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As filed with the Securities and Exchange Commission on May 14, 1997
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
VANS, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0272893
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
15700 Shoemaker Avenue
Santa Fe Springs, California 90670
(562) 565-8267
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Craig E. Gosselin
Vice President and General Counsel
VANS, INC.
15700 Shoemaker Avenue
Santa Fe Springs, California 90670
(562) 565-8267
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
Approximate date of commencement of proposed sale to public: From time to
time after this Registration Statement is declared effective.
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, check the following
box and list the Securities Act registration statement number of 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 PROPOSED
TITLE OF EACH CLASS MAXIMUM MAXIMUM
OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE(2)
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value ("Common Stock"),
issuable in exchange for certain common
shares of Global Accessories Limited............ 250,000 shares(1) $12.75 $3,187,500 $956.25
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(1) See "Selling Stockholders" for a determination of the aggregate shares
of Common Stock to be registered hereunder. Pursuant to Rule 416 under the
Securities Act of 1933, as amended, this Registration Statement covers an
indeterminate number of shares of Common Stock that may become issuable
pursuant to certain anti-dilution adjustments.
(2) Computed pursuant to Rule 457(c) promulgated under the Securities Act
of 1933, as amended, based on the last sale price of the Common Stock, as
reported on the Nasdaq Stock Market on May 12, 1997.
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 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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VANS, INC.
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
SHOWING LOCATION IN PROSPECTUS OF INFORMATION
REQUIRED BY ITEMS OF FORM S-3
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ITEM NUMBER AND HEADING IN
FORM S-3 REGISTRATION STATEMENT HEADING IN PROSPECTUS
----------------------------------------------------- -----------------------------------
<S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus............ Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus........................................ Inside Front Cover Page and Outside
Back Cover Page
3. Summary Information, Risk Factors, and Ratio
of Earnings to Fixed Charges...................... The Company; Risk Factors
4. Use of Proceeds................................... Use of Proceeds
5. Determination of Offering Price................... Not applicable
6. Dilution.......................................... Not applicable
7. Selling Security Holders.......................... Selling Stockholders
8. Plan of Distribution.............................. Plan of Distribution
9. Description of Securities to be Registered........ Not applicable
10. Interests of Named Experts and Counsel............ Legal Matters
11. Material Changes.................................. Not applicable
12. Incorporation of Certain Information by
Reference......................................... Incorporation of Certain Documents by Reference
13. Disclosure of Commission Position on
Indemnification of Securities Act Liabilities..... Not Applicable
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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.
PROSPECTUS SUBJECT TO COMPLETION, DATED MAY 14, 1997
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VANS, INC.
250,000 Shares of Common Stock
$.001 par value per share
The shares of Common Stock, $.001 par value ("Common Stock"), of Vans,
Inc. (the "Company") offered hereby (the "Shares") are being sold by certain
selling stockholders (the "Selling Stockholders") who will be receiving the
Shares in exchange for their common shares of Global Accessories Limited, a
United Kingdom corporation ("Global"), pursuant to a Share Sale and Purchase
Option Agreement entered into among the Company, Global and the Selling
Stockholders on November 20, 1996 (the "Purchase Agreement"). See "Selling
Stockholders."
It is anticipated that the Shares may be offered for sale by one or
more of the Selling Stockholders in their discretion, on a delayed or continuous
basis from time to time in transactions in the open market at prices prevailing
at the time of sale on the Nasdaq National Market System, or in privately
negotiated transactions. Such transactions may be effected directly by the
Selling Stockholders, each acting as principal for their own account.
Alternatively, such transactions may be effected through brokers, dealers or
other agents designated from time to time by the Selling Stockholders and such
brokers, dealers or other agents may receive compensation in the form of
customary brokerage commissions or concessions from the Selling Stockholders or
the purchasers of the Shares. The Selling Stockholders may also pledge Shares
as collateral and such Shares could be resold pursuant to the terms of such
pledges. The Selling Stockholders, brokers who execute orders on their behalf,
and other persons who participate in the offering of the Shares on their behalf
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act and a portion of the proceeds of sales and commissions or
concessions therefor may be deemed underwriting compensation for purposes of the
Securities Act of 1933, as amended (the "Securities Act"). The Company will not
receive any part of the proceeds from the sale of Shares by the Selling
Stockholders.
SEE "RISK FACTORS" ON PAGE 3 FOR A DISCUSSION OF CERTAIN RISKS
RELATED TO AN INVESTMENT IN THE COMMON STOCK.
