As Filed with the Securities and Exchange Commission on May 1, 2000
Registration No. 333-35088
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
GERALD STEVENS, INC.
(Exact name of registrant as specified in its charter)
Florida 41-0719035
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Gerald Stevens, Inc.
301 East Las Olas Boulevard, Suite 300
Fort Lauderdale, Florida 33301
(954) 713-5000
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(Address, including zip code, and telephone
number, including area code, of registrant's principal
executive offices)
Adam D. Phillips
Senior Vice President, Chief Administrative Officer and Secretary
301 East Las Olas Boulevard, Suite 300
Fort Lauderdale, Florida 33301
(954) 713-5000
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
Jonathan L. Awner, Esq.
Akerman, Senterfitt & Eidson, P.A.
One S.E. 3rd Avenue, 28th Floor
Miami, Florida 33131-1714
(305) 374-5600
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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
Proposed Maximum
Maximum Aggregate
Title of Shares to Amount to be Offering Price Offering Amount of
Be Registered Registered per Share(1) Price(1) Registration Fee
- -------------------------------------------------------------------------------------------------------------------
Common Stock, par value 4,894,039 Shares $6.10155 $29,861,223.66 $7,883.36
$0.01 per share
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act.
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 or until this Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
PROSPECTUS
4,894,039 Shares
Gerald Stevens, Inc.
Common Stock, par value $0.01 per share
The selling stockholders identified in the table beginning on page 9
of this prospectus are offering all of the shares. We will not receive any
proceeds from the sale of the shares.
Our common stock trades on the Nasdaq National Market under the symbol
"GIFT." On April 28, 2000, the closing sale price of the common stock on Nasdaq
was $5 1/8 per share.
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Investing in our common stock involves risks which we describe in the
"Risk Factors" section beginning on page 2 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is May 1, 2000.
TABLE OF CONTENTS
Page
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Forward-looking Statements.......................................................................................ii
Gerald Stevens....................................................................................................1
Risk Factors......................................................................................................2
Use of Proceeds...................................................................................................9
Dividend Policy...................................................................................................9
Selling Stockholders.............................................................................................10
Plan of Distribution.............................................................................................13
Legal Matters....................................................................................................14
Experts ........................................................................................................14
Incorporation of Information by Reference........................................................................14
Where You Can Find More Information..............................................................................15
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 which reflect our
current views with respect to future events and financial performance. Forward-
looking statements include all statements regarding our expected financial
position, results of operations, cash flows, dividends, financing plans,
strategy, budgets, capital and other expenditures, competitive positions, growth
opportunities, benefits from new technology, plans and objectives of management
and markets for stock. Like any other business, we are subject to risks and
other uncertainties that could cause these forward-looking statements to prove
incorrect. In addition to general economic, business and market conditions, we
are subject to risks and uncertainties that could cause these forward-looking
statements to prove incorrect, including those stated in the "Risk Factors"
section of this prospectus and the following:
o Our ability to accomplish our anticipated growth strategies
and to integrate acquired businesses.
o Our need to improve our information systems.
o Unexpected liabilities incurred in our acquisitions.
o Our dependence on additional capital for growth.
o A decline in discretionary spending on flowers and gifts by
consumers.
o Weather, governmental regulations, transportation problems or
other factors that could prevent us from obtaining sufficient
products when needed.
o Our ability to maintain business relationships within the
industry, including relationships with wire services,
wholesalers, growers, importers and other florist shops.
o Our ability to develop relationships with supermarkets, mass
merchants, department stores and other businesses to expand
our store-in-store operations.
o Our ability to develop and operate a profitable Internet
business.
o An inability to pursue potential transactions as a result of
certain restrictions imposed on us to protect the
pooling-of-interests accounting treatment of our April 30,
1999 merger with Gerald Stevens Retail.
* * * * *
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not, and the underwriters have not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. We are not, and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should assume that the information appearing in this prospectus is accurate only
as of the date on the front cover of this prospectus. Our business, financial
condition, results of operations and prospects may have changed since that date.
We are not incorporating any information from our websites into this document.
ii
GERALD STEVENS
We are an integrated retailer and marketer of flowers, plants, and
complementary gifts and decorative accessories. We operate the largest
company-owned network of floral specialty retail stores in the United States,
with over 300 retail locations in 36 markets on April 30, 2000. We are building
a national brand and believe we are transforming the retail floral industry by
integrating our operations throughout the floral supply chain, from product
sourcing to delivery, and by managing every interaction with the customer, from
order generation to order fulfillment. We ultimately intend to provide all of
our retail customers with a unique and enhanced shopping experience under the
Gerald Stevens brand.
Our national sales and marketing division permits us, through multiple
distribution channels, including the Internet, dial-up numbers and direct mail,
to serve customers who do not visit or phone our retail stores. This division
includes National Flora, the largest yellow page advertiser of floral products;
Calyx & Corolla, the largest direct marketer of flowers; The Flower Club, a
leading corporate affinity marketer; and four primary websites. To ensure
superior customer service and efficient order processing, we operate four
regional call centers. To distribute orders in markets where we do not have
stores, we use several floral wire services, including our own Florafax floral
wire service, which includes approximately 5,000 member florists covering all 50
states.
To provide the freshest and highest quality products to our retail
customers, we operate our own sourcing operation. Our leading floral importer
and wholesaler, AGA Flowers, has long-term supply agreements and other
relationships to purchase cut flowers with many of the finest growers in the
United States and Central and South America. Our supply arrangements help us to
eliminate several steps in the floral distribution chain, ensuring a reliable
source of high-quality products at favorable prices. By reducing the time needed
to transport flowers from farms to our retail stores, we extend the vase life of
our flowers, leading to greater customer satisfaction.
We believe our execution of this integrated operating model will make
the Gerald Stevens brand synonymous with superior service, quality and value and
build the most recognized and respected floral and gift brand in the United
States. Once established, we believe the Gerald Stevens brand will drive
increased consumption of all of our products, particularly flowers.
Gerald Stevens was incorporated in Delaware in 1970, and reincorporated
in Florida in 2000. Our principal executive offices are located at 301 East Las
Olas Boulevard, Suite 300, Ft. Lauderdale, Florida 33301. Our telephone number
is (954) 713-5000.
RISK FACTORS
An investment in our common stock involves various risks, including
those described in the risk factors below. You should carefully consider these
risk factors, together with all of the other information included in this
prospectus, before you decide to invest in our common stock. If any of the
following risks, or other risks not presently known to us or that we currently
believe not to be material, develop into actual events, then our business,
financial condition, results of operations, or prospects could be materially
adversely affected, the market price of our common stock could decline and you
could lose all or part of your investment.
