<PAGE>
SERENGETI EYEWEAR, INC.
8125 25TH COURT EAST
SARASOTA, FLORIDA 34243
July 20, 2000
Dear Shareholder:
I am pleased to inform you that on July 14, 2000, Serengeti Eyewear, Inc.
entered into an Agreement and Plan of Merger (the "Merger Agreement") with
Worldwide Sports and Recreation, Inc. ("WSR") and its wholly-owned subsidiary,
Sunshine Acquisition, Inc. (the "Purchaser"). The Merger Agreement provides for
the acquisition of all outstanding shares of Serengeti's common stock and
preferred stock. Under the terms of the proposed transaction, the Purchaser is
today commencing a cash tender offer to purchase all outstanding shares of
Serengeti's common stock for $3.95 per share, net of any amount paid to holders
of Serengeti's preferred stock. In addition, the holder of all outstanding
shares of Serengeti's preferred stock has agreed to sell all such shares to
Purchaser for an aggregate purchase price of $22.5 million. Following the
successful completion of the tender offer for the shares of common stock,
Purchaser will be merged into Serengeti and all shares of common stock not
purchased in the tender offer will be converted into the right to receive $3.95
per share in cash, without interest, in the merger. The tender offer is
currently scheduled to expire at 12:00 o'clock midnight, New York City time, on
Wednesday, August 16, 2000.
YOUR BOARD OF DIRECTORS HAS APPROVED THE MERGER AGREEMENT, THE TENDER OFFER
AND THE MERGER AND HAS DETERMINED THAT THE TERMS OF EACH OF THE TENDER OFFER AND
THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF HOLDERS OF SERENGETI COMMON
STOCK. ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT ALL HOLDERS OF
SERENGETI COMMON STOCK ACCEPT THE TENDER OFFER AND TENDER THEIR SHARES OF
SERENGETI COMMON STOCK TO THE PURCHASER PURSUANT TO THE TENDER OFFER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors that are described in the attached
Schedule 14D-9 that is being filed today with the Securities and Exchange
Commission.
Accompanying this letter, in addition to the attached
Solicitation/Recommendation Statement on Schedule 14D-9 relating to the tender
offer, is Purchaser's Offer to Purchase and related materials, including a
letter of transmittal for use in tendering your shares. These documents set
forth the terms and conditions of the Purchaser's tender offer and provide
instructions as to how to tender your shares. I urge you to read the enclosed
materials carefully.
Very truly yours,
[LOGO]
Stephen Nevitt
PRESIDENT
<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-9
(RULE 14D-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
---------------------
SERENGETI EYEWEAR, INC.
(Name of Subject Company)
------------------------
SERENGETI EYEWEAR, INC.
(Name of Person Filing Statement)
COMMON STOCK, PAR VALUE $0.001 PER SHARE
(Title of Class of Securities)
817498 10 8
(CUSIP Number of Class of Securities)
------------------------
STEPHEN NEVITT
PRESIDENT
SERENGETI EYEWEAR, INC.
8125 25TH COURT EAST
SARASOTA, FLORIDA 34243
(941) 359-3599
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing Statement)
------------------------
WITH A COPY TO:
ROBERT L. WINIKOFF, ESQ.
Cooperman Levitt Winikoff Lester & Newman, P.C.
800 Third Avenue
New York, New York 10022
(212) 688-7000
Fax: (212) 755-2839
/ / Check this box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
ITEM 1. SUBJECT COMPANY INFORMATION
The name of the subject company is Serengeti Eyewear, Inc., a New York
corporation. The address of the principal executive offices of Serengeti is 8125
25(th) Court East, Sarasota, Florida 34243. The telephone number of Serengeti is
(941) 359-3599. The title of the class of securities to which this Statement
relates is the common stock, par value $0.001 per share, of Serengeti, of which
2,384,000 shares were issued and outstanding as of July 18, 2000 (the "Shares").
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON
The name, address and telephone number of Serengeti, which is the person
filing this Statement and the subject company, are set forth in Item 1 above.
This Statement relates to a tender offer by Sunshine Acquisition, Inc., a
New York corporation ("Purchaser") and a wholly owned subsidiary of Worldwide
Sports and Recreation, Inc., a Delaware corporation ("Parent"), disclosed in a
Tender Offer Statement on Schedule TO (the "Schedule TO") dated July 20, 2000 to
purchase all outstanding Shares at a price of $3.95 per Share, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated July 20, 2000 (the "Offer to
Purchase"), a copy of which is attached hereto as Exhibit (a)(1), and in the
related Letter of Transmittal (the "Letter of Transmittal"), a copy of which is
attached hereto as Exhibit (a)(2) (which, together with the Offer to Purchase,
as amended or supplemented from time to time, constitute the "Offer").
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of July 14, 2000, among Serengeti, Parent and
Purchaser, pursuant to which, after the completion of the Offer and the
satisfaction or waiver of certain conditions, Purchaser will be merged with and
into Serengeti and Serengeti will be the surviving corporation (the "Merger").
On the effective date of the Merger, each outstanding Share (other than Shares
owned by Parent, Purchaser or any subsidiary of Parent, Purchaser or Serengeti
or held in the treasury of Serengeti or held by shareholders who properly
exercise dissenters' rights, if any), will by virtue of the Merger and without
action by the holder thereof be canceled and converted into the right to receive
an amount in cash equal to the per Share price paid pursuant to the Offer,
without interest thereon, upon the surrender of the certificate formerly
evidencing such Share.
In order to induce Parent and Purchaser to enter into the Merger Agreement,
on July 13, 2000, certain shareholders of Serengeti (I.E., Milton Nevitt, Joseph
Feldman, Stephen Nevitt, Michael Guccione and the Nevitt Family Trust,
collectively, the "Principal Shareholders"), who, in the aggregate, own
1,210,000 Shares, entered into Tender and Voting Agreements (the "Tender and
Voting Agreements") with Parent and Purchaser. Pursuant to the Tender and Voting
Agreements, each Principal Shareholder agreed, among other things, (a) to
tender, in accordance with the terms of the Offer, all of the Shares owned by
such Principal Shareholder, (b) to vote all of the Shares owned by such
Principal Shareholder in favor of the Merger and (c) not to exercise any options
or other rights to acquire any Shares prior to the effective date of the Merger.
The Shares owned by the Principal Shareholders represent approximately 51% of
the Shares computed in accordance with Rule 13d-3(d)(1)(i) under the Securities
Exchange Act of 1934.
According to the Offer to Purchase, the principal executive offices of
Purchaser and Parent are located at 676 North Michigan Avenue, Suite 3300,
Chicago, Illinois 60611.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
Certain contracts, agreements, arrangements or understandings between
Serengeti or its affiliates and certain of its directors, executive officers and
affiliates are, except as noted below, described in the Information Statement of
Serengeti attached to this Statement as Annex A (the "Information Statement").
