<PAGE>
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)
MAY 21, 1998
LITTLE SWITZERLAND, INC.
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(Exact name of registrant as specified in charter)
DELAWARE 0-19369 66-0476514
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(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
161-B CROWN BAY CRUISE SHIP PORT, ST. THOMAS, U.S.V.I. 00802
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (809) 776-2010
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<PAGE>
Item 5 - Other Events
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Little Switzerland, Inc. (the "Company") announced on May 21, 1998 that it
has received a second request by Destination Retail Holdings Corporation
("DRHC") for a ninety day extension in exchange for certain limited concessions.
In response, the Company apprised DHRC that the Company is prepared to extend
the date after which the Company has the right to terminate the Agreement and
Plan of Merger, dated as of February 4, 1998, by and among the Company, DRHC and
certain of its subsidiaries (the "Merger Agreement") to June 5, 1998. The
Company indicated that it is prepared to grant the two week extension in
exchange for DRHC's acknowledgment that all conditions to the merger have been
satisfied and the concessions offered by DRHC. The Company previously advised
DRHC that all of the conditions set forth in Article VI of the Merger Agreement
have been satisfied as of May 8, 1998 and that the Company has been prepared to
close the merger since such time.
The Company indicated that it remains willing to work with DRHC to close
the merger, provided that the Company can get reasonable assurances from DRHC
for the benefit of the Company's shareholders that DRHC has the ability to
obtain financing which will permit DRHC to close the merger promptly. Since May
8, 1998, the Company and its advisors have attempted to meet with DRHC, its
accountants, its lawyers and Donaldson, Lufkin & Jenrette, Inc. ("DLJ") in order
to gain an understanding of the structure, timing and likelihood of DRHC's
financing for the proposed merger. The Company has also requested a copy of
DRHC's most recent audited year-end and interim financial statements, which the
Company understands from DRHC have been completed and provided to DLJ.
DRHC has refused to meet with the Company or to provide it with DRHC's most
recent financial statements despite the Company's requests. Because DRHC has
permitted its financing commitments to expire and has not offered any
alternative financing structure, the Company indicated to DRHC that it would not
be in the best interests of the Company's shareholders or prudent to grant DRHC
an extension beyond two weeks at this time.
The Company again informed DRHC that it remains imperative that
representatives of the Company meet with DRHC, its accountants, its lawyers and
DLJ to understand the structure, timing and likelihood of DRHC's financing.
Upon receipt of such information, the Board of Directors of the Company will
review and analyze the alternatives available to the Company.
2
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Item 7 - Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits
Exhibit 99.1 - Press Release of Little Switzerland, Inc.,
dated May 21, 1998.
Exhibit 99.2 - Correspondence from Little Switzerland, Inc. to
Destination Retail Holdings Corporation, dated May 21,
1998.
Exhibit 99.3 - Correspondence from Destination Retail Holdings
Corporation to Little Switzerland, Inc., dated
May 19, 1998.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LITTLE SWITZERLAND, INC.
Date: May 21, 1998 By:/s/ John E. Toler, Jr.
----------------------
John E. Toler, Jr.
Chief Executive Officer
4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
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Exhibit 99.1 - Press Release of Little Switzerland, Inc., dated
May 21, 1998.
Exhibit 99.2 - Correspondence from Little Switzerland, Inc. to
Destination Retail Holdings Corporation, dated
May 21, 1998.
Exhibit 99.3 - Correspondence from Destination Retail Holdings
Corporation to Little Switzerland, Inc., dated
May 19, 1998.
<PAGE>
Exhibit 99.1
PRESS RELEASE
CONTACTS:
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Jeffrey H. Cohen C. William Carey
Wasserstein Perella & Co., Inc. Little Switzerland, Inc.
(212) 969-2715 (617) 451-3312
Mary Ellen Goodall
Walter Denby
D.F. King & Co., Inc.
(212) 269-5550
FOR IMMEDIATE RELEASE
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LITTLE SWITZERLAND RESPONDS
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TO DESTINATION'S REQUEST FOR AN EXTENSION
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ST. THOMAS, U.S. VIRGIN ISLANDS, May 21, 1998.....Little Switzerland, Inc.