The Company will pay all costs and expenses incurred in connection
with the registration of the Shares under the Securities Act, other than the
costs of counsel for the Selling Stockholders. The Selling Stockholders will
pay the costs of their counsel and any costs associated with any sales of
Shares, including any discounts, commissions and applicable transfer taxes.
The Common Stock is traded on the Nasdaq Stock Market under the symbol
"VANS." On May 13, 1997, the last sale price for the Common Stock, as reported
by Nasdaq, was $12.50.
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 COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is May 14, 1997.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement on Form S-3 under the
Securities Act relating to the Shares (the "Registration Statement"). This
Prospectus does not contain all the information set forth in the Registration
Statement. 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, information statements
and other information with the Commission. For further information, reference
is made to the Registration Statement, including the exhibits filed as a part
thereof, and to such reports, proxy statements, information statements and
other information, which may be obtained from the Commission at prescribed
rates or may be inspected without charge and copied at the public reference
facilities of the Commission at 450 Fifth Street, N.W., Room 1024, Washington
D.C. 20549; at its Chicago Regional Offices, Northwestern Atrium Center, 500
West Madison Avenue, Suite 1400, Chicago Illinois 60661; and at its New York
Regional Offices, 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at
prescribed rates. Additionally, since the Company is an electronic filer, the
Commission maintains a web site that contains reports, proxy and information
statements and other information regarding the Company. The address of such
web site is http://www.sec.gov. The reports, proxy statements, information
statements and other information it files with the Commission are also filed
with the National Association of Securities Dealers, Inc. and can be inspected
at its facility at 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE; ADDITIONAL INFORMATION
The following documents and information are incorporated by reference
into this Prospectus: (i) the Company's Annual Report on Form 10-K for the
year ended May 31, 1996, and Amendment No. 1 on Form 10-K/A thereto; (ii) the
Company's Quarterly Report on Form 10-Q for the period ended August 31, 1996;
(iii) the Company's Quarterly Report on Form 10-Q for the period ended November
30, 1996, and Amendment No. 1 on Form 10-Q/A thereto; and (iv) the Company's
Quarterly Report on Form 10-Q for the period ended March 1, 1997. The
description of the Common Stock is incorporated by reference from the
Registration Statement of the Company on Form 8-A, dated July 12, 1991, filed
pursuant to Section 12 of the Securities Exchange Act of 1934.
All annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, definitive information in proxy statements and
other reports filed with the Commission 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 filing of a post-effective amendment which indicates that all the
securities offered by this Prospectus have been sold or which deregisters all
the securities remaining unsold shall be deemed to be incorporated by reference
into this Prospectus to be part hereof from the date of filing such documents.
These documents are or will be available for inspection and copying at the
locations identified above. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for 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 replaces such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon
written or oral request of such person, a copy of any and all information that
has been incorporated by reference in this Prospectus (not including exhibits
to the information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this
Prospectus incorporates). Such request should be directed to Craig E.
Gosselin, Vice President and General Counsel of the Company, telephone number
(562) 565-8267.
No person has been authorized to give any information or to make any
representations not contained in this Prospectus in connection with the
offering made by this Prospectus, and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company or the Selling Stockholders. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy the securities to which this
Prospectus
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relates in any jurisdiction to any person to whom it is unlawful to make such
an offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of the Company since
the date hereof or since the date as of which information is set forth herein.
THE COMPANY
The Company is a branded manufacturer, wholesaler and retailer of high
quality, stylish casual and active casual footwear and apparel, as well as
performance footwear for enthusiast sports, snowboard boots and snowboard
outerwear. Products are distributed through a network of independent and
national retailers, international distributors for 65 countries, and 84
Company-owned stores and factory outlets. The Company was incorporated in
Delaware in 1988 and its principal executive office is located at 15700
Shoemaker Avenue, Santa Fe Springs, California 90670. Its telephone number is
(562) 565-8267.
RISK FACTORS
The securities offered hereby involve certain risks. Each prospective
investor should carefully consider, along with the other matters referred to
herein, the following factors in evaluating an investment in the securities
offered hereby.
