As filed with the Securities and Exchange Commission on May 22, 1997
Registration No. 333-26169
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Carlyle Golf, Inc.
(Exact name of registrant as specified in its charter)
Colorado 84-1218066
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
10550 East 54th Avenue, Unit E
Denver, Colorado 80239
(303) 371-2889
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
With copies to:
JEROME M. HAUSE CYNTHIA R. SMITH, Esq.
Carlyle Golf, Inc. Gorsuch Kirgis L.L.C.
10550 East 54th Avenue, Unit E 1401 17th Street, Suite 1100
Denver, Colorado 80239 Denver, Colorado 80202
(303) 371-2889 (303) 299-8900
(303) 298-0215 Fax
(Name, address, including zip code, and telephone number,
including area code, of agents for service)
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Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes effective when
warranted by market conditions and other factors.
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. [ ]
CALCULATION OF REGISTRATION FEE
Proposed
Title of Each Maximum Proposed
Class of Offering Maximum
Securities Amount Price Aggregate Amount of
to be to be per Offering Registration
Registered Registered Share Price Fee
Common Stock,
$.001 par value
per share 2,518,749 $2.00(1) $ 5,037,498(1) $ 1,526.51
Common Stock
issuable upon
exercise of the
Redeemable Warrants
to purchase one share
of Common Stock
("Redeemable
Warrants")(2) 1,928,800(2) $4.50 $ 8,679,600 $2,630.18
Common Stock
issuable upon
exercise of
Representative's
Warrants(3) 170,000(3) $3.90 $ 663,000 $ 200.91
Common Stock
issuable upon
exercise of
Underlying Warrants
("Underlying Warrants")
included in
Representative's
Warrants(4) 170,000(4) $4.50 $ 765,000 $ 231.82
Total -- -- $15,145,098 $4,589.42
(1) Estimated solely for the purpose of calculating the amount of the
registration fee. The price of $2.00 per share is the last sale
price reported by The Nasdaq Stock Market on April 28, 1997.
(2) Underlying shares of Common Stock issuable upon exercise of the
Redeemable Warrants sold in the Company's initial public offering
declared effective August 12, 1994. This Registration Statement also
covers such additional number of shares of Common Stock as may become
issuable upon exercise of the Redeemable Warrants by reason of anti-
dilution provisions pursuant to Rule 416.
(3) Underlying shares of Common Stock issuable upon exercise of
Representative's Warrants. This Registration Statement also covers
such additional number of shares of Common Stock as may become
issuable upon exercise of the Representative's Warrants by reason of
anti-dilution provisions pursuant to Rule 416.
(4) Underlying shares of Common Stock issuable upon exercise of
Underlying Warrants included in Representative's Warrants. This
Registration Statement also covers such additional number of shares
of Common Stock as may become issuable upon exercise of the
Underlying Warrants included in the Representative's Warrants by
reason of anti-dilution provisions pursuant to Rule 416.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) may determine.
SUBJECT TO COMPLETION, DATED MAY 22, 1997
[LOGO TO BE
CARLYLE GOLF, INC. INSERTED]
4,787,549 Shares
This Prospectus relates to the offer and sale of 4,787,549 shares of
common stock, par value $0.001 per share (the "Shares") of Carlyle Golf,
Inc. (the "Company") by certain shareholders and option and warrant
holders (the "Selling Shareholders") of the Company. The Shares may be
sold from time to time by the Selling Shareholders, through ordinary
brokerage transactions in negotiated transactions or otherwise, at fixed
prices which may be changed, at market prices prevailing at the time of
sale or at negotiated prices. See - "Selling Shareholders" and "Plan of
Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares. The Company has agreed to bear certain expenses in connection
with the registration of the Shares being offered and sold by the Selling
Shareholders.
The Company's Common Stock, $0.001 par value per share (the "Common
Stock") are traded on The Nasdaq Stock Market -- SmallCap Market under the
symbol "CRLG". On May 21, 1997, the last reported sale price of the
Company's Common Stock was $2.25.
THESE ARE SPECULATIVE SECURITIES.
SUCH SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" AT PAGE 4.
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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 person has been authorized to give any information or to make any
representation other than those contained in the Prospectus in connection
with the offering made hereby, and if given or made, such information or
representation must not be relied upon as having been authorized by the
Company or by the Selling Shareholders. 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.
--------------------------------
The date of this Prospectus is May 22, 1997
AVAILABLE INFORMATION
Carlyle Golf, Inc. (the "Company") has filed with the Securities and
Exchange Commission (the "Commission") a Registration Statement on Form S-
3 (the "Registration Statement" ) under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Common Stock offered
hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto or
incorporated by reference therein. Such information, including exhibits
and schedules to the Registration Statement incorporated by reference
therein, can be inspected and copied at the Public Reference Section of
the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street NW,
Washington, D.C 20549. Statements made in this Prospectus as to the
contents of any contract or any other document referred to 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.
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 Commission. All such information may be inspected and copied at
the public reference facilities maintained by the Commission at its
principal office at Room 1024, Judiciary Plaza, 450 Fifth Street NW.,
Washington, D.C. 20549, and at the following regional offices of the
Commission: 1801 California Street, Suite 4800, Denver, Colorado 80202-
2648; Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can also be obtained from
the Public Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission also maintains a site on the World Wide Web at
http://www.sec.gov/edgarhp.htm that contains reports, proxy and
information statements and other information concerning registrants that
file electronically with the Commission. The Common Stock is traded on
the Nasdaq SmallCap Market. Information filed by the Company with Nasdaq
may be inspected at the offices of Nasdaq at 1735 K Street, N.W.,
Washington, D.C. 20006.
This Prospectus incorporates by reference documents which are not
presented herein or delivered herewith. Copies of these documents (other
than exhibits to such documents unless such exhibits are specifically
incorporated by reference) are available to any person, including any
beneficial owner, to whom this Prospectus is delivered, on written or oral
request, without charge, directed to Jerome M. Hause, President, Carlyle
Golf, Inc., 10550 East 54th Avenue, Unit E, Denver, Colorado 80239,
telephone number 303/371-2889.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference
(Commission File No. 0-24160):
1. Annual Report on Form 10-KSB for the year ended October 31,
1996, filed January 21, 1997;
2. Quarterly Report on Form 10-QSB for the quarter ended January
31, 1997, filed March 17, 1997;
3. Form 8-A (Commission File No. 0-24160) effective August 12,
1994;
4. Current Reports on Form 8-K dated January 24, 1997 and filed
February 10, 1997, and Amendment No. 1 on Form 8-K/A dated January 24,
1997 and filed April 9, 1997.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of the offering
shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such reports and documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein prior to the date hereof shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference
herein, modifies or supersedes 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.
A copy of the documents incorporated by reference other than
exhibits to such documents (unless such exhibits are specifically
incorporated by reference in the information contained in this
Prospectus), may be obtained upon request without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered upon the written or oral request of such person. Requests for
such copies should be made to Carlyle Golf, Inc., 10550 East 54th Avenue,
Unit E, Denver, Colorado 80239, Attention: Jerome M. Hause, President,
telephone number (303)371-2889. In addition, such materials filed
electronically by the Company with the Commission are available at the
Commission's World Wide Web site at http://www.sec.gov/edgarhp.htm.
