As filed with the Securities and Exchange Commission on October 3, 1996
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________
THE WET SEAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 33-0415940
(State of Other Juris- (I.R.S. Employer
diction of Incorporation Identification
or Organization) Number)
64 Fairbanks
Irvine, California 92718
(714) 583-9029
(Address, Including Zip Code, and Telephone Number, Including Area Code
of Registrant's Principal Executive Offices)
Edmond S. Thomas
64 Fairbanks
Irvine, California 92718
(714) 583-9029
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service)
_____________
Copy to:
Alan Siegel, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
399 Park Avenue
New York, New York 10022
___________
Approximate date of commencement of proposed sale to the public: From time to
time or at one time after the effective date of this Registration Statement as
determined by the Selling Stockholder.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
<PAGE>
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. [ ]
_____________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================================
Proposed Proposed
Shares Maximum Maximum Amount of
Title of Shares to be Offering Price Aggregate Registration
to be Registered Registered Per Share(1) Offering Price(1) Fee
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Class A Common
Stock................. 200,000 $32.625 $6,525,000 $2,250.00
==========================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, based on the average high
and low sales prices of the Class A Common Stock on September 26, 1996 as
reported by the Nasdaq National Market.
____________
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 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
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 3, 1996
PROSPECTUS
200,000 Shares
THE WET SEAL, INC.
Class A Common Stock, $.10 par value
This Prospectus relates to 200,000 shares (the "Class A Shares" or
"Shares") of Class A Common Stock, $.10 par value ("Class A Common Stock"), of
The Wet Seal, Inc. (the "Company"). The Class A Shares being offered hereby are
being offered by La Senza Inc., a Canadian corporation which is a wholly-owned
subsidiary of Suzy Shier Limited, a Canadian corporation which indirectly is a
principal stockholder of the Company. La Senza Inc. is referred to herein as the
"Selling Stockholder." The offering of the Shares by the Selling Stockholder is
referred to herein as the "Offering." The Company will not receive any of the
proceeds from the sale of Class A Shares offered hereby. The Class A Shares will
be offered as such upon the automatic conversion into Class A Common Stock of
200,000 shares of Class B Common Stock, $.10 par value ("Class B Common Stock")
held by the Selling Stockholder. The Company's Restated Certificate of
Incorporation provides certain restrictions on the ownership and transfer of
Class B Common Stock, including that shares of Class B Common Stock may not be
transferred by sale or otherwise to any person other than a Permitted Transferee
(as defined in the Company's Restated Certificate of Incorporation, see "Selling
Stockholder") without first being converted to Class A Common Stock. All of the
Shares being offered hereby were issued by the Company in private transactions
not involving any public offering and may not be resold in a public distribution
except in compliance with the Securities Act of 1933, as amended (the "Act"),
and except upon conversion into Class A Common Stock. Holders of Class A Common
Stock are entitled to one vote per Share and holders of Class B Common Stock are
entitled to two votes per share on matters submitted to a vote of stockholders.
The Class A Common Stock is traded on the Nasdaq National Market under
the symbol "WTSLA". On October 3, 1996, the last reported sale price of the
Class A Common Stock on the Nasdaq National Market was $37.375 per share.
See "Risk Factors" beginning on page 3 of this Prospectus for a
discussion of certain factors that should be considered by prospective
purchasers of the Shares offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMIS-
SION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is __________________, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices at 7 World Trade Center, Suite 1300, New York, New
York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials can be obtained from the
Commission at prescribed rates from the Public Reference Section of the
Commission at its principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding the
Company at http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Act, with respect to the Shares offered
hereby. This Prospectus, which constitutes a part of the Registration Statement,
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is hereby made to the
Registration Statement and exhibits filed as a part thereof and otherwise
incorporated therein and which may be inspected and copied in the manner and at
the sources described above. Statements contained in this Prospectus as to the
contents of any document referred to are not necessarily complete, and in each
instance reference is made to such exhibit for a more complete description and
each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed by the Company with the
Commission are incorporated by reference into this Prospectus.
1) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended August 3, 1996.
2) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended May 4, 1996.
3) The Company's Annual Report on Form 10-K for the fiscal year ended
February 3, 1996.
-2-
<PAGE>
4) The description of the Company's Class A Common Stock, $.10 par
value per share, contained in the Company's Registration Statement on Form S-1
under the Securities Act filed with the Commission on July 30, 1990 (File No.
33-34895); and
5) All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of this offering shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
such documents.
