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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE TO
(RULE 14d-100)
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF
THE SECURITIES EXCHANGE ACT OF 1934
THE NORTH FACE, INC.
(NAME OF SUBJECT COMPANY)
SEQUOIA ACQUISITION, INC.,
A WHOLLY OWNED SUBSIDIARY OF
V.F. CORPORATION
(OFFEROR)
COMMON STOCK, PAR VALUE $0.0025 PER SHARE
(TITLE OF CLASS OF SECURITIES)
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659317101
(CUSIP NUMBER OF CLASS OF SECURITIES)
FRANK C. PICKARD III
SEQUOIA ACQUISITION, INC.
628 GREEN VALLEY ROAD, SUITE 500
GREENSBORO, NC 27408
TELEPHONE: (336) 547-6000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF FILING PERSONS)
COPIES TO:
GEORGE R. BASON, JR.
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
TELEPHONE: (212) 450-4000
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$25,514,458 $5,102
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* Estimated for purposes of calculating the amount of filing fee only. The
amount assumes the purchase of 12,757,229 shares of common stock, par value
$0.0025 per share, and the associated preferred share purchase rights (the
"Shares"), at a price per Share of $2.00 in cash, without interest.
** The filing fee, calculated in accordance with Rule 0-11 of the Securities and
Exchange Act of 1934, is 1/50th of one percent of the aggregate Transaction
Value.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
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Amount Previously Paid: Not applicable Filing Party: Not applicable
Form or Registration No.: Not applicable Date Filed: Not applicable
</TABLE>
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which
the statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer. [ ]
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TENDER OFFER
This Tender Offer Statement on Schedule TO (the "Schedule TO") relates to
an offer by Sequoia Acquisition, Inc., a Delaware corporation ("Purchaser") and
a wholly owned subsidiary of V.F. Corporation, a Pennsylvania corporation
("Parent"), to purchase all of the outstanding shares of common stock, par value
$0.0025 per share, and associated preferred share purchase rights (the
"Shares"), of The North Face, Inc. (the "Company") for a price of $2.00 per
Share, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase (the "Offer to Purchase")
and in the related Letter of Transmittal, copies of which are attached hereto as
Exhibits (a)(1) and (a)(2) (which, as either may be amended or supplemented,
together constitute the "Offer").
The information in the Offer to Purchase, including all schedules and
annexes thereto, is hereby expressly incorporated herein by reference in
response to all the items of the Schedule TO, except as otherwise set forth
below.
ITEM 12. MATERIALS TO BE FILED AS EXHIBITS.
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(a)(1) Offer to Purchase dated April 19, 2000.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement dated April 19, 2000.
(b) Not applicable.
(d)(1) Agreement and Plan of Merger, dated April 7, 2000, by and
among Purchaser, Parent and the Company.
(g) Not applicable.
(h) Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: April 19, 2000
SEQUOIA ACQUISITION, INC.
By: /s/ FRANK C. PICKARD III
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Name: Frank C. Pickard III
Title: Vice President and Assistant
Secretary
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Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
THE NORTH FACE, INC.
AT
$2.00 NET PER SHARE
BY
SEQUOIA ACQUISITION, INC.,
A WHOLLY OWNED SUBSIDIARY OF
VF CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
TUESDAY, MAY 16, 2000, UNLESS THE OFFER IS EXTENDED.
THIS OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF APRIL 7, 2000, BY AND AMONG THE NORTH FACE, INC. (THE "COMPANY"), VF
CORPORATION ("PARENT") AND SEQUOIA ACQUISITION, INC. ("PURCHASER"). THE BOARD OF
DIRECTORS OF THE COMPANY HAS (1) UNANIMOUSLY DETERMINED THAT EACH OF THE MERGER
AGREEMENT, THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF,
THE STOCKHOLDERS OF THE COMPANY, (2) DULY APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND (3)
SUBJECT TO THE TERMS AND CONDITIONS OF THE MERGER AGREEMENT, RESOLVED TO
RECOMMEND THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER, AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE
MERGER.
DEUTSCHE BANK SECURITIES INC. ("DEUTSCHE BANK"), FINANCIAL ADVISOR TO THE
COMPANY, HAS DELIVERED TO THE BOARD OF DIRECTORS OF THE COMPANY ITS WRITTEN
OPINION TO THE EFFECT THAT, AS OF THE DATE OF THE MERGER AGREEMENT, THE PRICE OF
$2.00 IN CASH PER SHARE (THE "OFFER PRICE") TO BE RECEIVED BY THE HOLDERS OF
SHARES IN THE OFFER AND THE MERGER IS FAIR TO SUCH HOLDERS FROM A FINANCIAL
POINT OF VIEW. THE FULL TEXT OF THE WRITTEN OPINION OF DEUTSCHE BANK CONTAINING
THE ASSUMPTIONS MADE, THE MATTERS CONSIDERED AND THE SCOPE OF THE REVIEW
UNDERTAKEN IN RENDERING SUCH OPINION, AS WELL AS THE LIMITATIONS OF SUCH
OPINION, IS INCLUDED WITH THE COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON
SCHEDULE 14D-9, WHICH IS BEING MAILED TO STOCKHOLDERS AT THE SAME TIME AS THIS
OFFER TO PURCHASE. STOCKHOLDERS ARE URGED TO READ THE FULL TEXT OF SUCH OPINION
IN CONJUNCTION WITH THIS OFFER TO PURCHASE.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES OF COMMON STOCK, PAR VALUE $0.0025 PER SHARE, OF THE COMPANY WHICH,
TOGETHER WITH THE SHARES THEN OWNED BY PURCHASER AND PARENT, WOULD REPRESENT AT
LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED
BASIS AND (2) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD
UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED.
IMPORTANT
Any stockholder who desires to tender all or any portion of such
stockholder's shares should either (i) complete and sign the Letter of
Transmittal (or facsimile thereof) that accompanies this Offer to Purchase in
accordance with the instructions in the Letter of Transmittal, have such
stockholder's signature thereon guaranteed if required by Instruction 1 to such
Letter of Transmittal, and deliver it with the certificate(s) representing
tendered shares and all other required documents to the Depositary (as defined
below) or tender such shares pursuant to the procedures for book-entry transfer
set forth in "The Offer -- Section 3 -- Procedures for Tendering Shares" on page
8 or (ii) request his or her broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for him or her. A stockholder having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such person if he or she desires to tender
such shares.
Any stockholder who desires to tender shares and cannot deliver such shares
and all other required documents to the Depositary by the expiration of the
offer or who cannot comply with the procedures for book-entry transfer on a
timely basis must tender such shares pursuant to the guaranteed delivery
procedure set forth in "The Offer -- Section 3 -- Procedures for Tendering
Shares" on page 8.
Questions and requests for assistance may be directed to D.F. King & Co.,
Inc. or Salomon Smith Barney Inc. at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional copies
of this Offer to Purchase, the Letter of Transmittal and other related documents
may also be obtained from D.F. King & Co., Inc. or brokers, dealers, commercial
banks or trust companies.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE FAIRNESS OR MERITS OF THIS TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF
THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
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The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
April 19, 2000
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TABLE OF CONTENTS
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PAGE
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Summary Term Sheet................................................. 1
Introduction....................................................... 5
The Offer.......................................................... 6
1. Terms of the Offer; Expiration Date......................... 6
2. Acceptance for Payment and Payment.......................... 7
3. Procedures for Tendering Shares............................. 8
4. Withdrawal Rights........................................... 10
5. Certain Tax Considerations.................................. 11
6. Price Range of Shares; Dividends............................ 11
7. Certain Information Concerning the Company.................. 12
8. Other Financial Information................................. 12
9. Certain Information Concerning Purchaser and Parent......... 12
10. Source and Amount of Funds.................................. 13
11. Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company............................... 13
12. Purpose of the Offer; Plans for the Company; The Merger
Agreement................................................... 15
13. Effect of the Offer on the Market for the Shares; Stock
Exchange Listing; Registration under the Exchange Act....... 21
14. Dividends and Distributions................................. 22
15. Extension of Tender Period; Subsequent Offering Period;
Termination; Amendment...................................... 22
16. Certain Conditions of the Offer............................. 23
17. Certain Legal Matters; Regulatory Approvals................. 25
18. Fees and Expenses........................................... 27
19. Miscellaneous............................................... 28
Schedule I -- Directors and Executive Officers of VF Corporation
and Sequoia Acquisition, Inc..................................... S-1
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SUMMARY TERM SHEET
VF Corporation ("VF"), through its wholly owned subsidiary, Sequoia
Acquisition, Inc. ("Sequoia"), is offering to purchase all of the outstanding
common stock of The North Face, Inc. ("North Face") for $2.00 per share, net to
the seller in cash. The following are some of the questions you, as a
stockholder of North Face, may have and the answers to those questions. We urge
you to carefully read the remainder of this Offer to Purchase and the
accompanying Letter of Transmittal because the information in this summary is
not complete and additional important information is contained in the remainder
of this Offer to Purchase and the Letter of Transmittal.
WHO IS OFFERING TO BUY MY SECURITIES?
VF, a Pennsylvania corporation, through its wholly owned subsidiary,
Sequoia, a Delaware corporation, is offering to purchase all of the outstanding
common stock of North Face. Sequoia was formed for the purpose of making a
tender offer for all of the common stock of North Face. See "Introduction" on
page 5.
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
We are seeking to purchase all of the outstanding common stock, par value
$0.0025 per share, and the associated preferred share purchase rights of North
Face. See "Introduction" on page 5.
HOW MUCH ARE YOU OFFERING TO PAY FOR MY SECURITIES AND WHAT IS THE FORM OF
PAYMENT? WILL I HAVE TO PAY ANY FEES OR COMMISSIONS?
We are offering to pay the price of $2.00 per share, net to you, in cash.
If you tender your shares to us in the offer, you will not have to pay brokerage
fees, commissions or similar expenses. If you own your shares through a broker
or other nominee, and your broker tenders your shares on your behalf, your
broker or nominee may charge you a fee for doing so. You should consult your
broker or nominee to determine whether any charges will apply.
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
VF will provide Sequoia with sufficient funds to purchase shares validly
tendered and not withdrawn in the offer and to complete the merger which is
expected to follow the successful completion of the offer. It is anticipated
that all of such funds will be readily obtainable from VF's general corporate
funds. See "The Offer--Section 10 - Source and Amount of Funds" on page 13.
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision
whether to tender in the offer because the form of payment consists solely of
cash and we believe our funding will be readily obtainable. Additionally, the
offer is not subject to any financing condition. See "The Offer -- Section
9 -- Certain Information Concerning Purchaser and Parent" on page 12 and "The
Offer -- Section 10 -- Source and Amount of Funds" on page 13.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on
Tuesday, May 16, 2000, to decide whether to tender your shares in the offer.
Further, if you are unable to deliver the required documents in order to make a
valid tender by that time, you may be able to use the guaranteed delivery
procedure described in Section 3 of this Offer to Purchase. In addition, if we
decide to include a subsequent offering period or periods in the Offer as
described below, you will have an additional opportunity to tender your shares.
See "The Offer -- Section 1 -- Terms of the Offer; Expiration Date" on page 6
and "The Offer -- Section 3 -- Procedures for Tendering Shares" on page 8.
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
We have agreed in the merger agreement that if any of the conditions to the
offer have not been satisfied or waived, we may extend the offer without North
Face's consent until such time as all conditions to the offer are satisfied or
waived. We also have agreed in the merger agreement that we may extend the offer
once after all the
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conditions have been satisfied for a period of not more than five (5) business
days as of the scheduled expiration date of the offer if the number of shares
tendered, together with shares owned by Sequoia and VF, if any, is less than 90%
of the shares outstanding on the scheduled expiration date. If we choose to make
this one-time extension, our obligation to pay for all of the shares tendered in
the offer and not withdrawn would only be subject to the following conditions:
(i) at least a majority of shares outstanding on a fully diluted basis having
been tendered and not withdrawn, (ii) there having been no claim or litigation
by a governmental authority or any other person negatively affecting the offer
or merger or which in the judgment of VF would be likely to have a material
adverse effect on North Face or VF and (iii) if a third party has made a
proposal to acquire North Face, the board of directors of North Face not having
withdrawn or adversely changed its recommendation of the merger agreement, the
offer or the merger. See "The Offer -- Section 15 -- Extension of Tender Period;
Subsequent Offering Period; Termination; Amendment" on page 22.
In addition, we may extend the offer for any period required by any rule,
regulation, interpretation or position of the U.S. Securities and Exchange
Commission or its staff or as required by applicable law, including providing a
subsequent offering period of three (3) to twenty (20) business days. A
subsequent offering period, if any, will be an additional opportunity for you to
tender your shares (if you have not already done so) and receive the offer
consideration following the expiration of the offer. If you do not tender during
the initial offering period or the subsequent offering period, if any, you will
have to wait until after the merger is completed to receive the cash
consideration for your shares. See "The Offer -- Section 15 -- Extension of
Tender Period; Subsequent Offering Period; Termination; Amendment" on page 22.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED OR IF YOU DECIDE TO INCLUDE A
SUBSEQUENT OFFERING PERIOD?
If we decide to extend the offer, we will inform American Stock Transfer &
Trust Company, the depositary for the offer, of that fact and will make a public
announcement of the extension, not later than 9:00 a.m., New York City time, on
the business day after the day on which the offer was scheduled to expire. In
addition, if we decide to provide a subsequent offering period, we will inform
American Stock Transfer & Trust Company of that fact and will make a public
announcement of the extension not later than 9:00 a.m., New York City time, on
the next business day after the expiration date of the initial offering period.
See "The Offer -- Section 15 -- Extension of Tender Period; Subsequent Offering
Period; Termination; Amendment" on page 22.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
We are not obligated to purchase any shares in the offer unless the number
of shares validly tendered, when added to the Shares then owned by VF and
Sequoia, if any, represents at least a majority of the shares of North Face
outstanding on a fully diluted basis. This minimum number of shares represents
approximately 63.4% of the presently outstanding shares. In addition, our
obligation to purchase shares that are validly tendered is conditioned upon the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 having expired or been waived. Other conditions to the offer are
described on pages 23 through 25. See "The Offer -- Section 16 -- Certain
Conditions of the Offer" on page 23.
HOW DO I TENDER MY SHARES?
If you are a record holder, you may tender your shares by delivering the
certificates representing your shares, together with a completed Letter of
Transmittal, to American Stock Transfer & Trust Company, the depositary for the
offer, not later than the time the offer expires. If your shares are held in
street name, the shares can be tendered by your nominee through The Depository
Trust Company. You should contact your broker or bank and instruct that your
shares be tendered. If you are unable to deliver the required documents to the
depositary by the expiration of the offer, you may get some extra time to do so
by having a broker, a bank or other fiduciary which is a member of the
Securities Transfer Agents Medallion Program or other eligible institution
guarantee that the missing items will be received by the depositary within three
(3) trading days. A trading day is any day on which the Nasdaq National Market
is open for business. However, the depositary must receive the missing items
within that three (3) day period. See "The Offer -- Section 3 -- Procedures for
Tendering Shares" on page 8.
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HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a properly executed written notice of
withdrawal (or a facsimile of one) with the required information to American
Stock Transfer & Trust Company while you still have the right to withdraw the
shares. See "The Offer -- Section 4 -- Withdrawal Rights" on page 10.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired and, if we
have not accepted your shares for payment by June 17, 2000, you can withdraw
them at any time after such time until we accept shares for payment. See "The
Offer -- Section 4 -- Withdrawal Rights" on page 10. This right to withdraw will
not apply to any subsequent offering period discussed in "The Offer -- Section
1 -- Terms of the Offer; Expiration Date" on page 6, if any, except if such
shares are not immediately accepted for payment.
IS THERE AN AGREEMENT GOVERNING THE OFFER?
Yes. VF, Sequoia and North Face have entered into a merger agreement dated
as of April 7, 2000. The merger agreement provides, among other things, for the
terms and conditions of the offer and the merger of Sequoia into North Face
following the offer. See "Section 12 -- Purpose of the Offer; Plans for the
Company; The Merger Agreement" on page 15.
WHAT DOES THE BOARD OF DIRECTORS OF NORTH FACE THINK OF THE OFFER?
We are making the offer pursuant to the merger agreement, which has been
approved by the board of directors of North Face. The board of directors of
North Face has (i) unanimously determined that each of the merger agreement, the
offer and the merger, is fair to, and in the best interests of, the stockholders
of North Face, (ii) duly approved the merger agreement, and the transactions
contemplated by the merger agreement, including the offer and the merger and
(iii) subject to the terms and conditions of the merger agreement, resolved to
recommend that the stockholders of North Face accept the offer and tender their
shares pursuant to the offer, and approve and adopt the merger agreement and the
merger. See "The Offer -- Section 11 -- Background of the Offer; Past Contacts,
Transactions or Negotiations with the Company" on page 13 and "The
Offer -- Section 12 -- Purpose of the Offer; Plans for the Company; The Merger
Agreement" on page 15.
HAVE ANY STOCKHOLDERS PREVIOUSLY AGREED TO TENDER THEIR SHARES?
No.
IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL NORTH
FACE CONTINUE AS A PUBLIC COMPANY?
No. Following the purchase of the shares in the offer, we expect to
consummate the merger. If the merger takes place, North Face will be privately
owned. Even if the merger does not take place, if we purchase all the tendered
shares, there may be so few remaining stockholders and publicly held shares that
North Face's common stock will no longer be eligible to be traded on a
securities exchange, there may not be a public trading market for North Face's
stock, and North Face may cease making filings with the U.S. Securities and
Exchange Commission or otherwise cease being required to comply with the rules
of the U.S. Securities and Exchange Commission relating to publicly held
companies. See "The Offer -- Section 13 -- Effect of the Offer on the Market for
Shares; Stock Exchange Listing; Registration under the Exchange Act" on page 21.
WILL THE OFFER BE FOLLOWED BY A MERGER IF ALL NORTH FACE SHARES ARE NOT TENDERED
IN THE OFFER?
Yes. If we accept for payment and pay for at least a majority of the
outstanding shares of North Face on a fully diluted basis, Sequoia will be
merged with and into North Face. If that merger takes place, VF will own all of
the shares of North Face and all remaining stockholders (other than Sequoia, VF,
North Face and stockholders properly exercising dissenters' rights) will receive
$2.00 per share (or any other higher price per share that is paid in the offer)
in cash. We may attempt to effect the merger even if we own less than a majority
of the shares of North
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<PAGE> 6
Face, but in such event the merger is not certain to occur. See "The
Offer -- Section 13 -- Effect of the Offer on the Market for Shares; Stock
Exchange Listing; Registration under the Exchange Act" on page 21.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
If the merger described above takes place, stockholders (other than those
properly exercising dissenters' rights) not tendering in the offer will receive
the same amount of cash per share that they would have received had they
tendered their shares in the offer. Therefore, if the merger takes place, the
only difference to you between tendering your shares and not tendering your
shares is that you will be paid earlier and will not have dissenter's rights if
you tender your shares into the offer. However, even if the merger does not take
place, the number of stockholders and shares of North Face that are still in the
hands of the public may be so small that there no longer will be an active
public trading market (or, possibly, any public trading market) for North Face's
common stock. Also, as described above, North Face may cease making filings with
the U.S. Securities and Exchange Commission or otherwise being required to
comply with the rules of the U.S. Securities and Exchange Commission relating to
publicly held companies. See "The Offer -- Section 13 -- Effect of the Offer on
the Market for Shares; Stock Exchange Listing; Registration under the Exchange
Act" on page 21.
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On April 6, 2000, the last full trading day before we announced the offer
and the possible subsequent merger, the closing bid price per share of North
Face's common stock reported on the Nasdaq National Market was $1 7/32 per
share. On April 18, 2000 the last full trading day before the date of this Offer
to Purchase, the closing bid price per share of North Face's common stock was
$1 29/32. We advise you to obtain a recent quotation for shares of North Face's
common stock in deciding whether to tender your shares.
WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?
You can call D.F. King & Co., Inc. at (888) 460-7637 (toll free) or Salomon
Smith Barney Inc. at (877) 518-9871 (toll free). D.F. King & Co., Inc. is acting
as the information agent and Salomon Smith Barney Inc. is acting as the dealer
manager for our offer. See the back of this Offer to Purchase.
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To the Holders of Common Stock of The North Face, Inc.
INTRODUCTION
Sequoia Acquisition, Inc., a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of VF Corporation, a Pennsylvania corporation
("Parent"), hereby offers to purchase all of the outstanding shares of common
stock, par value $0.0025 per share, including the associated preferred share
purchase rights (the "Shares"), of The North Face, Inc., a Delaware corporation
(the "Company"), at a price of $2.00 per Share, net to the seller in cash,
without interest (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer").
If your Shares are registered in your name, you will not be obligated to
pay brokerage fees or commissions or, except as described in Instruction 6 of
the Letter of Transmittal, transfer taxes on the sale of Shares pursuant to the
Offer. However, if you do not complete and sign the Substitute Form W-9 that is
included in the Letter of Transmittal, you may be subject to a required backup
federal income tax withholding of 31% of the gross proceeds payable to you. See
"The Offer--Section 3 - Procedures for Tendering Shares" on page 8. Purchaser
will pay all charges and expenses of Salomon Smith Barney Inc. (the "Dealer
Manager"), American Stock Transfer & Trust Company (the "Depositary") and D.F.
King & Co., Inc. (the "Information Agent") incurred in connection with the
Offer. See "The Offer -- Section 18 -- Fees and Expenses" on page 27.
We are making the Offer under the Agreement and Plan of Merger, dated as of
April 7, 2000 (the "Merger Agreement"), among the Company, Parent and the
Purchaser. Following the consummation of the Offer and the satisfaction or
waiver of certain conditions, Purchaser will merge with and into the Company
(the "Merger"), and the Company will continue as the surviving corporation. In
the Merger, each outstanding Share that is not owned by Purchaser or Parent
(other than Shares held by stockholders who properly exercise their dissenters'
rights under Delaware law) will be converted into the right to receive $2.00 or
any higher price paid per Share in the Offer, without interest (the "Merger
Consideration"). For a more detailed description of the Merger Agreement see
"The Offer -- Section 12 -- Purpose of the Offer; Plans for the Company; The
Merger Agreement" on page 15.
THE BOARD OF DIRECTORS OF THE COMPANY HAS (i) UNANIMOUSLY DETERMINED THAT
EACH OF THE MERGER AGREEMENT, THE OFFER AND THE MERGER IS FAIR TO, AND IN THE
BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, (ii) DULY APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER AND (iii) SUBJECT TO THE TERMS AND CONDITIONS OF THE MERGER
AGREEMENT, RESOLVED TO RECOMMEND THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER TO PURCHASE, AND APPROVE AND
ADOPT THE MERGER AGREEMENT AND THE MERGER.
We are not required to purchase any Shares unless at least a majority of
the outstanding Shares (assuming exercise of all stock options and warrants and
the conversion or exchange of all securities convertible or exchangeable into
Shares) are validly tendered and not withdrawn prior to the expiration of the
Offer (the "Minimum Tender Condition") and any applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act") has expired or been terminated (the "HSR Condition"). For a discussion of
other terms and conditions to the Offer, see "The Offer -- Section 1 -- Terms of
the Offer; Expiration Date" on page 6, "The Offer -- Section 12 -- Purpose of
the Offer; Plans for the Company; the Merger Agreement" on page 15 and "The
Offer -- Section 16 -- Certain Conditions of the Offer" on page 23. We reserve
the right (subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "SEC") and, where required by the Merger Agreement, the
prior written consent of the Company), to waive any conditions to the Offer or
make any changes to the terms and conditions of the Offer prior to the
expiration date of the Offer. We presently have no intention of exercising such
right.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999, as of April 10, 2000, there were 12,757,229 Shares
issued and outstanding and 3,429,561 Shares reserved for issuance upon the
exercise of outstanding stock options and warrants. Based upon the foregoing,
there were approximately 16,186,790 Shares outstanding on a fully diluted basis.
Accordingly, the Minimum Tender Condition would be satisfied if approximately
8,093,396 Shares are validly tendered pursuant to the Offer and not withdrawn.
5
<PAGE> 8
DEUTSCHE BANK SECURITIES INC. ("DEUTSCHE BANK"), FINANCIAL ADVISOR TO THE
COMPANY, HAS DELIVERED TO THE BOARD OF DIRECTORS OF THE COMPANY ITS WRITTEN
OPINION TO THE EFFECT THAT, AS OF THE DATE OF THE MERGER AGREEMENT, THE PRICE OF
$2.00 PER SHARE IN CASH TO BE RECEIVED BY THE HOLDERS OF SHARES IN THE OFFER AND
THE MERGER IS FAIR TO SUCH HOLDERS FROM A FINANCIAL POINT OF VIEW. THE FULL TEXT
OF THE WRITTEN OPINION OF DEUTSCHE BANK CONTAINING THE ASSUMPTIONS MADE, THE
MATTERS CONSIDERED AND THE SCOPE OF THE REVIEW UNDERTAKEN IN RENDERING SUCH
OPINION, AS WELL AS THE LIMITATIONS OF SUCH OPINION, IS INCLUDED WITH THE
COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE "SCHEDULE
14D-9"), WHICH IS BEING MAILED TO STOCKHOLDERS AT THE SAME TIME AS THIS OFFER.
STOCKHOLDERS ARE URGED TO READ THE FULL TEXT OF SUCH OPINION IN CONJUNCTION WITH
THIS OFFER.
Under the Delaware General Corporation Law (the "DGCL"), if Purchaser
acquires, pursuant to the Offer or otherwise, at least 90% of the outstanding
Shares, Purchaser believes it would be able to effect a merger of the Purchaser
with and into the Company without a vote of the Company's stockholders. If
Purchaser does not acquire at least 90% of the Shares, it will have to seek
approval of the Merger Agreement and the Merger by the Company's stockholders.
Approval of the Merger Agreement and the Merger requires the affirmative vote of
holders of a majority of the outstanding Shares. As a result, if the Minimum
Tender Condition, the HSR Condition and the other conditions to the Offer are
satisfied and the Offer is completed, we will own a sufficient number of Shares
to ensure that the Merger Agreement will be approved by the Company's
stockholders. See "The Offer -- Section 12 -- Purpose of the Offer; Plans for
the Company; The Merger Agreement" on page 15.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions set forth in the Offer (including, if the Offer is extended or
amended, the terms and conditions of any extension or amendment), Purchaser will
accept for payment and pay for all Shares that are validly tendered and not
withdrawn in accordance with the procedures set forth in this Offer on or prior
to the Expiration Date. The term "Expiration Date" means 12:00 midnight, New
York City time, on Tuesday, May 16, 2000, unless Purchaser extends the period of
time for which the Offer is open, in which case the term "Expiration Date" shall
mean the latest time and date at which the Offer, as it may be extended by
Purchaser, shall expire.
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Securities and Exchange Act of 1934 (the "Exchange Act"), pay for any Shares
tendered pursuant to the Offer, and may postpone the acceptance for payment of
or, subject to the restriction referred to above, payment for any Shares
tendered pursuant to the Offer, and may terminate or amend the Offer (whether or
not any Shares have theretofore been purchased or paid for pursuant to the
Offer) and not accept for payment any Shares, if the Minimum Tender Condition,
the HSR Condition and the other conditions set forth in "The Offer -- Section
16 -- Certain Conditions of the Offer" on page 23, (collectively, the "Offer
Conditions"), are not satisfied. Subject to the provisions of the Merger
Agreement, Purchaser expressly reserves the right to waive, in whole or in part
at any time or from time to time, in each case, prior to the Expiration Date,
any such condition; provided that, unless previously approved by the Company, no
change may be made that decreases the Offer Price, changes the form of
consideration payable in the Offer, reduces the number of Shares to be purchased
in the Offer, imposes conditions to the Offer in addition to the Offer
Conditions, or waives or amends the Minimum Tender Condition.
If all Offer Conditions are not satisfied on the initial expiration date of
the Offer, Purchaser may extend (and re-extend) the Offer to provide additional
time to satisfy such conditions. We also have agreed in the Merger Agreement
that we may extend the Offer once after all the Offer Conditions have been
satisfied for a period of not more than five (5) business days as of the
scheduled expiration date of the offer if the number of Shares validly tendered,
together with Shares owned by Parent and Purchaser, if any, is less than 90% of
the Shares outstanding on the scheduled expiration date. If we choose to make
this one-time extension, our obligation to pay for all of the Shares tendered
into the Offer and not withdrawn would only be subject to the following
conditions: (i) the Minimum Tender Condition, (ii) there having been no claim or
litigation by a governmental authority or any other person negatively affecting
the Offer or Merger or which in the judgment of Parent likely to have a material
adverse effect on the Company or Parent and (iii) if a third
6
<PAGE> 9
party has made a proposal to acquire the Company, the board of directors of the
Company not having withdrawn or adversely changed its recommendation of the
Merger Agreement, the Offer or the Merger. See "The Offer -- Section
16 -- Certain Conditions of the Offer" on page 23.
Pursuant to Rule 14d-11 of the Exchange Act, Purchaser has the right, but
is not required, to extend the Offer for a subsequent offering period of up to
twenty (20) business days (a "Subsequent Offering Period"), subject to certain
conditions set forth in such Rule. A Subsequent Offering Period is an additional
period of time from three (3) business days up to twenty (20) business days,
beginning after Purchaser purchases Shares tendered in the Offer, during which
stockholders may tender, but not withdraw, their Shares and receive the Offer
Price. If Purchaser decides to provide for a Subsequent Offering Period, and
such Subsequent Offering Period is for a period of time which is less than
twenty (20) business days, the Purchaser may extend (and re-extend) such
Subsequent Offering Period up to an aggregate of twenty (20) business days.
Pursuant to Rule 14d-7 under the Exchange Act, no withdrawal rights apply
to Shares tendered during a Subsequent Offering Period or Shares tendered in the
Offer and accepted for payment. During a Subsequent Offering Period, Purchaser
will promptly purchase and pay for any Shares tendered at the same price paid in
the Offer.
Any extension, delay, termination or amendment of the Offer will be
followed as promptly as practicable by public announcement thereof, such
announcement in the case of an extension to be issued no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date, in accordance with the public announcement requirements of Rule
14e-1(d) under the Exchange Act. Subject to applicable law (including Rules
14d-4(d) and 14d-6(c) under the Exchange Act, which requires that any material
change in the information published, sent or given to stockholders in connection
with the Offer be promptly disseminated to stockholders in a manner reasonably
designed to inform stockholders of such change), and without limiting the manner
in which Purchaser may choose to make any public announcement, Purchaser shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material Offer Condition,
Purchaser will disseminate additional tender offer materials (including by
public announcement as set forth above) and extend the Offer to the extent
required by Rules 14d-4(d) and 14e-1 under the Exchange Act. The minimum period
during which the Offer must remain open following material changes in the terms
of the Offer, other than a change in price or the percentage of securities
sought or the inclusion of or change to a dealer's soliciting fee, will depend
upon the facts and circumstances, including the materiality, of the changes. In
the SEC's view, an offer should remain open for a minimum of five (5) business
days from the date the material change is first published, sent or given to
stockholders. However, a minimum of ten (10) business days from the date of such
change may be required to allow for adequate dissemination and investor response
if a change relates to the price to be paid or, subject to certain limitations,
a change in the percentage of securities sought or the inclusion of or change to
a dealer's soliciting fee. Accordingly, if, prior to the Expiration Date,
Purchaser decreases the number of Shares being sought or increases or decreases
the consideration offered pursuant to the Offer, and if the Offer is scheduled
to expire at any time earlier than the tenth (10th) business day from the date
that notice of such increase or decrease is first published, sent or given to
stockholders, Purchaser will extend the Offer until at least the expiration of
such tenth (10th) business day. For purposes of the Offer, a "business day"
means any day other than a Saturday, Sunday or a U.S. federal holiday and
consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
In connection with the Offer, the Company has provided Purchaser with the
names and addresses of all record holders of Shares and security position
listings of Shares held in stock depositories. This Offer to Purchase, the
related Letter of Transmittal and other relevant materials will be mailed to
registered holders of Shares and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the stockholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer, Purchaser will accept for payment and pay for all
Shares validly tendered by the Expiration Date and not withdrawn
7
<PAGE> 10
as soon as practicable after the later of the Expiration Date and the
satisfaction of the HSR Condition. In addition, Purchaser reserves the right, in
its sole discretion and subject to applicable law, to delay the acceptance for
payment or payment for Shares in order to comply in whole or in part with any
applicable law. For a description of Purchaser's right to terminate the Offer
and not accept for payment or pay for Shares or to delay acceptance for payment
or payment for Shares, see "The Offer -- Section 4 -- Withdrawal Rights" on page
10.