(NASDAQ:LSVI) today announced that it has received a second request by
Destination Retail Holdings Corporation for a ninety day extension in exchange
for certain limited concessions. In response, Little Switzerland apprised
Destination that Little Switzerland is prepared to extend the date after which
Little Switzerland has the right to terminate the Merger Agreement to June 5,
1998. Little Switzerland indicated that it is prepared to grant the two week
extension in exchange for Destination's acknowledgment that all conditions to
the merger have been satisfied and the concessions offered by Destination.
Little Switzerland previously advised Destination that all of the conditions set
forth in Article VI of the Merger Agreement have been satisfied as of May 8,
1998 and that Little Switzerland has been prepared to close the merger since
such time.
Little Switzerland indicated that it remains willing to work with
Destination to close the merger, provided that Little Switzerland can get
reasonable assurances from Destination for the benefit of Little Switzerland's
shareholders that Destination has the ability to obtain financing which will
permit Destination to close the merger promptly. Since May 8, 1998, Little
Switzerland and its advisors have attempted to meet with Destination, its
accountants, its lawyers and Donaldson, Lufkin & Jenrette, Inc. in order to gain
an understanding of the structure, timing and likelihood of Destination's
financing for the proposed merger. Little Switzerland has also requested a copy
of Destination's most recent audited year-end and interim financial statements,
which Little Switzerland understands from Destination have been completed and
provided to Donaldson, Lufkin & Jenrette.
Destination has refused to meet with Little Switzerland or to provide it
with Destination's most recent financial statements despite Little Switzerland's
requests. Because
<PAGE>
Destination has permitted its financing commitments to expire and has not
offered any alternative financing structure, Little Switzerland indicated to
Destination that it would not be in the best interests of Little Switzerland
shareholders or prudent to grant Destination an extension beyond two weeks at
this time.
Little Switzerland again informed Destination that it remains imperative
that representatives of Little Switzerland meet with Destination, its
accountants, its lawyers and Donaldson, Lufkin & Jenrette to understand the
structure, timing and likelihood of Destination's financing. Upon receipt of
such information, the Board of Directors of Little Switzerland will review and
analyze the alternatives available to Little Switzerland.
Little Switzerland, Inc. is a leading specialty retailer of brand name
watches, jewelry, crystal, china, fragrances and accessories, operating 24
stores on ten Caribbean islands, and three stores in Alaska cruise ship
destinations. Little Switzerland's primary market consists of vacationing
tourists attracted by free-port pricing, duty-free allowances and a wide variety
of high quality merchandise.
<PAGE>
Exhibit 99.2
[Letterhead of Little Switzerland, Inc.]
May 21, 1998
Stephen G.E. Crane
Destination Retail Holdings Corporation
International Bazaar
P.O. Box F 40349
Freeport, Bahamas
Dear Mr. Crane:
I am writing in response to your letter, dated May 19, 1998, which you sent
to the Board of Directors of Little Switzerland, Inc. (the "Company") on behalf
of Destination Retail Holdings Corporation ("DRHC"). In that letter, DRHC
reiterated its request for a ninety (90) day extension of the date by which DRHC
must satisfy its obligations under the Agreement and Plan of Merger, dated as of
February 4, 1998, by and among the Company, DRHC and certain of its subsidiaries
(the "Merger Agreement").
As you were notified on May 8, 1998, the Company believes that all of the
conditions set forth in Article VI of the Merger Agreement have been satisfied
as of such date, and the Company has been prepared to close the merger since
such time. The Company remains willing to work with DRHC to close the merger,
provided that the Company can get reasonable assurances from DRHC for the
benefit of the Company's shareholders that DRHC has the ability to obtain
financing which will permit DRHC to close the merger promptly. It is in this
context that the Company is prepared to grant DRHC a two week extension under
the Merger Agreement. In addition to the limited items that you offered in your
letter of May 19, 1998 in exchange for an extension, we believe that the grant
of any extension must be conditioned on DRHC's acknowledgment that all
conditions to the merger have in fact been satisfied. Toward this end, we have
attached hereto an Extension Agreement pursuant to which the Company is prepared
to grant DRHC a two week extension.