Any statement contained herein or in any document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus, except as so modified or superseded. The
Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the information that has been incorporated by reference in this
Prospectus (excluding exhibits to such information which are not specifically
incorporated by reference into such information). Requests for such documents
should be directed to the Company at its principal executive offices, 64
Fairbanks, Irvine, California 92718, Attention: Corporate Secretary, telephone
(714) 583-9029.
RISK FACTORS
Potential purchasers of the Class A Common Stock should carefully
consider the following factors, as well as the other information contained in
this Prospectus, before deciding to purchase the Class A Shares offered hereby.
Historical Decline in Comparable Store Sales; Prior Losses
Although the Company's comparable store sales have increased by 10.5%
through the twenty-six weeks ended August 3, 1996 and 16.5% in the 13 weeks
ended August 3, 1996, comparable store sales declined by 14.2%, 9.2% and 4.1%
during fiscal years 1993, 1994 and 1995, respectively. The Company believes
these declines were primarily attributable to an industry-wide decrease in sales
of women's apparel, due in part to a shift in consumer discretionary spending.
This resulted in reduced profitability for many women's apparel retailers and
led a large number of retailers, including a number of specialty retailers, to
close stores or go out of business. There can be no assurance that these and
other factors will not again result in declining comparable store sales, which
could adversely affect the Company's profitability.
The Company incurred net losses in fiscal 1993 and 1994 of $2.4
million and $1.0 million, respectively. Those losses were due to a combination
of factors, including adverse economic conditions in the Southern California
market and declines in the Company's comparable store sales. Following the
Company's acquisition of Contempo Casuals on July 1, 1995, the Company achieved
-3-
<PAGE>
greater economies of scale and improved margins, which resulted in the Company's
return to profitability in fiscal 1995 and for the first six months of the
current fiscal year. There can be no assurance that the Company will continue to
be profitable in the current fiscal year or in future years.
Changes in Fashion Trends
The Company's profitability is largely dependent upon its ability to
anticipate the changing fashion tastes of its customers and to respond to those
changing tastes in a timely manner. The failure of the Company to anticipate,
identify or react appropriately to changing styles, trends or brand preferences
could lead to, among other things, lower sales, excess inventories and more
frequent markdowns, which could have a material adverse effect on the Company's
financial condition and results of operations. In addition, fashion misjudgments
could adversely affect the Company's image with its customers, which could
materially adversely affect the Company's long-term sales, profitability and
growth.
Duplicate Store Locations
As a result of the acquisition of Contempo Casuals, the Company
currently operates both a Contempo Casuals store and a Wet Seal store in 66
malls, which contain approximately 134 of the Company's stores. Such duplicate
locations may compete for the same sales, which has resulted in a decrease in
sales volume and profitability at these stores. The Company has attempted to
reduce the level of competition between its duplicate stores by differentiating
the merchandise mix in such stores or by closing duplicate locations. The
Company is also converting certain duplicate stores to test new retail concepts.
There can be no assurance that the Company will be able to reduce comparable
store sales declines or improve the profitability of its duplicate stores.
Competition
The young women's retail apparel industry is highly competitive. The
Company competes for sales primarily with specialty apparel retailers,
department stores and certain other apparel retailers, many of which have
significantly greater financial, marketing and other resources available to
them. In addition, the Company competes for favorable site locations and lease
terms in shopping malls. Competition may significantly increase in the future,
which could adversely affect the Company.
Economic Conditions and Consumer Spending
As with other retail businesses, the Company's business is sensitive
to consumer spending patterns and preferences. The Company's growth, sales and
profitability may be adversely affected by unfavorable local, regional or
national economic conditions. The Company is especially affected by economic
conditions in California, where approximately 35% of its stores are located.
-4-
<PAGE>
Substantially all of the Company's stores are located in regional
shopping malls. The Company's sales are derived, in part, from the high volume
of traffic in such malls. The Company therefore benefits from the ability of
mall "anchor" tenants and other area attractions to generate consumer traffic in
the vicinity of the Company's stores and the continuing popularity of malls as
shopping destinations. Sales volume and mall traffic may be adversely affected
by economic downturns in a particular area, competition from non-mall retailers
and other malls, the closing of anchor department stores, and declines in the
desirability of the shopping environment in a particular mall, all of which
could adversely affect the Company's sales and profitability.
The Company's sales and profitability also depend upon the continued
demand by the Company's customers for fashionable, casual apparel. If the demand
for apparel and related merchandise were to decline, the Company's financial
condition and results of operations could be materially and adversely affected.
