<PAGE> 1
As Filed With The Securities and Exchange Commission On October 4, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
OSHKOSH B'GOSH, INC.
(Name of Issuer)
OSHKOSH B'GOSH, INC.
(Name of Person(s) Filing Statement)
CLASS A COMMON STOCK CLASS B COMMON STOCK
(Title of Class of Securities) (TITLE OF CLASS OF SECURITIES)
688222 206 688222 306
(CUSIP NUMBER OF CLASS OF SECURITIES) (CUSIP NUMBER OF CLASS OF SECURITIES)
DAVID L. OMACHINSKI
VICE PRESIDENT, TREASURER AND CHIEF FINANCIAL OFFICER
OSHKOSH B'GOSH, INC.
112 OTTER AVENUE
OSHKOSH, WISCONSIN 54901
(920) 231-8800
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
---------------
With a Copy to:
STEVEN R. DUBACK, ESQ.
QUARLES & BRADY
411 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202-4497
OCTOBER 4, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
---------------
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
TRANSACTION VALUATION* AMOUNT OF FILING FEE
- --------------------------------------------------------------------------------
$96,600,000 $19,320.00
- --------------------------------------------------------------------------------
* Calculated solely for the purpose of determining the filing fee, based
upon the purchase of 4,600,000 shares at $21.00 per share.
[ ] 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 filings: NOT
APPLICABLE
<PAGE> 2
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Schedule 13E-4 relates
is OshKosh B'Gosh, Inc., a Delaware corporation (the "Company"), and the address
of its principal executive office is 112 Otter Avenue, Oshkosh, Wisconsin,
54901.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase
4,500,000 shares (or such lesser number of shares as are properly tendered) of
its Class A Common Stock, par value $.01 per share ("Class A Shares") and
100,000 shares (or such lesser number of shares as are properly tendered) of its
Class B Common Stock, par value $.01 per share ("Class B Shares") (such shares
are hereinafter collectively referred to as the "Shares"), of which 14,022,481
Class A Shares and 2,248,218 Class B Shares were outstanding as of September
30, 1999, at a price not in excess of $21.00 nor less than $18.50 per Share in
cash upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated October 4, 1999 (the "Offer to Purchase"), and in the related
Letter of Transmittal and Option Exercise Form, which together constitute the
"Offer," copies of which are attached as Exhibits (a)(1), (a)(2) and (a)(4),
respectively, and incorporated herein by reference. As of the date of this
filing, the Class B Shares are not registered under the Securities Exchange Act
of 1934, as amended. Officers and directors of the Company may participate in
the Offer on the same basis as the Company's other shareholders, but none of
them have advised the Company that they intend to do so. The Company has been
advised that certain members of the Wyman and Hyde families who are parties to
the cross purchase agreement described in Section 11 of the Offer to Purchase
(including family members who serve as officers and directors of the Company),
presently intend to sell to unrelated persons in independent market transactions
an aggregate of approximately 411,000 Class A Shares, including shares subject
to exercisable options held by them. The information set forth in "The
Offer--Section 1, Number of Shares; Proration" and "The Offer-- Section 11,
Interest of Directors and Officers; Transactions and Arrangements Concerning
Shares" of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "The Offer--Section 1, Number of
Shares; Proration" and "The Offer--Section 8, Price Range of Shares; Dividends"
of the Offer to Purchase is incorporated herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "The Offer--Section 9, Source and
Amount of Funds" of the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in "The Offer--Section 2, Purpose of
the Offer; Certain Effects of the Offer," "The Offer--Section 9, Source and
Amount of Funds," "The Offer--Section
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10, Certain Information Concerning the Company,""The Offer--Section 11,
Interest of Directors and Officers; Transactions and Arrangements Concerning
Shares" and "The Offer--Section 12, Effects of the Offer on the Market for
Shares; Registration Under the Exchange Act" of the Offer to Purchase is
incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "The Offer--Section 11, Interest of
Directors and Officers; Transactions and Arrangements Concerning Shares" of the
Offer to Purchase is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in "The Offer--Section 2, Purpose of the Offer;
Certain Effects of the Offer," "The Offer--Section 9, Source and Amount
of Funds" and "The Offer--Section 11, Interest of Directors and Officers;
Transactions and Arrangements Concerning Shares" of the Offer to Purchase is
incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED, OR TO BE COMPENSATED.
The information set forth in "The Offer--Section 16, Fees and Expenses"
of the Offer to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in "The Offer--Section 10, Certain
Information Concerning the Company" of the Offer to Purchase is incorporated
herein by reference, the information set forth in Item 8, "Financial Statements
and Supplementary," of the Company's Annual Report on Form 10-K for the year
ended January 2, 1999, filed as Exhibit (g)(1) hereto, is incorporated herein by
reference, and the information set forth in Item 1, "Financial Statements," of
the Company's Quarterly Report on Form 10-Q for the quarter ended July 3, 1999,
filed as Exhibit (g)(2) hereto, is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in "The Offer--Section 13, Certain Legal
Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein
by reference.
(c) The information set forth in "The Offer--Section 12, Effect of the
Offer on the Market for Shares; Registration Under the Exchange Act" of the
Offer to Purchase is incorporated herein by reference.
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(d) Not applicable.
(e) The information set forth in the Offer to Purchase, the Letter of
Transmittal and the Option Election Form is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase, dated October 4, 1999.
(2) Form of Letter of Transmittal (including Certification of Taxpayer
Identification Number on Form W-9).
(3) Overview of Questions and Answers.
(4) (a) Form of Memorandum dated October 4, 1999, to holders of options
for Class A Shares; (b) Instructions for Tender of Option Shares;
and (c) Option Election Form.
(5) Form of Notice of Guaranteed Delivery.
(6) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(7) Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(8) Text of Press Release issued by the Company, dated October 1, 1999.
(9) Form of Summary Advertisement, dated October 4, 1999.
(10) Form of Letter to Shareholders of the Company, dated October 4,
1999, from Douglas W. Hyde, Chairman and Chief Executive Officer of
the Company.
(11) Guidelines for Certification of Taxpayer Identification Number on
Substitute W-9.
(b) Commitment Letters dated September 22, 1999.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
4
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(g)(1) The information set forth in Item 8, "Financial Statements and
Supplementary," of the Company's Annual Report on Form 10-K for the
year ended January 2, 1999.
(2) The information set forth in Item 1, "Financial Statements," of the
Company's Quarterly Report on Form 10-Q for the quarter ended
July 3, 1999.
5
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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 Schedule 13E-4 is true, complete and
correct.
OSHKOSH B'GOSH, INC.
By: /s/ David L. Omachinski
---------------------------------------
Name: David L. Omachinski
Title: Vice President, Treasurer and Chief
Financial Officer
October 4, 1999
<PAGE> 1
[OSHKOSH B'GOSH LOGO]
OFFER TO PURCHASE FOR CASH
UP TO 4,500,000 SHARES OF CLASS A COMMON STOCK
AND UP TO 100,000 SHARES OF CLASS B COMMON STOCK,
EACH AT A PURCHASE PRICE NOT IN EXCESS OF $21.00
NOR LESS THAN $18.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON NOVEMBER 2, 1999, UNLESS THE OFFER IS EXTENDED.
OshKosh B'Gosh, Inc. hereby invites you to tender shares of its Class A
Common Stock and its Class B Common Stock (collectively, the "Shares") to the
Company, on the terms and conditions set forth in this Offer to Purchase, the
related Letter of Transmittal and the Option Election Form and related
instructions, which together constitute the "Offer." Whenever this Offer to
Purchase refers to rights "we" have, actions "we" may take or similar matters,
it is referring to rights or actions of the Company. As part of the Offer, the
Company is permitting tenders of Class A Shares in connection with the
conditional exercise by holders of exercisable options granted under our stock
option plans.
We will determine the lowest price, not in excess of $21.00 nor less than
$18.50 per Class A Share (the "Class A Purchase Price"), that we will pay for
Class A Shares properly tendered pursuant to the Offer and that will allow the
Company to buy 4,500,000 Class A Shares (or any smaller number of Class A Shares
as are properly tendered), and the separate price, not in excess of $21.00 nor
less than $18.50 per Class B Share (the "Class B Purchase Price"), that we will
pay for Class B Shares properly tendered pursuant to the Offer and that will
allow the Company to purchase 100,000 Class B Shares (or any smaller number of
Class B Shares as are properly tendered), taking into account the prices
specified by tendering shareholders. Subject to the terms and the conditions of
the Offer, including the proration and conditional tender provisions, we will
purchase, at the Purchase Price for the class, all Shares that are properly
tendered at prices at or below the Purchase Price for that class and not
withdrawn, provided that the actual payment with respect to option shares will
be reduced by the exercise price of the option and by applicable withholding
taxes. We reserve the right to purchase more than 4,500,000 Class A Shares or
more than 100,000 Class B Shares pursuant to the Offer. See Sections 1 and 15.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE
OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7.
WE MAKE NO RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR
REFRAIN FROM TENDERING SHARES. See Section 11 regarding anticipated transactions
by officers, directors and certain others.
The Class A Shares are listed and traded on the Nasdaq Stock Market Inc.
National Market under the symbol "GOSHA." The Class B Shares are not listed or
traded on any exchange, but they are convertible into Class A Shares on a
one-for-one basis. On September 30, 1999, the last trade price per Class A Share
as reported on the Nasdaq National Market was $15 31/32. We encourage you to
obtain current market quotations for the Class A Shares. See Section 8.
The Dealer Manager for the Offer is:
GOLDMAN, SACHS & CO.
The date of this Offer to Purchase is October 4, 1999.
<PAGE> 2
IMPORTANT
Except as described below, any shareholder wishing to tender all or any
part of his or her Shares should either:
- complete and sign a Letter of Transmittal in accordance with the
instructions in the Letter of Transmittal and either mail or deliver it
with any required signature guarantee and any other required documents to
Harris Trust and Savings Bank (the "Depositary"), and either mail or
deliver the stock certificates for the Shares to the Depositary with all
the other documents or tender the Shares pursuant to the procedure for
book-entry tender set forth in Section 3; or
- request a broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for the shareholder.
Holders of Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee should contact that person if they desire
to tender their Shares. Any shareholder who desires to tender Shares and whose
stock certificates cannot be delivered to the Depositary or who cannot comply
with the procedure for book-entry tender or whose other required documents
cannot be delivered to the Depositary by the expiration of the Offer must tender
those Shares pursuant to the guaranteed delivery procedure described in Section
3.
Except as described below, shareholders must complete the section of the
Letter of Transmittal stating the price at which they are tendering Shares. If
you wish to tender Shares at more than one price, you must submit a separate
copy of the Letter of Transmittal for each price.
You may direct questions and requests for assistance or for additional
copies of this Offer to Purchase, the Letter of Transmittal or the Notice of
Guaranteed Delivery to the Information Agent or to the Dealer Manager. Their
addresses and telephone numbers appear on the back cover of this Offer to
Purchase.
SPECIAL INSTRUCTIONS FOR HOLDERS OF EXERCISABLE OPTIONS
Holders of exercisable options who wish to participate in the Offer by
conditionally tendering the option shares must follow the instructions and
procedures set forth in the documents described below. These documents are also
part of the terms of the Offer.
Holders of exercisable options should read this Offer to Purchase, the
related Letter of Transmittal and the Option Election Form and related
instructions, as they contain the terms of the Offer. The special instructions
in the documents for option holders supplement the information contained in this
Offer to Purchase and the Letter of Transmittal. Holders of exercisable options
should also see "Certain Federal Income Tax Consequences--Tax Considerations for
Holders of Option Shares" in Section 14 for information about tax considerations
and Section 5 for special payment procedures that apply if they participate in
the Offer. Holders of exercisable options who wish to tender option shares in
the Offer must follow the instructions contained in the materials specifically
applicable to them.
NEITHER THE COMPANY NOR THE DEALER MANAGER HAS AUTHORIZED ANY PERSON TO
MAKE ANY RECOMMENDATION AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. NEITHER THE COMPANY NOR THE DEALER
MANAGER HAS AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN THE INFORMATION AND
REPRESENTATIONS CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF
TRANSMITTAL AND OPTION ELECTION FORM.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
------- ----
<S> <C>
SUMMARY..................................................... 1
THE OFFER................................................... 3
1. Number of Shares; Proration............................. 3
2. Purpose of the Offer; Certain Effects of the Offer...... 5
3. Procedures for Tendering Shares......................... 8
4. Withdrawal Rights....................................... 11
5. Purchase of Shares and Payment of Purchase Price........ 11
6. Conditional Tender of Shares............................ 13
7. Certain Conditions of the Offer......................... 13
8. Price Range of Shares; Dividends........................ 15
9. Source and Amount of Funds.............................. 16
10. Certain Information Concerning the Company.............. 17
11. Interest of Directors and Officers; Transactions and
Arrangements Concerning Shares.......................... 20
12. Effects of the Offer on the Market for Shares;
Registration Under the Exchange Act..................... 24
13. Certain Legal Matters; Regulatory Approvals............. 25
14. Certain Federal Income Tax Consequences................. 25
15. Extension of Offer; Termination; Amendment.............. 29
16. Fees and Expenses....................................... 29
17. Miscellaneous........................................... 30
</TABLE>
<PAGE> 4
To the Holders of Class A Shares and Class B Shares of OshKosh B'Gosh, Inc.
SUMMARY
This general summary is solely for your convenience. It may not contain all
of the information that is important to you, and it is qualified in its entirety
by reference to the full text and more specific details in this Offer to
Purchase and the other materials provided in the Offer.
PURCHASE PRICE............. The Class A Purchase Price will be not more than
$21.00 nor less than $18.50 per Class A Share. The
separate Class B Purchase Price will be not more
than $21.00 nor less than $18.50 per Class B Share.
We will select the lowest prices that will permit
the purchase of the number of Shares mentioned
below. All Shares of a particular class that we
purchase will be purchased at the Purchase Price
for that class, even if tendered below the Purchase
Price. Holders who tender option shares will
receive the Class A Purchase Price less the per
Share exercise price and the applicable withholding
tax amount. See Section 1.
NUMBER OF SHARES TO BE
PURCHASED.................. Up to 4,500,000 Class A Shares, including option
shares (or any smaller number of Class A Shares as
are properly tendered) and up to 100,000 Class B
Shares (or any smaller number of Class B Shares as
are properly tendered).
HOW TO TENDER SHARES....... Each shareholder (other than holders qualifying for
the "Odd Lots" preference described below) desiring
to tender Shares must either specify in the Letter
of Transmittal (or, in the case of option shares,
in the Option Election Form) the minimum price (not
more than $21.00 nor less than $18.50 per Share) at
which the shareholder is willing to have his or her
Shares purchased by the Company or must state that
he or she is tendering at the Purchase Price for
the applicable class resulting from the dutch
auction tender process. A shareholder can specify
the priority of tendered Shares among his or her
Shares of a given class and can specify different
minimum prices for different Shares held by that
shareholder. See Section 3. A shareholder may call
the Information Agent or the Dealer Manager or
consult with a broker for assistance in tendering
Shares.
BROKERAGE COMMISSIONS AND
STOCK TRANSFER TAX......... Tendering shareholders will not be obligated to pay
any fees or commissions to the Dealer Manager, the
Depositary or the Information Agent or, if payment
is made to the registered holder, transfer taxes on
the sale of Shares pursuant to the Offer. A
tendering shareholder who holds securities with a
broker may be required by the broker to pay a
service charge or other fee.
EXPIRATION AND PRORATION
DATES...................... November 2, 1999, at 12:00 midnight, Eastern Time,
unless extended by the Company.
PAYMENT DATE............... As soon as practicable after the termination of the
Offer. We expect that the Payment Date will be
approximately seven to ten business days after
expiration of the Offer.
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POSITION OF THE COMPANY AND
ITS DIRECTORS.............. NEITHER WE NOR OUR BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING SHARES. We have
been advised that some members of the Hyde and
Wyman families (including members who are among the
Company's directors and executive officers) intend
to sell Shares in independent market transactions.
See Section 11.
WITHDRAWAL RIGHTS.......... Tendered Shares may be withdrawn at any time until
12:00 midnight, Eastern Time, on November 2, 1999,
unless the Offer is extended by the Company. Unless
previously purchased, tendered Shares may also be
withdrawn at any time after 12:00 midnight, Eastern
Time, on December 2, 1999. See Section 3.
ODD LOTS................... There will be no proration of Shares tendered by
any shareholder owning beneficially fewer than 100
Class A Shares or fewer than 100 Class B Shares who
tenders all of those Shares at or below the
Purchase Price for the applicable class prior to
the Expiration Date and who checks the "Odd Lots"
box in the Letter of Transmittal. See Section 1.
2
<PAGE> 6
THE OFFER
1. NUMBER OF SHARES; PRORATION.
General. Upon the terms and subject to the conditions of the Offer, the
Company will purchase 4,500,000 Class A Shares and 100,000 Class B Shares, or
any smaller number of Shares of each class as are properly tendered (and not
withdrawn in accordance with Section 4) prior to the Expiration Date at prices
(determined in the manner set forth below) not in excess of $21.00 nor less than
$18.50 per Share in cash. Holders of exercisable options for Class A Shares
granted under our stock option plans will be permitted to tender in connection
with conditional "cashless" exercises of their options and, for each option
share purchased by us, will receive the difference between the Class A Purchase
Price and the sum of the exercise price and applicable withholding taxes. The
term "Expiration Date" means 12:00 midnight, Eastern Time, on November 2, 1999,
unless and until we, in our sole discretion, extend the period of time during
which the Offer will remain open, in which event the term "Expiration Date" will
refer to the latest time and date at which the Offer, as so extended, will
expire. See Section 15 for a description of our right to extend, delay,
terminate or amend the Offer. We reserve the right to purchase more than
4,500,000 Class A Shares and 100,000 Class B Shares pursuant to the Offer. In
accordance with applicable regulations of the SEC, we may purchase pursuant to
the Offer an additional amount of Shares of either class not to exceed 2% of the
outstanding Shares of that class without amending or extending the Offer. See
Section 15. In the event of an over-subscription of the Offer for Class A Shares
or Class B Shares as described below, Shares of the applicable class tendered at
or below the Purchase Price for that class prior to the Expiration Date will be
subject to certain proration and conditional tender provisions, except for Odd
Lots as explained below. The proration period also expires on the Expiration
Date.
In the event that (1) we
- increase or decrease the price to be paid for Shares;
- increase or decrease the Dealer Manager's soliciting fee;
- increase the number of Shares being sought by more than 2% of the
outstanding Shares of the applicable class; or
- decrease the number of Shares being sought,
and (2)
- the Offer is scheduled to expire at any time earlier than the tenth
business day from, and including, the date that notice of the change is
first published, sent or given in the manner specified in Section 15,
then the Offer will be extended until the expiration of that period of ten
business days. For this purpose, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, Eastern Time.
As promptly as possible after the Expiration Date we will select the lowest
Class A Purchase Price that will allow the Company to buy 4,500,000 Class A
Shares (or any smaller number of Class A Shares as are properly tendered at
prices not in excess of $21.00 nor less than $18.50 per Share) and the lowest
Class B Purchase Price that will allow the Company to buy 100,000 Class B Shares
(or any smaller number of Class B Shares as are properly tendered at prices not
in excess of $21.00 nor less than $18.50 per Share), taking into account the
number of Shares of each class tendered and the prices specified by tendering
Shareholders. All Class A Shares properly tendered at prices at or below the
Class A Purchase Price and not withdrawn will be purchased at the Class A
Purchase Price and all Class B Shares properly tendered at prices at or below
the Class B Purchase Price and not withdrawn will be purchased at the Class B
Purchase Price, subject to the terms and the conditions of the Offer, including
the proration and conditional tender provisions. In the case of conditional
tenders of option shares for Class A Common Stock, we will pay the Class A
Purchase Price less the exercise price and applicable withholding taxes for all
option shares purchased.
THE OFFER IS NOT CONDITIONED UPON THE TENDER OF ANY MINIMUM NUMBER OF
SHARES, BUT IT IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 7.
3
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In accordance with Instruction 5 of the Letter of Transmittal, shareholders
(other than certain beneficial owners of fewer than 100 Class A Shares or fewer
than 100 Class B Shares) desiring to tender Shares generally must specify the
price, not in excess of $21.00 nor less than $18.50 per Share, at which they are
willing to sell their Shares to the Company, or indicate that they are tendering
at the Purchase Price for the applicable class, determined by the Company in
accordance with this Offer. By following the instructions to the Letter of
Transmittal, shareholders can specify one minimum price for a specified portion
of their Shares and a different minimum price for other specified Shares.
Shareholders can also specify the order in which their Shares of either class
will be purchased in the event that, as a result of the proration provisions or
otherwise, some but not all of their tendered Shares of that class are purchased
pursuant to the Offer, and they can condition their tender of Shares on the
purchase of all or a specified minimum number of their shares being purchased.
We will return all Shares tendered and not purchased pursuant to the Offer,
including Shares tendered at prices in excess of the Purchase Price for the
applicable class and Shares not purchased because of proration or conditional
tender, to the tendering shareholder (or to another person specified by a
tendering shareholder) at the Company's expense as promptly as practicable
following the Expiration Date. Option shares that are conditionally exercised
and tendered but not purchased pursuant to the Offer will be deemed not to have
been exercised and will continue to constitute outstanding options.
Priority of Purchases. Upon the terms and subject to the conditions of the
Offer, if more than 4,500,000 Class A Shares or more than 100,000 Class B Shares
have been properly tendered at prices at or below the Class A Purchase Price or
the Class B Purchase Price, respectively, and not withdrawn prior to the
Expiration Date, the Company will purchase properly tendered Shares of the
oversubscribed class in the following order of priority:
(a) first, all Shares tendered and not withdrawn prior to the
Expiration Date by any shareholder who beneficially owns fewer than 100
Class A Shares or fewer than 100 Class B Shares and who:
(1) tenders all Shares of that class that the shareholder
beneficially owns at a price at or below the Purchase Price for that
class, including by electing to accept the Purchase Price for that class
determined by the Company (tenders of less than all Shares of a
particular class owned by the shareholder will not qualify for this
preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) second, after purchase of all of the foregoing Shares in item (a)
above, all Shares of the applicable class (1) conditionally tendered in
accordance with Section 6, for which the condition was satisfied, and (2)
all other Shares tendered properly and unconditionally, in each case at
prices at or below the Purchase Price for the applicable class, and not
withdrawn prior to the Expiration Date, on a pro rata basis (with
appropriate adjustments to avoid purchases of fractional Shares) as
described below; and
(c) third, if necessary, Shares conditionally tendered at or below the
Purchase Price for the applicable class and not withdrawn prior to the
Expiration Date by shareholders who tendered all of their Shares of the
applicable class but for which the minimum condition was not satisfied,
selected by random lot in accordance with Section 6.
Odd Lots. For purposes of the Offer, the term "Odd Lots" means all Shares
properly tendered prior to the Expiration Date at prices at or below the
Purchase Price for the applicable class and not withdrawn by any person who
owns, beneficially or of record, an aggregate of fewer than 100 Class A Shares
and/or fewer than 100 Class B Shares (and so certifies in the appropriate place
on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed
Delivery). In order to qualify for this preference, a qualifying shareholder
must tender all applicable Shares of a class in accordance with the procedures
described in Section 3. Odd Lots will be accepted for payment before proration,
if any, of the purchase of other tendered Shares. This preference is not
available to partial tenders. Any shareholder wishing to tender all of the
shareholder's Class A Shares or
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<PAGE> 8
Class B Shares pursuant to this preference for Odd Lots should complete the box
captioned "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery. See Instruction 8 to the Letter of Transmittal.
We also reserve the right, but will not be obligated, to purchase all
Shares duly tendered by any shareholder who tenders all Class A Shares and/or
all Class B Shares owned, beneficially or of record, at or below the Purchase
Price for the applicable class and who, as a result of proration, would then
own, beneficially or of record, an aggregate of fewer than 100 Class A Shares
and/or fewer than 100 Class B Shares. If we exercise this right, we will
increase the number of Shares that the Company is offering to purchase by the
number of Shares purchased through the exercise of the right.
Proration. If proration of tendered Shares of either class is required, we
will determine the proration factor as soon as practicable following the
Expiration Date. Proration for each shareholder tendering Shares of the
applicable class, other than those qualifying for the preference for Odd Lots,
will be based on the ratio of the number of Shares of that class tendered by the
shareholder to the total number of Shares of that class tendered by all
shareholders subject to proration, at or below the Purchase Price for the
applicable class, subject to the conditional tender provisions described in
Section 6. Because of the difficulty in determining the number of Shares
properly tendered (including Shares tendered by guaranteed delivery procedures,
as described in Section 3) and not withdrawn, and because of the Odd Lot
procedure, we do not expect to be able to announce the final proration factor or
commence payment for any Shares purchased pursuant to the Offer until
approximately seven to ten business days after the Expiration Date. We will
announce the preliminary results of any proration by press release as soon as
practicable after the Expiration Date. Shareholders may obtain any available
preliminary information from the Information Agent or the Dealer Manager and may
also be able to obtain it from their brokers or financial advisors.
The same proration factor will be separately applied to option shares which
are tendered. We will purchase option shares in the order in which the holder of
the options indicates on the Option Election Form.
As described in Section 14, the number of Shares that the Company will
purchase from a shareholder may affect the federal income tax consequences to
the shareholder and therefore may be relevant to the shareholder's decision
whether to tender Shares and how many Shares to tender. The Letter of
Transmittal and the Option Election Form afford each tendering shareholder the
opportunity to designate the order of priority in which tendered Shares of
either class are to be purchased in the event of proration and the opportunity
to make a tender of Shares conditioned on the purchase of all or a specified
minimum number of the Shares.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares and will be furnished to brokers, banks and similar
persons whose names, or the names of whose nominees, appear on the Company's
shareholder 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. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
The discussion in this Section 2 and Section 10 contains forward-looking
statements that involve risks and uncertainties that could cause actual results
to differ materially from those in the forward-looking statements. When used in
this Offer to Purchase, the words "anticipate," "believe," "estimate," "intend"
and "expect" and similar expressions are intended to identify forward-looking
statements. The forward-looking statements are based on the Company's current
views and assumptions. The factors that could cause the Company's results of
operations and financial position to be weaker than expected include, among
other things: changes in consumer spending for apparel, particularly in the
children's wear segment; overall consumer acceptance of the Company's product
styling; the financial strength of the retail industry, including, but not
limited to, business conditions and the general economy; competitive factors;
risk of non-payment of accounts receivable; the unanticipated loss of a major
customer; failure of the Company's suppliers to timely deliver needed raw
materials; Year 2000 issues, particularly with respect to the Company's vendors
and customers; consumer and retailer responses to Company marketing initiatives,
including new Company retail
5
<PAGE> 9
stores; and risks associated with foreign operations, including foreign economic
conditions, currency rate fluctuations, and other matters. Some or all of the
factors are beyond the Company's control.
Since May 1994, the Company has repurchased approximately 13.1 million
Class A Shares and approximately 83,000 Class B Shares (as adjusted for the
two-for-one stock split of both classes effected in the form of a stock dividend
in 1998) pursuant to its tender offer in 1997 and in open market transactions.
Consistent with this strategy, on August 17, 1999, the Company's board of
directors authorized our officers to consider the advisability of the Offer and
on September 30, 1999, the board of directors approved the Offer. The Company
decided to include the Class B Shares in the Offer so that holders of Class B
Shares could determine whether to participate in the Offer without undergoing
the uncertainty and burdens of making an irrevocable conversion into Class A
Shares.
Purpose and Potential Benefits of the Offer. The Offer is being made
because the Company's board of directors determined that the Offer constitutes a
prudent use of the Company's financial resources, given the Company's business
profile, assets and prospects. As of September 30, 1999, the Company had
available approximately $15.7 million in cash and short-term investments. We
have received commitments for a new $200,000,000 credit agreement under which up
to $125,000,000 is available for stock repurchases. The amounts required to fund
the Offer and pay related expenses will be provided from a combination of
available cash and borrowings under these new credit facilities. See Section 9.
We believe the Offer may provide several benefits to the Company.
- The Offer will provide a capital structure that makes greater use of
financial leverage at reasonable interest rates, thus making possible
improved earnings per share for continuing shareholders if future
earnings are at the level anticipated, without imposing excessive risk on
the Company or its shareholders if future earnings are weaker than
expected.
- Our financial condition and outlook and current market conditions,
including recent trading prices of the Shares, make this an attractive
time to repurchase a significant portion of the outstanding Shares.
- We believe that after the Offer is completed the Company's financial
condition, access to capital and outlook for continued favorable cash
generation will allow it to continue to pursue the development of its
core business, including ongoing product development activities,
important retail marketing initiatives, capital expenditures and global
expansion. See Section 10.
Accordingly, the board of directors believes that the Offer is consistent with
our long term corporate goal of increasing shareholder value.
We believe the Offer may also be attractive from the perspective of our
shareholders.
- The Offer gives shareholders the opportunity to sell Shares at prices
greater than market prices prevailing prior to announcement of the Offer.
See Section 8 for information about recent market prices of Class A
Shares.
- The Offer provides shareholders who are considering a sale of all or a
portion of their Shares with the opportunity to determine the price or
prices (not in excess of $21.00 nor less than $18.50 per Share) at which
they wish to sell their Shares and, subject to the terms and conditions
of the Offer, to sell those Shares for cash without the usual transaction
costs associated with market sales and without regard to whether the
trading market is sufficiently liquid to permit the sale.
- Shareholders who determine not to accept the Offer will realize a
proportionate increase in their relative equity interest in the Company
and thus in the Company's future earnings and assets.
Potential Risks and Disadvantages of the Offer. The Offer also presents
some potential risks and disadvantages to the Company and its continuing
shareholders.
- The Company will incur significant additional indebtedness in order to
pay for the tendered Shares. In fact, the Company's pro forma balance
sheet as of July 3, 1999, shows a deficit in shareholders' equity of
$17.6 million if the Offer is fully subscribed and the Purchase Price of
each class is $21.00 per
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<PAGE> 10
Share. See Section 9 and Section 10. Although the board of directors
carefully evaluated this matter in determining that the Offer is both
prudent and lawful (and obtained an opinion from American Appraisal
Associates, Inc. that based on the fair value of its assets on a pro
forma basis as of August 28, 1999, the fair value of the aggregate assets
of the Company, on a consolidated basis, will exceed its liabilities,
including its contingent liabilities, by at least the aggregate par value
of its issued capital stock after the Offer is completed), we cannot
determine whether stock market or other third party perceptions of the
Company will be adversely affected by the additional indebtedness of the
Company.
- Because of the additional indebtedness, the interest rate that the
Company must pay on all of its borrowing, including its seasonal
borrowings to cover working capital needs, initially will increase from
prime or LIBOR plus .625% to prime or LIBOR plus 1.50%, and will remain
at these levels until the indebtedness is significantly reduced or the
ratio of debt to cash flow is otherwise improved.