Our Potential Inability to Implement Our Growth Strategy
Our business strategy will focus on growing our revenue and operations
internally by opening new retail locations and expanding sales through other
order-generation businesses, including our websites, as well as by making
acquisitions of floral and gift businesses. The success of our growth strategy
will depend on a number of factors including our ability to:
o assess the value, strengths and weaknesses of acquisition
candidates;
o evaluate the costs and projected returns of expanding our
operations;
o expand our customer base;
o market our products and services effectively over the Internet
and through traditional media;
o lease desirable store locations on suitable terms and complete
construction on a timely basis;
o promptly and successfully integrate acquired businesses and
new retail locations with existing operations; and
o obtain financing to support this growth.
We may not be able to identify suitable acquisition candidates or
locations for new stores. If we are not able to identify suitable acquisition
candidates or if acquisitions of suitable candidates are prohibitively
expensive, we may be forced to alter our growth strategy. Also, we may not be
able to retain a sufficient portion of the customers of the retail stores that
we acquire. Our growth strategy may affect short-term cash flow and net income
as we increase our indebtedness and incur additional expenses. As a result, our
operating results may fluctuate and our growth strategy may not result in
improving our profitability. If we fail to implement our growth strategy
successfully, the market price of our common stock may decline.
We may expand our operations not only within our current lines of
business, but also into other related and complementary businesses. Our entry
into any new lines of business may not be successful, as we may lack the
understanding and experience to operate profitably in new lines of business.
Demands on Our Resources Due to Growth
Our anticipated growth could place significant demands on our
management and our operational, financial and marketing resources. These demands
are primarily due to our plans to:
o acquire and integrate numerous floral and gift retailers;
o open new locations;
o increase the number of our employees;
2
o expand the scope of our operating and financial systems;
o broaden the geographic area of our operations;
o increase the complexity of our operations;
o increase the level of responsibility of management personnel;
and
o continue to train and manage our employee base.
Our management and resources, now and in the future, may not be
adequate to meet the demands resulting from our expected growth.
Continued Net Losses Could Hinder Our Growth Strategy
We have experienced losses during our most recent fiscal year. Our net
loss for fiscal 1999 was $12.3 million, which included a merger expense of $4.6
million and a non-cash compensation expense of $1.4 million related to non-plan
stock options. If we incur net losses in future periods, we may not be able to
implement our growth strategy in accordance with our present plans and our stock
price may decline.
Our Financial Results May Not Be Indicative of Future Results
The financial statements incorporated by reference in this prospectus
cover periods when Gerald Stevens and some of our acquired businesses were not
under common control or management. These financial statements may not be
indicative of our future financial condition, operating results, growth trends
or prospects. We acquired our initial retail operations in our April 1999 merger
with Gerald Stevens Retail, Inc. Gerald Stevens Retail was established in May
1998 and commenced operations in October 1998 upon completion of its acquisition
of ten floral businesses. For the period from its inception to September 30,
1998, Gerald Stevens Retail was a development stage company with no revenue and
generated a net loss of $2.1 million.
You must evaluate our prospects in light of the risks, expenses and
difficulties frequently encountered by companies in the early stages of a new
growth strategy. Our strategy of building a nationally branded floral and gift
retailer and marketer may not lead to growth, profitability or increased market
prices for our common stock.
We Need to Improve Our Information Systems
We need to improve and integrate our information systems. Although we
invested approximately $5.5 million in fiscal 1999, and over the next two to
three years we intend to invest approximately $15.0 million for our information
systems, this budget may not be sufficient for our needs. We also need to hire
more accounting and information systems personnel. We may experience delays,
disruptions and unanticipated expenses in improving, implementing, integrating
and operating our information systems. Failure to improve and fully integrate
and enhance our information systems or failure to hire additional personnel
could have a material adverse effect on our business, financial condition,
results of operations and growth prospects.
We May Have Difficulties Integrating Acquired Businesses With Our Company
Until we complete and install our information systems, we will use and
depend upon the information and operating systems of our acquired entities. We
may not be able to efficiently combine our operations with those of the
businesses we have acquired without encountering difficulties. These
difficulties could result from having different and potentially incompatible
operating practices, computers or other information systems. By consolidating
personnel with different business backgrounds and corporate cultures into one
company, we may experience additional difficulties. As a result, we may not
achieve anticipated cost savings and operating efficiencies and we may have
difficulties managing, operating and integrating our businesses.
3
We May Incur Unexpected Liabilities When We Acquire Businesses
During the acquisition process, we may not discover some of the
liabilities of businesses we acquire. These liabilities may result from a prior
owner's non-compliance with applicable federal, state or local laws. For
example, we may be liable after an acquisition of a business for the prior
owner's failure to pay taxes or comply with environmental regulations.
Environmental liabilities could arise regardless of whether we own or lease our
properties. While we will try to minimize our potential exposure by conducting
thorough investigations during the acquisition process, we will not be able to
identify all existing or potential liabilities. We also generally will require
each seller of an acquired business to indemnify us against undisclosed
liabilities. In most cases, this indemnification obligation will be supported by
deferring payment of a portion of the purchase price or other appropriate
security. However, this indemnification may not be adequate to fully offset any
undisclosed liabilities associated with the acquired business.
Goodwill Resulting From Acquisitions May Adversely Affect Our Results
Goodwill and related amortization are expected to increase principally
as a result of future retail floral business acquisitions, and the amortization
of goodwill and other intangible assets could adversely affect our financial
condition and results of operations. We have considered various factors,
including projected future cash flows, in determining the purchase prices of our
acquired retail floral and order generation businesses, and we do not believe
that any material portion of the goodwill related to any of these acquisitions
will dissipate over a period shorter than the expected useful life. However, our
earnings in future years could be materially adversely affected if management
later determines either that the remaining balance of goodwill is impaired or
that a shorter amortization period is applicable.
We Will Depend On Additional Capital For Our Growth
Our ability to remain competitive, sustain our expected growth and
expand our operations largely depends on our access to capital. We anticipate
making numerous acquisitions of floral businesses, which will require ongoing
capital expenditures. We also expect to make expenditures to continue
integrating the acquired floral businesses with our existing businesses. To
date, we have financed capital expenditures and acquisitions primarily through
private equity, a public offering and our revolving bank credit facility. We
have a $40 million revolving credit facility under which we have outstanding
borrowings of approximately $33 million as of April 30, 2000. We are in
discussions with our primary lending bank regarding a proposed syndication of
and increase to our bank credit facility. We are also in discussions with a
number of third parties regarding different debt or equity investments in Gerald
Stevens. We may not be successful in obtaining an increased credit facility or
otherwise raising additional capital. In addition, to execute our growth
strategy and meet our capital needs, we plan to issue additional equity
securities as part of the purchase price of future acquisitions and we may issue
additional debt or equity securities for cash in public or private offerings.
