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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
____________________
Date of Report (Date of earliest event reported):
APRIL 27, 1995
L.A. GEAR, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation)
1-10157
(Commission File Number)
95-3375118
(IRS Employer Identification No.)
2850 OCEAN PARK BOULEVARD, SANTA MONICA, CALIFORNIA 90405
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(310) 452-4327
NOT APPLICABLE
(Former name or former address, if changed since last report)
==============================================================
THIS REPORT INCLUDES A TOTAL OF 8 PAGES.
THE EXHIBIT INDEX APPEARS ON PAGE 4.
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Item 5. Other Events.
On January 29, 1995, L.A. Gear, Inc., a California corporation
("L.A. Gear"), Brands Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of L.A. Gear ("Brands"), and Ryka Inc., a Delaware corporation
("Ryka"), entered into a definitive merger agreement (the "Merger Agreement"),
providing for the acquisition of all of the issued and outstanding shares of
the common stock, par value $.01 per share, of Ryka (the "Ryka Shares") by L.A.
Gear.
On April 27, 1995, L.A. Gear and Ryka entered into a letter
agreement pursuant to which L.A. Gear formally terminated the Merger Agreement
and each party agreed to release the other from any claims or liabilities
relating to the transaction or the termination, a copy of which is attached
hereto as an exhibit and incorporated herein by reference. Pursuant to such
letter agreement, L.A. Gear agreed to waive its rights (i) to fees in
connection with a Competing Transaction (as defined in the Merger Agreement)
and (ii) to any rights it now has or may in the future have pursuant to the
Stock Option Agreement. On April 28, 1995, L.A. Gear issued a press release
with respect to termination of the Merger Agreement, a copy of which is
attached hereto as an exhibit and incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
99.8 Letter Agreement, dated April 27, 1995 between
L.A. Gear, Inc. and Ryka Inc.
99.9 Press Release, dated as of April 28, 1995, by
L.A. Gear, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
L.A. GEAR, INC.
Dated: April 28, 1995 By: /s/ Thomas F. Larkins
--------------------------
Thomas F. Larkins,
Senior Vice-President and
General Counsel
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
No. Document No.
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<S> <C> <C>
99.8 Letter Agreement, dated April 27, 1995 between 5
L.A. Gear, Inc. and Ryka Inc.
99.9 Press Release dated as of April 28, 1995, by L.A. Gear, Inc. 8
</TABLE>
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Exhibit 99.8
L.A. GEAR, INC.
2850 OCEAN PARK BOULEVARD
SANTA MONICA, CALIFORNIA 90405
April 27, 1995
Board of Directors
Ryka Inc.
249 Oceana Way
Norwood, MA 02062
Ladies and Gentlemen:
In light of the financial information concerning Ryka Inc. ("Ryka")
presented in Ryka's Annual Report on Form 10-K for the year ended December 31,
1994 as filed with the Securities and Exchange Commission, and additional
information provided to us by you, including but not limited to Ryka's total
losses in fiscal 1994, anticipated losses in the first and second quarters of
fiscal 1995, Ryka's continuing default under its financing arrangements with
Pro-Specs America Corporation and Ryka's current and anticipated cash deficits,
we are hereby exercising our right, pursuant to Section 8.01 of the Agreement
and Plan of Merger, dated as of January 29, 1995 (the "Merger Agreement"), by
and among Ryka, L. A. Gear, and Brands Acquisition Corp., a wholly owned
subsidiary of L.A. Gear ("Brands"), to terminate the Merger Agreement.
Our decision is based on our determination that, due to the above
disclosures, several of the representations and warranties of Ryka contained in
the Merger Agreement are untrue and incapable of being adequately cured. These
include, among others, Section 3.08(xii) of the Merger Agreement, which
provides that since September 30, 1994, there shall not have been a Company
Material Adverse Effect.
By your signature in the appropriate space below, and effective upon our
receipt from you of a signed counterpart of this letter, Ryka Inc. ("Ryka")
and L.A. Gear, Inc. ("L.A. Gear") each hereby agree, acknowledge and confirm as
follows:
1. L.A. Gear hereby agrees to waive its rights under Section 8.05(b)
to certain fees in connection with a Competing Transaction (as defined in the
Merger Agreement).