CHANGES IN FASHION TRENDS
The Company's success is largely dependent on its ability to
anticipate the rapidly changing fashion tastes of its customers and to provide
merchandise that appeals to their preferences in a timely manner. There can be
no assurance that the Company will respond in a timely manner to changes in
consumer preferences or that the Company will successfully introduce new models
and styles of footwear and apparel. Achieving market acceptance for new
products may also require substantial marketing and product development efforts
and the expenditure of significant funds to create consumer demand. Decisions
with respect to product designs often need to be made several months in advance
of the time when consumer acceptance can de determined. As a result, the
Company's failure to anticipate, identify or react appropriately to changes in
styles and features could lead to, among other things, excess inventories and
higher markdowns, lower gross margins due to the necessity of providing
discounts to retailers, as well as the inability to sell such products through
Company-owned retail and factory outlet stores. Conversely, failure by the
Company to anticipate consumer demand could result in inventory shortages,
which can adversely affect the timing of shipments to customers, negatively
impacting retailer and distributor relationships and diminishing brand loyalty.
The failure to introduce new products that gain market acceptance would have a
material adverse effect on the Company's business, financial condition and
results of operations, and could adversely affect the image of the VANS brand
name.
In response to consumer demand, the Company also uses certain
specialized fabrics in its footwear and apparel. The failure of footwear or
apparel using such fabrics to perform to customer satisfaction could result in
a higher rate of customer returns and could adversely affect the image of the
VANS brand name, which could have a material adverse effect on the Company's
business and results of operations.
COMPETITION
Footwear Industry. The athletic and casual footwear industry
is highly competitive. The Company competes with a number of domestic and
foreign manufacturers of footwear. Many of the Company's competitors, such as
Nike, Inc., Reebok International Ltd., adidas AG and Fila Holding SpA, have
significantly greater financial resources than the Company, have more
comprehensive lines of product offerings, compete with the Company in the Far
East for manufacturing sources and spend substantially more on product
advertising than the Company. In addition, the general availability of
offshore shoe manufacturing capacity allows for rapid expansion by competitors
and new entrants in the footwear market. In addition, in the casual footwear
market, the Company competes with a number of companies, such as Airwalk,
Converse Inc. and Stride Rite Corporation (Keds), many of which may have
significantly greater financial and other resources than the Company.
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Snowboard Boot Industry. Although the Company has experienced
substantial growth in sales of its line of snowboard boots, and is now one of
the three industry leaders, it faces significant competition, most notably from
Airwalk and Burton Snowboards, Inc., the other two industry leaders. The
Company also anticipates that several large, well-known companies, such as
Nike, Inc., Fila SpA, Tommy Hilfiger and Nautica will enter the snowboard boot
industry in the near future. These companies are much larger and have greater
financial resources than the Company, and have significant brand recognition.
Snowboarding is a relatively new sport and there can be no
assurance that it will continue to grow at the rate experienced in recent years,
or that its popularity will not decline. Moreover, the market for snowboards is
characterized by image-conscious consumers. The failure by the Company to
accurately predict and target future trends or to maintain its progressive image
could have a material adverse effect on its snowboard boot sales. The Company
believes that its future success in the snowboard boot market will depend, in
part, on its ability to introduce innovative, well-received products, and there
can be no assurance that it will do so.
Apparel Industry. The Company is a new entrant in the apparel
business. The apparel industry is highly competitive and fragmented, and many
of the Company's competitors have significantly greater financial resources
than the Company and spend substantially more on product advertising than the
Company. Additionally, the apparel industry is particularly dependent on
changes in fashion, which will require the Company to devote substantial
resources to responding to changes in consumer preferences in a timely manner.
See "--Changes in Fashion Trends."
DEPENDENCE ON FOREIGN MANUFACTURERS
Approximately 76% of the Company's shoes and 100% of the
Company's snowboard boots sold during fiscal 1996 were manufactured by
independent suppliers located in South Korea. The Company has increased its
reliance on offshore manufacturers by commencing sourcing of footwear and
apparel in the Peoples Republic of China, India and Israel and anticipates
that it will begin sourcing some footwear in Mexico in the near future and some
apparel from other Far East countries, such as Thailand and Taiwan. The Company
sources its foreign-produced products through its Hong Kong subsidiary, Vans Far
East Limited ("VFEL"). VFEL does not have contracts with its foreign
manufacturers. There can be no assurance that VFEL will not experience
difficulties with such manufacturers, including reduction in the availability of
production capacity, errors in complying with product specifications, inability
to obtain sufficient raw materials, insufficient quality control, failure to
meet production deadlines or increases in manufacturing costs. In addition, if
VFEL's relationship with any of its manufacturers were to be interrupted or
terminated, it would be required to locate alternative manufacturing sources.