While the Company is prepared to work with DRHC in an effort to close the
merger, we remain very concerned about DRHC's ability to perform its obligations
under the Merger Agreement, specifically, DRHC's ability to pay for the
outstanding shares of the Company's common stock. Since the Company advised you
of the satisfaction of all conditions to the
<PAGE>
Stephen G.E. Crane
Destination Retail Holdings Corporation
May 21, 1998
Page 2
merger on May 8, 1998, the Company and its advisors have attempted to meet with
you, Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), DRHC's accountants and its
lawyers in order to gain an understanding of the structure, timing and
likelihood of DRHC's financing for the proposed merger. We have also requested a
copy of DRHC's most recent audited year-end and interim financial statements,
which we understand from you have been completed and provided to DLJ. Despite
our numerous requests, you have refused to meet with us or to provide us with
DRHC's most recent financial statements.
Despite your lack of cooperation in sharing information with us and your
apparent inability to make any progress in obtaining financing for the merger,
we remain committed to consummating the proposed merger promptly. Because DRHC
has permitted its financing commitments to expire and has not offered any
alternative firm financing structure, it would not be in the best interests of
our shareholders or prudent to grant DRHC an extension beyond two weeks. It
remains imperative that we meet with you, DLJ, DRHC's accountants and its
lawyers to understand the structure, timing and likelihood of DRHC's financing.
We look forward to hearing from you in the near future.
Yours faithfully,
/s/ John E. Toler, Jr.
John E. Toler, Jr.
Attachment
cc: Charles H. Baker, Esq. - Battle Fowler LLP
Kevin M. Dennis, Esq. - Goodwin, Procter & Hoar LLP
<PAGE>
EXTENSION AGREEMENT
-------------------
This EXTENSION AGREEMENT (this "Agreement") is made as of May __, 1998, by
and among Little Switzerland, Inc., a Delaware corporation (the "Company"),
Destination Retail Holdings Corporation, a Nevis corporation ("Parent"), LSI
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Sub"), Young Caribbean Jewellery Company Limited, a Cayman Islands
corporation and a subsidiary of Parent ("YCJCL"), Alliance International
Holdings Limited, a Bahamian corporation and a wholly-owned subsidiary of Parent
("AIHL"), and CEI Distributors Inc., a British Virgin Islands corporation and a
wholly-owned subsidiary of Parent ("CDI" and, together with YCJCL and AIHL, the
"Parent Related Entities").
WHEREAS, on May 8, 1998, the Agreement and Plan of Merger, dated as of
February 4, 1998, by and among the Company, Parent, Sub and the Parent Related
Entities (the "Merger Agreement") was adopted by the requisite affirmative vote
of the stockholders of the Company;
WHEREAS, on May 8, 1998, Parent received a notice (the "Satisfaction
Notice") from the Company that all of the conditions set forth in Article VI of
the Merger Agreement had been satisfied as of such date and that, if, by 5:00
p.m. on Friday, May 22, 1998, the Merger Agreement has not been consummated and
neither Parent nor Sub has deposited the Merger Consideration (as defined in the
Merger Agreement) with the Paying Agent (as defined in the Merger Agreement),
the Company has the right to terminate the Merger Agreement in accordance with
Section 7.01(e) thereof; and
WHEREAS, by letter dated May 13, 1998, Parent has requested an extension of
the deadline by which the Merger Agreement contemplates that Parent deposit the
Merger Consideration.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Company, Parent, Sub and the Parent Related Entities hereby agree as follows.
1. Satisfaction of Conditions. Parent, Sub and the Parent Related
--------------------------
Entities hereby acknowledge and agree that all of the conditions to the merger
of Sub with and into the Company (the "Merger") set forth in Article VI of the
Merger Agreement were satisfied as of May 8, 1998, including, without
limitation, the following:
(a) On May 8, 1998, the Merger Agreement was adopted by the
requisite affirmative vote of the stockholders of the Company, satisfying
the condition to the Merger set forth in Section 6.01(a) of the Merger
Agreement;
(b) The waiting period applicable to the Merger under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any other
applicable anti-trust
<PAGE>
laws expired as of March 16, 1998, satisfying the condition to the Merger
set forth in Section 6.01(c) of the Merger Agreement; and
(c) An Officers' Certificate and a Certificate as to Dissenting
Shares and No Material Adverse Effect, each dated as of May 8, 1998, were
delivered by the Company to Parent on such date, satisfying the conditions
to the Merger set forth in Section 6.02 of the Merger Agreement.