For purposes of the Offer, Purchaser shall be deemed to have accepted for
payment tendered Shares when, as and if, Purchaser gives oral or written notice
to the Depositary of its acceptance of such tendered Shares. Payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price with the Depositary, which will act as agent for the tendering
stockholders for the purpose of receiving payments from Purchaser and
transmitting such payments to tendering stockholders. In all cases, payment for
Shares accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of certificates for such Shares or of a confirmation
of a book-entry transfer, ("Book-Entry Confirmation") of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in "The
Offer -- Section 3 -- Procedures for Tendering Shares"), a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) and any other
required documents. For a description of the procedures for tendering Shares
pursuant to the Offer, see "The Offer -- Section 3 -- Procedures for Tendering
Shares" below. Accordingly, payment may be made to tendering stockholders at
different times if delivery of the Shares and other required documents occur at
different times. Under no circumstances will Purchaser pay interest on the
consideration paid for Shares pursuant to the Offer, regardless of any delay in
making such payment.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares which are the subject of such book-entry
confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that Purchaser may enforce such agreement
against such participant.
If Purchaser increases the consideration to be paid for Shares pursuant to
the Offer, Purchaser will pay such increased consideration for all Shares
purchased pursuant to the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its or Parent's affiliates the right to
purchase Shares tendered pursuant to the Offer. Any such transfer or assignment
will not relieve Purchaser of its obligations under the Offer or prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted for more Shares than are tendered,
certificates for such unpurchased or untendered Shares will be returned (or, in
the case of Shares tendered by book-entry transfer, such Shares will be credited
to the account at the Book-Entry Transfer Facility from which such Shares were
tendered), without expense to the tendering stockholder, as promptly as
practicable following the expiration or termination of the Offer.
3. PROCEDURES FOR TENDERING SHARES.
Valid Tender of Shares. Except as set forth below, in order for you to
properly tender Shares in the Offer, the Depositary must receive the Letter of
Transmittal (or a facsimile thereof), properly completed and signed, together
with any required signature guarantees or an Agent's Message in connection with
a book-entry delivery of Shares and any other documents that the Letter of
Transmittal requires at its address set forth on the back cover of this Offer to
Purchase on or prior to the Expiration Date and either (i) you must deliver
share certificates representing tendered Shares to the Depositary or you must
cause your Shares to be tendered pursuant to the procedure for book-entry
transfer set forth below and the Depositary must receive Book-Entry
Confirmation, in each case on or prior to the Expiration Date, or (ii) you must
comply with the guaranteed delivery procedures set forth below.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF
THE TENDERING STOCKHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE DEPOSITARY. IF CERTIFICATES FOR SHARES ARE SENT BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
8
<PAGE> 11
The tender of Shares pursuant to any one of the procedures described below
will constitute the tendering stockholder's acceptance of the Offer, as well as
the tendering stockholder's representation and warranty that (i) such
stockholder owns the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Exchange Act, (ii) the tender of such Shares complies with
Rule 14e-4 and (iii) such stockholder has the full power and authority to tender
and assign the Shares tendered, as specified in the Letter of Transmittal.
Purchaser's acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering stockholder and Purchaser
upon the terms and subject to the conditions of the Offer.
Book Entry Delivery. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two (2) business days after the date
of this Offer to Purchase, and any financial institution that is a participant
in the system of the Book-Entry Transfer Facility may make delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the procedures of the Book-Entry
Transfer Facility. However, although delivery of Shares may be effected through
book-entry transfer, the Letter of Transmittal (or facsimile thereof) properly
completed and duly executed together with any required signature guarantees or
an Agent's Message and any other required documents must, in any case, be
received by the Depositary at its address set forth on the back cover of this
Offer to Purchase by the Expiration Date, or the guaranteed delivery procedure
described below must be complied with. Delivery of the Letter of Transmittal and
any other required documents to the Book-Entry Transfer Facility does not
constitute delivery to the Depositary.
Signature Guarantees. Signatures on a Letter of Transmittal need not be
guaranteed if (i) the Letter of Transmittal is signed by the registered holder
of the Shares tendered therewith and such holder has not completed the box
entitled "Special Payment Instructions" on the Letter of Transmittal or (ii)
such Shares are tendered for the account of an Eligible Institution. See
Instruction 5 of the Letter of Transmittal. Except as otherwise provided in the
sentence, all signatures on a Letter of Transmittal must be guaranteed by a
financial institution (such as bank, savings and loan association or brokerage
house) that is a member of a recognized Medallion Program approved by The
Securities Transfer Association Inc., including the Securities Transfer Agents
Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the
New York Stock Exchange, Inc. Medallion Signature Program (MSP) (each an
"Eligible Institution"). See Instruction 1 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and cannot deliver such Shares and all other required documents to the
Depositary by the Expiration Date, or such stockholder cannot complete the
procedure for delivery by book-entry transfer on a timely basis, such Shares may
nevertheless be tendered if all of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by Purchaser is received by the
Depositary (as provided below) by the Expiration Date; and
(iii) the Share Certificates (or Book-Entry Confirmation), evidencing
all tendered Shares, in proper form for transfer, in each case together
with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantee or an Agent's
Message and any other documents required by the Letter of Transmittal, are
received by the Depositary within three (3) trading days after the date of
the execution of the Notice of Guaranteed Delivery. A "trading day" is any
day on which the Nasdaq Stock Market's National Market (the "Nasdaq
National Market") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice.
Taxation. Under the federal income tax laws, the Depositary will be
required to withhold 31% of the amount of any payments made to certain
stockholders pursuant to the Offer. In order to avoid such backup withholding,
each tendering stockholder must provide the Depositary with such stockholder's
correct taxpayer identification number and certify that such stockholder is not
subject to such backup withholding by completing the Substitute Form W-9
included in the Letter of Transmittal. If a stockholder is a non-resident alien
or foreign entity not subject to backup withholding, the stockholder must give
the Depositary a completed Form W-8 Certificate of Foreign Status prior to
receipt of any payment.
9
<PAGE> 12
Proxy. By executing a Letter of Transmittal, a tendering stockholder
irrevocably appoints Purchaser's designees as such stockholder's proxies in the
manner set forth in the Letter of Transmittal to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder and
accepted for payment by Purchaser (and any and all other Shares or other
securities issued or issuable in respect of such Shares on or after April 6,
2000). All such proxies shall be irrevocable and coupled with an interest in the
tendered Shares. Such appointment is effective only upon the acceptance for
payment of such Shares by Purchaser. Upon such acceptance for payment, all prior
proxies and consents granted by such stockholder with respect to such Shares and
other securities will, without further action, be revoked, and no subsequent
proxies may be given nor subsequent written consents executed by such
stockholder (and, if given or executed, will not be deemed to be effective).
Purchaser's designees will be empowered to exercise all voting and other rights
of such stockholder as they, in their sole discretion, may deem proper at any
annual, special or adjourned meeting of the Company's stockholders, by written
consent or otherwise. Purchaser reserves the right to require that, in order for
Shares to be validly tendered, immediately upon Purchaser's acceptance for
payment of such Shares, Purchaser is able to exercise full voting rights with
respect to such Shares and other securities (including voting at any meeting of
stockholders then scheduled or acting by written consent without a meeting).
Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by Purchaser, in its sole discretion,
which determination shall be final and binding. Purchaser reserves the absolute
right to reject any or all tenders of Shares determined by it not to be in
proper form or the acceptance for payment of, or payment for, which may, in the
opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the
absolute right to waive any defect or irregularity in any tender of Shares. None
of Purchaser, Parent, the Dealer Manager, the Depositary, the Information Agent
or any other person will be under any duty to give notification of any defect or
irregularity in tenders or incur any liability for failure to give any such
notification.
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer may be
withdrawn at any time prior to the Expiration Date. After the Expiration Date,
tenders are irrevocable, except that they may be withdrawn after June 17, 2000,
unless accepted for payment before then as provided in this Offer to Purchase
and except as provided below with respect to a Subsequent Offering Period. If
Purchaser extends the period of time during which the Offer is open, is delayed
in accepting for payment or paying for Shares or is unable to accept for payment
or pay for Shares pursuant to the Offer for any reason, then, without prejudice
to Purchaser's rights under the Offer, the Depositary may, on behalf of
Purchaser, retain all Shares tendered, and such Shares may not be withdrawn
except as otherwise provided in this Section 4.
To be effective, a written, telegraphic, telex or facsimile transmission
notice of withdrawal must be timely received by the Depositary at its address
set forth on the back cover of this Offer to Purchase and must specify the name
of the person who tendered the Shares to be withdrawn and the number of Shares
to be withdrawn and the name of the registered holder of the Shares to be
withdrawn, if different from that of the person who tendered such Shares. If the
Shares to be withdrawn have been delivered to the Depositary, a signed notice of
withdrawal (except in the case of Shares tendered by an Eligible Institution)
with signatures guaranteed by an Eligible Institution must be submitted prior to
the release of such Shares. In addition, such notice must specify, in the case
of Shares tendered by delivery of certificates, the name of the registered
holder (if different from that of the tendering stockholder) and the serial
numbers shown on the particular certificates evidencing the Shares to be
withdrawn or, in the case of Shares tendered by book-entry transfer, the name
and number of the account at the Book-Entry Transfer Facility to be credited
with the withdrawn Shares. Withdrawals may not be rescinded, and Shares
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by following one of the
procedures described in "The Offer -- Section 3 -- Procedures for Tendering
Shares" on page 8, at any time prior to the Expiration Date.
If Purchaser provides a Subsequent Offering Period, stockholders may not
withdraw Shares tendered in such Subsequent Offering Period or Shares tendered
in the Offer and accepted for payment.
All questions as to the form and validity (including the time of receipt)
of any notice of withdrawal will be determined by Purchaser, in its sole
discretion, which determination shall be final and binding. None of Purchaser,
Parent, the Dealer Manager, the Depositary, the Information Agent or any other
person will be under any duty to
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<PAGE> 13
give notification of any defect or irregularity in any notice of withdrawal or
incur any liability for failure to give any such notification.
5. CERTAIN TAX CONSIDERATIONS. The summary of federal income tax
consequences set forth below is for general information only and is based on the
law as currently in effect. The tax consequences to each stockholder will depend
in part upon such stockholder's particular situation. Special tax consequences
not described herein may be applicable to particular classes of taxpayers, such
as financial institutions, broker dealers, persons who are not citizens or
residents of the United States and stockholders who acquired their Shares
through the exercise of an employee stock option or otherwise as compensation.
ALL STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE
APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL OR
FOREIGN INCOME AND OTHER TAX LAWS AND CHANGES IN SUCH TAX LAWS.
Sales of Shares by stockholders of the Company pursuant to the Offer will
be taxable transactions for federal income tax purposes under the Internal
Revenue Code of 1986, as amended, and may also be taxable transactions under
applicable state, local and foreign income tax laws. In general, a stockholder
will recognize gain or loss equal to the difference between the tax basis of his
or her Shares and the amount of cash received in exchange therefor. For federal
income tax purposes, such gain or loss will be capital gain or loss if the
Shares are capital assets in the hands of the stockholder and will be long-term
gain or loss if the holding period for the Shares is more than one year as of
the date of the sale of such Shares.
A stockholder that tenders Shares may be subject to backup withholding
unless the stockholder provides its taxpayer identification number and certifies
that such number is correct or an exemption applies. A stockholder who does not
furnish its taxpayer identification number may be subject to a penalty imposed
by the Internal Revenue Service. See "The Offer -- Section 3 -- Procedures for
Tendering Shares" on page 8.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are authorized for
quotation on the Nasdaq National Market under the symbol "TNFI." The following
table sets forth for the periods indicated the high and low bid prices per Share
on the Nasdaq National Market, as reported in published financial sources:
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1998
First Quarter............................................. $29 $20 5/8
Second Quarter............................................ $26 1/2 $19 1/2
Third Quarter............................................. $24 5/8 $ 9 1/8
Fourth Quarter............................................ $14 5/8 $ 9 1/8
1999
First Quarter............................................. $16 11/16 $ 9 1/4
Second Quarter............................................ $12 7/8 $ 6 3/4
Third Quarter............................................. $ 7 1/16 $ 3 15/16
Fourth Quarter............................................ $ 7 1/4 $ 2 11/16
2000
First Quarter............................................. $ 7 1/4 $ 2 11/16
Second Quarter (through April 18, 2000)................... $ 4 1/32 $ 1
</TABLE>
The Company did not pay dividends during the periods set forth in the table
above.
On April 6, 2000, the last full day of trading prior to the announcement of
the Offer, the reported closing bid price per Share on the Nasdaq National
Market was $1 7/32. On April 18, 2000, the last full trading day before the date
of this Offer to Purchase, the reported closing bid price per Share on the
Nasdaq National Market was $1 29/32.
STOCKHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.
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<PAGE> 14
7. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware
corporation with its principal executive offices located at 2013 Farallon Drive,
San Leandro, CA 94577. The telephone number of the Company's executive offices
is (510) 618-3500. Except as otherwise set forth herein, the information
concerning the Company contained in this Offer to Purchase has been furnished by
the Company or has been taken from or based upon publicly available documents
and records on file with the SEC and other public sources. Neither Parent nor
Purchaser takes any responsibility for the accuracy or completeness of the
information contained in such reports and other documents or for any failure by
the Company to disclose events that may have occurred and may affect the
significance or accuracy of any such information but that are unknown to
Purchaser and Parent.
The Company was founded in 1965 by outdoor enthusiasts as a retailer of
high performance climbing and backpacking equipment. The Company, together with
its consolidated subsidiaries, designs and distributes technically sophisticated
outerwear, snowsports gear, functional sportswear, tents, sleeping bags,
backpacks, day packs, accessories and rugged footwear under The North Face(R)
name.
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files periodic reports, proxy statements and
other information with the SEC relating to its business, financial condition and
other matters. The Company is required to disclose in such proxy statements
certain information, as of particular dates, concerning the Company's directors
and officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company. Such reports, proxy statements and other
information may be inspected at the public reference facilities maintained by
the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; 7
World Trade Center, Suite 1300, New York, New York 10048 and CitiCorp Center,
Suite 1400, 500 W. Madison Street, Chicago, Illinois 60661. Copies of such
material can also be obtained at prescribed rates from the Public Reference
Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, or free of charge at the website maintained by the SEC at
http://www.sec.gov.
8. OTHER FINANCIAL INFORMATION. During the course of discussions between
Parent and the Company, the Company provided Parent with certain financial
projections for the Company for fiscal year 2000.
The projections were not prepared with a view to public disclosure or
compliance with published guidelines of the SEC or the guidelines established by
the American Institute of Certified Public Accountants regarding projections,
and are included in this Offer to Purchase only because the Company provided
them to Parent. None of Parent, the Company, or either of Parent's or the
Company's respective financial advisors, assumes any responsibility for the
accuracy of these projections. While presented with numerical specificity, these
projections are based upon a variety of assumptions relating to the businesses
of the Company which may not be realized and are subject to significant
uncertainties and contingencies, many of which are beyond the control of the
Company. There can be no assurance that the projections will be realized, and
actual results may vary materially from those shown.
Set forth below is a summary of the projections provided by the Company.
The projections should be read together with the financial statements contained
in its filings with the SEC.
<TABLE>
<CAPTION>
2000
------------
<S> <C>
Revenues.................................................... $284,923,000
Operating Income............................................ $ 11,414,000
Net Loss.................................................... $ (272,000)
Loss per Share (on a fully diluted basis)................... $ (0.02)
</TABLE>
9. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT. Purchaser is a
Delaware corporation incorporated on March 30, 2000 and to date has engaged in
no activities other than those incident to its formation, the execution and
delivery of the Merger Agreement and the commencement of the Offer. Purchaser is
a wholly owned subsidiary of Parent. The principal executive offices of
Purchaser are located at 628 Green Valley Road, Suite 500, Greensboro, NC 27408,
and the telephone number of Purchaser's executive offices is (336) 547-6000.
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<PAGE> 15
Parent is a Pennsylvania corporation. It is principally engaged in the
design, manufacture and marketing of branded jeanswear, intimate apparel,
children's playwear, occupational apparel, knitwear and other apparel. The
principal executive offices of Parent are located at 628 Green Valley Road,
Suite 500, Greensboro, NC 27408, and the telephone number of Parent's executive
offices is (336) 547-6000. The name, business address, principal occupation or
employment, five year employment history and citizenship of each director and
executive officer of Parent and Purchaser and certain other information are set
forth on Schedule I hereto.
Parent is subject to the informational requirements of the Exchange Act and
in accordance therewith files periodic reports, proxy statements and other
information with the SEC relating to its business, financial condition and other
matters. Parent is required to disclose in such proxy statements certain
information, as of particular dates, concerning its directors and officers,
their remuneration, stock options granted to them, the principal holders of its
securities and any material interests of such persons in transactions with
Parent. Such reports, proxy statements and other information may be inspected at
the offices of the SEC in the same manner as set forth with respect to the
Company in "The Offer -- Section 7 -- Certain Information Concerning the
Company" on page 12.
None of Parent, Purchaser or, to the best knowledge of Parent or Purchaser,
any of the persons listed in Schedule I to this Offer to Purchase or any
associate or majority-owned subsidiary of Parent or Purchaser or any of the
persons so listed, beneficially owns or has any right to acquire, directly or
indirectly, any Shares and none of Parent, Purchaser, or, to the best knowledge
of Parent and Purchaser, any of the persons or entities referred to above or any
director, executive officer or subsidiary of any of the foregoing has effected
any transaction in the Shares during the past 60 days.
Except as provided in the Merger Agreement, or as otherwise described in
this Offer to Purchase, none of Parent, Purchaser or, to the best knowledge of
Parent and Purchaser, any of the persons listed in Schedule I to this Offer to
Purchase, has any contract, arrangement, understanding or relationship with any
other person with respect to any securities of the Company, including, but not
limited to, any contract, arrangement, understanding or relationship concerning
the transfer or voting of such securities, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of loans, guarantees against
loss or the giving or withholding of proxies.
Other than transactions conducted in the ordinary course of business, none
of Parent, Purchaser or, to the best knowledge of Parent and Purchaser, any of
the persons listed on Schedule I hereto, has had any business relationship or
transaction with the Company or any of its executive officers, directors or
affiliates that is required to be reported under the rules and regulations of
the SEC applicable to the Offer. Except as set forth in Section 12 of this Offer
to Purchase, there have been no contacts, negotiations or transactions between
Parent or any of its subsidiaries or, to the best knowledge of Parent, any of
the persons listed in Schedule I to this Offer to Purchase, on the one hand, and
the Company or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets. None of Parent, Purchaser or any of the persons listed in Schedule I
have, during the past five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors). None of Parent,
Purchaser or any of the persons listed in Schedule I have, during the past five
years, been a party to any judicial or administrative proceeding (except for
matters that were dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining the person from future violations of,
or prohibiting activities subject to federal or state securities, laws, or a
finding of any violation of federal or state securities laws.
10. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by
Parent and Purchaser to consummate the Offer and the Merger and to pay related
fees and expenses is estimated to be approximately $30 million.
The Offer and the Merger are not conditioned on obtaining financing. Parent
expects to fund the Offer and the Merger and to pay related fees and expenses
from internally generated funds.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS
WITH THE COMPANY. Parent continually reviews possible strategic initiatives
that might complement its existing business. In late October 1999, Parent's
financial advisor, Salomon Smith Barney Inc. ("Salomon Smith Barney") expressed,
on Parent's behalf, Parent's interest in a possible acquisition of the Company
on mutually agreed upon terms to Deutsche Bank, the
13
<PAGE> 16
Company's financial advisor. Deutsche Bank informed Salomon Smith Barney that
the Company was not then interested in entering into discussions regarding a
potential acquisition.
On December 1, 1999, Mr. Mackey J. McDonald, Chairman, President and Chief
Executive Officer of Parent wrote a letter addressed to Mr. Robert P. Bunje,
Chairman of the Company, and Mr. Geoffrey D. Lurie, Chief Executive Officer of
the Company. The letter stated that Parent remained interested in discussing a
possible acquisition of the Company by Parent. After Mr. Lurie received the
letter, Mr. McDonald and Mr. Lurie had a telephone conversation discussing the
letter during which Mr. Lurie again stated that the Company was not interested
in entering into discussions regarding a possible acquisition.
In early January, Mr. Lurie told Mr. McDonald that the Company was
interested in pursuing strategic alternatives and that Deutsche Bank would
contact Parent regarding the process. Shortly thereafter, Parent received a
draft confidentiality agreement. The Company and Parent entered into a
Confidentiality Agreement dated as of January 20, 2000.
In early February, 2000, representatives of Parent and Davis Polk &
Wardwell, counsel to Parent, conducted due diligence at a data room established
by the Company. At such time, representatives of Parent attended an information
session with Company representatives. Following this initial due diligence
through the execution of the Merger Agreement, Parent and its advisors conducted
further due diligence with respect to the Company and were in contact with the
Company and its advisors in relation thereto.
On March 5, 2000, Parent (along with other bidders) received a bid
solicitation, including a draft Merger Agreement, from Deutsche Bank. On March
20, 2000, Parent submitted its proposal to acquire the Company, including a
proposed mark-up of the Merger Agreement. The proposal was subject to various
conditions, including a commitment to negotiate exclusively with Parent, the
approval of Parent's board of directors, additional due diligence and execution
of a mutually acceptable definitive agreement.
In the days that followed, representatives of the Company and Parent spoke
on several occasions regarding the draft Merger Agreement and the satisfaction
of certain conditions contained in Parent's bid. On March 23, 2000, Deutsche
Bank requested that Parent submit a letter confirming its bid and remove any
conditions to proceeding with a transaction which had been satisfied. On March
27, 2000, Parent delivered a letter together with a revised mark-up of the draft
Merger Agreement confirming its willingness to proceed with negotiations subject
to such negotiations being conducted on an exclusive basis.
On March 28, 2000, counsel to the Company advised counsel to Parent that
the Company would negotiate with Parent on an exclusive basis through March 31,
2000. In addition, counsel discussed the open issues in the draft Merger
Agreement.
On March 28, 2000, counsel to the Company distributed a revised draft
Merger Agreement. On March 29, 2000, counsel to the Company distributed draft
disclosure schedules.
From March 29, 2000, through April 7, 2000, representatives of Parent and
the Company continued to negotiate and revise the draft Merger Agreement. In the
course of discussions among the parties during this period, the Company
disclosed to Parent that the Company would be required to pay the banks party to
the Company loan agreement $3.5 million, among other fees, upon consummation of
the transactions contemplated by the draft Merger Agreement. On April 4, 2000,
Parent advised the Company that a condition to its willingness to proceed with
negotiations was that the banks agree to waive the $3.5 million fee. On April 6,
2000, after discussions with the Company, the banks agreed to reduce the fee to
$876,000 in the case of a transaction with Parent. Counsel for the Company
informed Parent of their agreement with the banks.
On the afternoon of April 6, 2000, Parent was informed that the board of
directors of the Company was going to meet that evening to decide whether to
proceed with the transaction by authorizing the Company to enter into a
definitive agreement and plan of merger. On April 7, 2000, Parent was informed
that the board of directors had decided to proceed with the transaction on the
basis of the draft Merger Agreement presented to the board on April 6, 2000. On
April 7, 2000, Parent, Purchaser and the Company executed the Merger Agreement.
After executing the Merger Agreement, Parent issued a press release
announcing the execution of the Merger Agreement and the Offer and the Merger
contemplated thereby.
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<PAGE> 17
On April 10, 2000, representatives of the Company informed representatives
of Parent that the Company had received a letter from a third party expressing
its interest in a possible acquisition of the Company. This letter contained no
specific offer, set forth no specific price and was subject to further due
diligence. Representatives of Parent expressed to the Company their view that if
the Company entered into negotiations with the third party based upon the letter
received from such third party, such action would constitute a breach of the
Merger Agreement. Purchaser understands that the board of directors of the
Company met on April 11, 2000, and determined not to pursue negotiations with
the third party.
On April 12, 2000, Mr. Lurie requested a letter from Parent stating
Parent's intentions with respect to the repayment of the Company's obligations
under its loan agreement. On April 13, 2000, Parent wrote a letter to the
Company confirming that if the Offer was consummated successfully, Parent agreed
(i) for the period prior to the Merger to use its best efforts to cause, and
(ii) after the Effective Time to cause, the Company to comply with its repayment
obligations under the Company's loan agreement.
12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; THE MERGER
AGREEMENT. The purpose of the Offer is to acquire control of, and the entire
equity interest in, the Company. The Offer, as the first step in the acquisition
of the Company, is intended to facilitate the acquisition of all the Shares. The
purpose of the Merger is to acquire all capital stock of the Company not
purchased pursuant to the Offer or otherwise. Pursuant to the Merger, the
outstanding Shares not owned by Purchaser, Parent or their respective affiliates
would be converted into the right to receive cash in an amount equal to the
price per Share provided pursuant to the Offer, without interest.
Stockholders of the Company who sell their Shares in the Offer will cease
to have any equity interest in the Company or any right to participate in its
earnings and future growth. If the Merger is consummated, non-tendering
stockholders will no longer have an equity interest in the Company or any right
to participate in its earnings and future growth. Similarly, after selling their
Shares in the Offer or the subsequent Merger, stockholders of the Company will
not bear the risk of any decrease in the value of the Company.
Plans for the Company. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business and
operations of the Company will be continued substantially as they are currently
being conducted. Following the Merger, the directors of Purchaser will be the
directors of the Company, and the executive officers of the Company prior to the
Merger will be the executive officers of the Company.
Parent intends to conduct a detailed review of the Company and its assets,
corporate structure, capitalization, operations, policies, management and
personnel. After such review, Parent will determine what actions or changes, if
any, would be desirable in light of the circumstances which then exist,
including steps to integrate the operations of the Company and the operations of
Parent. In parallel, Parent plans to give consideration to any potential avenues
that may be open for further strengthening the Company's marketing and financial
position, including through possible alliances, or partnership or joint venture
arrangements with third parties.
The Company has announced its intention to sell its subsidiary, La
Sportiva, U.S.A. La Sportiva, U.S.A. is engaged in the business of distributing
rock climbing shoes, mountaineering boots and other rugged footwear under the La
Sportiva(R) name. Parent intends to pursue a disposition of La Sportiva, U.S.A.
if a transaction is possible on terms satisfactory to Parent.
Except as described in this Offer to Purchase or the Merger Agreement,
neither Parent nor Purchaser has any present plans or proposals that would
relate to or result in (i) any extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company or any of its
subsidiaries, (ii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries (other than the potential disposition of La
Sportiva, U.S.A.), (iii) any change in the Board or management, (iv) any
material change in the Company's capitalization or (v) any other material change
in the Company's corporate structure or business.
Parent and Purchaser intend to cause the Company to make an application for
termination of registration of the Shares as soon as possible after consummation
of the Offer if the Shares are then eligible for such termination. In such
event, following the consummation of the Merger, there will be no publicly
traded Shares outstanding. See "The Offer -- Section 13 -- Effect of the Offer
on the Market for Shares; Stock Exchange Listing; Registration under the
Exchange Act" on page 21.
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<PAGE> 18
THE MERGER AGREEMENT
The following is a summary of the Merger Agreement, a copy of which is
filed as an Exhibit to Purchaser's Tender Offer Statement on Schedule TO (the
"Schedule TO"). The summary is qualified in its entirety by reference to the
Merger Agreement. The following summary may not contain all of the information
important to you. The Merger Agreement may be examined and copies may be
obtained from the SEC in the same manner as set forth in "The Offer -- Section
7 -- Certain Information Concerning the Company" on page 12. Capitalized terms
used in the following summary and not otherwise defined in this Offer to
Purchase have the meanings set forth in the Merger Agreement.
The Offer. The Merger Agreement provides for the making of the Offer. The
Merger Agreement provides that Purchaser will commence the Offer as promptly as
practicable following the public announcement by Parent and the Company of the
execution of the Merger Agreement (but in no event later than the later of 10
business days and the first business day following the filing by the Company
with the SEC of its Annual Report on Form 10-K for the fiscal year ended
December 31, 1999). The obligation of Purchaser to accept for payment Shares
tendered pursuant to the Offer is subject to the satisfaction of the Minimum
Tender Condition, the HSR Condition and certain other Offer Conditions that are
described below in "The Offer -- Section 16 -- Certain Conditions of the Offer"
on page 23. Purchaser has agreed that it will not (i) decrease the Offer Price
or change the form of the consideration payable in the Offer, (ii) decrease the
number of Shares sought to be purchased in the Offer, (iii) impose conditions to
the Offer in addition to those set forth in Annex A of the Merger Agreement and
described below in "The Offer -- Section 16 -- Certain Conditions of the Offer"
on page 23, (iv) amend any Offer Condition described in the preceding clause or
(v) amend or waive satisfaction of the Minimum Tender Condition.
If all Offer Conditions are not satisfied on the initial expiration date of
the Offer, Purchaser may extend (and re-extend) the Offer to provide additional
time to satisfy such Offer Conditions. We also have agreed in the Merger
Agreement that we may extend the offer once after all the conditions have been
satisfied for a period of not more than five (5) business days as of the
scheduled expiration date of the offer if the number of Shares tendered,
together with shares owned by Parent and Purchaser, if any, is less than 90% of
the Shares outstanding on the scheduled expiration date. If we choose to make
this one-time extension our obligation to pay for all of the Shares tendered in
the Offer and not withdrawn would only be subject to the following conditions:
(i) the Minimum Tender Condition, (ii) there having been no claim or litigation
by a governmental authority or any other person negatively affecting the Offer
or Merger or which in the reasonable judgment of Parent would be reasonable
likely to have a material adverse effect on the Company or Parent and (iii) if a
third party has made a proposal to acquire the Company, the board or directors
of the Company not having withdrawn or adversely changed its recommendation of
the Offer, the Merger Agreement or the Merger. See "The Offer -- Section
16 -- Certain Conditions of the Offer" on page 23.
Recommendation. The board of directors of the Company has (i) unanimously
determined that each of the Merger Agreement, the Offer and the Merger is fair
to, and in the best interests of, the stockholders of the Company, (ii) duly
approved the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger and (iii) subject to the terms and conditions
of the Merger Agreement, resolved to recommend that the stockholders of the
Company accept the Offer and tender their shares thereunder to Purchaser and
approve and adopt the Merger Agreement and the Merger. This recommendation of
the board of directors of the Company may be withdrawn or modified by the board.