Any of these transactions may have a dilutive effect on the interests of our
stockholders. However, additional capital may not be available on terms
acceptable to us. Our failure to obtain sufficient additional capital could
curtail or alter our growth strategy or delay capital expenditures.
Debt Covenants May Restrict Our Growth
Restrictive covenants contained in our credit facility may limit our
ability to finance future acquisitions, new locations and other expansion of our
operations. Credit facilities obtained in the future likely will contain similar
restrictive covenants. These covenants may also require us to achieve specific
financial ratios.
With regard to acquisitions, our credit facility requires that, in the
event that our consolidated leverage ratio is greater than 2.0 to 1.0 and the
cash portion of the cost of a business acquisition exceeds $3.0 million, certain
acquisition-specific covenants are applicable. These covenants include the
requirement that at least 35% of the cost of an acquisition be paid in the form
of common stock, that the proceeds of loans used to pay the cost of an
acquisition cannot exceed three times the acquired company's earnings before
interest, taxes, depreciation and amortization, and that the lender be provided
certain financial information and give consent to the acquisition.
4
Our credit facility also requires us to maintain financial ratios that
limit total debt and capital expenditures. Consolidated debt in the future
cannot exceed earnings before interest, taxes, depreciation and amortization by
a ratio of 2.75 to 1.00 or exceed consolidated stockholders' equity. In
addition, the ratio of EBIT plus lease payments to the sum of interest expense,
current maturities of debt, cash income taxes and lease payments must not be
less than 1.10 to 1.00 prior to December 31, 2000 and 1.25 to 1.00 thereafter.
Capital expenditures cannot exceed $52 million for the 2002 fiscal year.
Any of these covenants could become more restrictive over time. Our
ability to respond to changing business and economic conditions and to secure
additional financing for operating and capital needs may be significantly
restricted by these covenants. Furthermore, we may be prevented from engaging in
transactions including acquisitions that are important to our growth strategy.
Any breach of these covenants could cause a default under our debt obligations
and result in our debt becoming immediately due and payable. We are not certain
whether we would have, or would be able to obtain, sufficient funds to make
these accelerated payments.
Our Quarterly Operating Results Will Fluctuate Due to Seasonality
Unit sales of floral products have historically been seasonal,
concentrated primarily in the second and third fiscal quarters as a result of
holidays such as Valentine's Day, Easter and Mother's Day. In contrast to the
second and third fiscal quarters, the first and fourth fiscal quarters have
relatively few flower-giving holidays. Negative fluctuations have been
particularly pronounced and net losses have been incurred in these quarters. In
the past, we have experienced, and we expect to continue to experience,
quarterly variations in revenue and cash flows. Other factors that could cause
quarterly variations include additional selling, general and administrative
expenses to acquire and support new business and the timing and magnitude of
capital expenditures. We intend to plan our operating expenditures based on
revenue forecasts. Any revenue shortfall below these forecasts in any quarter
would likely decrease our operating results for that quarter.
Customers May Reduce Discretionary Purchases of Flowers and Gifts
We believe that the floral and gift industry is influenced by general
economic conditions, particularly by the level of personal discretionary
spending by customers. As a result, the floral and gift industry could
experience periods of decline and recession during economic downturns. The
industry may experience sustained periods of decline in sales in the future. Any
material decline in personal discretionary spending could have a negative effect
on our business, financial condition, results of operations or prospects.
Competition May Adversely Impact Our Performance
The floral and gift industry is highly competitive. Competition exists
in each segment of the industry. We expect competition from:
o flower growers, importers, wholesalers and bouquet companies,
including Dole Food Company Inc. and USA Floral Products Inc.;
o floral wire services, including FTD, Teleflora and AFS;
o retailers including traditional floral and gift shops,
supermarkets, mass merchandisers and garden centers; and
o traditional and online order generators of floral and gift
products, including 1-800-FLOWERS.
In many of our markets, our competitors have larger and greater
financial resources than we do. The Gerald Stevens brand is new, and may not be
marketed effectively by us. We may not be able to compete successfully against
our existing competitors and any future competitors.
5
We May Incur Anti-Dumping Liability
The majority of flowers sold in the United States are grown in other
countries. Flower-importing companies are subject to anti-dumping duties.
Generally, if the United States Department of Commerce determines that a foreign
grower sold flowers to an importer in the United States for a price less than
the home market price or constructed value of the flowers, then the Commerce
Department may impose an anti-dumping duty upon the importer. The precise amount
of duty is calculated after a review of sales over a twelve-month period and a
comparison of the prices of the United States sales with the prices of home
market sales or constructed value.
Political and Economic Events in Foreign Countries May Limit Supply of Flowers
Flowers are imported principally from countries in South America and
Central America. The political and economic climate in several of these
countries from time to time has been volatile. In some of these countries, this
volatility has from time to time adversely affected many aspects of the
countries' economies, including flower production. At times, this volatility has
also impacted trade relations with the United States. As a result, future
political and economic events in these flower-growing countries may reduce the
production or export of flowers. Any adverse changes in the production or export
of flowers from flower-producing countries could have a material impact on our
business, financial condition, results of operations or prospects.
Potential Adverse Effects of Bad Weather In Flower Growing Regions
The supply of perishable floral products depends significantly on
weather conditions where the products are grown. Severe weather, including
unexpected cold weather, may have an adverse effect on the available supply of
flowers, especially at times of peak demand. For example, in order for a
sufficient supply of roses to be available for sale on Valentine's Day, rose
growing regions must not suffer a freeze or other harsh conditions in the weeks
leading up to the holiday. Any shortages or disruptions in the supply of fresh
flowers, or any inability on our part to procure our flower supply from
alternate sources at acceptable prices in a timely manner, could lead to the
inability to fulfill orders during periods of high demand, and the loss of
customers.
We May Have Difficulties Transporting Flowers
The perishable nature of flowers requires the floral industry to have a
transportation network that can move products quickly from the farm to the
retailer. Flowers grown in South America and Central America are typically
transported via charter flights to the United States, principally to Miami.
After flowers arrive in Miami or other ports of entry, they are distributed
throughout the United States primarily via refrigerated trucks. We cannot assure
you that there will be no disruptions in service at Miami International Airport,
fuel shortages, work stoppages in the air charter or trucking industries or
other problems encountered in transporting flowers.
Problems With Order Transmission Networks and The Compatibility of Our Systems
A large percentage of floral industry revenue is dependent upon the
ability of the party taking an order from a customer to transmit the order to a
delivering florist outside the immediate geographic market.