The establishment of new manufacturing relationships involves numerous
uncertainties, and there can be no assurance that VFEL would be able to obtain
alternative manufacturing sources on terms satisfactory to it. Should a change
in its suppliers become necessary, VFEL would likely experience increased costs,
as well as substantial disruption and resulting loss of sales. In addition,
VFEL utilizes several international sourcing agents who assist it in selecting
and overseeing third party manufacturers, ensuring quality, sourcing fabrics and
monitoring quotas and other trade regulations. The loss or reduction in the
level of services from such agents could significantly affect the ability of
VFEL to efficiently source products from overseas, which could have a material
adverse effect on VFEL's and the Company's business, financial condition and
results of operations.
Foreign manufacturing is subject to a number of risks,
including work stoppage, transportation delays and interruptions, political
instability, foreign currency fluctuations, changing economic conditions,
expropriation, nationalization, the imposition of tariffs, import and export
controls and other non-tariff barriers (including quotas) and restrictions on
the transfer of funds, environmental regulation and other changes in
governmental policies. There can be no assurance that such factors will not
materially adversely affect VFEL's and the Company's business, financial
condition and results of operations.
All VANS products manufactured overseas and imported into the
United States are subject to duties collected by the United States Customs
Service. Customs information submitted by the Company is subject to review by
the Customs Service. The Company is unable to predict whether additional
United States Customs duties, quotas or other restrictions may be imposed on
the importation of its products in the future. The enactment of any such
duties, quotas or restrictions could result in increases in the cost of such
products generally and might adversely affect the sales or profitability of the
Company.
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MANAGEMENT OF GROWTH
The Company intends to pursue an aggressive growth strategy
through expanded marketing and promotion efforts, more frequent introductions
of products, broader lines of casual and performance footwear and snowboard
boots, as well as apparel and other accessories, and increased international
market penetration. To the extent the Company is successful in increasing
sales of its products, a significant strain may be placed on its financial,
management and other resources. The Company's future performance will depend
in part on its ability to manage change in its operations and will require the
Company to attract, train, manage and retain management, sales, marketing and
other key personnel. In addition, the Company's ability to manage its growth
effectively will require it to continue to improve its operational and
financial control systems and infrastructure and management information
systems. There can be no assurance that the Company will be successful in such
efforts, and the inability of the Company's management to manage growth
effectively could have a material adverse effect on the Company's business,
financial condition and results of operations.
SEASONALITY AND QUARTERLY FLUCTUATION
The footwear industry is characterized by significant
seasonality of net sales and results of operations. Historically, the
Company's business has been moderately seasonal, with the largest percentage of
sales realized in the first and fourth fiscal quarters (March through August),
the "Spring and Summer" and "Back to School" months. In addition, because
snowboarding is a winter sport, sales of the Company's snowboard boots have
historically been strongest in the first and second fiscal quarters. As the
Company increases its international sales through VFEL and experiences changes
in its product mix, it expects that its quarterly results will vary from
historical trends. As a result of these and other factors, the Company
anticipates that a higher portion of its overall fiscal year revenues will be
recognized in the first fiscal quarter. Therefore, the results of operations
of any quarter may not necessarily be indicative of the results that may be
achieved for a full fiscal year or any future quarter. In addition to seasonal
fluctuations, the Company's operating results fluctuate on a quarter-to-quarter
basis as a result of holidays, weather and the timing of large shipments of
footwear. The Company's operating margins also fluctuate according to product
mix, cost of materials and the mix between wholesale and retail channels.
Given these factors, there can be no assurance that the Company's future
results will be consistent with past results or the projections of securities
analysts. Historically, the Company has shipped a large portion of its
products late in the quarter. Consequently, the Company may not learn of sales
shortfalls until late in any particular fiscal quarter, which could result in
an immediate and adverse effect on the Company's business, financial condition
and results of operations.
TRADE CREDIT RISK
The Company's results of operations are affected by the timely
payment for products by its customers. Particularly as the Company increases
sales to independent retailers, including snowboard boot retailers, the
Company's bad debt risk may increase. Although the Company's bad debt expense
has not been material to date, no assurance can be given that it will not
increase relative to net sales in the future or that the Company's current
reserves for bad debt will be adequate. Any significant increase in the
Company's bad debt expense relative to net sales could adversely impact the
Company's net income and cash flow, and could adversely affect the Company's
ability to pay its obligations as they become due.
ECONOMIC CYCLICALITY
Certain economic conditions affect the level of consumer
spending on the products offered by the Company, including, among other things,
general business conditions, interest rates, taxation and consumer confidence
in future economic conditions. The Company and the footwear and apparel
industry in general are highly dependent on the economic environment and
discretionary levels of consumer spending that affect not only the consumer,
but also distributors and retailers of the Company's products. As a result,
the Company's results of operations may be materially adversely affected by
downward trends in the economy of the occurrence of events that adversely
affect the economy in general. In addition, a significant portion of the
Company's revenues come from sales in California, including sales through the
Company's retail stores. A decline in the economic conditions in California
could materially adversely affect the Company's business, financial condition
and results of operations.