The Company
Carlyle Golf, Inc., a Colorado corporation formed in September of
1992, is engaged in the design, contract for manufacture and marketing of
men's golf apparel. The Company markets Carlyle apparel to resorts, golf
pro shops located on golf courses in the United States and throughout the
world, major golf tournament events and corporations. In addition, as a
result of its recent acquisition of substantially all of the assets of
Star Point Enterprises, Inc., d/b/a Pro-Line Cap Company ("Star Point"),
the Company manufactures and sells high quality sized and adjustable
athletic and golf headwear under the Pro-Line name into the licensed
products, college, team dealer, corporate and golf markets across the
United States. The Company plans to expand Pro-Line's golf market segment
to complement its own men's apparel line which currently includes knit,
woven and wind shirts, shorts and sweaters all sold under the Carlyle(TM)
label, and to serve its existing customer base.
Since its formation, the Company has focused on developing its
products, marketing strategy, and distribution network as the foundation
for growth. In particular, the Company obtained endorsements of the
Company's products by PGA Touring Professionals, formed an Advisory
Council which includes 25 golf professionals employed by golf clubs,
country clubs, and resorts who advise the Company on design and marketing
of the Company's products, and organized a network of approximately 33
experienced, independent sales representatives. The Company's offices are
located at 10550 East 54th Avenue, Unit E, Denver, Colorado 80239, and its
telephone number is 303/371-2889.
RISK FACTORS
An investment in the Company involves a high degree of risk. In
addition to the other information set forth in this Prospectus,
prospective investors should carefully consider the following risk factors
when evaluating an investment in the Company.
RELATIVELY NEW COMPANY. The Company began operations in 1993 and
thus is subject to various risks typical of young companies including
uncertainty as to whether it will be able to generate sufficient sales
revenues to cover its fixed and other costs. The continuation of the
Company for an extended period is dependent upon achieving adequate gross
profit margins to realize profitable operations. There can be no
assurance that the Company will realize earnings from operations or net
profits in the future.
SEASONALITY OF GOLF APPAREL SALES. Golf apparel sales are seasonal
in nature. The Company anticipates that the greatest amount of sales will
occur from March to September of each year. There is also a selling
season for apparel from October through December which takes place
primarily in warmer states such as Florida, Arizona and California. The
seasonal nature of golf apparel sales will result in variations in the
Company's net sales and operating results on a quarterly basis.
RAW MATERIALS AND SUPPLIERS. A major risk in the apparel industry is
the reliance upon mills to deliver fabric and trim on time and according
to specifications. The Company is dependent upon its ability to obtain
quality fabrics to meet its sales requirements. Significant delivery
delays or delivery of a substantial amount of defective fabric or trim
could have a material adverse effect upon the scheduling of production
and, consequently, the Company's ability to make timely delivery of
products to its customers. Although the Company has not experienced any
significant problems with obtaining fabric to date, it cannot be certain
that it will be able to obtain all of the fabrics needed to meet its
anticipated sales in the future.
DEPENDENCE ON KEY PERSONNEL. The success of the Company is highly
dependent upon the services of William A. Clymor, Jerome M. Hause, Warren
F. Mack, Grant M. Beeman, Wendy K. Williams, and other key personnel. The
loss of the services of such key personnel could adversely affect the
Company and its business. The Company may also require the services of
additional executive personnel in the future. There can be no assurance
that the Company will be able to retain these individuals or to attract
qualified individuals to replace the loss of any key personnel or to
satisfy additional executive personnel requirements. The Company does not
carry key man life insurance on any of its personnel.
COMPETITION. The golf apparel and athletic headwear businesses are
highly competitive with a large number of competitors and relatively low
barriers to entry into the market. While many of these competitors are
larger and better financed than the Company, management believes that its
products, pricing and distribution methods compare favorably to those of
many of its competitors. Naturally, however, there can be no assurance
that the Company will not be adversely affected in the future by
competitive pressures from one or more other golf apparel or athletic
headwear companies.
VARIATIONS FROM SALES FORECASTS. The Company places orders and
establishes the production schedules for its fabric suppliers and contract
manufacturers well in advance of deliveries to its customers based on its
internal sales forecasts. The Company does so in order to ensure that it
has sufficient inventory to avoid significant delays in its customer
deliveries. If the Company's forecast of sales of a particular line is
inaccurate, the Company could be faced with either excessive or
insufficient inventory. A substantial variation from anticipated sales
could have a material adverse affect on the Company's business.
LIQUIDITY AND CAPITAL RESOURCES. To date, the Company has financed
its operations with a combination of a bank line of credit, proceeds from
the Company's initial public offering in 1994 and the sale of private
equity. There can be no assurance that the line of credit will continue
to be available or that additional capital resources will be available to
the Company. In connection with the acquisition of Star Point
Enterprises, Inc. in January of 1997, the Company borrowed $1,243,000 and
agreed to use its best efforts to obtain additional capital financing
sufficient to repay this debt, and allow the Company to retain $800,000.
The Company also assumed liabilities in the approximate amount of
$3,000,000 in connection with the acquisition.
PRODUCT DESIGN AND MARKETING STRATEGY. The Company's success is
dependent upon its ability to design, produce and project a marketing
image for golf apparel and athletic and golf headwear which will generate
sales at favorable prices through the marketing channels utilized by the
Company. The Company is, therefore, dependent upon its key personnel to
develop designs and marketing strategies which distinguish its apparel
favorably from the apparel of its competitors. While the Company believes
that its designs and its marketing strategy will be successful, there can
be no assurance that they will generate sufficient sales revenues to make
the Company profitable.
ABSENCE OF COPYRIGHT PROTECTION OF DESIGNS. The design of men's golf
apparel is subject to rapid changes, and thus the Company does not intend
to apply for copyrights of its designs. The Company primarily relies upon
nondisclosure agreements and the laws of unfair competition to protect its
designs and other proprietary information, to the extent that such
measures and protections are available or obtainable. The
misappropriation or unauthorized disclosure of such designs or other
proprietary information may have an adverse affect on the Company's
business.
DEPENDENCE ON OUTSIDE CONTRACTORS. Other than the headwear, which
the Company manufactures itself, the Company relies on outside contractors
for the manufacture of its products. Delays in manufacturing or delivery
of finished product to the Company could have a material adverse effect on
the Company's sales. The Company does not have any long-term agreements
with outside contractors to manufacture its products, but instead
contracts with various manufacturers to avoid undue dependence on any
contractor or group of contractors.
TRADEMARKS. The Company's gold apparel products are sold under the
Carlyle label using the Company's logo of a stylized "C", which is a
registered trademark. The Company's application for registration of the
name "Carlyle" as a trademark was rejected by the United States Patent and
Trademark Office ("USPTO") on account of the use of a similar name on
apparel by a hotel company. The Company plans to continue to use the
Carlyle name notwithstanding the USPTO action and may seek a license or
waiver from the potentially conflicting user cited by the USPTO. If a
license or waiver is not obtained from the hotel company, the Company will
have to rely on whatever common law trademark rights it may have, which
rights may be limited. No assurance can be given that the Company will be
able to protect its trademarks from conflicting uses or claims of
ownership. It is possible that the Company will be required to change its
trademarks to avoid conflict with prior third party users. The Company
could be adversely affected if it is unable to protect its trademarks from
conflicting users or claims of ownership or if it becomes necessary to
change its name.