The Information Statement is being furnished to Serengeti's shareholders
pursuant to Section 14(f) of the
2
<PAGE>
Securities Exchange Act of 1934 (the "Exchange Act"), and Rule 14f-1 issued
under the Exchange Act in connection with Parent's right (after the Purchaser
acquires such number of Shares that would constitute at least 66 2/3% of the
aggregate outstanding Shares pursuant to the Offer) to designate persons to the
Board of Directors of Serengeti (the "Serengeti Board"). The Information
Statement is incorporated herein by reference.
Except as set forth in the response to this Item 3 or in Annex A attached
hereto or as incorporated by reference herein, to the knowledge of Serengeti, as
of the date hereof, there are no material contracts, agreements, arrangements or
understandings or any actual or potential conflicts of interest between
Serengeti or its affiliates and (i) Serengeti, its executive officers, directors
or affiliates or (ii) the Parent, the Purchaser, or their respective executive
officers, directors or affiliates.
THE MERGER AGREEMENT
A summary of the Merger Agreement is contained in Section 11 ("The Merger
Agreement") of the Offer to Purchase and is incorporated herein by reference. A
copy of the Merger Agreement is filed as Exhibit (e)(1) hereto and is
incorporated herein by reference.
TENDER AND VOTING AGREEMENTS
In order to induce Parent and Purchaser to enter into the Merger Agreement,
on July 13, 2000, the Principal Shareholders, who, in the aggregate, own
1,210,000 Shares, entered into the Tender and Voting Agreements with Parent and
Purchaser. Pursuant to the Tender and Voting Agreements, each Principal
Shareholder agreed, among other things, (a) to tender, in accordance with the
terms of the Offer, all of the Shares owned by such Principal Shareholder, (b)
to vote all of the Shares owned by such Principal Shareholder in favor of the
Merger and (c) not to exercise any options or other rights to acquire any Shares
prior to the effective date of the Merger.
Copies of the Tender and Voting Agreements are filed as Exhibits (e)(2)(i),
(e)(2)(ii), (e)(2)(iii), (e)(2)(iv) and (e)(2)(v) hereto and are incorporated
herein by reference.
CONSULTING AND NONCOMPETITION AGREEMENT
On July 14, 2000, Purchaser, Serengeti and Stephen Nevitt (the President and
a director of Serengeti) entered into a Consulting and Noncompetition Agreement
for a term of 3 years commencing on the date of the consummation of the Offer
(the "Term"). Pursuant to the Consulting and Noncompetition Agreement,
Mr. Nevitt will be engaged by Serengeti as a consultant and advisor with respect
to matters relating to the business of Serengeti. The consideration payable to
Mr. Nevitt pursuant to the Consulting and Noncompetition Agreement consists of:
- $900,000 payable in 12 equal quarterly installments of $75,000;
- the transfer to Mr. Nevitt by Serengeti of title to the automobile
currently used by Mr. Nevitt, free and clear of all debt, liens and other
encumbrances; and
- the provision by Serengeti of family health benefits consistent with those
provided to senior executives of the Parent.
Mr. Nevitt has also agreed that, during the Term, he will not, directly or
indirectly, be engaged or have a financial interest in (other than 5% or less of
the voting securities of any publicly traded entity), or provide any services
to, any person or other entity engaged or interested in the manufacture, sale or
distribution of sunglasses or related products which is carried on within or
from, or directed at, or whose products or services are sold or distributed
within, from or into any place in North America.
A copy of the Consulting and Noncompetition Agreement is filed as
Exhibit (e)(3) hereto and is incorporated herein by reference.
3
<PAGE>
PREFERRED STOCK AND ESCROW AGREEMENT
In January 1998, RBB Bank Aktiengesellschaft filed a complaint against
Serengeti and numerous other parties in the United States District Court,
Southern District of New York in connection with the purchase by RBB of
22,500 shares of Serengeti's convertible preferred stock for an aggregate
purchase price of $22,500,000 (the "Preferred Stock Litigation"). On July 14,
2000, Parent, Purchaser and RBB entered into a Preferred Stock and Escrow
Agreement providing for the purchase by Purchaser of all shares of such
convertible preferred stock for $22,500,000 plus a payment to RBB of $250,000 as
partial reimbursement of legal fees in connection with the Preferred Stock
Litigation. Pursuant to the Preferred Stock and Escrow Agreement, Purchaser has
agreed to deposit with an escrow agent, within two business days after the
consummation of the Offer, an aggregate amount equal to $21,750,000 in cash and
a note in the amount of $1,000,000. The escrow deposit will be released to RBB
upon delivery by RBB to the escrow agent of the preferred stock certificates and
evidence that the Preferred Stock Litigation has been dismissed with prejudice.
A copy of the Preferred Stock and Escrow Agreement is filed as
Exhibit (e)(4) hereto and is incorporated herein by reference.
CONFLICT OF INTEREST
David Newman, Stephen Nevitt, Milton Nevitt, Michael Guccione and William
Keener, each a member of the Serengeti Board, and Cooperman Levitt Winikoff
Lester & Newman, P.C., a law firm in which Mr. Newman is a partner and which
renders legal services on behalf of Serengeti, are each named defendants in the
Preferred Stock Litigation. In the event that the Offer is completed, the
Preferred Stock Litigation will be settled and these persons will each be
released from any and all potential liability in connection with such
litigation. See "Preferred Stock and Escrow Agreement" above.
STAY AGREEMENTS WITH CERTAIN EMPLOYEES
To provide an incentive for certain employees of Serengeti to continue to
serve as employees during the negotiation of the transactions contemplated by
the Merger Agreement and during the pendency of the Offer, and to ensure the
successful completion of the transactions contemplated by the Merger Agreement
and the orderly operation of Serengeti's business during the period between the
commencement and completion of the Offer, Serengeti has agreed to make certain
payments to such employees upon the successful completion of the Offer. In the
event that such employees are employed by Serengeti on the date that the Offer
is completed, Serengeti will pay to the following employees the amount set forth
opposite their respective names:
<TABLE>
<CAPTION>
EMPLOYEE NAME AMOUNT
------------- --------
<S> <C>
William L. McMahon......................................... $75,000
Lucia Almquist............................................. $50,000
Jeffrey Rubin.............................................. $25,000
Colleen Riley.............................................. $25,000
Alison MacDonald........................................... $27,500
</TABLE>
CONFIDENTIALITY AGREEMENT
Serengeti and Parent are parties to a Confidentiality Agreement, dated as of
October 8, 1999, containing customary terms. A copy of the Confidentiality
Agreement is filed as Exhibit (e)(5) hereto and is incorporated herein by
reference.
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<PAGE>
STOCK OPTION PLAN
Pursuant to the Merger Agreement, each option to purchase Shares (each an
"Option") pursuant to Serengeti's 1995 Stock Option Plan that is outstanding as
of the effective date of the merger, whether or not then vested or exercisable,
will be terminated and canceled. At the effective date of the merger, all
holders of canceled Options, whether or not then vested or exercisable, having
an exercise price per Share that is less than the per Share price in the Offer
and the Merger will receive in exchange for such canceled Options the right to
receive in cash, without interest, a single lump sum payment equal to the
product of (1) the number of Shares subject to such Option and (2) the excess of
the per Share price in the Offer and the Merger over the exercise price per
Share of such Option, and all holders of canceled Options, whether or not then
vested or exercisable, having an exercise price per Share that is greater than
the per Share price in the Offer and the Merger will receive no consideration in
exchange for such canceled Options. There are currently outstanding Options to
purchase an aggregate of 905,000 Shares, which Options have an exercise price
per Share that is less than the per Share price in the Offer and the Merger.
