AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 3, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SUNGLASS HUT INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 22-2802551
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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<TABLE>
<S> <C>
LARRY G. PETERSEN
SENIOR VICE PRESIDENT--FINANCE
AND CHIEF FINANCIAL OFFICER
SUNGLASS HUT INTERNATIONAL, INC.
255 ALHAMBRA CIRCLE 255 ALHAMBRA CIRCLE
CORAL GABLES, FLORIDA 33134 CORAL GABLES, FLORIDA 33134
(305) 461-6100 (305) 461-6225
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
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COPIES OF COMMUNICATIONS TO:
BRUCE E. MACDONOUGH
GREENBERG, TRAURIG, HOFFMAN,
LIPOFF, ROSEN & QUENTEL, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
(305) 579-0500
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS TO BE OFFERING PRICE AGGREGATE REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE(1)
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share ....... 2,152,032 shares $28.00 $60,256,896 $20,779
<FN>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.
</FN>
</TABLE>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
<TABLE>
<CAPTION>
SUNGLASS HUT INTERNATIONAL, INC.
CROSS REFERENCE SHEET
Furnished Pursuant to Item 501(b) of Regulation S-K
ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
- ----------------------- ----------------------
<S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus ....... Facing Page of the Registration Statement;
Cross Reference Sheet; Outside Front Cover
Page
2. Inside Front and Outside Back Cover
Pages of Prospectus .......................... Inside Front Cover Page; Outside Back Cover
Page
3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges ........... Prospectus Summary; Risk Factors
4. Use of Proceeds ................................ *
5. Determination of Offering Price ................ *
6. Dilution ....................................... *
7. Selling Security Holders ....................... Selling Stockholders
8. Plan of Distribution ........................... Plan of Distribution
9. Description of Securities
to be Registered ............................. Price Range of Common Stock;
Dividend Policy
10. Interests of Named Experts
and Counsel .................................. *
11. Material Changes ............................... *
12. Incorporation of Certain Information
by Reference ................................. Inside Front Cover Page
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities .................................. *
<FN>
- ----------
* Not applicable or answer thereto is negative.
</FN>
</TABLE>
<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 MAY JUNE 3, 1996
2,152,032 SHARES
SUNGLASS HUT
INTERNATIONAL
COMMON STOCK
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This Prospectus relates to the proposed sale from time to time of up to
2,152,032 shares (the "Shares") of the Common Stock, in the amount and in the
manner and on terms and conditions described herein, by the Selling
Stockholders, who are former stockholders of companies acquired by Sunglass
Hut International, Inc. (the "Company"). See "Selling Stockholders." The
Selling Stockholders may sell the Shares in one or more transactions (which
may include "block" transactions) on the Nasdaq National Market, in the
over-the-counter market, in negotiated transactions or in a combination of
such methods of sales, at fixed prices which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholders may effect such
transactions by selling the Shares directly to purchasers, or may sell to or
through agents, dealers or underwriters designated from time to time and such
agents, dealers or underwriters may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or
the purchaser(s) of Shares for whom they may act as agent or to whom they may
sell as principals, or both. See "Plan of Distribution" and "Selling
Stockholders." The Company will not receive any of the proceeds from the sale
of the Shares and will bear all of the expenses of registering this offering
of the Shares.
The Common Stock of the Company is traded on the Nasdaq National Market
under the symbol "RAYS." On May 31, 1996, the last reported sale price of the
Common Stock on the Nasdaq National Market System was $27.50. See "Price Range
of Common Stock."
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SEE "RISK FACTORS" BEGINNING ON PAGE 7 IN THE PROSPECTUS FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.
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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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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION 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
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
June , 1996
<PAGE>
TABLE OF CONTENTS
PAGE
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Available Information .............................. 2
Incorporation of Certain Documents by Reference ... 2
Prospectus Summary ................................. 3
Risk Factors ....................................... 7
Price Range of Common Stock ........................ 9
Dividend Policy .................................... 9
Selling Stockholders ............................... 10
Plan of Distribution ............................... 11
Legal Matters ...................................... 12
Additional Information ............................. 12
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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 may be inspected and
copied (at prescribed rates) at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549
and at the Commission's regional office located at Seven World Trade Center,
13th Floor, New York, New York 10048 and at 500 West Madison Street, Suite
1400, Chicago, Illinois 60611. Quotations relating to the Company's Common
Stock appear on the Nasdaq National Market and such reports, proxy statements
and other information concerning the Company can also be inspected at the
offices of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission pursuant to the Exchange Act are incorporated by reference in this
Prospectus:
(1) the Company's Annual Report on Form 10-K, for the fiscal year ended
February 3, 1996;
(2) the Company's Registration Statement on Form 8-A filed on April 30,
1993, registering the Company's Common Stock under Section 12(g) of
the Exchange Act; and
(3) the Company's Proxy Statement filed on May 3, 1996.
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 offering of the Common Stock registered hereunder
shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents. The Company
will provide a copy of any or all of such documents (exclusive of exhibits
unless such exhibits are specifically incorporated by reference therein),
without charge, to each person to whom this Prospectus is delivered, upon
written or oral request to Larry G. Petersen, Senior Vice President--Finance
and Chief Financial Officer, 255 Alhambra Circle, Coral Gables, Florida
33134, telephone (305) 461-6225.
Any statement contained in a 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 supercedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
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AS USED IN THIS PROSPECTUS, "FISCAL 1990," "FISCAL 1991," "FISCAL 1992,"
"FISCAL 1993," "FISCAL 1994," "FISCAL 1995" AND "FISCAL 1996" REFER TO THE
COMPANY'S FISCAL YEAR ENDED JANUARY 31, 1991, FEBRUARY 1, 1992, JANUARY 30,
1993, JANUARY 29, 1994, JANUARY 28, 1995, FEBRUARY 3, 1996 AND ENDING
FEBRUARY 1, 1997, RESPECTIVELY.
2
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION CONTAINED IN THIS PROSPECTUS AND THE CONSOLIDATED FINANCIAL
STATEMENTS AND THE RELATED NOTES INCORPORATED HEREIN BY REFERENCE. THIS
PROSPECTUS, INCLUDING THE INFORMATION INCORPORATED BY REFERENCE, CONTAINS
CERTAIN FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND UNCERTAINTIES. THE
COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS DISCUSSED
IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN "RISK FACTORS."
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THE COMPANY
Sunglass Hut International ("Sunglass Hut" or the "Company") is the
world's largest specialty retailer of sunglasses with over 1,700 locations
worldwide. Since opening its first kiosk in Miami, Florida in 1971, the
Company has grown rapidly both through internal expansion and acquisitions,
increasing from 156 stores at February 1, 1988 to 1,726 locations at February
3, 1996.
During fiscal 1995, the Company (i) opened or acquired 379 stores and 37
licensed sunglass departments, and closed 22 stores, (ii) acquired an
additional 351 stores from Sunsations Sunglass Company ("Sunsations") in a
pooling of interests transaction and (iii) acquired the remaining 50%
interest in Sunglass World Holdings Pty Ltd. ("Sunglass World"), a premier
specialty retailer of sunglasses in Australia, who operated 85 stores at the
time of acquisition.
Sunglass Hut's business strategy is to enhance its position as the largest
specialty retailer of sunglasses by emphasizing:
(i) Dominant Merchandise Selection--The Company strives to offer the most
extensive selection of brand name function, sport and fashion sunglasses in
the industry. A typical store carries approximately 1,000 stock keeping
units, including sunglasses made by Ray-Ban, Oakley, Serengeti, Revo, Diesel,
Vuarnet, Giorgio Armani and DKNY, as well as private label sunglasses sold
primarily under the Sungear brand name.
(ii) Competitive Everyday Low Pricing--The Company's market-by-market
pricing policy is to maintain everyday low prices that are competitive within
each market. The Company supports this policy by regularly monitoring price
levels at its competitors' stores and by offering a lowest price guarantee.