Shifts in consumer discretionary spending to other goods such as electronic
equipment, computers and music could also adversely affect the Company.
Seasonality
The retail apparel industry is highly seasonal. The Company generates
its highest level of sales during the Christmas season (beginning the week of
Thanksgiving and ending the first Saturday after Christmas) and the "back to
school" season (beginning the last week of July and ending the first week of
September). The Company's profitability depends, to a significant degree, on the
sales generated during these peak periods. Any decrease in sales or margins
during these periods, whether as a result of then current economic conditions,
poor weather or other factors beyond the control of the Company, could have a
material adverse effect on the Company.
Dependence on Key Personnel
The Company's success depends to a significant extent upon the
performance of its senior management, particularly Kathy Bronstein, Vice
Chairman and Chief Executive Officer, and Edmond Thomas, President and Chief
Operating Officer. While the Company has employment agreements with Ms.
Bronstein and Mr. Thomas that extend through January 30, 2001, there can be no
assurance that the services of either of such executives will remain available
to the Company pursuant to such employment agreements. The employment agreements
of each of Ms. Bronstein and Mr. Thomas contain non-competition covenants. The
Company maintains "key man" life insurance on the life of each of Ms. Bronstein
and Mr. Thomas in the amount of $5 million.
Voting Rights of Common Stock; Control by Selling Stockholder
The voting rights of Class A Common Stock are limited by the Company's
Restated Certificate of Incorporation (the "Restated Certificate"). On all
matters with respect to which the Company's stockholders have a right to vote,
including for the election of directors, a holder of Class A Common Stock is
entitled to one vote per share, while a holder of Class B Common Stock is
-5-
<PAGE>
entitled to two votes per share. Except as otherwise required by law, Class A
Common Stock and Class B Common Stock vote together as a single class.
Prior to the Offering, the holders of Class B Common Stock (including
the Selling Stockholder) represented 35.9% of the voting power of all classes of
the Company's capital stock, of which shares representing 30.2% of the voting
power were owned in the aggregate by 3254127 Canada Inc., 3254143 Canada Inc.,
Los Angeles Express Fashions Inc. (collectively, the "GT Stockholders") and the
Selling Stockholder. The GT Stockholders and the Selling Stockholders are
controlled, directly or indirectly, by Irving Teitelbaum, Chairman of the Board,
and Stephen Gross, Secretary and a Director of the Company.
Following consummation of the Offering, the holders of Class B Common
Stock will own shares representing 33.9% of the voting power of all classes of
the Company's capital stock, and 28.1% of the voting power will be owned by the
GT Stockholders. As a result, after the Offering, the GT Stockholders may be
able to direct the election of all the directors of the Company and determine
the outcome of any matter submitted to a vote of stockholders, including any
merger, consolidation or sale of all or substantially all of the Company's
assets, except as otherwise provided by law.
Anti-Takeover Proposals
The Board of Directors has approved a resolution proposing certain
amendments to its Restated Certificate of Incorporation which would (i) create a
classified Board of Directors consisting of three classes each serving a three
year term and (ii) provide for a 75% super-majority voting in the event of
certain unsolicited takeover offers. These proposals will be the subject of a
proxy solicitation to be presented to the stockholders for adoption. If adopted
by the stockholders, the proposals would make the Company less vulnerable to
hostile bidders and would possibly prevent stockholders from realizing the
premium price usually associated with such bids.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholder.
SELLING STOCKHOLDER
The Selling Stockholder is a wholly-owned subsidiary of Suzy Shier
Limited, a public company whose shares are traded on the Montreal and Toronto
Stock Exchanges. Suzy Shier Limited is also the indirect parent of Los Angeles
Express Fashions Inc., holder of 1,300,000 shares of Class B Common Stock of the
Company. These companies are controlled, directly or indirectly, by Irving
Teitelbaum, Chairman of the Board, and Stephen Gross, Secretary and a Director
of the Company. Messrs. Teitelbaum and Gross are brothers-in-law.
-6-
<PAGE>
Except for sales to Permitted Transferees, any sale or transfer of
shares of Class B Common Stock will result in the automatic conversion of such
shares of Class B Common Stock into an equal number of Class A Shares. A
Permitted Transferee is defined in the Company's Restated Certificate of
Incorporation as (i) an original holder of Class B Common Stock (an "Original
Holder"), (ii) an immediate family member of an Original Holder that is a
natural person, or (iii) a corporation, trust, partnership, limited partnership,
association or similar entity which is directly or indirectly wholly-owned by an
Original Holder or his family members. The Shares being registered hereby by the
Selling Stockholder will be issued upon the conversion of 200,000 shares of
Class B Common Stock currently held by the Selling Stockholder.
