
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
14
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN prospectus
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee..................$ 2,832
Nasdaq National Market Listing Fee................................... 17,500
Transfer Agent Fees.................................................. 500
Printing Expenses.................................................... 1,000
Accounting Fees and Expenses......................................... 3,000
Legal Fees and Expenses.............................................. 5,000
500
Blue Sky Fees and Expenses...........................................---------
Total................................................................$ 30,332
=========
</TABLE>
All of the above expenses except the Securities and Exchange Commission
registration fee and the Nasdaq National Market listing fee are estimated. All
of such expenses will be borne by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is empowered by Section 145 of the Delaware General
Corporation Law, subject to the procedures and limitations stated therein, to
indemnify any person who has or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal or administrative by reason of the fact that such person is or
was an officer, employee, agent or director of the Company, or is serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Company may indemnify
any such person against expenses (including attorneys' fees) in an action by or
in right of the Company under the same conditions, except that no
indemnification is permitted without judicial approval if such person is
adjudged to be liable to the Company. To the extent such person is successful on
the merits or otherwise in the defense of any action referred to above, the
Company must indemnify him against the expenses which he actually and reasonably
incurred in connection therewith.
The Company's Certificate of Incorporation provides that, to the
fullest extent permitted by the Delaware General Corporation Law, a director of
the Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ---------- -------
<S> <C>
3.1 Restated Certificate of Incorporation dated February 22,
1986, filed as Exhibit 3.1 to the Company's Registration
Statement on Form S-8 filed with the Securities and Exchange
Commission on December 9, 1996, which Exhibit is
incorporated herein by reference.
</TABLE>
II-1
<PAGE> 17
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ---------- -------
<S> <C>
3.2 Certificate of Amendment to Restated Certificate of
Incorporation dated April 7, 1987, filed as Exhibit 3.2 to
the Company's Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on December 9, 1996,
which Exhibit is incorporated herein by reference.
3.3 Certificate of Amendment to Restated Certificate of
Incorporation dated April 3, 1992, filed as Exhibit 3.3 to
the Company's Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on December 9, 1996,
which Exhibit is incorporated herein by reference.
3.4 Bylaws, as amended on March 21, 1991, filed as an Exhibit to
the Company's Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on December 9, 1996,
which Exhibit is incorporated herein by reference.
4.1 Stock Purchase Agreement, filed as Exhibit 4.1 to the
Company's Current Report on Form 8-K dated August 3, 1998,
which Exhibit is incorporated herein by reference.
*5.1 Opinion of Haynes and Boone, LLP.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Grant Thornton LLP.
*23.3 Consent of Haynes and Boone, LLP, contained in the
opinion filed as Exhibit 5.1.
*24.1 Power of Attorney, included as part of signature page
of this Registration Statement.
</TABLE>
- ------------------
* Filed herewith.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
SEC under Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than
a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective
Registration Statement;
II-2
<PAGE> 18
(iii) to include any material information with respect to
the plan of distribution not previously disclosed
in the Registration Statement or any material
change to such information in the registration
statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant under
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the small business issuer under the foregoing provisions, or otherwise, the
small business issuer has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event a claim for indemnification against
such liabilities (other than the payment by the small business issuer of
expenses incurred or paid by a director, officer or controlling person of the
small business issuer in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the small business issuer will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant under Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 19
SIGNATURES AND POWER OF ATTORNEY
Under the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Carrollton, State of Texas, on September 24, 1998.
BEAUTICONTROL COSMETICS, INC.
By: RICHARD W. HEATH
-------------------------------------
Name: Richard W. Heath
Title: President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Richard W. Heath and M. Douglas
Tucker, his or her true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign, execute and file with the
Securities and Exchange Commission and any state securities regulatory board or
commission any documents relating to the proposed issuance and registration of
the securities offered under this Registration Statement on Form S-3 under the
Securities Act of 1933, including any amendment or amendments relating thereto,
with all exhibits and any and all documents required to be filed with respect
thereto with any regulatory authority, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he or
she might or could do if personally present, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or either of them, or their or his
substitute or substitutes, may lawfully do or cause to be done.