- The Company's higher leverage will cause its continuing shareholders to
bear a higher risk in the event of future losses or earnings reductions
(see Section 9).
- If and to the extent that Shares tendered in the Offer were issued upon
the exercise of Company options within six months of the Offer, including
conditional exercises of options pursuant to the Option Exercise Form as
described herein, the Company's financial statements will record
compensation expense equal to the excess of the Class A Purchase Price
over the exercise price of the options, and the Company's reported
earnings will be correspondingly lower.
- The Offer will reduce the Company's "public float" (the number of shares
owned by outside shareholders and available for trading in the securities
markets). This and the Company's higher leverage may result in lower
stock prices or reduced liquidity in the trading market for Class A
Shares in the future (see Section 12).
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY SHARES. WE
HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION. SHAREHOLDERS SHOULD
CAREFULLY EVALUATE ALL INFORMATION IN THE OFFER, SHOULD CONSULT THEIR OWN
INVESTMENT AND TAX ADVISORS, AND SHOULD MAKE THEIR OWN DECISIONS ABOUT WHETHER
TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES
AT WHICH TO TENDER.
We have been advised that some members of the Hyde and Wyman families
(including certain of the Company's directors and executive officers) intend to
sell Shares to unrelated persons in independent market transactions. See Section
11.
We may in the future purchase additional Shares on the open market, in
private transactions, through tender offers or otherwise. Any additional
purchases may be on the same terms or on terms which are more or less favorable
to shareholders than the terms of the Offer. However, SEC Rule 13e-4 prohibits
the Company and its affiliates from purchasing any Shares, other than pursuant
to the Offer, until at least ten business days after the Expiration Date. Any
possible future purchases by the Company will depend on many factors, including
the results of the Offer, the market price of the Shares, the Company's business
and financial position and general economic and market conditions.
Shares the Company acquires pursuant to the Offer will be canceled and
returned to the status of authorized but unissued stock, and will be available
for the Company to issue without further shareholder action (except as required
by applicable law or the rules of Nasdaq or any other securities exchange on
which the Shares are listed) for purposes including, without limitation, the
acquisition of other businesses, the raising of additional capital for use in
the Company's business and the satisfaction of obligations under existing or
future employee benefit or compensation programs or stock plan or compensation
programs for directors. The Company has no current plans for issuance of the
Shares repurchased pursuant to the Offer.
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<PAGE> 11
3. PROCEDURES FOR TENDERING SHARES.
Proper Tender of Shares. For Shares, other than option shares, to be
tendered properly pursuant to the Offer:
- the certificates for the Shares (or confirmation of receipt of the Shares
pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof), including any
required signature guarantees, or an Agent's Message, and any other
documents required by the Letter of Transmittal, must be received by the
Depositary at its address set forth on the back cover of this Offer to
Purchase prior to 12:00 midnight, Eastern Time, on the Expiration Date;
or
- the tendering shareholder must comply with the guaranteed delivery
procedure set forth below.
IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, SHAREHOLDERS
DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE
SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING
TENDERED" ON THE LETTER OF TRANSMITTAL THE PRICE AT WHICH THEIR SHARES ARE BEING
TENDERED, EITHER BY SPECIFYING A PARTICULAR PRICE (IN INCREMENTS OF $.25) OR BY
INDICATING THAT THEY ARE TENDERING AT THE PURCHASE PRICE FOR THE APPLICABLE
CLASS AS DETERMINED BY THE COMPANY IN ACCORDANCE WITH THE TERMS OF THE OFFER.
Shareholders who desire to tender Shares at more than one price must complete a
separate Letter of Transmittal for each price at which Shares are tendered,
provided that the same Shares cannot be tendered (unless properly withdrawn
previously in accordance with the terms of the Offer) at more than one price. IN
ORDER TO PROPERLY TENDER SHARES, ONE AND ONLY ONE PRICE BOX MUST BE CHECKED IN
THE APPROPRIATE SECTION ON EACH LETTER OF TRANSMITTAL.
Holders of exercisable options to purchase Class A Shares should not
complete the Letter of Transmittal but should follow the instructions for
tendering Shares referred to below. See "Tenders by Holders of Exercisable
Options." In addition, qualifying shareholders who tender all Odd Lot Shares
must complete the box captioned "Odd Lots" on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery, in order to qualify for the
preferential treatment available to Odd Lots as set forth in Section 1. See
Instruction 8 of the Letter of Transmittal.
To prevent backup federal income tax withholding of 31% of the gross
proceeds, and in the case of certain foreign shareholders, to prevent a 30%
withholding tax, certain completed forms should accompany the Letter of
Transmittal. See Section 14.
Tenders by Holders of Exercisable Options. Holders of exercisable options
for Class A Shares granted under our stock option plans who wish to participate
by conditionally exercising options and tendering the underlying Shares should
not complete the Letter of Transmittal. Instead, they must complete the Option
Election Form and follow the procedures and instructions in the related
documents. These documents are also part of the terms of the Offer.
Holders of exercisable options should read this Offer to Purchase, the
related Letter of Transmittal and the Option Election Form and related
instructions, as they contain the terms of the Offer. Holders of options should
also see "Certain Federal Income Tax Consequences -- Tax Considerations for
Holders of Options" in Section 14 for information about tax considerations and
Section 5 for special payment procedures that apply to option holders if they
participate in the Offer.
Holders of exercisable options who wish to tender option shares in the
Offer should review the information and must follow the instructions to the
Option Election Form. See Section 5 below, "Purchases of Shares and Payment of
Purchase Price -- Special Procedures for Holders of Options." Holders of
exercisable options who also hold Shares directly may participate in the Offer
with respect to the directly owned Shares by following the instructions in this
Offer to Purchase and the Letter of Transmittal.
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<PAGE> 12
Signature Guarantees and Method of Delivery. No signature guarantee is
required on the Letter of Transmittal if:
- The Letter of Transmittal is signed by the registered holder of the
Shares tendered and the holder has not completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal. For this purpose the
"registered holder" includes any participant in The Depository Trust
Company (the "Book-Entry Transfer Facility"); or
- Shares are tendered for the account of a firm or other entity that is a
member in good standing of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office,
branch or agents in the United States (each an "Eligible Institution").
If a certificate for Shares is registered in the name of a person other than the
person executing a Letter of Transmittal or if payment is to be made, or Shares
not purchased or tendered are to be issued, to a person other than the
registered holder, then the certificate must be endorsed or accompanied by an
appropriate stock power, in either case signed exactly as the name of the
registered holder appears on the certificate, and the signatures on the Letter
of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1
of the Letter of Transmittal. Also, see Section 5 for information about
applicable stock transfer taxes.
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
certificates for the Shares (or a timely confirmation of a book-entry transfer
of the Shares into the Depositary's account at the Book-Entry Transfer Facility
as described below), a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile), or an Agent's Message, and any
other documents required by the Letter of Transmittal. THE METHOD OF DELIVERY OF
ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, THE LETTER OF TRANSMITTAL AND
ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING
SHAREHOLDER. IF DELIVERY IS BY MAIL, THEN WE RECOMMEND REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares for purposes of the Offer at the Book-Entry Transfer Facility
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of the Shares by causing the facility to transfer
Shares into the Depositary's account in accordance with the Book-Entry Transfer
Facility's procedures for transfer. Although delivery of Shares may be effected
through a book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility, either (a) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required signature
guarantees, or an Agent's Message, and any other required documents must, in any
case, be transmitted to and received by the Depositary at its address set forth
on the back cover of this Offer to Purchase prior to the Expiration Date or (b)
the guaranteed delivery procedure described below must be followed. DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and the shareholder's Share certificates cannot be delivered to the
Depositary prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed on a timely basis) or if time will not permit all
required documents to reach the Depositary prior to the Expiration Date, the
Shares may nevertheless be tendered, provided that all of the following
conditions are satisfied:
- the tender is made by or through an Eligible Institution;
- the Depositary receives by hand, mail, or facsimile transmission, prior
to the Expiration Date, a properly completed and duly executed Notice of
Guaranteed Delivery in substantially the form the Company has provided
with this Offer to Purchase (specifying the price at which the Shares are
being tendered), including (where required) a signature guarantee by an
Eligible Institution; and
- the certificates for all tendered Shares, in proper form for transfer (or
confirmation of book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility), together with a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile
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<PAGE> 13
thereof) and any required signature guarantees or an Agent's Message, and
any other documents required by the Letter of Transmittal, are received
by the Depositary within three Nasdaq trading days after the date of
receipt by the Depositary of such Notice of Guaranteed Delivery.
If any tendered Shares are not purchased or if less than all Shares
evidenced by a shareholder's certificates are tendered, we will return
certificates for unpurchased Shares as promptly as practicable after the
expiration or termination of the Offer or, in the case of Shares tendered by
book-entry transfer at the Book-Entry Transfer Facility, the Shares will be
credited to the appropriate account maintained by the tendering shareholder at
the Book-Entry Transfer Facility, in each case without expense to the
shareholder.
Backup Federal Income Tax Withholding. Under the United States federal
income tax backup withholding rules, unless an exemption applies under the
applicable law and regulations, 31% of the gross proceeds payable to a
shareholder or other payee pursuant to the offer must be withheld and remitted
to the United States Treasury, unless the shareholder or other payee provides
such person's taxpayer identification number, employer identification number or
social security number, to the Depositary and certifies under penalties of
perjury that such number is correct. Therefore, each tendering shareholder
should complete and sign the Substitute Form W-9 included as part of the Letter
of Transmittal so as to provide the information and certification necessary to
avoid backup withholding, unless the shareholder otherwise establishes to the
satisfaction of the Depositary that the shareholder is not subject to backup
withholding. Certain shareholders, including, among others, corporations and
certain foreign shareholders, in addition to foreign corporations, may not be
subject to these backup withholding and reporting requirements. In order for a
foreign shareholder to qualify as an exempt recipient, that shareholder must
submit an IRS Form W-8 or a Substitute Form W-8, signed under penalties of
perjury, attesting to that shareholder's exempt status. Such statements can be
obtained from the Depositary. See Instructions 14 and 15 of the Letter of
Transmittal.
To prevent backup federal income tax withholding equal to 31% of the gross
payments made to shareholders for Shares purchased pursuant to the Offer, each
shareholder who does not otherwise establish an exemption from withholding must
provide the Depositary with the shareholder's correct taxpayer identification
number and provide certain other information by completing the Substitute Form
W-9 included with the Letter of Transmittal.
For a discussion of certain United States federal income tax consequences
to tendering shareholders, see Section 14.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid for Shares to be accepted and the validity,
form, eligibility (including time of receipt) and acceptance of any tender of
Shares will be determined by the Company, in its sole discretion, and its
determination shall be final and binding on all parties. We reserve the absolute
right to reject any or all tenders of any Shares that we determine are not in
appropriate form or the acceptance for payment of or payments for which may be
unlawful. We also reserve the absolute right to waive any of the conditions of
the Offer or any defect or irregularity in any tender with respect to any
particular Shares or any particular shareholder. No tender of Shares will be
deemed to have been properly made until all defects or irregularities have been
cured by the tendering shareholder or waived by the Company. None of the
Company, the Dealer Manager, the Depositary, the Information Agent or any other
person is obligated to give notice of any defects or irregularities in tenders,
nor will any of them incur any liability for failure to give notice of any
defect or irregularity.
Tendering Shareholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. A tender of Shares pursuant to any of the procedures
described above will constitute the tendering shareholder's acceptance of the
terms and conditions of the Offer, as well as the tendering shareholder's
representation and warranty to the Company that (a) such shareholder has a net
long position in the Shares being tendered within the meaning of SEC Rule 14e-4
and (b) the tender of such Shares complies with Rule 14e-4. It is a violation of
Rule 14e-4 for a person, directly or indirectly, to tender Shares for the
person's own account unless, at the time of tender and at the end of the
proration period or period during which Shares are accepted by law (including
any extensions thereof), the person so tendering (1) has a net long position
equal to or greater than the amount of (a) Shares tendered or (b) other
securities convertible into or exchangeable
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<PAGE> 14
or exercisable for the Shares tendered and will acquire such Shares for tender
by conversion, exchange or exercise and (2) will deliver or cause to be
delivered such Shares in accordance with the terms of the Offer. Rule 14e-4
provides a similar restriction applicable to the tender or guarantee of a tender
on behalf of another person. Our acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
shareholder and the Company upon the terms and conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date. Unless the Company has accepted the Shares, including
option shares, for payment pursuant to the Offer, tenders for Shares may also be
withdrawn at any time after 12:00 midnight, Eastern Time, on December 2, 1999.
For a withdrawal to be effective as to Shares other than option shares, the
Depositary must receive a notice of withdrawal in written, telegraphic or
facsimile transmission form in a timely manner at its address set forth on the
back cover of this Offer to Purchase. Any notice of withdrawal must specify the
name of the tendering shareholder, the name of the registered holder (if
different from that of the person who tendered such Shares), the number and
class(es) of Shares tendered and the number and class(es) of Shares to be
withdrawn. If the certificates for Shares to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the release of the
certificates, the tendering shareholder must also submit the serial numbers
shown on the particular certificates for Shares to be withdrawn. The signature
on the notice of withdrawal must be guaranteed by an Eligible Institution
(except in the case of Shares tendered by an Eligible Institution). If Shares
have been tendered pursuant to the procedure for book-entry tender set forth in
Section 3, the notice of withdrawal also must specify the name and the number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares and otherwise comply with the procedures of such facility.
Holders of exercisable options must comply with the withdrawal procedures set
forth in the instructions for them.
We will determine, in our sole discretion, all questions as to the form and
validity, including time of receipt, of notices of withdrawal. Our determination
will be final and binding on all parties. None of the Company, the Dealer
Manager, the Depositary, the Information Agent or any other person is obligated
to give notice of any defects or irregularities in any notice of withdrawal, and
none of them will incur liability for failure to give notice of any defects or
irregularities. Withdrawals may not be rescinded and any Shares withdrawn will
thereafter be deemed not properly tendered for purposes of the Offer unless the
withdrawn Shares are properly retendered prior to the Expiration Date by again
following one of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then the
Depositary may, subject to applicable law, retain tendered Shares on behalf of
the Company until the tender is properly withdrawn as described in this Section
4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
General. Upon the terms and subject to the conditions of the Offer, as
promptly as practicable following the Expiration Date:
- we will determine the Class A Purchase Price and the Class B Purchase
Price that the Company will pay for the Shares properly tendered and not
withdrawn prior to the Expiration Date, taking into account the number of
Shares of each class tendered and the prices specified by tendering
shareholders, and
- we will accept for payment and pay for (and thereby purchase) Shares
properly tendered at prices at or below the applicable Purchase Price and
not withdrawn prior to the Expiration Date.
For purposes of the Offer, the Company will be deemed to have accepted for
payment (and therefore purchased) Shares that are tendered at or below the
applicable Purchase Price and not withdrawn (subject to the proration and
conditional tender provisions of the Offer) only when, as and if we give oral or
written notice to the Depositary of the Company's acceptance of the Shares for
payment pursuant to the Offer.
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<PAGE> 15
Upon the terms and subject to the conditions of the Offer, promptly
following the Expiration Date, we will accept for payment and pay the Class A
Purchase Price for 4,500,000 Class A Shares (subject to increase or decrease as
provided in Section 15) or such lesser number of Class A Shares as are properly
tendered at prices not in excess of $21.00 nor less than $18.50 per Share and
not withdrawn as permitted in Section 4. Similarly, we will accept for payment
and pay the Class B Purchase Price for 100,000 Class B Shares (subject to
increase or decrease as provided in Section 15) or such lesser number of Class B
Shares as are properly tendered at prices not in excess of $21.00 nor less than
$18.50 per Share and not withdrawn as permitted in Section 4. In the case of
option shares, the Company will pay the Class A Purchase Price less the exercise
price and the applicable withholding amount.
The Company will pay for Shares, other than option shares, purchased
pursuant to the Offer by depositing the aggregate Purchase Price therefor with
the Depositary, which will act as agent for tendering shareholders for the
purpose of receiving payment from the Company and transmitting the payment to
the tendering shareholders.
In the event of proration, we will determine the proration factor and pay
for those tendered Shares, including option shares, accepted for payment as soon
as practicable after the Expiration Date. However, we do not expect to be able
to announce the final results of any proration and commence payment for Shares
purchased until approximately seven to ten business days after the Expiration
Date. Certificates for all Shares tendered and not purchased, including all
Shares tendered at prices in excess of the applicable Purchase Price and Shares
not purchased due to proration or conditional tender, will be returned (or, in
the case of Shares tendered by book-entry transfer, the Shares will be credited
to the account maintained with the Book-Entry Transfer Facility by the
participant who so delivered the Shares) to the tendering shareholder at the
Company's expense as promptly as practicable after the Expiration Date without
expense to the tendering shareholders. Under no circumstances will we pay
interest on the Purchase Price by reason of any delay in making payment. In
addition, if certain events occur, we may not be obligated to purchase Shares
pursuant to the Offer. See Section 7.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, payment
of the Purchase Price is to be made to, or (in the circumstances permitted by
the Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or such other person), payable on account of the transfer to
such person will be deducted from the applicable Purchase Price unless the
shareholder provides satisfactory evidence of the payment of the stock transfer
taxes, or an exemption from those taxes. See Instruction 7 of the Letter of
Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO DOES NOT COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE FORM W-9 INCLUDED WITH THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING OF
31% OF THE GROSS PROCEEDS PAID TO THE SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE
OFFER. SEE SECTION 3 AND SECTION 14. ALSO SEE SECTION 14 REGARDING FEDERAL
INCOME TAX CONSEQUENCES FOR NON-U.S. SHAREHOLDERS.
Special Procedures for Holders of Exercisable Options. Holders of
exercisable options to purchase Class A Shares granted under the Company's stock
option plans may tender option shares in connection with the conditional
exercise of the options as part of the Offer. Tendering option holders will
instruct the Company, as their agent, to tender part or all of the option shares
resulting from the conditional exercise.
This exercise of options will be "conditional" because the option holder is
deemed to exercise the option only if, and to the extent that, the Company
actually purchases the option shares in the Offer. If, after taking into account
proration, we purchase less than all of the option shares which the holder has
tendered in the Offer, the options will be exercised, and the option shares
purchased, only in the order designated by the holder in the Option Election
Form. If any of the tendered option shares are not purchased, the related
options will not be considered to have been exercised and will remain
outstanding.
12
<PAGE> 16
As an accommodation to option holders planning to tender option shares in
the Offer, the Company will permit a "cashless" exercise of the options for
Class A Shares purchased in the Offer. In this event, the option holder will not
be required to pay cash for the exercise price, and the consideration received
by the holder whose option shares are purchased in the Offer will be the
difference between the Class A Purchase Price per Share and the exercise price
per Share relating to the option shares so purchased (less the applicable tax
withholding amount). Option holders who have not exercised their options for
cash and received Shares may not use the Letter of Transmittal to direct the
tender of the option shares. Instead, such holders must follow the procedures
for tender described in the Option Election Form and related instructions
included with this Offer to Purchase.
6. CONDITIONAL TENDER OF SHARES.
Under certain circumstances set forth in Section 1 above, the Company may
prorate the number of Shares of either class purchased pursuant to the Offer. As
discussed in Section 14, the number of Shares to be purchased from a particular
shareholder might affect the tax consequences of the purchase to the shareholder
and the shareholder's decision whether to tender and how many shares to tender.
Accordingly, a shareholder may tender Shares subject to the condition that all
or a specified minimum number, if any, must be purchased. Any shareholder
wishing to make such a conditional tender should so indicate in the box
captioned "Conditional Tender" on the Letter of Transmittal and, if applicable,
on the Notice of Guaranteed Delivery, or, in the case of an option holder
wishing to make a conditional tender of option shares, in Section 4 of the
Option Election Form. It is the tendering shareholder's responsibility to
calculate the minimum number of Shares and to decide on the priority of
purchases of each class, if applicable. In making this determination, we urge
you to consult your own tax advisor. If the effect of accepting tenders on a pro
rata basis is to reduce the number of Shares to be purchased from any
shareholder below the minimum number specified by that shareholder, the tender
will automatically be deemed withdrawn, except as provided in the next
paragraph, and Shares tendered by the shareholder will be returned as soon as
practicable after the Expiration Date.
However, if so many conditional tenders would be deemed withdrawn that the
total number of Shares to be purchased falls below 4,500,000 Class A Shares or
below 100,000 Class B Shares, then, to the extent feasible, the Company will
select enough of the conditional tenders, which would otherwise have been deemed
withdrawn, to purchase the desired number of Shares. In selecting among the
conditional tenders, the Company will select by random lot and will limit its
purchase in each case to the designated minimum number of Shares to be
purchased. CONDITIONAL TENDERS WILL BE SELECTED BY LOT ONLY FROM SHAREHOLDERS
WHO TENDER ALL OF THEIR SHARES.
7. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Company will not be
required to accept for payment, purchase or pay for any Shares tendered and may
terminate or amend the Offer or may postpone the acceptance for payment of, or
the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f),
if at any time on or after October 4, 1999, and prior to the time of payment for
any Shares (whether any Shares have previously been accepted for payment
pursuant to the Offer) any of the following events occur (or are reasonably
determined by the Company to have occurred) and, in the Company's judgment and
regardless of the circumstances giving rise to the event (including any action
or omission to act by the Company), the occurrence of the event makes it
inadvisable to proceed with the Offer or with the acceptance for payment or
payment:
(a) there shall have been threatened or instituted or be pending any
action or proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person, domestic
or foreign, before any court, authority, agency or tribunal that directly
or indirectly (1) challenges the making of the Offer, the acquisition of
some of all of the Shares pursuant to the Offer or otherwise relates in any
manner to the Offer; or (2) in the Company's sole judgment, could
materially and adversely affect the business, condition (financial or
other), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or otherwise materially impair in any way
the
13
<PAGE> 17
contemplated future conduct of the business of the Company or any of its
subsidiaries or materially impair the contemplated benefits of the Offer to
the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any court or any authority, agency or tribunal
that, in the Company's sole judgment, would or might directly or indirectly
(1) make the acceptance for payment of, or payment for, some or all of the
Shares illegal or otherwise restrict or prohibit consummation of the Offer;
(2) delay or restrict the ability of the Company, or render the Company
unable, to accept for payment or pay for some or all of the Shares; (3)
materially impair the contemplated benefits of the Offer to the Company; or
(4) materially and adversely affect the business, condition (financial or
other), income, operations or prospects of the Company and its
subsidiaries, taken as whole, or otherwise materially impair in any way the
contemplated future conduct of the business of the Company or any of its
subsidiaries.
(c) there shall have occurred:
(1) any general suspension of trading in, or limitation on prices
for, securities on any national securities exchange or in the
over-the-counter market;
(2) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States;
(3) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States;
(4) any limitation (whether or not mandatory) by any governmental,
regulatory or administrative agency or authority on, or any event that,
in the Company's sole judgment, might affect the extension of credit by
banks or other lending institutions in the United States;
(5) any significant decrease in the market price of the Shares or
any change in the general political, market, economic or financial
conditions in the United States or abroad that could, in the sole
judgment of the Company, have a material adverse effect on the Company's
business, operations or prospects or the trading in the Shares;
(6) any change in the general political, market, economic or
financial conditions in the United States or abroad that could have a
material adverse effect on the Company's business, operations or
prospects, taken as a whole;
(7) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
or
(8) any decline in either the Dow Jones Industrial Average or the
Standard and Poor's Index of 500 Companies by an amount in excess of 10%
measured from the close of business on October 1, 1999;
(d) a tender or exchange offer with respect to some or all of the
Shares (other than this Offer), or a merger or acquisition proposal for the
Company, shall have been proposed, announced or made by another person or
entity or shall have been publicly disclosed, or the Company shall have
learned that:
(1) any person, entity or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) shall have acquired or proposed to acquire
beneficial ownership of more than 5% of the outstanding Shares of either
class, or any new group shall have been formed that beneficially owns
more than 5% of the outstanding Shares of either class (other than any
such person, entity or group who has filed a Schedule 13D or Schedule
13G with the SEC before October 4, 1999;
(2) any person, entity or group who has filed a Schedule 13D or
Schedule 13G with the SEC before October 4, 1999, shall have acquired or
proposed to acquire beneficial ownership of an additional 2% or more of
the outstanding Shares of the applicable class; or
14
<PAGE> 18
(3) any person, entity or group shall have filed a Notification and
Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 or made a public announcement reflecting an intent to acquire the
Company or any of its subsidiaries or any of their respective assets or
securities;
(e) any change or changes shall have occurred in the business,
financial condition, assets, income, operations, prospects or stock
ownership of the Company or its subsidiaries that, in our sole judgment, is
or may be material to the Company or its subsidiaries; or
(f) despite the commitment from the Company's banks described in
Section 9, the financing described in Section 9 is not available for any
reason.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any condition. These conditions may be
waived by the Company, in whole or in part, at any time and from time to time in
its sole discretion. The Company's failure at any time to exercise any of the
foregoing rights will not be deemed a waiver of the right and each right will be
deemed an ongoing right which may be asserted at any time and from time to time.
Any determination by the Company concerning the events described above will be
final and binding on all parties.
8. PRICE RANGE OF SHARES; DIVIDENDS.
The Class A Shares are listed and traded on the Nasdaq National Market.
Until June 27, 1997, the Class B Shares were listed and traded on the Nasdaq
National Market and are no longer listed or traded on the Nasdaq National Market
or any exchange.
The following table sets forth, for the fiscal quarters indicated, the high
and low closing per share sales prices for the Class A Shares and the Class B
Shares on the Nasdaq National Market as compiled from Nasdaq and the cash
dividends declared per Share in each fiscal quarter. All amounts have been
adjusted for the two-for-one stock split effected in the form of a stock
dividend that was declared by the Company on August 10, 1998.
<TABLE>
<CAPTION>
CLASS A HIGH LOW DIVIDENDS
------- ---- --- ---------
<S> <C> <C> <C> <C> <C>
1997:
First Quarter.................................... $ 8 9/16 $ 6 7/8 $.035
Second Quarter................................... 10 7/8 7 3/4 .035
Third Quarter.................................... 14 1/16 10 9/16 .035
Fourth Quarter................................... 17 13/16 13 3/8 .035
1998:
First Quarter.................................... $20 1/4 $14 1/2 $.035
Second Quarter................................... 23 17 3/4 .035
Third Quarter.................................... 24 9/16 18 1/4 .05
Fourth Quarter................................... 24 1/4 17 7/8 .05
1999:
First Quarter.................................... $20 1/2 $14 15/16 $.05
Second Quarter................................... 22 3/4 17 1/8 .05
Third Quarter (through September 30)............. 21 14 1/4 .05
</TABLE>
15
<PAGE> 19
<TABLE>
<CAPTION>
CLASS B HIGH LOW DIVIDENDS
------- ---- --- ---------
<S> <C> <C> <C> <C> <C>
1997:
First Quarter........................................ $ 9 3/4 $ 9 9/16 $.03
Second Quarter....................................... 9 9/16 9 9/16 .03
Third Quarter........................................ N.A. N.A. .03
Fourth Quarter....................................... N.A. N.A. .03
1998:
First Quarter........................................ N.A. N.A. $.03
Second Quarter....................................... N.A. N.A. .03
Third Quarter........................................ N.A. N.A. .0425
Fourth Quarter....................................... N.A. N.A. .0425
1999:
First Quarter........................................ N.A. N.A. $.0425
Second Quarter....................................... N.A. N.A. .0425
Third Quarter (through September 30)................. N.A. N.A. .0425
</TABLE>
SHAREHOLDERS ARE ENCOURAGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
CLASS A SHARES.
9. SOURCE AND AMOUNT OF FUNDS.
The Company maintains an unsecured credit agreement with a number of banks
which provides for both a $60 million revolving credit facility and a $40
million demand line of credit. These credit facilities may be used by the
Company for cash borrowings, the issuance of letters of credit or the support of
commercial paper issued by the Company. While the $40 million line of credit is
revocable at any time, the $60 million revolving credit facility expires in
June, 2001.
On September 22, 1999, the Company received commitments for a new credit
agreement with eight participating banks that will replace our existing credit
agreement. These commitments are subject to certain conditions, including, among
others, negotiation and execution of the new credit agreement containing the
terms described below. This new credit agreement will provide for a five year,
$125 million term loan which can be used to finance repurchases of Shares. It
will also provide a three year, $75 million revolving credit facility that is
available for general corporate purposes. The Offer is contingent upon entering
into this new Credit Agreement.
Assuming the Company purchases 4,500,000 Class A Shares and 100,000 Class B
Shares pursuant to the Offer at a purchase price of $21.00 per Share, we expect
the maximum aggregate cost to purchase Shares and to pay related fees and
expenses to be approximately $97.4 million. We expect to fund the purchase of
Shares pursuant to the Offer and the payment of related fees and expenses from a
combination of available cash and borrowings under the new credit agreement for
which the Company has obtained commitments as described above. At September 30,
1999, the Company had available cash and marketable securities of approximately
$15.7 million. We therefore expect to finance up to approximately $81.7 million
of the maximum aggregate purchase price of the Offer from borrowing under the
new credit agreement.
The new term loan will require annual principal payments of at least $15
million per year. The terms of the new revolving credit facility will require
that outstanding loans under the revolving credit facility be reduced to $0 for
at least 60 consecutive days each year.
Both the term loan facility and the revolving credit facility will provide
for the payment of interest based, at the Company's election, on either a base
rate (prime rate) or LIBOR plus between 0.75% and 1.5% per year, depending upon
the Company's ratio of debt to cash flow. The LIBOR interest rate will be fixed
for interest periods of one month, two months or three months, at the Company's
option. The Company will also pay a commitment fee based on the average unused
portion of the revolving credit facility of between 0.200% and 0.275% per year,
depending upon the Company's ratio of debt to cash flow. Thus, as the Company's
leverage declines, the interest rate and commitment fee payable to the banks
under the new credit agreement also decline.
16
<PAGE> 20
The Company is currently negotiating the details of the new credit
agreement. While not yet finally determined, the Company anticipates that the
agreement will contain customary events of default and agreements, including
limitations on additional indebtedness, dividends and share repurchases, mergers
and capital expenditures.
As of September 30, 1999, there were no outstanding extensions of credit
under the Company's current credit agreement, except for certain letters of
credit issued for the account of the Company. We believe that loans under the
new credit agreement and currently available cash and short term investments,
along with cash generated from operations, will be sufficient to finance the
Offer and the Company's seasonal working capital needs, as well as its capital
expenditures and business development needs.
Although we currently do not have specific plans, we may, in the future,
depending on business and market conditions, refinance or replace all or a
portion of the cash used to purchase Shares in the Offer with proceeds from the
sale of debt or equity securities or such other financing as we deem
appropriate.