(iii) Flexible Innovative Formats--The relatively small size of sunglasses
gives the Company the ability to operate many sizes of in-line and kiosk
formats. In addition to operating in traditional regional malls, management
believes that the flexibility of the Company's store formats permits it to
operate stores in (a) quality outlet malls, (b) on-street sites in
high-traffic locations, (c) mixed use, festival, hotel and other specialty
locations, (d) airports and other transportation terminals and (e) licensed
departments within department stores and mass merchandisers.
(iv) Exceptional Customer Service--The Company believes that its
knowledgeable and personalized customer service differerentiates it from its
competitors and is a critical component of its success. The Company has
implemented extensive employee training programs designed to ensure that its
sales associates are both thoroughly familiar with the technical, fashion and
function elements of its sunglass offerings and committed to achieving total
customer satisfaction.
(v) Key Vendor Partnerships--The Company views its key suppliers as
partners and works with these vendors on an ongoing basis to develop new
products and sunglass styles. From time to time, the Company negotiates
exclusive and favorable volume purchasing terms for merchandise. Sunglass Hut
believes that it is the largest customer of Bausch & Lomb, Oakley and
Serengeti, as well as other leading sunglass manufacturers.
3
<PAGE>
The following table shows the historical growth of the Company's
locations:
FISCAL(1)
---------------------------------------------
STORE LOCATION: 1991 1992 1993 1994 1995
- --------------- ------- ------- ------- -------- --------
Sunglass Hut ................. 501 716 872 1,202 1,686
Licensed Sunglass Departments -- -- 1 1 38
EyeX Optical Stores .......... -- -- -- -- 2
------- ------- ------- -------- --------
Total ....................... 501 716 873 1,203 1,726
======= ======= ======= ======== ========
- ----------
(1) Historical store location information has been restated to reflect
Sunsations store locations.
At February 3, 1996, the Company operated 1,429 stores and 37 licensed
sunglass departments throughout the United States as well as 90 stores in
Canada, 87 in Australia, 59 locations (including 58 stores and one licensed
department) throughout nine countries in Europe, 11 stores in Puerto Rico,
six in the U.S. Virgin Islands and seven in Mexico for a total of 1,726
locations.
The Company believes that its general business strategies and established
infrastructure will enable it to continue to grow profitably through the
following strategies:
SUNGLASS SPECIALTY FUTURE UNIT EXPANSION
---SUNGLASS HUT. The Company believes that the flexibility of its Sunglass
Hut store format and its attractive unit level economics provide it with
access to a wide range of leasing opportunities which will facilitate its
continued expansion. The Company is pursuing opportunities to continue to
expand Sunglass Hut locations both domestically and internationally.
Management plans to open approximately 200 domestic locations and up to 150
international locations in fiscal 1996.
--LICENSED SUNGLASS DEPARTMENTS. Due to the Company's successful
merchandising in Company owned stores, leading retailers are providing the
Company with the opportunity to establish licensed departments within their
stores. At February 3, 1996, the Company operated 38 licensed Sunglass
Departments, (37 "Sunspot" licensed departments in selected Sears stores
throughout the U.S. and one licensed department in Selfridges, a department
store in the United Kingdom). To date, during fiscal 1996, the Company has
either opened or reached agreements in principle to open an additional 150
licensed departments, including (i) 21 licensed departments in Dayton Hudson
department stores in the Midwest, (ii) 45 licensed departments in Burdines,
a division of Federated Department stores, throughout Florida, (iii) 83
licensed departments in Eaton's department stores, a premier department
store in Canada and (iv) one licensed department in Innos, the largest
department store chain in Belgium. The Company is actively seeking
additional licensed retail sunglass department opportunities with other
retailers and believes that it has the opportunity to expand eventually up
to 1,000 department stores and mass merchants.
ADDITIONAL SUNGLASS SPECIALTY GROWTH OPPORTUNITIES
--DIRECT MAIL. The Company launched a catalog program in 1994 to further
increase retail store and mail order sales and reinforce brand recognition
of Sunglass Hut and its principal vendors. The catalog program has grown
rapidly, with 2.6 million catalogs distributed in 1994 and approximately
nine million in 1995. The Company expects to distribute approximately 14
million catalogs in 1996.
--SUNSCRIPTIONS. During 1995, the Company initiated a test of
"Sunscriptions," a prescription sunglass program, at 13 existing Sunglass
Hut in-line stores in an effort to address the prescription sunglass needs
of the significant number of consumers who need corrective lenses. During
1996, the Company plans to expand this program to over 250 locations.
4
<PAGE>
NEW SPECIALTY STORE CONCEPTS
--EYEX. The Company believes that the market for prescription glasses
represents an attractive new store expansion opportunity. During 1995, the
Company initiated testing of a separate optical store concept under the
tradename "EyeX" in an effort to address the prescription glass needs of the
significant number of consumers who need corrective lenses (primarily clear
but also sunglass). The Company plans to open up to 50 EyeX stores by the
end of fiscal 1996. Management's goal is to apply the key business
strategies utilized in its existing Sunglass Hut stores to these
prescription optical stores. The EyeX stores target affluent consumers under
age 45, and offer a broad assortment of premium optical frames in an
updated, easy to shop environment that emphasizes customer service.
--WATCH STATION. During 1996, the Company also plans to implement a
separate store concept focusing on retail watch sales consistent with the
successful kiosk and in-line store formats that the Company developed for
its sunglass stores. The Company believes an opportunity exists to develop
"Watch Station" as a watch specialty store concept which caters to a market
demographic that is similar to the existing demographics for sunglasses--a
younger, more affluent shopper. The stores will offer the customer a unique
product assortment in a fun, casual environment. A typical Watch Station
store will offer from 1,000 to 1,500 styles of fashion, sport, function and
novelty watches retailing typically from $45-$500.
RECENT DEVELOPMENTS
For the first quarter of fiscal 1996 (ended May 4, 1996), earnings per
share increased 44.4% to $0.13 per share or $7.2 million, compared to $0.09
per share or $5.0 million for the first quarter of fiscal 1995. Net sales for
the first quarter of fiscal 1996 were $122.8 million, an increase of 40.2%
from sales of $87.6 million for the first quarter of 1995. Comparable store
sales for this period increased 7.6% over the comparable period in 1995.
The Board of Directors of the Company has approved a proposal to
reincorporate the Company from Delaware to Florida. The proposal will be
submitted to the Company's stockholders at the Company's annual meeting to be
held on June 4, 1996. There can be no assurance that the proposed
reincorporation will be approved by the Company's stockholders. Reference is
made to the Company's Proxy Statement for the Company's 1996 Annual Meeting
of Shareholders, which was filed with the Commission on May 3, 1996 and is
incorporated herein by reference, for more details relating to the proposed
reincorporation. See "Incorporation of Certain Documents by Reference." If
the proposed reincorporation is approved by the Company's stockholders, the
Company will become subject to (i) the Florida Control Share Act, which
generally provides that shares acquired in excess of certain specified
thresholds will not possess any voting rights unless such voting rights are
approved by a majority vote of the corporation's disinterested shareholders,
and (ii) the Florida Fair Price Act, which generally requires supermajority
approval by disinterested directors or shareholders of certain specified
transactions between a corporation and holders of more than 10% of the
outstanding shares of the corporation (or their affiliates).
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Unless the context otherwise requires, the terms "Company" and "Sunglass
Hut" as used in this Prospectus refer to Sunglass Hut International, Inc.,
its predecessors and consolidated subsidiaries. The Company's principal
executive offices are located at 255 Alhambra Circle, Coral Gables, Florida
33134, and its telephone number is (305) 461-6100.