Parent, Sub and the Parent Related Entities further acknowledge and agree (i)
that Parent received a Satisfaction Notice from the Company on May 8, 1998, to
the effect that all of the conditions set forth in Article VI of the Merger
Agreement had been satisfied and that, if, by 5:00 p.m. on Friday, May 22, 1998,
the Merger Agreement has not been consummated and neither Parent nor Sub has
deposited the Merger Consideration with the Paying Agent, the Company has the
right to terminate the Merger Agreement in accordance with Section 7.01(e)
thereof; (ii) that such Satisfaction Notice satisfies the notice requirements
set forth in Section 7.01(e) of the Merger Agreement; and (iii) that the Company
has the right to terminate the Merger Agreement pursuant to Section 7.01(e)
thereof at any time after 5:00 p.m. on Friday, May 22, 1998.
2. Waiver of Covenants, Conditions and Termination Fees. In accordance
----------------------------------------------------
with Section 7.04 of the Merger Agreement, Parent, Sub and the Parent Related
Entities hereby waive compliance by the Company at any time after May 8, 1998
with the terms of Article V, Article VI, Section 8.08(b) and Section 8.08(c) of
the Merger Agreement.
3. Extension. In accordance with Section 7.04 of the Merger Agreement,
---------
and in consideration of the agreements set forth in Sections 1 and 2 hereof, the
Company hereby agrees to extend the date after which the Company has the right
to terminate the Merger Agreement in accordance with Section 7.01(e) thereof to
June 5, 1998. Accordingly, the Company hereby covenants and agrees not to
exercise its right to terminate the Merger Agreement pursuant to Section 7.01(e)
thereof prior to 5:00 p.m. on June 5, 1998.
4. Publicity. In accordance with Section 8.09 of the Merger Agreement,
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Parent, Sub and the Parent Related Entities hereby consent to the issuance and
publication of a press release by the Company with respect to the terms of this
Agreement.
5. Rights Under the Merger Agreement. Notwithstanding anything to the
---------------------------------
contrary contained herein, nothing in the Agreement shall be construed to
modify, amend or otherwise alter any of the rights of the Company under the
Merger Agreement, including, without limitation, the rights of the Company under
Article VII or Article VIII thereof.
6. Notices. All notices and other communications hereunder shall be in
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writing (and shall be deemed given upon receipt) if delivered personally,
telecopied (which is confirmed) or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
<PAGE>
(a) if to Parent, Sub or any Parent Related Entity, to
Destination Retail Holdings Corporation
International Bazaar
P.O. Box F 40349
Freeport, Bahamas
Attention: Stephen GE Crane
Telephone: (242) 352-5464
Facsimile: (242) 352-6574
with a copy to
Battle Fowler LLP
Park Avenue Tower
75 East 55th Street
New York, New York 10022
Attention: Charles H. Baker, Esq.
Telephone: (212) 856-6944
Facsimile: (212) 856-7814
and
(b) if to the Company, to
Little Switzerland, Inc.
161-B Crown Bay Cruise Ship Port
P.O. Box 930
St. Thomas, U.S.V.I. 00802
Attention: John E. Toler, Jr.
Telephone: (809) 776-2010
Facsimile: (809) 774-9900
with a copy to
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attention: Kevin M. Dennis, Esq.
Telephone: (617) 570-1528
Facsimile: (617) 523-1231
7. Descriptive Headings. The descriptive headings herein are inserted
--------------------
for convenience only and are not intended to be part of or to affect the meaning
or interpretation of this Agreement.
<PAGE>
8. Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
9. Entire Agreement; Assignment. This Agreement constitutes the entire
----------------------------
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof (other
than the Merger Agreement, any provisions of such agreement which are
inconsistent with the agreements contemplated by this Agreement being waived
hereby).