10. CERTAIN INFORMATION CONCERNING THE COMPANY.
GENERAL
OshKosh B'Gosh was founded in 1895 and was incorporated in the state of
Delaware in 1929. The Company designs, manufactures, sources and markets apparel
for the children's wear and youth wear markets. The Company also offers a
children's footwear collection. While its heritage is in the men's work wear
market, the Company is currently best known for its line of high quality
children's wear. It is the Company's vision to become the dominant global
marketer of branded products for children ages newborn through ten through
leverage of the existing brand franchise in OshKosh B'Gosh and related
trademarks and utilization of the Company's core competencies to supply the
market with all appropriate products for children where quality, durability and
fashion innovation are important. The Company is also pursuing niche
opportunities in adult apparel, where its century old heritage can provide
meaningful differential advantage to address the needs of the marketplace.
The success of the children's wear business can be attributed to the
Company's core themes: quality, durability, style, trust and Americana. These
themes have propelled the Company to the position of a market leader in the
branded children's wear industry. The Company strategically extends the product
line and also leverages the economic value of the OshKosh B'Gosh name via both
domestic and international licensing agreements.
In order to meet the diverse needs of its broad customer base, the Company
uses a wide variety of distribution channels to market its products. Wholesale
distribution is made primarily through department and specialty stores, although
sales are made through direct mail catalog companies, foreign retailers and
other outlets. Product sales to department and specialty stores are made
primarily by an employee sales force with the balance of sales made by
manufacturer's representatives or through in-house accounts. The Company works
closely with its department store customers to enhance brand presentation and
availability of products through the creation of "showcase" environments that
combine fixtures, in-store merchandising support and focused advertising to
communicate a powerful and consistent brand presence to the consumer.
In addition to the Company's wholesale business, the Company also operates
a chain of 128 domestic OshKosh B'Gosh brand stores, including 122 outlet stores
which sell first quality and irregular OshKosh B'Gosh merchandise throughout the
United States, five showcase/mall specialty stores and one strip mall specialty
store. The Company is currently exploring additional marketing formats through
the anticipated development of approximately ten strip mall specialty stores
during the next 15 months. In addition, the Company currently plans to further
broaden distribution through the OshKosh B'Gosh website during the fourth
quarter of 1999.
In 1997, the Company expanded its retail product line in its OshKosh B'Gosh
branded stores by offering youth wear sizes for girls and boys under the trade
name of Genuine Girls (girls sizes 7-16) and Genuine Blues (boys sizes 8-16).
The Company has recently expanded distribution of the Genuine Girls and Genuine
Blues product offerings to its wholesale customers.
17
<PAGE> 21
The Company designs and arranges for the manufacture of substantially all
of its apparel and footwear product offerings. Company designers develop
fabrications, trim accessories and detailed manufacturing specifications. The
product is then manufactured according to detailed Company specifications and
production schedules in Company-owned manufacturing facilities or at third-party
contractor locations worldwide. Product sourcing is based on manufacturing
capacity, quality, cost and lead times, in addition to capabilities of specific
manufacturing facilities.
The Company leverages its name and brand equity into a wide variety of
children's products including sleepwear, socks, eyewear, toys, bedding, car
seats, strollers and other juvenile products. The Company regularly reviews the
seasonal offerings of all related products both locally and internationally for
consistency, brand image and quality. The Company earns royalties for use of its
name on children's and men's wear products throughout the world, and from
related accessories distributed in the United States.
CERTAIN FINANCIAL INFORMATION
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
The following summary historical financial information as of and for the
years ended January 2, 1999, and December 31, 1997, was derived from the audited
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the year ended January 2, 1999 (the "Company's 1998 Annual
Report"). The following summary historical financial information as of and for
the six months ended July 3, 1999, and July 4, 1998, was derived from the
unaudited consolidated condensed financial statements included in the Company's
Quarterly Report on Form 10-Q for the period ended July 3, 1999 (the "Company's
1999 Second Quarter Report"). The financial statements are hereby incorporated
herein by reference, along with the other information and data contained in the
Company's 1998 Annual Report and the Company's 1999 Second Quarter Report. The
Company intends to report third quarter results on or about October 18, 1999.
More comprehensive financial information is included in such reports, and the
financial information that follows is qualified in its entirety by reference to
such reports, as such reports may be amended from time to time, and all the
financial statements and related notes contained therein, copies of which may be
obtained as set forth below under the caption "--Additional Information."
The summary historical financial information as of and for the six months
ended July 3, 1999, and July 4, 1998, is unaudited and was derived from the
accounting records of the Company. In the opinion of management of the Company,
the summary historical financial information as of and for the six months ended
July 3, 1999, and July 4, 1998, include all adjusting entries (consisting only
of normal recurring adjustments) necessary to present fairly the information set
forth therein. Results for an interim period may not be indicative of the
results of operations for any future period.
Summary Unaudited Pro Forma Financial Information. The following summary
unaudited pro forma financial information sets forth the summary historical
financial information of the Company as adjusted to give effect to the purchase
of 4,600,000 Shares in the Offer at a Purchase Price of $21.00 per Share and at
a Purchase Price of $18.50 per Share, the minimum and maximum possible Purchase
Prices in the Offer for both Class A Shares and Class B Shares. Expenses related
to the Offer are estimated to be approximately $800,000. The summary, unaudited
pro forma consolidated income statement information gives effect to the purchase
of Shares pursuant to the Offer as if it had occurred as of January 1, 1998. The
summary, unaudited pro forma consolidated balance sheet information gives effect
to the purchase of Shares pursuant to the Offer as if it had occurred as of July
3, 1999. The summary unaudited pro forma financial information does not purport
to be indicative of the results that would have been obtained had the purchase
of Shares in the Offer been completed at the dates indicated or results that may
be obtained in the future. The summary unaudited
18
<PAGE> 22
pro forma financial information should be read in conjunction with the summary
historical financial information and accompanying notes.
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
--------------------------------------------------- -------------------------------------------
PRO FORMA ACTUAL PRO FORMA ACTUAL
----------------------- ------------------------- --------------------- -------------------
ASSUMED ASSUMED ASSUMED ASSUMED
$18.50 PER $21 PER $18.50 PER $21 PER
SHARE SHARE SHARE SHARE
PURCHASE PURCHASE PURCHASE PURCHASE
PRICE, PRICE, PRICE, PRICE,
JANUARY 2, JANUARY 2, JANUARY 2, DECEMBER 31, JULY 3, JULY 3, JULY 3, JULY 4,
1999 1999 1999 1997 1999 1999 1999 1998
---------- ---------- ---------- ------------ ---------- -------- ------- -------
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE INFORMATION)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT
INFORMATION:
Net sales............ $423,232 $423,232 $423,232 $395,196 $184,449 $184,449 $184,449 $184,823
Income before income
taxes.............. 43,061 42,256 49,325 38,187 12,358 11,984 15,245 13,850
Net income........... 25,576 25,093 29,335 22,558 7,534 7,306 9,295 8,172
Weighted average
number of common
shares outstanding
-- basic........... 14,472 14,472 19,072 22,033 12,498 12,498 17,098 19,620
-- diluted......... 14,761 14,761 19,361 22,184 12,709 12,709 17,309 19,886
Earnings per share
-- basic........... $ 1.77 $ 1.73 $ 1.54 $ 1.02 $ .60 $ .58 $ .54 $ .42
-- diluted......... 1.73 1.70 1.52 1.02 .59 .57 .54 .41
Ratio of earnings to
fixed charges...... 4.61x 4.32x 8.99x 7.85x 3.16x 2.96x 5.86x 5.81x
BALANCE SHEET
INFORMATION (AT END OF
PERIOD):
Working capital...... $ 37,547 $ 37,547 $ 54,947
Total assets......... 139,390 139,390 140,790
Total debt........... 84,500 96,000 --
Other long-term
liabilities........ 12,856 12,856 12,856
Shareholders' equity
(deficit).......... (6,106) (17,606) 79,794
Book value per common
share.............. $ (.52) $ (1.50) $ 4.89
</TABLE>
NOTES TO SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
The following assumptions were made in presenting the summary historical
and pro forma financial information.
(a) The pro forma income statement information assumes 4,500,000 Class A Shares
and 100,000 Class B Shares were purchased January 1, 1998, at $18.50 per
Share and $21.00 per Share, as applicable, with the purchase being initially
financed with borrowings under new credit facilities of $64,900 and $76,400,
respectively, and available cash at January 1, 1998, of $22,000 (Note: The
pro forma borrowings would have been increased during 1998 and the first six
months of 1999 to reflect seasonal working capital needs).
19
<PAGE> 23
(b) The pro forma balance sheet information assumes 4,500,000 Class A Shares and
100,000 Class B Shares were purchased July 3, 1999, at $18.50 per Share and
$21.00 per Share, financed with borrowings under the new credit facilities
of $84,500 and $96,000, respectively, and available cash at July 3, 1999, of
$2,400.
(c) For purposes of the Ratio of Earnings to Fixed Charges computation, earnings
are defined as income before income taxes and fixed charges. Fixed charges
are the sum of interest expense and the interest portion of operating lease
expense.
(d) Book value per common share is calculated as total shareholders' equity
(deficit) divided by the number of common shares outstanding at the end of
the period.
(e) The above unaudited pro forma financial information assumes that none of the
Shares purchased pursuant to the Offer are option shares.
ADDITIONAL INFORMATION
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is obligated to file reports and
other information with the SEC relating to its business, financial condition and
other matters. Information, as of particular dates, concerning the Company's
directors and officers, their remuneration, options granted to them, the
principal holders of the Company's securities and any material interest of these
persons in transactions with the Company is required to be disclosed in proxy
statements distributed to the Company's shareholders and filed with the SEC.
These reports, proxy statements and other information can be inspected and
copied at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Room 2120, Washington, D.C. 20549; at its regional offices located
at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 7
World Trade Center, New York, New York 10048. Copies of these materials may also
be obtained by mail, upon payment of the SEC's customary charges, from the
Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC also maintains a Web site on the World Wide Web
at http://www.sec.gov that contains reports, proxy statements and other
information regarding registrants that file electronically with the SEC.
11. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING
SHARES.
As of September 30, 1999, the Company had issued and outstanding 14,022,481
Class A Shares and 2,248,218 Class B Shares. The 4,500,000 Class A Shares and
100,000 Class B Shares that the Company is offering to purchase pursuant to the
Offer represent approximately 32.1% of the outstanding Class A Shares and 4.4%
of the outstanding Class B Shares. As of September 30, 1999, the Company's
directors and executive officers as a group (17 persons) beneficially owned an
aggregate of 1,008,711 Class A Shares and 1,104,338 Class B Shares, representing
approximately 13.0% of the outstanding Shares. At the same date members of the
Wyman and Hyde families that are parties to the cross purchase agreement
described in the last paragraph of this Section 11 (including certain of the
Company's directors and executive officers) beneficially owned an aggregate of
approximately 1,945,452 Class A Shares and approximately 2,071,310 Class B
Shares, representing approximately 24.7% of the outstanding Shares.
The directors and executive officers of the Company are entitled to
participate in the Offer on the same basis as all other shareholders. Although
none of the officers or directors have indicated that they presently intend to
tender any Shares pursuant to the Offer, some of them may choose to do so.
The members of the Wyman and Hyde families, including some of the Company's
directors and executive officers, have indicated that they do not intend to
tender any Shares pursuant to the Offer because, as a result of the capital
structure of the Company and the substantial percentage of the Class B Shares
owned by members of the Wyman and Hyde families, their sales would probably be
taxed as dividends rather than receiving capital gains treatment, which is
generally available to public shareholders in the Offer. See Section 14.
However, the following persons have indicated that they may sell up to the
number of Class A Shares specified below, including Shares obtained through the
exercise of stock options, to unrelated persons in market transactions, either
during the Offer or otherwise. Sales by the three officers named below would
occur
20
<PAGE> 24
only after the Company announces its third quarter results. The number of Shares
these persons actually sell, if any, will depend upon the market prices and
liquidity of trading in the Class A Shares from time to time. The prices they
receive could be either higher or lower than the Class A Purchase Price for
Shares tendered pursuant to the Offer.
<TABLE>
<CAPTION>
NAME CLASS A SHARES
---- --------------
<S> <C>
Douglas W. Hyde............................................. up to 42,000 Shares
Michael D. Wachtel.......................................... up to 39,000 Shares
William F. Wyman............................................ up to 110,000 Shares
Other members of the Wyman and Hyde families................ up to 220,000 Shares
</TABLE>
If the Company purchases an aggregate of 4,600,000 Shares pursuant to the
Offer, the Company's executive officers and directors do not tender any Shares
and members of the Wyman and Hyde families sell or tender Shares as anticipated,
then immediately after the purchase of Shares pursuant to the Offer, the
Company's executive officers and directors as a group will beneficially own
approximately 8.6% of the outstanding Class A Shares and approximately 51.4% of
the outstanding Class B Shares and members of the Wyman and Hyde families
collectively will beneficially own approximately 16.1% of the outstanding Class
A Shares and approximately 96.4% of the outstanding Class B Shares.
Based upon the Company's records and upon information provided to the
Company by its directors and executive officers, neither the Company nor, to the
best of the Company's knowledge, any of the directors or executive officers, has
effected any transactions in the Shares during the 40 business days prior to the
date hereof, except that the following persons or members of their immediate
families or trusts for their benefit have made or received gifts of Shares to or
from family members as a part of their annual financial planning activities.
<TABLE>
<CAPTION>
NAME GIFTS RECEIVED GIFTS MADE
---- -------------- ----------
<S> <C> <C>
Douglas W. Hyde................................... 2,400 Class A Shares 2,600 Class A Shares
1,200 Class B Shares
Michael D. Wachtel................................ 2,400 Class A Shares 2,800 Class A Shares
1,200 Class B Shares
William F. Wyman.................................. 4,000 Class B Shares
</TABLE>
Except as set forth in this Offer to Purchase, neither the Company nor any
person controlling the Company nor, to the Company's knowledge, any of its
directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, consents or
authorizations).
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Class A Shares and Class B Shares by each director
owning more than 1% of either Class A Shares or Class B Shares, each person
known to own more than 5% of either class of the Company's Shares, and all
directors and executive officers as a group. The table is based on information
available to the Company as of September 30, 1999, and is believed to be current
except as noted in the accompanying footnotes. Although shares of Class B Shares
are convertible into Class A Shares on a one-for-one basis, the Class A Shares
disclosures do not include shares that would be issuable upon such conversion.
Except as indicated in the footnotes such persons have sole voting and
investment power of the shares beneficially owned and disclaim beneficial
ownership of shares held directly by their spouses.
21
<PAGE> 25
<TABLE>
<CAPTION>
SHARES OF CLASS A PERCENTAGE SHARES OF CLASS B PERCENTAGE
NAME AND ADDRESS COMMON STOCK OF SHARES COMMON STOCK OF SHARES
OF BENEFICIAL OWNER BENEFICIALLY OWNED OUTSTANDING BENEFICIALLY OWNED OUTSTANDING
------------------- ------------------ ----------- ------------------ -----------
<S> <C> <C> <C> <C>
Bank One Corporation and
subsidiaries, including amounts
owned as Trustee of the Earl W.
Wyman Trusts dated February 17,
1960 as amended ("Earl W. Wyman
Trusts")(1)........................ 1,316,455 9.4% *
100 East Broad Street
Columbus, OH 43271-0251
William F. Wyman(1)(2)(3).......... 114,920 0.8% 483,364 21.5%
1373 Waugoo Avenue
Oshkosh, WI 54901
Thomas R. Hyde(1)(2)(4)............ 166,332 1.2% 219,884 9.8%
109 Chapin Parkway
Buffalo, NY 14209
Thomas R. Wyman(1)(2)(5)........... 589,530 4.2% 289,188 12.7%
2896 Fond du Lac Road
Oshkosh, WI 54901
Douglas W. Hyde(1)(2)(6)........... 293,866 2.1% 310,724 13.8%
3700 Edgewater Lane
Oshkosh, WI 54901
Michael D. Wachtel(1)(2)(7)........ 332,659 2.4% 308,512 13.7%
1030 Washington Avenue
Oshkosh, WI 54901
Joyce W. Hyde(1)(2)(8)............. 102,564 0.7% 125,908 5.6%
1234 Washington Avenue
Oshkosh, WI 54901
Steven R. Duback(9)................ 18,370 0.1% 0 --
3212 North Summit Avenue
Milwaukee, WI 53211
Orren J. Bradley(10)............... 17,626 0.1% 238 --
925 East Wells Street, Apt. 216
Milwaukee, WI 53202
Jerry M. Hiegel(11)................ 36,000 0.2% 0 --
One South Pinckney Street
Suite 333
Madison, WI 53703
David L. Omachinski(12)............ 73,400 0.5% 0 --
1605 Maricopa Drive
Oshkosh, WI 54904
Stig A. Kry(13).................... 14,000 0.1% 0 --
333 East 68th Street
Apt. 2F
New York, NY 10021
Shirley A. Dawe(13)................ 12,000 0.1% 0 --
119 Crescent Road
Toronto, Ontario, Canada M4W 1T8
All Directors and Executive
Officers as a group.............. 1,008,711 7.2% 1,104,338 49.1%
(17 persons)(14)
</TABLE>
- -------------------------
* Except for 220,720 shares of Class B Common Stock owned by Bank One as
Trustee of the Earl W. Wyman Trusts described in Note (1) below, the
Company does not have knowledge of the ownership of Class B Common Stock by
this entity. Bank One Corporation's aggregate ownership of Class A Common
Stock shown in the table is based on its Schedule 13G dated February 1,
1999, reporting its ownership as of December 31, 1998.
22
<PAGE> 26
(1) The Earl W. Wyman Trust for the benefit of the Wyman family beneficially
owns 400,000 shares of Class A Common Stock and 110,360 shares of Class B
Common Stock, or about 2.9% and 4.9%, respectively, of such stock
outstanding. Its beneficiaries are Thomas R. Wyman and his children
(William F. Wyman and Ann E. Wolf). The Earl W. Wyman Trust for the benefit
of the Hyde family beneficially owns 120,000 shares of Class A Common Stock
and 110,360 shares of Class B Common Stock, or about 0.9% and 4.9%
respectively, of such stock outstanding. Its beneficiaries are Joyce W.
Hyde and her children (Douglas W. Hyde, Thomas R. Hyde, and Margaret H.
Wachtel).
(2) Thomas R. Wyman and Shirley F. Wyman are the parents of William F. Wyman
and Ann E. Wolf. Thomas R. Wyman is also the brother of Joyce W. Hyde.
Joyce W. Hyde and Charles F. Hyde are the parents of Douglas W. Hyde,
Thomas R. Hyde and Margaret H. Wachtel (who is the wife of Michael D.
Wachtel).
(3) William F. Wyman owns directly 90,760 shares of Class A Common Stock and
436,267 shares of Class B Common Stock, or approximately 0.6% and 19.4%,
respectively, of such stock outstanding. He also owns, as sole trustee of
three trusts created for the benefit of his children, 1,760 shares of Class
A Common Stock and 47,097 shares of Class B Common Stock. The amounts shown
in the table also include 22,400 shares of Class A Common Stock issuable
pursuant to the vested portion of employee stock options.
(4) Thomas R. Hyde owns directly 89,860 shares of Class A Common Stock and
189,032 shares of Class B Common Stock, or approximately 0.6% and 8.4%,
respectively, of such stock outstanding. He owns as sole trustee of two
trusts created for the benefit of his children 22,660 shares of Class A
Common Stock and 6,560 shares of Class B Common Stock. He has beneficial
ownership of 38,272 shares of Class A Common Stock and 16,292 shares of
Class B Common Stock held by him as custodian for his children, and he
shares beneficial ownership of 5,270 shares of Class A Common Stock held by
his spouse and of 8,000 shares of Class B Common Stock held by his spouse
as custodian for his children. In addition, he shares beneficial ownership
with his spouse of 5,600 shares of Class A Common Stock owned by a limited
partnership in which he and his spouse are the sole general partners, and
he shares beneficial ownership as co-trustee with his parents, brother and
sister of 4,670 shares of Class A Common Stock held by the Hyde Family
Charitable Fund.
(5) Thomas R. Wyman owns the shares listed as marital property with his wife,
Shirley F. Wyman.
(6) Douglas W. Hyde owns directly 60,050 shares of Class A Common Stock and
280,544 shares of Class B Common Stock, or approximately 0.4% and 12.5%,
respectively, of the total number of such shares outstanding. He also owns
as sole trustee of two trusts created for the benefit of his children
33,460 shares of Class A Common Stock and 6,560 shares of Class B Common
Stock. In addition, he shares beneficial ownership of 77,836 shares of
Class A Common Stock and 18,730 shares of Class B Common Stock owned
directly by his spouse, held by his spouse as trustee for the benefit of
his children, held by him as custodian for his children, and held by the
Hyde Family Charitable Fund, of which he and his parents, his brother and
his sister are trustees. The amounts shown in the table include 89,250
shares of Class A Common Stock issuable pursuant to the vested portion of
employee stock options. The amounts shown in the table also include 33,270
shares of Class A Common Stock and 4,890 shares of Class B Common Stock
owned by a trust of which he is the income beneficiary and his minor
daughter is the remainder beneficiary.
(7) Michael D. Wachtel owns directly 27,420 shares of Class A Common Stock and
3,420 shares of Class B Common Stock, or approximately 0.2% and 0.2%,
respectively, of the outstanding shares of each class. He owns an
additional 2,800 shares of Class A Common Stock and 20,236 shares of Class
B Common Stock as sole trustee of two trusts created for the benefit of his
children. In addition, he shares beneficial ownership of 164,897 shares of
Class A Common Stock and 220,130 shares of Class B Common Stock owned
directly by his spouse and held by his wife as custodian for their children
and 33,460 shares of Class A Common Stock and 6,560 shares of Class B
Common Stock owned by his spouse as sole trustee of two trusts created for
the benefit of their children and 4,670 shares of Class A Common Stock held
by the Hyde Family Charitable Fund, of which she and her parents and
brothers are trustees. The amounts shown in the table include 74,050 shares
of Class A Common Stock issuable pursuant to the vested
23
<PAGE> 27
portion of employee stock options. The amounts shown in the table also
include 25,362 shares of Class A Common Stock and 58,166 shares of Class B
Common Stock owned by two trusts of which his spouse is the income
beneficiary and his children are remainder beneficiaries, respectively.
(8) Joyce W. Hyde and her husband own a total of 121,494 shares of Class A
Common Stock and 238,918 shares of Class B Common Stock, or about 0.9% and
10.6%, respectively, of the outstanding shares, all as marital property,
but she has sole or shared voting and dispositive power with respect to the
amounts shown in the table (i.e., shared voting and dispositive power with
respect to 24,806 shares of Class A Common Stock, and sole voting and
dispositive power as to the remainder). The amounts shown in the table do
not include the shares owned directly or indirectly by their three adult
children, as to which she disclaims beneficial ownership.
(9) Steven R. Duback owns 2,370 shares of Class A Common Stock directly. The
amount shown in the table also includes 16,000 shares of Class A Common
Stock issuable pursuant to vested stock options.
(10) Orren J. Bradley owns 1,626 shares of Class A Common Stock directly. The
amount shown in the table also includes 16,000 shares of Class A Common
Stock issuable pursuant to vested stock options.
(11) The shares listed include 20,000 shares of Class A Common Stock owned by a
trust of which Mr. Hiegel is the primary beneficiary. Mr. Hiegel has the
right to amend or revoke the trust at any time. The amount shown in the
table also includes 16,000 shares of Class A Common Stock issuable pursuant
to vested stock options.
(12) David L. Omachinski owns 30,000 of the shares of Class A Common Stock
listed in the table as marital property with his spouse, 5,000 of which are
held by a self-directed IRA. The amount shown in the table also includes
43,400 shares of Class A Common Stock issuable pursuant to the vested
portion of employee stock options.
(13) The shares consist of Class A Common Stock issuable pursuant to vested
stock options.
(14) The amounts shown in the table include 395,950 shares of Class A Common
Stock issuable to directors and executive officers pursuant to the vested
portions of stock options.
The descendants of Earl W. Wyman, their spouses and trusts of which they
are beneficiaries (the "Wyman and Hyde families," including, among others,
Thomas R. Hyde, Joyce W. Hyde, Douglas W. Hyde, Michael D. Wachtel, Margaret H.
Wachtel, the Earl W. Wyman Trusts, Thomas R. Wyman and William F. Wyman) own a
total of 1,945,452 Class A Shares (approximately 13.9% of the outstanding Class
A Shares) and 2,071,310 Class B Shares (approximately 92.1% of the outstanding
Class B Shares). Each member of the Wyman and Hyde families is subject to a
cross purchase agreement pursuant to which his or her Class B Shares generally
may not be transferred except to a spouse or descendant (or a trust for their
benefit) unless the shares first have been offered to the other members of the
Wyman and Hyde families. However, the cross purchase agreement does not limit
transactions with respect to the Class A Shares of any member of the Wyman and
Hyde families. Assuming that the Company purchases a total of 4,500,000 Class A
Shares and 100,000 Class B Shares pursuant to the Offer and that members of the
Wyman and Hyde families sell Class A Shares as indicated above, after the Offer
is completed members of the Wyman and Hyde families would beneficially own
approximately 16.1% of the outstanding Class A Shares and approximately 96.4% of
the outstanding Class B Shares.
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Class A Shares that might otherwise be traded publicly and may reduce
the number of shareholders. That may well reduce the already low volume of
trading and make it more difficult to buy or sell significant amounts of stock
without affecting the market price, which could adversely affect continuing
shareholders. Nonetheless, we anticipate that there will be a sufficient number
of Class A Shares outstanding and publicly traded following consummation of the
Offer to ensure a continued trading market for the shares. Based upon published
guidelines of the Nasdaq National Market, we do not believe that the Company's
purchase of Shares pursuant to the Offer will cause the Company's remaining
Class A Shares to be delisted from the Nasdaq National Market.
24
<PAGE> 28
The Class A Shares are currently 'margin securities' under the rules of the
Federal Reserve Board. This has the effect, among other things, of allowing
brokers to extend credit to their customers using such Shares as collateral. We
believe that, following the purchase of Shares pursuant to the Offer, the Shares
will continue to be "margin securities" for purposes of the Federal Reserve
Board's margin regulations.
The Class B Shares were deregistered under the Exchange Act and delisted by
the Nasdaq National Market in 1997 and therefore are no longer "margin
securities."
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
We are not aware of any license or regulatory permit that appears to be
material to the Company's business that might be adversely affected by the
Company's acquisition of Shares as contemplated herein or 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 the Company as contemplated herein. Should
any approval or other action be required, we presently intend to seek the
required approval or to take the required action. We cannot predict whether any
such matter would delay payments pursuant to the Offer. We cannot guarantee that
any required approval or other action would be obtained or would be obtained
without substantial conditions or that the failure to obtain any such approval
or other action might not result in adverse consequences to the Company's
business. The Company's obligations under the Offer to accept for payment and
pay for Shares is subject to certain conditions. See Section 7.
14. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a general summary of the material U.S. federal income tax
consequences of the exchange of Shares for cash pursuant to the Offer. This
discussion is based on the Internal Revenue Code of 1986, as amended (the
"Code"), its legislative history, Treasury Regulations thereunder and
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change (possibly on a retroactive basis). This summary
does not discuss all the tax consequences that may be relevant to a particular
shareholder in light of the shareholder's particular circumstances and it is not
intended to be applicable in all respects to all categories of shareholders,
some of whom -- such as insurance companies, tax-exempt persons, financial
institutions, regulated investment companies, dealers in securities or
currencies, persons that hold Shares as a position in a "straddle" or as part of
a "hedge," "conversion transaction" or other integrated investment, persons who
received Shares as compensation or persons whose functional currency is other
than United States dollars -- may be subject to different rules not discussed
below. This summary does not address any state, local or foreign tax
considerations that may be relevant to a shareholder's decision to tender Shares
pursuant to the Offer. This summary discusses only Shares held as capital assets
within the meaning of Section 1221 of the Code. EACH SHAREHOLDER IS URGED TO
CONSULT HIS OR HER OWN TAX ADVISER WITH RESPECT TO THE U.S. FEDERAL, STATE AND
LOCAL CONSEQUENCES OF PARTICIPATING IN THE OFFER, AS WELL AS ANY TAX
CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION.
Dividend v. Sale Treatment. If an exchange of Shares for cash pursuant to
the Offer is treated as a sale because a shareholder meets any of the tests
discussed below, the shareholder will recognize gain or loss on the exchange in
an amount equal to the difference between the amount of cash received by the
shareholder and such shareholder's tax basis in the Shares exchanged. Such gain
or loss will be a capital gain or loss and will be long-term capital gain or
loss if the Shares were held more than one year. Calculation of gain or loss
must be made separately for each block of Shares owned by a shareholder. Under
the tax laws, a shareholder may be able to designate which blocks and the order
of such blocks of Shares to be tendered pursuant to the Offer.
If a shareholder's exchange of Shares for cash pursuant to the Offer
satisfies none of the tests discussed below, the receipt of cash by the
shareholder will be treated as a distribution from the Company and will be taxed
to the shareholder as ordinary dividend income provided the Company has
sufficient current and accumulated earnings and profits (as the Company believes
it does). If the exchange is treated as a dividend, the tax basis of a
shareholder's Shares which are exchanged for cash pursuant to the Offer is added
to the tax basis of the remaining Shares of common stock of the Company which
the shareholder actually or constructively owns and cannot be used to offset
such shareholder's dividend income from the transaction.
25
<PAGE> 29
Consequences of Sale Treatment for the Purchase of Shares for Cash Pursuant
to the Offer. An exchange of Shares for cash will be treated as a sale of Shares
by the exchanging shareholder provided that at least one of the following tests
under Section 302 of the Code is met:
(a) as a result of the exchange the shareholder's equity interest in
the Company is completely terminated (a "complete termination");
(b) the receipt of cash in exchange for the shareholder's Shares is
"not essentially equivalent to a dividend"; or
(c) as a result of the exchange there is a "substantially
disproportionate" reduction in the shareholder's equity interest in the
Company.
If a shareholder sells Shares to persons other than the Company at or about
the time the shareholder also sells Shares to the Company pursuant to the Offer,
and the various sales effected by the shareholder are part of an overall plan to
reduce or terminate the shareholder's proportionate interest in the Company,
then the sales to persons other than the Company may, for federal income tax
purposes, be integrated with the shareholder's sale of Shares pursuant to the
Offer and, if integrated, should be taken into account in determining whether
the shareholder satisfies any of the three tests referred to above.
In applying the foregoing tests, the constructive ownership rules of
Section 318 of the Code apply. Thus a shareholder generally takes into account
Shares actually owned by the shareholder as well as Shares actually (and in some
cases constructively) owned by others, but which the shareholder is treated as
owning by reason of the application of the constructive ownership rules.