THE OFFERING
Common Stock offered by the Selling Stockholders ..... 2,152,032 shares
Common Stock outstanding ............................. 54,175,916 shares
Nasdaq National Market symbol ........................ RAYS
5
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<TABLE>
<CAPTION>
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA(a)
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
FISCAL(a)
-------------------------------------
1993 1994 1995
----------- ----------- -----------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales ........................................................... $206,005 $289,985 $418,228
Cost of goods sold, occupancy and buying expenses ................... 115,314 162,631 235,292
----------- ----------- -----------
Gross profit ....................................................... 90,691 127,354 182,936
----------- ----------- -----------
Selling, general and administrative expenses:
Operating expenses ................................................. 63,176 82,515 114,045
Depreciation and leasehold amortization ............................ 8,660 11,832 16,604
Amortization of cost in excess of net assets of acquired businesses 834 1,106 1,746
Amortization of noncompete agreements .............................. 5,000 -- --
Management incentive compensation .................................. 476 -- --
Expenses related to acquisitions ................................... 1,485 -- 10,100
----------- ----------- -----------
Total ........................................................... 79,631 95,453 142,495
----------- ----------- -----------
Earnings before interest, taxes and extraordinary item ............. 11,060 31,901 40,441
Interest expense .................................................... 2,926 2,670 3,292
----------- ----------- -----------
Earnings before income taxes and extraordinary item ................. 8,134 29,231 37,149
Provision for income taxes .......................................... 4,559 10,913 15,512
----------- ----------- -----------
Earnings before extraordinary item .................................. 3,575 18,318 21,637
Extraordinary charge on debt retirement, net of tax ................. (1,573) -- --
----------- ----------- -----------
Net income .......................................................... 2,002 18,318 21,637
Pro forma adjustment for income taxes(b) ............................ (541) (1,007) (775)
----------- ----------- -----------
Pro forma net income ................................................ 1,461 17,311 20,862
Redeemable preferred stock dividends ................................ (472) -- --
----------- ----------- -----------
Pro forma net income applicable to common stockholders ............. $ 989 $ 17,311 $ 20,862
=========== =========== ===========
Pro forma net income per share ...................................... $ 0.02 $ 0.34 $ 0.38
=========== =========== ===========
Weighted average shares outstanding ................................. 45,269 50,481 55,009
Supplemental pro forma earnings per share ........................... $ 0.20(c) $ 0.52(d)
=========== ===========
SELECTED OPERATING DATA:
Number of locations open at end of period ........................... 873 1,203 1,726
Comparable store net sales increase(e) .............................. 10.6% 13.5% 10.3%
BALANCE SHEET DATA:
Working capital ..................................................... $ 20,889 $ 35,863 $ 87,925
Total assets ........................................................ 98,695 153,614 267,076
Total debt .......................................................... 18,307 48,528 69,561
Stockholders' equity ................................................ 53,682 72,216 152,824
<FN>
- ----------
(a) In June 1995, the Company acquired Sunsations through the exchange of
7,411,764 shares of the Company's Common Stock for all of the outstanding
common stock of Sunsations. The acquisition was accounted for as a
pooling of interests, and accordingly, the accompanying selected
financial data have been retroactively adjusted to include the operations
of Sunsations for all periods prior to the merger. Prior to the merger,
Sunsations used a calendar year-end. Accordingly, the selected financial
data for fiscal 1993 and 1994 combine Sunsations' historical selected
financial data on a calendar year-end basis with the Company's historical
selected financial data on a fiscal year-end basis. As a result of the
merger, effective January 29, 1995 (the first day of the Company's fiscal
1995 year), Sunsations' year-end was changed to conform to the Company's
fiscal year-end.
(b) The pro forma adjustment for income taxes reflects the additional tax
provision that would have been recorded at the corporation level had
Sunsations not been an S corporation during the respective period.
(c) Supplemental pro forma earnings per share for fiscal 1993 excludes certain
specific selling, general and administrative expenses (net of taxes) that
did not continue beyond fiscal 1993, including amortization of noncompete
agreements, management incentive compensation and expenses related to
acquisitions. Supplemental pro forma earnings per share also excludes the
interest expense, extraordinary charge on debt retirement and preferred
stock dividends related to the debt and preferred stock retired with the
proceeds of the Company's initial public offering of Common Stock in June
1993 (the "IPO"), assuming that the IPO occurred as of the beginning of
fiscal 1993.
(d) Supplemental pro forma earnings per share for fiscal 1995 excludes $10.1
million of nonrecurring expenses (net of taxes) related to the acquisition
of Sunsations.
(e) A store becomes comparable after it has been operated by the Company for
more than 12 months. All comparable store results reflect the operations of
Sunsations.
</FN>
</TABLE>
6
<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, THE
FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING THE COMPANY
AND ITS BUSINESS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED HEREBY.
ABILITY TO MANAGE GROWTH
The Company has grown significantly in the past several years, and intends
to continue to pursue an aggressive growth strategy. The continued growth of
the Company is dependent, in large part, upon the Company's ability to open
and operate new stores on a timely and profitable basis. However, the rate of
new store openings is subject to various contingencies, many of which are
beyond the Company's control. These contingencies include, among others, the
Company's ability to secure suitable store sites on a timely basis and on
satisfactory terms, the Company's ability to hire, train and retain qualified
personnel, the availability of adequate capital resources and the successful
integration of new stores into existing operations. There can be no assurance
that the Company's new stores will achieve sales and profitability comparable
to the Company's existing stores.
There can be no assurance that the Company will be able to successfully
execute other components of its specialty sunglass growth strategies. The
Company's expansion plans include both its "Sunscriptions" prescription
sunglass program and an increasing percentage of non-traditional retail
locations, including licensed departments, with respect to which the Company
has substantially less experience. Moreover, the Company's continued
international expansion may subject the Company to certain risks and
limitations not associated with its current U.S. operations, including (i)
the uncertainty of market acceptance of specialty retailers and/or the
Company's product offerings, (ii) the Company's ability to hire and train
local personnel, (iii) the Company's dependence on local business practices,
(iv) foreign currency losses, (v) the impact of foreign taxes, and (vi)
foreign investment restrictions and limitations. In addition, although the
Company has acquired competitors in the past and considers acquiring
additional smaller chains of specialty sunglass retailers on an ongoing
basis, there can be no assurance that the Company will be able to consummate
acquisitions on satisfactory terms or that any acquired operations will be
successfully integrated.
RISKS OF NEW SPECIALTY STORE CONCEPTS
The Company opened its first EyeX store in October 1995 and opened its
first Watch Station store in May 1996. Accordingly, their operations will be
subject to the numerous risks of establishing new business enterprises,
including unanticipated operating problems, lack of experience and customer
acceptance, significant competition from existing and new retailers and the
extent of existing relationships between such retailers and
manufacturers/distributors. Moreover, the Company's EyeX operations (as well
as its "Sunscriptions" program) subject the Company to governmental
regulation of opticians. There can be no assurance that the Company will be
able to operate any one or more of the foregoing concepts profitably.
CONCENTRATION OF SUPPLIERS
In fiscal 1995, Bausch & Lomb and Oakley, the Company's largest suppliers,
accounted for approximately 31% and 25%, respectively, of the Company's total
merchandise purchases. The Company has not experienced any significant
difficulty in obtaining satisfactory sources of supply in the past. However,
the Company has no long-term purchase contracts or other contractual
assurance of continued supply, pricing or access to new product offerings.
The inability or failure of one or more key vendors to supply merchandise, or
a material change in the Company's current purchase terms, would have a
material adverse effect on the Company's business.