10. Governing Law. This Agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware without regard to any
applicable principles of conflicts of law. Each of the Company, Parent, Sub and
the Parent Related Entities hereby irrevocably and unconditionally consent to
the jurisdiction of the courts of the State of Delaware and the United States
District Court for the District of Delaware for any action, suit or proceeding
arising out of or relating to this Agreement or the agreements contemplated
hereby, and agrees not to commence any action, suit or proceeding related
thereto except in such courts. Each of the Company, Parent, Sub and the Parent
Related Entities further hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, claim or other proceeding
arising out of or relating to this Agreement in the courts of the State of
Delaware or the United States District Court for the District of Delaware, and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such lawsuit, claim or other proceeding brought
in any such court has been brought in an inconvenient forum. Each of the
Company, Parent, Sub and the Parent Related Entities further agree that service
of any process, summons, notice or document by U.S. registered mail to its
address set forth above shall be effective service of process for any action,
suit or proceeding brought against it in any such court.
11. Parties in Interest. This Agreement shall be binding upon and inure
-------------------
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person or
persons any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement. Parent shall cause Sub to perform its obligations
hereunder and shall be fully liable, severally and jointly, for any failure of
Sub to perform such obligations.
12. Severability. The invalidity or unenforceability of a provision of
------------
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the Company, Parent, Sub and the Parent Related
Entities have caused this Agreement to be signed by their respective officers
there unto duly authorized as of the date first written above.
DESTINATION RETAIL HOLDINGS CORPORATION
By:
--------------------------------------------
Name:
Title:
LSI ACQUISITION CORP.
By:
--------------------------------------------
Name:
Title:
YOUNG CARIBBEAN JEWELLERY COMPANY LIMITED
By:
--------------------------------------------
Name:
Title:
ALLIANCE INTERNATIONAL HOLDINGS LIMITED
By:
--------------------------------------------
Name:
Title:
<PAGE>
CEI DISTRIBUTORS INC.
By:
--------------------------------------------
Name:
Title:
LITTLE SWITZERLAND, INC.
By:
--------------------------------------------
Name:
Title:
<PAGE>
Exhibit 99.3
[Letterhead of Destination Retail Holdings Corporation]
May 19, 1998
CONFIDENTIAL
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Board of Directors
Little Switzerland, Inc.
161-B Crown Bay Cruise Ship Port
St. Thomas, US Virgin Islands 00802
Attention: John E. Toler, Jr.
Ladies and Gentlemen:
Reference is made to my May 13, 1998 letter to you in which I requested a
ninety day extension of the date by which Destination Retail Holdings
Corporation ("Destination Retail") is to deposit the Merger consideration
contemplated by the Merger Agreement. As I have previously disclosed to you,
Destination Retail is still working to obtain the financing necessary to
consummate the Merger. Consequently, I am writing this letter in order to
reiterate my request for a ninety day extension, as well as to offer to Little
Switzerland, Inc. ("Little Switzerland") several concessions under the Merger
Agreement in consideration for such extension.
In exchange for the grant by Little Switzerland of the requested time
extension, Destination Retail will agree to release Little Switzerland from: (i)
any restrictions in the Merger Agreement with respect to the conduct by Little
Switzerland of its day to day operations which Little Switzerland deems to be
burdensome, (ii) the provisions of the Merger Agreement which prohibit Little
Switzerland from soliciting other offers relating to its acquisition by a third
party and (iii) the provisions of the Merger Agreement which contemplate the
payment by Little Switzerland to Destination Retail of the $2,481,100
termination fee.
I strongly believe that the grant of a time extension during which
Destination Retail can consummate the proposed Merger is in the best interests
of all parties concerned, particularly Little Switzerland's stockholders. In
addition, I believe that any litigation initiated by Little Switzerland because
of a failure to close the Merger promptly would involve the expenditure of
considerable time and money by both parties, would impair Destination Retail's
ability to obtain financing to consummate the Merger, would not bestow any
benefit upon Little
<PAGE>
Switzerland's stockholders and is not likely to lead to the recovery of any
damages by Little Switzerland. Indeed, I believe any such litigation would be
protracted, and like all litigation, a two-way street.
I trust you will, in good faith, duly consider this request and I look
forward to your prompt response.
Yours faithfully,
/s/ Stephen G.E. Crane
Stephen G.E. Crane
cc: William C. Carey
Timothy B. Donaldson
Ilene B. Jacobs
Kenneth W. Watson
Charles H. Baker, Esq. - Battle Fowler LLP
Kevin M. Dennis, Esq. - Goodwin, Procter & Hoar LLP