The Selling Stockholder, a Permitted Transferee, received its shares
as a result of a transaction with Los Angeles Express Fashions Inc., also a
Permitted Transferee.
The following table sets forth, as of October 1, 1996, (i) the
ownership of the outstanding shares of Common Stock held by the Selling
Stockholder before the Offering, (ii) the number of shares of Class A Common
Stock being sold by the Selling Stockholder in the Offering, and (iii) the
number of shares held by the Selling Stockholder after the Offering.
<TABLE>
<CAPTION>
Number of Number of Shares
Shares of of Class A
Class A Number of Shares Common Stock
Common of Class B Number of Shares and Class B
Stock Owned Common Stock of Class A Common Stock
Before Owned Before Common Stock Owned After
Offering Offering Being Offered Offering
<S> <C> <C> <C> <C>
La Senza Inc. 0 200,000 200,000 0
</TABLE>
PLAN OF DISTRIBUTION
The Selling Stockholder may elect, from time to time, to sell Shares
in the over-the-counter market, on any other exchange on which the Class A
Common Stock is listed or traded, in negotiated transactions or through a
combination of such methods of sale, at market prices prevailing at the time of
sale, prices related to the then-current market price or at negotiated prices,
including pursuant to an underwritten offering or one or more of the following
methods: (a) purchases by a broker-dealer as principal and resale by such broker
or dealer for its account pursuant to this Prospectus; (b) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (c)
block trades in which the broker-dealer so engaged will attempt to sell the
Shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction. The Selling Stockholder may also pledge Shares as
collateral for margin accounts and such Shares could be resold pursuant to the
terms of such accounts. In effecting sales, broker-dealers engaged by the
Selling Stockholder may arrange for other broker-dealers to participate. Such
broker-dealers may receive compensation in the form of discounts, concessions or
-7-
<PAGE>
commissions from the Selling Stockholder and/or the purchasers of the Shares for
which such broker-dealers may act as agent or to whom they may sell as
principal, or both (which compensation shall be negotiated immediately prior to
sale and which, as to a particular broker-dealer, may be in excess of customary
compensation). Any broker-dealer may act as broker-dealer on behalf of the
Selling Stockholder in connection with the offering of certain of the Shares by
the Selling Stockholder.
Under the Exchange Act, and the regulations thereunder, any person
engaged in a distribution of the Shares offered by this Prospectus may not
simultaneously engage in market making activities with respect to the Class A
Common Stock of the Company during the applicable "cooling off" periods prior to
the commencement of such distribution. In addition, and without limiting the
foregoing, the Selling Stockholder will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder including, without
limitation, Rules 10b-6 and 10b-7, which provisions may limit the timing of
purchases and sales of Shares by the Selling Stockholder.
EXPERTS
The financial statements incorporated in this Prospectus by reference
from the Company's Annual Report on Form 10-K for the year ended February 3,
1996 have been audited by Deloitte & Touche LLP, independent auditors, as stated
in their report, which financial statements are incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in auditing and accounting.
LEGAL MATTERS
The validity of the Class A Shares offered hereby will be passed upon
for the Company by Akin, Gump, Strauss, Hauer & Feld, L.L.P., New York, New
York. Alan Siegel, a director of the Company, is a member of the firm of Akin,
Gump, Strauss, Hauer & Feld, L.L.P. and holds options to purchase 6,000 shares
of Class A Common Stock.
-8-
<PAGE>
No dealer, salesperson or other
individual has been authorized to give
any information or make any
representations not contained in this
Prospectus in connection with the
offering covered by this Prospectus. If
given or made, such information or THE WET SEAL, INC.
representations must not be relied upon
as having been authorized by the 200,000 Shares
Company. This Prospectus does not Class A Common Stock, $.10 par value
constitute an offer to sell, or a
solicitation of an offer to buy, any
securities in any jurisdiction where, or
to any person to whom, it is unlawful to
make such offer or solicitation. Neither
the delivery of this Prospectus nor any
sale made hereunder shall, under any
circumstances, create an implication
that there has not been any change in
the facts set forth in this Prospectus
or in the affairs of the Company since
the date hereof.