Over the past several years, this process has increasingly relied on
electronic communications and computers to create networks that serve as the
transmission medium for orders. We believe that a substantial number of floral
industry participants use one or more of these networks, particularly FTD's
Mercury network. In the event that one or more of these networks were to become
disabled, or our systems were unable to communicate with the network or any
other transmission medium, we may not be able to use our normal computer-based
methods for communicating orders. In this event, we would either need to route
orders via alternative wire services, requiring reconfiguration of the existing
wire interfaces and programming logic, or be required to make individual
telephone calls or send faxes to florists. Conducting business primarily through
telephone and fax orders would cause us to operate in a slower and more costly
manner. Any of these situations could have a negative impact on our business,
financial condition, results of operations or prospects.
6
Relationships With Floral Wire Service Businesses May Deteriorate
The retail floral industry has traditionally relied upon floral wire
services, including FTD, Teleflora, AFS and our Florafax wire service business,
to act as intermediaries to effectively manage, among other things, the
financial settlement among florists and serve as a clearinghouse for orders. To
our knowledge, these intermediaries do not currently operate retail stores but
do engage in other marketing and floral order generating activities. One or more
of these wire services may seek to prohibit our order generation business or our
retail operations from settling orders through their wire services, or using
their technology to transmit orders. These actions may have a short-term
material adverse impact on our business, financial condition, results of
operations or prospects.
Wire service intermediaries also provide financial rebates or
incentives to those florists, order generators and other parties that transmit
and/or financially settle a large number of orders through their system. These
rebates and incentives provide a significant portion of our operating profit.
Any change in the industry's rebate or incentive structure may have a short-term
material impact on our business, financial condition, results of operations or
prospects.
Relationships With Member Florists of Our Wire Service Business May Deteriorate
Some of the member florists of our Florafax wire service business may
not want to continue as members if they perceive that we are in competition with
them through our retail stores. This risk may be heightened when we acquire or
open retail operations in markets where our member florists are located. Loss of
member florists could have a negative impact on our business, financial
condition, results of operations or prospects.
Uncertainty of Internet Use and Its Impact on Our Business
We believe that the Internet and electronic commerce will play an
increasingly important role in floral and gift- related merchandising and order
taking over the coming years. As such, we intend to devote significant financial
resources to our Internet operations. However, the use of the Internet and
e-commerce by customers to purchase flowers and gifts may not increase as
rapidly as we expect, and other purchasing mediums may replace the Internet.
Additionally, unlike building traditional retail stores, where there is a
limited amount of prime retail real estate and significant capital requirements,
there are few barriers to entry on the Internet. Our competitors may be better
funded or have other proprietary technologies or approaches to e-commerce that
may make it difficult for us to compete on the Internet. In any of these
instances, our business, financial condition, results of operation or prospects
may be materially adversely impacted.
In addition, if the use of the Internet for direct-from-grower sales
does rapidly increase and such sales replace locally delivered floral
arrangements, then the revenue we plan to generate by owning and operating
numerous retail stores may be adversely affected. Also, as e-commerce becomes
more prevalent and the use of Internet phone directories increases, the value we
receive from advertisements in traditional phone books may decrease.
We May Face Increased Government Regulations of the Internet
There are an increasing number of federal, state, local and foreign
laws and regulations pertaining to the Internet. In addition, a number of
federal, state, local and foreign legislative and regulatory proposals are under
consideration. Laws or regulations may be adopted with respect to the Internet
relating to liability for information retrieved from or transmitted over the
Internet, online content, user privacy and quality of services. Changes in tax
laws relating to electronic commerce could adversely affect our business. The
applicability to the Internet of existing laws covering issues such as
intellectual property, libel, personal privacy and other areas is uncertain and
developing. New legislation or regulations could decrease growth in the use of
the Internet, impose additional burdens on e-commerce or alter how we do
business. This could decrease demand for our online product offerings, increase
our cost of doing business, increase the costs of products sold on the Internet
or otherwise have an adverse effect on our business, financial condition,
results of operations and prospects.
7
Our Directors and Executive Officers Have Limited Industry Experience
Other than Ruth Owades, Kenneth Royer and Andrew Williams, none of our
directors and executive officers have significant experience in the floral and
gift industry. Our directors and executive officers may not ultimately be
successful in the floral and gift industry. In addition, we believe that our
success will depend to a significant extent upon the efforts and abilities of
the management of companies that we acquire.
We Depend Heavily On Our Senior Management
We believe that our success will depend to a significant extent upon
the efforts and abilities of our executive officers and the senior management of
the companies that we acquire. While we have entered into employment agreements
with our executive officers and the senior management of some companies we have
acquired, these individuals may not remain with us throughout the term of the
agreements or thereafter. Our employment agreements with Gerald Geddis, Albert
Detz and Adam Phillips terminate on December 31, 2000, our employment agreement
with Steven Nevill terminates on February 2, 2001 and our employment agreement
with Eleanor Callison terminates on September 27, 2001. We do not have "key
person" life insurance policies covering any of our employees. We will likely
also depend on the senior management of any significant business that we acquire
in the future. If we lose the services of one or more of these key employees
before we are able to attract qualified replacement personnel, our business
could be adversely affected.
Our Significant Stockholders Will Be In A Position to Influence Corporate Action
As a result of its stock ownership and board representation, New River
Capital Partners will be in a position to influence our corporate actions such
as mergers or takeover attempts in a manner that could conflict with the
interests of our other stockholders. New River Capital Partners owns
approximately 7.4 million shares, or approximately 15.1% of our outstanding
common stock.
In addition, our Chairman of the Board controls the managing general
partner of New River Capital Partners. Our executive officers are deemed to
beneficially own approximately 11.8 million shares, or approximately 24.0%, of
our outstanding common stock (which include the shares owned by New River
Capital Partners). Although there are no agreements or understandings between
New River Capital Partners and our executive officers as to voting, if these
parties voted in concert they would exert significant influence over us.
Our Stock Price May Be Volatile
The market price for our common stock has been volatile and may be
affected by a number of factors, including the announcement of acquisitions or
other developments by us or our competitors, quarterly variations in our or
other industry participants' results of operations, changes in earnings
estimates or recommendations by securities analysts, developments in the floral
and gift industry, sales of a substantial number of shares of our common stock
in the public market, general market conditions, general economic conditions and
other factors. Some of these factors may be beyond our control or may be
unrelated to our results of operations or financial condition. Such factors may
lead to further volatility in the market price of our common stock.
Possible Depressing Effect of Shares Eligible for Future Sale
We have issued a substantial number of shares of our common stock
pursuant to our acquisition program, and we expect to issue additional shares of
common stock as part of the purchase price for future acquisitions. The shares
of common stock issued pursuant to our acquisition program will be registered
with the Commission periodically, making them immediately available for resale.