Under the requirements of the Securities Act of 1933, this Registration
Statement on Form S-3 has been signed by the following persons on behalf of the
Registrant in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
RICHARD W. HEATH President, Chief Executive Officer and September 24, 1998
- ---------------------------------- Director (principal executive officer)
Richard W. Heath
JINGER L. HEATH Chairman of the Board and Director September 24, 1998
- ----------------------------------
Jinger L. Heath
J. ROBERT WARD-BURNS Executive Vice President, Chief September 24, 1998
- ---------------------------------- Operating Officer and Director
J. Robert Ward-Burns
CHARLES M. DIKER Director September 24, 1998
- ----------------------------------
Charles M. Diker
ROBERT S. FOLSOM Director September 24, 1998
- ----------------------------------
Robert S. Folsom
JOSEPH M. HAGGAR Director September 24, 1998
- ----------------------------------
Joseph M. Haggar
</TABLE>
II-4
<PAGE> 20
<TABLE>
<S> <C> <C>
DENISE ILITCH Director September 24, 1998
- ----------------------------------
Deniuse Ilitch
A. STARKE TAYLOR, JR. Director September 24, 1998
- ----------------------------------
A. Starke Taylor, Jr.
JOEL T. WILLIAMS, JR. Director September 24, 1998
- ----------------------------------
Joel T. Williams, Jr.
</TABLE>
II-5
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT NO. EXHIBIT PAGE
- ---------- ------- ------------
<S> <C> <C>
3.1 Restated Certificate of Incorporation dated February 22,
1986, filed as Exhibit 3.1 to the Company's Registration
Statement on Form S-8 filed with the Securities and Exchange
Commission on December 9, 1996, which Exhibit is
incorporated herein by reference.
3.2 Certificate of Amendment to Restated Certificate of
Incorporation dated April 7, 1987, filed as Exhibit 3.2 to
the Company's Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on December 9, 1996,
which Exhibit is incorporated herein by reference.
3.3 Certificate of Amendment to Restated Certificate of
Incorporation dated April 3, 1992, filed as Exhibit 3.3 to
the Company's Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on December 9, 1996,
which Exhibit is incorporated herein by reference.
3.4 Bylaws, as amended on March 21, 1991, filed as an Exhibit to
the Company's Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on December 9, 1996,
which Exhibit is incorporated herein by reference.
4.1 Stock Purchase Agreement, filed as Exhibit 4.1 to the
Company's Current Report on Form 8-K dated August 3, 1998,
which Exhibit is incorporated herein by reference.
*5.1 Opinion of Haynes and Boone, LLP.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Grant Thornton LLP.
*23.3 Consent of Haynes and Boone, LLP, contained in the
opinion filed as Exhibit 5.1.
*24.1 Power of Attorney, included as part of signature page
of this Registration Statement.
</TABLE>
- ------------------
* Filed herewith.
<PAGE> 1
[HAYNES AND BOONE, LLP LETTERHEAD]
EXHIBIT 5.1
October 23, 1998
BeautiControl Cosmetics, Inc.
2121 Midway Road
Carrollton, TX 75006
Re: Registration Statement on Form S-3 of 1,200,000 shares of
Common Stock of BeautiControl Cosmetics, Inc.
Gentlemen:
We have acted as counsel to BeautiControl Cosmetics, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-3 (the "Registration Statement") to be filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended. The Registration Statement relates to the registration of 1,200,000
shares of Common Stock, par value $.10 per share (the "Common Stock") of the
Company.
We have examined such documents, records and matters of law as we have deemed
necessary for the purposes of this opinion. Based upon the foregoing, and having
due regard for such legal considerations as we deem relevant, we are of the
opinion that the 1,200,000 shares of Common Stock to be registered pursuant to
the Registration Statement have been duly authorized and are validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to this
Registration Statement, and to the reference to us under the caption "Legal
Matters" in the Prospectus constituting a part of such Registration Statement.
Very truly yours,
/s/ HAYNES AND BOONE, LLP
HAYNES AND BOONE, LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of BeautiControl
Cosmetics, Inc. for the registration of 1,200,000 shares of its common stock and
to the incorporation by reference therein of our report dated January 2, 1998,
with respect to the consolidated financial statements of BeautiControl
Cosmetics, Inc. included in its Annual Report (Form 10-K) for the year ended
November 30, 1997 filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
October 19, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated December 26, 1995, accompanying the consolidated
statements of income, changes in stockholders' equity and cash flows of
BeautiControl Cosmetics, Inc. and Subsidiaries for the year ended November 30,
1995, included in the Annual Report of BeautiControl Cosmetics, Inc. on Form
10-K for the year ended November 30, 1997, which are incorporated by reference
in this Registration Statement. We consent to the incorporation by reference in
the Registration Statement of the aforementioned report and to the use of our
name as it appears under the caption "Experts."
GRANT THORNTON LLP
Dallas, Texas
October 21, 1998