Pursuant to the constructive ownership rules, a shareholder will be considered
to own those Shares owned, directly or indirectly, by certain members of the
shareholder's family and certain related entities (such as corporations,
partnerships, trusts and estates) in which the shareholder has an interest, as
well as Shares which the shareholder has an option to purchase. Under certain
circumstances, however, a shareholder may avoid the constructive ownership of
Shares owned by family members solely for the purpose of determining whether the
"complete termination" of interest test referred to above has been satisfied if
(a) the shareholder does not actually own any Shares after the purchase by the
Company, and (b) in accordance with Section 302(c)(2) of the Code, the
shareholder files an effective waiver with the Internal Revenue Service ("IRS").
If a shareholder desires to file such a waiver, the shareholder should consult
his or her own tax advisor.
"COMPLETE TERMINATION": A sale of shares pursuant to the Offer will be
deemed to result in a "complete termination" of the shareholder's interest in
the Company if, immediately after the sale, either:
(a) the shareholder owns, actually and constructively, no Shares of
the Company's common stock; or
(b) the shareholder actually owns no Shares of the Company's common
stock and constructively owns only Shares of the Company's common stock as
to which the shareholder is eligible to waive, and does effectively waive,
such constructive ownership under the procedures described in Section
302(c)(2) of the Code, as discussed above.
"NOT ESSENTIALLY EQUIVALENT TO A DIVIDEND": Even if a shareholder's receipt
of cash in exchange for Shares pursuant to the Offer fails to meet the "complete
termination" test, the shareholder may nevertheless meet the "not essentially
equivalent to a dividend" test. Whether a shareholder meets this test will
depend on his or her facts and circumstances. In any case, in order to satisfy
this test, the shareholder's sale of Shares pursuant to the Offer must result in
a "meaningful reduction" in his or her interest in the Company taking into
account the constructive ownership rules of Section 318 of the Code referred to
above. The IRS has held in a public ruling that, under the particular facts of
that ruling, a 3.3% reduction in the percentage stock ownership of a stockholder
constituted a "meaningful reduction" when the stockholder owned .0001118% of the
publicly-held corporation's stock before a redemption, owned .0001081% of the
corporation's stock after the redemption, and did not exercise any control over
corporate affairs. In that ruling, the IRS applied the meaningful reduction
standard to three important rights attributable to stock ownership: (1) the
right to vote and thereby exercise control; (2) the right to participate in
current earnings and
26
<PAGE> 30
accumulated surplus; and (3) the right to share in net assets on liquidation. In
measuring the change, if any, in a shareholder's proportionate interest in the
Company, the meaningful reduction test is applied by taking into account all
Shares that the Company purchases pursuant to the Offer, including Shares
purchased from other shareholders.
If, taking into account the constructive ownership rules of Section 318 of
the Code referred to above, a shareholder owns Shares that constitute only a
minimal interest in the Company and does not exercise any control over the
affairs of the Company, any reduction in the shareholder's percentage interest
in all of the three rights described in the preceding paragraph should be a
"meaningful reduction." Such selling shareholder would, under these
circumstances, be entitled to treat his or her sale of Shares to the Company
pursuant to the Offer as a "sale or exchange" for U.S. federal income tax
purposes.
If a shareholder intends to rely on the "not essentially equivalent to a
dividend" test to obtain "sale or exchange" treatment for Shares that he or she
sells pursuant to the Offer, particularly if he or she owns, actually or
constructively, a combination of Class A Shares and Class B Shares, the
shareholder is urged to consult his or her own tax advisor, inasmuch as the
redeeming corporation in the public ruling described above had only one class of
stock outstanding, and the Company has two classes of outstanding voting shares
which classes have different voting and dividend rights.
"SUBSTANTIALLY DISPROPORTIONATE": Under Section 302(b)(2) of the Code, a
sale of Shares pursuant to the Offer, in general, will be "substantially
disproportionate" as to a shareholder if immediately after the sale:
(a) The ratio of the outstanding voting stock of the Company that the
shareholder then actually and constructively owns (treating as not
outstanding all voting stock purchased by the Company pursuant to the
Offer) is less than 80% of the ratio of the outstanding voting stock of the
Company that the shareholder actually and constructively owned immediately
before the sale of Shares (treating as outstanding all voting stock
purchased by the Company pursuant to the Offer); and
(b) the ratio of the fair market value of the outstanding common stock
that the shareholder then actually and constructively owns (treating as not
outstanding all common stock purchased by the Company pursuant to the
Offer) is less than 80% of the ratio of the fair market value of the
outstanding common stock that the shareholder actually and constructively
owned immediately before the sale of Shares (treating as outstanding all
common stock purchased by the Company pursuant to the Offer).
Both classes of the Company's outstanding common stock are voting shares.
However, because the voting rights of those two classes differ, certain issues
exist as to precisely how the "substantially disproportionate" percentage
determinations, described above, are to be calculated in these circumstances.
For this reason, if a shareholder intends to rely on the "substantially
disproportionate" test to obtain "sale or exchange" treatment for Shares that a
shareholder sells pursuant to the Offer, the shareholder should consult his or
her tax advisor regarding the particulars of how this test will be applied to
the shareholder in this instance.
Corporate Dividends-received Deduction. If the case of a corporate
shareholder, if the cash paid is treated as a dividend, such dividend income may
be eligible for the 70% dividends-received deduction. The dividends-received
deduction is subject to certain limitations, and may not be available if the
corporate shareholder does not satisfy certain holding period requirements set
forth in Section 246 of the Code or if the Shares are treated as "debt financed
portfolio Stock" within the meaning of Section 246A(c) of the Code.
Additionally, if a dividends-received deduction is available, the dividend may
be treated as an "extraordinary dividend" under Section 1059(a) of the Code, in
which case a corporate shareholder's adjusted tax basis in the Shares retained
by such shareholder would be reduced, but not below zero, by the amount of the
nontaxed portion of such dividend. Any amount of the nontaxed portion of the
dividend in excess of the corporate shareholder's adjusted tax basis will be
treated as gain from the sale of stock for the taxable year in which the cash is
received. Corporate shareholders are urged to consult their own tax advisors as
to the effect of Section 1059 of the Code on the adjusted tax basis of their
Shares.
Over-subscription of the Offer. The Company cannot predict whether or the
extent to which the Offer will be oversubscribed. If the Offer is
oversubscribed, proration of tenders pursuant to the Offer will cause the
27
<PAGE> 31
Company to accept fewer Shares than are tendered. Consequently, the Company can
give no assurance that a sufficient number of any shareholder's Shares will be
purchased pursuant to the Offer to ensure that such purchase will be treated as
a sale or exchange, rather than as a dividend, for federal income tax purposes
pursuant to the rules discussed above. However, see Section 6 regarding a
shareholder's right to tender Shares subject to the condition that a specified
minimum number of such Shares must be purchased (if any are purchased).
Consequences to Shareholders Who Do Not Tender Pursuant to the
Offer. Shareholders who do not accept the Company's Offer to tender their Shares
will not incur any tax liability as a result of the consummation of the Offer.
Backup Federal Income Tax Withholding. See Section 3 for a discussion of
the United States federal income tax backup withholding rules and the procedures
to avoid backup withholding.
Tax Considerations for Holders of Option Shares. A holder of a stock option
for Class A Shares who receives cash in the Offer in exchange for option shares
will be treated as receiving compensation income per share sold equal to the
excess of the Class A Purchase Price over the exercise price per share of the
relevant option. This income will be taxed to the option holder at ordinary
income rates and will be subject to withholding for income and employment taxes.
In addition to recognizing the compensation income described above, if, after
taking into account the constructive ownership rules of Section 318 of the Code
referred to above, the Company's purchase of option shares from the option
holder fails to satisfy any of the three tests described above, the full amount
of the Class A Purchase Price may be treated as a dividend to the option holder.
If (a) an option holder owns (directly or constructively) either Class A Shares
or Class B Shares in addition to option shares, or (b) even though an option
holder does not own (directly or constructively) any Class A Shares or Class B
Shares, the option holder intends to tender less than all of his or her vested
option shares, the option holder may not be entitled to treat his or her sale of
option shares as a "sale or exchange" and may be treated as receiving a
dividend. The option holder is urged to consult his or her own tax advisor.
Withholding for non-U.S. Shareholders. Although a non-U.S. shareholder may
be exempt from U.S. federal backup withholding, certain payments to the non-U.S.
shareholders are subject to U.S. withholding tax at a rate of 30%. The
Depositary will withhold the 30% tax from gross payments made to non-U.S.
shareholders pursuant to the Offer unless the Depositary determines that a
non-U.S. shareholder is either exempt from the withholding or entitled to a
reduced withholding rate under an income tax treaty. For purposes of this
discussion, a "non-U.S. shareholder" means a shareholder who is not (a) a
citizen or resident of the United States, (b) a corporation, partnership or
other entity created or organized under the laws of the United States or of any
State or political subdivision of the foregoing, (c) an estate the income of
which is includible in gross income for U.S. federal income tax purposes
regardless of its source, or (d) a "United States Trust." A United States Trust
is any trust if, and only if, (a) a court within the United States is able to
exercise primary supervision over the administration of the trust and (b) one or
more U.S. trustees have the authority to control all substantial decisions of
the trust. A non-U.S. shareholder will not be subject to the withholding tax if
the payment from the Company is effectively connected with the conduct of a
trade or business in the United States by such non-U.S. shareholder (and, if
certain tax treaties apply, is attributable to a United States permanent
establishment maintained by such non-U.S. shareholder) and the non-U.S.
shareholder has furnished the Depositary with a properly executed IRS Form 4224
prior to the time of payment.
A non-U.S. shareholder who is eligible for a reduced rate of withholding
pursuant to a U.S. income tax treaty must certify such to the Depositary by
providing to the Depositary a properly executed IRS Form 1001 prior to the time
payment is made. A non-U.S. shareholder may be eligible to obtain from the IRS a
refund of tax withheld if such non-U.S. shareholder is able to establish that no
tax (or a reduced amount of tax) is due.
ALL SHAREHOLDERS OF THE COMPANY ARE ADVISED TO CONSULT THEIR OWN TAX
ADVISORS REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF
EXCHANGING SHARES FOR CASH PURSUANT TO THE OFFER IN LIGHT OF THEIR OWN
PARTICULAR CIRCUMSTANCES.
28
<PAGE> 32
15. EXTENSION OF OFFER; TERMINATION; AMENDMENT.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 7 shall have occurred or shall be reasonably determined by
the Company to have occurred, to extend the period of time during which the
Offer is open and thereby delay acceptance for payment of and payment for any
Shares by giving oral or written notice of such extension to the Depositary and
making a public announcement thereof. The Company also expressly reserves the
right, in its sole discretion, to terminate the Offer and not accept for payment
or pay for any Shares not previously accepted for payment or paid for or,
subject to applicable law, to postpone payment for Shares upon the occurrence of
any of the conditions specified in Section 7 by giving oral or written notice of
the termination or postponement to the Depositary and making a public
announcement of it. The Company's reservation of the right to delay payment for
Shares which it has accepted for payment is limited by Rule 13e-4(f)(5)
promulgated under the Exchange Act, which requires that the Company must pay the
consideration offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law, the
Company further reserves the right, in its sole discretion, and regardless of
whether any of the events set forth in Section 7 shall have occurred or shall be
reasonably determined by the Company to have occurred, to amend the Offer in any
respect (including, without limitation, by decreasing or increasing the
consideration offered in the Offer to holders of Shares of either class or by
decreasing or increasing the number of Shares of either class being sought in
the Offer). Amendments to the Offer may be made at any time and from time to
time by publicly announcing them. In the case of an extension, the announcement
must be issued no later than 9:00 a.m., Eastern Time, on the next business day
after the last previously scheduled or announced Expiration Date. Any public
announcement made pursuant to the Offer will be disseminated promptly to
shareholders in a manner reasonably designated to inform shareholders of the
change. Without limiting the manner in which the Company may choose to make a
public announcement, except as required by applicable law, the Company has no
obligation to publish, advertise or otherwise communicate any public
announcement other than by making a release to the Dow Jones New Service.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) under the Exchange Act. These rules require that the minimum period
during which an offer must remain open following material changes in the terms
of the Offer or information concerning the Offer (other than a change in price
or a change in percentage of securities sought) will depend on the facts and
circumstances, including the relative materiality of the terms or information.
If (a) the Company increases or decreases the price to be paid for Shares, the
number of Shares being sought in the Offer or the Dealer Manager's soliciting
fees and, in the event of an increase in the number of Shares being sought, the
increase exceeds 2% of the outstanding Shares, and (b) the Offer is scheduled to
expire at any time earlier than the expiration of a period ending on the tenth
business day from and including the date that the notice of an increase or
decrease is first published, sent or given in the manner specified in this
Section 15, the Offer will be extended until the expiration of the period of ten
business days.
16. FEES AND EXPENSES.
The Company has retained Goldman, Sachs & Co. to act as the Dealer Manager
in connection with the Offer. The Dealer Manager will receive a fee for its
service of $.10 per share for each Share purchased in this Offer. The Company
also has agreed to reimburse the Dealer Manager for certain out-of-pocket
expenses incurred in connection with the Offer and to indemnify the Dealer
Manager against certain liabilities in connection with the Offer, including
liabilities under the federal securities laws.
The Company has retained D. F. King & Co., Inc. to act as Information Agent
and Harris Trust and Savings Bank to act as Depositary in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telegraph and personal interviews and may request brokers, dealers and other
nominee shareholders to forward materials relating to the Offer to beneficial
owners. The Information Agent and the Depositary will each receive reasonable
and customary compensation for their respective services, will be reimbursed by
the Company for certain reasonable out-of-pocket expenses and will be
indemnified against certain liabilities in connection with the Offer, including
certain liabilities under the federal securities laws.
29
<PAGE> 33
No fees or commissions will be payable to brokers, dealers or other persons
(other than fees to the Dealer Manager, the Information Agent and the Depositary
as described above) for soliciting tenders of Shares pursuant to the Offer. The
Company, however, upon request, will reimburse brokers, dealers and commercial
banks for customary mailing and handling expenses incurred by them in forwarding
the Offer and related materials to the beneficial owners of Shares they hold as
a nominee or in a fiduciary capacity. No broker, dealer, commercial bank or
trust company has been authorized to act as the agent of the Company, the Dealer
Manager, the Information Agent or the Depositary for purposes of the Offer. The
Company will pay or cause to be paid all stock transfer taxes, if any, on its
purchase of Shares except as otherwise provided in Instruction 7 in the Letter
of Transmittal.
17. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with the
law. If, after a good faith effort, the Company cannot comply with the law, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
the holders of Shares residing in that jurisdiction. In any jurisdiction where
applicable securities or blue sky laws require the Offer to be made by a
licensed broker or dealer, the Offer is being made on the Company's behalf by
the Dealer Manager or one or more registered brokers or dealers licensed under
the laws of that jurisdiction.
Pursuant to Rule 13e-4 of the General Rules and Regulations under the
Exchange Act, the Company has filed with the Commission an Issuer Tender Offer
Statement on Schedule 13E-4 which contains additional information with respect
to the Offer. The Schedule 13E-4, including the exhibits and any amendments, may
be examined, and copies may be obtained, at the same places and in the same
manner as is set forth in Section 10 with respect to information concerning the
Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGER IN CONNECTION WITH
THE OFFER OTHER THAN THOSE CONTAINED IN THE OFFER TO PURCHASE OR IN THE RELATED
LETTER OF TRANSMITTAL AND OPTION ELECTION FORM.
OSHKOSH B'GOSH, INC.
October 4, 1999
30
<PAGE> 34
Manually signed facsimile copies of the Letter of Transmittal will be
accepted from Eligible Institutions. The Letter of Transmittal and certificates
for Shares and any other required documents should be sent or delivered by each
shareholder or his or her broker, dealer, commercial bank, trust company or
nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
HARRIS TRUST AND SAVINGS BANK
<TABLE>
<CAPTION>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
-------- ----------------------- -----------------------------
<S> <C> <C>
Harris Trust and Savings Bank (for Eligible Institutions Only) Harris Trust and Savings Bank
c/o Harris Trust Company of New (212) 701-7636 c/o Harris Trust Company of New
York (212) 701-7637 York
Wall Street Station Receive Window
P.O. Box 1010 Confirm by Telephone: 88 Pine Street, 19th Floor
New York, New York 10268-1010 New York, New York 10005
(212) 701-7624
</TABLE>
Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at the telephone
numbers and locations listed below. Shareholders may also contact their local
broker, dealer, commercial bank, trust company or nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, NY 10005
Banks and Brokerage Firms Call Collect:
(212) 425-1685
All Others Call Toll Free:
(888) 246-5358
The Dealer Manager for the Offer is:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000
October 4, 1999
<PAGE> 1
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON TUESDAY, NOVEMBER 2, 1999, UNLESS THE OFFER IS EXTENDED.
LETTER OF TRANSMITTAL
To Tender Shares of Class A Common Stock and/or Class B Common Stock
of
OSHKOSH B'GOSH, INC.
Pursuant to the Offer To Purchase Dated October 4, 1999
<TABLE>
<S> <C> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED (SEE INSTRUCTIONS 3 AND 4)
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) TENDERED CERTIFICATES
(PLEASE USE PRE-ADDRESSED LABEL OR FILL IN AS (ATTACH SIGNED ADDITIONAL LIST IF
NAME(S) APPEAR(S) ON CERTIFICATE(S)) NECESSARY)
NUMBER OF
CLASS CERTIFICATE NUMBER OF SHARES
(A/B) NUMBER(S)* SHARES TENDERED**
TOTAL SHARES TENDERED
Indicate in this box the order (by Class and certificate number) in which Shares are to be purchased in
event of proration. (Attach additional list if necessary.)***See Instruction 10.
1st: 2nd: 3rd: 4th: 5th:
* DOES NOT need to be completed if Shares are tendered by book-entry transfer.
** If you desire to tender fewer than all Shares evidenced by any certificates listed above, please
indicate in this column the number of Shares you wish to tender. Otherwise, all Shares evidenced by
such certificates will be deemed to have been tendered. See Instruction 4.
*** If you do not designate an order, in the event less than all Shares tendered are purchased due to
proration, Shares will be selected for purchase in the order listed above (top Shares first, then
second to top Shares, etc., with bottom Shares last), or in any order determined by the Depositary.
[ ] Check here if any of the certificates representing Shares that you own have been lost, destroyed or
stolen. See Instruction 16.
Number of Shares represented by lost, destroyed or stolen certificates:
</TABLE>
The Depositary is:
HARRIS TRUST AND SAVINGS BANK
<TABLE>
<CAPTION>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
-------- -------------------------- -----------------------------
(for Eligible Institutions Only)
<S> <C> <C>
Harris Trust and Savings Bank (212) 701-7636 Harris Trust and Savings Bank
c/o Harris Trust Company (212) 701-7637 c/o Harris Trust Company
of New York Confirm by Telephone: of New York
Wall Street Station (212) 701-7624 Receive Window
P. O. Box 1010 88 Pine Street, 19th Floor
New York, New York 10268-1010 New York, New York 10005
</TABLE>
------------------------
<PAGE> 2
DELIVERY OF THIS INSTRUMENT AND ALL OTHER DOCUMENTS TO ANY ADDRESS OR
TRANSMISSION OF INSTRUCTIONS TO AN ADDRESS OTHER THAN AS SET FORTH ON THE COVER
PAGE DOES NOT CONSTITUTE A VALID DELIVERY. PLEASE READ THE ENTIRE LETTER OF
TRANSMITTAL CAREFULLY, INCLUDING THE ACCOMPANYING INSTRUCTIONS, BEFORE
COMPLETING IT.
This Letter of Transmittal is to be used only if (a) certificates for
Shares (as defined below) are being forwarded herewith (or such certificates
will be delivered pursuant to a Notice of Guaranteed Delivery previously sent to
the Depositary) or (b) a tender of Shares is being made concurrently by
book-entry transfer to the account maintained by Harris Trust and Savings Bank
(the "Depositary") at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to Section 3 of the Offer to Purchase. See Instruction 2.
THIS LETTER OF TRANSMITTAL MAY NOT BE USED FOR SHARES ATTRIBUTABLE TO
ACCOUNTS UNDER THE COMPANY'S STOCK OPTION PLANS. SEE SECTION 3, "PROCEDURES FOR
TENDERING SHARES -- TENDERS BY HOLDERS OF EXERCISABLE OPTIONS" IN THE OFFER TO
PURCHASE.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
Shareholders who cannot deliver the certificates for their Shares to the
Depositary prior to the Expiration Date (as defined in the Offer to Purchase (as
defined below)) or who cannot complete the procedure for book-entry transfer on
a timely basis or who cannot deliver a Letter of Transmittal and all other
required documents to the Depositary prior to the Expiration Date must, in each
case, tender their Shares pursuant to the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase. See Instruction 2.
Delivery of documents to the Book-Entry Transfer Facility does not
constitute delivery to the Depositary.
THIS BOX IS FOR USE BY ELIGIBLE INSTITUTIONS ONLY
[ ] 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:
Name of Tendering Institution:
--------------------------------------------------------------------------
Account No.:
--------------------------------------------------------------------------
Transaction Code No.:
--------------------------------------------------------------------------
[ ] CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):
--------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------------------------------------------------------------
Name of Institution that Guaranteed Delivery:
--------------------------------------------------------------------------
Give Account Number if Delivered by Book-Entry Transfer through The
Depository Trust Company
Account No.:
--------------------------------------------------------------------------
2
<PAGE> 3
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
TO HARRIS TRUST AND SAVINGS BANK
The undersigned hereby tenders to OshKosh B'Gosh, Inc., a Delaware
corporation (the "Company"), the above described shares of the Company's Class A
Common Stock (the "Class A Shares") or its Class B Common Stock (the "Class B
Shares") (collectively, the "Shares"), at a price per Share indicated in this
Letter of Transmittal (unless this Letter of Transmittal is for an Odd Lot
Holder who has elected to accept the Purchase Price for the applicable class
determined by the Company in accordance with the Offer to Purchase), net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Company's Offer to Purchase, dated October 4, 1999 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which, together with the Option Election Form and the related instructions,
constitute the "Offer").
Subject to and effective upon acceptance for payment of the Shares tendered
hereby in accordance with the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of the
extension or amendment), the undersigned hereby sells, assigns and transfers to,
or upon the order of, the Company all right, title and interest in and to all
the Shares that are being tendered hereby and orders the registration of all of
those Shares if tendered by book-entry transfer and hereby irrevocably
constitutes and appoints the Depositary as the true and lawful agent and
attorney-in-fact of the undersigned (with full knowledge that the Depositary
also acts as the agent of the Company) with respect to the tendered Shares with
full power of substitution (this power of attorney being deemed to be an
irrevocable power coupled with an interest), to:
- deliver certificate(s) for the Shares or transfer ownership of the Shares
on the account books maintained by the Book-Entry Transfer Facilities,
together in either such case with all accompanying evidences of transfer
and authenticity, to, or upon the order of, the Company upon receipt by
the Depositary, as the undersigned's agent, of the aggregate Class A
Purchase Price or Class B Purchase Price (as defined below) with respect
to the Shares;
- present certificates for the Shares for cancellation and transfer on the
Company's books; and
- receive all benefits and otherwise exercise all rights of beneficial
ownership of the Shares, subject to the next paragraph, all in accordance
with the terms of the Offer.
The undersigned hereby represents and warrants to the Company that:
(a) 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 the undersigned's acceptance of
the terms and conditions of the Offer, including the undersigned's
representation and warranty that:
(i) the undersigned has a net long position in Shares or equivalent
securities at least equal to the Shares tendered within the meaning of
Rule 14e-4 under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and
(ii) the tender of Shares complies with Rule 14e-4 under the 1934
Act;
(b) when and to the extent the Company accepts the Shares for
purchase, the Company will acquire good, marketable and unencumbered title
to them, free and clear of all security interests, liens, charges,
encumbrances, conditional sales agreements or other obligations relating to
their sale or transfer, and not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any
additional documents the Depositary or the Company deems necessary or
desirable to complete the assignment, transfer and purchase of the Shares
tendered hereby; and
(d) the undersigned has read and agrees to all of the terms of the
Offer.
3
<PAGE> 4
All authorities conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, executors, administrators, successors, assigns,
trustees in bankruptcy, and legal representatives of the undersigned. Except as
stated in the Offer to Purchase, this tender is irrevocable.
Please print the name(s) and address(es) of the registered holder(s) above,
if they are not already printed above, exactly as they appear on the
certificates representing Shares tendered hereby. The class and certificate
numbers, the number of Shares represented by the certificates and the number of
Shares that the undersigned wishes to tender, should be set forth in the
appropriate boxes above. Any order (by class and certificate number) in which
the tendered Shares must be purchased should also be indicated above. The price
at which the Shares are being tendered should be indicated in the box below
(unless this Letter of Transmittal is for a shareholder who has elected to
accept the Purchase Price for the applicable class as determined by the
Company).
The undersigned understands that the Company will, upon the terms and
subject to the conditions of the Offer, determine a single price per Class A
Share (not in excess of $21.00 nor less than $18.50 per Class A Share) net to
the seller in cash (the "Class A Purchase Price") that it will pay for Class A
Shares properly tendered and not withdrawn prior to the Expiration Date pursuant
to the Offer, and the separate price per Class B Share (not in excess of $21.00
nor less than $18.50 per Class B Share) net to the seller in cash (the "Class B
Purchase Price") that it will pay for Class B Shares properly tendered and not
withdrawn prior to the Expiration Date pursuant to the Offer, taking into
account the number of Shares so tendered and the prices (in increments of $.25)
specified by tendering shareholders. The undersigned understands that the
Company will select the lowest Class A Purchase Price that will allow it to buy
4,500,000 Class A Shares (or any smaller number of Class A Shares as are
properly tendered at prices not in excess of $21.00 nor less than $18.50 per
Class A Share) pursuant to the Offer, and that the Company will also select the
lowest Class B Purchase Price that will allow it to buy 100,000 Class B Shares
(or any smaller number of Class B Shares as are properly tendered at prices not
in excess of $21.00 nor less than $18.50 per Class B Share) pursuant to the
Offer. The undersigned understands that all Shares properly tendered at prices
at or below the Purchase Price for the applicable class and not withdrawn prior
to the Expiration Date will be purchased at the Purchase Price for the
applicable class, upon the terms and subject to the conditions of the Offer,
including its proration and conditional tender provisions, and that the Company
will return all other Shares not purchased pursuant to the Offer, including
Shares tendered at prices greater than the Purchase Price for the applicable
class and not withdrawn prior to the Expiration Date and Shares not purchased
because of proration or conditional tender.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may accept for payment fewer than all of the Shares tendered hereby. In any such
event, the undersigned understands that certificate(s) for any Shares delivered
herewith but not tendered or not purchased will be returned to the undersigned
at the address indicated above, unless otherwise indicated under the "Special
Payment Instructions" or "Special Delivery Instructions" boxes below. The
undersigned recognizes that the Company has no obligation, pursuant to the
Special Payment Instructions, to transfer any certificate for Shares from the
name of its registered holder, or to order the registration or transfer of
Shares tendered by book-entry transfer, if the Company purchases none of the
Shares represented by the certificate or tendered by the book-entry transfer.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
The check for the aggregate Purchase Price for the applicable class for
that number of the Shares tendered hereby as are purchased will be issued to the
order of the undersigned and mailed to the address indicated above, unless
otherwise indicated under the "Special Payment Instructions" or "Special
Delivery Instructions" boxes below.
4
<PAGE> 5
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
(SEE INSTRUCTION 5)
CHECK ONLY ONE BOX
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED
THERE IS NO PROPER TENDER OF SHARES
SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION
[ ] I want to maximize the chance of having OshKosh purchase all of the Shares I
am tendering (subject to the possibility of proration). Accordingly, by
checking this ONE box INSTEAD OF ONE OF THE PRICE SELECTION BOXES BELOW, I
hereby tender my Shares at the Purchase Price for the applicable class
resulting from the dutch auction tender process. I acknowledge that this
action will result in me receiving a price per Share that could be as low as
$18.50 or as high as $21.00.
OR
SHARES TENDERED AT PRICE SELECTED BY SHAREHOLDER
By checking ONE of the boxes below INSTEAD OF THE BOX ABOVE, I hereby tender
Shares at the price checked. I acknowledge that this action could result in none
of the Shares being purchased if the Purchase Price for Shares of the applicable
class is less than the price checked. (SHAREHOLDERS WHO DESIRE TO TENDER SHARES
AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE LETTER OF TRANSMITTAL FOR EACH
PRICE AT WHICH SHARES ARE TENDERED.)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
-- [ ] $19.00 [ ] $20.00 [ ] $21.00
-- [ ] $19.25 [ ] $20.25 --
[ ] $18.50 [ ] $19.50 [ ] $20.50 --
[ ] $18.75 [ ] $19.75 [ ] $20.75 --
</TABLE>
5
<PAGE> 6
CONDITIONAL TENDER
(SEE INSTRUCTION 9)
A. Do you intend to make a conditional tender of your Shares?
If so, you MUST complete the following:
Minimum number of Shares to be sold: ---------------------------------
If not all tendered Shares are purchased, select them as follows (check
one):*
[ ] Purchase my outstanding Shares first, in the order indicated in this
Letter of Transmittal, even if I am also conditionally exercising and
tendering Option Shares.
[ ] I am also conditionally exercising and tendering Option Shares.
Purchase my Options Shares first, in the order indicated in my Option
Exercise Form.
B. Are you tendering all of your Shares?**
[ ] Check here if you ARE tendering all of your Shares, including any Shares you
own directly or in street name that are already issued and outstanding and
any Option Shares you are conditionally exercising.
[ ] Check here if you are NOT tendering all of your Shares, including any Shares
you own directly or in street name that are already issued and outstanding
and any Option Shares you are conditionally exercising.
* If neither box is checked, we will purchase outstanding Shares first, in the
order indicated on page 1.
** If neither box is checked, we will assume you ARE tendering all of your
Shares.
ODD LOTS
(SEE INSTRUCTION 8)
To be completed ONLY if the Shares are being tendered by or on behalf of a
person owning beneficially or of record an aggregate of fewer than 100 Class A
Shares or fewer than 100 Class B Shares. The undersigned either (check one box):
[ ] is the beneficial or record owner of an aggregate of fewer than 100
Class A Shares and/or Class B Shares, and all of the Shares of that
class are being tendered; or
[ ] is a broker, dealer, commercial bank, trust company, or other nominee
that (a) is tendering for the beneficial owner(s) thereof, Shares with
respect to which it is the record holder, and (b) believes based upon
representations made to it by such beneficial owner(s) that each such
person is the beneficial owner of an aggregate of fewer than 100 Class
A Shares and/or fewer than 100 Class B Shares and is tendering all of
the shares of that class.
In addition, the undersigned is tendering the Shares either (check one
box):
[ ] at the Purchase Price for the applicable class, as determined by the
Company in accordance with the terms of the Offer (persons checking
this box need not indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (In Dollars) Per
Share At Which Shares Are Being Tendered."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED.