Pursuant to the Merger Agreement, the holders of such Options will receive an
aggregate of $848,030 in exchange for the canceled Options or individually as
follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES CONSIDERATION TO
NAME* UNDERLYING OPTIONS BE RECEIVED
----- ------------------ ----------------
<S> <C> <C>
Stephen Nevitt............................... 750,000 $706,480
Michael Guccione............................. 75,000 $ 75,750
David Newman................................. 50,000 $ 35,500
Jerome Werbner............................... 25,000 $ 25,250
Jeffrey Rubin................................ 5,000 $ 5,050
</TABLE>
------------------------
* Each of such persons has agreed not to exercise any options or other rights
to acquire any Shares prior to the effective date of the Merger. Copies of
the Tender and Voting Agreements, which were executed by Messrs. Nevitt and
Guccione, are filed as Exhibits (e)(2)(iii) and (e)(2)(iv) hereto and are
incorporated herein by reference. Copies of the Standstill Agreements, which
were executed by Messrs. Newman, Werbner and Rubin, are filed as
Exhibits (e)(6)(i), (e)(6)(ii) and (e)(6)(iii) hereto and are incorporated
herein by reference.
LEGAL SERVICES
Certain of Serengeti's legal services are rendered by Cooperman Levitt
Winikoff Lester & Newman, P.C. Fees incurred during 1999, 1998 and 1997 to such
firm approximated $410,000, $370,000 and $565,000, respectively.
INDEMNIFICATION
Section 721 through 726 of the Business Corporation Law of the State of New
York provide that a corporation may indemnify any persons who are (or are
threatened to be made) parties to any action or proceeding, whether civil or
criminal, by reason of their being officers or directors of the corporation or
serving at the request of the corporation as a director or officer of any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise, against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys fees actually and necessarily incurred
as a result of such action or proceeding; provided that the officer or director
acted in good faith, for a purpose that such officer or director reasonably
believed to be in or, in the case of service for any other corporation or any
partnership, joint venture, trust employee benefit plan or other enterprise, not
opposed to, the best interests of the corporation and, in the case of criminal
actions or proceedings, in addition, such officer or director had no reasonable
cause to believe that his conduct was unlawful. In the case of derivative
actions, no indemnification is allowed in the case of (i) a threatened action,
or a pending action which is settled or otherwise disposed of, or (ii) any
claim, issue or matter as to which such person
5
<PAGE>
has been adjudged liable to the corporation, unless and only to the extent that
a court of competent jurisdiction determines that the person is fairly and
reasonably entitled to indemnity for such portion of the settlement amount and
expenses as the court deems proper. An officer or director who is successful, on
the merits or otherwise, in defense of such civil or criminal action or
proceeding is entitled to indemnification.
Article SEVENTH of Serengeti's Restated Certificate of Incorporation
provides as follows:
The Corporation shall, to the fullest extent permitted by the
Business Corporation Law of the State of New York, indemnify any
and all persons who it shall have the power to indemnify from and
against any and all expenses, costs, liabilities and other matters
as provided under Article 7 of the Business Corporation Law of the
State of New York, as from time to time in effect.
Article VII of Serengeti's Amended and Restated By-Laws provides as follows:
The Corporation shall indemnify any person to the full extent
permitted, and in the manner provided, by the New York Business
Corporation Law, as the same now exists or may hereafter be
amended.
A summary of the indemnification provisions of the Merger Agreement is
contained in Section 11 ("The Merger Agreement") of the Offer to Purchase and is
incorporated herein by reference.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) RECOMMENDATION OF THE SERENGETI BOARD
The Serengeti Board held a special telephonic board meeting on July 13, 2000
to consider the Merger Agreement and the transactions contemplated thereby. At
the special meeting, the Serengeti Board (1) approved the Merger Agreement, the
Offer and the Merger, (2) determined that the Offer and the Merger and the
transactions contemplated in the Merger Agreement are in the best interests of
Serengeti and the holders of Shares and are fair to the holders of Shares, and
(3) recommended that holders of Shares accept the Offer and, if required by
applicable law, approve the Merger.
THE SERENGETI BOARD RECOMMENDS THAT HOLDERS OF SHARES ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
A copy of a letter to the holders of Shares communicating such approval and
recommendation is filed as Exhibit (a)(3) to this Statement and is incorporated
herein by reference.
(b) REASONS FOR THE SERENGETI BOARD'S RECOMMENDATION
In reaching the conclusions and recommendations described in paragraph (a)
of this Item 4, the Serengeti Board considered a number of factors, including,
but not limited to, the following:
- The presentations and views expressed by Serengeti's management regarding,
among other things, the financial condition, results of operations, cash
flows, business and prospects of Serengeti, including the prospects of
Serengeti if Serengeti were to remain independent.
- The views expressed by management and the Serengeti Board's conclusion
that it was not likely that any other party would enter into a transaction
that was more favorable to Serengeti and its shareholders which would also
provide for the purchase all outstanding shares of Serengeti's preferred
stock on terms acceptable to the holder of such preferred stock.
- The fact that the willingness of Purchaser to purchase all outstanding
shares of Serengeti's preferred stock for an aggregate purchase price of
$22.5 million would enable Serengeti to settle outstanding litigation with
the holder of such preferred stock, thus eliminating the uncertainty
created by such litigation. The Serengeti Board noted that the preferred
stock was originally issued for an aggregate purchase price of
$22.5 million and that stock dividends aggregating $2,884,000
6
<PAGE>
were issued on such preferred stock as of June 30, 2000 and stock
dividends aggregating $2,398,000 were accrued and unissued on such
preferred stock as of June 30, 2000.
- That the $3.95 per Share to be paid in the Offer and the Merger represents
a premium of approximately 37% over the $2.875 closing sale price for the
Shares on July 13, 2000, the last trading day prior to the special meeting
of the Serengeti Board; a premium of approximately 46% over the $2.70
average closing sale price for the Shares for the six month period ended
July 13, 2000; and a premium of approximately 132% over the $1.70 average
closing sale price for the Shares for the 12 month period ended July 13,
2000.
- The fact that the purchase price would be payable in cash, thus
eliminating any uncertainties in valuing the consideration to be received
by Serengeti's shareholders.
- The fact that the Offer and the Merger provide for a prompt cash tender
offer for all Shares to be followed by a merger for the same
consideration, thereby enabling Serengeti's shareholders to obtain cash in
exchange for their shares at the earliest possible time.
- The terms and conditions of the Merger Agreement and the course of the
negotiations resulting in the execution thereof. The Serengeti Board
viewed favorably that the Merger Agreement provides that if the Offer or
the Merger Agreement is terminated by any party due to the Purchaser's
failure to obtain financing, and such failure to obtain financing is not
related to a material adverse change in Serengeti or a failure of the 90%
tender condition, Parent will be obligated to pay certain of Serengeti's
expenses and, in most cases, to pay a fee of $1,000,000 to Serengeti.