DIVIDENDS NOT LIKELY. The Company does not anticipate paying any
dividends on the shares of Common Stock offered hereby within the
foreseeable future.
VOLATILITY OF STOCK PRICES. The market price of the Common Stock may
be significantly affected by factors such as variations in the Company's
results of operations and market conditions in the golf apparel and
athletic and gold headwear industry in general. Market prices may also be
affected by movements in prices of securities in general. Although the
Common Stock is traded on the Nasdaq SmallCap Market, there is no
assurance that it will remain eligible to be included on Nasdaq.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
of Common Stock by the Selling Shareholders. The Company may, however,
receive proceeds upon the exercise of the 1,928,800 Redeemable Warrants
for the exercise price of $4.50 per Share, the exercise of the 170,000
Representative's Warrants for the exercise price of $3.90 per Share, the
exercise of the 170,000 Representative's Warrants for the exercise price
of $0.325 per Warrant, and the exercise of the 170,000 Underlying Warrants
for the exercise price of $4.50 per Share. See "Plan of Distribution -
Redeemable Warrants" and "Plan of Distribution - Representatives
Warrants." The Company may also receive proceeds upon the exercise of Mr.
Anton's option to purchase 200,000 shares in the amount of $2.08 per Share
and upon exercise of The Wallach Company's option to purchase 100,000
Shares in the amount of $1.80 per Share. See "Plan of Distribution -
Asset Purchase Agreement." The proceeds of such exercise, if any, will be
used by the Company for working capital. The Selling Shareholders have
agreed to pay all commissions and other compensation to any securities
broker-dealers through whom they sell any of the Shares.
SELLING SHAREHOLDERS
The following table sets forth certain information regarding the
Selling Shareholders and the Shares offered by the Selling Shareholders
pursuant to this Prospectus. None of the Selling Shareholders within the
past three years has had any material relationship with the Company or any
of its affiliates except as described below.
Shares to be
Beneficially
No. of No. of Owned on
Shares Shares Completion
Name of Beneficially Being of the
Selling Shareholder Owned Offered Offering
Number % of Class
Carl A. Militello, Jr. 170,000(1) 170,000 0 *
Eugene L. Neidiger 44,000(1) 44,000 0 *
Anthony B. Petrelli 39,000(1) 39,000 0 *
Charles C. Bruner 54,000(1) 39,000 15,000 *
Robert L. Parrish 20,000(1) 20,000 0 *
J. Henry Morgan 14,000(1) 14,000 0 *
Gina L. Neidiger 5,000(1) 5,000 0 *
John J. Turk, Jr. 5,000(1) 5,000 0 *
Randall S. Mallett 4,000(1) 4,000 0 *
The Wallach Company, Inc. 100,000(2) 100,000 0 *
Laurence H. Anton 522,875(3) 522,375 500 *
Kenneth R. LaBounty(4) 1,572,213 1,572,213 0 *
William A. Clymor 682,212(5) 309,712 372,500 6.7%
W. Clayton Cole 64,523(6) 6,273 58,250 1.1%*
Wendy K. Williams 8,225(7) 3,125 5,100 *
Jerome M. Hause 96,539(8) 3,119 93,420 1.7%
G. Richard Oscarson 30,247(9) 1,247 29,000 *
Warren F. Mack 63,812(10) 312 63,500 1.2%
Michael D. Reid(11) 50,311 311 50,000*
Grant M. Beeman 33,562(12) 62 33,500 *
* Less than one percent
(1) Consists of Shares included in the Representative's Warrants and the
Shares issuable upon exercise of the Underlying Warrants included in
the Representative's Warrants. The Representative's Warrants were
issued to certain officers of the underwriter in connection with the
Company's initial public offering declared effective August 12, 1994.
See - "Representative's Warrants" below.
(2) Consists of options to purchase 100,000 Shares.
(3) Includes 322,375 Shares owned by Star Point Enterprises, Inc. Also
includes options to purchase 200,000 Shares. Does not include
528,174 shares of Common Stock issuable upon the conversion of
1,320,432 shares of Preferred Stock which are not currently
convertible and which are owned by family members of Mr. Anton. Mr.
Anton disclaims beneficial ownership of such shares. Mr. Anton has
been a Director of the Company since January 25, 1997, shortly after
the Company acquired substantially all of the assets of Star Point
Enterprises, Inc. of which Mr. Anton was and is the sole shareholder.
See - "Asset Purchase Agreement."
(4) 1,262,501 Shares being offered by Mr. Labounty herein are subject to
an Escrow Agreement executed in connection with the Company's initial
public offering. Mr. LaBounty serves as a Director of the Company.
(5) Includes 309,712 Shares owned by Clymor Partners, Ltd. L.L.P. Also
includes options to purchase 300,000 Shares, but does not include
options for an additional 200,000 shares which are not currently
vested. Mr. Clymor serves as Chief Executive Officer, Chairman of
the Board and a Director of the Company.
(6) Includes options to purchase 3,000 Shares. Mr. Cole serves as a
Director of the Company.
(7) Includes options to purchase 5,100 Shares, but does not include
options for an additional 10,000 shares which are not currently
vested. Ms. Williams serves as Vice President of Finance, Secretary
and Treasurer of the Company.
(8) Includes options to purchase 92,420 Shares, but does not include
options for an additional 60,000 shares which are not currently
vested. Mr. Hause serves as President, Chief Operating Officer and a
Director of the Company.
(9) Includes options to purchase 9,000 Shares. Mr. Oscarson served as a
Director of the Company from September 1992 to October 1996.
(10) Includes options to purchase 10,500 Shares, but does not include
options for an additional 10,000 shares which are not currently
vested. Mr. Mack serves as Senior Vice President - Sales and
Marketing for the Company.
(11) Mr. Reid served as a Director of the Company from September 1992 to
October 1996.
(12) Includes options to purchase 8,500 Shares, but does not include
options for an additional 10,000 shares which are not currently
vested. Mr. Beeman serves as Vice President of Design and
Manufacturing of the Company.
PLAN OF DISTRIBUTION
All of the Shares offered hereby are being offered by the Selling
Shareholders. The Shares will be offered from time to time (i) at market
prices prevailing on the Nasdaq SmallCap Market at the time of offer and
sale or at prices related to such prevailing market prices, (ii) in
negotiated transactions, or (iii) a combination of such methods of sale.
The Selling Shareholders may effect such transactions by offering and
selling the Shares directly to or through securities broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions, or commissions from the Selling Shareholders and/or the
purchasers of the Shares for whom such broker-dealers may act as agent or
to whom the Selling Shareholders may sell as principal, or both (which
compensation as to a particular broker-dealer might be in excess of
customary commissions).