However, the Company will be obligated to pay Parent the $5 million fee
described below under "Fees and Expenses."
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, at the time at which the Company and Purchaser file a
certificate of merger (the "Merger Certificate") with the Secretary of State of
the State of Delaware and make all other filings or recordings required by the
DGCL in connection with the Merger, Purchaser shall be merged with and into the
Company and the Company will be the surviving corporation in the Merger. As soon
as practicable after the satisfaction or waiver of the conditions set forth in
Article VII of the Merger Agreement (and described in "The Offer -- Section 16
- -- Certain Conditions of the Offer" on page 23), Parent, Purchaser and the
Company shall cause the Merger Certificate to be executed and filed on the date
of the closing of the Merger (or on such other date as Parent and the Company
may agree) in the manner provided by the DGCL and the parties shall take such
other and further action as may be required by law to
16
<PAGE> 19
make the Merger effective. The time the Merger becomes effective in accordance
with applicable law is hereinafter referred to as the "Effective Time." As a
result of the Merger, the separate corporate existence of Purchaser will cease
and the Company will be the surviving corporation, with all of its rights,
privileges, immunities, powers and franchises continuing unaffected by the
Merger except that (i) the certificate of incorporation of the Company shall be
amended in its entirety to read as the certificate of incorporation of the
Purchaser immediately prior to the Effective Time, except that Article I thereof
shall read as follows: "The name of the Corporation is The North Face, Inc."
and, as so amended, shall be the certificate of incorporation of the surviving
corporation until thereafter amended as provided by law and such certificate of
incorporation and (ii) the bylaws of the Purchaser, as in effect immediately
prior to the Effective Time, shall be the bylaws of the surviving corporation
until thereafter amended as provided by, the certificate of incorporation or
such bylaws.
At the Effective Time, (i) each issued and outstanding Share held in the
treasury of the Company, or owned by Purchaser, Parent or any of Parent's
subsidiaries shall be canceled, and no payment shall be made with respect
thereto, (ii) each share of common stock of Purchaser then outstanding shall be
converted into and become one share of common stock of the corporation surviving
the Merger and (iii) each Share outstanding immediately prior to the Effective
Time shall, except as otherwise provided in (i) above, shall be converted into
the right to receive $2.00 in cash or any higher price per Share that may be
paid pursuant to the Offer, without any interest thereon.
Immediately after the date Shares are accepted for payment pursuant to the
Offer, each holder of a then outstanding option under any employee stock option
or compensation plan or arrangement (the "Options") whether or not then
exercisable or fully vested, and each holder of the warrants to purchase an
aggregate of 202,597 Shares issued to certain parties (collectively, the
"Warrants"), shall in settlement thereof, receive for each Share subject to such
Option or Warrant, an amount (net of applicable withholding tax) in cash equal
to the difference between the Offer Price and the per Share exercise price of
such Option or Warrant, to the extent the Offer Price is greater than the per
Share exercise price of such Option or Warrant, provided, however, that with
respect to any person subject to Section 16(a) of the Exchange Act, any such
amount shall be paid as soon as practicable after the first date payment can be
made without liability to such person under Section 16(a) of the Exchange Act.
Agreements of Parent, Purchaser and the Company. Subject to compliance
with applicable law, promptly upon the purchase by Purchaser pursuant to the
Offer of such number of Shares which represents a majority of all outstanding
Shares on a fully diluted basis, Parent shall be entitled to designate the
number of directors, rounded up to the next whole number, on the Company's board
of directors as is equal to the product of (i) the total number of directors on
such board (determined after giving effect to the directors designated by Parent
pursuant to this sentence) and (ii) the percentage (expressed as a decimal) that
the aggregate number of Shares beneficially owned by Parent bears to the number
of Shares then outstanding. In furtherance thereof, the Company shall, upon the
request of Parent promptly secure the resignations of such number of its
incumbent directors as is necessary to enable Parent's designees to be elected
to the Company's board of directors and shall take all actions available to the
Company to cause Parent's designees to be so elected, subject to compliance with
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The
Merger Agreement provides that, subject to applicable law, the directors of the
Purchaser and the officers of the Company at the Effective Time shall, from and
after the Effective Time, be the directors and officers of the surviving
corporation until their successors shall have been duly elected or appointed or
qualified or until their earlier death, resignation or removal in accordance
with the certificate of incorporation and the bylaws of the Company following
the Effective Time. In the event that Parent's designees are elected to the
Company's board, such board will have at least two (2) directors who were
directors of the Company on the date of the Merger Agreement neither of whom is
an officer of the Company nor a designee, stockholder, affiliate or associate of
Parent (each an "Independent Director"). If, at the Effective Time, a vacancy
shall exist on the board of directors of the Company or in any office of the
Company, such vacancy may thereafter be filled in the manner provided by law.
Stockholder's Meeting. Pursuant to the Merger Agreement, if required by
law or the Company's certificate of incorporation in order to consummate the
Merger, the Company shall cause a meeting of its stockholders to be duly called
and held as soon as reasonably practicable for the purpose of voting on the
approval and adoption of the Merger Agreement and the Merger, and otherwise
comply with all legal requirements applicable to a stockholders' meeting.
Subject to the board of directors' fiduciary duties in the event that the board
receives an unsolicited acquisition proposal from a third party which it
determines is more favorable, the board of directors of the Company
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<PAGE> 20
shall recommend the approval and adoption of the Merger, the Merger Agreement
and the transactions contemplated thereby to the Company's stockholders.
Proxy Statement. The Merger Agreement provides that, if required, the
Company will promptly prepare and file with the SEC under the Exchange Act a
preliminary proxy or information statement relating to the Merger and the Merger
Agreement and use its best efforts (i) to obtain and furnish the information
required to be included by the SEC in such preliminary proxy or information
statement and respond promptly to any comments made by the SEC with respect to
the preliminary proxy or information statement and cause a definitive proxy or
information statement, including any amendment or supplement thereto and all
other proxy materials to be mailed to its stockholders and (ii) to obtain the
necessary approvals of the Merger Agreement and the transactions contemplated
thereby to its stockholders and (iii) subject to the board of directors'
fiduciary duties in the event that the board receives an unsolicited acquisition
proposal from a third party which it determines is more favorable, include in
such proxy or information statement the recommendation of the board of directors
that the stockholders of the Company vote in favor of the approval of the Merger
and the adoption of the Merger Agreement.
Certain Covenants. The Company has agreed that, prior to the Effective
Time, the Company will not adopt or propose any change in its certificate of
incorporation or bylaws. In addition, the Company has agreed that, prior to the
Effective Time, the Company will not, and will not permit any of its
subsidiaries to (i) merge or consolidate with any other person or entity or
acquire a material amount of stock or assets of any other person or entity, (ii)
sell, lease, license or otherwise dispose of any material subsidiary or a
material amount of assets, securities or property to any person or entity,
except pursuant to existing contracts or commitments and in the ordinary course
consistent with past practice, (iii) knowingly take any action that would make
any representation and warranty of the Company under the Merger Agreement
inaccurate in any respect at, or as of any time prior to, the Effective Time or
(iv) agree to commit to do any of the foregoing.
Pursuant to the Merger Agreement, the Company has agreed that from the date
of the Merger Agreement until the termination thereof, the Company and its
subsidiaries will not, and will use their respective best efforts to ensure that
their respective officers, directors, employees or other agents will not,
directly or indirectly; (i) initiate, solicit or knowingly encourage or
knowingly take any action to facilitate the making of any offer or proposal
which constitutes or is reasonably likely to lead to an Acquisition Proposal (as
defined below); (ii) enter into any agreement with respect to an Acquisition
Proposal; or (iii) in the event of any unsolicited Acquisition Proposal, (x)
grant any waiver or release under any standstill or similar agreement to which
the Company or any of its subsidiaries is a party in effect on the date of the
Merger Agreement or (y) engage in negotiations with, or disclose any non-public
information relating to, the Company or any of its subsidiaries or afford access
to the properties, books or records of the Company or any of its subsidiaries
to, any Person that may be considering making, or has made, an Acquisition
Proposal. "Acquisition Proposal" shall mean any tender or exchange offer
involving the Company, any proposal for a merger, consolidation or other
business combination involving the Company, any proposal or offer to acquire in
any manner a substantial equity interest in, or a substantial portion of the
business or assets of, the Company or any material subsidiary (other than
immaterial or insubstantial assets or inventory in the ordinary course of
business or assets held for sale), any proposal or offer with respect to any
recapitalization or restructuring with respect to the Company or any material
subsidiary or any proposal or offer with respect to any other transaction
similar to any of the foregoing with respect to the Company other than pursuant
to the transactions to be effected pursuant to the Merger Agreement. The Company
has agreed to notify promptly, but in no event later than 24 hours, Purchaser
after receipt of any Acquisition Proposal or any request for non-public
information relating to the Company or any of its subsidiaries or for access to
the properties, books or records of the Company or any of its subsidiaries by
any Person that may be considering making, or has made, an Acquisition Proposal.
Parent, Purchaser and the Company have each agreed that for six (6) years
after the Effective Time, Parent will cause the Company to indemnify and hold
harmless the present and former officers and directors of the Company (each an
"Indemnified Person") in respect of acts or omissions occurring at or prior to
the Effective Time to the fullest extent provided by Delaware law under the
Company's certificate of incorporation and bylaws in effect on the date of the
Merger Agreement, subject to any limitation imposed from time to time under
applicable law. In addition, for six (6) years after the Effective Time, the
Company will provide officers' and directors' liability insurance in respect of
acts or omissions occurring prior to the Effective Time covering each such
Indemnified Person currently covered by the Company's officers' and directors'
liability insurance policy on terms with respect to
18
<PAGE> 21
coverage and amount no less favorable than those of such policy in effect on the
date of the Merger Agreement, provided that the Company will not be obligated to
cause the Company to pay premiums in excess of 200% of the amount per annum the
Company paid in its last full fiscal year. If Parent, the Company or any of its
successors or assigns (i) consolidates with or merges into any other person or
entity and the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any person or entity, then, and in each such case,
to the extent necessary, proper provision shall be made so that the successors
and assigns of Parent or the Company, as the case may be, will assume such
indemnification and liability insurance obligations.
Representations and Warranties. The Merger Agreement contains customary
representations and warranties of the parties thereto including representations
by the Company with respect to, among other things: its organization and
qualification and its subsidiaries; its certificate of incorporation and bylaws;
capitalization; authority relative to the Merger Agreement; no conflicts;
required filings and consents; compliance with the law; SEC filings; financial
statements; absence of certain changes or events; undisclosed liabilities;
litigation; employee benefit plans; employment and labor matters; taxes;
environmental matters; intellectual property; and opinion of financial advisor.
Certain representations and warranties in the Merger Agreement are qualified as
to "materiality" or "Material Adverse Effect" on the Company. For purposes of
the Merger Agreement and this Offer to Purchase, when used in connection with
the Company, the term "Material Adverse Effect" means a material adverse effect
on the financial condition, business, assets or results of operations of the
Company and its subsidiaries, taken as a whole, provided, however, that in no
event shall any effect that results from (i) changes affecting the retail
industry generally, (ii) changes affecting the United States economy generally,
or (iii) a so-called "going concern" qualification in respect of the Company's
financial statements for the year ended December 31, 1999, or the absence of
liquidity or capital resources giving rise, thereto or the adverse effect on the
Company's relations with customers, suppliers and others proximately resulting
therefrom constitute a Material Adverse Effect.
Conditions to Certain Obligations. The obligations of the Company, Parent
and Purchaser to consummate the Merger are subject to the satisfaction of the
following conditions: (i) if required by the DGCL, the approval and adoption by
the stockholders of the Company of the Merger Agreement in accordance with such
law, provided, however, that the Parent and Purchaser shall vote all shares
purchased in the Offer in favor of the Merger; (ii) no statute, rule,
regulation, judgment, injunction, order or decree shall prohibit the
consummation of such approval; and (iii) Purchaser shall have purchased, or
caused to be purchased, the Shares pursuant to the Offer (provided that this
condition shall be deemed to have been satisfied if Purchaser fails to accept
for payment, or pay for, Shares pursuant to the Offer in violation of the terms
of the Offer or the Merger Agreement).
Termination. The Merger Agreement may be terminated and the Offer and the
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
any approval of the Merger Agreement by the stockholders of the Company: (i) by
mutual written consent of the Company and Parent; (ii) by either the Company or
Parent, if (x) without any material breach by the terminating party of the
obligations under the Merger Agreement, Purchaser shall not have purchased
Shares pursuant to the Offer by June 15, 2000, or (y) if there shall be any law
or regulation that makes acceptance for payment of, and payment for, the Shares
pursuant to the Offer or consummation of the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining the Merger
is entered and such judgment, injunction, order or decree shall become final and
nonappealable; (iii) by the Company but only prior to the date Shares are
accepted for payment, if it shall have received a Superior Proposal (as defined
below) which the board of directors has determined is more favorable to the
stockholders of the Company than the transactions contemplated by the Merger
Agreement and, subject to the fiduciary duties of the Company's board of
directors, the Company provides written notice to Parent at least 72 hours prior
to such termination of its intention to terminate the Merger Agreement and enter
into a binding agreement with respect to such Superior Proposal (as defined
below) and Parent does not make an offer that is at least as favorable to
shareholders within 72 hours after receiving such notice; (iv) by Parent, but
only prior to the Acceptance Date, if (x) the Company board of directors has
withdrawn, modified or changed in any adverse respect its recommendation of the
Merger Agreement, the Merger and the transactions contemplated thereby, (y) the
Company's board of directors has recommended to its stockholders a Superior
Proposal (as defined below), or (z) resolved to do any of the foregoing; such
termination does not release the Company from its obligation to pay any amounts
described in "Fees and Expenses" below; or (v) by Parent, if the Company shall
not have filed its Annual Report on Form 10-K for the year ended
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<PAGE> 22
December 31, 1999, by May 1, 2000. A "Superior Proposal" means a bona fide
written proposal (a) made by a party or group on an unsolicited basis to the
Company relating to any such transaction which the Company's board of directors
determines in good faith, after receiving advice from a nationally recognized
investment banking firm and taking into account all the terms and conditions of
such proposal, including any break-up fees, expense reimbursement provisions and
conditions to consummation, is more favorable and provides greater value to all
the Company's stockholders than as provided in the Merger Agreement and for
which financing, to the extent required, is then fully committed or reasonably
determined to be available by the Company's board of directors and (b) the
failure to engage in discussions or negotiations with respect to such proposal
would, in the opinion of the Company's board of directors, cause the board of
directors to violate its fiduciary duties to the Company's stockholders under
applicable law. If the Merger Agreement is terminated, the Merger Agreement will
become void and of no effect with no liability on the part of the Company,
Parent or Purchaser other than obligations of Parent under certain provisions of
the Merger Agreement with respect to the treatment of confidential non-public
information concerning the Company and its Subsidiaries, and the obligations of
the Company under certain provisions of the Merger Agreement to pay certain fees
to and expenses of Parent or Purchaser as described in "Fees and Expenses"
below.
Fees and Expenses. The Merger Agreement provides that if (i) prior to the
date Shares are accepted for payment, the Company terminates the Merger
Agreement as described in clause (iii) of "Termination" above, or (ii) Parent
terminates the Merger Agreement as described in clause (iv) of "Termination"
above, then the Company shall pay Parent a fee of $5 million at the time such
event occurs. The Merger Agreement further provides that if any Acquisition
Proposal has been made prior to the expiration or termination of the Offer and a
Third Party Acquisition (as defined below) shall occur at any time on or prior
to the date that is twelve months after the termination of the Merger Agreement,
the Company will pay Parent a fee equal to $5 million in cash within two (2)
business days following such Third Party Acquisition. A "Third Party
Acquisition" means the occurrence of any of the following: (i) the Company
merges with or into, or is acquired, directly or indirectly, by merger or
otherwise, by a person other than Purchaser or Parent (a "Third Party"); (ii) a
Third Party acquires more than 50% of the total assets of the Company and its
Subsidiaries, taken as a whole; (iii) a Third Party acquires more than 50% of
the outstanding Shares; or (iv) the Company adopts or implements a plan of
liquidation, recapitalization or share repurchase relating to more than 50% of
the outstanding Shares or an extraordinary dividend relating to more than 50% of
the outstanding Shares or 50% of the assets of the Company and its subsidiaries,
taken as a whole; no transaction shall constitute a Third Party Acquisition
unless the Company or the holders of Shares receive, pursuant to such
transaction, consideration per Share having an aggregate value in excess of
$2.00.
In addition, the Company has agreed in the Merger Agreement that if the
Merger Agreement is terminated in a manner that requires payment of the $5
million fee described above it shall (no later than two (2) business days after
such termination), reimburse Parent, Purchaser and their Affiliates for
reasonable out-of-pocket fees and expenses (including all fees and expenses of
counsel, accountants, experts, investment bankers, financial and other
consultants to Parent, Purchaser and their affiliates) incurred by Parent and
Purchaser in connection with transactions contemplated by the Merger Agreement,
including, but not limited to, the negotiation, preparation, execution and
performance of the Merger Agreement and Parent's due diligence investigation of
the Company.
Except as described in the preceding paragraph, the Merger Agreement
provides that the Company, Parent and Purchaser shall each bear all expenses
incurred by it in connection with the Merger Agreement and the transactions
contemplated thereby.
Amendment and Waivers. Prior to the purchase of Shares pursuant to the
Offer, any provision of the Merger Agreement may be amended, modified or
supplemented if, and only if, such amendment, modification or supplement is in
writing and signed by action taken by the respective boards of the Company,
Purchaser and Parent. After the purchase of Shares pursuant to the Offer, no
such amendment, modification or supplement shall decrease the amount of
consideration to be received in exchange for any Shares and after approval of
the Merger Agreement by the stockholders of the Company no such amendment,
modification or supplement shall be made which by law requires the further
approval of the Company's stockholders, without obtaining the further approval
of such stockholders. If Parent's designees are elected to the Company's board
of directors, after the acceptance for payment of Shares pursuant to the Offer
and prior to the Effective Time, the affirmative vote of a majority of the
Independent Directors (as defined in "Agreements of Parent, Purchaser and the
Company" above) shall be required to (i) amend or terminate the Merger Agreement
on behalf of the Company, (ii) exercise or waive any of
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<PAGE> 23
the Company's rights, benefits or remedies hereunder, (iii) extend the time for
performance of Purchase's obligations under the Merger Agreement or (iv) take
any other action on behalf of the Company under or in connection with the Merger
Agreement.
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK EXCHANGE
LISTING; REGISTRATION UNDER THE EXCHANGE ACT. The purchase of Shares by
Purchaser pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and may reduce the number of holders of Shares, which
could adversely affect the liquidity and market value of the remaining Shares
held by the public. Purchaser cannot predict whether the reduction in the number
of Shares that might otherwise trade publicly would have an adverse or
beneficial effect on the market price for, or marketability of, the Shares or
whether such reduction would cause future market prices to be greater or less
than the Offer Price.
The Shares are authorized for quotation on the Nasdaq National Market (as
defined in "The Offer -- Section 6 -- Price Range of Shares; Dividends" on page
11). According to the published guidelines of the Nasdaq National Market, the
Shares might no longer be eligible for quotation on the Nasdaq National Market
if, among other things, either (i) the number of Shares publicly held were less
than 750,000, there were fewer than 400 holders of round lots, the aggregate
market value of publicly held Shares was less than $5,000,000, net tangible
assets were less than $4,000,000 and there were fewer than two registered and
active market makers for the Shares, or (ii) the number of Shares publicly held
were less than 1,100,000, there were fewer than 400 holders of round lots, the
aggregate market value of publicly held Shares were less than $15,000,000 and
either (x) the Company's market capitalization was less than $50,000,000 or (y)
the total assets and total revenue of the Company for the most recently
completed fiscal year or two of the last three most recently completed fiscal
years were less than $50,000,000 and there were fewer than four registered and
active market makers. Shares held directly or indirectly by directors or
officers of the Company or beneficial owners of more than 10% of the Shares are
not considered as being publicly held for this purpose. The Depositary has
informed us that as of April 17, 2000, there were 187 stockholders of record.
If the Shares were to cease to be quoted on the Nasdaq National Market, the
market for the Shares could be adversely affected. It is possible that the
Shares would be traded or quoted on other securities exchanges (with trades
published by such exchanges), the Nasdaq Stock Market (with quotations published
in the Nasdaq "additional list" or in one of the "local lists") or in the
over-the-counter market. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of
stockholders and the aggregate market value of the Shares remaining at such
time, the interest in maintaining a market in the Shares on the part of the
securities firms, the possible termination of registration of the Shares under
the Exchange Act and other factors.
Margin Regulations. The Shares are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve Board (the "Federal
Reserve Board"), which has the effect, among other things, of allowing brokers
to extend credit on the collateral of such Shares. Depending upon factors
similar to those described above regarding listing and market quotations and
below regarding registration under the Exchange Act, the Shares might no longer
constitute "margin securities" for the purposes of the Federal Reserve Board's
margin regulations in which event the Shares would be ineligible as collateral
for margin loans made by brokers.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated by the Company upon
application to the SEC if the outstanding Shares are not listed on a national
securities exchange and if there are fewer than 300 holders of record of Shares.
Termination of registration of the Shares under the Exchange Act would reduce
the information required to be furnished by the Company to its stockholders and
to the SEC and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b) and the requirement to
furnish a proxy statement in connection with stockholders' meeting pursuant to
Section 14(a) and the related requirement to furnish an annual report to
stockholders, no longer applicable with respect to the Shares. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144
under the Securities Act of 1933, as amended, may be impaired or eliminated. If
registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be eligible for Nasdaq National Market reporting or for
continued inclusion on the Federal Reserve Board's list of "margin securities".
Purchaser intends to
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<PAGE> 24
seek to cause the Company to apply for termination of registration of the Shares
under the Exchange Act as soon as possible after consummation for the Offer if
the requirements for termination of registration are met.
14. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement prohibits the
Company from paying or declaring any dividends on the Shares and from changing
the number of Shares outstanding as a result of any stock split, stock dividend,
recapitalization or similar transaction.
15. EXTENSION OF TENDER PERIOD; SUBSEQUENT OFFERING PERIOD; TERMINATION;
AMENDMENT. Subject to the Merger Agreement, Purchaser reserves the right, at
any time or from time to time, in its sole discretion to extend (and re-extend)
the Offer until such time as all conditions to the offer are satisfied or
waived. The Merger Agreement provides that Purchaser may extend the Offer once,
after all the conditions have been satisfied, for a period of not more than five
(5) business days as of the scheduled expiration date of the offer if the number
of shares tendered, together with shares owned by Parent and Purchaser, if any,
is less than 90% of the shares outstanding on the scheduled expiration date. If
Purchaser chooses to make this one-time extension our obligation to pay for all
of the shares tendered into the Offer and not withdrawn would only be subject to
the following conditions: (i) the Minimum Tender Condition, (ii) there having
been no claim or litigation by a governmental authority or any other person
negatively affecting the Offer or Merger or which would be reasonably likely to
have a material adverse effect on the Company or Parent and (iii) if a third
party has made a proposal to acquire the Company, the board of directors of the
Company not having withdrawn or adversely changed its recommendation of the
Merger Agreement, the Offer or the Merger. See "The Offer -- Section
16 -- Certain Conditions of the Offer" on page 23.
If Purchaser decreases the percentage of Shares being sought or increases
or decreases the consideration to be paid for Shares pursuant to the Offer and
the Offer is scheduled to expire at any time before the expiration of a period
of ten (10) business days from, and including, the date that notice of such
increase or decrease is first published, sent or given in the manner specified
below, the Offer will be extended until the expiration of such period of ten
(10) business days. If Purchaser makes a material change in the terms of the
Offer (other than a change in price or percentage of securities sought) or in
the information concerning the Offer, or waives a material condition of the
Offer, Purchaser will extend the Offer, if required by applicable law, for a
period sufficient to allow stockholders to consider the amended terms of the
Offer. In a published release, the SEC has stated that in its view an offer must
remain open for a minimum period of time following a material change in the
terms of such offer and that the waiver of a condition such as the Minimum
Tender Condition is a material change in the terms of an offer. The release
states that an offer should remain open for a minimum of five (5) business days
from the date the material change is first published, sent or given to
stockholders, and that if a material change is made with respect to information
that approaches the significance of price and share levels, a minimum of ten
(10) business days may be required to allow adequate dissemination and investor
response.
Purchaser may also, subject to certain conditions, provide a Subsequent
Offering Period following the expiration of the Offer on the Expiration Date
pursuant to which Purchaser may add a period of up to twenty (20) business days
to permit additional tenders of Shares. Purchaser may include a Subsequent
Offering Period so long as, among other things, (i) the Offer remains open for a
minimum of twenty (20) business days and has expired, (ii) all conditions to the
Offer are deemed satisfied or waived by Purchaser on or before the Expiration
Date, (iii) Purchaser accepts and promptly pays for all securities validly
tendered during the initial period of the Offer, (iv) Purchaser announces the
results of the Offer, including the approximate number and percentage of Shares
deposited in the Offer, no later than 9:00 a.m., New York City time, on the next
business day after the Expiration Date and immediately begins the Subsequent
Offering Period and (v) Purchaser immediately accepts and promptly pays for
Shares as they are tendered during the Subsequent Offering Period. In a public
release, the SEC has expressed the view that providing a Subsequent Offering
Period would constitute a material change to the terms of the Offer requiring
Purchaser to disseminate new information to stockholders in a manner reasonably
calculated to inform them of such change sufficiently in advance of the
Expiration Date (generally five (5) business days). In the event Purchaser
elects to include a Subsequent Offering Period, it will notify stockholders of
the Company consistent with the requirements of the SEC.
A Subsequent Offering Period, if one is provided, is not an extension of
the Offer. A Subsequent Offering Period would be an additional period of time,
following the expiration of the Offer, in which stockholders may tender
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<PAGE> 25
Shares not tendered into the Offer. No withdrawal rights apply to shares
tendered in a subsequent offering period and no withdrawal rights apply during a
Subsequent Offering Period with respect to Shares tendered in the Offer and
accepted for payment. The same consideration will be paid to stockholders
tendering shares in the Offer or in a Subsequent Offering Period, if one is
provided.
Purchaser also reserves the right, in its sole discretion, in the event any
of the conditions specified in "The Offer -- Section 16 -- Certain Conditions of
the Offer" on page 23 shall not have been satisfied and so long as Shares have
not theretofore been accepted for payment, to delay (except as otherwise
required by applicable law) acceptance for payment of, or payment for, Shares or
to terminate the Offer and not accept for payment, or pay for, Shares.
If Purchaser extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Shares or is unable to accept for
payment, or pay for, Shares pursuant to the Offer for any reason, then, without
prejudice to Purchaser's rights under the Offer, the Depositary may, on behalf
of Purchaser, retain all Shares tendered, and such Shares may not be withdrawn
except as otherwise provided in "The Offer -- Section 4 -- Withdrawal Rights" on
page 10. The reservation by Purchaser of the right to delay acceptance for
payment of or payment for Shares is subject to applicable law, which requires
that Purchaser pay the consideration offered or return the Shares deposited by
or on behalf of stockholders promptly after the termination or withdrawal of the
Offer.
Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by a public announcement thereof. Without limiting the
manner in which Purchaser may choose to make any public announcement, Purchaser
will have no obligation (except as otherwise required by applicable law) to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service. In the case of an
extension of the Offer, Purchaser will make a public announcement of such
extension no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date.
16. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provisions
of the Offer, Purchaser shall not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
under the Exchange Act (relating to Purchaser's obligation to pay for or return
tendered Shares promptly after termination or expiration of the Offer), pay for,
and may delay the acceptance for payment of or, subject to the restriction
referred to above, the payment for, any tendered Shares (i) unless (a) the
Minimum Tender Condition shall have been satisfied prior to the Expiration Date
and (b) the HSR Condition shall have been satisfied prior to the Expiration
Date, and/or (ii) if, at any time on or after April 7, 2000, the date of the
Merger Agreement, and prior to the Expiration Date, any of the following events
shall have occurred and be continuing:
(a) (i) there shall be instituted or pending any action or proceeding
by any government or governmental authority or agency, domestic, foreign,
or supranational, before any court or governmental authority or agency,
domestic, foreign or supranational, (A) challenging or seeking to make
illegal, to delay materially or otherwise, directly or indirectly, to
restrain or prohibit the making of the Offer, the acceptance for payment
of, or payment for, some or all of the Shares by Parent or Purchaser or the
consummation of the Merger, (B) seeking to obtain material damages or
otherwise directly or indirectly relating to the transactions contemplated
by the Offer or the Merger, (C) seeking to restrain or prohibit Parent's
ownership or operation (or that of its affiliates) of all or any material
portion of the business or assets of the Company and its subsidiaries,
taken as a whole, or of Parent and its subsidiaries, taken as a whole, or
to compel Parent or any of its affiliates to dispose of or hold separate
all or any material portion of the business or assets of the Company and
its subsidiaries, taken as a whole, or of Parent and its subsidiaries,
taken as a whole, (D) seeking to impose or confirm material limitations on
the ability of Parent, Purchaser or any of Parent's other affiliates
effectively to exercise full rights of ownership of the Shares, including
the right to vote any Shares acquired or owned by Parent, Purchaser or any
of Parent's other affiliates on all matters properly presented to the
Company's stockholders, (E) seeking to require divestiture by Parent,
Purchaser or any of Parent's other affiliates of any Shares, or (F) that
otherwise in the judgment of Parent, is likely to have a Material Adverse
Effect on the Company or a material adverse effect on Parent (any action or
proceeding described in clauses (A) through (E), a "Significant
Proceeding"); or (ii) there shall be instituted or pending any other
Significant Proceeding, or any development shall have
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occurred in any action or proceeding pending on the date of the Merger
Agreement that, in each case, in the judgment of Parent is reasonably
likely to result in a Company Material Adverse Effect or a material adverse
effect on Parent; or
(b) there shall have been any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Merger, by any
court, government or governmental authority or agency, domestic, foreign or
supranational, other than the application of the waiting period provisions
of the HSR Act to the Offer or the Merger that, in the judgment of Parent,
is likely, directly or indirectly, to result in any of the consequences
referred to in clauses (i)(A) through (F) of paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any
development shall have occurred or been threatened involving a prospective
change) in the business, assets, liabilities, financial condition,
capitalization, operations or results of operations of the Company or any
of its subsidiaries that, in the reasonable judgment of Parent, is, or is
likely to have, a Material Adverse Effect on the Company; or
(d) (i) any of the representations and warranties of the Company
contained in the Merger Agreement shall not be true and correct when made,
(ii) any of the representations and warranties of the Company contained in
the Merger Agreement (other than Section 3.11(a)(3)) shall not be true and
correct at any time prior to the consummation of the Offer as if made at,
and as of, such time or (iii) the representation set forth in Section
3.11(a)(3) of the Merger Agreement shall not be true and correct at any
time prior to the consummation of the Offer as if made at, and as of, such
time due to the existence of a Tax Issue or Tax Issues (as defined in the
Merger Agreement) that would, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on the Company; or
(e) the Company shall have breached or failed to perform or comply in
all material respects with the obligations under the Merger Agreement to be
performed or complied with by it; or
(f) the Merger Agreement shall have been terminated in accordance with
its terms; or
(g) prior to the purchase of Shares pursuant to the Offer, an
Acquisition Proposal for the Company exists and the board of directors of
the Company shall have withdrawn or materially modified or changed
(including by amendment of the Schedule 14D-9) in a manner adverse to
Purchaser its recommendation of the Offer, the Merger Agreement or the
Merger; or
(h) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that (i) any person or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than Parent or its affiliates or any
group of which any of them is a member or any person or group that, on the
date of the Merger Agreement, has beneficial ownership (determined pursuant
to Rule 13(d)-3 promulgated under the Exchange Act) of more than 10% of the
outstanding Shares and which had filed a Schedule 13D or 13G with the SEC
on or prior to March 31, 2000, shall have acquired beneficial ownership of
more than 10% of any class or series of capital stock of the Company
(including the Shares), through the acquisition of stock, the formation of
a group or otherwise, or shall have been granted an option, right or
warrant, conditional or otherwise, to acquire beneficial ownership of more
than 10% of any class or series of capital stock of the Company (including
the Shares); or (ii) any person or group that, prior to March 31, 2000, had
filed a Schedule 13D or 13G with the SEC, shall have acquired beneficial
ownership of additional shares of any class or series of capital stock of
the Company (including the Shares), through the acquisition of stock, the
formation of a group or otherwise, constituting 5% or more of any such
class or series; or (iii) any person or group shall have entered into a
definitive agreement or agreement in principle with respect to a merger,
consolidation or other business combination with the Company; or
(i) the Company or any material subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency, reorganization or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or
shall consent to any such relief or the appointment of or taking possession
by any such official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of
creditors, or shall fail
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<PAGE> 27
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; or
(j) an involuntary case or other proceeding shall be commenced against
the Company or any material subsidiary seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy,
insolvency, reorganization or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property; or an
order for relief shall be entered against the Company or any subsidiary
under the federal bankruptcy laws as now or hereafter in effect; or
(k) the Company's and its subsidiaries' existing lenders and their
affiliates shall not have continued to fund the business of the Company and
its Subsidiaries on substantially the same basis as had been applicable
prior to the date of the Merger Agreement;
which, in the sole judgment of Purchaser, in any such case, and regardless of
the circumstances (including any action or omission by Purchaser or Parent)
giving rise to any such condition, makes it inadvisable to proceed with such
acceptance for payment.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser regardless of the circumstances
giving rise to any such condition and may be waived by Parent or Purchaser in
whole or in part at any time and from time to time in the sole discretion of
Parent or Purchaser, subject in each case to the terms of the Merger Agreement.
The failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time or from time to
time.
17. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
General. Based on its examination of publicly available information filed
by the Company with the SEC and other publicly available information concerning
the Company, Purchaser is not aware of any governmental license or regulatory
permit that appears to be material to the Company's business that might be
adversely affected by Purchaser's acquisition of Shares as contemplated herein
or, except as set forth below, of any approval or other action by any government
or governmental administrative or regulatory authority or agency, domestic or
foreign, that would be required for the acquisition or ownership of Shares by
Purchaser as contemplated herein. Should any such approval or other action be
required, Purchaser currently contemplates that, except as described below under
"State Takeover Statutes," such approval or other action will be sought or
taken. There can be no assurance that any such approval or other action, if
needed, would be obtained or taken, in the case of approvals, or would be
obtained without substantial conditions or that if such approvals were not
obtained or such other actions were not taken adverse consequences might not
result to the Company's business or certain parts of the Company's business
might not have to be disposed of, any of which could cause Purchaser to elect to
terminate the Offer without the purchase of Shares thereunder. Purchaser's
obligation under the Offer to accept for payment and pay for Shares is subject
to certain conditions. See "The Offer -- Section 16 -- Certain Conditions of the
Offer" on page 23.
Delaware Law. In general, Section 203 of the DGCL prevents an "interested
stockholder" (generally, a stockholder owning 15% or more of a corporation's
outstanding voting stock or an affiliate thereof) from engaging in a "business
combination" (defined to include a merger and certain other transactions as
described below) with a Delaware corporation for a period of three (3) years
following the time on which such stockholder became an interested stockholder
unless, among other exceptions, prior to such time the corporation's board of
directors approved either the business combination or the transaction which
resulted in such stockholder becoming an interested stockholder. The board of
directors of the Company has determined that Section 203 of the DGCL does not
apply to the Merger Agreement, the Offer, the Merger or the transactions
contemplated thereby.
Rights Agreement Amendment. On July 6, 1998, the Company entered into a
Preferred Rights Agreement (the "Rights Agreement") with American Stock Transfer
& Trust Company, as Rights Agent providing for the issuance of certain rights to
acquire preferred shares of the Company. Such rights become exercisable in the
event of certain acquisitions or proposed acquisitions of the equity securities
of the Company. In early April, the Company's board of directors determined that
an amendment to the Rights Agreement was necessary and desirable and consistent
with the objectives of the board of directors in adopting the Rights Agreement.
Such amendment, dated
25
<PAGE> 28
as of April 7, 2000, effectively amended the terms of the Rights Agreement
relating to the "Distribution Date", the "Expiration Date" and "Shares
Acquisition Date" (each as defined herein), amended the definition of "Acquiring
Person" and added certain other provisions. The effect of such revised
definitions and additional provisions was to ensure that approval, execution,
delivery and performance of the Merger Agreement and the making of the Offer by
Purchaser would not cause a distribution of rights, cause the rights to become
exercisable or give any holder of rights under the Rights Agreement or any other
Person any legal or equitable rights, remedies or claims under such Rights
Agreement.
State Takeover Statutes. A number of states have adopted laws which
purport, to varying degrees, to apply to attempts to acquire corporations that
are incorporated in, or which have substantial assets, stockholders, principal
executive offices or principal places of business or whose business operations
otherwise have substantial economic effects in, such states. The Company,
directly or through subsidiaries, conducts business in a number of states
throughout the United States, some of which have enacted such laws. Except as
described herein, Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer or the Merger or any other business combination
between Purchaser or any of its affiliates and the Company and has not complied
with any such laws. To the extent that certain provisions of these laws purport
to apply to the Offer or the Merger, Purchaser believes that there are
reasonable bases for contesting such laws.
In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States
invalidated on constitutional grounds the Illinois Business Takeover Statute
which, as a matter of state securities law, made takeovers of corporations
meeting certain requirements more difficult. However, in 1987 in CTS Corp. v.
Dynamics Corp. of America, the Supreme Court of the United States held that the
State of Indiana could, as a matter of corporate law, constitutionally
disqualify a potential acquiror from voting shares of a target corporation
without the prior approval of the remaining stockholders where, among other
things, the corporation is incorporated, and has a substantial number of
stockholders, in the State of Indiana. Subsequently, in TLX Acquisition Corp. v.
Telex Corp., a Federal District Court in Oklahoma ruled that the Oklahoma
takeover statutes were unconstitutional insofar as they apply to corporations
incorporated outside Oklahoma in that they would subject such corporations to
inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a
Federal District Court in Tennessee ruled that four Tennessee takeover statutes
were unconstitutional as applied to corporations incorporated outside Tennessee.
This decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a Federal District Court in Florida held in Grand
Metropolitan PLC v. Butterworth, that the provisions of the Florida Affiliated
Transactions Act and the Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
If any government official or third party should seek to apply any state
takeover law to the Offer or the Merger, Purchaser will take such action as then
appears desirable, which action may include challenging the applicability or
validity of such statute in appropriate court proceedings. In the event it is
asserted that one or more state takeover statutes is applicable to the Offer or
the Merger and an appropriate court does not determine that such statute or
statutes is or are inapplicable or invalid as applied to the Offer or Merger,
Purchaser might be required to file certain information with, or to receive
approvals from, the relevant state authorities or holders of Shares, and
Purchaser might be unable to accept for payment, or pay for, Shares tendered
pursuant to the Offer, or be delayed in continuing or consummating the Offer or
the Merger. In such case, Purchaser may not be obligated to accept for payment,
or pay for, any tendered Shares. See "The Offer -- Section 16 -- Certain
Conditions of the Offer" on page 23.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied. The purchase of Shares pursuant to the Offer is subject to such
requirements.
Pursuant to the requirements of the HSR Act, Purchaser will file a
Notification and Report Form with respect to the Offer with the Antitrust
Division and the FTC as promptly as practicable after the date hereof. The
waiting period applicable to the purchase of Shares pursuant to the Offer will
expire at 11:59 p.m., New York City time, on the day that is fifteen (15) days
from the date of such filing. However, prior to such time, the Antitrust
Division or
26
<PAGE> 29
the FTC may extend the waiting period by requesting additional information or
documentary material relevant to the Offer from Purchaser. If such a request is
made, the waiting period will be extended until 11:59 p.m., New York City time,
on the tenth day after substantial compliance by Purchaser with such request.
Thereafter, such waiting period can be extended only by court order. A request
is being made pursuant to the HSR Act for early termination of the waiting
period applicable to the Offer. There can be no assurance, however, that the
15-day HSR Act waiting period will be terminated early.
Shares will not be accepted for payment, or paid for, pursuant to the Offer
until the expiration or earlier termination of the applicable waiting period
under the HSR Act. Subject to certain circumstances described in "The
Offer -- Section 4 -- Withdrawal Rights" on page 10, any extension of the
waiting period will not give rise to any withdrawal rights not otherwise
provided for by applicable law. If Purchaser's acquisition of Shares is delayed
pursuant to a request by the Antitrust Division or the FTC for additional
information or documentary material pursuant to the HSR Act, the Offer may, but
need not, be extended.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the consummation of
any such transactions, the Antitrust Division or the FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or seeking divestiture of the Shares so acquired or divestiture of
substantial assets of Purchaser, Parent or the Company. Private parties
(including individual states) may also bring legal actions under the antitrust
laws. Purchaser does not believe that the consummation of the Offer will result
in a violation of any applicable antitrust laws. However, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made,
or if such a challenge is made, what the result will be. See "The
Offer -- Section 16 -- Certain Conditions of the Offer" on page 23 for a
description of certain conditions to the Offer, including conditions with
respect to litigation and certain governmental actions, and for certain
termination rights in connection with antitrust suits.
Other. Based upon Purchaser's representations and warranties in the Merger
Agreement, the Company and its subsidiaries own property and conduct business in
a number of foreign countries. In connection with the acquisition of Shares
pursuant to the Offer, the laws of certain of these foreign countries may
require the filing of information with, or the obtaining of the approval of,
governmental authorities therein. After commencement of the Offer, Purchaser
will seek further information regarding the applicability of any such laws and
currently intends to take such action as they may require, but no assurance can
be given that such approvals will be obtained. If any action is taken prior to
the completion of the Offer by any such government or governmental authority,
Purchaser may not be obligated to accept for payment, or pay for, any tendered
Shares. See "The Offer -- Section 16 -- Certain Conditions of the Offer" on page
23.
18. FEES AND EXPENSES. Salomon Smith Barney is acting as Dealer Manager
for the Offer and as financial advisor to Parent in connection with Parent's
proposed acquisition of the Company, for which services Salomon Smith Barney
will receive customary compensation. Parent also has agreed to reimburse Salomon
Smith Barney for reasonable travel and other out-of-pocket expenses, including
reasonable fees and expenses of its legal counsel, and to indemnify Salomon
Smith Barney and certain related parties against certain liabilities, including
liabilities under the federal securities laws, arising out of its engagement. In
the ordinary course of business, Salomon Smith Barney and its affiliates may
actively trade or hold the securities of Parent and the Company for their own
account or for the account of customers and, accordingly, may at any time hold a
long or short position in such securities.
Parent and Purchaser have retained D.F. King & Co., Inc. to act as the
Information Agent and American Stock Transfer & Trust Company to act as the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telegraph and personal interviews
and may request brokers, dealers and other nominees to forward materials
relating to the Offer to beneficial owners. The Information Agent and the
Depositary each will receive reasonable and customary compensation for their
respective services, will be reimbursed for certain reasonable out-of-pocket
expenses and will be indemnified against certain liabilities in connection
therewith, including certain liabilities under the federal securities laws.
None of Parent or Purchaser will pay any fees or commissions to any broker
or dealer or any other person (other than the Dealer Manager, the Information
Agent and the Depositary) for soliciting tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks and trust companies will, upon
request, be reimbursed by
27
<PAGE> 30
Purchaser for reasonable and necessary costs and expenses incurred by them in
forwarding materials to their customers.
19. MISCELLANEOUS. The Offer is not being made to, and tenders will not
be accepted from, or on behalf of, holders of Shares in any jurisdiction in
which the making of the Offer or acceptance thereof would not be in compliance
with the laws of such jurisdiction. However, Purchaser may, in its discretion,
take such action as it may deem necessary to make the Offer in any such
jurisdiction and extend the Offer to holders of Shares in such jurisdiction. In
any jurisdiction the securities, blue sky or other laws of which require the
Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of Purchaser by one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER NOT CONTAINED IN THIS OFFER TO PURCHASE OR
IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Purchaser has filed with the SEC the Schedule TO, together with exhibits,
pursuant to Rule 14d-1 of the Exchange Act, furnishing certain additional
information with respect to the Offer. In addition, the Company has filed the
Schedule 14D-9, together with all exhibits thereto, pursuant to Rule 14d-9 of
the Exchange Act setting forth its recommendation with respect to the Offer and
the reasons for such recommendations and furnishing certain additional related
information. The Schedule TO, the Schedule 14D-9 and any amendments thereto,
including exhibits, may be examined and copies may be obtained from the offices
of the SEC in the manner set forth in "The Offer -- Section 7 -- Certain
Information Concerning the Company" on page 12 of this Offer to Purchase (except
that such information will not be available at the regional offices of the SEC).
Sequoia Acquisition, Inc.
April 19, 2000
28
<PAGE> 31
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The name, age, current
principal occupation or employment and five-year employment history of each
director and executive officer of Parent are set forth below. The address of
each director and officer is 628 Green Valley Road, Suite 500, Greensboro, NC
27408. None of the directors and officers of Parent listed below has, during the
past five years, (i) been convicted in a criminal proceeding or (ii) been a
party to any judicial or administrative proceeding that resulted in a judgement,
decree or final order enjoining the person from future violations of, or
prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws. All directors and
officers listed below are citizens of the United States. Directors are
identified by an asterisk.
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND PERIOD SERVED IN SUCH
NAME FIVE-YEAR EMPLOYMENT HISTORY AGE OFFICE(S)
- ---- ---------------------------------------------- --- ---------------------
<S> <C> <C> <C>
Erskine B. Bowles* General Partner, Forstmann Little & Co. 54 1999 to date
White House Chief of Staff
1996 to 1998
Assistant to the President and
Deputy Chief of Staff
1994 to 1995
Director, VF Corporation
1999 to date
Robert D. Buzzell* Distinguished Visiting Professor, 66 1998 to date
Georgetown University
Professor Emeritus,
Harvard Business School
1993 to date
Director, VF Corporation
1983 to date
Edward E. Crutchfield* Chairman and Chief Executive Officer, 58 1985 to date
First Union Corporation
Director, VF Corporation 1992 to date
Ursula F. Fairbairn* Executive Vice President -- Human 57 1996 to date
Resources & Quality, American Express
Company
Senior Vice President of 1990 to 1996
Human Resources, Union Pacific
Corporation
Director, VF Corporation 1994 to date
Barbara S. Feigin* Consultant 62 1999 to date
Executive Vice President and 1993 to 1999
Worldwide Director of
Strategic Services, Grey
Advertising
Director, VF Corporation 1987 to date
George Fellows* Former President and Chief Executive 57 1997 to 1999
Officer, Revlon, Inc.
President and Chief Operating 1995 to 1997
Officer, Revlon, Inc. and Revlon
Consumer Products Corporation
Director, VF Corporation 1997 to date
</TABLE>
S-1
<PAGE> 32
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND PERIOD SERVED IN SUCH
NAME FIVE-YEAR EMPLOYMENT HISTORY AGE OFFICE(S)
- ---- ---------------------------------------------- --- ---------------------
<S> <C> <C> <C>
Robert J. Hurst* Vice Chairman, The Goldman Sachs 54 1997 to date
Group, Inc.
Head or Co-Head of Investment Banking, 1990 to 1999
The Goldman Sachs Group
Director, VF Corporation 1994 to date
Mackey J. McDonald* Chairman of the Board, VF Corporation 53 1998 to date
Chief Executive Officer, VF Corporation 1996 to date
President, VF Corporation 1993 to date
Director, VF Corporation 1993 to date
M. Rust Sharp* Of Counsel, Heckscher, Teillon, 59 1999 to date
Terrill & Sager
Of Counsel, Pepper Hamilton LLP 1996 to 1999
Partner, Clark, Ladner, Fortenbaugh prior to 1996
& Young
Director, VF Corporation 1984 to date
L. Dudley Walker* Chairman of the Board, VF Knitwear, Inc. 69 1984 to date
Director, VF Corporation 1984 to date
Timothy A. Lambeth Vice President -- Global Processes, 53 1999 to date
VF Corporation (VF since 1982)
Terry L. Lay Vice President and Chairman -- 52 1999 to date
International Coalition, VF Corporation (VF since 1974)
Daniel G. MacFarlan Vice President, VF Corporation 49 1995 to date
Chairman -- Knitwear, Playwear & Intimate 1996 to date
Apparel Coalitions, VF Corporation (VF since 1978)
John P. Schamberger Vice President and Chairman -- North & South 51 1995 to date
America, Jeanswear & Workwear (VF since 1972)
Coalitions, VF Corporation
Candace S. Cummings Secretary, VF Corporation 53 1997 to date
Vice President -- Administration, General 1996 to date
Counsel, VF Corporation (VF since 1995)
Frank C. Pickard III Vice President -- Treasurer, 55 1994 to date
VF Corporation (VF since 1976)
Robert K. Shearer Vice President -- Finance and Chief 48 1998 to date
Financial Officer, VF Corporation (VF since 1986)
</TABLE>
S-2
<PAGE> 33
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The name, age, current
principal occupation or employment and five-year employment history of each
director and executive officer of Purchaser are set forth below. The address of
each director and officer is 628 Green Valley Road, Suite 500, Greensboro, NC
27408. None of the directors and officers of Purchaser listed below has, during
the past five years, (i) been convicted in a criminal proceeding or (ii) been a
party to any judicial or administrative proceeding that resulted in a judgement,
decree or final order enjoining the person from future violations of, or
prohibiting activities subject to, federal or state securities laws, or a
finding of any violation of federal or state securities laws. All directors and
officers listed below are citizens of the United States. The Director is
identified by an asterisk.
<TABLE>
<CAPTION>
CURRENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND PERIOD SERVED IN SUCH
NAME FIVE-YEAR EMPLOYMENT HISTORY AGE OFFICE(S)
- ---- ---------------------------------------------- --- ---------------------
<S> <C> <C> <C>
Mackey J. McDonald President, Sequoia Acquisition, Inc. 53 March 2000 to date
Chairman of the Board, VF Corporation 1998 to date
Chief Executive Officer, VF Corporation 1996 to date
President, VF Corporation 1993 to date
Director, VF Corporation 1993 to date
Candace S. Cummings* Vice President and Secretary, 53 March 2000 to date
Sequoia Acquisition, Inc.
Secretary, VF Corporation
Vice President -- Administration and General 1997 to date
Counsel, VF Corporation 1996 to date
(VF since 1995)
Frank C. Pickard III Vice President and Assistant Secretary, 55 March 2000 to date
Sequoia Acquisition, Inc.
Vice President -- Treasurer, VF Corporation
1994 to date
</TABLE>
S-3
<PAGE> 34
Facsimile copies of the Letter of Transmittal will be accepted. The Letter of
Transmittal and Share Certificates and any other required documents should be
sent to the Depositary at the address set forth below:
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
FOR INFORMATION CALL TOLL FREE (800) 937-5449
<TABLE>
<S> <C>
By Mail: By Hand or Overnight Courier:
40 Wall Street 40 Wall Street
46th Floor 46th Floor
New York, New York 10005 New York, New York 10005
Attn: Reorganization Department Attn: Reorganization Department
</TABLE>
By Facsimile Transmission:
(718) 234-5001
Confirm Facsimile Transmission by Telephone:
(718) 921-8200
Questions or requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers set
forth below. Stockholders may also contact their broker, dealer, commercial bank
or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT: (212) 269-5550
ALL OTHERS CALL TOLL FREE: (888) 460-7637
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
338 GREENWICH STREET
NEW YORK, NEW YORK 10013
CALL TOLL FREE: (877) 518-9871
<PAGE> 1
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
THE NORTH FACE, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED APRIL 19, 2000
OF
SEQUOIA ACQUISITION, INC.,
A WHOLLY OWNED SUBSIDIARY OF
VF CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
TUESDAY, MAY 16, 2000, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
(718) 234-5001
40 Wall Street 40 Wall Street
46th Floor Confirm Facsimile Transmission 46th Floor
New York, New York 10005 by Telephone: New York, New York 10005
Attn: Reorganization Department (718) 921-8200 Attn: Reorganization Department
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THE ONE SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined in the Offer to Purchase (as defined below)) is utilized, if
delivery of Shares is to be made by book-entry transfer to the Depositary's
account at the Book-Entry Transfer Facility (as defined in the Offer to
Purchase) pursuant to the procedures set forth in Section 3 of the Offer to
Purchase. Delivery of documents to the Book-Entry Transfer Facility does not
constitute delivery to the Depositary.
Stockholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) or who cannot complete the procedures for delivery by
book-entry transfer on a timely basis, must tender their Shares pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
See Instruction 2.
<PAGE> 2
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARES TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the
Depositary are being tendered. See Instruction 4. IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED SEE INSTRUCTION 8.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
[ ] CHECK HERE IF CERTIFICATES HAVE BEEN LOST, DESTROYED OR STOLEN. SEE
INSTRUCTION 8.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
---------------------------------------------
Account No. at The Depository Trust Company
--------------------------
Transaction Code No.
-------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY, ENCLOSE A PHOTOCOPY
OF SUCH NOTICE AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s)
---------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-------------------------
Name of Institution that Guaranteed Delivery
-------------------------------
If delivery is by book-entry transfer:
-------------------------------------
Name of Tendering Institution
------------------------------------------
Account No. at The Depository Trust Company
----------------------
Transaction Code No.
----------------------------------------------------
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Sequoia Acquisition, Inc., a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of VF Corporation, a
Pennsylvania corporation ("Parent"), the above described shares of common stock,
$0.0025 par value, and associated preferred share purchase rights (the
"Shares"), of The North Face, Inc., a Delaware corporation (the "Company"),
pursuant to Purchaser's offer to purchase all outstanding Shares at a price of
$2.00 per Share, net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
April 19, 2000 (the "Offer to Purchase"), and this Letter of Transmittal (which,
together with any amendments or supplements thereto or hereto, constitute the
"Offer"). Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates, the right to purchase
Shares tendered pursuant to the Offer.
Upon the terms and subject to the terms and conditions of the Offer and
effective upon acceptance for payment of, and payment for, the Shares tendered
herewith, the undersigned hereby sells, assigns and transfers to, or upon the
order of, Purchaser all right, title and interest in and to all Shares tendered
hereby (and any and all other Shares or other securities or rights issued or
issuable in respect thereof on or after April 6, 2000) and appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares (and all such other Shares or securities or rights),
with full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to the full extent of the
undersigned's rights with respect to such Shares (and any such other Shares or
securities or rights) to (a) deliver certificates for such Shares (and all such
other Shares or securities or rights), or transfer ownership of such Shares (and
all such other Shares or securities or rights) on the account books maintained
by the Book-Entry Transfer Facility, together, in any such case, with all
accompanying evidences of transfer and authenticity to, or upon the order of,
Purchaser, (b) present such Shares (and all such other Shares or securities or
rights) for transfer on the books of the Company and (c) receive all benefits
and otherwise exercise all rights of beneficial ownership of such Shares (and
all such other Shares or securities or rights), all in accordance with the terms
of the Offer.
The undersigned hereby irrevocably appoints Mackey J. McDonald, Frank C.
Pickard III and Candace S. Cummings and each of them, and any other designees of
Purchaser, the attorneys-in-fact and proxies of the undersigned, each with full
power of substitution, to exercise all voting and other rights of the
undersigned in such manner as each such attorney-in-fact and proxy or his
substitute shall in his sole discretion deem proper, with respect to all of the
Shares tendered hereby which have been accepted for payment by Purchaser prior
to the time of any vote or other action (and any and all other Shares or other
securities or rights issued or issuable in respect thereof on or after April 6,
2000), at any meeting of stockholders of the Company (whether annual, special or
adjourned), by written consent or otherwise. This proxy is irrevocable and is
granted in consideration of, and is effective upon, the acceptance for payment
of such Shares by Purchaser in accordance with the terms of the Offer. Such
acceptance for payment shall revoke any other proxy, power-of-attorney or
written consent granted by the undersigned at any time with respect to such
Shares (and all such other Shares or securities or rights), and no subsequent
powers of attorney or proxies will be given or written consents will be executed
by the undersigned (and if given or executed, will not be deemed to be
effective).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any and all other Shares or other securities or rights
issued or issuable in respect thereof on or after April 6, 2000) and that when
the same are accepted for payment by Purchaser, Purchaser will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges,
claims and encumbrances and not subject to any adverse claim. The undersigned
will, upon request, execute and deliver any additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby (and all such other Shares
or securities or rights).
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
3
<PAGE> 4
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and
Purchaser upon the terms and subject to the conditions of the Offer.
The undersigned understands that the Offer is conditioned upon, among other
things, (i) there being validly tendered and not withdrawn prior to the
expiration of the Offer a number of Shares which, together with the Shares then
owned by Purchaser and Parent, would represent at least a majority of the total
number of outstanding Shares on a fully diluted basis and (ii) the expiration or
termination of any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares purchased, and return any
Shares not tendered or not purchased, in the name(s) of the undersigned (and, in
the case of Shares tendered by book-entry transfer, by credit to the account at
the Book-Entry Transfer Facility designated above). Similarly, unless otherwise
indicated under "Special Delivery Instructions", please mail the check for the
purchase price of any Shares purchased and any certificates for Shares not
tendered or not purchased (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature(s). In the
event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the purchase price of
any Shares purchased and return any Shares not tendered or not purchased in the
name(s) of, and mail said check and any certificates to, the person(s) so
indicated. The undersigned recognizes that Purchaser has no obligation, pursuant
to the "Special Payment Instructions", to transfer any Shares from the name of
the registered holder(s) thereof if Purchaser does not accept for payment any of
the Shares so tendered.
4
<PAGE> 5
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased (less the amount of any federal income and backup withholding
tax required to be withheld) or certificates for Shares not tendered or
not purchased are to be issued in the name of someone other than the
undersigned.
Issue [ ] check
[ ] certificates to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION NO.)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased (less the amount of any federal income and backup withholding
tax required to be withheld) or certificates for Shares not tendered or
not purchased are to be mailed to someone other than the undersigned or to
the undersigned at an address other than that shown below the
undersigned's signature(s).
Mail [ ] check
[ ] certificates to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(ZIP CODE)
------------------------------------------------------------
5
<PAGE> 6
SIGN SIGN HERE
HERE (PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
arrow right
- --------------------------------------------------------------------------------
arrow left
arrow right
- --------------------------------------------------------------------------------
arrow left
SIGNATURE(S) OF OWNERS
Dated
- --------------------------- , 2000
Name(s) ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title)
------------------------------------------------------------
Address-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number -------------------------------------------
Taxpayer Identification or
Social Security Number -------------------------------------------------------
(SEE SUBSTITUTE FORM W-9)
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
GUARANTEE OF SIGNATURES(S)
(IF REQUIRED; SEE INSTRUCTIONS 1 AND 5)
arrow right
Name of Firm
- -------------------------------------------------------------------------
arrow left
Authorized Signature
- ------------------------------------------------------------------
Dated
- --------------------------- , 2000
6
<PAGE> 7
PAYOR: AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
PART 1 -- TAXPAYER IDENTIFICATION NO. -- FOR ALL ACCOUNTS PART II -- FOR PAYEES EXEMPT
SUBSTITUTE FROM BACKUP WITH-HOLDING (SEE
FORM W-9 ENCLOSED Guidelines)
---------------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY ENTER YOUR TAXPAYER IDENTIFICATION NUMBER IN THE --------------------------------
INTERNAL REVENUE SERVICE APPROPRIATE BOX. FOR MOST INDIVIDUALS AND SOLE SOCIAL SECURITY NUMBER
PROPRIETORS, THIS IS YOUR SOCIAL SECURITY NUMBER.
FOR OTHER ENTITIES, IT IS YOUR EMPLOYER IDENTIFICATION OR
NUMBER. IF YOU DO NOT HAVE A NUMBER, SEE "OBTAINING A -------------------------------
NUMBER" IN THE ENCLOSED GUIDELINES. EMPLOYEE IDENTIFICATION NUMBER
NOTE: IF THE ACCOUNT IS IN MORE THAN ONE NAME, SEE THE
CHART ON PAGE 1 OF THE ENCLOSED GUIDELINES TO DETERMINE
WHAT NUMBER TO ENTER.
---------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
PAYER'S REQUEST FOR PART 2 -- CERTIFICATION -- UNDER PENALTIES OF PERJURY, I
TAXPAYER IDENTIFICATION NO. CERTIFY THAT:
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER
IDENTIFICATION NUMBER (OR I AM WAITING FOR A NUMBER TO BE
ISSUED TO ME) AND EITHER (a) I HAVE MAILED OR
DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER
IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL
REVENUE SERVICE CENTER OR SOCIAL SECURITY
ADMINISTRATION OFFICE OR (b) I INTEND TO MAIL OR
DELIVER AN APPLICATION IN THE NEAR FUTURE. I
UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER
IDENTIFICATION NUMBER WITHIN (60) DAYS, 31% OF ALL
REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE
WITHHELD UNTIL I PROVIDE A NUMBER;
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE
(A) I AM EXEMPT FROM BACKUP WITHHOLDING, OR (b) I HAVE NOT
BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE ("IRS")
THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF
A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS OR (c)
THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO
BACKUP WITHHOLDING; AND
(3) ANY INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT
AND COMPLETE.
SIGNATURE DATE , 2000
------------
- --------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER
HAS NOT BEEN ISSUED TO ME, AND EITHER (a) I HAVE MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE OR (b)
I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDER STAND
THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER TO THE DEPOSITARY, 31%
PERCENT OF ALL REPORTABLE PAYMENTS MADE TO ME WILL BE WITHHELD, BUT WILL BE
REFUNDED TO ME IF I PROVIDE A CERTIFIED TAXPAYER IDENTIFICATION NUMBER WITHIN 60
DAYS.
Signature Date
------------ -----------
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificate for Shares and any other
required documents should be sent or delivered by each stockholder of the
Company or such stockholder's broker, dealer, commercial back, trust company or
other nominee to the Depositary at its address set forth below.
7
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Signatures on a Letter of Transmittal need
not be guaranteed if (1) the Letter of Transmittal is signed by the registered
holder of the Shares tendered therewith and such holder has not completed the
boxes entitled "Special Payment Instructions" or "Special Delivery Instructions"
on the Letter of Transmittal or (2) such Shares are tendered for the account of
an Eligible Institution (as defined below). See Instruction 5 below. Except as
otherwise provided in the preceding sentence, all signatures on a Letter of
Transmittal must be guaranteed by a financial institution (such as a bank,
savings and loan association or brokerage house) that is a member of a
recognized Medallion Program approved by The Securities Transfer Association
Inc., including the Securities Transfer Agents Medallion Program (STAMP), the
Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange, Inc.
Medallion Signature Program (MSP) (each an "Eligible Institution").