6
<PAGE> 7
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND 11)
To be completed ONLY if certificates for Shares not tendered or not purchased
and/or any check for the aggregate Purchase Price of Shares purchased are to be
issued in the name of and sent to someone other than the undersigned.
Issue: [ ] Check to: [ ] Certificates to:
Name(s)
- --------------------------------------------------------------------------------
(Please Print)
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Zip Code)
- --------------------------------------------------------------------------------
(Taxpayer Identification or Social Security Number.
See Substitute Form W-9)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 6, 7 AND 11)
To be completed ONLY if certificates for Shares not tendered or not purchased
and/or any check for the Purchase Price of Shares purchased, issued in the name
of the undersigned, are to be mailed to someone other than the undersigned at an
address other than that Issue: shown above.
Mail: [ ] Check to: [ ] Certificates to:
Name(s)
- --------------------------------------------------------------------------------
(Please Print)
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Zip Code)
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<PAGE> 8
PLEASE SIGN HERE
(PLEASE ALSO COMPLETE AND RETURN THE ENCLOSED FORM W-9)
(Must be signed by the registered holder(s) exactly as name(s)
appear(s) on certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificate(s) and
documents transmitted with this Letter of Transmittal. If signature is by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation or another person acting in a fiduciary or representative
capacity, please set forth full title and see Instruction 6.)
->----------------------------------------------------------------------<-
->----------------------------------------------------------------------<-
Signature(s) of owner(s)
Dated: ------------------------------------------------------------ , 1999
Name(s): -----------------------------------------------------------------
(Please print)
Capacity (full title): ---------------------------------------------------
Address: -----------------------------------------------------------------
Area Code(s) and Telephone Number(s): ------------------------------------
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Name of Firm: ------------------------------------------------------------
Authorized Signature: ----------------------------------------------------
Name: --------------------------------------------------------------------
(Please print)
Title: -------------------------------------------------------------------
Address: -----------------------------------------------------------------
(Include zip code)
Area Code and Telephone Number: ------------------------------------------
Dated: ------------------------------------------------------------ , 1999
8
<PAGE> 9
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is a
bank, broker, dealer, credit union, savings association, or other entity that is
a member in good standing of the Securities Transfer Agents Medallion Program
("Eligible Institutions"). No signature guarantee is required if:
(a) this Letter of Transmittal is signed by the registered holder of
the Shares (which term, for purposes of this document, shall include any
participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of the Shares) exactly as the name
of the registered holder appears on the certificate(s) tendered with this
Letter of Transmittal and payment and delivery are to be made directly to
the registered holder; or
(b) the Shares are tendered for the account of an Eligible
Institution.
In all other cases, including any case in which the owner has completed
either the box entitled "Special Payment Instructions" or "Special Delivery
Instructions" above, an Eligible Institution must guarantee all signatures on
this Letter of Transmittal. See Instructions 6 and 11.
2. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be used only if certificates for
Shares are delivered with it to the Depositary (or the certificates will be
delivered pursuant to a Notice of Guaranteed Delivery previously sent to the
Depositary) or if a tender for Shares is being made concurrently pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Certificates for all physically tendered Shares or confirmation of
a book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of Shares tendered electronically, together in each case with a
properly completed and duly executed Letter of Transmittal or duly executed and
manually signed facsimile of it, or an Agent's Message in the case of a
book-entry transfer, and any other documents required by this Letter of
Transmittal, should be mailed or delivered to the Depositary at the appropriate
address set forth herein and must be delivered to the Depositary on or before
the Expiration Date (as defined in the Offer to Purchase). DELIVERY OF DOCUMENTS
TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Shareholders whose certificates are not immediately available or who cannot
deliver certificates for their Shares and all other required documents to the
Depositary before the Expiration Date, or whose Shares cannot be delivered on a
timely basis pursuant to the procedures for book-entry transfer, must, in any
case, tender their Shares by or through any Eligible Institution by properly
completing and duly executing and delivering a Notice of Guaranteed Delivery (or
facsimile of it) and by otherwise complying with the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. Pursuant to the
guaranteed delivery procedure, certificates for all physically tendered Shares
or book-entry confirmations, as the case may be, as well as a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile of it),
or an Agent's Message in the case of a book-entry transfer, and all other
documents required by this Letter of Transmittal, must be received by the
Depositary within three (3) Nasdaq trading days after receipt by the Depositary
of the Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer
to Purchase.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
signature guarantee by an Eligible Institution in the form set forth in the
Notice. For Shares to be tendered validly pursuant to the guaranteed delivery
procedure, the Depositary must receive the Notice of Guaranteed Delivery on or
before the Expiration Date.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION
AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, THEN WE RECOMMEND
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED.
The Company will not accept any alternative, conditional or contingent
tenders, nor will it purchase any fractional Shares, except as expressly
provided in the Offer to Purchase. All tendering shareholders, by
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<PAGE> 10
execution of this Letter of Transmittal (or a manually signed facsimile of it),
waive any right to receive any notice of the acceptance of their tender.
3. Inadequate Space. If the space provided in the box captioned
"Description of Shares Tendered" is inadequate, the certificate numbers, the
class or classes, and/or the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
4. Partial Tenders and Unpurchased Shares. This Instruction is not
applicable to shareholders who tender by book-entry transfer. If fewer than all
Shares evidenced by any certificate are to be tendered, fill in the number of
Shares that are to be tendered in the column entitled "Number of Shares
Tendered, in the box captioned "Description of Shares Tendered." In any such
case, if any tendered Shares are purchased, a new certificate for the remainder
of the Shares (including any Shares not purchased) evidenced by the old
certificate(s) will be issued and sent to the registered holder(s), unless
otherwise specified in either the "Special Payment Instructions" or "Special
Delivery Instructions" box on this Letter of Transmittal, as soon as practicable
after the Expiration Date. Unless otherwise indicated, all Shares represented by
the certificate(s) listed and delivered to the Depositary will be deemed to have
been tendered.
5. Indication of Price at Which Shares are being Tendered. Unless this
Letter of Transmittal is for an Odd Lot Holder who has elected to accept the
Purchase Price for the applicable class determined by the Company and has
checked the appropriate box, in order for Shares to be properly tendered, the
shareholder MUST check either the box indicating the price per Share at which he
or she is tendering Shares or the box tendering the shares at the price
resulting from the dutch auction tender process, in either case under the
caption "Price (In Dollars) Per Share At Which Shares Are Being Tendered" on
this Letter of Transmittal. ONLY ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS
CHECKED OR IF NO BOX IS CHECKED, THERE IS NO PROPER TENDER OF SHARES. A
shareholder wishing to tender portions of his or her Shares at different prices
must complete a separate Letter of Transmittal (and, if applicable, a separate
Notice of Guaranteed Delivery) for each price at which he or she wishes to
tender each portion of his or her Shares. The same Shares cannot be tendered at
more than one price unless previously properly withdrawn as provided in Section
4 of the Offer to Purchase.
6. Signatures on Letter of Transmittal, Stock Powers and Endorsements.
(a) If this Letter if Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the certificate(s)
without any change whatsoever.
(b) If any tendered Shares are registered in the names of two or more
joint holders, each such holder must sign this Letter of Transmittal.
(c) When this Letter of Transmittal is signed by the registered
holder(s) of the Shares listed and transmitted hereby, no endorsement(s) of
certificate(s) representing the Shares or separate stock power(s) are
required unless payment is to the made or the certificate(s) for the Shares
not tendered or not purchased are to be issued to a person other than the
registered holder(s). If this Letter of Transmittal is signed by a person
other than the registered holder(s) of the certificate(s), or if payment is
to be made to a person other than the registered holder(s), the
certificate(s) must be endorsed or accompanied by appropriate stock
power(s), in either case signed exactly as the name(s) of the registered
holder(s) appears on the certificate(s). SIGNATURES ON THE CERTIFICATE(S)
OR STOCK POWER(S) MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION. SEE
INSTRUCTION 1.
(d) If this Letter of Transmittal or any certificate(s) or stock
powers(s) are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in any
fiduciary or representative capacity, the signing persons should so
indicate when signing and must submit proper evidence satisfactory to the
Company of their authority to act.
7. Stock Transfer Taxes. Except as provided in this Instruction 7, no stock
transfer tax stamps or funds to cover stock transfer taxes need accompany this
Letter of Transmittal. The Company will pay or cause to be
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<PAGE> 11
paid any stock transfer taxes payable on the transfer to it of Shares purchased
pursuant to the Offer. If, however:
(a) payment of the aggregate Purchase Price for Shares tendered hereby
and accepted for purchase is to be made to any other person than the
registered holder(s);
(b) Shares not tendered or not accepted for purchase are to be
registered in the name(s) of any person(s) other than the registered
holder(s); or
(c) tendered certificates are registered in the name(s) of any
person(s) other than the person(s) signing this Letter of Transmittal;
then the Depositary will deduct the amount of any stock transfer taxes (whether
imposed on the registered holder, the transferee or otherwise) payable on
account of the transfer from the aggregate Purchase Price payable for the Shares
tendered hereby, unless satisfactory evidence of the payment of the taxes or any
exemption from the taxes is submitted to the Depositary.
8. Odd Lots. As described in Section 1 of the Offer to Purchase, if the
Company is to purchase fewer than all Shares tendered at or below the Class A
Purchase Price or the Class B Purchase Price before the Expiration Date and not
withdrawn, the Shares of the applicable class that are purchased first will
consist of all Shares of that class tendered by any shareholder who owned of
record or owned beneficially an aggregate of fewer than 100 Class A Shares
and/or fewer than 100 Class B Shares, as applicable, at or below the applicable
Purchase Price (an "Odd Lot Holder"). This preference will not be available
unless the box captioned "Odd Lots" is completed.
9. Conditional Tenders. As described in Sections 1 and 6 of the Offer to
Purchase, shareholders may condition their tenders of Shares of a particular
class (including any option shares acquired and tendered pursuant to the
conditional exercise procedures described in the Offer to Purchase and the
Option Exercise Form) on all or a minimum number of their tendered Shares of a
that class being purchased ("Conditional Tenders"). If the Company is to
purchase less than all Shares of either class tendered before the Expiration
Date and not withdrawn, the Depositary will perform a preliminary proration of
the Shares of that class, and any Shares tendered at or below the Purchase Price
for that class pursuant to a Conditional Tender for which the condition was not
satisfied by the preliminary proration will be deemed withdrawn, subject to
reinstatement if the conditionally tendered Shares are subsequently selected by
random lot for purchase subject to Sections 1 and 6 of the Offer to Purchase. If
you hold vested options and are conditionally exercising and tendering any
option shares, you must complete the Conditional Tender box on both your Option
Exercise Form and your Letter of Transmittal for any outstanding Shares, even if
the condition relates only to Shares covered by one form or the other. ALTHOUGH
SHAREHOLDERS WHO TENDER ONLY A PORTION OF THEIR SHARES (INCLUDING OPTION SHARES)
ARE PERMITTED TO MAKE CONDITIONAL TENDERS, CONDITIONAL TENDERS WILL BE SELECTED
BY LOT FOR REINSTATEMENT ONLY FROM SHAREHOLDERS WHO TENDER ALL OF THEIR SHARES
OF THE APPLICABLE CLASS (INCLUDING ANY OPTION SHARES BEING CONDITIONALLY
EXERCISED IN CONNECTION WITH THE OFFER). All tendered Shares will be deemed
unconditionally tendered unless the "Conditional Tender" box is completed. The
Conditional Tender alternative is made available primarily so that a shareholder
may assure that the purchase of Shares from the shareholder pursuant to the
Offer will be treated as a sale of the Shares by the shareholder, rather than
the payment of a dividend to the shareholder, for federal income tax purposes.
Odd Lot Shares, which will not be subject to proration, cannot be conditionally
tendered. It is the tendering shareholder's responsibility to determine the
minimum number of Shares of either class that must be purchased from the
shareholder in order for the shareholder to qualify for sale (rather than
dividend) treatment. We encourage each shareholder to consult his or her own tax
advisor.
IN THE EVENT OF PRORATION, ANY SHARES TENDERED PURSUANT TO A CONDITIONAL
TENDER FOR WHICH THE MINIMUM REQUIREMENTS ARE NOT SATISFIED MAY NOT BE ACCEPTED
AND WILL BE DEEMED WITHDRAWN.
10. Order of Purchase in the Event of Proration. As described in Section 1
of the Offer to Purchase, shareholders may designate the order in which their
Shares of a particular class are to be purchased in the event of proration. The
order of purchase may have an effect on the federal income tax treatment of the
Purchase Price for the Shares purchased. If you do not designate an order and
fewer than all Shares tendered
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<PAGE> 12
are purchased due to proration, Shares will be selected in the order in which
they are listed in the box entitled "Description of Shares Tendered." If for any
reason the order is not clearly specified, Shares will be selected by the
Depositary. See Sections 1 and 14 of the Offer to Purchase.
11. Special Payment and Delivery Instructions. If certificate(s) for Shares
not tendered or not purchased and/or check(s) are to be issued in the name of a
person other than the signer of the Letter of Transmittal or to the signer at a
different address, the boxes captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed as applicable and signatures must be guaranteed as described in
Instruction 1.
12. Irregularities. All questions as to the number of Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Company in its sole discretion. The Company's
determinations will be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders of Shares it determines not to
be in proper form or the acceptance of which or payment for which may, in the
opinion of the Company's counsel, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Offer and any defect or
irregularity in the tender of any particular Shares, and the Company's
interpretation of the terms of the Offer (including these instructions) will be
final and binding on all parties. No tender of Shares will be deemed to be
properly made until all defects and irregularities have been cured or waived.
Unless waived, any defects or irregularities in connection with tenders must be
cured within the time that the Company may determine. None of the Company, the
Dealer Manager (as defined in the Offer to Purchase), the Depositary, the
Information Agent (as defined in the Offer to Purchase) or any other person is
or will be obligated to give notice of any defects or irregularities in tenders
and none of them will incur any liability for failure to give any notice of
defects or irregularities.
13. Questions and Requests for Assistance and Additional Copies. Questions
and requests for assistance may be directed to, or additional copies of the
Offer to Purchase, the Notice of Guaranteed Delivery and this Letter of
Transmittal may be obtained from, the Information Agent or the Dealer Manager at
their addresses and telephone numbers set forth at the end of this Letter of
Transmittal or from your broker, dealer, commercial bank or trust company.
14. 31% Backup Withholding. Under federal income tax law, a shareholder who
receives a payment pursuant to the Offer is required to provide the Depositary
(as payer) with the shareholder's correct taxpayer identification number ("TIN")
on Substitute Form W-9. If the shareholder is an individual, the TIN is his or
her social security number. If the Depositary is not provided with the correct
TIN, payments that are made to the shareholder or other payee with respect to
the Offer may be subject to 31% backup withholding.
Certain shareholders (including, among others, corporations and certain
foreign individuals) may not be subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, the shareholder must submit a Form W-8, signed under penalties
of perjury, attesting to the individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the shareholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of the persons subject to
backup withholding will be reduced by the amount of tax withheld, provided that
the required information is given to the Internal Revenue Service. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the
submitting shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the shareholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary.
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<PAGE> 13
However, the withheld amount will be refunded to the shareholder if a TIN is
provided to the Depositary within 60 days.
The shareholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are registered in more than one name or
are not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
15. Withholding for Non-U.S. Shareholders. Although a non-U.S. shareholder
may be exempt from U.S. federal backup withholding, certain payments to non-U.S.
shareholders are subject to U.S. withholding tax at a rate of 30%. The
Depositary will withhold the 30% from gross payments made to any non-U.S.
shareholder pursuant to the Offer unless the Depositary determines that a
non-U.S. shareholder is either exempt from the withholding or entitled to a
reduced withholding rate under an income tax treaty. For purposes of this
discussion, a "non-U.S. shareholder" means a shareholder who is not (1) a
citizen or resident of the Untied States, (2) a corporation or partnership
created or organized in the United States or under the law of the United States
or of any State or political subdivision of the foregoing, (3) an estate the
income of which is includible in gross income for U.S. federal income tax
purposes regardless of its source, or (4) a "United States Trust." A United
States Trust is any trust if, and only if, (1) a court within the United States
is able to exercise primary supervision over the administration of the trust and
(2) one or more U.S. trustees have the authority to control all substantial
decisions of the trust. A non-U.S. shareholder will not be subject to the
withholding tax if the payment from the Company is effectively connected with
the conduct of a trade or business in the United States by the non-U.S.
shareholder (and, if certain tax treaties apply, is attributable to a Unites
States permanent establishment maintained by the non-U.S. shareholder) and the
non-U.S. shareholder has furnished the Depositary with a properly executed IRS
Form 4224 prior to the date of payment.
A non-U.S. shareholder who is eligible for a reduced rate of withholding
pursuant to a U.S. income tax treaty must certify that fact to the Depositary by
providing to the Depositary a properly executed IRS Form 1001 prior to the time
payment is made. A non-U.S. shareholder may be eligible to obtain from the IRS a
refund of tax withheld if the non-U.S. shareholder is able to establish that no
tax (or a reduced amount of tax) is due.
16. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the shareholder should
promptly notify the Depositary by checking the box provided in the box titled
"Description of Shares Tendered" and indicating the number of Shares represented
by the certificate(s) so lost, destroyed or stolen. The shareholder will then be
instructed by the Depositary 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. Please allow sufficient time to complete those
procedures.
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<TABLE>
<S> <C> <C>
PAYER'S NAME: HARRIS TRUST AND SAVINGS BANK
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX
SUBSTITUTE AT RIGHT AND CERTIFY BY SIGNING AND DATING -----------------------------
FORM W-9 BELOW. Social Security Number
OR
--------------------------
Employer Identification Number
DEPARTMENT OF THE TREASURY PART 2-- PART 3--
INTERNAL REVENUE SERVICE CERTIFICATION -- Under Penalties of Perjury, Awaiting TIN [ ]
I certify that:
(a) 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
(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
(the "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.
CERTIFICATION INSTRUCTIONS -- You must cross out Part 3 item (2) above if you
REQUEST FOR TAXPAYER have been notified by the IRS that you are currently subject to backup
IDENTIFICATION NUMBER withholding because of under reporting interest or dividends on your tax
(TIN) AND CERTIFICATION return. However, if after being notified by the IRS that you are subject to
backup withholding, you received another notification from the IRS that you
are no longer subject to backup withholding, do not cross out such item (2).
SIGNATURE DATE
---------------------------------- ---------------------------------
</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
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF SUBSTITUTE FORM W-9
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 understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
reportable payments made to me will be withheld; but that such amounts will be
refunded to me if I then provide a Taxpayer Identification Number within sixty
(60) days.
SIGNATURE DATE
---------------------------------- -------------------------------
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<PAGE> 15
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 WATER STREET
NEW YORK, NY 10005
Banks and Brokerage Firms Call Collect:
(212) 425-1685
All Others Call Toll Free:
(888) 246-5358
The Dealer Manager for the Offer is:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000
IMPORTANT: This Letter of Transmittal or a manually signed facsimile hereof
(together with certificates for the Shares being tendered and all other required
documents), or a Notice of Guaranteed Delivery, must be received prior to 12:00
midnight, Eastern Time, on the Expiration Date.
15
<PAGE> 1
OSHKOSH B'GOSH, INC.
FREQUENTLY ASKED QUESTIONS AND ANSWERS
ABOUT THE OFFER TO PURCHASE UP TO 4,500,000 SHARES OF CLASS A COMMON STOCK
AND UP TO 100,000 SHARES OF CLASS B COMMON STOCK,
EACH AT A PURCHASE PRICE NOT IN EXCESS OF $21.00 NOR LESS THAN $18.50 PER SHARE
Below are certain questions that might arise in connection with OshKosh's
dutch auction for its Class A and Class B Common Stock at a price not to exceed
$21.00 nor less than $18.50 per share in cash, together with the related
answers. You should refer to the Offer to Purchase and the Letter of Transmittal
for a detailed description of the terms and conditions of the Offer. As
indicated in all of the tender offer documents, however, questions about the
dutch auction should be directed to the Information Agent at the numbers set
forth below:
D. F. KING & CO., INC.
77 WATER STREET
NEW YORK, NY 10005
Banks and Brokerage Firms Call Collect:
(212) 425-1685
All Others Call Toll Free:
(888) 246-5358
1. Q. WHY IS THE COMPANY MAKING THE OFFER?
A. We believe the Offer may provide several benefits to the Company.
- - The Offer will provide a capital structure that makes greater use of financial
leverage at reasonable interest rates, thus making possible improved earnings
per share for continuing shareholders if future earnings are at the level
anticipated, without imposing excessive risk on the Company or its
shareholders if future earnings are weaker than expected.
- - Our financial condition and outlook and current market conditions, including
recent trading prices of the Shares, make this an attractive time to
repurchase a significant portion of the outstanding Shares.
- - We believe that after the Offer is completed the Company's financial
condition, access to capital and outlook for continued favorable cash
generation will allow it to continue to pursue the development of its core
business, including ongoing product development activities, important retail
marketing initiatives, capital expenditures and global expansion.
Accordingly, the board of directors believes that the Offer is consistent with
our long term corporate goal of increasing shareholder value.
2. Q. WHAT ARE THE EXPECTED BENEFITS OF THE OFFER FOR SHAREHOLDERS?
A. We believe the Offer may be attractive from the perspective of our
shareholders in several ways.
- - The Offer gives shareholders the opportunity to sell Shares at prices greater
than market prices prevailing prior to announcement of the Offer. See Section
8 of the Offer to Purchase for information about recent market prices of Class
A Shares.
- - The Offer provides shareholders who are considering a sale of all or a portion
of their Shares with the opportunity to determine the price or prices (not in
excess of $21.00 nor less than $18.50 per Share) at which they wish to sell
their Shares and, subject to the terms and conditions of the Offer, to sell
those Shares for cash without the usual transaction costs associated with
market sales and without regard to whether the trading market is sufficiently
liquid to permit the sale.
- - Shareholders who determine not to accept the Offer will realize a
proportionate increase in their relative equity interest in the Company and
thus in the Company's future earnings and assets.
<PAGE> 2
3. Q. WHAT ARE THE POTENTIAL RISKS AND DISADVANTAGES OF THE OFFER?
A. There are several risks and potential disadvantages.
- - The Company will incur significant additional indebtedness in order to pay for
the tendered Shares. In fact, the Company's pro forma balance sheet as of July
3, 1999, shows a deficit in shareholders' equity of $17.6 million if the Offer
is fully subscribed and the Purchase Price of each class is $21.00 per Share.
See Section 9 and Section 10. Although the board of directors carefully
evaluated this matter in determining that the Offer is both prudent and lawful
(and obtained an opinion from American Appraisal Associates, Inc. that based
on the fair value of its assets on a pro forma basis as of August 28, 1999,
the fair value of the aggregate assets of the Company, on a consolidated
basis, will exceed its liabilities, including its contingent liabilities, by
at least the aggregate par value of its issued capital stock after the Offer
is completed), we cannot determine whether stock market or other third party
perceptions of the Company will be adversely affected by the additional
indebtedness of the Company.
- - Because of the additional indebtedness, the interest rate that the Company
must pay on all of its borrowing, including its seasonal borrowings to cover
working capital needs, initially will increase from prime or LIBOR plus .625%
to prime or LIBOR plus 1.50%, and will remain at these levels until the
indebtedness is significantly reduced or the ratio of debt to cash flow is
otherwise improved.
- - The Company's higher leverage will cause its continuing shareholders to bear a
higher risk in the event of future losses or earnings reductions. See Section
9 of the Offer to Purchase.
- - If and to the extent that Shares tendered in the Offer were issued upon the
exercise of Company options within six months of the Offer, including
conditional exercises of options pursuant to the Option Exercise Form as
described herein, the Company's financial statements will record compensation
expense equal to the excess of the Class A Purchase Price over the exercise
price of the options, and the Company's reported earnings will be
correspondingly lower.
- - The Offer will reduce the Company's "public float" (the number of shares owned
by outside shareholders and available for trading in the securities markets).
This and the Company's higher leverage may result in lower stock prices or
reduced liquidity in the trading market for Class A Shares in the future. See
Section 12 of the Offer to Purchase.
4. Q. WHAT WILL HAPPEN TO MY SHARES IF I TENDER THE SHARES BUT THEY ARE NOT
PURCHASED IN THE OFFER?
A. All Shares tendered and not purchased pursuant to the Offer, including
Shares tendered at prices in excess of the Purchase Price for the
applicable class and Shares not purchased because of proration or
because the terms of a conditional tender were not met, will be
returned to tendering shareholders (or to another person specified by a
tendering shareholder) at the Company's expense as promptly as
practicable following the Expiration Date.
5. Q. CAN I USE A SINGLE LETTER OF TRANSMITTAL IF I WANT TO TENDER SHARES AT
MORE THAN ONE PRICE?
A. No. Shareholders who desire to tender Shares at more than one price
must complete a separate Letter of Transmittal for each price at which
Shares are tendered, and particular Shares cannot be tendered (unless
previously withdrawn in accordance with the terms of the Offer) at more
than one price.
6. Q. WHAT SHOULD I DO IF MY CERTIFICATE FOR SHARES IS REGISTERED IN MY NAME
BUT THE PERSON EXECUTING THE LETTER OF TRANSMITTAL, THE PERSON TO WHOM A
PAYMENT IS TO BE MADE, OR THE PERSON TO WHOM SHARES NOT PURCHASED OR
TENDERED ARE TO BE ISSUED, IS A PERSON OTHER THAN ME?
A. In any of those circumstances, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case, signed
exactly as the name of the registered holder appears on the
certificate, and guaranteed by an Eligible Institution.
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7. Q. HOW CAN I PARTICIPATE IN THE OFFER IF I HOLD VESTED OPTIONS UNDER
OSHKOSH'S 1994 INCENTIVE STOCK OPTION PLAN OR ITS DIRECTORS STOCK
OPTION PLAN?
A. Refer to the separate Questions and Answers relating to conditional
exercises of option shares.
8. Q. HOW DO I WITHDRAW MY SHARES TENDERED IN THE OFFER?
A. Shares tendered pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date and, unless accepted for payment by the
Company pursuant to the Offer, may also be withdrawn at any time after
40 business days from the beginning of the Offer. For a withdrawal to
be effective, notice of withdrawal must be in written, telegraphic or
facsimile transmission form and must be received in a timely manner by
the Depositary at its address set forth in the Offer to Purchase. The
notice of withdrawal must specify the name of the tendering
shareholder, the name of the registered holder (if different), the
number and classes tendered and the number and classes of Shares to be
withdrawn.
9. Q. WHAT FORMS DO I NEED TO SIGN IF I CAN'T GET MY LETTER OF TRANSMITTAL AND
STOCK CERTIFICATES IN ON TIME?
A. If (a) certificates are not available to be delivered to the Depository
prior to the Expiration Date, or (b) the procedure for book entry
transfer cannot be completed on a timely basis, or (c) the Letter of
Transmittal and all other required documents cannot be delivered to the
Depositary prior to the Expiration Date, the shareholder will have to
have an Eligible Institution complete and execute the Notice of
Guaranteed Delivery instead. If a shareholder is going to submit his or
her its certificates for the Shares to the Depositary prior to the
Expiration Date, the Letter of Transmittal will be the only form that
will need to be signed and filled out by the shareholder.
10. Q. WHAT PURPOSE DOES THE LETTER OF TRANSMITTAL SERVE?
A. The Letter of Transmittal is to be used when (a) certificates for
Shares are to be forwarded with the Letter of Transmittal, or (b) a
tender of Shares is being made concurrently by book-entry transfer to
the account maintained by the Depositary at the Book-Entry Transfer
Facility. The Letter of Transmittal will also be the document pursuant
to which a shareholder tendering Shares indicates the price at which he
or she wishes to have the Shares tendered.
11. Q. WHAT PURPOSE DOES THE NOTICE OF GUARANTEED DELIVERY SERVE?
A. The Notice of Guaranteed Delivery must be used in the Offer if: (a)
certificates for Shares cannot be delivered to the Depositary prior to
the Expiration Date; or (b) the procedures for book-entry transfer
cannot be completed on a timely basis; or (c) the Letter of Transmittal
and all other required documents cannot be delivered to the Depositary
prior to the Expiration Date.
12. Q. WHERE DO I OBTAIN MORE COPIES OF THE LETTER OF TRANSMITTAL AND OTHER
DOCUMENTS?
A. Additional copies of the Letters of Transmittal and other documents can
be obtained by contracting the Information Agent for the Offer.
13. Q. WHEN WILL THE COMPANY ANNOUNCE ITS THIRD QUARTER EARNINGS?
A. The Company expects to announce its third quarter earnings on or about
October 18, 1999, and cannot comment about its earnings prior to that
date. The Company will send earnings information to its shareholders
shortly after the earnings are announced.
14. Q. WHAT PRICES DOES THE COMPANY EXPECT?
A. Several factors will determine the prices at which shareholders will
tender their Shares, over which the Company has no control.
Consequently, the Company cannot predict the prices or price at which
Shares will be tendered by shareholders.
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<PAGE> 4
15. Q. WHAT MUST I DO TO TENDER SHARES?
A. For Shares, other than option shares, to be tendered properly pursuant
to the Offer:
- - the certificates for the Shares (or confirmation of receipt of the Shares
pursuant to the procedures for book-entry transfer set forth below), together
with a properly completed and duly executed Letter of Transmittal (or manually
signed facsimile thereof), including any required signature guarantees, or an
Agent's Message, and any other documents required by the Letter of
Transmittal, must be received by the Depositary at its address set forth on
the back cover of this Offer to Purchase prior to 12:00 midnight, Eastern
Time, on the Expiration Date; or
- - the tendering shareholder must comply with the guaranteed delivery procedure.
16. Q. WILL OSHKOSH EXTEND THE OFFER?
A. Probably not. However, the Company reserves the right to extend or
amend the Offer. At this time, the Offer expires on November 2, 1999,
at 12:00 midnight, Eastern Time.
This brochure is neither an offer to purchase nor a solicitation of an
offer to sell securities. The offer to purchase the stock of the Company is made
only by the OshKosh B'Gosh, Inc. Offer to Purchase document dated October 4,
1999, and the related Letter of Transmittal and Option Exercise Form.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF
SUCH SHAREHOLDERS' SHARES AND NEITHER HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH
RECOMMENDATION. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN
THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS AND MAKE THEIR OWN
DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND AT
WHAT PRICE OR PRICES.
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<PAGE> 1
MEMORANDUM TO HOLDERS OF OSHKOSH B'GOSH STOCK OPTIONS
TO: Holders of OshKosh B'Gosh Stock Options
FROM: OshKosh B'Gosh, Inc.
DATE: October 4, 1999
RE: Tender of Option Shares in the Company's Tender Offer
We have prepared the following frequently asked questions and answers for
your convenience. Please review this information together with the Offer to
Purchase, the Letter of Transmittal, the Option Election Form and the related
instructions. If you have additional questions, please call David Omachinski,
Greg Spaeth or Michael Heider at the Company.