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RELIANCE ON THIRD PARTY TECHNOLOGY
The Company currently licenses certain proprietary technology
and the right to produce snowboard boots for a step-in-boot binding system from
Switch Manufacturing ("Switch"). Such license expires on December 31, 1997 and
is non-exclusive, except that Switch may not enter into license agreements with
the two snowboard boot market leaders measured by sales in 1994. The loss of
the Switch license, failure by Switch to renew such license or the termination
of the Company's limited exclusivity could adversely impact the Company's
competitive position in the snowboard boot market. In addition, failure by
Switch to receive a patent on its binding system, or patent litigation
regarding such system, could significantly reduce the value to the Company of
its relationship with Switch. In that regard, the Company has been advised
that Switch has been sued for patent infringement by Mark Raines, Gregory
Deeney and Preston Binding Company ("Preston"), a division of Ride, Inc.
("Ride"). The suit alleges that the Switch binding system infringes the patent
of a binding system developed by Messrs. Raines and Deeney which was
subsequently assigned to Preston. Switch has responded to the suit by filing
an answer denying such allegations and a complaint against Preston and Ride
seeking a declaratory judgment of patent non-infringement and damages for
alleged bad faith allegations of patent infringement. The parties are
currently conducting discovery in this matter.
Additionally, the Company has been advised by Switch that K2
Corporation ("K2") has notified Switch that, in its opinion, Switch's binding
system infringes certain allowed claims in a U.S. patent application filed by
K2. To the Company's knowledge, no litigation has commenced in this matter.
The Company has not been named as a defendant in the Preston
suit or threatened with litigation in either of the foregoing matters; however,
there can be no assurance that the Company will not be named in the Preston
suit or any potential litigation which might arise between Switch and K2, and
there can be no assurance as to the outcome of the litigation between Switch
and Preston and Ride or any potential litigation between Switch and K2. In the
event Switch is found liable in the Preston suit or in any suit that may be
filed by K2, the Company may be unable to use the Switch step-in boot binding
system, which could adversely impact the Company's competitive position in the
snowboard boot market.
PRODUCT LIABILITY
The Company's snowboard boots are often used in relatively
high-risk recreational settings. Consequently, the Company is exposed to the
risk of product liability claims in the event that a user of such boots is
injured in connection with such use. In many cases, users of the Company's
boots may engage in imprudent or even reckless behavior while using such
products, thereby increasing the risk of injury. The Company maintains general
liability insurance (which includes product liability coverage) and excess
liability insurance coverage in an amount the Company believes to be
sufficient. However, there can be no assurance that such coverage will be
sufficient, will continue to be available on acceptable terms, will be
available in sufficient amounts to cover one or more large claims, or that the
insurer will not disclaim coverage as to any future claim. The successful
assertion of one or more large claims against the Company that exceed available
insurance coverage, or changes in the Company's insurance policies, including
premium increases or the imposition of large deductible or co- insurance
requirements, could have a material adverse effect on the Company's financial
condition and results of operations.
VOLATILITY OF STOCK PRICE
The market price of the Common Stock has fluctuated
substantially since the Company's initial public offering in August 1991.
There can be no assurance that the market price of the Common Stock will not
continue to fluctuate significantly. Future announcements concerning the
Company or its competitors, quarterly variations in operating results, the
introduction of new products or changes in product pricing policies by the
Company or its competitors, weather patterns that may be perceived to affect
the demand for the Company's products, changes in earnings estimates by
analysts or changes in accounting policies, among other factors, could cause
the market price of the Common Stock to fluctuate substantially. In addition,
stock markets have experienced extreme price and volume volatility in recent
years. This volatility has had a substantial effect on the market prices of
securities of many smaller public companies for reasons frequently unrelated to
the operating performance of the specific companies. These broad market
fluctuations could adversely affect the market price of the Common Stock.
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INTERNATIONAL BUSINESS OPERATIONS; RISK OF FOREIGN CURRENCY FLUCTUATIONS
The Company has recently begun to do business directly in the
United Kingdom, through a subsidiary, and in Mexico, Brazil and Argentina as
part of a joint venture. The Company may experience certain risks of doing
business directly in these countries including, but not limited to, managing
operations effectively and efficiently from a far distance and understanding
and complying with local laws, regulations and customs. Additionally, these
entities may, from time to time, collect payments in the customers' local
currencies and purchase raw materials or product in currencies other than U.S.
dollars. Accordingly, the Company is exposed to transaction gains and losses
that could result from changes in foreign currency exchange rates. When
considered appropriate, management may purchase financial instruments, primarily
forward exchange contracts, to reduce its exposure to these exchange rate
fluctuations.