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith
or, unless an Agent's Message is utilized, if delivery of Shares is to be made
by book-entry transfer pursuant to the procedures set forth in Section 3 of the
Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well as
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof or, in the case of a book-entry transfer, an Agent's Message) and any
other documents required by this Letter of Transmittal, must be received by the
Depositary at its address set forth on the front page of this Letter of
Transmittal by the Expiration Date. Stockholders who cannot deliver their Shares
and all other required documents to the Depositary by the Expiration Date must
tender their Shares pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender
must be made by or through an Eligible Institution, (b) a properly completed and
duly executed Notice of Guaranteed Delivery substantially in the form provided
by Purchaser must be received by the Depositary by the Expiration Date and (c)
the certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of all Shares delivered electronically, as well as a properly completed
and duly executed Letter of Transmittal (or facsimile thereof or, in the case of
a book-entry delivery, an Agent's Message) and any other documents required by
this Letter of Transmittal, must be received by the Depositary within three (3)
trading days after the date of execution of such Notice of Guaranteed Delivery,
all as provided in Section 3 of the Offer to Purchase. A "trading day" is any
day on which the Nasdaq Stock Market's National Market is open for business.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
SOLE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF CERTIFICATES FOR SHARES
ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal (or
a facsimile thereof), the tendering stockholder waives any right to receive any
notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto and referenced in the box entitled "Description of
Shares Tendered."
4. Partial Tenders (not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares which are to be tendered in the box entitled "Number of Shares
Tendered". In such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as promptly as practicable following the expiration or
termination of the Offer. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificates without alteration, enlargement or any change
whatsoever. If any of the Shares tendered hereby
8
<PAGE> 9
is held of record by two or more persons, all such persons must sign this Letter
of Transmittal. If any of the Shares tendered hereby are registered in different
names on different certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the purchase price is to be made, or Shares not
tendered or not purchased are to be returned, in the name of any person other
than the registered holder(s). Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and submit evidence satisfactory to
Purchaser of the authority of such person so to act.
6. Stock Transfer Taxes. The Purchaser will pay any stock transfer taxes
with respect to the sale and transfer of any Shares to it or its order pursuant
to the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), or if a transfer tax is imposed for
any reason other than the sale or transfer of Shares to the Purchaser pursuant
to the Offer, then the amount of any stock transfer taxes (whether imposed on
the registered holder(s), such other person or otherwise) will be deducted from
the purchase price unless satisfactory evidence of the payment of such taxes, or
exemption therefrom, is submitted herewith.
7. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares not
tendered or not purchased are to be returned, in the name of a person other than
the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Stockholders tendering Shares by book-entry transfer may request that Shares not
purchased be credited to such account at the Book-Entry Transfer Facility as
such stockholder may designate under "Special Payment Instructions." If no such
instructions are given, any such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated above.
8. Lost, Destroyed or Stolen Certificates. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly contact the American Stock Transfer & Trust Company, which is the
Company's transfer agent, by calling (800) 937-5449. The stockholder will then
be instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
certificates have been followed.
9. Substitute Form W-9. Under the federal income tax laws, the Depositary
will be required to withhold 31% of the amount of any payments made to certain
stockholders pursuant to the Offer. In order to avoid such backup withholding,
each tendering stockholder, and, if applicable, each other payee, must provide
the Depositary with such stockholder's or payee's correct taxpayer
identification number and certify that such stockholder or payee is not subject
to such backup withholding by completing the Substitute Form W-9 set forth
above. In general, if a stockholder or payee is an individual, the taxpayer
identification number is the Social Security number of such individual. If the
Depositary is not provided with the correct taxpayer identification number, the
stockholder or payee may be subject to a $50 penalty imposed by the Internal
Revenue Service. Certain stockholders or payees (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order to satisfy the Depositary that
a foreign individual qualifies as an exempt recipient, such stockholder or payee
must submit a statement, signed under penalties of perjury, attesting to that
individual's exempt status. Such statements can be obtained from the Depositary.
For further information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a taxpayer
identification number if you do not have one and how to complete the
9
<PAGE> 10
Substitute Form W-9 if Shares are held in more than one name), consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Shares to be deemed invalidly tendered, but may require the Depositary to
withhold 31% of the amount of any payments made pursuant to the Offer. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of a person subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained provided that the required information is furnished to
the Internal Revenue Service.
NOTE: FAILURE TO COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
10. Requests for Assistance or Additional Copies. Requests for assistance
or additional copies of the Offer to Purchase and this Letter of Transmittal may
be obtained from the Information Agent or the Dealer Manager at their respective
addresses or telephone numbers set forth below.
(DO NOT WRITE IN SPACES BELOW)
- --------------------------------------------------------------------------------
Date Received Accepted By Checked By
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SHARES SHARES AMOUNT OF SHARES CERTIFICATE
SURRENDERED TENDERED ACCEPTED CHECK NO. CHECK RETURNED NO.
- ----------- -------- -------- --------- --------- -------- ----------- BLOCK NO.
<C> <C> <C> <C> <S> <C> <C> <C>
Gr-----
Net----
</TABLE>
- --------------------------------------------------------------------------------
Delivery Prepared By Checked By Date
10
<PAGE> 11
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
FOR INFORMATION CALL TOLL FREE: (800) 937-5449
<TABLE>
<S> <C>
By Mail: By Hand or Overnight Courier:
40 Wall Street 40 Wall Street
46th Floor 46th Floor
New York, New York 10005 New York, New York 10005
Attn: Reorganization Department Attn: Reorganization Department
</TABLE>
By Facsimile Transmission:
(718) 234-5001
Confirm Facsimile Transmission by Telephone:
(718) 921-8200
Questions or requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers set
forth below. Stockholders may also contact their broker, dealer, commercial bank
or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT: (212) 269-5550
ALL OTHERS CALL TOLL FREE: (888) 460-7637
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
338 GREENWICH STREET
NEW YORK, NEW YORK 10013
CALL TOLL FREE: (877) 518-9871
<PAGE> 1
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
THE NORTH FACE, INC.
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to tender shares of common stock, par value $0.0025 per
share, and the associated preferred share purchase rights (the "Shares"), of The
North Face, Inc., a Delaware corporation (the "Company"), pursuant to the Offer
(as defined below) if certificates evidencing Shares (the "Share Certificates")
are not immediately available or the Share Certificates and all other documents
required by the Letter of Transmittal cannot be delivered to American Stock
Transfer & Trust Company (the "Depositary"), on or prior to the Expiration Date
(as defined in the Offer to Purchase), or if the procedure for delivery by
book-entry transfer cannot be completed on a timely basis. Such form may be
delivered by hand, facsimile transmission, telex or mail to the Depositary and
must include a guarantee by an Eligible Institution (as defined in the Offer to
Purchase).
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
40 Wall Street (718) 234-5001 40 Wall Street
46th Floor Confirm Facsimile Transmission 46th Floor
New York, New York 10005 by Telephone: New York, New York 10005
Attn: Reorganization Department Attn: Reorganization Department
(718) 921-8200
</TABLE>
------------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Sequoia Acquisition, Inc., a Delaware
corporation and a wholly owned subsidiary of VF Corporation, a Pennsylvania
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase dated April 19, 2000 (the "Offer to Purchase") and in the related
Letter of Transmittal (which, together with the Offer to Purchase and any
amendments or supplements thereto, constitute the "Offer"), receipt of which is
hereby acknowledged, the number of Shares indicated below pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Signature(s):
- ---------------------------------------
Name(s) of Record Holders:
- ------------------------------------------------------
- ------------------------------------------------------
(Please Type or Print)
Number of Shares:
- ---------------------------------
Share Certificate No(s). (if available)
- ------------------------------------------------------
- ------------------------------------------------------
Dated:
- ---------------------------------------, 2000
Address:
- --------------------------------------------
- ------------------------------------------------------
(Zip Code)
Area Code and Tel. No(s):
- ------------------------------------------------------
Check box if Shares will be tendered by book-entry transfer. [ ]
DTC Account Number:
- ---------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm that is a commercial bank, broker, dealer, credit
union, savings association or other entity that is a member in good standing of
a recognized Medallion Program approved by the Transfer Association, Inc.,
hereby guarantees to either deliver to the Depositary certificates evidencing
all the Shares tendered hereby, in proper form for transfer, or to deliver such
Shares pursuant to the procedure for book-entry transfer into the Depositary's
account at The Depository Trust Company, in either case together with the Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees or an Agent's Message, (as defined in the
Offer to Purchase) in the case of a book-entry transfer, and any other required
documents, within three (3) trading days after the date hereof. A "trading day"
is any day on which the Nasdaq Stock Market's National Market is open for
business.
Name of Firm:
- -------------------------------------
- ------------------------------------------------------
Address:
- --------------------------------------------
- ------------------------------------------------------
(Zip Code)
Area Code and Telephone No.:
- --------------------
Authorized Signature:
- ------------------------------
Name:
- ----------------------------------------------
Title:
- -----------------------------------------------
Dated:
- ----------------------------------------------
NOTE: DO NOT SEND CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE> 1
Exhibit (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
THE NORTH FACE, INC.
AT
$2.00 NET PER SHARE
BY
SEQUOIA ACQUISITION, INC.,
A WHOLLY OWNED SUBSIDIARY OF
VF CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, MAY 16, 2000 UNLESS OFFER IS EXTENDED.
April 19, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Sequoia Acquisition, Inc., a Delaware corporation
("Purchaser") and a wholly owned subsidiary of VF Corporation ("Parent") to act
as Dealer Manager in connection with Purchaser's offer to purchase all of the
outstanding shares of Common Stock, $0.0025 par value, and the associated
preferred share purchase rights (the "Shares"), of The North Face, Inc., a
Delaware corporation (the "Company"), at a price of $2.00 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April 19, 2000 (the "Offer
to Purchase"), and the related Letter of Transmittal (which, together with the
Offer to Purchase and any amendments or supplements thereto, constitute the
"Offer") enclosed herewith.
THIS OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES WHICH, TOGETHER WITH THE SHARES THEN OWNED BY PURCHASER AND PARENT, WOULD
REPRESENT AT LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING SHARES ON A
FULLY DILUTED BASIS AND (ii) THE EXPIRATION OR TERMINATION OF ANY APPLICABLE
WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976,
AS AMENDED.
Enclosed for your information and for forwarding to your clients for whose
accounts you hold Shares registered in your name or in the name of your nominee,
are copies of the following documents:
1. The Offer to Purchase dated April 19, 2000;
2. The Letter of Transmittal for your use and for the information of your
clients;
3. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9;
4. The Notice of Guaranteed Delivery (to be used to accept the Offer if the
certificates evidencing Shares ("Share Certificates") and all other
required documents cannot be delivered to the Depositary by the
Expiration Date (as defined in the Offer to Purchase);
5. A printed form of letter that may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions
with regard to the Offer; and
6. A return envelope addressed to American Stock Transfer & Trust Company,
the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER AND
WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, MAY
16, 2000, UNLESS THE OFFER IS EXTENDED.
<PAGE> 2
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
Shares Certificates or timely confirmation of a book-entry transfer of such
Shares into the Depositary's account at the Book-Entry Transfer Facility (as
defined in Section 3 of the Offer to Purchase), (ii) the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed, with any
required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and (iii) any other documents required by the Letter of
Transmittal.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of April 7, 2000 (the "Merger Agreement"), among Parent, Purchaser and the
Company pursuant to which, as soon as practicable following the consummation of
the Offer and the satisfaction or waiver of certain conditions, Purchaser will
be merged with and into the Company (the "Merger"), with the Company surviving
the Merger as a wholly owned subsidiary of Parent. At the Effective Time (as
defined in the Offer to Purchase) of the Merger, each outstanding Share (other
than Shares owned by Parent, Purchaser or the Company or any subsidiary of
Parent or the Company or by stockholders of the Company, if any, who are
entitled to and properly exercise appraisal rights under Delaware law) will be
converted into the right to received the price per Share paid pursuant to the
Offer, in cash, without interest thereon, as set forth in the Merger Agreement
and described in the Offer to Purchase.
The Board of Directors of the Company has (i) unanimously determined that
each of the Merger Agreement, the Offer and the Merger contemplated by the
Merger Agreement, is fair to, and in the best interests of, the stockholders of
the Company, (ii) duly approved the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, and (iii) subject to
the terms and conditions of the Merger Agreement, resolved to recommend that the
stockholders of the Company accept the Offer and tender their Shares pursuant to
the Offer and approve and adopt the Merger Agreement and the Merger.
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's Share Certificates are not immediately available or such
stockholder cannot deliver the Share Certificates and all other required
documents to reach the Depositary prior to the Expiration Date, or such
stockholder cannot complete the procedure for delivery by book-entry transfer on
a timely basis, such Shares may nevertheless be tendered by following the
guaranteed delivery procedure specified in Section 3 of the Offer to Purchase.
No fees or commissions will be paid to any broker or dealer or other person
(other than the Dealer Manager, the Information Agent or the Depositary as
described in the Offer to Purchase) for soliciting tenders of Shares pursuant to
the Offer. Purchaser will, however, upon request, reimburse brokers, dealers,
commercial banks and trust companies for reasonable and necessary costs and
expenses incurred by them in forwarding materials to their customers. Purchaser
will pay all stock transfer taxes applicable to its purchase of Shares pursuant
to the Offer, subject to Instruction 6 of the Letter of Transmittal.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
Shares, and any other required documents, should be sent to the Depositary by
12:00 midnight, New York City time, on Tuesday, May 16, 2000.
Any questions you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers set
forth on the back cover of the Offer to Purchase.
Very truly yours,
Salomon Smith Barney Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF PURCHASER, PARENT, THE COMPANY, THE DEALER
MANAGER, THE INFORMATION AGENT, THE DEPOSITARY OR ANY AFFILIATE OF ANY OF THEM,
OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT
ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
Exhibit (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
THE NORTH FACE, INC.
AT
$2.00 NET PER SHARE
BY
SEQUOIA ACQUISITION, INC.,
A WHOLLY OWNED SUBSIDIARY OF
VF CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON TUESDAY, MAY 16, 2000, UNLESS THE OFFER IS EXTENDED.
April 19, 2000
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated April 19,
2000 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer") in
connection with the offer by Sequoia Acquisition, Inc., a Delaware corporation
("Purchaser") and a wholly owned subsidiary of VF Corporation, a Pennsylvania
corporation ("Parent"), to purchase all of the outstanding shares of common
stock, $0.0025 par value, and the associated preferred share purchase rights
(the "Shares"), of The North Face, Inc., a Delaware corporation (the "Company")
at a price of $2.00 per Share, net to the seller in cash, without interest
thereon, upon the terms and conditions set forth in the Offer.
WE (OR OUR NOMINEE) ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR
ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US
FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, pursuant to the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is directed to the following:
1. The offer price is $2.00 per Share, net to you in cash, without any
interest thereon, upon the items and subject to the conditions of the
Offer.
2. The Offer and associated withdrawal rights expire at 12:00 midnight, New
York City time, on Tuesday, May 16, 2000, unless the Offer is extended.
3. The Offer is being made pursuant to the Agreement and Plan of Merger
dated as of April 7, 2000 (the "Merger Agreement"), among Parent,
Purchaser and the Company pursuant to which, as soon as practicable
following the consummation of the Offer and the satisfaction or waiver
of certain conditions, Purchaser will be merged with and into the
Company (the "Merger") with the Company surviving the Merger as a wholly
owned subsidiary of Parent. At the Effective Time (as defined in the
Offer to Purchase) of the Merger, each outstanding Share (other than
Shares owned by Parent, Purchaser or the Company or any subsidiary of
Parent or the Company or by stockholders, if any, who are entitled to
and properly exercise appraisal rights under Delaware Law) will be
converted into the right to receive $2.00 per Share, in cash, without
interest, as set forth in the Merger Agreement and described in the
Offer to Purchase.
4. The Offer is made for all of the outstanding Shares.
5. The board of directors of the Company has (i) unanimously determined
that each of the Merger Agreement, the Offer and the Merger is fair to,
and in the best interests of, the stockholders of the Company, (ii) duly
approved the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger and
<PAGE> 2
(iii) subject to the terms and conditions of the Merger Agreement,
resolved to recommend that the stockholders of the Company accept the
Offer and tender their Shares thereunder to Purchaser and approve and
adopt the Merger Agreement and the Merger.
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions to the Dealer Manager, the Depositary or the Information
Agent or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer. However, federal income tax backup withholding at
a rate of 31% may be required, unless an exemption is provided or unless
the required taxpayer identification information is provided. See
Instruction 9 of the Letter of Transmittal.
7. The Offer is conditioned upon, among other things, (i) there being
validly tendered by the Expiration Date (as defined in the Offer), and
not withdrawn, a number of Shares which, together with the Shares then
owned by Purchaser, Parent and any of their affiliates, represents at
least a majority of the total voting power of Shares on a fully-diluted
basis and (ii) the expiration or termination of any applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
8. Any stock transfer taxes applicable to the sale of Shares to the
Purchaser pursuant to the Offer will be paid by the Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, please instruct us
by completing, executing, detaching and returning to us the instruction form on
the following page. An envelope to return your instructions to us is enclosed.
If you authorize tender of your Shares, all such Shares will be tendered unless
otherwise specified on the following page.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF BY THE EXPIRATION OF THE OFFER.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction.
Payment for Shares purchased pursuant to the Offer will, in all cases, be
made only after timely receipt by American Stock Transfer & Trust Company (the
"Depositary") of (a) certificates evidencing Shares or timely confirmation of
the book-entry transfer of such Shares into the Depositary's account at the
"Book-Entry Transfer Facility" (as defined in the Offer to Purchase) pursuant to
the procedures set forth in Section 3 of the Offer to Purchase, (b) the Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees or an Agent's Message (as defined in the
Offer to Purchase), in connection with a book-entry delivery, and (c) any other
documents required by the Letter of Transmittal. Accordingly, payment may not be
made to all tendering shareholders at the same time depending upon when
certificates for or confirmations of book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility are actually received by
the Depositary.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
THE NORTH FACE, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated April 19, 2000, and the related Letter of Transmittal,
in connection with the offer by Sequoia Acquisition, Inc. to purchase all of the
outstanding shares of common stock, $0.0025 par value per share, and the
associated preferred share purchase rights (the "Shares"), of The North Face,
Inc.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
<TABLE>
<S> <C>
Number of Shares to be Tendered:
--------------------------- Shares(1) SIGN HERE
-----------------------------------------------------
SIGNATURE(S)
-----------------------------------------------------
-----------------------------------------------------
PLEASE PRINT NAME(S) AND ADDRESSES HERE
-----------------------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.
Dated:
-----------------------------------------------
</TABLE>
THIS FORM MUST BE RETURNED TO THE BROKERAGE FIRM MAINTAINING YOUR ACCOUNT.
- ---------------
(1) Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<PAGE> 1
Exhibit (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.
Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, the
first individual on
the account(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor, or
committee, for a designated ward, incompetent
minor or incompetent person person(3)
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under State law
8. Sole proprietorship account The owner(4)
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
9. A valid trust, estate, or pension The legal entity
trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district,
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the individual name, business name or "doing business as" name of the
owner. Use either individual's social security number or business's employer
identification number (if it has one).
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(A), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A dealer required to register in securities or commodities registered in the
U.S. or a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident alien partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payment of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
Exhibit (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is made
solely by the Offer to Purchase dated April 19, 2000 (as defined below), and
the related Letter of Transmittal (as defined below) and is not being made to,
nor will tenders be accepted from, or on behalf of, holders of Shares in any
jurisdiction in which the making of the Offer or acceptance thereof would not
be in compliance with the laws of such jurisdiction. In any jurisdiction in
which the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed made on behalf of
Purchaser (as defined below) by Salomon Smith Barney Inc., the Dealer Manager
(as defined below), or by one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Share Purchase Rights)
of
The North Face, Inc.
at
$2.00 Net Per Share
by
Sequoia Acquisition, Inc.,
a wholly owned subsidiary of
VF Corporation
Sequoia Acquisition, Inc., a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of VF Corporation, Pennsylvania corporation ("Parent"),
is offering to purchase all of the outstanding shares of common stock, par
value $0.0025 per share, and the associated preferred share purchase rights (the
"Shares"), of The North Face, Inc., a Delaware corporation (the "Company"), at
a price of $2.00 per Share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated April 19, 2000 (the "Offer to Purchase"), and in the related
Letter of Transmittal (the "Letter of Transmittal") (which, together with the
Offer to Purchase and any amendments or supplements thereto, constitute the
"Offer").
| ----------------------------------------------------------------------- |
| THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK |
| CITY TIME, ON TUESDAY, MAY 16, 2000, UNLESS THE OFFER IS EXTENDED (SUCH |
| DATE AND TIME, AS EXTENDED FROM TIME TO TIME, THE "EXPIRATION DATE"). |
| ----------------------------------------------------------------------- |
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (A) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, WHEN TAKEN TOGETHER WITH THE SHARES OWNED BY PARENT OR ITS
AFFILIATES, REPRESENT AT LEAST A MAJORITY OF THE THEN ISSUED AND OUTSTANDING
SHARES ON A FULLY-DILUTED BASIS (THE "MINIMUM TENDER CONDITION") AND (B) THE
EXPIRATION OR TERMINATION OF ANY APPLICABLE WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED.
<PAGE> 2
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of April 7, 2000 (the "Merger Agreement"), by and among the Company,
Purchaser and Parent. The Merger Agreement provides that as promptly as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction (or waiver, to the extent permissible under the Merger Agreement)
of the conditions to the Merger (as defined below), Purchaser shall, in
accordance with the General Corporation Law of the State of Delaware ("Delaware
Law"), be merged with and into the Company ("the Merger"), whereupon the
separate existence of Purchaser shall cease, and the Company shall continue as
the surviving corporation. Pursuant to the Merger, each outstanding Share (other
than Shares owned by Parent, Purchaser or the Company, or any subsidiary of
Parent or the Company or by stockholders of the Company, if any, who are
entitled to and properly exercise appraisal rights under Delaware Law) shall be
converted into the right to receive the per Share price paid in the Offer in
cash, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS (A) UNANIMOUSLY DETERMINED THAT
EACH OF THE MERGER AGREEMENT, THE OFFER AND THE MERGER CONTEMPLATED BY THE
MERGER AGREEMENT IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF
THE COMPANY, (B) DULY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND (C) SUBJECT TO THE
TERMS AND CONDITIONS OF THE MERGER AGREEMENT, RESOLVED TO RECOMMEND THAT THE
STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO
THE OFFER, AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as if and when Purchaser gives oral or written notice to American
Stock Transfer & Trust Company (the "Depositary") of Purchaser's acceptance for
payment of such Shares pursuant to the Offer. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payments from Purchaser and transmitting such payments to tendering
stockholders whose Shares have been accepted for payment. UNDER NO CIRCUMSTANCES
WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS OF ANY DELAY
IN MAKING SUCH PAYMENT. In all cases, payment for Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (A) the certificates evidencing such Shares (the "Share Certificates") or
confirmation of book-entry transfer of such Shares into the Depositary's account
at the Book-Entry Transfer Facility (as defined in the Offer to Purchase), (B)
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees or, in the case of a book-entry
transfer, an Agent's Message (as defined in the Offer to Purchase) and (C) any
other documents required by the Letter of Transmittal. Accordingly, payment may
be made to tendering stockholders at different times if delivery of the Shares
and other required documents occurs at different times.
Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from time
to time, to extend the period of time during which the Offer is open by giving
oral or written notice of such extension to the Depositary. Purchaser expressly
reserves the right, in its sole discretion, to extend the Offer on one occasion
following the time that all conditions to the consummation of the Offer have
been satisfied as of the scheduled Expiration Date of the Offer for a period not
to exceed five (5) business days, if the number of Shares tendered is less than
90% of the Shares outstanding on the scheduled Expiration Date (including Shares
owned by Parent and its wholly owned subsidiaries). If Purchaser elects to make
this one time extension, its obligation to accept for payment all Shares validly
tendered and not withdrawn shall be subject only to the Minimum Tender Condition
and the conditions set forth in Sections (a), (b) and (g) of Annex A to the
Merger Agreement. Any such extension will be followed by a public announcement
thereof no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date. In addition, Purchaser expressly
reserves the right, in its sole discretion, to extend the Offer if all
conditions to the consummation of the Offer have been satisfied or waived but
the number of Shares tendered is less than 90% of the Shares then issued and
outstanding (including Shares owned by Parent and its wholly owned subsidiaries)
for an aggregate period not to exceed twenty (20) business days (a "Subsequent
Offering Period") and only if Purchaser first accepts for payment all Shares
validly tendered prior to such extension. Any such extension will be followed by
a public announcement thereof no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date.
<PAGE> 3
Tenders of Shares made pursuant to the Offer are irrevocable, except that
such Shares may be withdrawn at any time prior to the Expiration Date and,
unless theretofore accepted for payment by Purchaser pursuant to the Offer,
may also be withdrawn at any time after June 17, 2000. If all conditions to the
Offer have been satisfied or waived and Purchaser provides a Subsequent Offering
Period, tendering stockholders will no longer have any withdrawal rights and
any Shares so tendered will be accepted for payment and paid for, by Purchaser.
For a withdrawal to be effective, a written, telegraphic facsimile transmission
notice of withdrawal must be timely received by the Depositary at its address
set forth on the back cover page of the Offer to Purchase. Any such notice of
withdrawal must specify the name, address and taxpayer identification number of
the person who tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered holder of such Shares, if different
from that of the person who tendered such Shares. If Share Certificates
evidencing Shares to be withdrawn have been delivered or otherwise identified
to the Depositary, then, prior to the physical release of such Share
Certificates, the name of the registered holder (if different from that of the
tendering stockholder) and the serial numbers shown on such Share Certificates
must be submitted to the Depositary and the signature(s) on the notice of
withdrawal must be guaranteed by an Eligible Institution (as defined in the
Offer to Purchase), unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure
for book-entry transfer as set forth in the Offer to Purchase, any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares. Withdrawn Shares
may be retendered by following one of the procedures described in the Offer to
Purchase at any time prior to the Expiration Date. All questions as to the
form and validity (including time of receipt) of any notice of withdrawal will
be determined by Purchaser, in its sole discretion, whose determination will be
final and binding.
The information required to be disclosed by paragraph (d)(1) of Rule 14d-6
of the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares and
furnished to brokers, dealers, banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the Company's stockholder
lists, or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.
THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO
THE OFFER.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager as set forth below. Requests for copies of the
Offer to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or brokers, dealers,
commercial banks or trust companies, and copies will be furnished promptly at
Purchaser's expense. Purchaser will not pay any fees or commissions to any
broker or dealer or any other person (other than the Dealer Manager and the
Information Agent) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokerage Firms Please Call: (212) 269-5550
All Others Call Toll Free: (888) 460-7637
The Dealer Manager for the Offer is:
Salomon Smith Barney
388 Greenwich Street
New York, New York 10013
Call Toll Free: (877) 518-9871
April 19, 2000
<PAGE> 1
Exhibit (d)(1)
AGREEMENT AND PLAN OF MERGER
by and among
VF CORPORATION
SEQUOIA ACQUISITION, INC.
and
THE NORTH FACE, INC.
dated
APRIL 7, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I THE OFFER AND MERGER.................................................. 2
Section 1.1 The Offer............................................... 2
Section 1.2 Company Actions......................................... 3
Section 1.3 Directors............................................... 4
Section 1.4 The Merger.............................................. 5
Section 1.5 Effective Time.......................................... 6
Section 1.6 Closing................................................. 6
Section 1.7 Directors and Officers of the Surviving Corporation..... 6
Section 1.8 Effects of the Merger................................... 6
Section 1.9 Stockholders' Meeting................................... 6
Section 1.10 Merger Without Meeting of Stockholders.................. 7
Section 1.11 Earliest Consummation................................... 7
ARTICLE II CONVERSION OF SECURITIES............................................. 7
Section 2.1 Conversion of Capital Stock............................. 7
Section 2.2 Dissenting Shares....................................... 8
Section 2.3 Surrender of Shares; Stock Transfer Books............... 8
Section 2.4 Company Stock Plans..................................... 10
Section 2.5 Adjustments............................................. 11
Section 2.6 Lost Certificates....................................... 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................... 11
Section 3.1 Corporate Existence and Power........................... 11
Section 3.2 Corporate Authorization................................. 12
Section 3.3 Consents And Approvals; No Violations................... 12
Section 3.4 Capitalization.......................................... 13
Section 3.5 Subsidiaries............................................ 14
Section 3.6 SEC Documents........................................... 14
Section 3.7 Financial Statements.................................... 15
Section 3.8 Absence Of Undisclosed Liabilities...................... 15
Section 3.9 Information in Proxy Statement and Offer Documents...... 15
Section 3.10 Absence of Certain Changes.............................. 16
Section 3.11 Taxes................................................... 17
Section 3.12 Employee Matters........................................ 18
Section 3.13 Litigation; Compliance With Laws........................ 20
Section 3.14 Labor Matters........................................... 20
Section 3.15 Certain Contracts and Arrangements...................... 21
Section 3.16 Environmental Matters................................... 21
Section 3.17 Intellectual Property................................... 22
Section 3.18 Opinion Of Financial Advisor............................ 23
</TABLE>
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<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
Section 3.19 Board Recommendation.................................... 23
Section 3.20 Rights Plan; Antitakover Statues........................ 23
Section 3.21 Finders' Fees........................................... 24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER............... 24
Section 4.1 Corporate Existence and Power........................... 24
Section 4.2 Authorization........................................... 24
Section 4.3 Consents And Approvals; No Violations................... 25
Section 4.4 Information in Proxy Statement.......................... 26
Section 4.5 Share Ownership......................................... 26
Section 4.6 Financing............................................... 26
Section 4.7 Finders' Fees........................................... 26
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER................................ 26
Section 5.1 Acquisition Proposals................................... 26
Section 5.2 Interim Operations of the Company....................... 27
Section 5.3 No Solicitation......................................... 27
Section 5.4 Notices of Certain Events............................... 28
ARTICLE VI ADDITIONAL AGREEMENTS................................................ 29
Section 6.1 Proxy Statement......................................... 29
Section 6.2 Meeting of Stockholders of the Company.................. 29
Section 6.3 Additional Agreements................................... 29
Section 6.4 Access; Confidentiality................................. 29
Section 6.5 Consents and Approvals.................................. 30
Section 6.6 Publicity............................................... 30
Section 6.7 Directors' and Officers' Insurance and Indemnification.. 30
Section 6.8 Purchaser Compliance.................................... 31
Section 6.9 Best Efforts............................................ 31
Section 6.10 Employee Benefits....................................... 32
Section 6.11 Further Assurances...................................... 32
ARTICLE VII CONDITIONS.......................................................... 33
Section 7.1 Conditions to Each Party's Obligations to Effect the
Merger.................................. ............... 33
ARTICLE VIII TERMINATION........................................................ 33
Section 8.1 Termination............................................. 33
Section 8.2 Effect of Termination................................... 34
ARTICLE IX MISCELLANEOUS........................................................ 35
Section 9.1 Amendment and Modification.............................. 35
</TABLE>
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<PAGE> 4
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
Page
<S> <C>
Section 9.2 Non-Survival of Representations and Warranties.......... 35
Section 9.3 Expenses................................................ 35
Section 9.4 Notices................................................. 36
Section 9.5 Interpretation.......................................... 37
Section 9.6 Counterparts............................................ 37
Section 9.7 Entire Agreement; No Third Party Beneficiaries.......... 37
Section 9.8 Severability............................................ 38
Section 9.9 Specific Performance.................................... 38
Section 9.10 Governing Law........................................... 38
Section 9.11 Jurisdiction............................................ 38
Section 9.12 WAIVER OF JURY TRIAL.................................... 38
Section 9.13 Assignment.............................................. 38
</TABLE>
-iii-
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated April 7, 2000, by
and among VF Corporation, a Pennsylvania corporation ("Parent"), Sequoia
Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and The North Face, Inc., a Delaware corporation (together
with its subsidiaries from time to time (except as the context may otherwise
require), (the "Company")).