The Selling Shareholders and any broker-dealers who act in connection
with the sale of the Shares hereunder may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act of 1933 (the
"Securities Act") and any commissions received by them and profit on any
resale of the Shares as principal might be deemed to be underwriting
discounts and commissions under the Securities Act. The Company has
agreed to indemnify the Selling Shareholders against certain liabilities,
including liabilities under the Securities Act as underwriters or
otherwise.
The Company has advised the Selling Shareholders that they and any
securities broker-dealers or others who may be deemed to be statutory
underwriters will be subject to the Prospectus delivery requirements under
the Securities Act. The Company has also advised the Selling Shareholders
that, in the event of a "distribution" of the Shares, the Selling
Shareholders, any "affiliated purchasers," and any broker-dealer or other
person who participates in such distribution may be subject to Rule 10b-6
under the Securities Exchange Act of 1934 (the "Exchange Act") until his
or its participation in that distribution is completed. A "distribution"
is defined in Rule 10b-6(c)(5) as an offering of securities "that is
distinguished from ordinary trading transactions by the magnitude of the
offering and the presence of special selling efforts and selling methods."
Rule 10b-6 makes it unlawful for any person who is participating in a
distribution to bid for or purchase stock of the same class as is the
subject of the distribution. The Company has also advised the Selling
Shareholders that Rule 10b-7 under the Exchange Act prohibits any
"stabilizing bid" or "stabilizing purchase" for the purposes of pegging,
fixing or stabilizing the price of the Company's Common Stock in
connection with this offering.
In the absence of this Prsospectus, those of the Selling Shareholders
who are executive officers, Directors or other "affiliates" of the Company
would be able to sell their Shares only subject to the limitations of Rule
144 promulgated under the Securities Act of 1933 ("Rule 144"). In
general, under Rule 144 as currently in effect, an "affiliate" of the
Company, or a person who has beneficially owned shares which are
"restricted securities" for at least one year, is entitled to sell within
any three-month period a number of shares that does not exceed the greater
of: (i) one percent (1%) of the then outstanding shares of Common Stock of
the Company, or (ii) the average weekly trading volume of the Common Stock
during the four calendar weeks preceding a sale by such person. Sales
under Rule 144 are also subject to certain manner of sale provisions,
notice requirements and the availability of current public information
about the Company. Under Rule 144, however, a person who is not, and for
the three months prior to the sale of such shares has not been, an
affiliate of the Company is free to sell shares which are "restricted
securities" which have been held for at least two years without regard to
the limitations contained in Rule 144. The executive officers, Directors
or other "affiliates" of the Company will not be subject to the foregoing
restrictions when selling Shares pursuant to this Prospectus.
Under Section 16 of the Securities Exchange Act of 1934, executive
officers, Directors, and 10% or greater shareholders of the Company will
be liable to the Company for any profit realized from any purchase and
sale (or any sale and purchase) of Common Stock within a period of less
than six months.
In connection with the Company's initial public offering in 1994, Mr.
LaBounty, a Director and shareholder of the Company, and certain other of
the Selling Shareholders, entered into escrow agreements with certain
states which restrict the sales of the shares of the Company's Common
Stock they held at that time. Under an escrow agreement with the State
Securities Commissioner of Texas, 1,262,501 of the shares owned by Mr.
LaBounty which are being registered hereby may not be sold until the
earlier to occur of: (i) such time as the Company has fully diluted net
earnings per share of Common Stock of at least 10% of the price per share
in the initial public offering of $3.00 ("IPO Price"); (ii) such time as
the Company, during any five consecutive fiscal years, has accumulated
fully diluted net earnings per share at least equal to 30% of the IPO
Price; (iii) such time as shares of the Company's Common Stock have traded
in a reliable public market (e.g., either the New York Stock Exchange, the
American Stock Exchange or Nasdaq National Market System) at 175% of the
IPO Price for at least 90 consecutive trading days; (iv) when a tender
offer or an offer to merge or otherwise acquire the Company's Common Stock
is made pursuant to which all public shareholders of the Company will
receive either cash, or securities equal in value to, at least one and
one-half times the IPO Price; or (v) if not sooner released pursuant to
(i)-(iv) above, then 25% of the total shares in escrow owned by each
shareholder subject to the escrow agreement will be released each year
beginning on the fifth anniversary of the initial public offering and on
each anniversary thereafter. To date, none of these conditions have been
met.
Under an escrow agreement required by the Arizona Securities
Division, 698,789 of Mr. LaBounty's shares are held in escrow for a term
of up to four years from the effective date of the initial public
offering. All of the shares held under the Agreement will be released at
such time as (i) shares of the Company's Common Stock trade at a price not
less than 110% of the IPO price for 90 consecutive trading days; or (ii)
the Company has earnings per share equal to 5% of the IPO Price for each
of two consecutive years. If neither of these events has occurred by the
end of the second year of the escrow agreement, one-eighth of the shares
held in escrow are eligible to be released over each of the next eight
calendar quarters.
REDEEMABLE WARRANTS
In the Company's initial public offering, the Company sold 1,928,800
warrants to purchase shares of Common Stock (the "Redeemable Warrants")
and reserved an equivalent number of shares of Common Stock for issuance
upon exercise of such Redeemable Warrants. No fractional shares will be
issued upon the exercise of the Warrants and the Company will pay cash in
lieu of fractional shares.
The Redeemable Warrants are subject to redemption by the Company at
$.05 per Warrant on thirty (30) days written notice provided the last
reported sale price of the Common Stock on Nasdaq is at least $5.40 for
ten consecutive trading days ending five days prior to the notice of
redemption.
Each Redeemable Warrant entitles the holder thereof to purchase one
share of Common Stock at a price of $4.50. The right to exercise the
Redeemable Warrants commenced 13 months after the August 12, 1994 public
offering, i.e., September 12, 1995, and will terminate at the close of
business on August 12, 1997. The Redeemable Warrants contain provisions
that protect the Redeemable Warrant holders against dilution by adjustment
of the exercise price in certain events including, but not limited to,
stock dividends, stock splits, reclassifications or mergers. A Redeemable
Warrant holder does not possess any rights as a shareholder of the
Company. The shares of Common Stock, when issued upon the exercise of the
Redeemable Warrants in accordance with the terms thereof, will be fully
paid and non-assessable.
So long as the Redeemable Warrants are outstanding, the Company has
undertaken to file post-effective amendments to its initial public
offering registration statement or to have another registration statement
effective which permits the issuance and resale of Common Stock issuable
upon exercise of the Redeemable Warrants. Because the exercise price of
the Redeemable Warrants has been substantially higher than the trading
prices of the Company's Common Stock on Nasdaq, however, the Company has
not previously filed any such post-effective amendments or registration
statements. While the trading price of the Company's Common Stock is
still substantially lower than the exercise price, the Company may amend
the terms of the Redeemable Warrants to extend the termination date or
lower the exercise prices. As of the date hereof, the Company has not
made a determination as to whether so to amend the terms of the Redeemable
Warrants but reserves the right to do so. The Common Stock underlying the
Redeemable Warrants is being registered herein.