Also, we have issued to our employees, officers and directors options to
purchase shares of our common stock. The shares issuable upon exercise of the
options have been registered with the Commission. Any actual sales or any
perception that sales of a substantial number of shares may occur could
adversely affect the market price of our common stock and could impair our
ability to raise capital through an offering of equity securities.
8
Possible Dilution in Value of Common Stock and Voting Power
If we issue additional shares of common stock, including shares that
may be issued pursuant to option grants, earn-out arrangements and future
acquisitions, purchasers of common stock may experience dilution in the net
tangible book values per share of the common stock. In addition, because our
stockholders do not have any preemptive right to purchase additional shares in
the future, their voting power will be diluted by any issuance of shares.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares in this
offering by the selling stockholders.
DIVIDEND POLICY
We have never paid dividends on our common stock and we do not
anticipate paying cash dividends in the foreseeable future. We intend to retain
future earnings to fund the development and growth of our business. Any payment
of dividends in the future will be at the discretion of our board of directors
and will be dependent upon our earnings, financial condition, capital
requirements and other factors deemed relevant by our board of directors. Our
credit facility also restricts our ability to pay dividends.
9
SELLING STOCKHOLDERS
The following table sets forth the name of each selling stockholder,
the total number of shares of our common stock beneficially owned by each of the
selling stockholders on the date of this prospectus and the total number of
shares of common stock that each selling stockholder may offer and sell pursuant
to this prospectus. Because the selling stockholders may offer all or a portion
of the shares at any time and from time to time after the date of this
prospectus, we cannot determine at this time the exact number of shares that
each selling stockholder may retain upon completion of the offering. No selling
stockholder will own more than 1% of our common stock upon completion of this
offering.
To our knowledge, none of the selling stockholders has had any material
relationship with us during the past three years, except as set forth in the
footnotes to the table.
Number of Shares Number of Shares
Beneficially Being Offered for
Owned Prior to Selling Stockholders'
Selling Stockholder the Offering (1) Account
------------------- ---------------------- -----------------------
Allen & Company Incorporated (2) 441,053 100,000
Allen Small Cap Partners L.P. 172,000 172,000
Anderson, Garrett & Anderson, Krista, Joint Tenants (3) 60,514 60,514
Anvil Investment Associates, LP 140,000 140,000
Argey, Inc. (4) 17,037 17,037
Arthur and Christine Bogad Family Trust, dated August 29, 1988 (5) 42,629 42,629
Ashford Capital Partners, L.P. 150,000 150,000
Barrett, Scott 110,000 100,000
Barriball, Scott E. (6) 65,804 65,804
Bolt, Ken & Bolt, Elaine, Joint Tenants (7) 43,274 43,274
Butler, William 25,000 25,000
Caputo, Fernanda (8) 13,793 13,793
Caputo, Joseph (8) 13,793 13,793
Cascade Investment, L.L.C. 750,000 750,000
Chilton International, L.P. 60,980 60,980
Chilton Investment Partners, L.P. 26,350 26,350
Chilton QP Investment Partners, L.P. 12,670 12,670
Dake, Shane (9) 1,234 1,234
Davis, John W. (10) 8,847 8,847
Davis, Monte (11) 15,631 15,631
Dyer, Jr., Robert C. (12) 7,725 7,725
Engert, Edgar & Engert, Renate - Trustees Engert Family Trust u/a 22,827 22,827
dtd 6/21/95 (13)
Eriksson, Karl O. (14) 17,289 17,289
Gildea, John W. 35,000 35,000
Graziano, Jr., Domenic and Graziano, Joan, Tenants by the 197,232 197,232
Entirety (15)
Harry Miller Flowers, Inc. (16) 22,291 22,291
Hawkins, Thomas (17) 432,000 337,500
Hetland, Barbara (18) 13,003 13,003
Holst, Judith C. (19) 2,848 2,848
Holzman, Steven D. 100,000 100,000
Ito, Alice A. (20) 14,337 14,337
Ito, Arthur T. (20) 6,588 6,588
Ito, James A. (20) 3,873 3,873
Jaffe, Stephen M. (21) 37,665 37,665
Kanamori, Lynn 1,811 1,811
Keegan, Michael (12) 1,016 1,016
Kendall, Donna (22) 12,802 12,802
Kim, Chang and Kim, Yea - Sook, Joint Tenants with Rights of 3,715 3,715
Survivorship (23)
King, Daniel (24) 28,346 28,346
King, Kevin (24) 28,347 28,347
Klug, Iris J. (25) 12,384 12,384
Kobrick Emerging Growth Fund 167,000 167,000
Kobrick Fund, L.P. 166,700 166,700
10
Number of Shares Number of Shares
Beneficially Being Offered for
Owned Prior to Selling Stockholders'
Selling Stockholder the Offering (1) Account
------------------- ---------------------- -----------------------
Kobrick Investment Fund, L.P. 127,800 127,800
Kobrick Offshore Fund, Ltd. 38,500 38,500
Estate of Corinne Kuromi (20) 10,851 10,851
Kuromi, Kevin (20) 1,811 1,811
Kuschel, Laurie (8) 6,897 6,897
Maril & Co. 210,000 210,000
Martin, Ann S. and Martin, Elmer E., Tenants in the Entirety (26) 11,248 11,248
Mathis, Alma (27) 71,756 71,756
McLeod, Kenneth (28) 7,740 7,740
McLeod, Sue (28) 7,740 7,740
MGN Opportunity Group LLC 250,000 250,000
Pavelka, David (29) 10,890 10,890
Pavelka, Steven (29) 10,889 10,889
Pendley, Curt & Pendley, Mary A., Joint Tenants (3) 60,514 60,514
Polites, Chris (30) 10,854 10,854
Polites, Kathy (30) 10,854 10,854
Rawls, James C. and Rawls, Judith F., Joint Tenants (31) 2,230 2,230
Robbins, Bill J. and Robbins, Deborah N., Joint Tenants with 5,573 5,573
Rights of Survivorship (32)
Rotunno, Gay (33) 11,228 11,228
Sankoran, Nan B. (31) 2,321 2,321
Smith, Donna G. (34) 3,060 3,060
Spunky's Enterprises Ltd. (35) 15,102 15,102
Takahashi, Midori (20) 3,873 3,873
Tatsch, Elizabeth J. (36) 11,308 11,308
Teleos Fund, L.P. 25,000 25,000
Teleos Strategies, Ltd. 225,000 225,000
Van Ewyk, James (14) 25,933 25,933
Werner, Robert G. and Werner, Deanna K., Joint Tenants (37) 126,538 126,538
White, Sheri M. and White, Donald L., Joint Tenants (38) 17,088 17,088
Wilson, Barbara J. (12) 11,586 11,586
The Wolfson Family Trust 28,800 28,800
F/B/O Zev Wolfson IRA 71,200 71,200
Wrap Two & Co. as nominee for AXP Variable Portfolio - 400,000 400,000
Managed Fund
---------------------- -------------------------
TOTAL 5,339,592 4,894,039
- ----------------
(1) As used herein, beneficial ownership means the sole power to vote, or
direct the voting of, a security, or the sole or shared power to
dispose, or direct the disposition of, a security. Except as otherwise
indicated, each selling stockholder has beneficial ownership with
respect to his/her shares of common stock.