- The fact that the Merger Agreement permits Serengeti, under certain
circumstances, to enter into or participate in discussions or negotiations
with any person who makes an unsolicited bona fide written offer to
acquire Serengeti that could lead to a Superior Proposal (as defined in
the Merger Agreement).
- Provisions of the Merger Agreement that allow the Serengeti Board to
terminate the Merger Agreement if, prior to the closing of the Offer,
Serengeti has received a Superior Proposal and the Serengeti Board
determines, in its good faith judgment after consultation with independent
legal counsel, that termination of the Merger Agreement would be
consistent with its fiduciary duties under applicable law.
- The fact that the only regulatory qualification required to consummate the
Merger was expiration or termination of the waiting period under the HSR
Act, and the favorable prospects for obtaining such qualification.
The Serengeti Board also identified and considered a number of uncertainties
and risks in its deliberations concerning the Offer and the Merger, including
the following:
- The fact that the obligation of Purchaser to accept Shares in the Offer is
subject to certain conditions including, but not limited to, Purchaser
obtaining financing in an amount sufficient to effectuate payment for the
Shares.
- The fact that Purchaser is entitled to terminate the Offer in the event
that certain conditions with respect to Serengeti are not met, including
with respect to indebtedness and working capital of Serengeti.
- The possibility that, although the Offer gives Serengeti's shareholders
the opportunity to realize a premium over the price at which the Shares
traded immediately prior to the public announcement of the Offer and the
Merger, the price or value of the Shares may increase in the future, and
holders of Shares would not benefit from such future increases.
- The fact that, if Serengeti were to exercise its right to terminate the
Merger Agreement in connection with the receipt of a Superior Proposal, a
$1.5 million termination fee would become payable by Serengeti to
Purchaser.
7
<PAGE>
The members of the Serengeti Board evaluated the factors described above in
view of their knowledge of the business and operations of Serengeti and their
business judgment. In view of the wide variety of factors considered by the
Serengeti Board, it did not find it practical to, and did not, quantify or
otherwise assign relative weights to the foregoing factors or determine that any
factor was of particular importance. Rather, the Serengeti Board viewed its
position and recommendation as being based on the totality of the information
presented to and considered by it. In addition, individual members of the
Serengeti Board may have given different weight to different factors. Having
considered all the foregoing, and other relevant factors, the Serengeti Board
determined to approve the Merger Agreement and recommend that holders of Shares
tender their Shares in the Offer.
Shareholders should take note of the fact that the settlement of the
Preferred Stock Litigation would result in the release of certain members of the
Serengeti Board from potential liability in connection therewith, as certain of
the members of the Serengeti Board are named as defendants in the Preferred
Stock Litigation. Each member of the Serengeti Board who is not named as a
defendant in the Preferred Stock Litigation was present at the special meeting
of the Serengeti Board held on July 13, 2000 and each such director voted to
approve the Offer, the Merger and the Merger Agreement. See "Conflict of
Interest" under Item 3 above.
It is expected that, if the Shares are not purchased by Purchaser in
accordance with the terms of the Offer or if the Merger is not consummated,
Serengeti's current management, under the general direction of the Serengeti
Board, will continue to manage Serengeti as an ongoing business.
To the best of Serengeti's knowledge, except for Shares the sale of which
may trigger liability for the holder(s) under Section 16(b) of the Exchange Act,
all executive officers and directors of Serengeti intend to tender to Purchaser
all Shares held by such persons. In addition, as of the date hereof, holders of
approximately 51% of Shares have entered into Tender and Voting Agreement with
the Purchaser pursuant to which such shareholders have agreed, among other
things, to validly tender (and not withdraw) all Shares owned by them in the
Offer and to vote the Shares owned by such shareholders in favor of the Merger.
This summary is qualified in its entirety by reference to the Tender and Voting
Agreements, copies of which are attached hereto as Exhibits (e)(2)(i),
(e)(2)(ii), (e)(2)(iii), (e)(2)(iv) and (e)(2)(v) and are incorporated herein by
reference.
ITEM 5. PERSON/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED
Neither Serengeti nor any person acting on its behalf has employed, retained
or agreed to compensate any person or class of persons to express any opinion as
to the fairness of the Offer, from a financial point of view, to the
shareholders of Serengeti or to make solicitations or recommendations on its
behalf concerning the Offer.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
No transactions in the Shares have been effected during the past 60 days by
Serengeti or by any executive officer, director, affiliate or subsidiary of
Serengeti.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
(a) Except as set forth above, Serengeti is not engaged in any negotiation
in response to the Offer which relates to or would result in (i) any
extraordinary transaction, such as a merger, reorganization or liquidation,
involving Serengeti; or (ii) any purchase, sale or transfer of a material amount
of assets of Serengeti; or (iii) any material change in the present dividend
rate or policy, or indebtedness or capitalization of Serengeti.
(b) Except as described in Items 3 and 4 above, there are no transactions,
Serengeti Board resolutions, agreements in principle or signed contracts in
response to the Offer that relate to or would result in one or more of the
events referred to in Item 7(a) above.
8
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ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
The Information Statement attached hereto as Annex A is being furnished in
connection with the contemplated designation by Parent, pursuant to the Merger
Agreement, of certain persons to the Serengeti Board following the purchase by
Purchaser of at least 66 2/3% of the Shares.
NEW YORK STATE LAW
A summary of selected provisions of the New York Business Corporation Law is
contained in Section 16 ("Certain Legal Matters") under the caption "State
Takeover Laws" of the Offer to Purchase and is incorporated herein by reference.
ANTITRUST
A summary of antitrust concerns related to the Offer is contained in
Section 16 ("Certain Legal Matters") under the caption "Antitrust in the United
States" of the Offer to Purchase and is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT NAME
------- ------------
<S> <C>
(a)(1) Offer to Purchase, dated July 20, 2000
(a)(2) Form of Letter of Transmittal
(a)(3) Letter to Shareholders of Serengeti Eyewear, Inc., dated as
of July 20, 2000*
(e)(1) Agreement and Plan of Merger, dated as of July 14, 2000,
among Parent, Purchaser and Serengeti
(e)(2)(i) Tender and Voting Agreement, dated as of July 13, 2000,
among Parent, Purchaser and Milton Nevitt
(e)(2)(ii) Tender and Voting Agreement, dated as of July 13, 2000,
among Parent, Purchaser and Joseph Feldman
(e)(2)(iii) Tender and Voting Agreement, dated as of July 13, 2000,
among Parent, Purchaser and Stephen Nevitt
(e)(2)(iv) Tender and Voting Agreement, dated as of July 13, 2000,
among Parent, Purchaser and Michael Guccione
(e)(2)(v) Tender and Voting Agreement, dated as of July 13, 2000,
among Parent, Purchaser and the Nevitt Family Trust
(e)(3) Consulting and Noncompetition Agreement, dated as of July
14, 2000, among Stephen Nevitt, Serengeti, Parent and
Purchaser
(e)(4) Preferred Stock and Escrow Agreement, dated as of July 14,
2000 among RBB Bank Aktiengesellschaft, Parent, Purchaser
and Baker Hostetler LLP, as escrow agent
(e)(5) Confidentiality Agreement, dated as of October 8, 1999,
between Serengeti and Parent
(e)(6)(i) Standstill Agreement, dated as of July 13, 2000 among
Parent, Purchaser and
David Newman
(e)(6)(ii) Standstill Agreement, dated as of July 13, 2000 among
Parent, Purchaser and
Jerome Werbner
(e)(6)(iii) Standstill Agreement, dated as of July 13, 2000 among
Parent, Purchaser and
Jeffrey Rubin
</TABLE>
------------------------
* Included in the Schedule 14D-9 mailed to Serengeti's shareholders.