REPRESENTATIVE'S WARRANTS
Upon the closing of the Company's initial public offering ("IPO"),
the Company sold to Neidiger/Tucker/Bruner, Inc., the underwriter for the
offering (the "Representative"), for $100, Representative's Warrants to
purchase 170,000 shares of Common Stock (the "Representative's Shares")
and 170,000 warrants to purchase shares of Common Stock which are not
subject to call by the Company (the "Underlying Warrants"). The prices at
which the Representatives Shares and Underlying Warrants may be purchased
upon exercise of the Representative's Warrants is $3.90 per Share and
$0.325, respectively (130% of the IPO share and warrant offering prices).
The price at which the Shares underlying the Underlying Warrant may be
purchased upon exercise of the Underlying Warrants is $4.50 per Share.
The Representative's Warrants are exercisable for a 48-month period
commencing one year from their date of issuance, August 12, 1994. The
Representative's Warrants are not transferable except to officers of the
Representative, subject to compliance with applicable securities laws.
The exercise price, number of shares of Common Stock and Underlying
Warrants (including the number of shares of Common Stock issuable upon
exercise of the Underlying Warrants) purchasable are subject to customary
anti-dilution provisions. The Representative's Warrants contain certain
"demand" rights to require, on any one occasion after August 12, 1995,
that the Company file a registration statement with respect to the
Underlying Warrants and/or Common Stock (including the Common Stock
issuable upon exercise of such Underlying Warrants) issued upon exercise
of the Representative's Warrants (the "Registrable Securities") in order
to effect a public offering thereof, and "piggyback" rights to require the
registration of such Common Stock on certain registration statements filed
by the Company with the Securities and Exchange Commission. Such
registration rights may be transferred to any subsequent holder of the
Registrable Securities. Holders of Registrable Securities may exercise
their demand registration rights with respect to all or part of their
Registrable Securities provided, in either case, that the holders
requesting registration represent not less than a majority of the
Registrable Securities then outstanding. The Company has agreed to pay
all expenses with respect to registration pursuant to the demand
registration rights described above. The holders of the Representative's
Warrants have exercised their "piggyback" rights in this instance so that
all of the shares of Common Stock issuable pursuant to the
Representative's Warrants (including the Common Stock issuable upon
exercise of the Underlying Warrants) are being registered herein.
INVESTMENT AGREEMENT
In January 1993 the Company and two of its officers entered into an
Investment Agreement with Kenneth R. LaBounty. Pursuant to that
agreement, Mr. LaBounty purchased 2,500,001 shares of Preferred
Convertible Stock in three installments during 1993 for $0.32 per share,
for a total of $800,000. The 2,500,001 shares purchased by Mr. LaBounty
were converted into 1,250,001 shares of Common Stock at the time of the
Company's initial public offering in August, 1994. The Investment
Agreement confers certain rights with respect to the registration of stock
under the Securities Act upon Mr. LaBounty. Under the agreement, Mr.
LaBounty, or his assigns, may require the Company to register his shares
unless all of his shares may be sold without registration under Rule 144
promulgated under the Securities Act. Mr. LaBounty, or his assigns, may
also require the Company to register those shares on any other
registration statement filed by the Company under the Securities Act,
except for filings on Forms S-4 or S-8. Mr. LaBounty, or his assigns,
shall then have the right to up to three registrations on Form S-3 in any
12-month period thereafter until his shares have all been sold. The
holders of shares participating in any of the foregoing registrations are
required to share in their pro rata share of the underwriting discount and
commissions, transfer taxes, fees and disbursements of counsel and
accountants retained by the selling security holders but all other
expenses are to be borne by the Company. Mr. LaBounty has exercised his
right to include the 1,250,001 shares of Common Stock with the shares
being registered herein.
STOCK PURCHASE AGREEMENT
On April 1, 1996, the Company entered into a Stock Purchase Agreement
(the "Stock Purchase Agreement") pursuant to which all of the Company's
executive officers and Directors purchased 633,873 shares of Common Stock.
Pursuant to the agreement, the purchasers have certain registration rights
with respect to the shares of Common Stock purchased. All of the
purchasers have exercised their right and all of the shares of Common
Stock purchased are being registered herein.
ASSET PURCHASE AGREEMENT
On January 24, 1997, the Company acquired substantially all of the
assets of Star Point Enterprises, Inc. d/b/a Pro-Line Cap Company of Fort
Worth, Texas ("Star Point"), a producer of high quality sized and
adjustable athletic and golf headwear, pursuant to an Asset Purchase
Agreement effective December 31, 1996 by and among the Company, Star Point
and Laurence H. Anton ("Mr. Anton"), the President and sole shareholder of
Star Point (the "Asset Purchase Agreement"). The purchase price for the
acquired assets pursuant to the Asset Purchase Agreement totaled
approximately $6.0 million, including approximately $4.8 million for
certain assets necessary for the Company to operate the Star Point
business (the "Transferred Assets"), approximately $600,000 for the
purchase of the building located at 8224 White Settlement Road, Fort
Worth, Texas, from Shirley G. Anton and Mr. Anton (collectively, the
"Building Owner") and $325,008 payable to Mr. Anton for consulting
services to be provided over three years. In connection with the
acquisition, the Company also entered into lease agreements for properties
located at 8314 White Settlement Road and 512 Jennings, both in Fort
Worth, Texas.
Payment of the purchase price for the Transferred Assets consisted of
the assumption of certain liabilities totaling approximately $3.0 million;
the assumption and simultaneous conversion of certain current and long-
term debt totaling $976,489 into 976,489 shares of the Company's
Convertible Preferred Stock pursuant to that certain Debt Conversion and
Registration Rights Agreement effective December 31, 1996 by and among the
Company, Star Point, Mr. Anton and the Building Owner (the "Star Point
Registration Rights Agreement"); and the issuance of 322,375 shares of the
Company's Common Stock to Star Point with an agreed upon value of
$670,540, or $2.08 per Share (representing the average of the closing ask
price of the Common Stock for the ten (10) trading days beginning five (5)
trading days prior to January 9, 1997). The payment to the Building Owner
consisted of the issuance of a secured promissory note in the principal
amount of $223,421 and the issuance of 343,943 shares of the Company's
Convertible Preferred Stock. The Company's Convertible Preferred Stock is
convertible into Common Stock of the Company at a rate of .4 shares of
Common Stock for each share of Preferred Stock converted, subject to
certain adjustments.
In connection with the acquisition, Star Point loaned to the Company
the sum of $1,243,000, and the Company agreed to use its best efforts to
obtain additional capital financing to repay this loan.
The Company has entered into an agreement with Mr. Anton pursuant to
which Mr. Anton will render certain consulting services to the Company for
a period of three years following the acquisition, which will be paid in
36 monthly installments of $9,028. Mr. Anton also received from the
Company a five-year option to purchase 200,000 shares of the Company's
Common Stock at $2.08 per Share (the "Option").
The holders of the Option, Common Stock and Convertible Preferred
Stock issued in connection with this transaction are entitled to certain
registration rights pursuant to the Registration Rights Agreement. Mr.