TABLE OF CONTENTS
__________
Page P R O S P E C T U S
Available Information........................2
Incorporation of Certain Documents __________
by Reference............................2
Risk Factors.................................3
Use of Proceeds..............................6
Selling Stockholder..........................6
Plan of Distribution.........................7
Experts......................................8
Legal Matters................................8
October 3, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses payable by the Registrant in connection with
the issuance and distribution of the securities being registered are as follows:
SEC Registration Fee........................... $ 2,250
Accounting Fees and Expenses................... $ 5,000
Legal Fees and Expenses (including Blue Sky)... $20,000
Miscellaneous Expenses ........................ $ 2,000
Total.................................. $29,250
Item 15. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
(the "Delaware Law") permits indemnification of directors, officers, employees
and agents of corporations under certain limitations.
The Certificate of Incorporation and the Bylaws of the Company provide
for indemnification of directors and officers of the Company to the fullest
extent permitted by Section 145.
Statutory Provisions
Section 102(b)(7) of the Delaware Law enables a corporation in its
certificate of incorporation to eliminate or limit the personal liability of
members of its board of directors to the corporation or its stockholders for
monetary damages for violations of a director's fiduciary duty of care. Such a
provision would have no effect on the availability of equitable remedies, such
as an injunction or rescission, for breach of fiduciary duty. In addition, no
such provision may eliminate or limit the liability of a director for breaching
his duty of loyalty, failing to act in good faith, engaging in intentional
misconduct or knowingly violating a law, paying an unlawful dividend or
approving an illegal stock repurchase, or obtaining an improper personal
benefit.
Section 145 of the Delaware Law empowers a corporation to indemnify
any persons who was or is a party to or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
II-1
<PAGE>
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. No indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the corporation unless and only to the extent that the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the court shall deem proper. Additionally, a corporation is required to
indemnify its directors and officers against expenses to the extent that such
directors or officers have been successful on the merits or otherwise in any
action, suit or proceeding or in defense of any claim, issue or matter therein.
An indemnification can be made by the corporation only upon a
determination that indemnification is proper in the circumstances because the
party seeking indemnification has met the applicable standard of conduct as set
forth in the Delaware Law. The indemnification provided by the Delaware Law
shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. A corporation also has the power to
purchase and maintain insurance on behalf of any person, whether or not the
corporation would have the power to indemnify him against such liability. The
indemnification provided by the Delaware Law shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
The Company's Charter and Bylaw Provisions
The Company's Certificate of Incorporation limits the director's
liability for monetary damages to the Company and its stockholders for breaches
of fiduciary duty except under the circumstances outlined in Section 102(b)(7)
of the Delaware Law as described above under "Statutory Provisions."
The Company's Bylaws extend indemnification rights to the fullest
extent authorized by the Delaware Law to directors and officers involved in any
action, suit or proceeding where the basis of such involvement is such person's
alleged action in an official capacity or in any other capacity while serving as
a director or officer in the Company. In addition, the Bylaws permit the Company
to maintain insurance to protect itself and any of its directors, officers,
employees or agents against any expense, liability or loss incurred as a result
of any action, suit or proceeding whether or not the Company would have the
power to indemnify such person under the Delaware Law.
II-2
<PAGE>
Indemnification Agreements
The Company has entered into Indemnification Agreements with each of
its directors and with its Chief Financial Officer, Ann Cadier Kim, pursuant to
which the Company has agreed to advance expenses for the defense of and to
indemnify such persons to the fullest extent permitted by applicable law.
Item 16. Exhibits
A list of exhibits included as part of this Registration Statement is
set forth in the Exhibit Index which immediately precedes such exhibits and is
hereby incorporated by reference herein.
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post- effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. 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 and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply
if the registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post- effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
II-3
<PAGE>
(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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) 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 pursuant to 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 purposes 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.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefor, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, state of California, on October 3, 1996.
THE WET SEAL, INC.
(Registrant)
By: /S/ EDMOND S. THOMAS
-------------------------------------
Edmond S. Thomas
President and Chief Operating Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the persons whose
signature appears below appoints and constitutes Kathy Bronstein and Edmond S.