(2) Allen & Company Incorporated acted as placement agent in connection
with a private placement of common stock by Gerald Stevens Retail, Inc.
in October 1998 and in connection with a private placement of common
stock by our company in March 2000. Allen & Company received customary
fees for both of these transactions. Allen & Company and certain of
its employees also purchased shares of common stock in these private
placements on the same terms as the other investors. Allen & Company
also acted as co-managing underwriter for our public offering of common
stock in June 1999, for which it received 9 customary discount.
(3) Held ownership interest in Piccolo's prior to Gerald Stevens'
acquisition of certain assets thereof.
(4) Held ownership interest in Dusty's Flowers prior to Gerald Stevens'
acquisition of certain assets thereof.
(5) Held ownership interest in Simpsons prior to Gerald Stevens'
acquisition of certain assets thereof.
(6) Held ownership interest in Diversified Floral prior to Gerald Stevens'
acquisition of the ownership interests therein.
(7) Held ownership interest in Brant's Florist prior to Gerald Stevens'
acquisition of certain assets thereof.
(8) Held ownership interest in Joe's Flower Shop prior to Gerald Stevens'
acquisition of certain assets thereof.
(9) Held ownership interest in California Rose prior to Gerald Stevens'
acquisition of certain assets thereof.
(10) Held ownership interest in Gwinnett prior to Gerald Stevens'
acquisition of certain assets thereof.
(11) Held ownership interest in Surroundings prior to Gerald Stevens'
acquisition of the ownership interests therein.
(12) Held ownership interest in Solarium prior to Gerald Stevens'
acquisition of certain assets thereof.
(13) Held ownership interest in Del Mar Floral prior to Gerald Stevens'
acquisition of certain assets thereof.
(14) Held ownership interest in Pfund & Clint prior to Gerald Stevens'
acquisition of the ownership interests therein.
(15) Held ownership interest in Domenic Graziano Flowers & Gifts prior to
Gerald Stevens' acquisition of certain assets thereof.
(16) Held ownership interest in Harry Miller Flowers prior to Gerald
Stevens' acquisition of certain assets thereof.
(17) Mr. Hawkins is a limited partner of New River Capital Partners, L.P.,
an affiliate of Gerald Stevens.
11
(18) Held ownership interest in Floral Affair in Plymouth prior to Gerald
Stevens' acquisition of certain assets thereof.
(19) Held ownership interest in Lemon Grove Florist prior to Gerald Stevens'
acquisition of certain assets thereof.
(20) Held ownership interest in Flower View Gardens prior to Gerald Stevens'
acquisition of the ownership interests therein.
(21) Held ownership interest in Orlando City Florist prior to Gerald
Stevens' acquisition of certain assets thereof.
(22) Held ownership interest in Seifert's Floral Company prior to Gerald
Stevens' acquisition of certain assets thereof.
(23) Held ownership interest in Stephen's Flowers prior to Gerald Stevens'
acquisition of certain assets thereof.
(24) Held ownership interest in Fort Meyers Florist prior to Gerald Stevens'
acquisition of certain assets thereof.
(25) Held ownership interest in Fresh Flower Market prior to Gerald Stevens'
acquisition of certain assets thereof.
(26) Held ownership interest in European Floral Gallery prior to Gerald
Stevens' acquisition of certain assets thereof.
(27) Held ownership interest in Suzann's prior to Gerald Stevens'
acquisition of the ownership interests therein.
(28) Held ownership interest in Whitfield's Flowers prior to Gerald Stevens'
acquisition of certain assets thereof.
(29) Held ownership interest in Kelly-Scherrer Flowers prior to Gerald
Stevens' acquisition of certain assets thereof.
(30) Held ownership interest in Polites prior to Gerald Stevens' acquisition
of certain assets thereof.
(31) Held ownership interest in McDonough's prior to Gerald Stevens'
acquisition of certain assets thereof.
(32) Held ownership interest in Atlanta Oil Lamp prior to Gerald Stevens'
acquisition of certain assets thereof.
(33) Held ownership interest in Lucy Little Flowers prior to Gerald Stevens'
acquisition of certain assets thereof.
(34) Held ownership interest in Springs Florist prior to Gerald Stevens'
acquisition of certain assets thereof.
(35) Held ownership interest in Spunky's prior to Gerald Stevens'
acquisition of certain assets thereof.
(36) Held ownership interest in Medical Center Florists prior to Gerald
Stevens' acquisition of certain assets thereof.
(37) Held ownership interest in A French Bouquet Flower Shoppe prior to
Gerald Stevens' acquisition of certain assets thereof.
(38) Held ownership interest in Bee Hive Florists prior to Gerald Stevens'
acquisition of certain assets thereof.
12
PLAN OF DISTRIBUTION
The selling stockholders may sell or distribute some or all of the shares
of common stock offered by this prospectus from time to time through
underwriters, dealers, brokers, or other agents or directly to one or more
purchasers, including pledgees, in transactions on Nasdaq, in privately
negotiated transactions, or in the over-the-counter market, or in a combination
of such transactions, or by any other legally available means. These
transactions may be effected by the selling stockholders at market prices
prevailing at the time of sale, at prices related to prevailing market prices,
at negotiated prices, or at fixed prices, which may be changed. Underwriters,
brokers, dealers, or other agents participating in these transactions as agent
for the selling stockholder may receive compensation in the form of discounts,
concessions, or commissions from the selling stockholders, and, if they act as
agent for the purchaser of the shares being sold, from the purchaser. The
discounts, concessions, or commissions given to a particular underwriter,
broker, dealer, or other agent might be in excess of those customary in the type
of transaction involved. This prospectus also may be used, with our consent, by
donees and pledges of the selling stockholders, or by other persons acquiring
shares offered by this prospectus and who wish to offer and sell these acquired
shares under circumstances requiring or making desirable its use. If required,
we will file, during any period in which offers or sales are being made, one or
more supplements to this prospectus to set forth the names of donees or pledgees
of selling stockholders and any other material information with respect to the
plan of distribution not previously disclosed.