1. WHAT IS THE OFFER?
We are offering to purchase 4,500,000 shares of our Class A Common Stock
and 100,000 shares of our Class B Common Stock (collectively, the "Shares"),
each at a purchase price of not more than $21.00 per Share nor less than $18.50
per Share. The Class A Purchase Price which we will pay for Class A Shares,
including Class A Shares acquired through option exercises, will be based on the
prices at which the Shares are tendered, as more fully described in the Offer to
Purchase. The Offer will be open until it expires at 12:00 midnight, Eastern
Time, on November 2, 1999, unless extended by us. The Offer is open to all of
our shareholders. If the shareholders tender more Shares than we have promised
to purchase, the Shares purchased will be selected first from shareholders
owning fewer than 100 Shares (including Option Shares following exercise), then
from unconditional tenders by other shareholders and from conditional tenders
for which the condition is satisfied (by proration, if necessary), and then from
other conditional tenders by lot.
You have the right at any time to exercise your vested options in the usual
way and sell the Class A Shares you acquire upon the exercise (including a sale
in the Offer).
We are allowing you, at your election, to make a special, "conditional"
exercise of your vested options in connection with this Offer. This exercise of
your vested options is "conditional" because it allows you to decide to exercise
the option only if, and to the extent, that the Company actually purchases the
Option Shares in the Offer. If you make such a conditional exercise and we do
not purchase all of the shares you acquire upon the exercise (the "Option
Shares") because of proration in the Offer, the portion of your Option Shares
that we do purchase will be selected in the order you designate on the enclosed
Option Election Form, and the remaining portion of your options will continue to
be outstanding.
We are also allowing you to make a "cashless exercise" of your vested
options in connection with the Offer, as explained below. You must complete and
deliver the Option Election Form to the Company in order to tender part or all
of your Option Shares resulting from a conditional, cashless exercise of the
vested options.
The Offer, which is subject to a number of other conditions, is described
in the Offer to Purchase dated October 4, 1999, and related Letter of
Transmittal provided to you. Please read these documents carefully, together
with the Option Election Form and the Instructions for Tender of Options.
Please remember that neither the Company nor its Board of Directors is
making any recommendation as to whether shareholders or option holders should
participate in the Offer. You must make your own decision. You must carefully
follow the instructions below and in the enclosed Instructions for Tender of
Options and Option Election Form if you want to participate in our Offer.
Failure to follow the instructions may make you ineligible to tender your Option
Shares in our Offer.
2. WHY IS THE COMPANY MAKING THE OFFER?
We believe the Offer may provide several benefits to the Company.
- The Offer will provide a capital structure that makes greater use of
financial leverage at reasonable interest rates, thus making possible
improved earnings per share for continuing shareholders if future
earnings are at the level anticipated, without imposing excessive risk on
the Company or its shareholders if future earnings are weaker than
expected.
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<PAGE> 2
- Our financial condition and outlook and current market conditions,
including recent trading prices of the Shares, make this an attractive
time to repurchase a significant portion of the outstanding Shares.
- We believe that after the Offer is completed the Company's financial
condition, access to capital and outlook for continued favorable cash
generation will allow it to continue to pursue the development of its
core business, including ongoing product development activities,
important retail marketing initiatives, capital expenditures and global
expansion.
Accordingly, the board of directors believes that the Offer is consistent with
our long term corporate goal of increasing shareholder value.
3. WHAT ARE THE EXPECTED BENEFITS OF THE OFFER FOR SHAREHOLDERS?
We believe the Offer may be attractive from the perspective of our
shareholders in several ways.
- The Offer gives shareholders the opportunity to sell Shares at prices
greater than market prices prevailing prior to announcement of the Offer.
See Section 8 of the Offer to Purchase for information about recent
market prices of Class A Shares.
- The Offer provides shareholders who are considering a sale of all or a
portion of their Shares with the opportunity to determine the price or
prices (not in excess of $21.00 nor less than $18.50 per Share) at which
they wish to sell their Shares and, subject to the terms and conditions
of the Offer, to sell those Shares for cash without the usual transaction
costs associated with market sales and without regard to whether the
trading market is sufficiently liquid to permit the sale.
- Shareholders who determine not to accept the Offer will realize a
proportionate increase in their relative equity interest in the Company
and thus in the Company's future earnings and assets.
4. WHAT ARE THE POTENTIAL RISKS AND DISADVANTAGES OF THE OFFER?
There are several risks and potential disadvantages.
- The Company will incur significant additional indebtedness in order to
pay for the tendered Shares. In fact, the Company's pro forma balance
sheet as of July 3, 1999, shows a deficit in shareholders' equity of
$17.6 million if the Offer is fully subscribed and the Purchase Price of
each class is $21.00 per Share. See Section 9 and Section 10. Although
the board of directors carefully evaluated this matter in determining
that the Offer is both prudent and lawful (and obtained an opinion from
American Appraisal Associates, Inc. that based on the fair value of its
assets on a pro forma basis as of August 28, 1999, the fair value of the
aggregate assets of the Company, on a consolidated basis, will exceed its
liabilities, including its contingent liabilities, by at least the
aggregate par value of its issued capital stock after the Offer is
completed), we cannot determine whether stock market or other third party
perceptions of the Company will be adversely affected by the additional
indebtedness of the Company.
- Because of the additional indebtedness, the interest rate that the
Company must pay on all of its borrowing, including its seasonal
borrowings to cover working capital needs, initially will increase from
prime or LIBOR plus .625% to prime or LIBOR plus 1.50%, and will remain
at these levels until the indebtedness is significantly reduced or the
ratio of debt to cash flow is otherwise improved.
- The Company's higher leverage will cause its continuing shareholders to
bear a higher risk in the event of future losses or earnings reductions.
See Section 9 of the Offer to Purchase.
- If and to the extent that Shares tendered in the Offer were issued upon
the exercise of Company options within six months of the Offer, including
conditional exercises of options pursuant to the Option Exercise Form as
described herein, the Company's financial statements will record
compensation expense equal to the excess of the Class A Purchase Price
over the exercise price of the options, and the Company's reported
earnings will be correspondingly lower.
- The Offer will reduce the Company's "public float" (the number of shares
owned by outside shareholders and available for trading in the securities
markets). This and the Company's higher
2
<PAGE> 3
leverage may result in lower stock prices or reduced liquidity in the
trading market for Class A Shares in the future. See Section 12 of the
Offer to Purchase.
5. MUST I ACTUALLY EXERCISE MY OPTIONS IN ORDER TO PARTICIPATE IN THE
OFFER?
No, not in the usual way. As a holder of unexercised vested options, we are
allowing you to "conditionally" exercise all or part of your vested options and
tender the Option Shares you would be entitled to receive upon the exercise.
This exercise of options is "conditional" because you are deemed to exercise the
option only if, and to the extent that, we actually purchase the Option Shares
in the Offer.
6. DO I HAVE TO PAY THE EXERCISE PRICE WITH CASH?
No. In order to facilitate your participation in the Offer, we are allowing
you to conditionally exercise your vested options without paying the exercise
price in cash. This is called a "cashless exercise." This means that your vested
options will be exercised and the Option Shares will be tendered, and the amount
of cash you receive for each Option Share purchased will equal the difference
between the Class A Purchase Price per Share and the option exercise price per
Share, less withholding taxes. You do not need to send any money with your
Option Election Form.
7.IF MY OPTIONS ARE NOT VESTED, MAY I STILL TENDER OPTION SHARES UNDERLYING
THEM?
No. You may only tender Option Shares that are subject to vested options.
8.WILL ALL OF THE OPTION SHARES THAT I TENDER BE PURCHASED IN THE OFFER?
Not necessarily. In the Offer, the Company is offering to purchase a total
of 4,500,000 Class A Shares at a price of not more than $21.00 nor less than
$18.50 per Share determined as described in the Offer to Purchase, and also to
purchase a total of 100,000 Class B Shares at a price of not more than $21.00
nor less than $18.50 per Share determined as described in the Offer to Purchase.
If more than 4,500,000 Class A Shares are tendered, the Company will purchase
properly tendered Class A Shares in the following order of priority:
- first, all Class A Shares tendered and not withdrawn prior to the
Expiration Date by any shareholder who beneficially owns fewer than 100
Class A Shares (including shares being acquired through the conditional
exercise of vested options) and who:
- tenders all Class A Shares that the shareholder beneficially owns at a
price at or below the Class A Purchase Price, including by electing to
accept the Class A Purchase Price determined by the Company (tenders
of less than all Class A Shares owned by the shareholder will not
qualify for this preference); and
- completes the box captioned "Odd Lots" on the Letter of Transmittal
and, if applicable, on the Notice of Guaranteed Delivery; and
- second, after purchase of all of the Shares in item (a) above, all Class
A Shares (1) conditionally tendered in accordance with Section 6 of the
Offer to Purchase, for which the condition has been satisfied, and (2)
all other Shares tendered properly and unconditionally, in each case at
prices at or below the Class A Purchase Price and not withdrawn prior to
the Expiration Date, on a pro rata basis (with appropriate adjustments to
avoid purchases of fractional Shares); and
- third, if necessary, Shares conditionally tendered at or below the Class
A Purchase Price and not withdrawn prior to the Expiration Date by
shareholders who tendered all of their Class A Shares but for which the
minimum condition was not satisfied, selected by random lot in accordance
with Section 6 of the Offer to Purchase.
This means that we may not be able to purchase all of the Option Shares you
tender. In addition, if you tender outstanding Class A Shares that you already
own as well as Option Shares and the Offer is oversubscribed, then both the
already owned Shares and the Option Shares you tender will be subject to
proration. We currently do not know how many Shares will be tendered in the
Offer. If, after taking into account proration, we purchase only a portion of
your Option Shares, your options relating to the unpurchased Option Shares will
3
<PAGE> 4
be treated as though they had not been exercised and will remain outstanding as
options rather than as Shares. In the Option Election Form you may designate the
order in which the Option Shares are purchased by the Company. You may also make
a conditional tender of both Option Shares and already outstanding Shares by
complying with the instructions to the Option Exercise Form and the Letter of
Transmittal.
9.WHAT WILL HAPPEN TO MY OPTIONS IF THE OPTION SHARES ARE NOT PURCHASED?
We will return to you any options for Option Shares that we do not
purchase. They will remain outstanding as options rather than as Shares.
10.HOW WILL I KNOW IF MY OPTION SHARES HAVE BEEN PURCHASED AND WHEN WILL I
BE PAID?
After the Offer expires, all tenders submitted in the Offer will be
tabulated. This may take up to seven to ten business days. Soon thereafter, you
will be advised by the Depositary or the Company of the number, if any, of your
Option Shares that were purchased in the Offer. You will receive a check for the
purchase price of all of your Option Shares purchased in the Offer (less the
applicable exercise price or prices and applicable withholding taxes) promptly
thereafter.
11. WILL I BE TAXED ON THE MONEY I RECEIVE?
Yes. You will be treated as receiving compensation income for each Option
Share sold equal to the excess of the Class A Purchase Price over the exercise
price for each Option Share. This income will be taxed to you at ordinary income
rates, not capital gains rates, and will be subject to withholding for income
and employment taxes. See Sections 3 and 14 of the Offer to Purchase. You should
be aware that in addition to recognizing the compensation income described
above, if, after taking into account the constructive ownership rules of Section
318 of the Internal Revenue Code referred to in Section 14 of the Offer to
Purchase, our purchase of option shares from you fails to satisfy any of the
three tests described in Section 14 of the Offer to Purchase, the full amount of
the Class A Purchase Price for each Option Share will be taxed to you as a
dividend. In contrast, and aside from the compensation income described above,
if our purchase of Option Shares from you meets one or more of the three tests
described in Section 14 of the Offer to Purchase, then no portion of the Class A
Purchase Price (aside from the compensation income element described above) will
be taxable to you either as capital gain or ordinary income. Because of the
drastic difference in tax treatment which depends upon whether one or more of
these three tests is met, we strongly urge you to read Section 14 of the Offer
to Purchase very carefully and to consult your own tax advisor.
12.WHAT WILL HAPPEN TO ANY OPTION I STILL HOLD AFTER THE OFFER?
If, after taking into account proration, we do not purchase all of the
Option Shares you are treated as having received as the result of your
"conditional" exercise of your vested options, your remaining vested options, as
well as your nonvested options, will be treated as not having been exercised and
will remain outstanding. These unexercised options will continue to be
outstanding until you later decide to exercise the options or until they expire
in accordance with their terms.
13.HOW DO I TENDER MY OPTION SHARES IN THE OFFER?
The only way that you can conditionally tender Option Shares in the Offer
is by completing the Option Election Form, signing the form, and returning it to
the Company, which will transmit to the Depositary one or more Letters of
Transmittal and/or Notices of Guaranteed Delivery and any other appropriate
documents as agent for the option holders. The Option Election Form must be
received by the Company before 5 p.m., Wisconsin time, on October 27, 1999.
On this form, you will conditionally exercise your options and tender your
Option Shares in the Offer at a price you select not greater than $21.00 nor
less than $18.50 per Option Share. This is a "conditional" exercise, which means
that if some or all of the Option Shares are not purchased in the Offer because
of the proration process described below and in the Offer to Purchase (or for
any other reason), the options will be returned to you as unexercised options.
If you would prefer to unconditionally exercise your vested options and tender
the Shares you receive in the Offer, you can do so. If you decide to
unconditionally exercise your options in order to receive Shares to tender in
the Offer, you will need to exercise the options in sufficient time
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<PAGE> 5
to deliver Option Shares to the Depositary before the Expiration Date for the
Offer, 12:00 midnight, Eastern Time, on November 2, 1999. If you do
unconditionally exercise options, when you receive the Shares you should follow
the same procedures applicable to all of our other shareholders.
If you wish to conditionally exercise your vested options and tender the
resulting Option Shares, please return our Option Election Form. If you use the
United States mail, we recommend using registered mail, return receipt
requested. Please remember that in all events the materials must be received by
the Company before 5:00 p.m., Wisconsin time, on October 27, 1999.
14.WHAT IF I HOLD CLASS A SHARES OR CLASS B SHARES IN ADDITION TO MY STOCK
OPTIONS?
If you already own Shares, either in your possession or at a brokerage
firm, you may tender those Shares as well. In this case, you may receive two or
more sets of Offer materials. You should be careful to follow the separate
directions that apply to outstanding Shares and Option Shares. In the event that
we must reduce on a pro rata basis the number of Shares and Option Shares that
we purchase from each shareholder, the total number of Shares, including Option
Shares, that you tender will be reduced independently unless you have given
other instructions in connection with a conditional tender.
15.CAN I CHANGE MY MIND AND WITHDRAW OPTION SHARES THAT I DIRECTED TO BE
TENDERED?
Yes, but only if you perform the following steps:
- You must send a signed notice of withdrawal to the Company, and it must
be received by the Company before 5:00 p.m., Wisconsin time, on October
27, 1999.
- The notice of withdrawal must be in writing. You may fax your notice of
withdrawal to (920) 231-3261.
- The notice of withdrawal must state your name and social security number
and the number of Option Shares that you wish to withdraw from the Offer.
The withdrawal procedures are described in the Instructions for Tender of
Options. You must follow these instructions carefully.
You are entitled to retender Option Shares after withdrawal, provided that
all resubmitted materials are completed properly and delivered on time in
accordance with the instructions applicable to the original submission.
16. WHAT DO I DO IF I HAVE ANY QUESTIONS ABOUT THE OFFER?
If you have questions about the offer or need help in properly responding
to the offer, you may call any of the following people at OshKosh B'Gosh:
David Omachinski (920) 232-4140
Greg Spaeth (920) 232-4211
Michael Heider (920) 232-4418
******
This memorandum is intended to help you understand the Offer and how
options will be treated in the Offer. The Offer to Purchase, Letter of
Transmittal and Option Election Form, and the related instructions, contain the
legal terms of the Offer, and are controlling. We encourage you to carefully
read these documents, which explain our Offer in detail. This memorandum is
neither an offer to purchase nor a solicitation of an offer to sell securities.
5
<PAGE> 6
INSTRUCTIONS FOR CONDITIONAL EXERCISE OF OPTIONS
(Note: Before completing the Option Election Form, you should read the attached
memorandum from OshKosh B'Gosh, Inc., as well as the Offer to Purchase and
related Letter of Transmittal.)
THE OPTION ELECTION FORM MUST BE RECEIVED BY THE COMPANY BEFORE 5:00 P.M.
WISCONSIN TIME, ON OCTOBER 27, 1999. YOU MUST SIGN AND COMPLETE THE OPTION
ELECTION FORM IN ORDER FOR YOUR DIRECTION TO BE VALID. THE COMPANY WILL USE YOUR
OPTION ELECTION FORM TO PREPARE AND TRANSMIT ONE OR MORE LETTERS OF TRANSMITTAL
TO THE DEPOSITARY ON BEHALF OF YOU AND OTHERS WHO ELECT TO CONDITIONALLY
EXERCISE OPTIONS AND TENDER THE RESULTING OPTION SHARES.
Send the Option Election Form to:
David Omachinski
OshKosh B'Gosh, Inc.
112 Otter Avenue, P.O. Box 300
Oshkosh, Wisconsin 54902-0300
By Facsimile Transmission:(920) 231-3261
Note: Delivery of the form to an address other than as set forth above will not
constitute a valid delivery.
By signing the Option Election Form, you acknowledge receipt of the
materials relating to the Offer to Purchase dated October 4, 1999 (the "Offer to
Purchase") and the related Letter of Transmittal with respect to an offer by
OshKosh B'Gosh, Inc., a Delaware corporation (the "Company"), for 4,500,000
shares Class A Common Stock and 100,000 shares of Class B Common Stock
(collectively, the "Shares"), at a price of not greater than $21.00 nor less
than $18.50 per Share, determined as described in the Offer to Purchase. The
number of Class A Shares the Company is offering to purchase includes Class A
Shares that may be tendered upon the exercise of vested options under the
Company's stock option plans ("Option Shares").
1. You should complete the Option Election Form to tender, at the Class A
Purchase Price to be determined as set forth in the Offer to Purchase but not
less than the price you specify in the Option Election Form, the Option Shares
that you are entitled to receive upon exercise, pursuant to the terms and
conditions set forth in the Offer to Purchase furnished to you. By signing the
Option Election Form, you agree that if any Option Shares you validly tender are
accepted, you will receive a cash payment equal to (a) the number of Option
Shares that are accepted for purchase, multiplied by (b) the difference between
the applicable option exercise price(s) and the Class A Purchase Price, less (c)
any taxes required to be withheld, and you further agree to be bound by the
terms and conditions set forth herein and in the Offer to Purchase and Letter of
Transmittal.
2. By signing the Option Election Form, you acknowledge that the Company is
allowing you to conditionally exercise your options for the purpose of allowing
you to tender Option Shares in the Offer. Further, by signing the Option
Election Form, you acknowledge that if, after taking into account proration, the
Company purchases less than all of your Option Shares, your remaining Options
will not be considered to have been exercised and will remain outstanding. In
addition, you acknowledge that the order of the Options purchased by the Company
will be as designated by you in the Option Election Form.
3. Option Shares tendered pursuant to the Offer to Purchase may be
withdrawn at any time prior to 5:00 p.m., Wisconsin time, on October 27, 1999.
After that, Option Shares may be withdrawn if they have not been accepted for
payment by the Company as provided in the Offer to Purchase by 12:00 midnight,
Eastern Time, on Tuesday, November 2, 1999. Prior to the expiration of the
Offer, an option holder must submit a written, telegraphic or facsimile
transmission notice of withdrawal so that it is received by the Company at the
address indicated above before 5:00 p.m., Wisconsin time, on October 27, 1999.
After 5 p.m. Wisconsin time, on October 27, 1999, and until the Expiration Date,
an option holder must submit such a notice of withdrawal to the Depositary at
the address indicated on the back cover page of the Offer to Purchase. Any
notice of withdrawal must specify the name and social security number of the
option holder who tendered the Option Shares to be withdrawn and the number of
Option Shares to be withdrawn. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by the
Company, in its sole
<PAGE> 7
discretion. The Company's determination will be final and binding. None of the
Company, the Depositary, Goldman, Sachs & Co., D. F. King & Co., Inc. or any
other person is obligated to give any notice of any defects or irregularities in
any notice of withdrawal and none of them will incur any liability for failure
to give any notice of defects or irregularities. Any Option Shares properly
withdrawn will thereafter be deemed not tendered for purposes of the Offer to
Purchase. However, withdrawn Option Shares may be retendered by the Expiration
Date by again following the procedures for properly tendering Option Shares.
The Option Election Form must be received by the Company before 5:00 p.m.,
Wisconsin time, on October 27, 1999. You must sign and complete this form for
your direction to be valid. The Company will use your Option Election Form to
prepare and transmit one or more Letters of Transmittal to the Depositary on
behalf of you and others who elect to conditionally exercise options and tender
the resulting Option Shares.
GENERAL TERMS AND CONDITIONS OF THE OFFER APPLICABLE TO OPTION SHARE TENDERS:
NOTE: BY SIGNING THE OPTION ELECTION FORM, YOU ALSO AGREE TO THE FOLLOWING TERMS
AND CONDITIONS. THESE ARE IN ADDITION TO THE TERMS AND CONDITIONS SET FORTH IN
THE OFFER TO PURCHASE, WHICH ALSO APPLY TO YOU.
1. You hereby represent and warrant to the Company that:
(a) you understand that your tender of the Option Shares will
constitute your acceptance of the terms and conditions of the Offer,
including your representation and warranty that:
(i) you have a net long position in Shares or equivalent securities
at least equal to the Option Shares tendered within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended (the "1934
Act"), and
(ii) the tender of Shares complies with Rule 14e-4 under the 1934
Act;
(b) when and to the extent the Company accepts the Option Shares for
purchase, the Company will acquire good, marketable and unencumbered title
to them, free and clear of all security interests, liens, charges,
encumbrances, conditional sales agreements or other obligations relating to
their sale or transfer, and not subject to any adverse claim; and
(c) you have read and agree to all of the terms of the Offer.
2. You will, upon request, execute and deliver any additional documents
deemed by the Depositary, or by the Company to be necessary or desirable to
complete the sale, assignment and transfer of the Option Shares tendered hereby
and you acknowledge that you have read, understand and agree with all of the
terms of the Offer to Purchase. You hereby authorize and direct the Company to
submit a Letter of Transmittal and/or a Notice of Guaranteed Delivery and to
take any other actions and submit any other documents to the Depositary on your
behalf with respect to the Option Shares as either the Company or the Depositary
may deem necessary or desirable.
3. You understand that tenders of Option Shares pursuant to the procedures
described in the Offer to Purchase and in the Instructions for Tender of Options
will constitute an agreement between you and the Company upon the terms and
subject to the conditions of the Offer to Purchase.
4. All authority that you are giving to the Company by signing this form
shall survive your death or incapacity. Your obligations hereunder shall be
binding upon your heirs, personal representatives, successors and assigns.
Except as stated herein or in the Offer to Purchase, this tender is irrevocable.
5. The Company will pay any stock transfer taxes with respect to the sale
and transfer of any Option Shares to it pursuant to the Offer to Purchase. You
understand that (a) the purchase price, net of the option exercise price and
applicable withholding taxes, will be paid to you (you cannot elect to have the
purchase price paid to another person); and (b) you will be responsible for
paying federal and state income taxes arising from the sale of the Option Shares
in the Offer (a portion of which will be withheld as described above and in
Instruction 6 below).
2
<PAGE> 8
6. Under the U.S. federal income tax laws, the Company will be required to
withhold income and employment taxes from the amount of any payments made to
option holders pursuant to the Offer to Purchase. See Section 14 of the Offer to
Purchase.
7. All questions as to the number of Option Shares accepted, the form of
documents and the validity, eligibility (including time of receipt) and
acceptance for payment of any tender of Option Shares will be determined by the
Company in its sole discretion. The Company's determinations shall be final and
binding on all parties. The Company reserves the absolute right to reject any or
all tenders of Option Shares it determines not to be in proper form or the
acceptance of which or payment for which may, in the opinion of the Company's
counsel, be unlawful. The Company also reserves the absolute right to waive any
of the conditions of the Offer and any defect or irregularity in the tender of
any particular Options Shares. The Company's interpretation of the terms of the
Offer to Purchase (including these Instructions for Tender of Options) will be
final and binding on all parties. No tender of Option Shares will be deemed to
be properly made until all defects and irregularities have been cured or waived.
Unless waived, any defects or irregularities in connection with tenders must be
cured within such time as the Company determines. None of the Company, the
Depositary, Goldman, Sachs & Co., D. F. King & Co., Inc. or any other person is
or will be obligated to give notice of any defects or irregularities in tenders,
and none of them will incur any liability for failure to give any notice of
defects or irregularities.
8. If the Option Election Form is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, or other person acting in a fiduciary
capacity, the signing person should indicate that fact when signing. Proper
evidence, satisfactory to the Company, of the authority of the trustee or other
person to sign must be submitted with the Option Election Form.
9. Questions and requests for assistance or additional copies of the Offer
to Purchase and these Instructions for the Tender of Options should be directed
to David Omachinski, Greg Spaeth or Michael Heider at the Company.
10. As described in Sections 1 and 6 of the Offer to Purchase, shareholders
may condition their tenders of Shares of a particular class on all or a minimum
number of their tendered Shares of a that class being purchased ("Conditional
Tenders"). If the Company is to purchase less than all Shares of either class
tendered before the Expiration Date and not withdrawn, the Depositary will
perform a preliminary proration of the Shares of that class, and any Shares
tendered at or below the Purchase Price for that class pursuant to a Conditional
Tender for which the condition was not satisfied by the preliminary proration
will be deemed withdrawn, subject to reinstatement under certain circumstances
if the conditionally tendered Shares are subsequently selected by random lot for
purchase subject to Sections 1 and 6 of the Offer to Purchase. Especially if you
hold both vested options and outstanding Shares, or if you are conditionally
exercising only part of your vested options and tendering the resulting Shares
(so that you will still hold vested options after the Offer, even if you do not
hold any outstanding Shares), for tax reasons you may wish to make a Conditional
Tender of all or a minimum number of your tendered Shares (including Option
Shares) by completing the appropriate box on the Option Exercise Form and
completing the appropriate box on the Letter of Transmittal that you submit with
your outstanding Shares, if any. You must complete the Conditional Tender box on
both your Option Exercise Form and your Letter of Transmittal for outstanding
Shares (if any), even if the condition relates only to Shares covered by one
form or the other. CONDITIONAL TENDERS FOR WHICH THE CONDITION IS NOT SATISFIED
BY THE PRELIMINARY PRORATION MAY BE SUBSEQUENTLY SELECTED FOR REINSTATEMENT BY
RANDOM LOT ONLY FROM SHAREHOLDERS WHO TENDER ALL OF THEIR SHARES OF THE
APPLICABLE CLASS (INCLUDING BOTH OUTSTANDING SHARES AND ANY OPTION SHARES BEING
CONDITIONALLY EXERCISED IN CONNECTION WITH THE OFFER). All Option Shares covered
by this form will be deemed unconditionally tendered unless the "Conditional
Tender" box is completed. The Conditional Tender alternative is made available
primarily so that a shareholder may assure that the purchase of Shares from the
shareholder pursuant to the Offer will be treated as a sale of the Shares by the
shareholder, rather than the payment of a dividend to the shareholder, for
federal income tax purposes. It is the tendering shareholder's responsibility to
determine the minimum number of Shares of either class that must be purchased
from the shareholder in order for the shareholder to qualify for sale (rather
than dividend) treatment. We encourage you to consult your own tax advisor.
3
<PAGE> 9
IN THE EVENT OF PRORATION, ANY SHARES TENDERED PURSUANT TO A CONDITIONAL
TENDER FOR WHICH THE MINIMUM REQUIREMENTS ARE NOT SATISFIED MAY NOT BE ACCEPTED
AND THEREBY WILL BE DEEMED WITHDRAWN. THE TENDER MAY BE REINSTATED ONLY IF THE
TENDER COVERS ALL OF THE SHARES OF THAT CLASS OWNED BY THE SHAREHOLDER AND THE
TENDER IS SELECTED FOR REINSTATEMENT BY RANDOM LOT AS DESCRIBED ABOVE.
4
<PAGE> 10
OPTION ELECTION FORM
- ---------------------------------------------------------
Name
- ---------------------------------------------------------
- ---------------------------------------------------------
Address
(Please Print)
1. I hereby conditionally exercise vested options, for the number of Class
A Shares set forth herein ("Option Shares"), granted to me by OshKosh B'Gosh,
Inc. (the "Company") under one of the Company's stock option plans, and I tender
the resulting Option Shares to the Company pursuant to its Offer to Purchase. My
exercise of options hereunder is subject to the condition that any options for
Option Shares tendered but not purchased by the Company, because of proration or
otherwise, shall be deemed not to have been exercised. I authorize and direct
the Company to withhold from the gross proceeds both the option exercise price
of the exercised options and any applicable tax withholding with respect to the
Option Shares.
2. I hereby elect as follows with respect to my options:
(Choose only one)
[ ] I wish to conditionally exercise and tender Option Shares underlying ALL of
my vested options that have an exercise price of less than the Class A
Purchase Price per Share.
[ ] I wish to conditionally exercise and tender Option Shares under
------------
my vested options that have an exercise price of less than the Class A
Purchase Price per Share.
3. I understand that my vested options will be exercised and accepted in
the Offer in the order which I designate below*:
1. Purchase Class A Shares from the option grant dated
------ ----------------,
with an exercise price of $
------------ per share.
2. Purchase Class A Shares from the option grant dated
------ ----------------,
with an exercise price of $
------------ per share.
3. Purchase Class A Shares from the option grant dated
------ ----------------,
with an exercise price of $
------------ per share.
4. Purchase Class A Shares from the option grant dated
------ ----------------,
with an exercise price of $
------------ per share.
- -------------------------
* If no order is specified, I understand that I will be deemed to have exercised
and tendered my vested options beginning with those with the lowest exercise
price first, then the next lowest exercise price, and so on.
ATTACH ADDITIONAL PAGE IF NEEDED.
4. Conditional Tenders
[ ] Check here if you are tendering all of your Class A Shares that already have
been issued or are being issued using this Option Election Form, including
all Shares you may own directly or in street name that are already issued
and outstanding.
[ ] Check here if (a) you DO NOT own any Shares that are already outstanding
(i.e., you have options but no actual Shares) and (b) your tender of Option
Shares is conditioned on the Company purchasing all or a minimum number of
the tendered Option Shares.
If you checked the preceding box, what is the minimum number of your tendered
Option Shares that you are willing to sell? Shares
------------------
5
<PAGE> 11
[ ] Check here if (a) you DO own some Shares that are already outstanding (i.e.,
you have BOTH options and actual Shares) and (b) your tender of Shares is
conditioned on the Company purchasing all or a minimum number of the
tendered Shares.