Anton has exercised his right to include the shares of Common Stock owned
by Star Point and the Shares which he would receive upon the exercise of
the Option in the Shares being registered herein. Mr. Anton has agreed
that he will limit sales of these shares under this Prospectus to that
number of Shares that he would be permitted to sell if the sales were
being made under Rule 144(e)(i) of the Securities Act.
The Company engaged an investment banking firm, The Wallach Company,
Inc. ("TWC"), to provide financial advisory services in connection with
the transaction. TWC assisted the Company in determining an appropriate
structure and purchase price to pay for the acquisition of Star Point. In
addition to the fees for services rendered to the Company, TWC received
from the Company five-year options to purchase 100,000 shares of Common
Stock at $1.80 per Share. The Shares which TWC would receive upon the
exercise of the options are being registered herein.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the shares of Common Stock and
the Redeemable Warrants is American Securities Transfer & Trust, Inc.,
1825 Lawrence Street, #444, Denver, Colorado, 80202.
LEGAL MATTERS
The validity of the securities to be offered hereby will be passed
upon for the Company by Gorsuch Kirgis L.L.C., Denver, Colorado, counsel
for the Company.
EXPERTS
The financial statements of Carlyle Golf, Inc. as of October 31, 1996
and 1995 and for the years then ended have been incorporated by reference
herein and in the registration statement in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
The financial statements of Star Point Enterprises, Inc. as of
December 31, 1996 and 1995 and for the years then ended have been
incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS
The Stock Purchase Agreement and the Star Point Registration Rights
Agreement provide that the Company and its officers, directors, and
controlling shareholders are indemnified against losses arising out of any
untrue statement of a material fact or any omission to state a material
fact necessary to make the statements in the registration statement or
prospectus, in light of the circumstances under which they were made, not
misleading, to the extent that such untrue statement or omission is
contained in any information or affidavit a Selling Shareholder furnished
to the Company.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the small business issuer pursuant to the
foregoing provisions, or otherwise, the small business issuer has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimates of fees and expenses incurred or to be incurred in
connection with the issuance and distribution of securities being
registered are as follows:
Securities and Exchange Commission Filing Fee $ 4,589
State Securities Laws (Blue Sky) Fees and
Expenses 0
Printing and Mailing Costs and Fees 1,000
Legal Fees and Costs 20,000
Accounting Fees and Costs 5,000
Miscellaneous 1,411
--------
TOTAL $32,000
All of the above fees and expenses except the SEC filing fee are
estimated.
The Selling Shareholders have agreed to pay all commissions and other
compensation to any securities broker-dealers through whom they sell any
of the Shares.
Item 15. Indemnification of Directors and Officers.
The only statute, bylaw, contract or arrangement under which any
controlling person, director or officer of the Company is insured or
indemnified in any matter against liability which he may incur in his
capacity as such, is as follows:
Paragraph B of Article X of the Restated Articles of Incorporation
with Amendments of the Company includes the following provision:
The Corporation shall have every power and duty of
indemnification of directors, officers, employees and agents, without
limitation, provided by the laws of the State of Colorado.
Section 7-109-101 of the Colorado Business Corporation Act provides
that each corporation shall have the following powers using the following
definitions:
"As used in this article:
(a) "Corporation" includes any domestic or foreign entity that is a
predecessor of a corporation by reason of a merger or other transaction in
which the predecessor's existence ceased upon consummation of the
transaction.
(b) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation, is or
was serving at the corporation's request as a director, officer, partner,
trustee, employee, fiduciary, or agent of another domestic or foreign
corporation or other person or of an employee benefit plan. A director is
considered to be serving an employee benefit plan at the corporation's
request if his or her duties of the corporation also impose duties on, or
otherwise involve services by, the director to the plan or to participants
in or beneficiaries of the plan. "Director" includes, unless the context
requires otherwise, the estate or personal representative of a director.
(c) "Expenses" includes counsel fees.
(d) "Liability" means the obligation incurred with respect to a
proceeding to pay a judgment, settlement, penalty, fine, including an
excise tax assessed with respect to an employee benefit plan, or
reasonable expenses.
(e) "Official capacity" means, when used with respect to a director,
the office of director in a corporation and, when used with respect to a
person other than a director as contemplated in section 7-109-107, the
office in a corporation held by the officer or the employment, fiduciary,
or agency relationship undertaken by the employee, fiduciary, or agent on
behalf of the corporation. "Official capacity" does not include service
for any other domestic or foreign corporation or other person or employee
benefit plan.
(f) "Party" includes a person who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(g) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
7-109-102. Authority to indemnify directors.
(1) Except as provided in subsection (4) of this section, a
corporation may indemnify a person made a party to a proceeding because
the person is or was a director against liability incurred in the
proceeding if:
(a) The person conducted himself or herself in good faith; and
(b) The person reasonably believed:
(I) In the case of conduct in an official capacity with
the corporation, that his or her conduct was in the corporation's best
interests; and
(II) In all other cases, that his or her conduct was at
least not opposed to the corporation's best interests; and
(c) In the case of any criminal proceeding, the person had no
reasonable cause to believe his or her conduct was unlawful.
(2) A director's conduct with respect to an employee benefit plan
for a purpose the director reasonably believed of be in the interests of
the participants in or beneficiaries of the plan is conduct that satisfies
the requirement of subparagraph (II) of paragraph (b) of subsection (1) of
this section. A director's conduct with respect to an employee benefit
plan for a purpose that the director did not reasonably believe to be in
the interests of the participants in or beneficiaries of the plan shall be
deemed not to satisfy the requirements of paragraph (a) of subsection (1)
of this section.
(3) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of
conduct described in this section.
(4) A corporation may not indemnify a director under this section.
(a) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation;
or
(b) In connection with any other proceeding charging that the
director derived an improper personal benefit, whether or not involving
action in an official capacity, in which proceeding the director was
adjudged liable on the basis that he or she derived an improper personal
benefit.
(5) Indemnification permitted under this section in connection with
a proceeding by or in the right of the corporation is limited to
reasonable expenses incurred in connection with the proceeding.
7-109-103. Mandatory indemnification of directors. Unless limited
by its articles of incorporation, a corporation shall indemnify a person
who was wholly successful, on the merits or otherwise, in the defense of
any proceeding to which the person was a party because the person is or
was a director, against reasonable expenses incurred by him or her in
connection with the proceeding.
7-109-104. Advance of expenses to directors.
(1) A corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of final
disposition of the proceeding if:
(a) The director furnishes to the corporation a written
affirmation of the director's good faith belief that he or she has met the
standard of conduct described in section 7-109-102;
(b) The director furnishes to the corporation a written
undertaking, executed personally or on the director's behalf, to repay the
advance if it is ultimately determined that he or she did not meet the
standard of conduct; and
(c) A determination is made that the facts then known to those
making the determination would not preclude indemnification under this
article.
(2) The undertaking required by paragraph (b) of subsection (1) of
this section shall be an unlimited general obligation of the director but
need not be secured and may be accepted without reference to financial
ability to make repayment.
(3) Determinations and authorizations of payments under this section
shall be made in the manner specified in section 7-109-106.