WHEREAS, the Board of Directors of each of Parent, Purchaser and the
Company has approved, and deems it advisable and in the best interests of its
respective stockholders to consummate, the acquisition of the Company by Parent
upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance thereof, it is proposed that Purchaser make a
cash tender offer (the "Offer") to acquire all shares (the "Shares") of the
issued and outstanding common stock, par value $0.0025 per share, of the Company
(including the associated preferred share purchase rights issued pursuant to the
Rights Agreement (as defined in Section 3.20)), for $2.00 per share, net to the
seller in cash (such price, or any such higher price per Share as may be paid in
the Offer, being referred to herein as the "Offer Price" and the aggregate being
referred to herein as the "Offer Consideration");
WHEREAS, also in furtherance of such acquisition, the Board of
Directors of each of Parent, Purchaser and the Company have each approved the
Merger (as defined below) following the Offer in accordance with the General
Corporation Law of the State of Delaware (the "DGCL") and upon the terms and
subject to the conditions set forth herein, whereby each issued and outstanding
Share not owned directly or indirectly by Parent, Purchaser or the Company will
be converted into the right to receive an amount equal to the Offer Price in
cash; and
WHEREAS, the Board of Directors of the Company (the "Company Board of
Directors") has determined that the consideration to be paid for each Share in
the Offer and the Merger is fair to the holders of such Shares and has resolved
to recommend that the holders of such Shares accept the Offer and approve this
Agreement and each of the transactions contemplated hereby upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
<PAGE> 6
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Article VIII hereof and none of the events set
forth in Annex A shall have occurred and be existing, as promptly as practicable
(but in no event later than the later of (i) ten business days after a public
announcement of the execution of this Agreement and (ii) the first business day
following the filing by the Company with the United States Securities and
Exchange Commission (the "SEC") of its Annual Report on Form 10-K for the Fiscal
Year Ended December 31, 1999 (the "1999 10-K")), Purchaser shall, and Parent
shall cause Purchaser to, commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) the Offer at
the Offer Price. Subject only to the conditions set forth in Annex A hereto,
Purchaser shall, and Parent shall cause Purchaser to, accept for payment and pay
for all Shares validly tendered and not withdrawn pursuant to the Offer prior to
its expiration date. The Offer shall be made by means of an offer to purchase
(the "Offer to Purchase") subject to the conditions set forth in Annex A hereto.
Purchaser expressly reserves the right to waive any conditions to the Offer and
to make any change in the terms or conditions to the Offer, provided that,
except as provided in Section 1.1(d), Purchaser shall not, without the prior
consent of the Company, (i) decrease the Offer Price or change the form of
consideration payable in the Offer, (ii) decrease the number of Shares sought to
be purchased in the Offer, (iii) impose conditions to the Offer in addition to
those set forth in Annex A, (iv) amend any condition of the Offer set forth in
Annex A, or (v) amend or waive satisfaction of the Minimum Condition (as defined
in Annex A hereto). Purchaser shall on the terms and subject to the prior
satisfaction or waiver of the conditions of the Offer, accept for payment, and
pay for, Shares tendered as soon as it is legally permitted to do so under
applicable law, subject to Section 1.1(d) (the "Acceptance Date"). Parent shall
provide or cause to be provided to Purchaser on a timely basis the funds
necessary to accept for payment, and pay for, any Shares that Purchaser becomes
obligated to accept for payment, and pay for, pursuant to the Offer.
(b) As soon as practicable on the date the Offer is commenced,
Parent and Purchaser shall file with the SEC a Statement on Schedule TO
(together with all amendments and supplements thereto and including the exhibits
thereto, the "Schedule TO") with respect to the Offer. The Schedule TO will
contain (including as an exhibit) or incorporate by reference the Offer to
Purchase and a form of letter of transmittal and summary advertisement
(collectively, together with any amendments and supplements thereto, the "Offer
Documents"). Parent and Purchaser agree that the Offer Documents will comply in
all material respects with the provisions of applicable Federal securities laws
and shall not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading.
(c) Each of Parent and Purchaser will take all steps necessary
to cause the Offer Documents to be filed with the SEC as promptly as practicable
after the public announcement of the
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<PAGE> 7
execution of this Agreement. Each of Parent and Purchaser will promptly correct
any information in the Offer Documents if and to the extent that it shall have
become false or misleading in any material respect, and Purchaser further will
take all steps necessary to cause the Schedule TO or the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to holders of the
Shares, in each case as promptly as practicable. The Company and its counsel
shall be given the reasonable opportunity to review the Offer Documents,
including the initial Schedule TO (as well as all amendments or supplements
thereto), before any such document is filed with the SEC. In addition, Parent
and Purchaser will provide the Company and its counsel with any comments or
other communications, whether written or oral, Parent, Purchaser or their
counsel may receive from time to time from the SEC or its staff with respect to
the Offer Documents promptly after the receipt of such comments or other
communications.
(d) The Offer shall be made by means of an Offer to Purchase
which shall provide for an initial expiration date of twenty (20) business days
from the date of commencement (the "Initial Expiration Date"). Parent and
Purchaser agree that Purchaser shall not terminate or withdraw the Offer or
extend the expiration date of the Offer unless at the expiration date of the
Offer the conditions to the Offer shall not have been satisfied or earlier
waived; provided that notwithstanding the foregoing, Purchaser may, without the
consent of the Company, extend the Offer on one occasion following the time that
all of the conditions to the Offer have been satisfied as of the scheduled
expiration date of the Offer for a period not to exceed five (5) business days,
if the number of Shares tendered, together with any Shares beneficially owned by
Parent or Purchaser or any other subsidiary of Parent, is less than 90% of the
Shares outstanding on the scheduled expiration date of the Offer; provided,
further, that if Purchaser elects to extend the Offer as set forth in the
immediately preceding proviso, the obligation of Purchaser, and of Parent to
cause Purchaser to, accept for payment, purchase and pay for all of the Shares
tendered pursuant to the Offer and not withdrawn shall be subject only to the
Minimum Condition and the conditions set forth in Sections (a), (b) and (g) of
Annex A.
Section 1.2 Company Actions
(a) The Company represents that the Company Board of Directors
has (i) unanimously determined that each of the Agreement, the Offer and the
Merger are fair to and in the best interests of the stockholders of the Company,
(ii) duly approved this Agreement and the transactions contemplated hereby,
including the Offer and the Merger (collectively, the "Transactions"), and such
approval is sufficient to render Section 203 of the DGCL inapplicable to this
Agreement, and (iii) subject to the terms and conditions of this Agreement,
resolved to recommend that the stockholders of the Company accept the Offer and
tender their shares thereunder to Purchaser and approve and adopt this Agreement
and the Merger. The Company further represents that Deutsche Bank Securities
Inc. ("DB") has delivered to the Company's Board of Directors its written
opinion that the consideration to be paid in the Offer and the Merger is fair to
the holders of Shares from a financial point of view. The Company will promptly
furnish Parent with a list of its stockholders, mailing labels and any available
listing or computer file containing the names and addresses of all record
holders of Shares and lists of securities positions of Shares held in stock
depositories, in each case true and correct as of the most recent practicable
date, and will
-3-
<PAGE> 8
provide to Parent such additional information (including updated lists of
stockholders, mailing labels and lists of securities positions) and such other
assistance as Parent may reasonably request in connection with the Offer.
(b) As soon as practicable on the date the Offer is commenced, the Company shall
file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments or supplements thereto and including the exhibits
thereto, the "Schedule 14D-9") which shall, subject to Section 5.3 of this
Agreement, contain the recommendation referred to in clause (iii) of Section
1.2(a) hereof. The Schedule 14D-9 will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published or sent to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The Company further agrees to take all steps necessary to
cause the Schedule 14D-9 to be filed with the SEC and to be disseminated to
holders of the Shares, in each case, as and to the extent required by applicable
federal securities laws. The Company shall mail, or cause to be mailed, such
Schedule 14D-9 to the stockholders of the Company at the same time the Offer
Documents are first mailed to the stockholders of the Company together with such
Offer Documents. The Company agrees promptly to correct any information in the
Schedule 14D-9 if and to the extent that it shall have become false or
misleading in any material respect and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to holders of the Shares, in each case, as and to the
extent required by applicable federal securities laws. Parent and its counsel
shall be given the opportunity to review and comment on the Schedule 14D-9 and
any other material to be filed by the Company with the SEC in connection with
the Offer before it is filed with the SEC. In addition, the Company agrees to
provide Parent, Purchaser and their counsel with any comments, whether written
or oral, that the Company or its counsel may receive from time to time from the
SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt
of such comments or other communications.
Section 1.3 Directors
(a) Subject to compliance with applicable law, promptly upon
the purchase by Purchaser pursuant to the Offer of such number of Shares which
represents a majority of all outstanding Shares on a fully diluted basis, Parent
shall be entitled to designate the number of directors, rounded up to the next
whole number, on the Company Board of Directors as is equal to the product of
(i) the total number of directors on such Board (determined after giving effect
to the directors designated by Parent pursuant to this sentence) and (ii) the
percentage (expressed as a decimal) that the aggregate number of Shares
beneficially owned by Parent bears to the total number of Shares then
outstanding. In furtherance thereof, the Company shall, upon the request of
Parent promptly secure the resignations of such number of its incumbent
directors as is necessary to enable Parent's designees to be elected to the
Company Board of Directors and shall take all actions available to the Company
to cause Parent's designees to be so elected, subject to compliance with Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder.
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<PAGE> 9
(b) The Company shall promptly take all actions required
pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder in order to fulfill its obligations under Section 1.3(a) hereof, and
shall include in the Schedule 14D-9 mailed to stockholders promptly after the
commencement of the Offer (or an amendment thereof or an information statement
pursuant to Rule 14f-1 if Purchaser has not theretofore designated directors)
such information with respect to the Company and its officers and directors as
is required under Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under Section 1.3(a). Parent or Purchaser shall supply the Company
information with respect to either of them and their nominees, officers,
directors and affiliates required by such Section 14(f) and Rule 14f-1.
(c) In the event that Parent's designees are elected to the
Company Board of Directors, subject to the other terms of this Agreement and
until the Effective Time, the Company Board of Directors shall have at least two
directors who are directors on the date hereof and neither of whom is an officer
of the Company nor a designee, stockholder, affiliate or associate (within the
meaning of the federal securities laws) of Parent (one or more of such
directors, the "Independent Directors"), provided that, in such event, if the
number of Independent Directors shall be reduced below two for any reason
whatsoever, any remaining Independent Director shall be entitled to designate
persons to fill such vacancies who shall be deemed Independent Directors for
purposes of this Agreement or, if no Independent Director then remains, the
other directors shall designate one person to fill one of the vacancies who
shall not be a stockholder, affiliate or associate of Parent or Purchaser and
such person shall be deemed to be an Independent Director for purposes of this
Agreement. Notwithstanding anything in this Agreement to the contrary, in the
event that Parent's designees are elected to the Company Board of Directors,
after the acceptance for payment of Shares pursuant to the Offer and prior to
the Effective Time, the affirmative vote of a majority of the Independent
Directors shall be required to (a) amend or terminate this Agreement on behalf
of the Company, (b) exercise or waive any of the Company's rights, benefits or
remedies hereunder, (c) extend the time for performance of Purchaser's
obligations hereunder or (d) take any other action by the Company Board of
Directors under or in connection with this Agreement.
Section 1.4 The Merger. In accordance with the applicable provisions of
this Agreement and the DGCL, at the Effective Time (as defined in Section 1.5),
the Company and Purchaser shall consummate a merger (the "Merger") pursuant to
which (a) Purchaser shall be merged with and into the Company and the separate
corporate existence of Purchaser shall thereupon cease, (b) the Company shall be
the successor or surviving corporation in the Merger (sometimes hereinafter
referred to as the "Surviving Corporation") and shall continue to be governed by
the laws of the State of Delaware, and (c) the separate corporate existence of
the Company with all of its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger, except as set forth in this
Section 1.4. Pursuant to the Merger, (x) the Certificate of Incorporation of the
Company (the "Certificate of Incorporation") shall be amended in its entirety to
read as the Certificate of Incorporation of Purchaser in effect immediately
prior to the Effective Time, except that Article I thereof shall read as
follows: "The name of the Corporation is THE NORTH FACE, INC." and, as so
amended, shall be the certificate of incorporation of the Surviving Corporation
until thereafter amended as provided by law and such Certificate of
Incorporation and (y) the Bylaws of Purchaser (the "Bylaws"), as in effect
immediately prior to the Effective Time (as hereinafter defined), shall be
-5-
<PAGE> 10
the Bylaws of the Surviving Corporation until thereafter amended as provided by
law, such Certificate of Incorporation or such Bylaws.
Section 1.5 Effective Time. As soon as practicable after the satisfaction or
waiver of the conditions set forth in Article VII hereof, Parent, Purchaser and
the Company shall cause to be executed and filed on the Closing Date (as defined
in Section 1.6) (or on such other date as Parent and the Company may agree) with
the Secretary of State of the State of Delaware (the "Secretary of State") in
the manner required by the DGCL a certificate of merger, and the parties shall
take such other and further actions as may be required by law to make the merger
effective. The time the Merger becomes effective in accordance with applicable
law is hereinafter referred to as the "Effective Time."
Section 1.6 Closing. The closing of the Merger (the "Closing") shall take place
at 10:00 a.m. on a date to be specified by the parties, which shall be no later
than the second business day after satisfaction or waiver of all of the
conditions set forth in Article VII hereof (the "Closing Date"), at the offices
of Proskauer Rose LLP, 1585 Broadway, New York, New York, unless another date or
place is agreed to in writing by the parties hereto.
Section 1.7 Directors and Officers of the Surviving Corporation. Subject to
applicable law, the directors of Purchaser and the officers of the Company at
the Effective Time shall, from and after the Effective Time, be the directors
and officers of the Surviving Corporation until their successors shall have been
duly elected or appointed or qualified or until their earlier death, resignation
or removal in accordance with the Certificate of Incorporation and the Bylaws.
If, at the Effective Time, a vacancy shall exist on the Company Board of
Directors or in any office of the Surviving Corporation, such vacancy may
thereafter be filled in the manner provided by law.
Section 1.8 Effects of the Merger. At the Effective Time, the Merger shall have
the effects set forth in the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of the Company and Purchaser shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the Company and
Purchaser shall become the debts, liabilities and duties of the Surviving
Corporation.
Section 1.9 Stockholders' Meeting. If required by the Certificate of
Incorporation and/or applicable law in order to consummate the Merger, the
Company, acting through its Board of Directors, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its stockholders (the "Special Meeting") as promptly as
practicable following the acceptance for payment and purchase of Shares by
Purchaser pursuant to the Offer for the purpose of considering and taking action
upon the approval of the Merger and the adoption of this Agreement; and
otherwise comply with all legal requirements applicable to such meeting. Subject
to Section 5.3, the Board of Directors of the Company shall recommend the
approval and adoption of the Merger, this Agreement and the transactions
contemplated hereby to the Company's stockholders;
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<PAGE> 11
(ii) promptly prepare and file with the SEC a
preliminary proxy or information statement relating to the Merger and this
Agreement and use its best efforts (x) to obtain and furnish the information
required to be included by the SEC in the Proxy Statement (as hereinafter
defined) and to respond promptly to any comments made by the SEC with respect to
the preliminary proxy or information statement and cause a definitive proxy or
information statement, including any amendment or supplement thereto (the "Proxy
Statement") and all other proxy materials to be mailed to its stockholders, and
(y) to obtain the necessary approvals of the Merger, Agreement and the
transactions contemplated hereby by its stockholders; and
(iii) subject to Section 5.3, include in the Proxy
Statement the recommendation of the Board of Directors that stockholders of the
Company vote in favor of the approval of the Merger and the adoption of this
Agreement.
(b) Parent will provide the Company with the information
concerning Parent and Purchaser required to be included in the Proxy Statement.
Parent shall vote, or cause to be voted, all of the Shares then owned by it and
Purchaser or any of its other subsidiaries and affiliates in favor of the
approval of the Merger and the approval and adoption of this Agreement
Section 1.10 Merger Without Meeting of Stockholders. Notwithstanding
Section 1.9 hereof, in the event that Parent, Purchaser and any other
subsidiaries of Parent shall have acquired in the aggregate at least 90% of the
outstanding Shares pursuant to the Offer or otherwise, the parties hereto shall
take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the acceptance for payment of and payment
for Shares by Purchaser pursuant to the Offer, without a meeting of stockholders
of the Company, in accordance with the DGCL.
Section 1.11 Earliest Consummation. Each party hereto shall use its
best efforts to consummate the Merger as soon as practicable.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
Shares or holders of any class or series of common stock, par value $1.00 per
share, of Purchaser ("Purchaser Common Stock"):
(a) Each issued and outstanding share of Purchaser Common
Stock shall be converted into and become one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation.
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<PAGE> 12
(b) All Shares held by the Company as treasury stock or owned
by Parent, Purchaser or any other subsidiary of Parent shall be cancelled and
retired, and shall cease to exist and no consideration shall be delivered in
exchange therefor.
(c) Each issued and outstanding Share immediately before the
Effective Time (other than any Shares to be cancelled pursuant to Section 2.1(b)
and any Dissenting Shares (as hereinafter defined)) shall be cancelled and
extinguished and be converted into the right to receive the Offer Price in cash,
payable to the holder thereof, without interest (the "Merger Consideration"),
upon surrender of the certificate formerly representing such Share in the manner
provided in Section 2.3 hereof.
Section 2.2 Dissenting Shares. Notwithstanding Section 2.1 hereof,
Shares outstanding immediately prior to the Effective Time and held by a holder
who has not voted in favor of the Merger or consented thereto in writing and who
has demanded appraisal for such shares in accordance with the DGCL ("Dissenting
Shares") shall not be converted into the right to receive the Merger
Consideration as provided in Section 2.1, unless and until such holder fails to
perfect or withdraws or otherwise loses his right to appraisal and payment under
the DGCL. If, after the Effective Time, any such holder fails to perfect or
withdraws or loses his right to appraisal, then such Dissenting Shares shall
thereupon be treated as if they had been converted as of the Effective Time into
the right to receive the Merger Consideration, if any, to which such holder is
entitled, without interest or dividends thereon. The Company shall give Parent
prompt notice of any demands received by the Company for appraisal of Shares,
and Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. Except with the prior written consent
of Parent, the Company shall not make any payment with respect to, or settle or
offer to settle, any such demands.
Section 2.3 Surrender of Shares; Stock Transfer Books.
(a) Before the consummation of the Merger, (i) Purchaser shall
designate a bank or trust company reasonably acceptable to the Company to act as
paying agent for the holders of Shares (the "Paying Agent") for the payment of
the Merger Consideration, and (ii) Parent shall deposit or shall cause to be
deposited with the Paying Agent in a separate fund established for the benefit
of the holders of Shares, for payment in accordance with this Article II,
through the Paying Agent (the "Payment Fund"), immediately available funds in
amounts necessary to make the payments pursuant to the Merger to holders of
Shares. The Paying Agent shall invest portions of the Payment Fund as Parent
directs in obligations of or guaranteed by the United States of America, in
commercial paper obligations receiving the highest investment grade rating from
both Moody's Investors Services, Inc. and Standard & Poor's Corporation, or in
certificates of deposit, bank repurchase agreements or banker's acceptances of
commercial banks with capital exceeding $1,000,000,000 (collectively, "Permitted
Investments"); provided, however, that the maturities of Permitted Investments
shall be such as to permit the Paying Agent to make prompt payment to former
holders of Shares entitled thereto as contemplated by this Agreement. Parent
shall cause the Payment Fund to be promptly replenished to the extent of any
losses incurred as a result of Permitted Investments. If for any reason
(including losses) such funds are inadequate to pay the amounts to
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which holders of Shares shall be entitled under this Agreement, Parent shall in
any event be liable for payment thereof. Such funds deposited with the Paying
Agent pursuant to this Section 2.3 shall not be used for any purpose except as
expressly provided in this Agreement. From time to time at or after the
Effective Time, Parent shall take all lawful action necessary to make the
appropriate cash payments, if any, to holders of Dissenting Shares. Prior to the
Effective Time, Parent shall enter into appropriate commercial arrangements to
ensure effectuation of the immediately preceding sentence.
(b) As soon as reasonably practicable after the Effective
Time, the Paying Agent shall mail to each holder of record of a certificate or
certificates, which immediately prior to the Effective Time represented
outstanding Shares (the "Certificates"), whose Shares were converted pursuant to
Section 2.1 into the right to receive the Merger Consideration (i) a letter of
transmittal (which shall specify that delivery shall be effected and that the
risk of loss of and title to the Certificates shall pass, only upon delivery of
the Certificates to the Paying Agent and shall be in such form and have such
other provisions not inconsistent with this Agreement as Parent may specify) and
(ii) instructions for use in effecting the surrender of Certificates in exchange
for payment of the Merger Consideration (together, the "Transmittal Documents").
Upon surrender of a Certificate for cancellation to the Paying Agent or to such
other agent or agents as may be appointed by Parent, together with such letter
of transmittal, duly executed, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
represented by such Certificate, and the Certificate so surrendered shall
forthwith be cancelled. If payment of the Merger Consideration is to be made to
a person other than the person in whose name the surrendered Certificate is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall otherwise be in proper form for
transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.3, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 2.3.
Upon the surrender of Certificates in accordance with the terms and instructions
contained in the Transmittal Documents, Purchaser shall cause the Paying Agent
to pay the holder of such Certificates in exchange therefor cash in an amount
equal to the Merger Consideration multiplied by the number of Shares represented
by such Certificate (other than Certificates representing Dissenting Shares and
Certificates representing Shares held by Purchaser).
(c) At the Effective Time, the stock transfer books of the
Company shall be closed and there shall not be any further registration of
transfers of shares of any shares of capital stock thereafter on the records of
the Company. From and after the Effective Time, the holders of certificates
evidencing ownership of the Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such Shares,
except as otherwise provided for herein or by applicable law. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be cancelled and exchanged for cash as provided in this Article II. No
interest shall accrue or be paid on any cash payable upon the surrender of a
Certificate or Certificates which immediately before the Effective Time
represented outstanding Shares.
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(d) Promptly following the date which is six months after the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any cash (including any interest received with
respect thereto), Certificates and other documents in its possession relating to
the transactions contemplated hereby, which had been made available to the
Paying Agent and which have not been disbursed to holders of Certificates, and
thereafter such holders shall be entitled to look to the Surviving Corporation
(subject to abandoned property, escheat or similar laws) only as general
creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates, without any interest thereon. Notwithstanding
the foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Certificate for Merger Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law. Any amounts remaining unclaimed by holders of Shares two years
after the Effective Time (or such earlier date immediately prior to such time
when the amounts would otherwise escheat to or become property of any
governmental authority) shall become, to the extent permitted by applicable law,
the property of Parent free and clear of any claims or interest of any Person
previously entitled thereto.
(e) Any portion of the Merger Consideration made available to
the Paying Agent pursuant to Section 2.3(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to Parent, upon demand.
(f) The Merger Consideration paid in the Merger shall be net
to the holder of Shares in cash, subject to reduction only for any applicable
Federal, state, local or foreign withholding taxes or, as set forth in Section
2.3(b), stock transfer taxes payable by such holder.
Section 2.4 Company Stock Plans.
(a) Immediately after the Acceptance Date, each holder of a
then outstanding option under any employee stock option or compensation plan or
arrangement (the "Options"), whether or not then exercisable or fully vested,
and each holder of the warrants to purchase an aggregate of 202,597 Shares
issued to certain parties (collectively, the "Warrants"), shall, in settlement
thereof, receive for each Share subject to such Option, or Warrant, an amount
(net of any applicable withholding tax) in cash equal to the difference between
the Offer Price and the per Share exercise price of such Option, or Warrant, to
the extent the Offer Price is greater than the per Share exercise price of such
Option or Warrant (such excess amount with respect to Options being hereinafter
referred to as the "Option Consideration," and such amount with respect to the
Warrants being hereinafter referred to as the "Warrant Consideration");
provided, however, that with respect to any person subject to Section 16(a) of
the Exchange Act, any such amount shall be paid as soon as practicable after the
first date payment can be made without liability to such person under Section
16(b) of the Exchange Act. Prior to the Acceptance Date, the Company shall use
its reasonable efforts to obtain all necessary consents or releases from holders
of Options and holders of Warrants, and take any such other action as may be
reasonably necessary to give effect to the transactions contemplated by this
Section 2.4 (except for such action that may require the approval of the
Company's stockholders) and to otherwise cause each Option, and each Warrant, to
be surrendered to the Company and cancelled at the Acceptance Date. The
surrender of an Option, or
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Warrant, to the Company shall be deemed a release of any and all rights the
holder had or may have had in such Option or Warrant, other than the right to
receive the Option Consideration or Warrant Consideration. Parent shall provide
the Company with sufficient funds to make the payments required by this Section
2.4.
(b) Notwithstanding anything in this Agreement to the
contrary, a vote of a majority of the Independent Directors shall be required to
amend this Section 2.4 in any manner adverse to the holders of Options or
Warrants described herein.
Section 2.5 Adjustments. If, during the period between the date of this
Agreement and the Effective Time, any change in the outstanding Shares shall
occur, including by reason of any reclassification, recapitalization, stock
split or combination, exchange or readjustment of Shares, or stock dividend
thereon with a record date during such period, but excluding the issuance of
Shares upon exercise of currently outstanding Options or Warrants in accordance
with their terms, the cash payable pursuant to the Offer, the Merger
Consideration and any other amounts payable pursuant to this Agreement shall be
appropriately adjusted.
Section 2.6 Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond, in such
reasonable amount as the Surviving Corporation may direct, as indemnity against
any claim that may be made against it with respect to such Certificate, the
Paying Agent will pay, in exchange for such lost, stolen or destroyed
Certificate, the Merger Consideration to be paid in respect of the Shares
represented by such Certificate, as contemplated by this Article.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser, subject to
such exceptions as are specifically disclosed in writing in the disclosure
letter supplied by the Company to Parent, which disclosure shall provide an
exception to or otherwise qualify only the representations or warranties of
Company specifically referred to in such disclosure, and such other
representations and warranties to which such disclosure manifestly appears to be
applicable (the "Company Disclosure Schedule"), as follows:
Section 3.1 Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals (collectively,
"Licenses") required to carry on its business as now conducted except for
failures to have any such License which would not, in the aggregate, have a
Company Material Adverse Effect (as defined below). The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the character of the property owned, leased or operated
by it or the nature of its activities makes such qualification necessary, except
in such jurisdictions where failures to be so qualified would not reasonably be
expected to, in the aggregate, have a Company
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Material Adverse Effect. As used herein, the term "Company Material Adverse
Effect" means a material adverse effect on the financial condition, business,
assets or results of operations of the Company and its Subsidiaries (as defined
in Section 3.5 hereof), taken as a whole, provided, however, that in no event
shall any effect that results from (a) changes affecting the retail industry
generally, (b) changes affecting the United States economy generally, or (c) a
so-called "going concern" qualification in respect of the Company's financial
statements for the year ended December 31, 1999 or the absence of liquidity or
capital resources giving rise thereto or the adverse effect on the Company's
relations with customers, suppliers and others proximately resulting therefrom
constitute a Company Material Adverse Effect. The Company has heretofore made
available to Parent true and complete copies of the Certificate of Incorporation
and the Bylaws of the Company as currently in effect.
Section 3.2 Corporate Authorization. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
and the performance of its obligations hereunder have been duly and validly
authorized, and this Agreement has been approved, by the Board of Directors of
the Company and no other corporate proceedings on the part of the Company, other
than with respect to the Merger, the approval and adoption of the Merger and
this Agreement by the Company's stockholders to the extent required by the
Certificate of Incorporation and by applicable law, are necessary to authorize
the execution, delivery and performance of this Agreement. This Agreement has
been duly executed and delivered by the Company and constitutes, assuming due
authorization, execution and delivery of this Agreement by Parent and Purchaser,
a valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
Section 3.3 Consents And Approvals; No Violations
(a) None of the execution and delivery of this Agreement, the
performance by the Company of its obligations hereunder or the consummation by
the Company of the transactions contemplated hereby will (i) conflict with or
result in any breach of any applicable law or any provision of the Certificate
of Incorporation or the Bylaws of the Company; (ii) require any consent or other
action by any Person under or result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration or obligation to
repurchase, repay, redeem or acquire or any similar right or obligation) under
any of the terms, conditions or provisions of any note, mortgage, letter of
credit, other evidence of indebtedness, guarantee, license, lease or agreement
or similar instrument or obligation to which the Company or any of its
Subsidiaries (as defined in Section 3.5 hereof) is a party or by which any of
them or any of their assets may be bound or (iii) assuming that the filings,
registrations, notifications, authorizations, consents and approvals referred to
in subsection (b) below have been obtained or made, as the case may be, violate
any applicable law or any order, injunction, decree, statute, rule or regulation
of any Governmental Entity to which the Company or any of its Subsidiaries (as
defined in Section 3.5 hereof) is subject, excluding from the foregoing clauses
(ii)
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<PAGE> 17
and (iii) such requirements, defaults, breaches, rights or violations (A) that
would not, in the aggregate, reasonably be expected to have a Company Material
Adverse Effect and would not have a material adverse effect on the ability of
the Company to perform its obligations hereunder or (B) that become applicable
as a result of the business or activities in which Parent or Purchaser or any of
their respective affiliates is or proposes to be engaged or any acts or
omissions by, or facts specifically pertaining to, Parent or Purchaser.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any government or any agency, court,
tribunal, commission, board, bureau, department, political subdivision or other
instrumentality of any government (including any regulatory or administrative
agency), whether federal, state, multinational (including, but not limited to,
the European Community), provincial, municipal, domestic or foreign (each, a
"Governmental Entity") is required in connection with the execution and delivery
of this Agreement by the Company, the performance by the Company of its
obligations hereunder or the consummation by the Company of the transactions
contemplated hereby, except (i) the filing of an agreement of merger together
with an officer's certificate of the Company and Purchaser in accordance with
the DGCL; (ii) compliance with any applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act"), or any foreign laws regulating
competition, antitrust, investment or exchange controls; (iii) compliance with
any applicable requirements of the Securities Act of 1933, as amended, and the
rules and regulations thereunder (the "Securities Act") and the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder (the
"Exchange Act"); (iv) compliance with any applicable requirements of state blue
sky or takeover laws and (v) such other consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings (A) the
failure of which to be obtained or made would not, in the aggregate, reasonably
be expected to have a Company Material Adverse Effect and would not have a
material adverse effect on the ability of the Company to perform its obligations
hereunder or (B) that become applicable as a result of the business or
activities in which Parent or Purchaser or any of their respective affiliates is
or proposes to be engaged or any acts or omissions by, or facts specifically
pertaining to, Parent or Purchaser.