IMPACT OF CONSUMER SPENDING
The success of the Company's operations depends to a significant extent
upon a number of factors relating to discretionary consumer spending,
including economic conditions affecting disposable
7
<PAGE>
consumer income such as employment, business conditions, interest rates and
taxation, as well as the ability of mall anchor tenants and other attractions
to generate customer traffic in the vicinity of the Company's stores. There
can be no assurance that consumer spending will not be affected by economic
conditions, thereby impacting the Company's growth, net sales and
profitability. In addition, there can be no assurance that the rate of
comparable store sales growth experienced by the Company in recent periods
will continue. Moreover, comparable store sales may fluctuate significantly
on a month-to-month basis.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends to a significant extent upon the performance
of its senior management team, particularly Jack B. Chadsey, the Company's
President and Chief Executive Officer. While the Company believes that its
senior management team has significant depth, the loss of services of any of
the Company's executive officers could have a material adverse impact on the
Company. The Company does not maintain key man life insurance on the life of
Mr. Chadsey or any other executive officer.
ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE OF
INCORPORATION AND BYLAWS
Certain provisions of the Company's Restated Certificate of Incorporation
and Bylaws may be deemed to have anti-takeover effects and may delay, defer
or prevent a takeover attempt that a stockholder might consider in its best
interest. These provisions (i) classify the Company's Board of Directors into
three classes, each of which will serve for different three-year periods,
(ii) provide that only the Board of Directors or Chief Executive Officer may
call special meetings of the stockholders, and (iii) establish certain
advance notice procedures for nomination of candidates for election as
directors and for stockholder proposals to be considered at stockholders'
meetings. In addition, the Company's Board of Directors has approved the
reincorporation of the Company from Delaware to Florida. If such proposed
reincorporation is approved by the Company's stockholders, the Company will
become subject to certain provisions of the Florida Business Corporation Act
(the "FBCA") which may have the effect of delaying, deferring or preventing a
change in control of the Company.
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the Company's Common Stock has risen substantially
since the Company's IPO, which closed in June 1993. The Common Stock is
quoted on the Nasdaq National Market, which stock market has experienced and
is likely to experience in the future significant price and volume
fluctuations which could adversely affect the market price of the Common
Stock without regard to the operating performance of the Company. In
addition, the Company believes that factors such as quarterly fluctuations in
the financial results of the Company, monthly comparable store sales results,
shortfalls in earnings or sales below analyst expectations, the overall
economy and the financial markets could cause the price of the Common Stock
to fluctuate substantially. See "Price Range of Common Stock."
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK
This Prospectus, including the information incorporated by reference,
contains forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934,
including statements regarding, among other items, (i) the Company's growth
strategies, (ii) anticipated trends in the Company's business and
demographics, and (iii) the Company's ability to enter into contracts with
certain suppliers. These forward-looking statements are based largely on the
Company's expectations and are subject to a number of risks and
uncertainties, certain of which are beyond the Company's control. Actual
results could differ materially from these forward-looking statements as a
result of the factors described in "Risk Factors," including, among others,
regulatory or economic influences. In light of these risks and uncertainties,
there can be no assurance that the forward-looking information contained in
this Prospectus will in fact transpire.
8
<PAGE>
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "RAYS." The following table sets forth, for the periods indicated,
the high and low sale prices of shares of the Common Stock as reported on the
Nasdaq National Market.
HIGH LOW
------ -------
Fiscal 1994:
First Fiscal Quarter (January 30 to April 30) ...... 10 3/8 7 13/16
Second Fiscal Quarter (May 1 to July 30) ............ 9 7/16 5 7/8
Third Fiscal Quarter (July 31 to October 29) ....... 10 5/8 7 7/8
Fourth Fiscal Quarter (October 30 to January 28) ... 12 5/8 9 11/16
Fiscal 1995:
First Fiscal Quarter (January 29 to April 29) ...... 15 1/4 11 1/8
Second Fiscal Quarter (April 30 to July 29) ........ 20 7/8 13 5/8
Third Fiscal Quarter (July 30 to October 28) ....... 25 7/16 18 7/8
Fourth Fiscal Quarter (October 29 to February 3) ... 29 18 1/2
Fiscal 1996:
First Fiscal Quarter (February 4 to May 4) ......... 36 15/16 25
On May 31, 1996, the last reported sale price for the Company's Common
Stock on the Nasdaq National Market was $27.50 per share. As of May 31, 1996,
the Company had 159 stockholders of record (including brokerage firms and
other nominees).
DIVIDEND POLICY
The Company intends to retain its earnings to finance the growth and
development of its business and does not anticipate paying cash dividends on
its capital stock in the foreseeable future. Future dividends, if any, will
depend, among other things, on the future earnings, capital requirements and
financial condition of the Company, and on such other factors as the
Company's Board of Directors may consider relevant. In addition, the
Company's Credit Facility prohibits the payment of cash dividends if an event
of default exists and generally limits payment of cash dividends to 10% of
the Company's net income.
9
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information regarding the ownership of the
Company's Common Stock by the Selling Stockholders as of the date of this
Prospectus and as adjusted to reflect the sale of the shares of Common Stock
offered hereby. All of these shares were issued by the Company in connection
with the acquisition of sunglass retailers.
<TABLE>
<CAPTION>
OWNERSHIP NUMBER OF SHARES OWNERSHIP
PRIOR TO THE OFFERING OFFERED HEREBY AFTER THE OFFERING
------------------------ ---------------- --------------------
NAME AND ADDRESS SHARES PERCENTAGE SHARES PERCENTAGE
- ---------------- ---------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C>
D&L Partners, L.P.(1)(2)(3) ....................... 864,708 1.6% 355,000 509,708 *
Douglas J. Von Allmen, Trustee U/T/I Dated 4/25/89
f/b/o Douglas J. Von Allmen(1)(2)(3) ............ 144,000 * 144,000 0 0
Linda L. Von Allmen, Trustee U/T/I Dated 4/25/89
f/b/o Linda L. Von Allmen(1)(2)(3) .............. 114,000 * 114,000 0 0
Bruce A. Olson and Kimberly A. Olson,
Co-Trustees U/T/I Dated 6/27/89
f/b/o Bruce A. Olson(1)(2)(4) ................... 615,338 * 347,000 268,338 *
Bruce A. Olson and Kimberly A. Olson,
Co-Trustees U/T/I Dated 6/27/89
f/b/o Kimberly A. Olson(1)(2)(4) ................ 456,634 * 216,000 240,634 *
Kimberly A. Olson, Custodian for
Alexa K. Olson(1)(2)............................. 50,736 * 50,000 736 *
NGNG, Inc.(1)(2)(5) ............................... 1,111,764 2.1% 500,000 611,764 1.1%
D. Michael Cannady(1)(2)(6). ...................... 180,000 * 60,000 120,000 *
Daniel J. and Rebecca Paetz,
as joint tenants(1)(2)(7). ...................... 160,586 * 83,000 77,586 *
Jenifer Louise Deeter Giddens(1)(2)(8)............. 160,586 * 83,000 77,586 *
Mark S. Crawford(1)(2)(9).......................... 144,000 * 48,000 96,000 *
Frederick O. Wingate and Shirley P. Wingate(10).... 152,032 * 152,032 0 0
<FN>
- ----------
* Less than 1%.
(1) The Selling Stockholder is either a former shareholder of Sunsations or the
assignee thereof. The Selling Stockholder is participating in this offering
pursuant to contractual "piggyback" registration rights granted by the
Company in connection with the acquisition of Sunsations. The Company has
agreed to pay all fees and expenses incident to the registration of this
offering, including all registration and filing fees, all fees and expenses
of complying with state blue sky or securities laws, all costs of
preparation of the Registration Statement of which this Prospectus is a
part and fees and disbursements of counsel for the Company and its
independent public accountants.