ACQUISITION-RELATED RISKS
From time to time, the Company evaluates and considers the
acquisition of businesses involved in activities or with product lines that are
compatible to those of the Company. Acquisitions involve numerous risks,
including difficulties in the assimilation of the operations, technologies and
products of the acquired companies, the diversion of management's attention
from other business concerns, risks associated with entering markets or
conducting operations with which the Company has no or limited direct prior
experience, and the potential loss of key employees of the acquired company.
Moreover, there can be no assurance that the anticipated benefits of an
acquisition will be realized. Future acquisitions by the Company could result
in potentially dilutive issuances of equity securities, the incurrence of debt
and contingent liabilities and amortization expenses related to goodwill and
other intangibles assets, all of which could materially adversely affect the
Company's business, financial condition, results of operations or stock price.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the
reoffer and resale of the Shares by the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth, as of May 14, 1997, (i) the number of
Shares to be beneficially owned by each Selling Stockholder, (ii) the number of
shares to be offered by each Selling Stockholder, and (iii) the number of
shares of Common Stock to be beneficially owned by each Selling Stockholder
after the completion of the offering. Except as disclosed in the footnote to
the following table, no Selling Stockholder has held any position, office or
had any other material relationship with the Company, its predecessors or
affiliates for the past three years. To the knowledge of the Company, and
except as disclosed in the table below, the Selling Stockholders did not own, or
have any rights to acquire, any other shares of Common Stock as of the date of
this Prospectus.
<TABLE>
<CAPTION>
Number of Shares
Selling Stockholder/ beneficially owned Number of Shares Number of Shares of
Position with Company prior to the offering(1) to be offered for resale(1) class owned after sale
- --------------------- ------------------------ --------------------------- ----------------------
<S> <C> <C> <C>
Carolyn Barshall 90,000 90,000 -0-
Pailex Securities 160,000 160,000 -0-
International Inc.
</TABLE>
_________________________________
(1) Pursuant to the Purchase Agreement, during a 60-day period after the end
of Global's fiscal year in 1997, 1998, 1999, 2000 and 2001 (the "Buy-Out
Period"), the Selling Stockholders will have the irrevocable right to sell, and
the Company will have the irrevocable right to buy, certain percentages (the
"Buy -Out Percentages") of the common shares of Global beneficially owned by
the Selling Stockholders (the "Global Shares"). The number of Shares issuable
in exchange for the Global Shares will be determined by multiplying the
applicable Buy-Out Percentages by the product of (i) the net profits of Global
for a particular fiscal year and (ii) an agreed-to multiple, and dividing the
aggregate product by the average closing ask price of the Common Stock during
the 20 business days prior to the date of determination, as reported on the
Nasdaq Stock Market. Based on the Company's internal projections, it is
currently estimated that an aggregate of approximately 250,000 Shares will be
issued to the Selling Stockholders during the first year of the Buy-Out
Period.
7
<PAGE> 10
LEGAL MATTERS
The legality of the Shares offered hereby has been passed upon for the
Company by Craig E. Gosselin, Vice President and General Counsel of the
Company. Mr. Gosselin owns options to acquire 39,773 shares of Common Stock.
PLAN OF DISTRIBUTION
This offering is self-underwritten; neither the Company nor the
Selling Stockholders have employed an underwriter for the sales of Shares by
the Selling Stockholders. The Company will bear all expenses in connection
with the preparation of this Prospectus, other then the expense of counsel for
the Selling Stockholders. The Selling Stockholders will bear all the costs of
their own counsel and all expenses associated with the sale of the Shares.
Subject to the foregoing, the Shares may be offered for the account of
the Selling Stockholders from time to time in the over-the counter market or in
negotiated transactions, at fixed prices which may be changed or at privately
negotiated prices. The Selling Stockholders may effect such transactions by
selling Shares to or through broker-dealers, and all such broker-dealers may
receive compensation in the form of discounts, concessions, or commissions from
the Selling Stockholders and/or the purchasers of Shares for whom such
broker-dealers may act as agent or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).
Any broker-dealer acquiring Shares from the Selling Stockholders may
sell the Shares either directly, in its normal market-making activities,
through or to other brokers on a principal or agency basis or to its customers.