9
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
<TABLE>
<S> <C> <C>
SERENGETI EYEWEAR, INC.
By: /s/ STEPHEN NEVITT
----------------------------
Name: Stephen Nevitt
Title: PRESIDENT
</TABLE>
Dated: July 20, 2000
10
<PAGE>
ANNEX A
SERENGETI EYEWEAR, INC.
8125 25TH COURT EAST
SARASOTA, FLORIDA 34243
------------------------
INFORMATION STATEMENT PURSUANT
TO SECTION 14(f) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER
------------------------
NO VOTE OR OTHER ACTION OF SERENGETI'S SHAREHOLDERS
IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT.
NO PROXIES ARE BEING SOLICITED AND YOU ARE REQUESTED NOT
TO SEND SERENGETI A PROXY.
------------------------
This Information Statement, which is being mailed on or about July 20, 2000
to the holders of shares of common stock, par value $0.001 per share (the
"Shares") of Serengeti Eyewear, Inc., a New York corporation, is being furnished
in connection with the possible designation by Sunshine Acquisition, Inc., a New
York corporation ("Purchaser") and a wholly owned subsidiary of Worldwide Sports
and Recreation, Inc., a Delaware corporation ("Parent"), of persons to the Board
of Directors of Serengeti (the "Serengeti Board"). Such designation is to be
made pursuant to an Agreement and Plan of Merger dated as of July 14, 2000 (the
"Merger Agreement") among Serengeti, Parent and the Purchaser.
The terms of the Merger Agreement, a summary of the events leading up to the
Offer and the execution of the Merger Agreement and other information concerning
the Offer and the Merger are contained in the Offer to Purchase and in the
Solicitation/ Recommendation Statement on Schedule 14D-9 of Serengeti (the
"Schedule 14D-9") with respect to the Offer, copies of which are being delivered
to shareholders of Serengeti contemporaneously herewith. Certain other documents
(including the Merger Agreement) were filed with the Securities and Exchange
Commission (the "SEC") as exhibits to the Schedule 14D-9 and as exhibits to the
Tender Offer Statement on Schedule TO of the Purchaser and Parent (the "Schedule
TO"). The exhibits to the Schedule 14D-9 and the Schedule TO may be examined at,
and copies thereof may be obtained from, the regional offices of and public
reference facilities maintained by the SEC (except that the exhibits thereto
cannot be obtained from the regional offices of the SEC) in the manner set forth
in Section 7 ("Certain Information Concerning the Company") of the Offer to
Purchase.
No action is required by the shareholders of Serengeti in connection with
the election or appointment of the Purchaser Designees (as defined below) to the
Serengeti Board. However, Section 14(f) of the Securities Exchange Act of 1934,
requires the mailing to Serengeti's shareholders of the information set forth in
this Information Statement prior to a change in a majority of Serengeti's
directors otherwise than at a meeting of Serengeti's shareholders.
The information contained in this Information Statement concerning the
Parent, the Purchaser and the Purchaser Designees has been furnished to
Serengeti by such persons, and Serengeti assumes no responsibility for the
accuracy or completeness of such information. The Schedule TO indicates that the
principal executive office of the Parent and Purchaser is located at 676 North
Michigan Avenue, Suite 3300, Chicago, Illinois 60611.
A-1
<PAGE>
The Shares are the only class of voting securities of Serengeti entitled to
vote for the election of directors. Each Share is entitled to one vote. As of
July 18, 2000, there were 2,384,000 Shares outstanding. The Serengeti Board
currently consists of nine members. Each director holds office until his
successor is elected and qualified or until his earlier death, resignation or
removal.
BOARD OF DIRECTORS
RIGHT TO DESIGNATE DIRECTORS
The Merger Agreement provides that, if requested by the Parent, Serengeti
will, promptly following the purchase by Purchaser of at least 66 2/3% of the
outstanding Shares pursuant to the Offer, take all necessary action to cause a
number of persons designated by the Parent (the "Purchaser Designees"), rounded
up to the next whole number, to constitute a percentage of the members of the
Board of Directors equal to the percentage of Shares outstanding owned by
Purchaser and its affiliates, including by accepting resignations of those
incumbent directors designated by Serengeti or increasing the size of the
Serengeti Board and causing the Purchaser designees to be elected.
It is expected that the Purchaser Designees may assume office at any time
following the purchase by Purchaser of at least 66 2/3% of the Shares, which
purchase cannot be earlier than August 16, 2000, and that, upon assuming office,
the Purchaser Designees will thereafter constitute at least a majority of the
Serengeti Board.
Biographical information concerning each of the Purchaser Designees and the
current directors of Serengeti is presented on the following pages.
PURCHASER DESIGNEES
As of the date of this Information Statement, Parent has not determined who
will be the Purchaser Designees. The following table, prepared from information
furnished to Serengeti by Parent, sets forth certain information for each of the
persons who may be designated by Parent as Purchaser Designees. If necessary,
Parent may choose additional or other Purchaser Designees, subject to the
requirements of Rule 14f-1. Each such person is a citizen of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND CURRENT BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
--------------------------------- --------------------------------------------------
<S> <C>
Richard R. Kracum ........................... Chairman of the Board of Directors of Parent since
Wind Point Partners August 1999 and President and Secretary of Purchaser
676 N. Michigan Avenue, Suite 3300 since June 2000. Managing Director of Wind Point
Chicago, IL 60611 Partners, a private equity fund headquartered in
Chicago, Illinois ("Wind Point") since 1986. A
founder of Wind Point Partners III, L.P., a $215
million private equity fund in 1997 and a founder of
Wind Point Partners IV, L.P., a $400 million private
equity fund in 2000.
B. Joseph Messner ........................... President and Chief Executive Officer of Parent since
Worldwide Sports & Recreation August 1999 and Vice President of Purchaser since
9200 Cody June 2000. From 1996 to 1997, Mr. Messner was the CEO
Overland Park, KS 66214 of First Alert, a publicly held manufacturer of smoke
alarms. Prior to this position, Mr. Messner was
President of Bushnell, a division of Bausch & Lomb
from 1989 to 1995.