(2) Pursuant to the Sunsations acquisition agreement, the owner is obligated
to indemnify the Company for breaches of certain representations,
warranties and covenants made by Sunsations and its shareholders. In
general, the indemnification liability of any shareholder may not exceed
the value of 20% of the shares which the shareholder received in the
acquisition (such value to be determined by averaging the closing sale
price for the Common Stock on the Nasdaq National Market during the ten
trading days preceding June 29, 1995). Any claims of indemnification
against the former shareholders of Sunsations may be satisfied by the
Company cancelling a portion of the shares of Common Stock received by such
shareholders in connection with the acquisition. To secure their
indemnification obligations, the former Sunsations shareholders have placed
10% of their shares received in connection with the acquisition into escrow
with a trust company to be held in accordance with the terms of a set-off
escrow agreement, which escrowed shares will be returned to the former
Sunsations shareholders on or about June 29, 1996.
(3) Douglas J. Von Allmen, Trustee U/T/I dated 4/25/89 F/B/O Douglas J. Von
Allmen ("Von Allmen Trust A") and Linda L. Von Allmen, Trustee U/T/I dated
4/25/89 F/B/O Linda L. Von Allmen ("Von Allmen Trust B") transferred
864,708 shares to D&L Partners, L.P., a limited partnership in exchange for
interests in the partnership. D&L Management Corporation is the sole
general partner of D&L Partners, L.P. The sole shareholders of D&L
Management Corporation are Von Allmen Trust A and Von Allmen Trust B. Von
Allmen Trust A and Von Allmen Trust B are the sole limited partners of D&L
Partners, L.P. D&L Partners, L.P. has pledged 258,000 shares to a bank to
secure a loan and has entered into a series of transactions with a
brokerage firm pursuant to which 500,000 shares owned by D&L Partners, L.P.
are pledged until April 1998. Mr. and Ms. Von Allmen are husband and wife
and their address is 9 Isla Bahia, Ft. Lauderdale, Florida 33316. Mr. Von
Allmen was Vice President and a Director of Sunsations prior to the
Company's acquisition of Sunsations.
(4) Bruce A. Olson and Kimberly A. Olson, Co-Trustees U/T/I Dated 6/27/89 f/b/o
Bruce A. Olson ("Olson Trust A") has entered into a transaction with a
brokerage firm pursuant to which 339,338 shares owned by Olson Trust A are
pledged until February 7, 1998. Bruce A. Olson and Kimberly A. Olson,
Co-Trustees U/T/I Dated 6/27/89 f/b/o Kimberly A. Olson
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<PAGE>
("Olson Trust B") has entered into a transaction with a brokerage firm
pursuant to which 165,634 shares owned by Olson Trust B are pledged until
February 7, 1998. Mr. and Ms. Olson are husband and wife. Mr. Olson was the
Chairman of the Board of Sunsations prior to the Company's acquisition of
Sunsations. Mr. and Mrs. Olson's address is c/o Group One Capital, Inc.,
1611 DesPeres Road, St. Louis, Missouri 63131.
(5) NGNG, Inc. is a corporation 50% owned by Douglas J. Von Allmen and his and
his wife's children and 50% by Bruce A. Olson and his children. Mr. Von
Allmen was Vice President and a Director and Mr. Olson was Chairman of the
Board of Sunsations prior to the Company's acquisition of Sunsations. NGNG,
Inc.'s address is c/o Group One Capital, Inc., 1611 Des Peres Road, St.
Louis, Missouri 63131.
(6) Mr. Cannady has entered into a transaction with a brokerage firm pursuant
to which 120,000 shares owned by Mr. Cannady are pledged until September
1997. Mr. Cannady was the President and Chief Executive Officer of
Sunsations prior to the Company's acquisition of Sunsations. Mr. Cannady's
address is c/o Group One Capital, Inc. 1611 Des Peres Road, St. Louis,
Missouri 63131.
(7) Mr. and Mrs. Paetz's address is c/o Paetz Enterprises, Inc., 615 Dorchester
Dr., Noblesville, Indiana 46060.
(8) Ms. Giddens' address is 6624 West Sweet Creek Drive, New Palestine,
Indiana 46163.
(9) Mr. Crawford has entered into a transaction with a brokerage firm pursuant
to which 96,000 shares owned by Mr. Crawford are pledged until September
1997. Mr. Crawford was Secretary, Treasurer and a Director of Sunsations
prior to the Company's acquisition of Sunsations. Mr. Crawford's address is
c/o Group One Capital, Inc., 1611 Des Peres Road, Suite 395, St. Louis,
Missouri 63131.
(10) The owner is a former shareholder of Sun Shades 501, Ltd., a North
Carolina corporation ("Sun Shades"), acquired by the Company in December
1995. The owner is participating in this offering pursuant to certain
contractual "demand" registration rights granted by the Company in
connection with the acquisition of Sun Shades. The Company has agreed to
pay all fees and expenses incident to the registration of this offering,
including all registration and filing fees, all fees and expenses of
complying with state blue sky or securities laws, all costs of preparation
of the Registration Statement of which this Prospectus is a part and fees
and disbursements of counsel for the Company and its independent public
accountants. Pursuant to the Sun Shades acquisition agreement, the owner is
obligated to indemnify the Company for breaches of certain representations,
warranties and covenants made by Sun Shades and its shareholders. Any
claims for indemnification against the former shareholders may be satisfied
by the Company cancelling a portion of the shares of Common Stock received
by such shareholders in connection with the acquisition. To secure their
indemnification obligations, the former Sun Shades shareholders have placed
10% of their shares received in connection with the acquisition to be held
in accordance with the terms of an escrow agreement. Upon any sale of such
shares pursuant to this Prospectus, the proceeds thereof will be
substituted as the collateral to be held under such escrow arrangement. Mr.
Wingate was the President, Treasurer and a Director of Sun Shades prior to
the Company's acquisition of Sun Shades. Mrs. Wingate was a Vice President
and Secretary of Sun Shades prior to the Company's acquisition of Sun
Shades. Mr. and Mrs. Wingate's address is 3762 Abingdon Road, Charlotte,
North Carolina 28211.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
The Selling Stockholders may sell the Shares offered hereby in one or more
transactions (which may include "block" transactions) on the Nasdaq National
Market, in the over-the-counter market, in negotiated transactions or a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders
may effect such transactions by selling the Shares directly to purchasers, or
may sell the Shares to or through agents, dealers or underwriters designated
from time to time, and such agents, dealers or underwriters may receive
compensation in the form of underwriting discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of Shares for
whom they may act as agent or to whom they sell as principals, or both. The
Selling Stockholders and any agents, dealers or underwriters that act in
connection with the sale of Shares might be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act of 1933, as amended
(the "Securities Act"), and any discount or commission received by them and any
profit on the resale of Shares as principal might be deemed to be underwriting
discounts or commissions under the Securities Act.
Pursuant to the registration rights agreement between the Company and the
former shareholders of Sun Shades, the Company has agreed to use its best
efforts to cause the Registration Statement of which this Prospectus is a
part to become effective and to remain effective for a period of 90 days,
subject to certain limitations.
To the extent required, the number of Shares to be sold, the purchase
price and public offering price, the name or names of any agent, dealer or
underwriter, and any applicable commissions or
11
<PAGE>
discounts with respect to a particular offering will be set forth in a
supplement to this Prospectus to be filed with the Commission pursuant to Rule
424 under the Securities Act.
The Company will receive no portion of the proceeds from the sale of the
Shares and will bear all expenses related to the registration of this
offering of the Shares. The Selling Stockholders will also be indemnified by
the Company against certain civil liabilities, including certain liabilities
which may arise under the Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the Common Stock offered hereby will
be passed upon for the Company by Greenberg, Traurig, Hoffman, Lipoff, Rosen
& Quentel, P.A., Miami, Florida.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits. For further information with respect
to the Company and the Common Stock, reference is hereby made to such
Registration Statement and the exhibits. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete and, in each instance, reference is made to the copy of
such contract or document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. Copies
of the Registration Statement, including all exhibits thereto, may be
obtained from the Commission's principal office in Washington, D.C., upon
payment of the fees prescribed by the Commission, or may be examined without
charge at the offices of the Commission.