If you checked the preceding box, also complete the following information:
Minimum number of Shares (including both already outstanding Shares and Option
Shares) to be sold:
- ------------------------------------------------
If not all tendered Shares are purchased, select them as follows (check one):
[ ] Purchase my outstanding Shares first, in the order indicated on the
Letter of Transmittal.
[ ] Purchase my Options Shares first, in the order indicated in Item 3
above.
5. PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED.
CHECK ONLY ONE BOX
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED
THERE IS NO PROPER TENDER OF SHARES
SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION
[ ] I want to maximize the chance of having OshKosh purchase all of the Shares I
am tendering (subject to the possibility of proration. Accordingly by
checking this ONE box INSTEAD OF ONE OF THE PRICE SELECTION BOXES BELOW, I
hereby tender my Shares at the Purchase Price for the applicable class
resulting from the dutch auction tender process. I acknowledge that this
action will result in me receiving a price per Share that could be as low as
$18.50 or as high as $21.00.
OR
SHARES TENDERED AT PRICE SELECTED BY SHAREHOLDER
By checking ONE of the boxes below INSTEAD OF THE BOX ABOVE, I hereby tender
Shares at the price checked. I acknowledge that this action could result in none
of the Shares being purchased if the Purchase Price for Shares of the applicable
class is less than the price checked. (SHAREHOLDERS WHO DESIRE TO TENDER SHARES
AT MORE THAN ONE PRICE MUST COMPLETE A SEPARATE LETTER OF TRANSMITTAL FOR EACH
PRICE AT WHICH SHARES ARE TENDERED.)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------
-- [ ] $19.00 [ ] $20.00 [ ] $21.00
-- [ ] $19.25 [ ] $20.25 --
[ ] $18.50 [ ] $19.50 [ ] $20.50 --
[ ] $18.75 [ ] $19.75 [ ] $20.75 --
- ------------------------------------------------------------------------------------------
</TABLE>
I HEREBY AUTHORIZE AND DIRECT THE COMPANY, AS MY AGENT, TO TAKE SUCH ACTIONS AND
DELIVER SUCH DOCUMENTS AND OTHER MATERIALS (WHICH MAY INCLUDE ONE OR MORE
LETTERS OF TRANSMITTAL AND/OR NOTICES OF GUARANTEED DELIVERY) TO THE DEPOSITARY
AS THE COMPANY OR THE DEPOSITARY MAY DEEM NECESSARY OR APPROPRIATE FOR THE
TENDER OF MY OPTION SHARES PURSUANT TO THE OFFER TO PURCHASE.
6
<PAGE> 12
SIGN HERE
<TABLE>
<S> <C>
- -------------------------------------------------------- ------------------------------------------
Signature(s) of Option Holder Date
- -------------------------------------------------------- ------------------------------------------
Name(s) Please Print Capacity (Full title)
- ----------------------------------------------------------------------------------------------------
Address (if different from that shown on the cover page)
- --------------------------------------------------------
Daytime Telephone Number
</TABLE>
7
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF CLASS A COMMON STOCK AND/OR
CLASS B COMMON STOCK
OF
OSHKOSH B'GOSH, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED OCTOBER 4, 1999
This form or a facsimile hereof must be used to accept the Offer (as
defined below) if:
(a) certificates for shares of Class A Common Stock, $.01 par value
per share (the "Class A Shares") and/or of Class B Common Stock, $.01 par
value per share (the "Class B Shares") (collectively, the "Shares"), of
OshKosh B'Gosh, Inc., a Delaware corporation (the "Company"), cannot be
delivered to the Depositary prior to the Expiration Date (as defined in
Section 1 of the Company's Offer to Purchase dated October 4, 1999 (the
"Offer to Purchase")); or
(b) the procedure for book-entry transfer (set forth in Section 3 of
the Offer to Purchase) cannot be completed on a timely basis; or
(c) the Letter of Transmittal (or a facsimile thereof) and all other
required documents cannot be delivered to the Depositary prior to the
Expiration Date.
This form, properly completed and duly executed, may be delivered by hand,
mail or facsimile transmission to the Depositary. See Section 3 of the Offer to
Purchase.
TO: HARRIS TRUST AND SAVINGS BANK
<TABLE>
<CAPTION>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
-------- ----------------------- -----------------------------
<S> <C> <C>
Harris Trust and Savings Bank (for Eligible Institutions Only) Harris Trust and Savings Bank
c/o Harris Trust Company of New (212) 701-7636 c/o Harris Trust Company of New
York (212) 701-7637 York
Wall Street Station Confirm by Telephone: Receive Window
P.O. Box 1010 88 Pine Street, 19th Floor
New York, New York 10268-1010 (212) 701-7624 New York, New York 10005
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
This form 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, the signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to the Company at the price per Share
indicated in this Notice of Guaranteed Delivery, upon the terms and subject to
the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal and Option Election Form (which together constitute the "Offer"),
receipt of which are hereby acknowledged, Shares (consisting of
Class A Shares and Class B Shares) pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase.
CONDITIONAL TENDER
(SEE INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL)
A. Do you intend to make a conditional tender of your Shares?
If so, you MUST complete the following:
Minimum number of Shares to be sold: _____________________
B. Are you tendering all of your Shares?**
[ ] Check here if you ARE tendering all of your Shares, including any
Shares you own directly or in street name that are already issued and
outstanding and any Option Shares you are conditionally exercising.
[ ] Check here if you are NOT tendering all of your Shares, including any
Shares you own directly or in street name that are already issued and
outstanding and any Option Shares you are conditionally exercising.
(If neither box is checked, we will assume that you ARE tendering all of
your Shares.)
ODD LOTS
To be completed ONLY if the Shares are being tendered by or on behalf of a
person owning beneficially or of record an aggregate of fewer than 100 Class A
Shares and/or fewer than 100 Class B Shares. The undersigned either (check one
box):
[ ] is the beneficial or record owner of an aggregate of fewer than 100
Class A Shares, all of which are being tendered and/or fewer than 100
Class B Shares, all of which are being tendered; or
[ ] is a broker, dealer, commercial bank, trust company, or other nominee
that (a) is tendering for the beneficial owner(s) thereof, Shares with
respect to which it is the record holder, and (b) believes, based upon
representations made to it by such beneficial owner(s), that each such
person is the beneficial owner of an aggregate of fewer than 100 shares
of Class A Shares and/or fewer than 100 Class B Shares and is tendering
all of such Shares of such class.
In addition, the undersigned is tendering Shares either (check one box):
[ ] at the Purchase Price, as the same shall be determined by the Company
in accordance with the terms of the Offer (persons checking this box
need not indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (in Dollars) per
Share at which Shares are Being Tendered."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED.
2
<PAGE> 3
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED
THERE IS NO PROPER TENDER OF SHARES
SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION
[ ] I want to maximize the chance of having OshKosh purchase all of the
Shares I am tendering (subject to the possibility of proration).
Accordingly, by checking this ONE box INSTEAD OF ONE OF THE PRICE
SELECTION BOXES BELOW, I hereby tender my Shares at the Purchase Price
for the applicable class resulting from the dutch auction tender
process. I acknowledge that this action will result in me receiving a
price per Share that could be as low as $18.50 or as high as $21.00.
OR
SHARES TENDERED AT PRICE SELECTED BY SHAREHOLDER
BY CHECKING ONE OF THE BOXES BELOW INSTEAD OF THE BOX ABOVE, I HEREBY
TENDER SHARES AT THE PRICE CHECKED. I ACKNOWLEDGE THAT THIS ACTION COULD
RESULT IN NONE OF THE SHARES BEING PURCHASED IF THE PURCHASE PRICE FOR
SHARES OF THE APPLICABLE CLASS IS LESS THAN THE PRICE CHECKED.
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST
COMPLETE A SEPARATE NOTICE OF GUARANTEED DELIVERY FOR EACH PRICE AT WHICH
SHARES ARE TENDERED.)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
-- [ ] $19.00 [ ] $20.00 [ ] $21.00
-- [ ] $19.25 [ ] $20.25 --
[ ] $18.50 [ ] $19.50 [ ] $20.50 --
[ ] $18.75 [ ] $19.75 [ ] $20.75 --
</TABLE>
- --------------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
CERTIFICATE NOS. (IF AVAILABLE):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NAME(S)
- --------------------------------------------------------------------------------
ADDRESS(ES)
- --------------------------------------------------------------------------------
AREA CODE(S) AND TELEPHONE NUMBER(S)
SIGN HERE
- --------------------------------------------------------------------------------
SIGNATURE(S)
- --------------------------------------------------------------------------------
DATED:
IF SHARES WILL BE TENDERED BY BOOK-ENTRY TRANSFER THROUGH THE DEPOSITORY
TRUST COMPANY, FILL IN THE APPLICABLE ACCOUNT NUMBER:
ACCOUNT NUMBER:
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned is a firm or other entity that is a member in good standing
of a registered national securities exchange, or a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
having an office, branch or agency in the United States and represents that: (a)
the above-named person(s) "own(s)" the Shares tendered hereby within the meaning
of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended,
and (b) such tender of Shares complies with such Rule 14e-4, and guarantees that
the Depositary will receive (i) certificates of the Shares tendered hereby in
proper form for transfer, or (ii) confirmation that the Shares tendered hereby
have been delivered pursuant to the procedure for book-entry transfer (set forth
in Section 3 of the Offer to Purchase) into the Depositary's account at The
Depository Trust Company, together with a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof), or an Agent's
Message, and any other documents required by the Letter of Transmittal, all
within three Nasdaq trading days after the date the Depositary receives this
Notice of Guaranteed Delivery.
- ------------------------------------------------------
Authorized Signature
- ------------------------------------------------------
Name (Please Print)
- ------------------------------------------------------
Title
- ------------------------------------------------------
Name of Firm
- ------------------------------------------------------
Address
- ------------------------------------------------------
- ------------------------------------------------------
(Including Zip Code)
- ------------------------------------------------------
Area Code and Telephone Number:
Date: , 1999
DO NOT SEND CERTIFICATES WITH THIS FORM. YOUR STOCK CERTIFICATES MUST BE
SENT WITH THE LETTER OF TRANSMITTAL.
4
<PAGE> 1
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
OSHKOSH B'GOSH, INC.
OFFER TO PURCHASE FOR CASH
UP TO 4,500,000 SHARES OF CLASS A COMMON STOCK
AND UP TO 100,000 SHARES OF CLASS B COMMON STOCK,
EACH AT A PURCHASE PRICE NOT IN EXCESS OF $21.00
NOR LESS THAN $18.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON NOVEMBER 2, 1999, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
OshKosh B'Gosh, Inc., a Delaware corporation (the "Company"), has appointed
us to act as Dealer Manager in connection with its offer to purchase for cash
4,500,000 Class A Shares (or any smaller number of Class A Shares as are
properly tendered) and 100,000 Class B Shares (or any smaller number of Class A
Shares as are properly tendered) (collectively, the "Shares"). The Company will
determine the lowest price, not in excess of $21.00 nor less than $18.50 per
Class A Share (the "Class A Purchase Price"), that will allow it to purchase
4,500,000 Class A Shares (or any smaller number of Class A Shares as are
properly tendered), and the separate price, not in excess of $21.00 nor less
than $18.50 per Class B Share (the "Class B Purchase Price"), that will allow it
to purchase 100,000 Class B Shares (or any smaller number of Class B Shares as
are properly tendered), taking into account the prices specified by tendering
shareholders, upon the terms and subject to the conditions set forth in the
Offer. The Offer is being made upon the terms and subject to the conditions set
forth in its Offer to Purchase, dated October 4, 1999, and in the related Letter
of Transmittal and Option Election Form (which together constitute the "Offer").
All Shares acquired in the Offer will be acquired at the Purchase Price for
the applicable class. All Shares properly tendered at prices at or below the
Purchase Price for the applicable class and not withdrawn will be purchased at
the Purchase Price for that class, upon the terms and subject to the conditions
of the Offer, including the proration and conditional tender provisions. Shares
tendered at prices in excess of the Purchase Price for the applicable class and
Shares not purchased because of proration or conditional tender will be
returned. The Company reserves the right, in its sole discretion, to purchase
more than 4,500,000 Class A Shares or more than 100,000 Class B Shares pursuant
to the Offer. See Sections 1 and 15 of the Offer to Purchase.
If, prior to the Expiration Date (as defined in the Offer to Purchase),
more than 4,500,000 Class A Shares or more than 100,000 Class B Shares (or any
greater number of Shares of either class as the Company may elect to purchase)
are properly tendered and not withdrawn, the Company will, upon the terms and
subject to the conditions of the Offer, accept Shares for purchase (i) first
from Odd Lot Holders (as defined in the Offer to Purchase) who properly tender
all applicable Shares of a class beneficially owned by such Odd Lot Holder at or
below the Purchase Price for that class, (ii) second, after purchase of all of
the foregoing shares, all Shares conditionally tendered, for which the condition
was satisfied, and all other Shares tendered unconditionally, in each case at
prices at or below the Purchase Price for the applicable class, on a pro-rata
basis and (iii) third, if necessary, Shares conditionally tendered, for which
the condition was not satisfied, at prices at or below the Purchase Price for
the applicable class selected by random lot. If any shareholder tenders all of
his or her Shares and wishes to avoid proration or to limit the extent to which
only a portion of such Shares may be purchased because of the proration
provisions, the shareholder may tender Shares subject
<PAGE> 2
to the condition that a specified minimum number of Shares (which may be
represented by designated stock certificates) or none of such Shares be
purchased. See Sections 1, 3 and 6 of the Offer to Purchase.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 7 OF THE OFFER TO PURCHASE.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase, dated October 4, 1999;
2. Letter to Clients which 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;
3. Letter, dated October 4, 1999, from Douglas W. Hyde, Chairman and
Chief Executive Officer of the Company, to shareholders of the Company;
4. Letter of Transmittal for your use and for the information of your
clients (together with accompanying Form W-9); and
5. Notice of Guaranteed Delivery to be used to accept the Offer if the
Share certificates and all other required documents cannot be delivered to
the Depositary by the Expiration Date or if the procedure for book-entry
transfer cannot be completed on a timely basis.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN
TIME, ON NOVEMBER 2, 1999, UNLESS EXTENDED.
No fees or commissions will be payable to brokers, dealers or any person
for soliciting tenders of Shares pursuant to the Offer other than fees paid to
the Dealer Manager, the Information Agent or the Depositary as described in the
Offer to Purchase. The Company will, however, upon request, reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to the beneficial owners of Shares held by you as a nominee
or in a fiduciary capacity. The Company will pay or cause to be paid any stock
transfer taxes applicable to its purchase of Shares, except as otherwise
provided in Instruction 7 of the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary with either certificate(s) representing the tendered Shares or
confirmation of their book-entry transfer, all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
As described in Section 3, "Procedures for Tendering Shares," of the Offer
to Purchase, tenders may be made without the concurrent deposit of stock
certificates or concurrent compliance with the procedure for book-entry transfer
if such tenders are made by or through a broker or dealer which is a firm or
other entity that is a member in good standing of a registered national
securities exchange, or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office, branch or
agency in the United States. Certificates for Shares so tendered (or a
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the "Book-Entry Transfer Facility" described in the Offer to
Purchase), together with a properly completed and duly executed Letter of
Transmittal and any other documents required by the Letter of Transmittal, must
be received by the Depositary within three (3) Nasdaq trading days after timely
receipt by the Depositary of a properly completed and duly executed Notice of
Guaranteed Delivery.
Any inquiries you may have with respect to the Offer should be addressed to
Goldman, Sachs & Co. or to the Information Agent at their respective addresses
and telephone numbers set forth on the back cover page of the Offer to Purchase.
2
<PAGE> 3
Additional copies of the enclosed material may be obtained from the
undersigned, telephone: (312) 655-4600 or from the Information Agent, D.F. King
& Co., Inc., telephone: (212) 425-1685 or (888) 246-5358 (toll free).
Very truly yours,
Goldman, Sachs & Co.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR ANY OF ITS AFFILIATES, THE
DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, 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 DOCUMENTS ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED THEREIN.
3
<PAGE> 1
OSHKOSH B'GOSH, INC.
OFFER TO PURCHASE FOR CASH
UP TO 4,500,000 SHARES OF CLASS A COMMON STOCK
AND UP TO 100,000 SHARES OF CLASS B COMMON STOCK,
EACH AT A PURCHASE PRICE NOT IN EXCESS OF $21.00
NOR LESS THAN $18.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON NOVEMBER 2, 1999, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated October 4,
1999, and the related Letter of Transmittal and Option Exercise Form (which
together constitute the "Offer") in connection with the Offer by OshKosh B'Gosh,
Inc., a Delaware corporation (the "Company"), to purchase 4,500,000 Class A
Shares (or any smaller number of Class A Shares as are properly tendered) and
100,000 Class B Shares (or any smaller number of Class A Shares as are properly
tendered) (collectively, the "Shares"). The Company will determine the lowest
price, not in excess of $21.00 nor less than $18.50 per Class A Share (the
"Class A Purchase Price"), that will allow it to purchase 4,500,000 Class A
Shares (or any smaller number of Class A Shares as are properly tendered), and
the separate price, not in excess of $21.00 nor less than $18.50 per Class B
Share (the "Class B Purchase Price"), that will allow it to purchase 100,000
Class B Shares (or any smaller number of Class B Shares as are properly
tendered), taking into account the prices specified by tendering shareholders,
upon the terms and subject to the conditions set forth in the Offer.
All Shares acquired in the Offer will be acquired at the Purchase Price for
the applicable class. All Shares properly tendered at prices at or below the
Purchase Price for the applicable class and not withdrawn will be purchased at
the Purchase Price for that class, upon the terms and subject to the conditions
of the Offer, including the proration and conditional tender provisions. Shares
tendered at prices in excess of the Purchase Price for the applicable class and
Shares not purchased because of proration or conditional tender will be
returned. The Company reserves the right, in its sole discretion, to purchase
more than 4,500,000 Class A Shares or more than 100,000 Class B Shares pursuant
to the Offer. See Sections 1 and 15 of the Offer to Purchase.
If, prior to the Expiration Date (as defined in the Offer to Purchase),
more than 4,500,000 Class A Shares or more than 100,000 Class B Shares (or any
greater number of Shares of either class as the Company may elect to purchase)
are properly tendered and not withdrawn, the Company will, upon the terms and
subject to the conditions of the Offer, accept Shares for purchase (i) first
from Odd Lot Holders (as defined in the Offer to Purchase) who properly tender
all applicable Shares of a class beneficially owned by such Odd Lot Holder at or
below the Purchase Price for that class, (ii) second, after purchase of all of
the foregoing shares, all Shares conditionally tendered, for which the condition
was satisfied, and all other Shares tendered unconditionally, in each case at
prices at or below the Purchase Price for the applicable class, on a pro-rata
basis and (iii) third, if necessary, Shares conditionally tendered, for which
the condition was not satisfied, at prices at or below the Purchase Price for
the applicable class selected by random lot. If any shareholder tenders all of
his or her Shares and wishes to avoid proration or to limit the extent to which
only a portion of such Shares may be purchased because of the proration
provisions, the shareholder may tender Shares subject to the condition that a
specified minimum number of Shares (which may be represented by designated stock
certificates) or none of such Shares be purchased. See Sections 1, 3 and 6 of
the Offer to Purchase.
We are the owner of record of Shares held for your account. As such, we are
the only ones who can tender those Shares, and then only pursuant to your
instructions. WE ARE SENDING YOU THE LETTER OF TRANSMITTAL FOR YOUR INFORMATION
ONLY; YOU CANNOT USE IT TO TENDER SHARES WE HOLD FOR YOUR ACCOUNT.
<PAGE> 2
Please instruct us as to whether you wish us to tender any or all of the
Shares we hold for your account on the terms and subject to the conditions of
the Offer.
We call your attention to the following:
1. You may tender Shares of either class at prices not in excess of
$21.00 nor less than $18.50 per Share as indicated in the attached
Instruction Form, net to you in cash.
2. Whether or not you tender all of your Shares of either class, you
may condition your tender of Shares on the Company purchasing all or a
minimum number of your Shares. If you do so, however, unconditional tenders
and tenders with a lower minimum condition may have priority over your
Shares. Also, you will be eligible to participate in the random lot
selection procedures for conditional tenders in the case of certain
oversubscriptions (as discussed in the Offer to Purchase) only if your
conditional tender covers all of your Shares of the applicable class. For
all of these reasons, any conditional tender may reduce the likelihood that
at least some of your Shares will be purchased.
3. You may designate the order in which your Shares shall be purchased
in the event of proration.
4. The Offer is not conditioned upon any minimum number of Shares
being tendered.
5. The Offer, proration period and withdrawal rights will expire at
12:00 midnight, Eastern Time, on November 2, 1999, unless the Company
extends the Offer.
6. The Offer is for 4,500,000 Class A Shares and 100,000 Class B
Shares, constituting approximately 32.1% of the outstanding Class A Shares
and approximately 4.4% of the outstanding Class B Shares as of September
30, 1999.
7. Tendering shareholders 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 7 to the Letter of
Transmittal, transfer taxes on the sale of Shares pursuant to the Offer. A
tendering shareholder who holds securities with a shareholder's broker may
be required by the broker to pay a service charge or other fee.
8. If you beneficially hold an aggregate of fewer than 100 Class A
Shares and/or fewer than 100 Class B Shares, and you instruct us to tender
on your behalf all such Shares of either class at or below the Purchase
Price for the applicable class before the Expiration Date (as defined in
the Offer to Purchase) and check the box captioned "Odd Lots" in the
attached Instruction Form, the Company, upon the terms and subject to the
conditions of the Offer, will accept all of those Shares for purchase
before proration, if any, of the purchase of other Shares properly tendered
at or below the Purchase Price for that class.
9. If you wish to tender portions of your Shares of either class at
different prices, you must complete a separate Instruction Form for each
price at which you wish to tender each portion of your Shares. We must
submit a separate Letter of Transmittal on your behalf for each price you
will accept.
10. The Class B Shares are not listed on any exchange and do not
qualify as "margin securities." The Class B Shares continue to the
convertible into Class A Shares at the holder's option on a share for share
basis. The Class A Shares are expected to continue to be listed on the
Nasdaq National Market.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the attached
Instruction Form. An envelope to return your Instruction Form to us is enclosed.
If you authorize us to tender your Shares, we will tender all of your Shares
registered in our name unless you specify otherwise on the attached Instruction
Form.
YOUR INSTRUCTION FORM SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION DATE OF THE OFFER.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
EASTERN TIME, ON NOVEMBER 2, 1999, UNLESS THE COMPANY EXTENDS THE OFFER.
As described in Section 1 of the Offer to Purchase, if more than 4,500,000
Class A Shares or more than 100,000 Class B Shares have been properly tendered
at prices at or below the Class A Purchase Price or the Class B Purchase Price,
respectively, and not withdrawn prior to the Expiration Date (as defined in the
Offer
2
<PAGE> 3
to Purchase), the Company will purchase properly tendered Shares of the
oversubscribed class on the basis set forth below:
(a) first, all Shares properly tendered and not withdrawn prior to the
Expiration Date by any Odd Lot Holder (as defined in the Offer to Purchase)
who:
(1) tenders all Class A Shares and/or all Class B Shares, as
applicable, beneficially owned by such Odd Lot Holder at a price at or
below the Purchase Price for that class, including by electing to accept
the Purchase Price for that class determined by the Company (tenders of
less than all Shares of a particular class owned by the shareholder will
not qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) second, after purchase of all of the foregoing Shares listed
above, all Shares of the applicable class (1) conditionally tendered in
accordance with Section 6 of the Offer to Purchase, for which the condition
was satisfied, and (2) all other Shares tendered properly and
unconditionally, in each case at prices at or below the Purchase Price for
the applicable class and not withdrawn prior to the Expiration Date, on a
pro rata basis (with appropriate adjustments to avoid purchases of
fractional Shares) as described in Section 1 of the Offer to Purchase; and
(c) third, if necessary, Shares conditionally tendered, at or below
the Purchase Price for the applicable class and not withdrawn prior to the
Expiration Date by shareholders who tendered all of their Shares of the
applicable class but for which the condition was not satisfied, selected by
random lot in accordance with Section 6 of the Offer to Purchase.
Whether or not you tender all of the Shares you own (whether beneficially
or of record), you may condition your tender on the Company purchasing a minimum
number of your tendered Shares. In that case, if as a result of the preliminary
proration provisions in the Offer to Purchase the Company would purchase less
than the specified minimum number of your Shares, then the Company will not
purchase any of your Shares, except as provided in the next sentence. If as a
result of conditionally tendered Shares not being purchased the total number of
Shares that would be purchased falls below the aggregate number of Shares of
that class to be purchased, the Company will select, by random lot, Shares for
purchase from shareholders who conditionally tendered all of their Shares of the
applicable class and for which the condition, based on a preliminary proration,
has not been satisfied. See Sections 1 and 6 of the Offer to Purchase.
The Offer is being made to all holders of Shares of either class. The
Company is not aware of any state where the making of the Offer is prohibited by
administrative or judicial action pursuant to a valid state statute. If the
Company becomes aware of any valid state statute prohibiting the making of the
Offer, the Company will make a good faith effort to comply with the statute. If,
after that good faith effort, the Company cannot comply with such statute, the
Offer will not be made to, nor will tenders be accepted from or on behalf of,
holders of Shares in that state. In those jurisdictions whose securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer will be deemed to be made on behalf of the Company by the Dealer
Manager or one or more registered brokers or dealers licensed under the laws of
that jurisdiction.
3
<PAGE> 4
INSTRUCTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF
OSHKOSH B'GOSH, INC.
Please tender to OshKosh B'Gosh, Inc. (the "Company"), on (our) (my)
behalf, the number of Shares indicated below, which are beneficially owned by
(us) (me) and registered in your name, upon the terms and subject to the
conditions contained in the Offer to Purchase of the Company dated October 4,
1999, and the related Letter of Transmittal, the receipt of both of which is
acknowledged.
NUMBER OF SHARES TO BE TENDERED PURSUANT TO THIS INSTRUCTION FORM:
CLASS A SHARES
------------------
CLASS B SHARES
------------------
- --------------------------------------------------------------------------------
CONDITIONAL TENDER
[ ] Check here if you are tendering all of your Shares.
[ ] Check here and complete the following if your tender is conditional on the
Company purchasing all or a minimum number of your tendered Shares.
Minimum number of Shares to be sold:
-------------------------------------------
ODD LOTS
(SEE INSTRUCTION 8 OF THE LETTER OF TRANSMITTAL)
[ ] By checking this box the undersigned represents that the undersigned owns,
beneficially or of record, an aggregate of fewer than 100 Class A Shares
and/or fewer than 100 Class B Shares and is tendering all of the
undersigned's Shares of the applicable class or classes.
In addition, the undersigned is tendering the Odd Lot Shares either (check
one box):
[ ] at the Purchase Price for the applicable class, as determined by the
Company in accordance with the terms of the Offer (persons checking
this box need not indicate the price per Share below); or
[ ] at the price per Share indicated below under "Price (In Dollars) Per
Share At Which Shares Are Being Tendered."
ODD LOT SHARES CANNOT BE CONDITIONALLY TENDERED
4
<PAGE> 5
- --------------------------------------------------------------------------------
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
- --------------------------------------------------------------------------------
CHECK ONLY ONE BOX
IF MORE THAN ONE BOX IS CHECKED OR IF NO BOX IS CHECKED THERE IS NO PROPER
TENDER OF SHARES
SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION
[ ] I WANT TO MAXIMIZE THE CHANCE OF HAVING OSHKOSH PURCHASE ALL OF THE
SHARES I AM TENDERING (SUBJECT TO THE POSSIBILITY OF PRORATION.
ACCORDINGLY BY CHECKING THIS ONE BOX INSTEAD OF ONE OF THE PRICE
SELECTION BOXES BELOW, I HEREBY TENDER MY SHARES AT THE PURCHASE PRICE
FOR THE APPLICABLE CLASS RESULTING FROM THE DUTCH AUCTION TENDER
PROCESS. I ACKNOWLEDGE THAT THIS ACTION WILL RESULT IN ME RECEIVING A
PRICE PER SHARE THAT COULD BE AS LOW AS $18.50 OR AS HIGH AS $21.00.
OR
SHARES TENDERED AT PRICE SELECTED BY SHAREHOLDER
BY CHECKING ONE OF THE BOXES BELOW INSTEAD OF THE BOX ABOVE, I HEREBY
TENDER SHARES AT THE PRICE CHECKED. I ACKNOWLEDGE THAT THIS ACTION COULD
RESULT IN NONE OF THE SHARES BEING PURCHASED IF THE PURCHASE PRICE FOR
SHARES OF THE APPLICABLE CLASS IS LESS THAN THE PRICE CHECKED.
(SHAREHOLDERS WHO DESIRE TO TENDER SHARES AT MORE THAN ONE PRICE MUST
COMPLETE A SEPARATE LETTER OF TRANSMITTAL FOR EACH PRICE AT WHICH SHARES
ARE TENDERED.)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
-- [ ] $19.00 [ ] $20.00 [ ] $21.00
-- [ ] $19.25 [ ] $20.25 --
[ ] $18.50 [ ] $19.50 [ ] $20.50 --
[ ] $18.75 [ ] $19.75 [ ] $20.75 --
</TABLE>
- --------------------------------------------------------------------------------
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE
TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, WE RECOMMEND REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED. IN ALL CASES, ALLOW SUFFICIENT TIME TO ASSURE
DELIVERY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER,
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM
5
<PAGE> 6
TENDERING THEIR SHARES. EACH SHAREHOLDER MUST MAKE THE DECISION WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES AND AT WHAT PRICE OR PRICES SHARES
SHOULD BE TENDERED.
Signature(s):
------------------------------------------
- -------------------------------------------------------
Name(s):
-----------------------------------------------
- -------------------------------------------------------
(PLEASE PRINT)
- -------------------------------------------------------
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
Address:
-----------------------------------------------
- -------------------------------------------------------
(INCLUDING ZIP CODE)
Area Code and Telephone Number:
-----------------------
- -------------------------------------------------------
Date:
---------------------, 1999
6
<PAGE> 1
FOR RELEASE:
6:00 A.M., C.S.T., Friday, October 1, 1999
CONTACT:
David L. Omachinski
OshKosh B'Gosh, Inc.