Any such sales may be at prices then prevailing in the over-the-counter market
or at prices related to such prevailing market prices or at negotiated prices
to its customers or a combination of such methods. The Selling Stockholders
and any broker-dealers that act in connection with the sale of the Common Stock
hereunder might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act; any commissions received by them and any profit on
the resale of Shares as principal might be deemed to be underwriting discounts
and commissions under the Securities Act. Any such commissions, as well as
other expenses incurred by the Selling Stockholders and applicable transfer
taxes, are payable by the Selling Stockholders.
EXPERTS
The consolidated financial statements and schedule of the Company as
of May 31, 1996 and 1995, and for each of the years in the three- year period
ended May 31, 1996, have been incorporated by reference herein and in the
Registration Statement in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
________________________________________
8
<PAGE> 11
===============================================================
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information.................................. 2
Incorporation of Certain Documents by
Reference; Additional Information.................... 2
The Company............................................ 3
Risk Factors........................................... 3
Selling Stockholders................................... 7
Legal Matters.......................................... 7
Plan of Distribution................................... 8
Experts................................................ 8
</TABLE>
=============================================================
VANS, INC.
250,000 Shares of
Common Stock
-------------------
PROSPECTUS
-------------------
May 14, 1997
9
<PAGE> 12
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is a list of estimated expenses in connection with the
distribution of the securities being registered:
<TABLE>
<S> <C>
SEC Registration Fee . . . . . . . . . . . . . . . . . . $ 956.25
Accounting Fees and Expenses . . . . . . . . . . . . . . 5,000.00
Legal Counsel for Selling Stockholders . . . . . . . . . 2,500.00*
Miscellaneous Expenses . . . . . . . . . . . . . . . . . 1,543.75
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $10,000.00
==========
</TABLE>
- -----------
* To be borne by the Selling Stockholders
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law, the
Registrant has broad powers to indemnify its directors and officers against
liabilities they may incur in such capacities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"). The Registrant's
Restated Bylaws, as amended, provide that the Registrant will indemnify its
directors and executive officers and may indemnify other officers to the full
extent permitted by law. The Registrant believes that indemnification under
its Restated Bylaws covers at least negligence and gross negligence by
directors and officers, and requires the Registrant to advance litigation
expenses in the case of stockholder derivative actions or other actions,
against an undertaking by the officer or director to repay such advances if it
is ultimately determined that the director or officer is not entitled to
indemnification. The Restated Bylaws further provide that rights conferred
under such Bylaws shall not be deemed to be exclusive of any other right such
persons may have or acquire under any statute, provision of any Certificate of
Incorporation, Bylaw, agreement, or vote of stockholders or disinterested
directors, or otherwise.
In addition, the Registrant's Restated Certificate of Incorporation
(the "Certificate") provides that, pursuant to Delaware law, its directors
shall not be liable for monetary damages for breach of the directors' fiduciary
duty of care to the Registrant and its stockholders. This provision does not
eliminate the duty of care, and in appropriate circumstances equitable remedies
such as injunctive or other forms of non-monetary relief will remain available
under Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Registrant for
acts or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for actions leading to improper personal benefit to
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. The Registrant has
also entered into indemnity agreements with each of its directors and officers
indemnifying them to the fullest extent permitted by the foregoing. The
indemnification provisions discussed above and the indemnity agreements
II-1
<PAGE> 13
entered into between the Registrant and its directors and officers may be
sufficiently broad to permit indemnification of the Registrant's officers and
directors for liabilities arising under the Securities Act. The Registrant has
also purchased directors' and officers' insurance. The policy generally covers
claims made during the policy term against any director or officer of the
Registrant for any actual or alleged act, error, omission, misstatement,
misleading statement, neglect or breach of duty by the director or officer,
subject to certain exclusions. The assets of the Registrant will not be used
to indemnify its directors and officers to the extent any underlying claim that
creates an indemnification obligation is covered by the Registrant's current
directors' and officers' insurance policy and any renewals or replacements of
such policies.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
2.1 Share Sale and Purchase and Option Agreement, dated November 20, 1996,
among the Company, Global, and the shareholders of Global, filed as
Exhibit 2.1 to the Company's Form 8-K, dated November 20, 1996, and
incorporated herein by this reference
5. Opinion of Craig E. Gosselin, Esq.
23.1 Consent of Craig E. Gosselin, Esq. is included in his opinion filed as
Exhibit 5
23.2 Consent of KPMG Peat Marwick LLP
24. Powers of Attorney (included on the signature page).
</TABLE>
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; to
include any prospectus required by Section 10(a)(3) of the Securities Act; to
reflect in the prospectus any facts or events arising after the effective date
of this 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 this Registration Statement; and to
include any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change to
such information in this Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, 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.