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
NAME AND CURRENT BUSINESS ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
--------------------------------- --------------------------------------------------
<S> <C>
Dan DalleMolle .............................. Director of Parent since November 1999. Group
Newell Rubbermaid President, Hardware & Tools Division of Newell
One Millington Road Rubbermaid since January 2000. Prior to joining
Beloit, WI 53511 Newell Rubbermaid, Mr. DalleMolle served as President
and Chief Operating Officer of Intermatic, Inc., and
served as President of both LeeRowan Company and
Anchor Hocking Specialty Glass, each a division of
Newell. Mr. DalleMolle is currently on the Board of
Directors of Juno Lighting.
Jack Hoeft .................................. Director of Parent since November 1999. President and
MedHelp.com Chief Executive Officer of MedHelp.com since January
275 7(th) Avenue 2000. Prior to MedHelp, Mr. Hoeft served as Chairman
Suite 2300 and Chief Executive Officer of Bantam Doubleday Dell
New York, NY 10001 Publishing Group, and held various senior positions
at Bantam Books, Harlequin Enterprises and PepsiCo.
Mr. Hoeft is currently on the Supervisory Board of
Random House, on the Board of Directors of IDG Books
and a Trustee of The University of Dayton.
Norman Singer ............................... Director of Parent since August 1999 and of Purchaser
460 S. Marion Street since June 2000. Mr. Singer served as Chairman of the
#1504C Board of Directors of Parent from 1997 to 1999. He is
Denver, CO 80209 also a licensed attorney and in his capacity as a
Director also represents the remaining minority
interests of a predecessor of Parent.
Salam Chaudhary ............................. Assistant Secretary of Parent and Vice President and
Worldwide Sports and Recreation, Inc. Assistant Secretary of Purchaser since June 2000. Mr.
c/o Wind Point Partners Chaudhary joined Wind Point as an Associate in 1997
One Towne Square, Suite 780 and is currently a Vice-President. Prior to working
Southfield, MI 48076 at Wind Point Partners, he was an analyst at First of
Michigan Corporation, an investment bank, from 1996
to 1997 and the head analyst at Health Care REIT, a
publicly traded real estate investment trust, from
1995 to 1996.
John E. Bentley ............................. Vice President of Purchaser since June 2000.
Wind Point Partners Mr. Bentley joined Wind Point as an Associate in
676 N. Michigan Avenue, Suite 3300 1999. Prior to working at Wind Point Partners, he was
Chicago, IL 60611 an analyst at Lehman Brothers, an investment bank,
from 1997 to 1999.
</TABLE>
Parent has advised Serengeti that to the best knowledge of Parent, none of
the Purchaser Designees currently is a director of, or holds any position with,
Serengeti, and except as disclosed in the Offer to Purchase, none of the
Purchaser Designees beneficially owns any securities (or rights to acquire any
securities) of Serengeti or has been involved in any transactions with Serengeti
or any or its directors, executive officers or affiliates that are required to
be disclosed pursuant to the rules of the SEC, except as may be disclosed in the
Offer to Purchase. To the knowledge of Parent and Purchaser, none of the
Purchaser Designees has any family relationship with any current director or
executive officer of Serengeti.
Parent has advised Serengeti that each of the persons listed in the table
above has consented to act as a director, and that none of such persons has
during the last five years been convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors) or was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was, or is,
A-3
<PAGE>
subject to a judgement, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violation of such laws or is involved in any other legal proceeding which is
required to be disclosed under Item 401 (f) of Regulation S-K promulgated by the
SEC.
CURRENT DIRECTORS OF SERENGETI
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---- -------- -------------------------------------- --------
<S> <C> <C> <C>
Stephen Nevitt........................ 52 Mr. Nevitt became the President of 1976
Serengeti in 1993. Prior to such time,
he served as Vice President of
Serengeti since its founding in 1976
by his father, Milton Nevitt. As Vice
President, he was involved in all
phases of operations including
management and sales. As President he
has been given primary responsibility
for management and sales and has also
been responsible for design and
development of Serengeti's products as
well as product procurement.
Milton Nevitt......................... 79 Mr. Nevitt founded Serengeti in 1976 1976
and served as its President since
1993, and has since served Serengeti
as a Vice President. As President,
Mr. Nevitt was primarily responsible
for sales and administration.
Mr. Nevitt's career in the sunglass
industry began in 1950 as a
manufacturer's representative for
Rayex Corporation, a major domestic
supplier of popular priced sunglasses.
Mr. Nevitt worked in that capacity
until Rayex ceased its business
operations in 1976. Mr. Nevitt founded
Serengeti shortly thereafter.
</TABLE>
A-4
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---- -------- -------------------------------------- --------
<S> <C> <C> <C>
Michael J. Guccione................... 52 Mr. Guccione became a Vice President 1994
of Serengeti in December 1994. Since
joining Serengeti in 1992,
Mr. Guccione's primary
responsibilities have been marketing
and product development of Serengeti's
H2Optix and other product lines.
Mr. Guccione became employed by Wal-
Mart in 1976 and started and headed
its fine jewelry division.
Mr. Guccione was also in charge of the
development of the sunglass business
at Wal-Mart and traveled extensively
throughout the Far East and Pacific
Rim for the purpose of developing
resources for the purchase of
sunglasses. After leaving Wal-Mart in
1990, Mr. Guccione ran a management
consulting firm until joining
Serengeti.
Douglas Hinton........................ 44 Mr. Hinton became Vice President-- 1999
Premium Sales of Serengeti in 1998.
From 1997 until joining Serengeti,
Mr. Hinton was National Sales Manager
for Bucci, Inc. From 1996 to 1997,
Mr. Hinton was Senior Vice
President/Sales and Marketing for
Optic Video USA. From 1990 to 1996,
Mr. Hinton was Senior Vice President/
Optical & Golf Divisions for Bolle
USA.
William McMahon....................... 47 Mr. McMahon became the Chief Financial 1998
Officer of Serengeti in June 1998.
From 1992 until joining Serengeti,
Mr. McMahon was Director of Financial
Reporting and Corporate Development
for Uniroyal Technology Corporation, a
plastics manufacturing company. From
1984 until 1992, Mr. McMahon was a
vice president of Buccino and
Associates, Inc. a national turnaround
consulting firm.
David B. Newman....................... 45 Mr. Newman has for over the last ten 1994
years been a partner of Cooperman
Levitt Winikoff Lester & Newman, P.C.,
which has acted as outside counsel to
Serengeti since 1987.
</TABLE>
A-5
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
---- -------- -------------------------------------- --------
<S> <C> <C> <C>
William Keener........................ 54 Mr. Keener has served as Senior Vice 1996
President and Regional Credit Officer
for Regions Bank in Aiken, South
Carolina since September 1998. Prior
to this, he served as an Executive
Vice President and Chief Credit
Officer of SouthTrust Bank of the
Suncoast, a commercial bank, since
May 1994 to September 1997. From
March 1990 to May 1994, Mr. Keener
served as a Senior Vice President and
Group President for Commercial Lending
and, thereafter, as First
Vice-President for Commercial Real
Estate for Sunbank, N.A., a commercial
bank.
Jeffrey B. Sack....................... 38 Dr. Sack is board certified in 1998
internal medicine and cardiovascular
disease and currently practices in
Sarasota, Florida. Dr. Sack has a
degree in economics and over twenty
years of business experience in the
management of small growth companies.