Section 3.4 Capitalization. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock. As of March 9, 2000, there were
12,751,896 shares of Common Stock issued and outstanding. All shares of capital
stock of the Company have been, and all Shares that may be issued pursuant to
the Option Plans (as defined below) will be, when issued in accordance with the
respective terms thereof, duly authorized and validly issued and are fully paid
and nonassessable and were not issued in violation of any preemptive rights. The
Company has no shares of its capital stock reserved for issuance, except for
shares reserved for issuance pursuant to Options issued under the Company's 1994
Stock Incentive Plan, 1995 Stock Incentive Plan, 1996 Stock Incentive Plan, 1996
Directors' Stock Option Plan and 1998 Nonstatutory Stock Option Plan (the
"Option Plans"), which Options as of the date of this Agreement cover the number
of shares, and have the vesting dates and exercise prices, as set forth in
Section 3.4 of the Company Disclosure Schedule, 202,597 shares reserved for
issuance pursuant to outstanding Warrants and 87,706 shares reserved for
issuance pursuant to the Company's Employee Stock Purchase Program. Except as
set forth in Section 3.4 of the Company Disclosure Schedule, there are no
pre-emptive rights or
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outstanding subscriptions, options, warrants, rights, convertible securities or
other agreements or commitments of any character relating to the issued or
unissued capital stock or other securities of the Company or any of the
Company's Subsidiaries (as defined in Section 3.5). After the Effective Time,
the Surviving Corporation will have no obligation to issue, transfer or sell any
shares of the Company's capital stock or capital stock of the Surviving
Corporation (except as contemplated by Section 2.4 hereof). Except as set forth
in this Section 3.4 and for changes since March 9, 2000, resulting from the
exercise of employee stock options outstanding on such date and the issuance of
up to 87,706 shares pursuant to the Company's Employee Stock Purchase Program,
there are no outstanding (i) shares of capital stock or voting securities of the
Company, (ii) securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company or (iii) options or
other rights to acquire from the Company, or other obligations of the Company to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company. There are no
outstanding obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any of the Company's capital stock. No Subsidiary of
the Company owns any capital stock or other voting securities of the Company.
Section 3.5 Subsidiaries.
(a) Each Subsidiary of the Company (i) is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, (ii) has all corporate powers and all Licenses
required to carry on its business as now conducted and (iii) is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary, except for failures
of this representation and warranty to be true which would not, in the
aggregate, have a Company Material Adverse Effect. For purposes of this
Agreement, "Subsidiary" means with respect to any Person, any corporation or
other legal entity of which such Person owns, directly or indirectly, more than
50% of the outstanding stock or other equity interests, the holders of which are
entitled to vote for the election of the board of directors or other governing
body of such corporation or other legal entity. All Subsidiaries and their
respective jurisdictions of incorporation are identified in Section 3.5 of the
Company Disclosure Schedule.
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Subsidiary of the Company, is owned
by the Company, directly or indirectly, free and clear of any lien, security
interest or other encumbrance (a "Lien") and free of any other limitation or
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other voting securities or ownership
interests), except for the security interest of the banks under the Company's
loan agreement referred to in Section 3.21 of the Company Disclosure Schedule
(the "Loan Agreement").
Section 3.6 SEC Documents. Except for the 1999 10-K, which has not yet
been filed, the Company has filed all required reports, proxy statements,
registration statements, forms and other documents with the SEC since December
31, 1997 (the "Company SEC Documents"). As of their respective dates, and giving
effect to any amendments thereto or restatements thereof, (a) the
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Company SEC Documents complied, and, at the time the 1999 10-K is filed, the
1999 10-K will comply, in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the applicable rules
and regulations of the SEC promulgated thereunder and (b) none of the Company
SEC Documents contained, and, at the time the 1999 10-K is filed, the 1999 10-K
will not contain, any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were (or,
in the case of the 1999 10-K, will be) made, not misleading.
Section 3.7 Financial Statements. The financial statements of the
Company (including, in each case, any notes and schedules thereto) included in
the Company SEC Documents giving effect to any amendment thereto or restatements
thereof (a) were prepared from the books and records of the Company and its
Subsidiaries, (b) comply as to form in all material respects with all applicable
accounting requirements and the rules and regulations of the SEC with respect
thereto, (c) are in conformity with United States generally accepted accounting
principles ("GAAP"), applied on a consistent basis (except in the case of
unaudited statements, as permitted by Form 10-Q as filed with the SEC under the
Exchange Act) during the periods involved and (d) fairly present, in all
material respects, the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments which were
not and are not expected to be, individually or in the aggregate, material in
amount).
Section 3.8 Absence Of Undisclosed Liabilities. Except as set forth in
the Company SEC Documents or in Sections 3.12, 3.13, 3.15 or 3.21 of the Company
Disclosure Schedule, and except for liabilities and obligations incurred in the
ordinary course of business consistent with past practices since the date of the
most recent consolidated balance sheet included in the Company SEC Documents,
except for those that could not, in the aggregate, reasonably be expected to
have a Company Material Adverse Effect, neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) and there is no existing condition,
situation, or set of circumstances that could reasonably be expected to result
in such a liability.
Section 3.9 Information in Proxy Statement and Offer Documents
(a) The Proxy Statement, if any (or any amendment thereof or
supplement thereto), at the date mailed to Company shareholders and at the time
of the meeting of the Company shareholders to be held in connection with the
Merger, will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading, except that no representation is made by the Company with
respect to statements made therein based on information supplied in writing by
Parent or Purchaser expressly for inclusion in the Proxy Statement. The Proxy
Statement will comply in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder.
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(b) The information with respect to the Company or any of its
Subsidiaries that the Company furnishes to Parent specifically for use in the
Offer Documents, at the time of the filing thereof, at the time of any
distribution or dissemination thereof and at the time of the consummation of the
Offer, will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
Section 3.10 Absence of Certain Changes. Except as set forth in Section
3.10 of the Company Disclosure Schedule, since December 31, 1999, the Company
and its Subsidiaries have conducted their respective businesses only in the
ordinary and usual course consistent with past practices. Since December 31,
1999, there has not occurred (i) any event, change or effect (including the
incurrence of any liabilities of any nature, whether or not accrued, contingent
or otherwise) having, or which would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect; (ii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to the equity interests of the
Company or any of its Subsidiaries or any repurchase, redemption or other
acquisition by the Company or its Subsidiaries of any outstanding shares of
capital stock or other securities of, or other ownership interests in, the
Company or any of its Subsidiaries; (iii) any change in accounting principles or
methods, except insofar as may be required by a change in GAAP; (iv) any
amendment of any material term of any outstanding security of the Company or any
of its Subsidiaries; (v) any incurrence, assumption or guarantee by the Company
or any of its Subsidiaries of any indebtedness for borrowed money other than in
the ordinary course of business or in accordance with the Loan Agreement; (vi)
any creation or other incurrence by the Company or any of its Subsidiaries of
any Lien on any material asset other than in the ordinary course of business
consistent with past practices or in accordance with the Loan Agreement; (vii)
any making of any loan, advance or capital contributions to or investment in any
entity, other than loans, advances or capital contributions to or investments in
its wholly-owned Subsidiaries made in the ordinary course of business consistent
with past practices; (viii) any damage, destruction or other casualty loss
(whether or not covered by insurance) affecting the business or assets of the
Company or any of its Subsidiaries that has had or could reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect;
(ix) any transaction or commitment made, or any contract or agreement entered
into, by the Company or any of its Subsidiaries relating to its assets or
business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or any of its Subsidiaries of any contract or
other right, in either case, material to the Company and its Subsidiaries,
taking as a whole, other than transactions and commitments in the ordinary
course of business consistent with past practices, those contemplated by the
Agreement and the amendment to the Loan Agreement referred to in Section 3.21 of
the Company Disclosure Schedule; (x) any (1) grant of any severance or
termination pay to (or amendment to any existing arrangement with) any director,
officer or employee of the Company or any of its Subsidiaries, (2) increase in
benefits payable under any existing severance or termination pay policies or
employment agreements, (3) entering into any employment, deferred compensation
or other similar agreement (or any amendment to any such existing agreement)
with any director, officer or employee of the Company or any of its
Subsidiaries, (4) establishment, adoption or amendment (except as required by
applicable law) of any collective bargaining, bonus, profit-sharing, thrift,
pension, retirement, deferred compensation,
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compensation, stock option, restricted stock or other benefit plan or
arrangement covering any director, officer or employee of the Company or any of
its Subsidiaries, or (5) increase in compensation, bonus or other benefits
payable to any director, officer or employee of the Company or any of its
subsidiaries, other than in the ordinary course of business consistent with past
practices; or (xi) any labor dispute, other than routine individual grievances,
or any activity or proceeding by a labor union or representative thereof to
organize any employees of the Company or any of its Subsidiaries, which
employees were not subject to a collective bargaining agreement at December 31,
1999, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by
or with respect to such employees.
Section 3.11 Taxes.
(a) Except as set forth in Section 3.11 of the Company
Disclosure Schedule, (1) all federal, state, local and foreign Tax Returns (as
defined below) required to be filed by or on behalf of the Company, each of its
Subsidiaries, and each affiliated, combined, consolidated or unitary group of
which the Company or any of its Subsidiaries is a member (a "Company Group")
have been timely filed, and all returns filed are complete and accurate except
to the extent any failure to file or any inaccuracies in filed returns would
not, individually or in the aggregate, have a Company Material Adverse Effect;
(2) all Taxes (as defined below) due and owing by the Company, any Subsidiary of
the Company or any Company Group have been paid, or adequately reserved for in
accordance with GAAP, (3) there is no presently pending or, to the knowledge of
the Company, contemplated or scheduled material claim, audit, examination,
deficiency, refund litigation, proposed adjustment or matter (each a "Tax
Issue") in controversy with respect to any Taxes due and owing by the Company,
any Subsidiary of the Company or any Company Group, nor has the Company or any
Subsidiary of the Company filed any waiver of the statute of limitations
applicable to the assessment or collection of any Tax; (4) all assessments for
Taxes due and owing by the Company, any Subsidiary of the Company or any Company
Group with respect to completed and settled examinations or concluded litigation
have been paid; (5) neither the Company nor any Subsidiary of the Company is a
party to any tax indemnity agreement, tax sharing agreement or other agreement
under which the Company or any Subsidiary of the Company could become liable to
another person as a result of the imposition of a Tax upon any person, or the
assessment or collection of such a Tax; and (6) the Company and each of its
Subsidiaries has complied in all material respects with all rules and
regulations relating to the withholding of Taxes.
(b) For purposes of this Agreement, (i) "Taxes" means all
taxes, levies or other like assessments, charges or fees (including estimated
taxes, charges and fees), including, without limitation, income, corporation,
advance corporation, gross receipts, transfer, excise, property, sales, use,
value-added, license, payroll, withholding, social security and franchise or
other governmental taxes, duties or charges, imposed by the United States or any
state, county, local or foreign government or subdivision or agency thereof, and
such term shall include any interest, penalties or additions to tax attributable
to such taxes and (ii) "Tax Return" means any report, return, statement or other
written information required to be supplied to a taxing authority in connection
with Taxes.
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Section 3.12 Employee Matters.
(a) Except for any plan, fund, program, agreement or
arrangement that is subject to the laws of any jurisdiction outside the United
States, Schedule 3.12(a) of the Company Disclosure Schedule contains a true and
complete list of each material deferred compensation, incentive compensation,
and equity compensation plan; material "welfare" plan, fund or program (within
the meaning of Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")); material "pension" plan, fund or program (within
the meaning of Section 3(2) of ERISA); each material employment, termination or
severance agreement; and each other material employee benefit plan, fund,
program, agreement or arrangement, in each case, that is in writing and
sponsored, maintained or contributed to or required to be contributed to by the
Company or by any trade or business, whether or not incorporated (each, an
"ERISA Affiliate"), that together with the Company would be deemed a "single
employer" within the meaning of Section 4001(b) of ERISA, or to which the
Company or an ERISA Affiliate is party, whether written or oral, for the benefit
of any employee, consultant, director or former employee, consultant or director
of the Company or any Subsidiary of the Company. The plans, funds, programs,
agreements and arrangements listed on Schedule 3.12(a) of the Company Disclosure
Schedule are referred to herein collectively as the "Plans."
(b) With respect to each Plan, the Company has heretofore
delivered or made available to Parent true and complete copies of the Plan and
any amendments thereto (or if the Plan is not a written Plan, a description
thereof), any related trust or other funding vehicle, the most recent reports or
summaries required under ERISA or the Code and the most recent determination
letter received from the Internal Revenue Service with respect to each Plan
intended to qualify under Section 401 of the Code.
(c) Neither the Company nor any ERISA Affiliate nor any
predecessor thereof sponsors, maintains or contributes to, or has in the past
sponsored, maintained or contributed to, any Plan subject to Title IV of ERISA.
(d) No Plan is a "multiemployer plan," as defined in Section
3(37) of ERISA, nor is any Plan a plan described in Section 4063(a) of ERISA.
(e) Each Plan has been operated and administered in all
material respects in accordance with its terms and applicable law, including,
but not limited to, ERISA and the Code.
(f) Each Plan intended to be "qualified" within the meaning of
Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service, or in the case of such a Plan for which a
favorable determination letter has not yet been received, the applicable
remedial amendment period under Section 401(b) of the Code has not expired and
each trust forming a part thereof is exempt from tax pursuant to Section 501(a)
of the Code.
(g) Except as set forth in Section 3.12(g) of the Company
Disclosure Schedule, no Plan provides medical, surgical, hospitalization, death
or similar benefits (whether or not insured) for employees or former employees
of the Company or any Subsidiary for periods extending beyond
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their retirement or other termination of service, other than (i) coverage
mandated by applicable law, (ii) death benefits under any "pension plan," or
(iii) benefits the full cost of which is borne by the current or former employee
(or his or her beneficiary), dependant or other covered person.
(h) There are no pending, or to the knowledge of the Company,
threatened or anticipated, claims that would reasonably be expected to have a
Company Material Adverse Effect by or on behalf of any Plan, by any employee or
beneficiary covered under any such Plan, or otherwise involving any such Plan
(other than routine claims for benefits).
(i) Except as set forth in Section 3.12 of the Company
Disclosure Schedule, the consummation of the transactions contemplated by this
Agreement will not, either alone or in combination with another event, (i)
entitle any current or former employee or officer of the Company or any ERISA
Affiliate to severance pay, unemployment compensation or any other payment,
except as expressly provided in this Agreement, or (ii) accelerate the time of
payment or vesting, or increase the amount of compensation due any such employee
or officer, other than payments, accelerations or increases (x) under employee
benefit plans that are subject to the laws of a jurisdiction outside of the
United States and are listed on Section 3.12(i) of the Company Disclosure
Schedule or (y) mandated by applicable law.
(j) No amounts payable under the Plans will fail to be
deductible for federal income tax purposes by virtue of Section 280G of the
Code.
(k) There has been no amendment to, written interpretation or
announcement (whether or not written) by the Company relating to, or change in
employee participation or coverage under, a Plan which would increase materially
the expense of maintaining such Plan above the level of the expense incurred in
respect thereof for the fiscal year ended prior to the date hereof.
(l) To the knowledge of the Company, all employee benefit
plans that are subject to the laws of any jurisdiction outside the United States
have been maintained in substantial compliance with their terms and are in
material compliance with such applicable laws, including relevant Tax laws, and
the requirements of any trust deed under which they were established, except for
such exceptions to the foregoing which, in the aggregate, would not reasonably
be expected to have a Company Material Adverse Effect. Section 3.12(l) of the
Company Disclosure Schedule lists all material employee pension benefit plans
that are subject to the laws of any jurisdiction outside the United States
except for such plans that are governmental or statutory plans.
(m) Section 3.12(m) of the Company Disclosure Schedule lists
each agreement, arrangement, understanding or contract (a "Severance Contract")
that provides for severance, termination of employment, retention or other
special transaction bonus or similar benefit, or other similar benefits, to any
employee or former employee of the Company ("Severance Benefits") and identifies
the Severance Benefits thereunder (it being understood that the omission from
Schedule 3.12(m) of the Company Disclosure Schedule of Severance Contracts under
which the aggregate amount of Severance Benefits is less than $100,000 shall not
be deemed a misrepresentation). No Severance Contract listed in such Section
3.12(m) entitles any such employee or former employee to
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receive any such benefit if the individual's employment is terminated for
"cause" or if the individual otherwise commits (by action or omission) an act
constituting "cause".
Section 3.13 Litigation; Compliance With Laws.
(a) Except as set forth in the Company SEC Documents, in
Section 3.13 of the Company Disclosure Schedule or as otherwise covered by
insurance, there is no action, suit, investigation or proceeding pending
against, or to the knowledge of the Company threatened against, the Company, any
Subsidiary of the Company, any present or former officer, director or employee
of the Company or any Subsidiary or any other person for whom the Company may be
liable or any of their respective properties before any court or arbitrator or
any Governmental Entity which would reasonably be expected to have a Company
Material Adverse Effect.
(b) The Company and its Subsidiaries are and, since January 1,
1998, have been in compliance with, and to the knowledge of the Company are not
under investigation with respect to and have not been threatened to be charged
with or been given notice of any violation of, any applicable laws, ordinances,
rules, orders and regulations of any federal, state, local or foreign
governmental authority applicable to their respective businesses and operations,
except for such violations, if any, which, in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect. All
governmental approvals, permits and Licenses required to conduct the business of
the Company and its Subsidiaries have been obtained, are in full force and
effect and are being complied with except for such violations and failures to
have Licenses in full force and effect, if any, which, individually or in the
aggregate, could not reasonably be expected to have a Company Material Adverse
Effect.
Section 3.14 Labor Matters.
(a) The Company and its Subsidiaries are in compliance with
all currently applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, and are not engaged in
any unfair labor practice, failure to comply with which or engagement in which,
as the case may be, would reasonably be expected to have a Company Material
Adverse Effect. The Company is in compliance with, and is performing in all
material respects all its obligations under, the Conciliation Agreement between
the U.S. department of Labor/ESA, Office of Federal Contract Compliance Programs
and the Company.
(b) As of the date of this Agreement (i) there is no labor
strike, dispute, slowdown, stoppage or lockout actually pending or, to the
knowledge of the Company, threatened against the Company; (ii) to the knowledge
of the Company, no union organizing campaign with respect to the Company's
employees is underway; (iii) there is no unfair labor practice charge or
complaint against the Company pending or, to the knowledge of the Company,
threatened before the National Labor Relations Board or any similar state or
foreign agency; (iv) there is no written grievance pending relating to any
collective bargaining agreement or other grievance procedure; (v) to the
knowledge of the Company, no charges with respect to or relating to the Company
are pending before the Equal Employment Opportunity Commission or any other
agency responsible for the prevention of unlawful employment practices; and (vi)
there are no collective bargaining
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agreements with any union covering employees of the Company, except for such
exceptions to the foregoing clauses (i) through (v) which, individually or in
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect.
Section 3.15 Certain Contracts and Arrangements. Except as set forth in
Section 3.15 of the Company Disclosure Schedule, each contract or agreement to
which the Company or any of its Subsidiaries is a party or by which any of them
is bound is in full force and effect, and neither the Company nor any of its
Subsidiaries, nor, to the knowledge of the Company, any other party thereto, is
in breach of, or default under, any such contract or agreement, and no event has
occurred that with notice or passage of time or both would constitute such a
breach or default thereunder by the Company or any of its Subsidiaries, or, to
the knowledge of the Company, any other party thereto, except for such failures
to be in full force and effect and such breaches and defaults which, in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
Section 3.16 Environmental Matters.
(a) (i) "Environmental Claim" means any claim, action,
cause of action, investigation or written notice by any person or entity
alleging potential liability (including, without limitation, potential liability
for investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (A) the presence or release of any Hazardous
Materials at any location, currently or formerly leased, owned or operated by
the Company or any of its Subsidiaries or (B) any matters relating to the
Company or any of its Subsidiaries and relating to or arising out of any
Environmental Law (as defined hereafter).
(ii) "Environmental Laws" means all federal, state,
local and foreign laws (including, without limitation, common law) and any
regulations, treaty, permit or governmental restriction, or any agreement with
any governmental authority, relating to pollution or protection of the
environment, including, without limitation, laws relating to releases or
threatened releases of pollutants, contaminants, wastes or chemicals or any
toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous
substances, wastes or materials or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, transport or handling of
pollutants, contaminants, wastes or chemicals or any toxic, radioactive,
ignitable, corrosive, reactive or otherwise hazardous substances, wastes or
materials.
(iii) "Hazardous Materials" means all substances
defined as hazardous materials, hazardous wastes, hazardous substances, oils,
pollutants or contaminants or other chemical substances in, or regulated as such
under, any Environmental Law.
(b) (i) The Company and its Subsidiaries are and have
been in compliance with all applicable Environmental Laws (which compliance
includes, but is not limited to, the possession by the Company and its
Subsidiaries of all permits and other governmental authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof), except where failures to be in compliance would not, in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. Neither the
Company nor any of its
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Subsidiaries has received any written communication alleging that the Company or
any of its Subsidiaries is not in such compliance or may have liability under
any Environmental Law, except where failures to be in compliance or such
liability would not, in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(ii) There is no Environmental Claim pending or
threatened against the Company or any of its Subsidiaries that could result in
any environmental liability that would, in the aggregate, reasonably be expected
to result in a Company Material Adverse Effect.
(iii) There are no present or past actions,
activities, circumstances, conditions, events or incidents that could result in
any environmental liability that would, individually or in the aggregate,
reasonably be expected to result in a Company Material Adverse Effect.
(c) There has been no environmental investigation, study,
audit, test, review or other analysis conducted of which the company or any
Subsidiary has knowledge in relation to the current or prior business of the
Company or any Subsidiary or any property or facility currently or formerly
owned, leased or operated by the Company or any Subsidiary which has not been
delivered to Purchaser at least five days prior to the date hereof.
(d) Neither the Company nor any subsidiary owns, leases or
operates any real property, or conducts any operations, in New Jersey or
Connecticut.
(e) For purposes of this Section 3.16, "Company" and
"Subsidiary" shall include any entity which is, in whole or in part, a
predecessor of the Company or any Subsidiary.
Section 3.17 Intellectual Property.
(a) The Company and its Subsidiaries own or have the right to
use all material Intellectual Property (as defined hereafter) reasonably
necessary for the Company and its Subsidiaries to conduct their business as it
is currently conducted. Schedule 3.17(a) of the Company Disclosure Schedule
contains a complete and accurate list of all patent applications and issued
patents; and all registrations for trademarks, service marks and trade names,
copyrights, domain names and trade dress used or held for use by the Company or
any of its Subsidiaries in the conduct of their business specifying as to each
such item, as applicable: (i) the owner or owners of the item, (ii) the
jurisdictions in which the item is issued or registered or in which any
application for issuance or registration has been filed, (iii) the respective
registration or application number of the item and (iv) the date of application
and registration of the item. Section 3.17(b) of the Company Disclosure Schedule
contains a complete and accurate list of all material agreements to which the
Company or any Subsidiary is a party that provides for the license or sublicense
of Intellectual Property.
(b) (i) All of the registrations relating to material
Intellectual Property owned by the Company and its Subsidiaries are valid,
subsisting and unexpired, free of all liens or encumbrances (other than pursuant
to the Loan Agreement), and have not been abandoned; (ii) to the knowledge of
the Company, the Company does not infringe the intellectual property rights of
any
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third party in any respect that would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect; (iii) no
judgment, decree, injunction, rule or order has been rendered by Governmental
Entity which would limit, cancel or question the validity of, or the Company's
or its Subsidiaries' rights in and to, any Intellectual Property owned by the
Company in any respect that would reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect; and (iv) the Company has
not received notice of any pending or threatened suit, action or adversarial
proceeding that seeks to limit, cancel or question the validity of, or the
Company's or its Subsidiaries' rights in and to, any Intellectual Property,
which would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(c) For purposes of this Agreement "Intellectual Property"
shall mean all rights, privileges and priorities provided under U.S., state and
foreign law relating to intellectual property, including without limitation all
(x) (1) proprietary inventions, discoveries, processes, formulae, patterns,
designs, methods, techniques, procedures, concepts, developments, technology,
new and useful improvements to any of the foregoing and proprietary know-how
relating thereto, whether or not patented or eligible for patent protection; (2)
copyrights and copyrightable works; (3) trademarks, service marks, trade names,
domain names and trade dress, the goodwill of any business symbolized thereby,
and all common law rights relating thereto; (4) trade secrets and other
confidential information; (y) all registrations, applications and recordings for
any of the foregoing and (z) licenses or other similar agreements granting to
the Company or any of its Subsidiaries the rights to use any of the foregoing.
Section 3.18 Opinion Of Financial Advisor. The Company has received the
opinion of DB to the effect that, as of the date hereof, the consideration to be
received by the holders of Shares is fair from a financial point of view to such
holders.
Section 3.19 Board Recommendation. The Board of Directors of the
Company, at a meeting duly called and held, has approved this Agreement and (i)
determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, taken together are fair to and in the best
interests of the stockholders of the Company; and (ii) resolved to recommend
that the stockholders of the Company tender their Shares into the Offer, adopt
this Agreement and approve the Merger.
Section 3.20 Rights Plan; Antitakover Statues. The Board of Directors
of the Company has approved and adopted an amendment to the Preferred Shares
Rights Agreement between the Company and American Stock Transfer and Trust Co.,
dated as of July 6, 1998 (the "Rights Agreement") which provides that neither
the execution and delivery of this Agreement nor the consummation of any of the
transactions contemplated by this Agreement shall cause Parent or Purchaser to
be deemed to be "Acquiring Persons" within the meaning of the Rights Agreement
and the Company has taken all other action necessary to render the rights issued
pursuant to the Rights Agreement inapplicable to the Offer, the Merger, this
Agreement and the transactions contemplated hereby. The Company has taken all
action necessary to exempt the Offer, the Merger, this Agreement and the
transactions contemplated hereby from the provisions of Section 203 of DGCL,
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and, accordingly, no such Section nor other antitakeover or similar statute or
regulation applies or purports to apply to any such transaction. No other
"control share acquisition," "fair price," "moratorium" or other antitakeover
laws or regulations enacted under U.S. state or federal laws apply to this
Agreement or any of the transactions contemplated hereby.
Section 3.21 Finders' Fees. Except for DB, whose fees will be paid by
the Company, there is no investment banker, broker, finder or other intermediary
which has been retained by, or is authorized to act on behalf of, the Company or
any Subsidiary of the Company that would be entitled to any fee or commission
from the Company, any Subsidiary of the Company, Parent or any of Parent's
affiliates upon consummation of the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser, jointly and severally, represent and warrant to
the Company subject to such exceptions as are specifically disclosed in writing
in the disclosure letter and referencing a specific representation supplied by
Parent to Company, which disclosure shall provide an exception to or otherwise
qualify the representations or warranties of Parent specifically referred to in
such disclosure and such other representations and warranties to the extent such
disclosure shall reasonably appear to be applicable to such other
representations or warranties (the "Parent Disclosure Schedule"), as follows:
Section 4.1 Corporate Existence and Power. Each of Parent and Purchaser
is a corporation duly incorporated (or other entity duly organized), validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has all corporate or other power, as the case may be, and all
Licenses required to carry on its business as now conducted except for failures
to have any such License which would not, in the aggregate, have a Parent
Material Adverse Effect (as defined below). Each of Parent and Purchaser is duly
qualified to do business and is in good standing in each jurisdiction where the
character of the property owned, leased or operated by it or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where failures to be so qualified would not reasonably be expected to, in the
aggregate, have a Parent Material Adverse Effect. As used herein, the term
"Parent Material Adverse Effect" means a material adverse effect on the
financial condition, business, assets or results of operations of Parent and its
Subsidiaries, taken as a whole, provided, however, that in no event shall any
effect that results from (a) changes affecting the retail industry generally or
(b) changes affecting the United States economy generally, constitute a Parent
Material Adverse Effect.
Section 4.2 Authorization. Each of Parent and Purchaser has the
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
and the performance of its obligations hereunder have been duly and validly
authorized by the Boards of Directors of Parent and Purchaser, by Parent as the
sole stockholder of Purchaser, this Agreement has been approved by the Board of
Directors of Purchaser, and no other proceedings on the part of Parent or
Purchaser are necessary to authorize the
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execution, delivery and performance of this Agreement. This Agreement has been
duly executed and delivered by each of Parent and Purchaser and constitutes,
assuming due authorization, execution and delivery of this Agreement by the
Company, a valid and binding obligation of each of Parent and Purchaser,
enforceable against each of them in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
Section 4.3 Consents And Approvals; No Violations.
(a) Neither the execution and delivery of this Agreement nor
the performance by each of Parent and Purchaser of its obligations hereunder
will (i) conflict with or result in any breach of any provision of the articles
of incorporation or bylaws (or other governing or organizational documents) of
Parent or Purchaser, as the case may be, or (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration
or obligation to repurchase, repay, redeem or acquire or any similar right or
obligation) under any of the terms, conditions or provisions of any note,
mortgage, letter of credit, other evidence of indebtedness, guarantee, license,
lease or agreement or similar instrument or obligation to which any of Parent or
Purchaser is a party or by which any of them or any of the respective assets
used or held for use by any of them may be bound or (iii) assuming that the
filings, registrations, notifications, authorizations, consents and approvals
referred to in subsection (b) below have been obtained or made, as the case may
be, violate any order, injunction, decree, statute, rule or regulation of any
Governmental Entity to which either Parent or Purchaser is subject, excluding
from the foregoing clauses (ii) and (iii) such requirements, defaults, breaches,
rights or violations (A) that would not, in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect and would not reasonably be
expected to have a material adverse effect on the ability of either Parent or
Purchaser to consummate the transactions contemplated hereby or (B) that become
applicable as a result of any acts or omissions by, or facts specifically
pertaining to, the Company.
(b) No filing or registration with, notification to, or
authorization, consent or approval of, any Governmental Entity is required in
connection with the execution and delivery of this Agreement by each of Parent
and Purchaser or the performance by any of them of their respective obligations
hereunder, except (i) the filing of an agreement of merger together with an
officer's certificate of the Company and Purchaser in accordance with the DGCL;
(ii) compliance with any applicable requirements of the HSR Act or any foreign
laws regulating competition, antitrust, investment or exchange controls; (iii)
compliance with any applicable requirements of the Securities Act and the
Exchange Act; (iv) compliance with any applicable requirements of state blue sky
or takeover laws; and (v) such other consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings, the
failure of which to be obtained or made would not reasonably be expected to have
a Material Adverse Effect and would not have a material adverse effect on the
ability of either Parent or Purchaser to perform their respective obligations
hereunder or that become applicable as a result of any acts or omissions by, or
facts specifically pertaining to, the Company.
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Section 4.4 Information in Proxy Statement. None of the information
supplied by Parent or Purchaser in writing expressly for inclusion or
incorporation by reference in the Proxy Statement (or any amendment thereof or
supplement thereto) will, at the date mailed to shareholders and at the time of
the meeting of shareholders to be held in connection with the Merger, contain
any untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they are made, not
misleading.
Section 4.5 Share Ownership. Neither Parent nor Purchaser beneficially
owns any shares of capital stock of the Company.
Section 4.6 Financing. Parent has, or will have prior to the expiration
of the Offer, sufficient funds to consummate the transactions contemplated by
this Agreement, including payment in full for all Shares validly tendered into
the Offer or outstanding at the Effective Time.