Thomas, and each of them, his or her true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and her and in his or her name, place and stead, in any and all capacities, to
execute any and all amendments (including post-effective amendments) to the
within Registration Statement, and to file the same, together with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission and such other agencies, offices and persons as may be
required by applicable law, granting unto each said attorney-in-fact and agent,
each acting alone, full power and authority to do and perform each and every act
and thing requisite or necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that each said attorney-in-fact and agent, each
acting alone may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/S/ IRVING TEITELBAUM Chairman of the Board and October 3, 1996
- ----------------------- Director
Irving Teitelbaum
/S/ KATHY BRONSTEIN Vice Chairman and Chief October 3, 1996
- ----------------------- Executive Officer and Director
Kathy Bronstein (Principal Executive Officer)
/S/ EDMOND S. THOMAS President and Chief Operating October 3, 1996
- ----------------------- Officer and Director
Edmond S. Thomas
II-5
<PAGE>
/S/ ANN CADIER KIM Vice President of Finance and October 3, 1996
- ----------------------- Chief Financial Officer
Ann Cadier Kim (Principal Financial and
Accounting Officer)
/S/ STEPHEN GROSS Secretary and Director October 3, 1996
- -----------------------
Stephen Gross
/S/ WILFRED POSLUNS Director October 3, 1996
- -----------------------
Wilfred Posluns
/S/ GERALD RANDOLPH Director October 3, 1996
- -----------------------
Gerald Randolph
/S/ ALAN SIEGEL Director October 3, 1996
- -----------------------
Alan Siegel
/S/ GEORGE H. BENTER, JR. Director October 3, 1996
- --------------------------
George H. Benter, Jr.
/S/ WALTER F. LOEB Director October 3, 1996
- -----------------------
Walter F. Loeb
II-6
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Exhibit Page
4.1* Specimen certificate of the Class A Common Stock
4.2* Specimen certificate of the Class B Common Stock
5.1** Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
23.1** Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in Exhibit 5.1)
23.2(a)** Consent of Deloitte & Touche LLP
24.1** Power of Attorney (included on the signature page of
the Registration Statement)
* Incorporated by reference from the Registrant's Registration Statement
on Form S-1 (File No. 33-34895)
** Filed herewith.
Exhibit 5.1
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
399 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 872-1000
October 3, 1996
The Wet Seal, Inc.
64 Fairbanks
Irvine, California 92718
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 (No.
__________, the "Registration Statement"), filed October 3, 1996 by The Wet
Seal, Inc., a Delaware corporation (the "Company"), with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations promulgated thereunder (the "Rules and
Regulations"), you have requested that we furnish to you our opinion as to the
legality of the 200,000 shares of the Company's Class B Common Stock, $.10 par
value per share (the "Class B Shares"), registered in the name of La Senza Inc.,
a Canadian corporation ("La Senza"), and the 200,000 shares (the "Class A
Shares") of Class A Common Stock, $.10 par value per share (the "Class A Common
Stock") which are issuable upon conversion of the Class B Shares and which are
being registered under the Registration Statement.
In this regard, we have examined originals or copies authenticated to
our satisfaction of the Registration Statement, the stock certificate
representing the Class B Shares, the form of the stock certificate for the Class
A Common Stock and such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such inquiries
of such officers and representatives as we have deemed relevant and necessary in
order to render this opinion. In addition, we have made such other examinations
of law and fact as we have considered necessary in order to form a basis for the
opinions hereinafter expressed.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or of all
photostatic copies and the authenticity of the originals of such latter
documents. In addition, we have assumed that the Class A Common Stock will be
authorized, executed and delivered by the parties thereto substantially in the
forms examined by us.
Based upon and subject to the foregoing, we are of the opinion that
the Class B Shares held by the Selling Stockholder have been duly and validly
authorized and issued and are fully paid and non-assessable. The Class A Shares
being offered by the Selling Stockholder have been duly and validly authorized
and, when issued and delivered upon the conversion of an equal number of Class B
Shares, will be duly and validly issued, fully paid and non-assessable.
This law firm is a registered limited liability partnership organized
under the laws of the State of Texas. Our opinion relates only to the laws of
the State of New York, the General Corporation Law of the State of Delaware and
applicable federal law of the United States of America. We express no opinion of
the law of any other jurisdiction.
We hereby consent to the use of our name under the caption "Legal
Matters" in the prospectus included in the Registration Statement and to the use
of this opinion as an exhibit to the Registration Statement. In giving this
consent, we do not thereby admit that we come within the category of persons
whose consent is required by the Act or the Rules and Regulations.
Very truly yours,
/S/ AKIN, GUMP, STRAUSS, HAUER & FELD, LLP
--------------------------------------------
AKIN, GUMP, STRAUSS, HAUER & FELD, LLP
Exhibit 23.2(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Wet Seal, Inc. on Form S-3 of our report dated March 11, 1996, appearing in
the Annual Report on Form 10-K of The Wet Seal, Inc. for the year ended February
3, 1996 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/S/ DELOITTE & TOUCHE LLP
- ----------------------------
Costa Mesa, California
October 1, 1996