II-2
<PAGE> 14
(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.
(4) That, for the purposes of determining any liability
under the Securities Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in this 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.
(5) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers or controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been informed that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred 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 under this Registration Statement, 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
Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe 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 Santa Fe Springs, State of California, on May 14,
1997.
VANS, INC.
----------------------------------
(Registrant)
By:/s/ Gary H. Schoenfeld
Gary H. Schoenfeld
President and
Chief Executive Officer
II-3
<PAGE> 15
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, each officer and director whose
signature appears below, hereby authorizes, constitutes and appoints Gary H.
Schoenfeld and Craig E. Gosselin and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities to sign any and all post-effective amendments to this Registration
Statement, to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and any
other regulatory authority, granting unto such 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, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact deem appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Walter E. Schoenfeld Chairman of the Board May 14, 1997
- -------------------------- and Director
Walter E. Schoenfeld
/s/Gary H. Schoenfeld President, Chief Executive May 14, 1997
- -------------------------- Officer and Director
Gary H. Schoenfeld (Principal Executive Officer)
/s/George E. McCown Director May 14, 1997
- --------------------------
George E. McCown
/s/David E. De Leeuw Director May 14, 1997
- --------------------------
David E. De Leeuw
/s/Kyle B. Wescoat Vice President and Chief Financial May 14, 1997
- -------------------------- Officer (Principal Financial and
Kyle B. Wescoat Accounting Officer)
/s/Philip H. Schaff, Jr. Director May 14, 1997
- --------------------------
Philip H. Schaff, Jr.
/s/Wilbur J. Fix Director May 14, 1997
- --------------------------
Wilbur J. Fix
/s/James R. Sulat Director May 14, 1997
- --------------------------
James R. Sulat
/s/Kathleen M. Gardarian Director May 14, 1997
- --------------------------
Kathleen M. Gardarian
/s/Lisa M. Douglas Director May 14, 1997
- --------------------------
Lisa M. Douglas
</TABLE>
II-4
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Document Page No.
-------- --------
<S> <C> <C>
2.1 Share Sale and Purchase and Option Agreement, dated November 20, 1996,
among the Company, Global, and the shareholders of Global, files as
Exhibit 2.1 to the Company's Form 8-K, dated November 20, 1996, and
incorporated herein by this reference
5. Opinion of Craig E. Gosselin, Esq.
23.1 Consent of Craig E. Gosselin, Esq. is included in his opinion filed as
Exhibit 5
23.2 Consent of KPMG Peat Marwick LLP
24. Powers of Attorney (included on the signature page).
</TABLE>
<PAGE> 1
EXHIBIT 5
CRAIG E. GOSSELIN
Attorney-at-Law
15700 Shoemaker Avenue
Santa Fe Springs, CA 90670
May 14, 1997
Vans, Inc.
15700 Shoemaker Avenue
Santa Fe Springs, CA 90670
Re: REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
I have acted as counsel to Vans, Inc., a Delaware corporation (the
"Company"), with respect to the registration statement on Form S-3 (the
"Registration Statement") filed with the Securities and Exchange Commission for
the purpose of registering for sale under the Securities Act of 1933, as
amended, 250,000 shares of Common Stock, par value $.001 per share ("Common
Shares"), of the Company issuable to certain individuals and entities in
exchange for the outstanding common shares of Global Accessories Limited (the
"Global Shares").
Based on my review of the Restated Certificate of Incorporation of the
Company, the Restated By-Laws of the Company, as amended, the Minutes of
meetings of the Board of Directors and of the stockholders of the Company and
written consents in lieu of such meetings, the stock ledger of the Company, and
such other documents and records as I have deemed necessary and appropriate, I
am of the opinion that the Common Shares, if and when issued in exchange for
the Global Shares, will be validly issued, fully paid and nonassessable.
I consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very Truly Yours,
/s/Craig E. Gosselin
Craig E. Gosselin
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Vans, Inc.:
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated July 19, 1996, relating to the consolidated
balance sheets of Vans, Inc. as of May 31, 1996 and 1995, and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the years in the three-year period ended May 31, 1996, and related
schedule, which report appears in the May 31, 1996 Annual Report on Form 10-K/A
of Vans, Inc., and to the reference to our firm under the heading "Experts" in
the Prospectus.
/s/KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Orange County, California
May 14, 1997