The selling stockholders and any underwriters, brokers, dealers or other
agents that participate in a distribution of the shares offered by this
prospectus may be deemed to be "underwriters" within the meaning of the
Securities Act, and any discounts, commissions, or concessions received by any
underwriters, brokers, dealers or agents might be deemed to be underwriting
discounts and commissions under the Securities Act. Neither we nor the selling
stockholders can presently estimate the amount of such compensation. We know of
no existing arrangements between the selling stockholders and any underwriter,
broker, dealer or other agent relating to the sale or distribution of the shares
offered by this prospectus.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of any of the shares offered by this prospectus may
not simultaneously engage in market activities with respect to our common stock
for a period of nine business days prior to the commencement of such
distribution. In addition and without limiting the foregoing, the selling
stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including without limitation Rule 10b-5
and Regulation M, which provisions may limit the timing of purchases and sales
of any of the shares offered by this prospectus. Any of those rules or
regulations may affect the marketability of our common stock.
We will pay substantially all of the expenses incident to the offering of
the shares offered by the selling stockholders to the public pursuant to this
prospectus other than commissions and discounts of underwriters, brokers,
dealers, or other agents. The selling stockholders may indemnify any
underwriter, broker, dealer, or other agent that participates in transactions
involving sales of these shares against certain liabilities, including
liabilities arising under the Securities Act. We have agreed to indemnify the
selling stockholders against some of the liabilities they may incur, including
certain liabilities under the Securities Act.
Although we have no obligation to permit the selling stockholders to offer
shares under this prospectus in an underwritten offering, if any shares offered
by the prospectus are sold in an underwritten offering, those shares may be
acquired by the underwriters for their own account and may be further resold
from time to time in one or more transactions, including negotiated
transactions, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, at negotiated prices, or at fixed prices. The
names of the underwriters with respect to any offering of this kind and the
terms of the transactions, including any underwriting discounts, concessions or
commissions and other items constituting compensation of the underwriters and
broker-dealers, if any, will be set forth in a supplement to this prospectus
relating to that offering. Any public offering price and any discounts,
concessions or commissions allowed or reallowed or paid to broker-dealers may be
changed from time to time. Unless otherwise set forth in a supplement to this
prospectus, the obligations of the underwriters to purchase the shares will be
subject to certain conditions precedent and the underwriters will be obligated
to purchase all of the shares specified in the supplement if any shares are
purchased.
If any shares offered by this prospectus are sold in an underwritten
offering, the underwriters and selling group members, if any, may engage in
passive market making transactions in our common stock on Nasdaq immediately
prior
13
to the commencement of the sale of shares in such offering, in accordance with
Regulation M under the Exchange Act. Passive market making presently consists of
displaying bids on Nasdaq limited by the bid prices of market makers not
connected with the offering and purchases limited by these prices and effected
in response to order flow. Net purchases by a passive market maker on each day
are limited in amount to 30% of the passive market maker's average daily trading
volume in the common stock during the period of the two full consecutive
calendar months prior to the filing with the Commission of the Registration
Statement of which this prospectus is a part and must be discontinued when that
limit is reached. Passive market making may stabilize the market price of the
common stock at a level above that which might otherwise prevail and, if
commenced, may be discontinued at any time.
In order to comply with certain states' securities laws, if applicable, the
shares offered by this prospectus will be sold in those jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states our common stock may not be sold unless it has been registered or
qualified for sale in the state or an exemption form registration or
qualification is available and we comply with the exemption.
LEGAL MATTERS
Legal matters regarding the validity of our common stock offered under this
prospectus will be passed upon on our behalf by Akerman, Senterfitt & Eidson,
P.A., Miami, Florida. Some attorneys employed by Akerman, Senterfitt & Eidson,
P.A. own shares of our common stock.
EXPERTS
The audited consolidated financial statements as of August 31, 1999 and 1998
and for the years then ended of Gerald Stevens, Inc., incorporated by reference
in this Registration Statement and included in our Annual Report on Form 10-K
for the year ended August 31, 1999, have been audited by Arthur Andersen LLP,
independent certified public accountants, as indicated in their reports with
respect thereto, and are included therein in reliance upon the authority of such
firm as experts in giving said reports.
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule for the year ended August 31, 1997 included in
our Annual Report on Form 10-K for the year ended August 31, 1999, as set forth
in their reports which are incorporated by reference in this prospectus and
elsewhere in the registration statement. Our financial statements and schedule
are incorporated by reference in reliance on Ernst & Young LLP's, report, given
on their authority as experts in accounting and auditing.
INCORPORATION OF INFORMATION BY REFERENCE
We incorporate by reference the following documents which we have filed with
the Commission under the Exchange Act:
(1) Our Annual Report on Form 10-K for the fiscal year ended August 31,
1999, filed November 24, 1999, as amended on Form 10-K/A, filed
on December 28, 1999.
(2) Our Quarterly Report on Form 10-Q for the period ended November 30,
1999, filed January 14, 2000.
(3) Our Quarterly Report on Form 10-Q for the period ended February 29,
2000, filed April 12, 2000.
(4) Our Current Report on Form 8-K dated March 29, 2000, filed April 6,
2000.
(5) The description of our common stock contained in our Registration
Statement on Form 10, dated April 27, 1971.
You should consider all documents we file pursuant to sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this prospectus and
prior to the termination of this offering to be incorporated by reference in
this prospectus. You should consider any statement contained in this prospectus
or in a document incorporated or considered to be incorporated by reference in
this prospectus to be modified or superseded for purposes of this prospectus to
the extent that a statement contained in any subsequently filed document which
also is or is considered to be incorporated by reference in this prospectus
modifies or supersedes that statement. You should not consider any
14
statement modified or superseded in this manner, except as so modified or
superseded, to constitute a part of this prospectus.
We will provide without charge to each person to whom this prospectus is
delivered, upon written or oral request of that person, a copy of any and all of
the information that has been incorporated by reference in this prospectus
(excluding exhibits unless exhibits are specifically incorporated by reference
into the requested documents). Please direct requests for documents to Sheri
O'Neill, Gerald Stevens, Inc., 301 East Las Olas Boulevard, Suite 300, Ft.
Lauderdale, Florida 33301. Our telephone number is (954) 713-5000.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a Registration Statement on Form S-3 with the Securities and
Exchange Commission with respect to the common stock offered by this prospectus.
This prospectus does not contain all of the information included in the
registration statement because the Commission's rules and regulations permit us
to omit some of the information. For further information pertaining to our
company and the securities offered by this prospectus, reference is made to the
registration statement, including the exhibits and the financial statements,
notes and schedules filed as a part of or incorporated by reference into the
registration statement. Statements contained in this prospectus regarding the
content of any contract or other document referred to in the prospectus or
registration statement are not necessarily complete. In each instance reference
is made to the copy of the contract or other document filed as an exhibit to
this registration statement, and each statement is qualified in all respects by
reference to the contract or other document.