7-109-105. Court-ordered indemnification of directors.
(1) Unless otherwise provided in the articles of incorporation, a
director who is or was a party to a proceeding may apply for
indemnification to the court conducing the proceeding or to another court
of competent jurisdiction. On receipt of an application, the court, after
giving any notice the court considers necessary, may order indemnification
in the following manner:
(a) If it determines that the director is entitled to
mandatory indemnification under section 7-109-103, the court shall order
indemnification, in which case the court shall also order the corporation
to pay the director's reasonable expenses incurred to obtain court-ordered
indemnification.
(b) If it determines that the director is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not the director met the standard of conduct set
forth in section 7-109102(1) or was adjudged liable in the circumstances
described in section 7-109-102(4), the court may order such
indemnification as the court deems proper; except that the indemnification
with respect to any proceeding in which liability shall have been adjudged
in the circumstances described in section 7-109-102(4) is limited to
reasonable expenses incurred in connection with the proceeding and
reasonable expenses incurred to obtain court-ordered indemnification.
7-109-106. Determination and authorization of indemnification of
director.
(1) A corporation may not indemnify a director under Section
7-109-102 unless authorized in the specific case after a determination has
been made that indemnification of the director is permissible in the
circumstances because the director has met the standard of conduct set
forth in section 7-109-102. A corporation shall not advance expenses to a
director under section 7-109-104 unless authorized in the specific case
after the written affirmation and undertaking required by section
7-109-104(1)(a) and (1)(b) are received and the determination required by
section 7-109104(1)(c) has been made.
(2) The determinations required by subsection (1) of this section
shall be made:
(a) By the board of directors by a majority vote of those
present at a meeting at which a quorum is present, and only those
directors not parties to the proceeding shall be counted in satisfying the
quorum; or
(b) If a quorum cannot be obtained, by a majority vote of a
committee of the board of directors designated by the board of directors,
which committee shall consist of two or more directors not parties to the
proceeding; except that the directors who are parties to the proceeding
may participate in the designation of directors for the committee.
(3) If a quorum cannot be obtained as contemplated in paragraph (a)
of this subsection (2) of this section, and a committee cannot be
established under paragraph (b) of subsection (2) of this section, or,
even if a quorum is obtained or a committee is designated, if a majority
of the directors constituting such quorum or such committee so directs,
the determination required to be made by subsection (1) of this section
shall be made:
(a) By independent legal counsel selected by a vote of the
board of directors or the committee in the manner specified in paragraph
(a) or (b) of subsection (2) of this section or, if a quorum of the full
board cannot be obtained and a committee cannot be established, by
independent legal counsel selected by a majority vote of the full board of
directors; or
(b) By the shareholders.
(4) Authorization of indemnification and advance of expenses shall
be made in the same manner as the determination that indemnification or
advance of expenses is permissible; except that, if the determination that
indemnification or advance of expenses is permissible is made by
independent legal counsel, authorization of indemnification and advance of
expenses shall be made by the body that selected such counsel.
7-109-107. Indemnification of officers, employees, fiduciaries, and
agents.
(1) Unless otherwise provided in the articles of incorporation;
(a) An officer is entitled to mandatory indemnification under
section 7-109-103, and is entitled to apply for court-ordered
indemnification under section 7-109-105, in each case to the same extent
as a director;
(b) A corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent who is not a director to a greater
extent, if not inconsistent with public policy, and if provided for by its
bylaws, general or specific action of its board of directors or
shareholders, or contract.
7-109-108. Insurance. A corporation may purchase and maintain
insurance on behalf of a person who is or was a director, officer,
employee, fiduciary, or agent of the corporation, or who, while a
director, officer, employee, fiduciary, or agent of the corporation, is or
was servicing at the request of the corporation as a director, officer,
partner, trustee, employee, fiduciary, or agent of another domestic or
foreign corporation or other person or of an employee benefit plan,
against liability asserted against or incurred by the person in that
capacity or arising from his or her status as a director, officer,
employee, fiduciary, or agent, whether or not the corporation would have
power to indemnify the person against the same liability under section
7-109-102, 7-109-103, or 7-109-107. Any such insurance may be procured
from any insurance company designated by the board of directors, whether
such insurance company is formed under the laws of this state or any other
jurisdiction of the United States or elsewhere, including any insurance
company in which the corporation has an equity or any other interest
through stock ownership or otherwise.
7-109-109. Limitation of indemnification of directors.
(1) A provision treating a corporation's indemnification of, or
advance of expenses to, directors that is contained in its articles of
incorporation or bylaws, in a resolution of its shareholders or board of
directors, or in a contract, except an insurance policy, or otherwise, is
valid only to the extent the provision is not inconsistent with sections
7-109-101 to 7-109-108. If the articles of incorporation limit
indemnification or advance of expenses, indemnification and advance of
expenses are valid only to the extent not inconsistent with the articles
of incorporation.
(2) Sections 7-109101 to 7-109-108 do not limit a corporation's
power to pay or reimburse expenses incurred by a director in connection
with an appearance as a witness in a proceeding at a time when he or she
has not been made a named defendant or respondent in the proceeding.
7-109-110. Notice to shareholders of indemnification of director.
If a corporation indemnifies or advances expenses to a director under this
article in connection with a proceeding by or in the right of the
corporation, the corporation shall give written notice of the
indemnification or advance to the shareholders with or before the notice
of the next shareholders' meeting. If the next shareholder action is
taken without a meeting at the instigation of the board of directors, such
notice shall be given to the shareholders at or before the time the first
shareholder signs a writing consenting to such action."
Section 7-108-402(2) of the Colorado Revised Statutes states as
follows:
No officer or director shall be personally liable for any
injury to person or property arising out of a tort committed by
an employee unless such officer or director was personally
involved in the situation giving rise to the litigation or
unless such officer or director committed a criminal offense.
The protection afforded in this section shall not restrict other
common law protections and rights that an officer or director
may have. This section shall not restrict the corporation's
right to eliminate or limit the personal liability of a director
to the corporation or to its shareholders for monetary damages
for breach of fiduciary duty as a director.
Paragraph C of Article X of the Restated Articles of Incorporation
with Amendments of the Company includes the following provision:
The personal liability of any of the Corporation's
directors to the Corporation or to its shareholders for monetary
damages for breach of a fiduciary duty as a director is
eliminated, except that this provision shall not eliminate the
liability of the director to the Corporation or to its
shareholders for monetary damages (a) for any breach of the
director's duty of loyalty to the Corporation or its
shareholders; (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law; (c) for acts specified in Section 7-5-114 of the Colorado
Corporation Code; or (d) for any transaction from which the
director derived an improper personal benefit.