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant estimates that expenses payable by the Registrant in
connection with the offering described in this registration statement (other
than underwriting discounts and commissions) will be as follows:
Securities and Exchange Commission registration fee .... $20,779
Printing and engraving expenses ........................ 10,000
Accounting fees and expenses ........................... 10,000
Legal fees and expenses ................................ 15,000
Fees and expenses (including legal fees)
for qualifications under state securities laws ....... 500
Registrar and Transfer Agent's fees and expenses ...... 500
------------
Total ................................................ $56,779
============
All amounts except the Securities and Exchange Commission registration fee
are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under Section 145 of the Delaware General
Corporations Law to indemnify its directors and officers to the extent
provided in such statute. Such statute generally provides that a company may
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed proceeding (other than a
proceeding by or in the right of the company) by reason of the fact that such
person is or was a director, officer, employee or agent of the company, or is
or was serving at the request of the company in a similar position of another
entity, against expenses (including attorneys' fees), judgments, fines and
settlements incurred by such person in connection with such proceeding if
such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interest of the company, and
with respect to any criminal action or proceeding, had no reasonable cause to
believe such person's conduct was unlawful. The statute further provides that
a company may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed proceeding by or in
the right of the company by reason of the fact that such person is or was a
director, officer, employee or agent of the company, or is or was serving at
the request of the company in a similar position of another entity, against
expenses (including attorneys' fees) incurred by such person in connection
with such proceeding if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interest of
the company; PROVIDED, however, that no indemnification shall be made with
respect to any matter as to which such person has been adjudged to be liable
for negligence or misconduct in the performance of such person's duty to the
company, unless, and to the extent, the Delaware Court of Chancery or such
court as such proceeding was brought, despite the adjudication of liability,
determines such person is entitled to indemnity. The Registrant's Restated
Certificate of Incorporation provides that the Registrant shall indemnify its
executive officers and directors to the fullest extent permitted by law
either now or hereafter. The Registrant has also entered into an agreement
with each of its directors and certain of its officers wherein it has agreed
to indemnify each of them to the fullest extent permitted by law. Such
agreement also provides that expenses incurred by such director or officer of
the Registrant or any of its direct or indirect wholly owned subsidiaries in
defending a civil or criminal action, suit or proceeding will be paid by the
Registrant in advance of the final disposition of such action, suit or
proceeding, subject to the undertaking by such director or officer to repay
such amount if it shall ultimately be determined that he is not entitled to
be indemnified by the Registrant as authorized.
II-1
<PAGE>
At present, there is no pending litigation or proceeding involving a
director or officer of the Registrant as to which indemnification is being
sought, nor is the Registrant aware of any threatened litigation that may
result in claims for indemnification by any officer or director.
ITEM 16. EXHIBITS.
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
3.1 Registrant's Amended and Restated Certificate of Incorporation, as amended(3.1)(1)
3.2 Registrant's Amended and Restated Bylaws(3.2)(1)
4.1 Specimen Common Stock certificate(4.1)(1)
4.2 Registration Rights Agreement, dated as of May 31, 1993, among the Registrant, the Investor Group
and the Management Group (as such terms are defined in the Agreement)(4.2)(2)
4.3 Registration Rights Agreement, dated as of December 30, 1993, between the Registrant and Wallis
D. Arnold and Karen Arnold (4.3)(3)
4.4 Registration Rights Agreement, dated as of June 29, 1995, between the Registrant and the former
shareholders of Sunsations Sunglass Company(4.4)(4)
4.5 Registration Rights Agreement, dated December 1, 1995, between the Registrant and the former shareholders
of Sun Shades 501, Ltd.(4.4)(5)
4.6 Registration Rights Agreement, dated April 25, 1996, between the Registrant and the former shareholders
of Shady Biz, Inc. and Spectacular Eyewear, Inc.*
5.1 Opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. as to the validity of the
Common Stock being registered*
23.1 Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. (to be included in its opinion
to be filed as Exhibit 5.1)*
23.2 Consent of Arthur Andersen LLP*
23.3 Consent of Coopers & Lybrand L.L.P.*
24.1 Reference is made to the Signatures section of this Registration Statement for the Power of Attorney
contained therein*
<FN>
- ----------
* Filed herewith.
(1) Incorporated by reference to the exhibit shown in the preceding parenthesis
and filed with the Registrant's Registration Statement on Form S-1 (File No.
33-59872).
(2) Incorporated by reference to the exhibit shown in the preceding parenthesis
and filed with the Registrant's Registration Statement on Form S-1 (File No.
33-70214).
(3) Incorporated by reference to the exhibit shown in the preceding parenthesis
and filed with the Registrant's Registration Statement on Form S-1 (File No.
33-77792).
(4) Incorporated by reference to the exhibit shown in the preceding parenthesis
and filed with the Registrant's Registration Statement on Form S-3 (File No.
33-97550).
(5) Incorporated by reference to the exhibit shown in the preceding parenthesis
and filed with the Registrant's Annual Report on Form 10-K for the fiscal
year ended February 3, 1996.
</FN>
</TABLE>
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;
(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
II-2
<PAGE>
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
Securities and Exchange 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.
(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.
(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.
(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 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 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 to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report, to security holders that is incorporated
by reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 or Regulation S-X is not set forth in the prospectus, to deliver,
or cause to be delivered to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
II-3
<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 Coral Gables, State of Florida, on May 29, 1996.
SUNGLASS HUT INTERNATIONAL, INC.
By: /s/ LARRY G. PETERSEN
-------------------------------------------------
Larry G. Petersen, Senior Vice President--Finance
and Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Jack B. Chadsey and Larry G. Petersen
his true and lawful attorneys-in-fact, each acting alone, with full powers of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this registration statement, and to file the
same, with exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming
all that said attorneys-in-fact or their substitutes, 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 date indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JACK B. CHADSEY President, Chief Executive May 29, 1996
- ------------------------- Officer and Director
Jack B. Chadsey (principal executive officer)
/s/ LARRY G. PETERSEN Senior Vice President-- May 29, 1996
- ------------------------- Finance and Chief
Larry G. Petersen Financial Officer
(principal financial officer)
/s/ GEORGE L. PITA Vice President--Finance and May 29, 1996
- ------------------------- International Development
George L. Pita (principal accounting officer)
/s/ JAMES N. HAUSLEIN Chairman of the Board May 29, 1996
- -------------------------
James N. Hauslein
/s/ ROHIT M. DESAI Director May 29, 1996
- -------------------------
Rohit M. Desai
/s/ JOHN H. DUERDEN Director May 29, 1996
- -------------------------
John H. Duerden
Director , 1996
- -------------------------
William S. Field
Director , 1996
- -------------------------
Robert C. Grayson
/s/ WILLIAM E. PHILLIPS Director May 29, 1996
- -------------------------
William E. Phillips
II-4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered
into as of the 25th day of April, 1996, between SUNGLASS HUT INTERNATIONAL,
INC., a Delaware corporation (the "Company") and RANDY GARLIEPP, RICHARD KELTY
and DAVID SAKHRANI (collectively and individually the "Holders").
RECITALS
1. Pursuant to that certain Agreement and Plan of Merger, dated as of
April 25, 1996 (the "Merger Agreement"), among the Company, Sunglass Hut
Corporation, Shady Biz, Inc. ("Shady"), Spectacular Eyewear, Inc.
("Spectacular") and each of the Holders, the Company has agreed to provide to
Holders certain registration rights with respect to the shares of the Company's
common stock, $.01 par value per share (the "Common Stock"), issued to the
Holders pursuant to the Merger Agreement (such shares of Common Stock being
referred to herein as the "Restricted Shares").
2. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed thereto in the Merger Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and covenants set
forth in the Merger Agreement, the parties agree as follows:
(a) REGISTRATION RIGHTS.
(i) INCIDENTAL (PIGGYBACK) REGISTRATION. Subject to the
limitations set forth in this Agreement, if the Company at any time within two
(2) years of the date hereof proposes to file on its behalf and/or on behalf of
any of its security holders ("the demanding security holders") Registration
Statements under the Securities Act of 1933, as amended (the "Securities Act"),
on any form (other than a Registration Statement on Form S-4 or S-8 or any
successor form for securities to be offered in a transaction of the type
referred to in Rule 145 under the Securities Act or to employees of the Company
pursuant to any employee benefit plan, respectively) for the general
registration of securities to be sold for cash with respect to its Common Stock
in an underwritten offering, it will give written notice to the Holders at least
five (5) days before the initial filing with the Securities and Exchange
Commission (the "Commission") of such Registration Statement, which notice shall
set forth the intended method of disposition of the securities proposed to be
registered by the Company. The notice shall offer to include in such filing the
aggregate number of shares of Restricted Shares as Holders may request.
If Holders desire to have Restricted Shares
registered under this Section 1, they shall advise the Company within three (3)
days after the date of receipt of such offer from the Company, setting forth the
amount of such Restricted Shares for which registration is requested. The
Company shall thereupon include in such filing the number of shares of
Restricted Shares for which registration is so requested, subject to the
following. In the event that the proposed registration by the Company is, in
whole or in part, an underwritten public offering of securities of the Company,
the Company shall not be required to include any of the Restricted Shares in
such underwriting unless Holders agree to accept the offering on the same terms
and conditions as the shares of Common Stock, if any, otherwise being sold
through underwriters under such registration; provided, however, that: (i) if
the managing underwriter advises the Company in writing that the inclusion of
all Restricted Shares proposed to be included by the Holders in the underwritten
public offering and other issued and outstanding shares of Common Stock proposed
to be included therein by the persons other than the Holders, the Company and
any demanding
<PAGE>
security holder (the "Other Shares") would jeopardize the success of the
Company's offering, then the Company shall be required to include in the
offering (in addition to the number of shares to be sold by the Company and any
demanding security holder) only that number of Restricted Shares that the
managing underwriter believes will not jeopardize the success of the Company's
offering and the number of Restricted Shares and Other Shares not included in
such underwritten public offering shall be reduced pro rata based upon the
number of shares of Restricted Shares and Other Shares requested by the holders
thereof to be registered in such underwritten public offering; and (ii) in each
case all shares of Common Stock owned by the Holders which are not included in
the underwritten public offering shall be withheld from the market by the
Holders for a period, not to exceed one hundred eighty (180) calendar days,
which the managing underwriter reasonably determines as necessary in order to
effect the underwritten public offering. In the event the Company chooses a
registration form which limits the size offering either in terms of the number
of shares or dollar amount, the Company shall not be required to include in the
offering (in addition to the number of shares to be sold by the Company)
Restricted Shares which would exceed such limits.
(ii) SHELF REGISTRATION. Subject to the
limitations set forth in this Agreement, and upon the written request of any
Shareholder delivered to the Company, the Company will file a registration
statement (the "Shelf Registration Statement") not later than September 3, 1996,
covering the number of Restricted Shares set forth in the written request of the
Shareholders and thereafter shall use its best efforts to (i) cause the Shelf
Registration Statement to be declared effective as soon as practicable following
such filing, and (ii) maintain such effectiveness for a period of ninety (90)
days from the initial effective date thereof (such 90 day period is referred to
herein as the "Offering Period"); PROVIDED, HOWEVER, that the Company shall have
the right to prohibit the sale of Common Stock pursuant to the Shelf
Registration Statement, upon notice to the Holders (A) if in the opinion of
counsel for the Company, the Company would thereby be required to disclose
information not otherwise then required by law to be publicly disclosed,
provided that the Company shall use its best efforts to minimize the period of
time in which it shall prohibit the sale of any shares of Common Stock pursuant
to this clause (A), or (B) during the period starting with the date 10 days
prior to the Company's estimate of the date of filing of, and ending on a date
90 days after the effective date of, a Company-initiated registration in which
the Holders are entitled to participate in accordance with Section 1(a) hereof,
or such longer post-effective periods as may be reasonably required by the
underwriter or underwriters if such offering is underwritten. The Offering
Period shall be extended (on a day-to-day basis) for each day that sales during
the Offering Period are prohibited pursuant to the preceding sentence.
(b) REGISTRATION PROCEDURES. If the Company is required by the
provisions of Section 1 to use its best efforts to effect the registration of
any of its securities under the Securities Act, the Company will, as
expeditiously as possible:
(i) prepare and file with the Commission a Registration
Statement with respect to such securities and use its best efforts to cause such
Registration Statement to become and remain effective for a period of time (not
to exceed ninety (90) days) required for the disposition of such securities by
the holders thereof;
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such Registration Statement until
the earlier of such time as all of such securities have been disposed of in a
public offering or the expiration of ninety (90) days;
-2-
<PAGE>
(iii) furnish to such selling security holders such number of
copies of a summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents, as such selling security holders may reasonably request;
(iv) use its best efforts to register or qualify the
securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions within the United States and Puerto Rico as
each holder of such securities shall reasonably request (provided, however, the
Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is not then qualified or
to file any general consent to service or process), and do such other reasonable
acts and things as may be required of it to enable such holder to consummate the
disposition in such jurisdiction of the securities covered by such Registration
Statement;
(v) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Common
Stock; and as shall be required in connection with the action taken by the
Company; and
(vi) promptly notify in writing the Holders and each
underwriter of the happening of any event, during the period of distribution, as
a result of which the Registration Statement includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing (in which case, the Company shall promptly provide
the Holders with revised or supplemental prospectuses and if so requested by the
Company in writing, the Holders shall promptly take action to cease making any
offers of the Restricted Shares until receipt and distribution of such revised
or supplemental prospectuses).
(c) EXPENSES. All expenses incurred in complying with this Agreement,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD), printing expenses, fees and
disbursements of counsel for the Company, expenses of any special audits
incident to or required by any such registration and expenses (including
attorneys' fees) of complying with the securities or blue sky laws of any
jurisdictions pursuant to Section 2(d), except to the extent required to be paid
by participating selling securityholders by state securities or blue sky laws,
shall be paid by the Company; PROVIDED, HOWEVER, that the Holders (and not the
Company) shall be liable for (i) all fees, discounts and commissions to any
underwriter, if any, and (ii) all fees and disbursements of legal counsel to the
Holders, if any.