John Kopinski......................... 47 Mr. Kopinski has been serving as 1998
President of Rikart South, Inc. in
Bradenton, Florida for the past ten
years. Rikart South, Inc. is a leader
in the manufacturing of polyethylene
bags.
</TABLE>
INFORMATION CONCERNING THE BOARD
The Serengeti Board has an Audit Committee and a Stock Option Committee. The
Serengeti Board has no nominating or compensation committee; nominees for
election as directors of Serengeti are selected by the Board of Directors.
During 1999, the Audit Committee met once and the Stock Option Committee did not
meet.
The Audit Committee consists of three directors, two of whom are independent
directors. The current members of the Audit Committee are William Keener,
Dr. Jeffrey B. Sack and Stephen Nevitt. Its functions are to (i) recommend the
appointment of independent accountants, (ii) review the arrangements for and
scope of the audit by independent accountants, (iii) review the independence of
the independent accountants, (iv) consider the adequacy of the system of
internal accounting controls and review any proposed corrective actions,
(v) review and monitor Serengeti's policies regarding business ethics and
conflicts of interest, (vi) discuss with management and the independent
accountants Serengeti's annual financial statements and key accounting and
reporting matters and (vii) review the activities and recommendations of
Serengeti's accounting department.
The Stock Option Committee is presently comprised of two non-employee
directors, William Keener and David B. Newman. The Stock Option Committee
administers Serengeti's 1995 Stock Option Plan (the "Plan") and determines,
among other things, the time or times at which options will be granted, the
recipients of grants, whether a grant will consist of incentive stock options,
nonqualified stock options and stock appreciation rights (in tandem with an
option or free-standing) or a combination thereof, the option periods, the
limitations on option exercise and the number of shares to be subject to such
options, taking
A-6
<PAGE>
into account the nature and value of services rendered and contributions made by
the recipient to the success of Serengeti. The Stock Option Committee also has
authority to interpret the Plan and, subject to certain limitations, to amend
provisions of the Plan as it deems advisable.
During 1999, the Serengeti Board held three meetings.
DIRECTORS' COMPENSATION
William Keener, a non-employee director of Serengeti, receives a fee of $500
per month for his service as a director. No other non-employee director receives
any compensation for his services as such.
EXECUTIVE COMPENSATION
The following table summarizes the aggregate compensation for services
rendered in all capacities to Serengeti paid in 1997, 1998 and 1999 to the Chief
Executive Officer and Serengeti's four most highly paid executive officers whose
compensation exceeded $100,000 (collectively, the "Named Executives"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION COMPENSATION
--------------------------- -------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Stephen Nevitt............................ 1999 $250,000 -- $52,487 --
President (CEO) 1998 $232,761 -- $49,909 --
1997 $167,363 -- $11,590 --
Lucia Almquist............................ 1999 $175,000 -- $ 6,000 --
Vice President 1998 $156,173 -- $ 8,505 --
1997 $141,346 -- $ 2,980 --
Ed Borix(2)............................... 1999 $140,000 -- $ 6,000 --
Vice President 1998 $137,404 -- $ 8,505 --
1997 $103,366 -- $ 1,650 --
Michael Burke(2).......................... 1999 $ 86,154 -- $ 2,769 $100,000
Vice President 1998 $166,173 -- $10,276 --
1997 $156,923 -- $ 1,777 --
Doug Hinton............................... 1999 $129,423 -- $16,377 $ 4,108
Vice President 1998 -- -- -- --
1997 -- -- -- --
William McMahon........................... 1999 $139,769 $10,000 $ 6,000 --
Chief Financial Officer 1998 $ 67,500 -- $ 4,308 --
1997 -- -- -- --
</TABLE>
------------------------
(1) Messrs. Burke and Borix and Ms. Almquist received their respective salaries
for the year ended December 31, 1998 at their respective 1997 salary rates.
(2) Messrs. Borix and Burke left the employ of Serengeti on February 21, 2000
and July 9, 1999, respectively.
(3) Includes automobile allowances and vacation paid in lieu of time taken.
(4) Michael Burke received severance of $100,000 in 1999.
A-7
<PAGE>
OPTION GRANTS IN 1999
No options were granted to any of Serengeti's directors or executive
officers during the year ended December 31, 1999.
OPTION EXERCISES IN 1999 AND YEAR END OPTION VALUES
No options were exercised by any of Serengeti's directors or executive
officers during the year ended December 31, 1999. Set forth below is certain
information with respect to exercisable and non-exercisable options to acquire
shares of Serengeti's common stock held by Serengeti's Named Executives:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT FISCAL
OPTIONS AT FISCAL YEAR END YEAR END
--------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Stephen Nevitt................................. 681,974 68,026 -- --
Lucia Almquist................................. -- -- -- --
Ed Borix(2).................................... -- -- -- --
Michael Burke(2)............................... -- -- -- --
Doug Hinton.................................... -- -- -- --
William McMahon................................ -- -- -- --
</TABLE>
------------------------
* The last sales price of the common stock was approximately $0.34 per share
on December 31, 1999, which is lower than the exercise price of these
options.
EMPLOYMENT AGREEMENTS
In June 1998, Serengeti entered into a three-year employment agreement with
William McMahon, whereby Mr. McMahon became employed as Chief Financial Officer
of Serengeti, which provided for an annual base salary of $130,000 in 1998. The
agreement was amended in November 1999, providing for a base salary of $150,000
in the second half of 1999 and $170,000 during 2000. The agreement also provides
that if Serengeti achieves revenue and EBITDA projections as determined in
consultation with the optionee, Mr. McMahon will receive 45,000 stock options at
an exercise price of $2.94 per share for the year ended December 31, 2000.
In January 1999, Serengeti entered into a three-year employment agreement
with Douglas Hinton whereby Mr. Hinton became employed as Vice
President--Premium Sales of Serengeti which provides for a current annual base
salary of $130,000 and annual increases each January 1 by an amount equal to the
increase, if any, in the Consumer Price Index.
Each of the employment agreements contains a covenant by the employee not to
compete with Serengeti until the expiration of a one year period after the
expiration or termination of employment.
A-8
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On October 4, 1996, Serengeti issued 7,500 shares of its Series A 6.5%
convertible preferred stock, $.001 par value (the "Series A Shares"), to RBB
Bank Aktiengesellschaft, a banking institution whose principal offices are
located in Austria, in a private offshore offering pursuant to Regulation S
under the Securities Act of 1933. RBB purchased the Series A Shares for a
purchase price equal to their aggregate stated value of $7.5 million as set
forth in a Regulation S Offshore Subscription Agreement dated September 29,
1996, which also contemplated the purchase of the Series B Shares and Series C
Shares referred to below. The purpose of such investment was to fund, in part,
the acquisition of the assets of the Serengeti Eyewear division of Corning
Incorporated (the "Acquisition").