2. L.A. Gear hereby agrees to waive any rights it may now or in the
future have pursuant to the Stock Option Agreement dated as of January 29,
1995, between Ryka and L.A. Gear.
3. Ryka hereby releases and forever discharges each of L.A. Gear,
Brands, Shamrock Capital Advisors, Inc., and each of their respective
predecessors, successors, assigns, subsidiaries, parent corporations,
affiliates, partners, and each of their respective past, present and future
officers, directors, stockholders, partners, employees, agents,
representatives, attorneys and all persons acting by, through, under or in
concert with any of them (collectively, the "L.A. Gear Releasees"), and each of
L.A. Gear, Brands and Shamrock Capital Advisors, Inc. ("SCA") hereby releases
and forever discharges Ryka and each of its predecessors, successors, assigns,
subsidiaries, parent corporations, affiliates, partners and each of their
respective past, present and future officers, directors, stockholders,
partners, employees,
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agents, representatives, attorneys and all persons acting by, through, under or
in concert with any of them (collectively, the "Ryka Releasees"), from and
against any and all manner of action or actions, cause or causes of action, in
law or in equity, suits, debts, liens, contracts, agreements, promises,
liabilities, claims, demands, damages, losses, costs and expenses, of any
nature whatsoever, know or unknown, fixed or contingent, foreseeable or
unforeseeable, which any of L.A. Gear, Brands and SCA now has or may have
against each or any of the Ryka Releasees, or which Ryka now has or may have
against each or any of the L.A. Gear Releasees, by reason of any matter, cause
or thing whatsoever from the beginning of time to the date hereof arising out
of, based upon, or relating to the entering into, performance under,
termination of, and any other matter relating to, the Merger Agreement or any
of the agreements executed in connection therewith and contemplated thereby.
Ryka, L.A. Gear, Brands and SCA each hereby acknowledge that it has been
advised by legal counsel and is familiar with the provisions of California
Civil Code Section 1542, which provides as follows:
"a general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him, must have materially affected his settlement with
the debtor."
Each of Ryka, L.A. Gear, Brands and SCA, being aware of this code section,
hereby expressly waives any rights it may have thereunder, as well as under any
other statutes or common
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law principles of similar effect under California or Delaware law, federal law,
or the law of any other jurisdiction.
Very truly yours,
L.A. GEAR, INC.
By: W. L. Benford
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Name: W.L. Benford
Title: President
BRANDS ACQUISITION CORP.
By: W.L. Benford
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Name: W.L. Benford
Title President
SHAMROCK CAPITAL ADVISORS, INC.
By: Geoff Moore
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Name: Geoff Moore
Title: Managing Director
Agreed, Acknowledged and Confirmed:
RYKA INC.
By: Sheri Poe
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Name:
Title:
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Exhibit 99.9
FOR IMMEDIATE RELEASE
Contacts:
Jeff Rotondo Carrie Conn
L.A. Gear Golin/Harris
(310) 581-7446 213/623-4200
L.A. GEAR ANNOUNCES TERMINATION OF RYKA MERGER AGREEMENT
SANTA MONICA, Calif. -- April 28, 1995 -- L.A. Gear, Inc. (NYSE:LA)
announced today that it has terminated the merger agreement providing for the
acquisition of Ryka Inc., a Massachusetts-based marketer of high performance
women's athletic shoes, by L.A. Gear.
Stanley P. Gold, chairman and chief executive officer of L.A. Gear and
William L. Benford, president and chief operating officer of L.A. Gear, noted,
"In light of Ryka's recently announced financial results for 1994, anticipated
financial results for the first and second quarters of 1995, and current
financial condition, it would not be in the best interests of L.A. Gear and its
shareholders to continue to pursue the acquisition of Ryka."
Gold and Benford added, "L.A. Gear will continue to seek opportunities to
implement its 'L.A. Brands' strategy aimed at expanding L.A. Gear's product
lines and distribution channels through the acquisition of other footwear
brands and the licensing of key trade names."
Based in Santa Monica, California, L.A. Gear designs, develops and markets
a broad range of quality athletic and lifestyle footwear for adults and
children. The company markets its products internationally through
wholly-owned subsidiaries, independent distributors and a Far East joint
venture.
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