920/232-4140
OSHKOSH B'GOSH, INC. ANNOUNCES SELF-TENDER FOR UP TO 4.5 MILLION
SHARES OF CLASS A COMMON STOCK AND UP TO 100,000 SHARES OF CLASS
B COMMON STOCK
OSHKOSH, WISCONSIN-(PR NEWSWIRE) OCTOBER 1, 1999 -- OshKosh B'Gosh, Inc. (Nasdaq
OTC: GOSHA), a Delaware corporation, announced today that its board of directors
has authorized the Company to repurchase shares of its common stock pursuant to
a "dutch auction" self-tender offer. The self-tender will be for up to 4.5
million shares of the Company's Class A Common Stock and up to 100,000 shares of
its Class B Common Stock. The tender offer price will be determined separately
for each class and will range from $18.50 to $21.00 per share in cash, subject
to market and other customary conditions. The tender offer is expected to
commence on Monday, October 4, 1999, and expire at 12:00 Midnight, Eastern Time,
on Tuesday, November 2, 1999, unless extended. On September 30, 1999, OshKosh
Class A Common Stock was last traded at $15 31/32.
The tender offer will be subject to various terms and conditions described in
the tender offer materials to be distributed to shareholders. Under the terms of
the tender offer, OshKosh shareholders will be given the opportunity to specify
prices within the Company's stated price range at which they are willing to sell
their shares. Upon receipt of tenders, OshKosh will determine a final Class A
Purchase Price that enables it to purchase up to 4.5 million Class A Shares from
those shareholders who agreed to sell at or below the selected Class A Purchase
Price, and a final Class B Purchase Price that enables it to purchase up to
100,000 Class B Shares from those shareholders who agreed to sell at or below
the selected Class B Purchase Price. All shares of either class that are
purchased will be purchased at the determined price for that class. If more than
4.5 million Class A Shares are tendered at or below the Class A Purchase Price
or more than 100,000 Class B Shares are tendered at or below the Class B
Purchase Price, there will be a proration for the applicable class unless
OshKosh elects (in its sole discretion) to purchase the excess.
The Offer is not contingent upon any minimum number of shares being tendered. As
of September 30, 1999, OshKosh had 14,022,481 shares of Class A Common Stock and
2,248,218 shares of Class B Common Stock outstanding. The Class A Common Stock
is listed on the Nasdaq National Market under the symbol "GOSHA." The Class B
Common Stock is not listed or traded on any exchange. The Class B Common Stock
is convertible into Class A Common Stock on a share for share basis at the
shareholder's option. The Company intends to finance the tender offer primarily
through borrowings under a new loan agreement and, to a lesser extent, with
available cash from the Company's operations.
<PAGE> 2
Neither the Company nor its board of directors makes any recommendation to
shareholders as to whether to tender or refrain from tendering their shares.
Each shareholder must make the decision whether to tender shares and, if so, how
many shares and at what price or prices shares should be tendered.
Douglas W. Hyde, Chairman and Chief Executive Officer of OshKosh, commented, "We
believe that from a financial and capital structure perspective, using available
cash and leveraging our balance sheet to repurchase our shares will result in a
more efficient capital structure for the Company and is consistent with our
long-term goal of increasing shareholder value. Moving forward, we remain
committed to our consumer driven strategy of a strong focus on innovative
product design, further development and execution of our sourcing strategy and
exploring further brand extension possibilities."
Goldman, Sachs & Co. will serve as the dealer manager for the tender offer.
D. F. King & Co., Inc. will serve as the information agent.
2
<PAGE> 1
[TOMBSTONE ADVERTISEMENT IN WALL STREET JOURNAL]
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell the Shares. The Offer is made solely by the Offer to Purchase,
dated October 4, 1999, and the related Letter of Transmittal and Option Exercise
Form, and is not being made to, nor will tenders be accepted from or on behalf
of, holders of outstanding Class A Shares or Class B Shares in any jurisdiction
in which the making or acceptance thereof would not be in compliance with the
laws of the jurisdiction. In any jurisdiction the securities laws of which
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed made on behalf of the Company by the Dealer Manager or one or more
brokers or dealers licensed under the laws of the jurisdiction.
OFFER BY OSHKOSH B'GOSH, INC. TO PURCHASE FOR CASH UP TO 4,500,000
SHARES OF ITS OUTSTANDING CLASS A COMMON STOCK AT A PRICE OF NOT GREATER THAN
$21.00 NOR LESS THAN $18.50 PER SHARE AND UP TO 100,000 SHARES OF ITS
OUTSTANDING CLASS B COMMON STOCK AT A PRICE OF NOT GREATER THAN $21.00 NOR LESS
THAN $18.50 PER SHARE.
OshKosh B'Gosh, Inc. is offering to purchase for cash up to 4,500,000
shares of its Class A Common Stock and up to 100,000 shares of its Class B
Common Stock, upon the terms and subject to the conditions set forth in the
Offer to Purchase, to be dated October 4, 1999 (the "Offer to Purchase"), and in
the related Letter of Transmittal and Option Exercise Form (which together
constitute the "Offer"). The Company is inviting its shareholders to tender
their Class A Shares and Class B Shares (collectively, the "Shares") at prices
specified by each shareholder, not greater than $21.00 nor less than $18.50
per Share, upon the terms and subject to the conditions set forth in the Offer.
Based upon the number of Shares tendered and the prices specified by tendering
shareholders, the Company will select the lowest purchase price per Class A
Share, not greater than $21.00 nor less than $18.50 per share (the Class A
Purchase Price"), that the Company will pay for Class A Shares and that will
enable it to purchase 4,500,000 Class A Shares (or any lower number of Class A
Shares that are properly tendered and not withdrawn pursuant to the Offer), and
the separate purchase price per Class B Share, not greater than $21.00 nor less
than $18.50 per share (the Class B Purchase Price"), that the Company will pay
for Class B Shares and that will enable it to purchase 100,000 Class B Shares
(or any lower number of Class B Shares that are properly tendered and not
withdrawn pursuant to the Offer). All Shares tendered at or below the Purchase
Price for the applicable class will be purchased at the Purchase Price for that
class, subject to the terms and conditions of the Offer, including the proration
and "odd lot" provisions described therein. The Purchase Price for each class
will be paid in cash, net to the seller, with respect to all Shares purchased.
Shares tendered at prices in excess of the Purchase Price for the applicable
class and Shares not purchased because of proration will be returned. Tendering
shareholders will not be obligated to pay brokerage commissions, solicitation
fees or, subject to Instruction 7 of the Letter of Transmittal, stock transfer
taxes on the Company's purchase of Shares pursuant to the Offer. If the number
of Shares of either class validly tendered at or below the Purchase Price for
that class and not withdrawn prior to the Expiration Date (as defined below)
(the
<PAGE> 2
"Eligible Shares") exceeds the number of Shares of that class to be purchased
pursuant to the Offer, then the Company will select the Shares to be purchased
from the Eligible Shares on a pro rata basis after purchase of all Shares from
Odd Lot Holders (as defined below), subject to the provisions for conditional
tenders described below.
The Offer will expire at 12:00 midnight, Eastern Time, on Tuesday,
November 2, 1999 (as may be extended in accordance with the terms of the Offer,
the "Expiration Date"), unless the Company exercises its right, in its sole
discretion, to extend the Offer at any time or from time to time by oral or
written notice to the Depositary (as defined in the Offer to Purchase). The
Company expressly reserves the right, in its sole discretion, to purchase up to
an additional 2% of the outstanding Shares of either class pursuant to the Offer
without the need to extend the Offer.
Upon the terms and subject to the conditions of the Offer, in the event
that prior to the Expiration Date a greater number of Shares of either class is
properly tendered, and not withdrawn, at prices at or below the Purchase Price
of that class than will be accepted by the Company for purchase pursuant to the
Offer, the Company will accept the Shares to be purchased in the following order
of priority: (i) all Shares properly tendered at or below the Purchase Price for
the applicable class and not withdrawn before the Expiration Date by any
shareholder who holds fewer than 100 Class A Shares and/or fewer than 100 Class
B Shares ("Odd Lot Holder"), and tenders all of those Shares and does not
withdraw any those Shares, (ii) all Shares (a) conditionally tendered, for which
the condition was satisfied, and (b) all other Shares unconditionally tendered,
in each case at or below the Purchase Price for the applicable class and not
withdrawn before the Expiration Date, on a pro rata basis (with appropriate
adjustments to avoid purchases of fractional Shares), and (iii) if necessary,
Shares conditionally tendered by shareholders tendering all of their Shares of
the applicable class, for which the condition was not satisfied, at prices at or
below the Purchase Price for the applicable class, by random lot. Tenders of
Shares made pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date. Thereafter, such tenders are irrevocable, except that Shares
tendered may be withdrawn at any time after 40 business days from the
commencement of the Offer unless previously accepted for payment by the Company
as provided in the Offer to Purchase. To be effective, a written, telegraphic,
telex, or facsimile transmission notice of withdrawal must be received in a
timely manner by the Depositary at one of its addresses set forth in the Offer
to Purchase and must specify the name of the person who tendered the Shares to
be withdrawn and the number and class of Shares to be withdrawn and the name of
the registered holders of the Shares if different from the person who tendered
the Shares. If the Shares to be withdrawn have been delivered to the Depositary,
a signed notice of withdrawal with (except in the case of Shares tendered by an
Eligible Institution (as defined in the Offer to Purchase)) signatures
guaranteed by an Eligible Institution must be submitted prior to the release of
such Shares. In addition, the withdrawal 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 shareholder) and the class and 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
<PAGE> 3
at the Book-Entry Transfer Facility (as defined in the Offer to Purchase) to be
credited with the withdrawn Shares.
The Company is making the Offer (i) because its Board of Directors
believes that the purchase of Shares pursuant to the Offer constitutes a prudent
use of its financial resources, given its business profile, assets, and
prospects and (ii) to afford those shareholders who desire liquidity an
opportunity to sell all or a portion of their Shares without concern about the
liquidity of trading in the market for the Shares and without the usual
transaction costs associated with open market sales. This opportunity to sell
Shares without paying any brokerage fee may be particularly valuable to smaller
shareholders, for whom such fees may be relatively high. Odd Lot Holders who
tender into the Offer will realize additional transactional savings by avoiding
any applicable "odd lot" discount payable on a sale of Shares. If a shareholder
is considering the sale of all or a portion of his or her Shares, the Offer also
gives him or her the opportunity to determine the minimum price at which he or
she is willing to sell his or her Shares. The Offer also gives the shareholder
the opportunity to sell Shares at prices greater than the market price of the
Shares prevailing before the Company announced the Offer. Shareholders who do
not tender Shares or whose Shares are not purchased in the Offer will have a
proportionate increase in their ownership interest in the Company.
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Class A Shares that are available to be publicly traded on the
National Market of The Nasdaq Stock Market, Inc. ("Nasdaq"), and is likely to
reduce the number of shareholders. Nonetheless, the Company anticipates that
there will be enough shareholders and sufficient publicly available Class A
Shares following the Offer to continue to provide a trading market for them. The
Class B Shares are no longer listed with Nasdaq. The Company can make no
assurances that sufficient publicly traded Shares will be available following
the Offer to provide a reasonably liquid trading market. Also, the Company will
probably have significantly greater indebtedness and a deficit in its retained
earnings following consummation of the Offer, which could increase the
volatility of the Company's earnings and adversely affect market prices of the
Shares.
Neither the Company nor its Board of Directors makes any recommendation
to shareholders as to whether or not to tender Shares. A shareholder must make
his or her own decision whether to tender Shares of either class and, if so, how
many Shares to tender and at what price or prices.
The Company has been informed that some of its directors and officers,
and some members of the Wyman and Hyde families described in the Offer to
Purchase, currently intend to sell some of their Shares to unrelated persons in
market transactions. The information required to be disclosed by Rule 13e-4(d)
(1) of the General Rules and Regulations under the Securities Exchange Act of
1934 is contained in the Offer to Purchase and is incorporated herein by
reference. Copies of the Offer to Purchase and Letter of Transmittal are being
mailed commencing today to all holders of the Shares.
-3-
<PAGE> 4
The Offer is explained in detail in those materials. Shareholders are
urged to carefully read those materials before making any decision with respect
to the Offer. Additional copies of the Offer to Purchase and Letter of
Transmittal may be obtained from the Information Agent at the address and
telephone number set forth below and will be furnished promptly at the Company's
expense.
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth below. Shareholders 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, NY 10005
Banks and Brokerage Firms Call Collect:
(212) 425-1685
All Others Call Toll Free:
(888) 246-5358
The Dealer Manager For The Offer Is:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 920-1000
October 4, 1999
THE OFFER, PRORATION PERIOD, AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, EASTERN TIME, ON TUESDAY, NOVEMBER 2, 1999,
UNLESS THE OFFER IS EXTENDED.
-4-
<PAGE> 1
[OSHKOSH B'GOSH LOGO]
Dear Fellow Shareholder:
OshKosh B'Gosh, Inc. ("OshKosh") is offering (the "Offer") to purchase up
to 4,500,000 shares of its Class A Common Stock ("Class A Shares") and up to
100,000 shares of its Class B Common Stock ("Class B Shares") (collectively, the
"Shares") from existing shareholders. The price will be determined separately
for Class A Shares and for Class B Shares and will not be in excess of $21.00
nor less than $18.50 per Share for each class. OshKosh is conducting the tender
offer through a procedure known as a "Dutch Auction." This allows you to select
the price or prices within the specified range at which you are willing to sell
your Shares to OshKosh.
On September 30, 1999, the last trading day prior to the announcement of
the Offer, the price per share for the last trade for the Class A Shares on the
Nasdaq National Market was $15 31/32. The Class B Shares are not listed or
traded on any exchange. Any shareholder whose Shares are purchased in the Offer
will receive the total purchase price in cash and will not incur the usual
transaction costs associated with open market sales.
The Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. Employees who hold options to purchase Class A Shares
should also receive and review the Option Election Form and related materials.
We encourage you to read these materials carefully before making any decision
with respect to the Offer. If you desire to tender your Shares, the instructions
on how to tender Shares are also explained in detail in the accompanying
materials.
Neither OshKosh nor its Board of Directors makes any recommendation to any
shareholder as to whether to tender or refrain from tendering Shares. Each
shareholder must make the decision whether to tender Shares and, if so, how many
Shares and at what price or prices Shares should be tendered. OshKosh has been
advised that some members of the Wyman and Hyde families (as described in the
Offer to Purchase) currently intend to sell some of their Shares to unrelated
person in market transactions, either during the Offer or otherwise. Although
none of our directors or executive officers have indicated that they intend to
tender Shares in the Offer, they have the right to do so.
Please note that the Offer will expire at 12:00 midnight, Eastern Time, on
Tuesday, November 2, 1999, unless it is extended. Questions with respect to the
Offer should be referred to the D. F. King & Co., Inc., the Information Agent,
at (888) 246-5358 (toll free throughout the U.S.).
On behalf of your Board of Directors, thank you for your continued interest
and support.
Sincerely yours,
/S/ DOUGLAS W. HYDE
Douglas W. Hyde
Chairman and Chief Executive Officer
<PAGE> 1
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>
<CAPTION>
FOR THIS TYPE OF ACCOUNT:
GIVE THE SOCIAL
SECURITY NUMBER OF--
- ----------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more The actual owner of the
individuals account or, if combined
(joint account) funds, the first
individual on the
account(1)
3. Custodian account of The minor(2)
a minor (Uniform Gift
to Minors Act)
4. a. The usual The grantor-trustee(1)
revocable savings
trust account
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is
not a legal or
valid trust under
State law
5. Sole proprietorship The owner(3)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------
FOR THIS TYPE OF ACCOUNT:
GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF--
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, The legal entity(4)
estate, or pension
trust
8. Corporate The corporation
9. Association, club, The organization
religious,
charitable,
educational, or other
tax-exempt
organization
10. Partnership The partnership
11. A broker or The broker or nominee
registered nominee
12. Account with the The public entity
Department of
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) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
employment identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
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 do not have a taxpayer identification number or you do not know your
number, apply for one immediately. To apply for a social security number, obtain
Form SS-5, Application for a Social Security Number Card, from your local Social
Security Administration Office. To apply for an employer identification number,
obtain Form SS-4, Application for Employer Identification Number, from the
Internal Revenue Service. If you do not have a taxpayer identification number,
write "Applied For" in the space for the taxpayer identification number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding include the following:
- - An organization exempt from tax under section 501(a), of the Internal Revenue
Code of 1986, as amended (the "Code"), an individual retirement account or a
custodial account under section 403(b)(7), if the account satisfies the
requirements of section 401(f)(2).
- - The United States or any agency or instrumentality thereof.
- - A state, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
- - A foreign government or any political subdivision, agency or instrumentality
thereof.
- - An international organization or any agency or instrumentality thereof.
Other payees that MAY BE EXEMPT from backup withholding include:
- - A corporation.
- - A financial institution.
- - A dealer in securities or commodities required to register in the U.S., the
District of Columbia or a possession of the U.S.
- - A futures commission merchant registered with the Commodity Futures Trading
Commission.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a).
- - An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- - A foreign central bank of issue.
- - A middleman known in the investment community as a nominee or who is listed in
the most recent publication of the American Society of Corporate Secretaries,
Inc. Nominee List.
- - A trust exempt from tax under section 664 or described in section 4947.
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
Payments that are not subject to information reporting are also not subject to
backup withholding.
Dividends and patronage dividends that generally are exempt from 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.
- - Section 404(k) payments made by an ESOP.
Interest payments that generally are exempt from backup withholding include the
following:
- - Payments 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.
- - Mortgage interest paid to you.
Certain payments other than interest, dividends, and patronage dividends are
also not subject to backup withholding.
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" IN PART II OF THE FORM, SIGN AND DATE THE
FORM, AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE.--Section 6109 of the code requires most recipients of
dividend, interest, or other payments to give correct taxpayer identification
numbers to payers who must report the payments to the IRS. The IRS uses the
numbers for identification purposes and to help verify the accuracy of your tax
return. The IRS may also provide this information to the Department of Justice
for civil and criminal litigation and to cities, states, and the District of
Columbia to carry out their tax laws. You must provide your taxpayer
identification number whether or not you are required to file tax returns.
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
PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to
furnish your correct 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.
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.
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
[FIRSTAR LOGO]
September 22, 1999
OshKosh B'Gosh, Inc.
112 Otter Avenue
OshKosh, Wisconsin 54901
Attention: David Omachinski
Vice President of Finance
Re: Senior Credit Facilities--Commitment Offer
Ladies and Gentlemen:
OshKosh B'Gosh, Inc. (the "Company") has advised Firstar Bank
Milwaukee, N.A. ("Firstar") that it wishes to repurchase shares of its issued
and outstanding common stock for an aggregate cash consideration of not more
than $125,000,000 (the "Stock Repurchase"). In connection with the Stock
Repurchase the Company wishes to obtain an aggregate of $200,000,000 in credit
facilities (the "Credit Facilities") to finance the Stock Repurchase, to
refinance certain of the Company's existing credit facilities and to finance
the ongoing requirements of the Company.
Firstar is pleased to advise you that we are committed to provide up
to $40,000,000 of the Credit Facilities, upon and subject to the terms and
conditions summarized in this letter and the Summary of Proposed Terms attached
as Exhibit A hereto. Other institutional lenders have separately committed for
and have been allocated the remaining $160,000,000 principal amount of the
Credit Facilities as set forth on Exhibit B hereto, in each case based upon and
subject to the terms and conditions summarized in this letter and the Summary
of Proposed Terms attached hereto (individually a "Lender" and collectively the
"Lenders", including Firstar and other institutional lenders from time to time
executing commitments to provide any part of the Credit Facilities).
The Lenders' several commitments are subject to the negotiation,
execution and delivery prior to November 1, 1999 of definitive documentation
with respect to the Credit Facilities prepared by Firstar's counsel and
reasonably satisfactory to the Lenders. Such documentation shall contain the
terms and conditions set forth in the Summary of Proposed Terms attached hereto
and such other covenants, representations and warranties, events of default,
conditions precedent, security arrangements, indemnities and other terms and
conditions as shall be reasonably satisfactory to the Lenders and the Company.
We have reviewed certain historical financial statements of the
Company and the Company's six-year financial projections dated July 29, 1999
previously
<PAGE> 2
furnished to us. If the Lenders' continuing review of materials about the
Company discloses information, or the Lenders otherwise discover information
not previously disclosed the Lenders, which any Lender reasonably believes has
or could have a material adverse impact on the Company, Firstar may, in its
sole discretion, suggest alternative financing amounts or structures, and such
Lender, including Firstar, may, in its sole discretion, decline to participate
in the Credit Facilities.
You represent and warrant that (a) all information which has been or is
hereafter made available to the Lenders by you or any of your representatives in
connection with the transactions contemplated hereby is and will be complete and
correct in all material respects and does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not materially misleading in light of
the circumstances under which such statements are made and (b) all financial
projections that have been or are hereafter prepared by you and made available
to the Lenders or any other participants in the Credit Facilities have been or
will be prepared in good faith based upon reasonable assumptions. You agree to
supplement the information and projections referred to in clauses (a) and (b)
above from time to time until closing of the Credit Facilities so that the
representation and warranty in the preceding sentence remains correct. In
providing the Credit Facilities, the Lenders will be using and relying on such
information and projections without independent verification thereof.
The costs and expenses (including, without limitation, the reasonable
fees and expenses of counsel to Firstar and Firstar's reasonable out-of-pocket
expenses) arising in connection with the preparation, execution and delivery of
this letter and the definitive financing agreements shall be for your account.
You further agree to indemnify and hold harmless each Lender and each director,
officer, employee, affiliate and agent thereof (each, an "Indemnified Person")
against, and to reimburse each Indemnified Person, upon its demand, for, any
losses, claims, damages, liabilities or other expenses ("Losses") to which such
Indemnified Person may become subject insofar as such Losses arise out of or
in any way relate to or result from this letter or providing the financing
contemplated hereby, including, without limitation, Losses consisting of
reasonable legal or other expenses incurred in connection with investigating,
defending or participating in any legal proceeding relating to any of the
foregoing (whether or not such Indemnified Person is a party thereto); provided
that the foregoing will not apply to any Losses to the extent they are found by
a final decision of a court of competent jurisdiction to have resulted
principally from (a) the gross negligence or willful misconduct of such
Indemnified Person, (b) the breach by such Indemnified Person of any written
agreement between such Indemnified Person and the Company, (c) any express
agreement between such Indemnified Person and any third party, or (d) any
income taxes of any Lender.
By executing this letter, you acknowledge that this letter is the only
agreement between you and the Lenders with respect to the Credit Facilities and
sets forth the entire understanding of the parties with respect thereto. This
letter may not be changed except pursuant to a writing signed by each of the
parties hereto. This letter is
<PAGE> 3
intended to be solely for the benefit of the parties hereto and is not intended
to confer any benefits upon, or create any rights in favor of, any person other
than the parties hereto and shall not be assignable by you or any Lender. This
letter shall be governed by, and construed in accordance with, the internal
laws of the State of Wisconsin.
You agree to consult with us prior to issuing any public
announcement, statement or other disclosure with respect to this letter or the
financing transactions contemplated hereby and you shall not issue any such
public announcement, statement or other disclosure prior to such consultation,
except as may be required by law.
This letter may be executed by the parties hereto in counterparts,
each of which shall be an original and all of which together shall constitute
one instrument. This letter may be effectively delivered by facsimile
transmission; provided that any party delivering by facsimile transmission
shall promptly deliver an original, executed copy of this letter to the other
party.
If you are in agreement with the foregoing, please sign and return to
Firstar the enclosed copies of this letter no later than 5:00 p.m., Milwaukee
time, on September 30, 1999. This offer shall terminate at such time unless
prior thereto we shall have received signed copies of this letter.
Firstar appreciates having been given the opportunity by you to be
involved in this transaction.
Very truly yours,
FIRSTAR BANK MILWAUKEE, N.A.
For itself and as Agent
By: /s/ Jeff Janza
------------------------------
Name: Jeff Janza
----------------------------
Title: Vice President
---------------------------
Accepted and agreed to
as of September 30, 1999:
OSHKOSH B'GOSH, INC.
By: /s/ David L. Omachinski
---------------------------------
Name: David L. Omachinski
-------------------------------
Title: VP - Finance, Treasurer & CFO
------------------------------
<PAGE> 4
Exhibit A
Summary of Proposed Terms
<TABLE>
<S> <C>
Borrower: Oshkosh B'Gosh, Inc. (the "Company").
Agent: Firstar Bank Milwaukee, N.A. (the "Agent" or "Firstar").
Arranger: Firstar Capital Markets ("FCM").
Lenders: Firstar and other financial institutions listed on Exhibit B
hereto (the "Banks" or the "Lenders").
Facilities: 1. Revolving Line of Credit (the "Revolver").
2. Term Loan (the "Term Loan" and, together with the
Revolver, the "Facilities.")
Amount: 1. $75,000,000.
2. $125,000,000.
Maturity: 1. Three years from closing.
2. Five years from closing.
Amortization: 1. None.
2. Annual installments of $15,000,000.
Purpose: 1. For general corporate purposes.
2. To finance the repurchase of the Company's common
stock.
Collateral: 1 & 2. Unsecured with a negative pledge of assets.
Availability: 1. Outstanding loans under the facility must be reduced to $0
for 60 consecutive days each year.
2. The Term Loan may be partially drawn at closing, but
must be completely drawn or permanently reduced within 180
days of closing.
Borrowing Options: The Company's borrowing options for advances under the
Facilities will include a Base Rate and a LIBOR Rate Option.
Base Rate shall refer to Firstar's prime rate.
</TABLE>
<PAGE> 5
LIBOR Rate means Firstar's LIBOR rate which will be
adjusted for reserves and other regulatory
requirements plus the Applicable Margin as shown
below. LIBOR advances require a 2-day notice and
must be in a minimum amount of $1,000,000 and in
increments of $250,000. No more than ten LIBOR
advances may be outstanding at any one time.
LIBOR Periods: One, two, or three-month LIBOR periods.
Prepayment: The loans may be prepaid at any time without premium
except that prepayment during LIBOR interest periods
will require the payment of customary break-funding
charges.
Letters of Credit: The Company may request the Banks to issue letters of
credit under the Revolver up to an aggregate amount
of $45,000,000.
Swing Line: Firstar will provide from time to time up to
$5,000,000 under a Swing Line available to the
Company. The Swing Line is provided as an
accommodation to the Company and the Banks to handle
daily activity for small advances. Advances under
the Swing Line will be at the Base Rate or a rate
quoted by Firstar and shall reduce availability under
the Facilities. Firstar shall not be obligated to
make any advances under the Swing Line after the
occurrence and during the continuation of a Default
or an Event of Default. All Banks will be required
to fund a pro-rata share of any outstandings under
the Swing Line at Firstar's option after the
occurrence of a Default or Event of Default.
Pricing: The Applicable Margin for borrowings bearing interest
at the LIBOR Rate shall be the applicable rate per
annum set forth below:
<TABLE>
<CAPTION>
Debt/EBITDA LIBOR Spread
----------- ------------
<S> <C>
> 2.00 1.50%
-
> 1.50 and < 2.00 1.25%
-
> 1.00 and < 1.50 1.00%
-
< 1.00 0.75%
</TABLE>
<PAGE> 6
<TABLE>
<S> <C>
Unused Fee: The Company shall pay an unused fee as set forth below
based on the average unused portion of the Facilities:
Debt/EBITDA Unused Fee
----------- ----------
>2.00 .275%
-
>1.50 and < 2. .250%
-
>1.00 and < 1. .225%
-
< 1.00 .200%
Other Fee: Separate closing and arrangements fee will be payable at
closing as agreed upon between the Company and the Agent.
Interest Fees & Per annum interest and fees to be calculated on the basis of a
Calculations: 360-day year and actual days elapsed and paid monthly.
Legal Expenses: The Company will pay all of the Agent's legal expenses.
Financial Reports: (i) Audited consolidated financial statements of the Company
by accountants of recognized standing acceptable to Firstar
together with an officer's certificate showing compliance with
the financial covenants shall be due within 90 days after each
fiscal year-end.
(ii) Unaudited consolidated financial statements of the
Company together with an officer's certificate showing
compliance with the financial covenants shall be due within 45
days of each quarter end.
(iii) Such other information as Firstar may from time to time
reasonably request.
Closing Conditions: Conditions of closing to include satisfactory due diligence, no
material adverse change and no material litigation.
Documentation: The Facilities will be subject to the execution of a credit
agreement, closing certificates and opinions of counsel
regarding, without limitation, the due authorization,
execution, validity and enforceability of the loan documents,
in form satisfactory to Firstar and its counsel. The loan
documents will contain conditions, representations, warranties
and covenants regarding the condition of the Company's
properties, the conduct of the Company's business in
compliance with the environmental laws and absence of
material litigation, claims or orders concerning environmental
matters.
</TABLE>
<PAGE> 7
Representations Customary including representations regarding corporate
& Warranties: existence, authorization, financial statements,
absence of material adverse change, absence of material
litigation and material contingent obligations, taxes,
subsidiaries, ERISA, compliance with laws, ownership of
properties, insurance and absence of default.
Covenants: Customary including compliance with laws, maintenance
of insurance, keeping of books, conduct of business,
maintenance of properties, payment of taxes,
restriction on liens, limitation on additional
indebtedness, limitation on sale of assets, limitation
on dividends and share repurchases, limitation on
mergers and change of control and inspection of
records.
Financial Covenants: The principal financial covenants of the Facilities,
to be measured on a four-quarters rolling basis, will
include the following:
MINIMUM FIXED CHARGE RATIO The Company will not permit
the ratio of (i) earnings before interest, taxes,
depreciation and amortization to (ii) interest expense
and scheduled principal payments to be less than 1.75
from closing through December 30, 2001; 2.00 from
December 31, 2001 through December 30, 2002; 2.25 from
December 31, 2002 through December 30, 2003; and 2.50
thereafter.
MINIMUM INTEREST COVERAGE RATIO The Company will not
permit the ratio of (i) earnings before interest
expense and taxes to (ii) interest expense to be less
than 3.00.
MAXIMUM DEBT TO EBIDTA The Company will not permit the
ratio of total indebtedness (including obligations
under letters of credit) to earnings before interest,
taxes and depreciation and amortization to be greater
than the following
<TABLE>
<CAPTION>
1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Quarters 1,2,3 n/a 3.50 3.00 2.50 2.25 2.00
Fiscal Year End 2.75 2.50 2.25 2.00 1.75 n/a
</TABLE>
Defaults: Customary including failure to make payment in
connection with the Facilities when due (after giving
effect to any grace
<PAGE> 8
period), breach of representations and warranties, default
in any covenant (after giving effect to any cure period),
cross default to any occurrence of default under any other
agreement for indebtedness, events of bankruptcy, certain
ERISA defaults and the occurrence on any material judgement.
<PAGE> 9
Exhibit B
Commitments
Firstar Bank Milwaukee, N.A. $40,000,000
Bank One, NA $30,000,000
Harris Trust and Savings Bank $30,000,000
BankBoston, N.A. $30,000,000
Wells Fargo HSBC Trade Bank N.A. $20,000,000
LaSalle Bank, N.A. $20,000,000
U.S. Bank National Association $15,000,000
M&I Marshall & Ilsley Bank $15,000,000