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, and we file reports, proxy statements and other
information with the Commission. These reports, proxy statements and other
information, as well as the registration statement, exhibits and schedules, may
be inspected, without charge, or copied, at prescribed rates, at the public
reference facility maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. In addition, the Commission maintains a website
that contains reports, proxy and information statements and other information,
regarding issuers that file electronically with the Commission. You can access
the Commission's website at http://www.sec.gov.
15
Part II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution (1)
The following is a list of estimated expenses to be incurred by the Company
in connection with the registration of the shares of Common Stock registered
hereunder:
Securities and Exchange Commission registration fee........... 7,883.36
Printing expenses............................................. 5,000.00
Legal fees and expenses....................................... 3,000.00
Accountants' fees and expenses................................ 10,000.00
----------
Miscellaneous................................................. 4,116.64
----------
Total......................................................... $30,000.00
==========
- --------------------
(1) Estimated except for SEC registration fee.
Item 15. Indemnification of Directors and Officers
(a) The Florida Business Corporation Act permits a corporation to indemnify
a person who is a party to any proceeding by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or is or was a
director, officer, employee or agent of another entity at the request of the
corporation. The indemnification may cover any liability incurred in connection
with such proceeding, including any appeal, if the person acted in good faith
and in a manner such person reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
However, in connection with actions by or in the right of the corporation, such
indemnification is not permitted if such person has been adjudged liable to the
corporation unless the court determines that, under all of the circumstances,
such person is nonetheless fairly and reasonably entitled to indemnity for such
expenses as the court deems proper.
The FBCA also provides that a director, officer, employee, or agent of a
corporation who has been successful in defense of any proceeding referred to in
the preceding paragraph, or in defense of any claim, issue, or matter therein,
shall be indemnified against expenses incurred in connection with such defense.
Such expenses may be paid in advance of the final disposition of such
proceeding, if the indemnified party provides an undertaking to repay such
advanced amounts if ultimately found not to be entitled to indemnification for
such expenses.
The FBCA also permits a corporation to purchase and maintain insurance on
behalf of its directors and officers against any liability that may be asserted
against, or incurred by, such persons in their capacities as directors or
officers of the corporation whether or not the corporation would have the power
to indemnify such persons against such liabilities under the provisions of such
sections.
The FBCA further provides that the statutory provision is not exclusive of
any other right to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
independent directors, or otherwise, both as to action in such person's official
capacity and as to action in another capacity while holding such office.
(b) Our Articles of Incorporation permit, and our Bylaws provide for,
indemnification of directors, officers, employees and agents to the fullest
extent permitted by law.
(c) We maintain directors' and officers' liability insurance coverage for
our directors and officers and those of our subsidiaries and for certain other
executive employees. This coverage insures these persons against certain losses
that may be incurred by them in their respective capacities as directors,
officers or employees, with respect to which they may or may not be indemnified
under the provisions of our Articles of Incorporation or Bylaws.
II-1
Item 16. Exhibits
Exhibit Number Description
- -------------- -----------
3.1 Restated Articles of Incorporation of the registrant
(incorporated by reference to Exhibit 3.1 to the
registrant's Quarterly Report on Form 10-Q, for the period
ended February 29, 2000).
3.2 Amended and Restated Bylaws of the registrant
(incorporated by reference to Exhibit 3.2 to the
registrant's Annual Report on Form 10-K for the fiscal
year ended August 31, 1999).
5.1* Opinion of Akerman, Senterfitt & Eidson, P.A. as to the
validity of the shares of common stock to be registered.
23.1* Consent of Arthur Andersen LLP.
23.2* Consent of Ernst & Young LLP.
23.3* Consent of Akerman, Senterfitt & Eidson, P.A.
24.1* Powers of Attorney
- ----------------------
* Previously filed
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the high or low
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 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 this
Registration Statement;
(iii) To include any additional or changed material
information on the plan of distribution.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do
not apply if the information required to be included in a post-effective
amendment by these paragraphs is contained in periodic reports filed with or
furnished by the Registrant pursuant to the Exchange Act that are incorporated
by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, treat each such post-effective amendment as a new
Registration Statement of the securities offered, and the offering of the
securities at that time 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.
II-2
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the Registrant
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. In the event that a claim for indemnification against
such liabilities (other than the payment by the issuer of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Lauderdale, State of Florida, on the 1st day
of May, 2000.
Gerald Stevens, Inc.
By: /s/ Adam D. Phillips
---------------------
Adam D. Phillips,
Senior Vice President, Chief Administrative
Officer and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been duly signed by the following persons in the
capacities and on the dates indicated below:
Signatures Titles Date
---------- ------ ----
* President, Chief Executive Officer and May 1, 2000
- -------------------------------------------- Director (Principal Executive Officer)
Gerald R. Geddis
* Senior Vice President and Chief May 1, 2000
- -------------------------------------------- Financial Officer (Principal Financial
Albert J. Detz Officer)
* Vice President and Corporate Controller May 1, 2000
- -------------------------------------------- (Principal Accounting Officer)
Edward J. Baker
* Chairman of the Board May 1, 2000
- --------------------------------------------
Steven R. Berrard
* Director May 1, 2000
- --------------------------------------------
Robert L. Johnson
* Director May 1, 2000
- --------------------------------------------
Ruth M. Owades
/s/ Adam D. Phillips Director May 1, 2000
- --------------------------------------------
Adam D. Phillips
* Director May 1, 2000
- --------------------------------------------
Kenneth G. Puttick
* Director May 1, 2000
- ---------------------------------------------
Kenneth Royer
* Director May 1, 2000
- --------------------------------------------
Andrew W. Williams
* Adam D. Phillips, by power of attorney
II-4
Exhibit Index
Exhibit Number Description
- -------------- -----------
3.1 Restated Articles of Incorporation of the registrant
(incorporated by reference to Exhibit 3.1 to the
registrant's Quarterly Report on Form 10-Q, for the period
ended February 29, 2000).
3.2 Amended and Restated Bylaws of the registrant
(incorporated by reference to Exhibit 3.2 to the
registrant's Annual Report on Form 10-K for the fiscal
year ended August 31, 1999).
5.1* Opinion of Akerman, Senterfitt & Eidson, P.A. as to the
validity of the shares of common stock to be registered.
23.1* Consent of Arthur Andersen LLP.
23.2* Consent of Ernst & Young LLP.
23.3* Consent of Akerman, Senterfitt & Eidson, P.A.
24.1* Powers of Attorney
* Previously filed.