Pursuant to an Agreement of Purchase and Sale, dated as of October 29, 1996,
between Serengeti and Corning, Serengeti agreed to purchase the assets of the
Serengeti Eyewear division of Corning for a purchase price of $27.5 million,
which was effected on February 13, 1997. RBB purchased, concurrently with the
closing of the Acquisition, 7,500 shares of the Serengeti's Series B 6%
convertible preferred stock, $.001 par value (the "Series B Shares"), and 7,500
shares of Serengeti's Series C 6% convertible preferred stock, $.001 par value
(the "Series C Shares"; together with the Series A Shares and the Series B
Shares, the "Preferred Shares"), for a purchase price equal to their aggregate
stated value of $15.0 million. The proceeds to Serengeti from the sale of the
Preferred Shares were approximately $20.9 million (net of commissions and the
estimated expenses of such sale). Serengeti applied such net proceeds to the
Acquisition purchase price. Serengeti financed the remainder of such purchase
price and related costs and expenses with borrowings under its then credit
facility.
Concurrent with the issuance of the Series A Shares, Serengeti also issued
to RBB a Series A Warrant of Serengeti (the "Series A Warrant") to purchase up
to an aggregate of 150,000 Shares at an exercise price of $5.5625 per Share. The
Series A Warrant is exercisable at any time commencing January 1, 1999 and on or
prior to December 31, 2002. In addition, Serengeti issued to RBB, concurrent
with the issuance of the Series B Shares and the Series C Shares, a Series B
Warrant of Serengeti (the "Series B Warrant") and a Series C Warrant of
Serengeti (the "Series C Warrant"), each of which entitles RBB to purchase up to
an aggregate of 300,000 Shares at a per Share exercise price of (i) $7.50 with
respect to the Series B Warrant and (ii) $10.00 with respect to the Series C
Warrant. Each of the Series B Warrant and the Series C Warrant is exercisable at
any time commencing January 1, 1999 and on or prior to December 31, 2002.
Serengeti has also issued, as part of the commission payable to a third
party in connection with the sale of the Series A Shares, a Series D Warrant
Serengeti (the "Series D Warrant") to purchase up to an aggregate of 200,000
Shares at an exercise price of $5.50 per Share. The Series D Warrant is
immediately exercisable and expires on or prior to September 30, 2001.
Certain of Serengeti's legal services are rendered by Cooperman Levitt
Winikoff Lester & Newman, P.C., a law firm in which David Newman, a member of
Serengeti Board, is a partner. Fees incurred during 1999, 1998 and 1997 to such
firm approximated $410,000, $370,000 and $565,000, respectively.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of July 14, 2000 with
respect to the beneficial ownership of the outstanding Shares by (i) any
shareholder known by Serengeti to beneficially own more than 5% of such
outstanding shares, (ii) each of Serengeti's directors and Named Executives, and
(iii) the
A-9
<PAGE>
directors and executive officers of Serengeti as a group. Except as otherwise
indicated, the address of each beneficial owner of five percent or more of such
common stock is the same as Serengeti.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
NAME AND ADDRESS BENEFICIALLY OWNED(1) OF CLASS(1)
---------------- --------------------- -----------
<S> <C> <C>
Nevitt Family Trust(2)...................................... 506,103 21.2%
Milton Nevitt............................................... 278,781 11.7%
Stephen Nevitt.............................................. 1,469,948(3)(4) 47.4%
Michael J. Guccione......................................... 222,534(5) 9.0%
David B. Newman............................................. 556,103(3)(6) 22.8%
c/o Cooperman Levitt
Winikoff Lester & Newman, P.C.
800 Third Avenue
New York, New York 10022
William Keener.............................................. 2,000 *
Dr. Jeffrey Sack............................................ 3,500 *
John Kopinski............................................... 0 --
Douglas Hinton.............................................. 0 --
Lucia Almquist.............................................. 0 --
William McMahon............................................. 0 --
John R. Clarke.............................................. 200,000(7) 7.7%
1725 Lazy River Lane
Dunwoody, Georgia 30350
RBB Bank Aktiengesellschaft................................. 750,000(8) 23.9%
Burging 16
8010 Graz, Austria
Estate of Jerome B. Fox..................................... 122,700(9) 5.1%
7821 Wilton Crescent Circle
University Park, Florida 34201
Directors and executive officers as a group (10 persons).... 2,026,763(10) 62.8%
</TABLE>
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* Less than 1%.
(1) Computation based on the term beneficial ownership as used in the
regulations of the SEC which, for purposes of the computation of ownership
by the named holder, deems outstanding Shares issuable upon exercise of
options and convertible securities exercisable or convertible on the date,
and within sixty days following the date, of determination of beneficial
ownership. As of July , 2000, 2,384,000 shares of common stock were
actually issued and outstanding.
(2) The indicated trust (the "Trust") was created pursuant to a Trust
Agreement, dated as of September 11, 1992, between Milton Nevitt, as
grantor, and Stephen Nevitt and David B. Newman, as trustees. Such trustees
have the sole power to vote the shares held by the Trust. The children of
Milton Nevitt, including Stephen Nevitt, are the beneficiaries under the
Trust.
(3) Includes 506,103 shares held by the Trust, for which such beneficial owner
acts as trustee.
(4) Includes 715,987 shares issuable upon exercise of options granted pursuant
to the Plan. Stephen Nevitt, pursuant to exercise of a power granted in the
subscription agreement covering the issuance
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of Serengeti's Preferred Shares (as described in Footnote (8) below), has
the power to direct the voting of Shares issuable upon conversion thereof
for the election of a majority of the directors of Serengeti through
October 2000. The table does not include Shares issuable upon conversion of
such Preferred Shares.
(5) Includes 75,000 shares issuable upon exercise of options granted pursuant
to the Plan.
(6) Includes 50,000 shares issuable upon exercise of options granted pursuant
to the Plan.
(7) Represents shares issuable upon exercise of the Series D Warrant which
entitles the holder to purchase such number of shares at an exercise price
of $5.50 per share at any time prior to September 30, 2001.
(8) Represents 750,000 shares issuable upon exercise of warrants granted to
RBB. RBB is also the registered owner of 7,500 shares of Series A Shares,
7,500 shares of Series B Shares and 7,500 shares of Series C Shares of
Serengeti. Such Preferred Shares are presently convertible into shares of
common stock of Serengeti at a price determined by dividing the stated
value of the series ($7,500,000 for each) by a price equal to the lower of
(i) $5.50 in the case of the Series A Shares, $6.75 in the case of the
Series B Shares and $8.25 in the case of the Series C Shares, and (ii) 80%
of the average market price (as defined) for the ten consecutive trading
days ending three days prior to the notice of conversion. As of July 14,
2000, the average market price for the ten previous consecutive trading
days was approximately $2.77 per Share. The computation of beneficial
ownership in the table excludes Shares issuable upon conversion of the
Preferred Shares.
(9) Such information was set forth in a Schedule 13D, dated October 24, 1997.
Such Schedule 13D also stated that the spouse of Mr. Fox owns an additional
600 Shares and that Mr. Fox disclaims beneficial ownership with respect to
those Shares.
(10) Includes 840,987 Shares issuable upon exercise of options granted pursuant
to the Plan and 506,103 Shares held by the Trust, with Stephen Nevitt and
David B. Newman as trustees.
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