On October 31, 1996, the Board of Directors (with William A. Clymor
abstaining) agreed to indemnify Mr. Clymor against liability to the
maximum extent permitted by law, including reasonable expenses, if any,
incurred if Hat Brands, Inc. seeks to enforce its Non-Compete Agreement
with Mr. Clymor as a result of the Company's purchase of the assets of
Star Point Enterprises, Inc. d/b/a Pro-Line Cap Company of Fort Worth,
Texas ("Star Point"). Upon receipt by the Company of a written
affirmation by Mr. Clymor of his good faith belief that he had at all
times conducted himself in good faith, and that his conduct was in the
Company's best interest, along with his written undertaking to repay any
amounts advanced for his defense if it is ultimately determined that he
did not meet the standard of conduct cited above, the officers of the
Company were instructed by the Board to advance to Mr. Clymor his
reasonable expenses, including legal fees, if any such legal action should
arise.
Effective January 24, 1997, the Board of Directors agreed to
indemnify Laurence H. Anton against any claims which may be brought
against him or against his agents, assigns or affiliates by third parties
for actions taken by any of them as a shareholder, director, officer,
agent or employee of the Company or of Star Point to the fullest extent
permitted by law, including any of their actions in connection with the
purchase by the Company of substantially all of the assets of Star Point
(the "Acquisition") except that they shall not be indemnified by the
Company for any claims brought by or on behalf of the Company or its
officers, directors, shareholders or affiliates (including but not limited
to claims by or under the Asset Purchase Agreement or the other agreements
contemplated by the Acquisition) nor shall they be indemnified against any
claims arising out of the business of Star Point prior to the sale of its
assets to the Company other than actions in furtherance of the sale of its
assets to the Company.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons
controlling the Company pursuant to the foregoing provisions, the Company
has been informed that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in
the Securities Act of 1933 and is therefore unenforceable.
Item 16. Exhibits.
Exhibit No. Description
4.1 Specimen Certificate for $.001 par value Common Stock of
the Company filed as Exhibit 4.2 to the Registrant's Form
SB-2 Registration Statement (No. 33-78448-D) and
incorporated herein by reference.
4.2 Restated Articles of Incorporation with Amendments filed
as Exhibit 3.1 to the Registrant's Form SB-2 Registration
Statement (No. 33-78448-D) and incorporated herein by
reference.
4.3 Amendment and Waiver of the Terms of the Amended and
Restated Articles of Incorporation of the Company filed
as Exhibit 10.3 to Schedule 13D for Star Point
Enterprises, Inc. and Laurence H. Anton filed February 3,
1997 and incorporated herein by reference.
4.4 Bylaws of the Company filed as Exhibit 3.3 to the
Registrant's Form SB-2 Registration Statement (No.
33-78448-D) and incorporated herein by reference.
4.5 Investment Agreement dated January 1993 between the
Company, David J. Bullock, Timothy B. Kneen and Kenneth
R. LaBounty, as amended filed as Exhibit 10.1 to the
Registrant's Form SB-2 Registration Statement (No. 33-
78448-D) and incorporated herein by reference.
4.6 Representative's Warrant Agreement filed as Exhibit 1.3
to the Registrant's Form SB-2 Registration Statement (No.
33-78448-D) and incorporated herein by reference.
4.7 Stock Purchase Agreement dated April 1, 1996 between the
Company and its Directors and Executive Officers filed as
Exhibit 10.1 to the Registrant's Form 10-QSB dated July
31, 1996 and incorporated herein by reference.
4.8 Asset Purchase Agreement dated as of December 31, 1996
among Laurence H. Anton, Star Point Enterprises, Inc.,
and the Company filed as Exhibit 10.1 to Schedule 13D for
Star Point Enterprises, Inc. and Laurence H. Anton filed
February 3, 1997 and incorporated herein by reference.
4.9 Debt Conversion and Registration Rights Agreement dated
as of December 31, 1996 among the Company, Star Point
Enterprises, Inc., Laurence H. Anton, Shirley G. Anton
and the individuals listed in Schedule A thereto filed as
Exhibit 10.2 to Schedule 13D for Star Point Enterprises,
Inc. and Laurence H. Anton filed February 3, 1997 and
incorporated herein by reference.
4.10 Stock Option Agreement dated effective December 31, 1996
by and between the Company and Laurence H. Anton filed as
Exhibit 10.5 to Schedule 13D for Star Point Enterprises,
Inc. and Laurence H. Anton filed February 3, 1997 and
incorporated herein by reference.
4.11 Stock Option Agreement dated November 26, 1996 between
the Company and The Wallach Company, Inc.
4.12 Stock Option Agreement dated January 24, 1997 between the
Company and The Wallach Company, Inc.
5 Opinion of Gorsuch Kirgis L.L.C.
23.1 Consent of KPMG Peat Marwick LLP for Carlyle Golf, Inc.
23.2 Consent of KPMG Peat Marwick LLP for Star Point
Enterprises, Inc.
23.3 Consent of Gorsuch Kirgis L.L.C. contained in its opinion
filed as Exhibit 5
Except for the exhibits listed as incorporated by reference herein and the
Consents of KPMG Peat Marwick LLP filed herewith, all other exhibits have
been previously filed.
Item 17. Undertakings.
The undersigned Company hereby undertakes with respect to the
securities being offered and sold in this offering:
(1) File, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:
(a) Include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information 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 end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(c) Include any additional or changed material information on
the plan of distribution;
provided, however, that small business issuers do not need to give the
statements in paragraphs (1)(a) and (1)(b) if the registration statement
is on Form S-3 or Form S-8, and the information required in a post-
effective amendment is incorporated by reference from the periodic reports
filed by the small business issuer pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
The Stock Purchase Agreement and the Star Point Registration Rights
Agreement provide that the Company and its officers, directors, and
controlling shareholders are indemnified against losses arising out of any
untrue statement of a material fact or any omission to state a material
fact necessary to make the statements in the registration statement or
prospectus, in light of the circumstances under which they were made, not
misleading, to the extent that such untrue statement or omission is
contained in any information or affidavit a Selling Shareholder furnished
to the Company.
SIGNATURES
In accordance with 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 Denver, State of Colorado, on
May 22, 1997.
CARLYLE GOLF, INC.
By:/s/Jerome M. Hause
Jerome M. Hause, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
/s/William A. Clymor Date: May 22, 1997
William A. Clymor, Chairman of the Board,
Director, Chief Executive Officer
/s/Jerome M. Hause Date: May 22, 1997
Jerome M. Hause, President, Chief
Operating Officer and Director
/s/W. Clayton Cole Date: May 22, 1997
W. Clayton Cole, Director
/s/Kenneth R. LaBounty Date: May 22, 1997
Kenneth R. LaBounty, Director
/s/Edward S. Adams, Jr. Date: May 22, 1997
Edward S. Adams, Jr., Director
/s/Walter E. Kellogg III Date: May 22, 1997
Walter E. Kellogg III, Director
/s/Laurence H. Anton Date: May 22, 1997
Laurence H. Anton, Director
/s/Wendy K. Williams Date: May 22, 1997
Wendy K. Williams, Vice President
Finance, Chief Financial Officer
(Principal Financial and
Accounting Officer)
EXHIBIT INDEX
Exhibit Method of Filing
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23.1 Consent of KPMG Peat Marwick LLP
for Carlyle Golf, Inc. Filed herewith electronically
23.2 Consent of KPMG Peat Marwick LLP
for Star Point Enterprises, Inc. Filed herewith electronically