Section 4.7 Finders' Fees. Except for Salomon Smith Barney Inc., whose fees will
be paid by Parent, there is no investment banker, broker, finder or other
intermediary that might be entitled to any fee or commission in connection with
or upon consummation of the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of Parent or Purchaser.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Acquisition Proposals. The Company will notify Purchaser
promptly (but in no event later than 24 hours) if any proposals are received by,
any information is requested from, or any negotiations or discussions are sought
to be initiated or continued with the Company or its executive officers,
directors, investment bankers, attorneys, accountants or other agents, in each
case in connection with any Acquisition Proposal (as defined below). The Company
shall provide such notice orally and in writing and, subject to the Company's
directors' performance of their fiduciary duties, shall identify the person or
entity making, and the terms and conditions of, any such Acquisition Proposal,
indication or request. Subject to the Company's directors' performance of their
fiduciary duties, the Company shall keep Parent fully informed, on a current
basis, of the status and details of any such Acquisition Proposal, indication or
request. The Company agrees that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any Acquisition Proposal. As used in this
Agreement, "Acquisition Proposal" shall mean any tender or exchange offer
involving the Company, any proposal for a merger, consolidation or other
business combination involving the Company, any proposal or offer to acquire in
any manner a substantial equity interest in, or a substantial portion of the
business or assets of, the Company or any material Subsidiary (other than
immaterial or insubstantial assets or inventory in the ordinary course of
business or assets held for sale), any proposal or offer with respect to any
recapitalization or restructuring with respect to the Company or any material
Subsidiary or any proposal or offer with respect to any other transaction
similar to any
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of the foregoing with respect to the Company other than pursuant to the
transactions to be effected pursuant to this Agreement.
Section 5.2 Interim Operations of the Company. From the date hereof
until the Effective Time, the Company and its Subsidiaries shall conduct their
businesses in the ordinary course consistent with past practice and shall use
their best efforts to preserve intact their business organizations and
relationships with third parties and to keep available the services of their
present officers and employees. Without limiting the generality of the
foregoing, from the date hereof until the Effective Time:
(a) The Company will not adopt or propose any change to its
certificate of incorporation or bylaws;
(b) The Company will not, and will not permit any of its
Subsidiaries to, merge or consolidate with any other Person or acquire a
material amount of stock or assets of any other Person;
(c) The Company will not, and will not permit any of its
Subsidiaries to, sell, lease, license or otherwise dispose of any material
subsidiary or material amount of assets, securities or property (including,
without limitation, the stock or assets of La Sportiva USA, Inc.) except
pursuant to existing contracts or commitments and in the ordinary course
consistent with past practice;
(d) The Company will not, and will not permit any of its
Subsidiaries to, knowingly take any action that would make any representation
and warranty of the Company hereunder inaccurate in any respect at, or as of any
time prior to, the Effective Time; and
(e) The Company will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
Section 5.3 No Solicitation.
(a) Except as provided in Section 5.3(b) below, the Company,
from the date of this Agreement until the earlier of termination of this
Agreement or the Acceptance Date, will not nor shall it authorize or permit its
officers, directors, employees, investment bankers, attorneys, accountants and
other agents to directly or indirectly (i) initiate, solicit or knowingly
encourage, or knowingly take any action to facilitate the making of, any offer
or proposal which constitutes or is reasonably likely to lead to any Acquisition
Proposal, (ii) enter into any agreement with respect to any Acquisition
Proposal, (iii) in the event of an unsolicited Acquisition Proposal for the
Company, engage in negotiations or discussions with, or provide any information
or data to, or afford access to the business, properties, assets, books or
records of the Company or any of its Subsidiaries to, otherwise cooperate in any
way with, or knowingly assist, participate in, facilitate or encourage any
effort by, any person or entity (other than Parent, any of its affiliates or
representatives) relating to any Acquisition Proposal or grant any waiver or
release under any standstill or similar agreement with respect to any class of
equity securities of the Company or any of its Subsidiaries; provided,
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however, that nothing contained in this Section 5.3 or any other provision
hereof shall prohibit the Company or the Company Board of Directors from (i)
taking and disclosing to the Company's stockholders its position with respect to
a tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act or (ii) making such disclosure to the
Company's stockholders as, in the good faith judgment of the Board of Directors
is necessary for the Company Board of Directors to comply with its fiduciary
duties to the Company's stockholders under applicable law.
(b) Notwithstanding the foregoing, prior to the acceptance of
Shares pursuant to the Offer, the Company may furnish information concerning its
business, properties or assets to any person or entity pursuant to a
confidentiality agreement with terms no less favorable to the Company than those
contained in the Confidentiality Agreement, dated January 20, 2000, entered into
between Parent and the Company (the "Confidentiality Agreement") and may
negotiate and participate in discussions and negotiations with such person or
entity concerning an Acquisition Proposal if (x) such entity or group has on an
unsolicited basis submitted a bona fide written proposal to the Company relating
to any such transaction which the Board of Directors determines in good faith,
after receiving advice from a nationally recognized investment banking firm and
taking into account all the terms and conditions of the Acquisition Proposal,
including any break-up fees, expense reimbursement provisions and conditions to
consummation, are more favorable and provide greater value to all the Company's
stockholders than as provided hereunder and for which financing, to the extent
required, is then fully committed or reasonably determined to be available by
the Board of Directors of the Company and (y) in the opinion of the Company
Board of Directors, the failure to provide such information or access or to
engage in such discussions or negotiations would cause the Board of Directors to
violate its fiduciary duties to the Company's stockholders under applicable law
(an Acquisition Proposal which satisfies clauses (x) and (y) being referred to
herein as a "Superior Proposal"). The Company shall promptly, and in any event
within 24 hours following receipt of a Superior Proposal, notify Parent of the
receipt of the same and prior to entering into a confidentiality agreement with
such person or entity.
(c) Except as set forth herein, neither the Board of Directors
of the Company nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent or Purchaser, the
approval or recommendation by such Board of Directors or any such committee of
the Offer, this Agreement or the Merger, (ii) approve or recommend or propose to
approve or recommend, any Acquisition Proposal or (iii) enter into any agreement
with respect to any Acquisition Proposal. Notwithstanding the foregoing, prior
to the time of acceptance for payment of Shares in the Offer, the Board of
Directors of the Company may (subject to the terms of this Agreement) withdraw
or modify its approval or recommendation of the Offer, this Agreement or the
Merger, in each case, in connection with a Superior Proposal, or approve or
recommend a Superior Proposal.
Section 5.4 Notices of Certain Events. The Company shall promptly
notify Parent of:
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(a) any notice or other communication from any person or
entity alleging that the consent of such person or entity is or may be required
in connection with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting the Company or any of its Subsidiaries that, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Section 3.12, 3.13 or 3.20, as the case may be, or that relate to
the consummation of the transactions contemplated by this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Proxy Statement. As promptly as practicable after the
consummation of the Offer and if required by the Exchange Act, the Company shall
prepare and file with the SEC, and shall use its best efforts to respond
promptly to any comments made by the SEC, and promptly thereafter shall mail to
stockholders, the Proxy Statement. In such event, the Proxy Statement shall
contain the recommendation of the Board of Directors in favor of the Merger.
Section 6.2 Meeting of Stockholders of the Company. At the Special
Meeting, if any, the Company shall use its best efforts to solicit from
stockholders of the Company proxies in favor of the Merger and shall take all
other action necessary or, in the reasonable opinion of Purchaser, advisable to
secure any vote or consent of stockholders required by the DGCL to effect the
Merger. Parent and Purchaser agree that each shall vote, or cause to be voted,
in favor of the Merger all Shares directly or indirectly beneficially owned by
it.
Section 6.3 Additional Agreements. Each of the parties hereto agrees to
use its best efforts to obtain in a timely manner all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
and to use all reasonable efforts to take, or cause to be taken, all other
actions and to do, or cause to be done, all other things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement.
Section 6.4 Access; Confidentiality. From the date hereof to the
Effective Time, upon reasonable notice and subject to the terms of the
Confidentiality Agreement, the Company shall (and shall cause each of its
Subsidiaries to) afford to the officers, employees, accountants, counsel,
financing sources and other representatives of Parent, reasonable access, during
normal business hours during the period prior to the Acceptance Date, to all its
properties, books, contracts, commitments and records and, during such period,
the Company shall (and shall cause each of its subsidiaries to), subject to any
limitations imposed by law with respect to records of employees,
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furnish promptly to the Parent upon Parent's request (a) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of federal securities laws and
(b) all other information concerning its business, properties and personnel as
Parent may reasonably request. The Company shall instruct the employees,
counsel, financial advisors, auditors and other authorized representatives of
the Company and its Subsidiaries to cooperate with Parent in its investigation
of the Company and its Subsidiaries. No information or knowledge obtained by
Parent in any investigation pursuant to this Section shall affect or be deemed
to modify any representation or warranty made by the Company hereunder.
Section 6.5 Consents and Approvals. Each of Parent, Purchaser and the
Company will take all reasonable actions necessary to comply promptly with all
legal requirements which may be imposed on it with respect to this Agreement and
the Transactions (which actions shall include, without limitation, furnishing
all information required under the HSR Act and in connection with approvals of
or filings with any other Governmental Entity) and will promptly cooperate with
and, subject to such confidentiality agreements as may be reasonably necessary
or requested, furnish information to each other or their counsel in connection
with any such requirements imposed upon any of them or any of their subsidiaries
in connection with this Agreement and the Transactions.
(a) Each of the Company, Purchaser and Parent shall take all
reasonable actions (including cooperating with each other) necessary to file as
soon as practicable notifications under the HSR Act, or under comparable merger
notification laws of non-U.S. jurisdictions and to respond as promptly as
practicable to any inquiries received from the Federal Trade Commission and the
Antitrust Division of the Department of Justice or the authorities of such other
jurisdiction for additional information or documentation and to respond as
promptly as practicable to all inquiries and requests received from any State
Attorney General or other Governmental Entity in connection with antitrust
matters.
Section 6.6 Publicity. Parent and the Company will consult with each
other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except
for any release or statement that may be required by applicable law or any
listing agreement with any national securities exchange, will not issue any such
press release or make any such public statement prior to such consultation.
Section 6.7 Directors' and Officers' Insurance and Indemnification.
Parent shall cause the Surviving Corporation, and the Surviving Corporation
hereby agrees, to do the following:
(a) For six years after the Effective Time, the Surviving
Corporation shall indemnify and hold harmless the present and former officers
and directors of the Company (each an "Indemnified Person") in respect of acts
or omissions occurring at or prior to the Effective Time to the fullest extent
permitted by the DGCL or any other applicable laws or as provided under the
certificate of incorporation and bylaws in effect on the date hereof, provided
that such indemnification shall be subject to any limitation imposed from time
to time under applicable law.
(b) For six years after the Effective Time, the Surviving
Corporation shall provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the
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Effective Time covering each such Indemnified Person currently covered by the
Company's officers' and directors' liability insurance policy on terms with
respect to coverage and amount no less favorable than those of such policy in
effect on the date hereof, provided that, in satisfying its obligation under
this Section 6.7(b), the Surviving Corporation shall not be obligated to pay
premiums in excess of 200% of the amount per annum the Company paid in its last
full fiscal year, which amount Company has disclosed to Parent prior to the date
hereof.
(c) If Parent, the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person or
entity and shall not be the continuing or surviving corporation or entity of
such consolidation or merger, or (ii) transfers or conveys all or substantially
all of its properties and assets to any person or entity, then, and in each such
case, to the extent necessary, proper provision shall be made so that the
successors and assigns of Parent or the Surviving Corporation, as the case may
be, shall assume the obligations set forth in this Section 6.7.
(d) The rights of each Indemnified Person under this Section
6.7 shall be in addition to any rights such Person may have under the
certificate of incorporation or bylaws of the Company or any of its
Subsidiaries, under the DGCL or any other applicable laws or under any agreement
of any Indemnified Person with the Company or any of its Subsidiaries. These
rights shall survive consummation of the Merger for the periods set forth above
and are intended to benefit, and shall be enforceable by, each Indemnified
Person.
Section 6.8 Purchaser Compliance. Parent shall cause Purchaser to
comply with all of its obligations under this Agreement.
Section 6.9 Best Efforts.
(a) Prior to the Closing, upon the terms and subject to the
conditions of this Agreement, Purchaser and the Company, agree to use their
respective best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things reasonably necessary and appropriate, under any
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as promptly as practicable
including, but not limited to (i) the preparation and filing of all forms,
registrations and notices required to be filed to consummate the transactions
contemplated by this Agreement and the taking of such actions as are necessary
to obtain any requisite approvals, consents, orders, exemptions or waivers by
any third party or Governmental Entity, and (ii) the satisfaction of the other
parties' conditions to Closing. In addition, no party hereto shall take any
action after the date hereof that would reasonably be expected to materially
delay the obtaining of, or result in not obtaining, any permission, approval or
consent from any Governmental Entity necessary to be obtained prior to the
acceptance for payment, and payment for, the Shares in the Offer or the Closing.
(b) Prior to the Closing, each party shall promptly consult
with the other parties hereto with respect to and subject to such
confidentiality agreements as may be reasonably necessary or requested, provide
any necessary information with respect to and provide the other (or its counsel)
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copies of, all filings made by such party with any Governmental Entity or any
other information supplied by such party to a Governmental Entity in connection
with this Agreement and the transactions contemplated by this Agreement. Each
party hereto shall promptly inform the other of any communication from any
Governmental Entity regarding any of the transactions contemplated by this
Agreement unless otherwise prohibited by law. If any party hereto or affiliate
thereof receives a request for additional information or documentary material
from any such Government Entity with respect to the transactions contemplated by
this Agreement then such party will endeavor in good faith to make, or cause to
be made, as soon as reasonably practicable and after consultation with the other
party, an appropriate response in compliance with such request. To the extent
that transfers of permits or Environmental Permits are required as a result of
execution of this Agreement or consummation of the transactions contemplated
hereby, the Company shall use its commercially reasonable efforts to effect such
transfers.
(c) Notwithstanding anything else contained herein, the
provisions of Sections 6.3 and 6.5 and this Section 6.9 shall not be construed
to require any party to undertake any particular efforts or to take any
particular action if the result thereof would give rise to one of the events or
conditions set forth in Section (a) of Annex A.
Section 6.10 Employee Benefits.
(a) Parent agrees that the Company will honor and, on and
after the Effective Time, Parent will cause the Surviving Corporation to honor
all employment, benefit, severance, termination, consulting and retirement
agreements to which the Company or any of its subsidiaries presently is a party,
including the Plans.
(b) Parent shall cause the Surviving Corporation to take such
actions as are necessary so that, until December 31, 2000, employees of the
Company and its subsidiaries during such period will be provided such employee
benefit plans and programs (other than incentive compensation or similar
programs) as will provide benefits which in the aggregate are not materially
less favorable than those provided to such employees as of the date hereof under
the Plans.
(c) Nothing in this Section 6.10 will be or be deemed to be
for the benefit of, or enforceable by, any person who is not a party hereto,
including, without limitation, any employee of the Company, the Surviving
Corporation or any of their respective subsidiaries or shall be deemed to limit
the Surviving Corporation's or its subsidiaries' ability to modify or eliminate
any Plan.
Section 6.11 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Purchaser, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Purchaser, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger.
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ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions, any and all of which may be waived in whole or in part by
Parent, Purchaser and the Company, as the case may be, to the extent permitted
by applicable law:
(a) Stockholder Approval. If required by the DGCL, this
Agreement shall have been approved and adopted by the Company's stockholders in
accordance with such law; provided, however, that Parent and Purchaser shall
vote all Shares purchased in the Offer in favor of such approval;
(b) Statutes; Court Orders. No statute, rule, regulation,
judgment, injunction, order or decree shall prohibit the consummation of the
Merger; and
(c) Purchase of Shares in Offer. Purchaser shall have
purchased, or caused to be purchased, the Shares pursuant to the Offer;
provided, that this condition shall be deemed to have been satisfied with
respect to the obligation of Parent and Purchaser to effect the Merger if
Purchaser fails to accept for payment or pay for Shares pursuant to the Offer in
violation of the terms of the Offer or of this Agreement.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the
transactions contemplated herein may be abandoned at any time before the
Effective Time, whether before or after stockholder approval thereof (provided,
however, that if Shares are purchased pursuant to the Offer, Parent may not in
any event terminate this Agreement):
(a) By mutual written consent of Parent and the Company; or
(b) By Parent or the Company if, without any material breach
by such terminating party of its obligations under this Agreement, the purchase
of Shares pursuant to the Offer shall not have occurred on or before June 15,
2000; or
(c) By either Parent or the Company if there shall be any law
or regulation that makes acceptance for payment of, and payment for, the Shares
pursuant to the Offer or consummation of the Merger illegal or otherwise
prohibited or a court of competent jurisdiction or other Governmental Entity
shall have issued an order, decree or ruling or taken any other action, in each
case permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated
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by this Agreement and such judgment, injunction, order or decree shall have
become final and nonappealable; or
(d) By the Company, but only prior to the Acceptance Date, if
it shall have received a Superior Proposal which the Board of Directors has
determined is more favorable to the stockholders of the Company than the
transactions contemplated hereby in the manner permitted by, and in compliance
with, Section 5.3, provided that the Company shall have paid any amounts due
pursuant to Section 9.3 in accordance with the terms, and at the times,
specified therein, and provided, further, that, unless the Company's Board of
Directors is advised by its principal, independent legal advisor that it would
be in contravention of the performance of the directors' fiduciary duties to do
so, (i) the Company notifies Parent, in writing and at least 72 hours prior to
such termination, promptly of its intention to terminate this Agreement and to
enter into a binding written agreement concerning an Acquisition Proposal that
constitutes a Superior Proposal of the nature described in Section 5.3(b),
attaching the most current version of such agreement (or a description of all
material terms and conditions thereof), and (ii) Parent does not make, within 72
hours of receipt of such written notification, an offer that is at least as
favorable to the shareholders of the Company as such Superior Proposal, it being
understood that the Company shall not enter into any such binding agreement
during such 72-hour period;
(e) By Parent, but only prior to the Acceptance Date, if (i)
the Company Board of Directors shall have withdrawn, modified, or changed in any
adverse respect its recommendation of this Agreement, the Merger and the
transactions contemplated hereby, (ii) the Company Board of Directors shall have
recommended to its stockholders a Superior Proposal, or (iii) resolved to do any
of the foregoing, provided that in no way shall such termination release the
Company from its obligation to pay any amounts due pursuant to Section 9.3 in
accordance with the terms, and at the times, specified therein; or
(f) By Parent, if the 1999 10-K shall not have been filed on
or prior to May 1, 2000.
Section 8.2 Effect of Termination. In the event of the termination of
this Agreement as provided in Section 8.1 hereof, written notice thereof shall
forthwith be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made (unless the Agreement is terminated
pursuant to Section 8.1(a)), and this Agreement shall forthwith become null and
void and there shall be no liability on the part of any party or its directors,
officers or shareholders, except for the provisions of this Section 8.2 and
Section 9.3 hereof; provided, however, that nothing in this Section 8.2 shall
relieve any party to this Agreement of liability for any willful or intentional
breach of this Agreement.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Modification. Subject to applicable law and
except as otherwise provided in the Agreement, this Agreement may be amended,
modified and supplemented in any and all respects, whether before or after any
vote of the stockholders of the Company contemplated hereby, by written
agreement of the parties hereto, by action taken by their respective Boards of
Directors or equivalent governing bodies, but, after the purchase of Shares
pursuant to the Offer, no amendment shall be made which decreases the Merger
Consideration and, after the approval of this Agreement by the stockholders, no
amendment shall be made which by law requires further approval by such
stockholders without obtaining such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
Section 9.2 Non-Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
acceptance for payment, and payment for, the Shares by Purchaser pursuant to the
Offer.
Section 9.3 Expenses.
(a) Except as expressly set forth in Section 9.3(b) below, all
fees, costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees,
costs and expenses.
(b) If a Payment Event occurs, then the Company shall pay
Parent (by wire transfer of immediately available funds), if, pursuant to clause
(x) of the definition of Payment Event below, simultaneously with the occurrence
of such Payment Event or, if pursuant to clause (y) of the definition of Payment
Event below, within two Business Days following such Payment Event a fee equal
to $5 million. Upon such termination, the Company shall also reimburse Parent
and its Affiliates (by wire transfer of immediately available funds), no later
than two Business Days after such termination, for 100% of their Expenses (as
defined in clause (c) below). "Payment Event" means (x) the termination of this
Agreement pursuant to Sections 8.1(d) or (e), or (y) if any Acquisition Proposal
has been made prior to the expiration or termination of the Offer, the
occurrence of any of the following events (in the case of clauses (i), (ii) and
(iii) below, whether or not the Third Party referred to therein was the person
or entity making the Acquisition Proposal) within 12 months of the termination
of this Agreement pursuant to Section 8.1(b) whereby stockholders of the Company
receive, pursuant to any such event, cash, securities or other consideration
having an aggregate value, when taken together with the value of any securities
of the Company or its Subsidiaries otherwise held by such stockholders after
such event, in excess of $2.00 per Share: (i) the Company merges with or into,
or is acquired, directly or indirectly, by merger or otherwise by, a person or
entity which is not an Affiliate of Parent or Purchaser (a "Third Party"); (ii)
a Third Party, directly or indirectly, acquires more than 50% of the total
assets of the Company and its Subsidiaries, taken as a whole; (iii) a Third
Party, directly or indirectly, acquires more than 50% of the outstanding Shares;
or (iv) the Company adopts or implements a plan of
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liquidation, recapitalization or share repurchase relating to more than 50% of
the outstanding Shares or an extraordinary dividend relating to more than 50% of
the outstanding Shares or 50% of the assets of the Company and its Subsidiaries,
taken as a whole.
(c) As used herein, the term "Expenses" shall mean all of
Parent's, Purchaser's and their affiliates' reasonable out-of-pocket expenses
(including all fees and expenses of counsel, accountants, experts, investment
bankers, financial and other consultants to Parent, Purchaser and their
affiliates) incurred by them or on their behalf in connection with the
transactions contemplated by this Agreement, including, but not limited to, in
connection with the negotiation, preparation, execution and performance of this
Agreement and the Parent's due diligence investigation of the Company.
(d) The Company acknowledges that the agreements contained in
this Section 9.3 are an integral part of the transactions contemplated by this
Agreement and that, without these agreements, Parent and Purchaser would not
enter into this Agreement. Accordingly, if the Company fails to pay any amount
due to Parent pursuant to this Section 9.3 promptly, it shall also pay any costs
and expenses incurred by Parent or Purchaser in connection with a legal action
to enforce this Agreement that results in a judgment against the Company for
such amount.
Section 9.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by a nationally recognized overnight
courier service, such as Federal Express (providing proof of delivery), to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent or Purchaser, to:
Candace S. Cummings
Vice President, Administration and General Counsel
VF Corporation
628 Green Valley Road, Suite 500
Greensboro, NC 27408
Telephone: (336) 547-6000
Facsimile: (336) 547-7630
(b) with a copy to:
George R. Bason, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Telephone: (212) 450-4000
Facsimile: (212) 450-4800
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<PAGE> 41
if to the Company, to:
The North Face, Inc.
2013 Farallon Drive
San Leandro, California 94577
Attention: Chairman of the Board of Directors and
Chief Executive Officer
Telephone: (510) 618-3500
Facsimile: (510) 618-3557
with a copy to:
Proskauer Rose, LLP
1585 Broadway
New York, NY 10036
Attention: Edward W. Kerson, Esq.
Telephone: (212) 969-3290
Facsimile: (212) 969-2900
Section 9.5 Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include," "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation." As used in this Agreement, the term "affiliates" shall have the
meaning set forth in Rule 12b-2 of the Exchange Act. As used in this Agreement,
the term "Person" shall mean a natural person, partnership, corporation, limited
liability company, business trust joint stock company, trust, unincorporated
association, joint venture, Governmental Entity or other entity or organization.
Section 9.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 9.7 Entire Agreement; No Third Party Beneficiaries. This
Agreement and the Confidentiality Agreement:
(a) constitute the entire agreement among the parties with
respect to the subject matter hereof and thereof and supersedes all other prior
agreements and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof and thereof (provided that the
provisions of this Agreement shall supersede any conflicting provisions of the
Confidentiality Agreement), and
(b) except as provided in Section 6.7, is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
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Section 9.8 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by rule of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
Section 9.9 Specific Performance. The parties acknowledge and agree
that any breach of the terms of this Agreement would give rise to irreparable
harm for which money damages would not be an adequate remedy and accordingly the
parties agree that, in addition to any other remedies, each shall be entitled to
enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy of money damages as a remedy.
Section 9.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof.
Section 9.11 Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal court located in the State of Delaware or any Delaware state court,
and each of the parties hereby consents to the jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
form. Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 12.01 shall be deemed effective service of
process on such party.
Section 9.12 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 9.13 Assignment. This Agreement shall not be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written content of the other parties, except that Purchaser may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to Parent or any other subsidiary of Parent. Subject to the preceding sentence,
but without relieving any party hereto of any obligation hereunder, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
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IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
VF CORPORATION
By: /s/ Frank C. Pickard III
-------------------------------------
Name: Frank C. Pickard III
Title: Vice President-Treasurer
SEQUOIA ACQUISITION, INC.
By: /s/ Frank C. Pickard III
-------------------------------------
Name: Frank C. Pickard III
Title: Vice President
and Assistant Secretary
THE NORTH FACE, INC.
By: /s/ Geoffrey D. Lurie
-------------------------------------
Name: Geoffrey D. Lurie
Title: CEO
<PAGE> 44
ANNEX A
Notwithstanding any other provisions of the Offer, Purchaser shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Purchaser's obligation to pay for or return tendered Shares promptly after
termination or expiration of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares (A) unless (i) there are validly tendered and not
withdrawn prior to the expiration date for the Offer that number of Shares
which, when added to the Shares owned by Purchaser, will represent at least a
majority of the outstanding Shares on a fully diluted basis (the "Minimum
Condition"), (ii) any applicable waiting period under the HSR Act has expired or
terminated prior to expiration of the Offer; and/or (B) if at any time on or
after the date of the Agreement and before the expiration date of this Offer, if
any of the following events shall have occurred and be continuing:
(a)(i) there shall be instituted or pending any action or
proceeding by any government or governmental authority or agency,
domestic, foreign or supranational, before any court or governmental
authority or agency, domestic, foreign or supranational, (A)
challenging or seeking to make illegal, to delay materially or
otherwise directly or indirectly to restrain or prohibit the making of
the Offer, the acceptance for payment of or payment for some or all of
the Shares by Parent or Purchaser or the consummation of the Merger,
(B) seeking to obtain material damages or otherwise directly or
indirectly relating to the transactions contemplated by the Offer or
the Merger, (C) seeking to restrain or prohibit Parent's ownership or
operation (or that of its Affiliates) of all or any material portion of
the business or assets of the Company and its Subsidiaries, taken as a
whole, or of Parent and its Subsidiaries, taken as a whole, or to
compel Parent or any of its Affiliates to dispose of or hold separate
all or any material portion of the business or assets of the Company
and its Subsidiaries, taken as a whole, or of Parent and its
Subsidiaries, taken as a whole, (D) seeking to impose or confirm
material limitations on the ability of Parent, Purchaser or any of
Parent's other Affiliates effectively to exercise full rights of
ownership of the Shares, including the right to vote any Shares
acquired or owned by Parent, Purchaser or any of Parent's other
Affiliates on all matters properly presented to the Company's
stockholders, (E) seeking to require divestiture by Parent, Purchaser
or any of Parent's other Affiliates of any Shares or (F) that
otherwise, in the judgment of Parent, is likely to have a Company
Material Adverse Effect or a Parent Material Adverse Effect (any action
or proceeding described in clauses (A) through (E), a "Significant
Proceeding"); or (ii) there shall be instituted or pending any other
Significant Proceeding, or any development shall have occurred in any
action or proceeding pending on the date hereof that, in each case, in
the judgment of Parent is reasonably likely to result in a Company
Material Adverse Effect or a Parent Material Adverse Effect; or
(b) there shall have been any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Merger, by any
court, government or governmental authority or agency, domestic, foreign or
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supranational, other than the application of the waiting period provisions of
the HSR Act to the Offer or the Merger, that, in the judgment of Parent, is
likely, directly or indirectly, to result in any of the consequences referred to
in clauses (i)(A) through (F) of paragraph (a) above; or
(c) any change shall have occurred or been threatened (or any
development shall have occurred or been threatened involving a prospective
change) in the business, assets, liabilities, financial condition,
capitalization, operations or results of operations of the Company or any of its
Subsidiaries that, in the reasonable judgment of Parent, is or is likely to have
a Company Material Adverse Effect; or
(d) any of the representations and warranties of the Company contained
in the Agreement shall not be true and correct when made, (ii) any of the
representations and warranties of the Company contained in the Agreement (other
than Section 3.11(a)(3)) shall not be true and correct at any time prior to the
consummation of the Offer as if made at and as of such time or (iii) the
representation set forth in Section 3.11(a)(3) of the Agreement shall not be
true and correct at any time prior to the consummation of the Offer as if made
at and as of such time due to the existence of a Tax Issue or Tax Issues that
would, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect; or
(e) the Company shall have breached or failed to perform or comply in
all material respects with the obligations under the Agreement to be performed
or complied with by it; or
(f) the Agreement shall have been terminated in accordance with its
terms; or
(g) prior to the purchase of Shares pursuant to the Offer, an
Acquisition Proposal for the Company exists and the Board shall have withdrawn
or materially modified or changed (including by amendment of the Schedule 14D-9)
in a manner adverse to Purchaser its recommendation of the Offer, the Agreement
or the Merger; or
(h) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that (1) any person or "group" (as defined in Section 13(d)(3)
of the Exchange Act), other than Parent or its affiliates or any group of which
any of them is a member or any person or group that, on the date of the
Agreement, has beneficial ownership (determined pursuant to Rule 13(d)-3
promulgated under the Exchange Act) of more than 10% of the outstanding Shares
and which had filed a Schedule 13D or 13G with the SEC on or prior to March 31,
2000, shall have acquired beneficial ownership of more than 10% of any class or
series of capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, or shall have been
granted an option, right or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 10% of any class or series of capital stock of
the Company (including the Shares); or (2) any person or group that, prior to
March 31, 2000, had filed a Schedule 13D or 13G with the SEC, shall have
acquired beneficial ownership of additional shares of any class or series of
capital stock of the Company (including the Shares), through the acquisition of
stock, the formation of a group or otherwise, constituting 5% or more any such
class or series; or (3) any person or group shall have entered into a definitive
agreement or agreement in principle with the Company with respect to a merger,
consolidation or other business combination with the Company; or
A-2
<PAGE> 46
(i) the Company or any material Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to authorize
any of the foregoing; or
(j) an involuntary case or other proceeding shall be commenced against
the Company or any material Subsidiary seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property; or an order for relief
shall be entered against the Company or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect; or
(k) the Company's and its Subsidiaries' existing lenders and their
Affiliates shall not have continued to fund the business of the Company and its
Subsidiaries on substantially the same basis as had been applicable prior to the
date of the Agreement;
which, in the sole judgment of Purchaser in any such case, and regardless of the
circumstances (including any action or omission by Purchaser or Parent) giving
rise to any such condition, makes it inadvisable to proceed with such acceptance
for payment.
The foregoing conditions are for the sole benefit of Parent and
Purchaser, may be asserted by Parent or Purchaser regardless of the
circumstances giving rise to such condition and may be waived by Parent or
Purchaser in whole or in part at any time and from time to time in the sole
discretion of Parent or Purchaser, subject in each case to the terms of this
Agreement. The failure by Parent or Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
The capitalized terms used in this Annex A shall have the meanings set
forth in the Agreement and Plan of Merger among the Parent, Purchaser and the
Company to which it is annexed (the "Agreement").
A-3