(d) INDEMNIFICATION. In the event of any registration of any Restricted
Shares under the Securities Act pursuant to this Agreement, the Company shall
indemnify and hold harmless the seller of such shares, each underwriter of such
shares, if any, each such broker or any other person, if any, who controls any
of the foregoing persons, within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which any of the
foregoing persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement of a material fact
contained in any registration statement under which such Restricted Shares were
registered under the Securities Act, any final prospectus contained therein, or
any amendment or supplement thereto, or any document prepared and/or furnished
by the Company incident to the registration or qualification of any Restricted
Shares, or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or, with respect to any final prospectus, necessary to
make the statements therein in light of the circumstances under which they were
made, not misleading, or any violations by the Company of the Securities Act or
state securities or "blue sky" laws applicable to the Company relating to action
or inaction required of the Company in connection with such registration or
qualification under such state securities or blue sky laws; and shall reimburse
such seller,
-3-
<PAGE>
such underwriter, broker or other person acting on behalf of such seller and
each such controlling person for any legal or any other expenses reasonably
incurred by any of them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the Company
shall not be liable to the extent (i) any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said registration statement, said final
prospectus or said amendment or supplement or any document incident to the
registration or qualification of any Restricted Shares in reliance upon and in
conformity with information furnished by the Holders to the Company for use in
preparation thereof, or (ii) the Holders or their agents (x) utilized a
Prospectus which is dated in excess of ninety (90) days prior to the date of
such person's purchase of Common Stock, or (y) utilized a Prospectus after the
date Holders were notified, in accordance with Section 1(b) hereof, that sales
of Common Stock pursuant to the Shelf Registration are prohibited. Before
Restricted Shares held by the Holders shall be included in any registration
pursuant to this Agreement, the Holders shall have agreed to indemnify and hold
harmless (in the same manner and to the same extent as set forth in this Section
4 for the indemnification of such prospective seller and underwriter by the
Company) the Company, each director of the Company, each officer of the Company
who shall sign such registration statement and any person who controls the
Company within the meaning of the Securities Act, with respect to any untrue
statement or omission from such registration statement or final prospectus
contained therein or any amendment or supplement thereto, if such untrue
statement or omission was (i) made in reliance upon and in conformity with
information furnished by the Holders to the Company by Holders for use in the
preparation of such registration statement, final prospectus or amendment or
supplement or (ii) contained in any Registration Statement which was utilized by
the Holders or any controlling person or affiliate of the Holders either (A) on
any date which is in excess of 90 days after the date of the Prospectus included
therein, or (B) after the Holders were notified, in accordance with Section 2(f)
hereof, that such Registration Statement contained an untrue statement of a
material fact or omitted to state any material fact. Promptly after receipt by
an indemnified party of notice of the commencement of any action involving a
claim referred to in this Section 4, such indemnified party will, if a claim in
respect thereof is made against any indemnifying party, give written notice to
the latter of such claim and/or the commencement of such action. In case any
such action is brought against an indemnified party, the indemnifying party will
be entitled to participate in and assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election to assume the
defense thereof, the indemnifying party shall be responsible for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof, provided that if any indemnified party shall have reasonably
concluded that there may be one or more legal defenses available to such
indemnified party which conflict in any material respect with those available to
the indemnifying party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided in
this Section 4, such indemnifying party shall reimburse such indemnified party
and shall not have the right to assume the defense of such action on behalf of
such indemnified party and such indemnifying party shall reimburse such
indemnified party and any person controlling such indemnified party for that
portion of the fees and expenses of any counsel retained by the indemnified
party which are reasonably related to the matters covered by the indemnity
agreement provided in this Section 4. The indemnifying party shall not make any
settlement of any claims indemnified against thereunder without the written
consent of the indemnified party or parties, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing provisions of this Section
4, if pursuant to an underwritten public offering of the Common Stock, the
Company, the selling shareholders and the underwriters enter into an
underwriting or purchase agreement relating to such offering which contains
provisions covering indemnification among the parties thereto in connection with
such offering, the indemnification provisions of this Section 4 shall be deemed
inoperative for purposes of such offering.
(e) CERTAIN LIMITATIONS ON REGISTRATION RIGHTS. The Company's
obligations under Section 1 are also expressly conditioned upon (i) Holders
furnishing to the Company in writing such information
-4-
<PAGE>
concerning Holders and their controlling persons and the terms of such Holders'
proposed offering of Restricted Shares as the Company shall reasonably request
for inclusion in the Registration Statement; and (ii) there not having occurred
a material breach by either Holder of any agreement, covenant, representation or
warranty contained in the Merger Agreement and/or this Agreement.
(f) POOLING COVENANT OF HOLDERS. In consideration of Buyer's covenants
herein and in the Merger Agreement, Holders agree that they will not sell,
transfer or otherwise reduce their interest in any of the shares of the
Company's Common Stock issued pursuant to the Merger Agreement until such time
as the Company has published financial results covering at least thirty (30)
days of combined operations of the Company, Shady and Spectacular after the
Closing Date.
(g) MISCELLANEOUS.
(i) NOTICE GENERALLY. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Agreement shall be sufficiently given or made
if in writing and either delivered in person with receipt acknowledged,
delivered by reputable overnight courier, telecopied and confirmed separately in
writing by a copy mailed as follows or sent by registered or certified mail,
return receipt requested, postage prepaid, addressed as set forth in the Merger
Agreement.
(ii) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto; provided, however, that Holders' rights hereunder may not be transferred
without the written consent of the Company.
(iii) GOVERNING LAW. This Agreement shall be governed by
the laws of the State of Florida, without regard to the provisions thereof
relating to conflict of laws.
(iv) SEVERABILITY. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(v) ENTIRE AGREEMENT. This Agreement, together with the Merger
Agreement, is intended by the parties as a final expression of their agreement
and intended to be a complete exclusive statement of the Agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to the subject matter hereof.
(vi) COUNTERPARTS. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and
separately, constitute one agreement.
- 5 -
<PAGE>
IN WITNESS WHEREOF, the Company and Holders have executed this
Agreement as of the date first above written.
SUNGLASS HUT INTERNATIONAL, INC.
By: /S/GEORGE L. PITA
George L. Pita, Vice President
/S/RANDY GARLIEPP
RANDY GARLIEPP
/S/RICHARD KELTY
RICHARD KELTY
/S/DAVID SAKHRANI
DAVID SAKHRANI
- 6 -
June 3, 1996
Sunglass Hut International, Inc.
255 Alhambra Circle
Coral Gables, Florida 33134
Re: OFFERING OF COMMON STOCK OF SUNGLASS HUT INTERNATIONAL, INC.
Gentlemen:
On the date hereof, Sunglass Hut International, Inc., a Delaware
corporation (the "Company"), filed with the Securities and Exchange Commission a
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"). The Registration Statement
relates to the offering and sale by certain selling stockholders of 2,152,032
shares of the Company's Common Stock, par value $.01 per share (the "Shares").
We have acted as counsel to the Company in connection with the preparation and
filing of the Registration Statement.
In connection therewith, we have examined and relied upon the original
or a copy, certified to our satisfaction, of (i) the Amended and Restated
Certificate of Incorporation and the Amended and Restated Bylaws of the Company;
(ii) resolutions of the Board of Directors of the Company authorizing the
offering and related matters; (iii) the Registration
<PAGE>
Sunglass Hut International, Inc.
May 31, 1996
Page 2
Statement and exhibits thereto; and (iv) such other documents and instruments as
we have deemed necessary or appropriate for the expression of the opinion herein
contained. In making the foregoing examinations, we have assumed the genuineness
of all signatures and the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents submitted
to us as certified or photostatic copies. As to various questions of fact
material to this opinion, we have relied, to the extent we deem reasonably
appropriate, upon representations or certificates of officers or directors of
the Company and upon documents, records and instruments furnished to us by the
Company, without independently checking or verifying the accuracy of such
documents, records and instruments.
Based upon the foregoing examination, we are of the opinion that the
Shares have been duly and validly authorized and issued and are fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement. In
giving such consent, we do not admit that we come within the category of persons
whose consent is required by Section 7 of the Act or the rules and regulations
of the Commission thereunder.
Sincerely,
GREENBERG, TRAURIG, HOFFMAN,
LIPOFF, ROSEN & QUENTEL, P.A.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
March 20, 1996 included in the Form 10-K of Sunglass Hut International, Inc.
for the year ended February 3, 1996 and to all references to our firm included
in this registration statement.
ARTHUR ANDERSEN LLP
Miami, Florida,
May 30, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-3 of Sunglass Hut International, Inc. to be filed on or about May 31,
1996, of our report dated June 29, 1995, on our audits of the financial
statements of Sunsations Sunglass Company as of December 31, 1994 and for each
of the two years in the period ended December 31, 1994, which is included as an
exhibit to Sunglass Hut International, Inc.'s Form 10-K for the year ended
February 3, 1996.
/s/ COOPERS & LYBRAND L.L.P.
Indianapolis, Indiana
May 31, 1996
