P R O S P E C T U S
1,600,000 Shares
LOGO
Class A Common Stock
This Prospectus covers up to 1,600,000 shares of Class A
Common Stock (the"Shares") of Fruit of the Loom, Inc. (the
"Company"). The Shares are being registered in connection with the
pledge by William Farley (the "Selling Stockholder") of up to
1,600,000 shares of Class B Common Stock of the Company (the
"Pledged Shares") as collateral for a loan made to him and to
enable the Selling Stockholder, or the pledgee to which the Pledged
Shares are pledged as collateral, to publicly sell all or a portion
of the Shares to pay the principal of or interest on the loan or in
the event of a margin call or default in connection with the loan.
If at any time any of the Pledged Shares are beneficially owned by
any person other than the Selling Stockholder or any entity
controlled by the Selling Stockholder, such Pledged Shares
automatically convert into an equal number of shares of Class A
Common Stock of the Company. Resales of the Shares may, from time
to time, be made on the New York Stock Exchange ("NYSE") or other
stock exchanges, in privately negotiated transactions or otherwise.
The Selling Stockholder has advised the Company that he has no
present intention to sell any of the Shares and cannot do so except
as set forth in the loan agreement between the Selling Stockholder
and the pledgee. The Company will not receive any proceeds from the
sale of the Shares. See "Selling Stockholder" and "Description of
Capital Stock."
The Class A Common Stock is listed on the NYSE under the
trading symbol FTL. The reported closing price of the Class A
Common Stock on the NYSE on March 29, 1994 was $30.875 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR AD- EQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is March 30, 1994.
No dealer, salesman or other person has been authorized to
give any information or to make any representation not contained in
this Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by
the Company, the Selling Stockholder or any other person. This
Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make any such
offer in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information
contained herein is correct as of any time subsequent to the date
hereof or that there has been no change in the affairs of the
Company since such date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements
and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other
information concerning the Company can be inspected and copied at
the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's Regional Offices at Seven World Trade Center,
Suite 1300, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained upon written request addressed to the Commission,
Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Reports, proxy statements and other
information concerning the Company can also be inspected at the
offices of the NYSE, 11 Wall Street, New York, New York 10005.
The Company has filed with the Commission a registration
statement on Form S-3 (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"). This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration
Statement which may be inspected and copied in the manner and at
the sources described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 is incorporated herein by reference.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the Offering (as
hereinafter defined) shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date
of filing of such documents.
Any statement contained herein or in a document incorporated
or deemed to be incorporated herein by reference shall be deemed to
be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently
filed document which is deemed to be incorporated by reference
herein modifies or supersedes such prior statement. Any such
statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge, to each person to
whom a copy of this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents
incorporated herein by reference (other than exhibits thereto,
unless such exhibits are specifically incorporated by reference
into the information that this Prospectus incorporates). Written
or telephone requests for such copies should be directed to Fruit
of the Loom, Inc., 5000 Sears Tower, 233 South Wacker Drive,
Chicago, Illinois 60606, Attention: Secretary (telephone: (312)
876-1724).
TABLE OF CONTENTS
Page Page
Available Information...........2 Plan of Distribution...........4
Incorporation of Certain
Documents by Reference.........2 Description of Capital Stock...4
The Company.....................3 Legal Matters..................6
Use of Proceeds.................3 Experts........................6
Selling Stockholder.............3
THE COMPANY
The Company is a leading international basic apparel company,
emphasizing branded products for consumers ranging from infants to
senior citizens. It is the largest domestic producer of underwear
and of activewear for the imprinted market, selling products
principally under the FRUIT OF THE LOOM, BVD, SCREEN STARS, BEST,
MUNSINGWEAR and WILSON brand names. The Company sells licensed
sports apparel for major American sports leagues, professional
players and many American colleges and universities under the
SALEM, SALEM SPORTSWEAR and OFFICIAL FAN brand names. The Company
manufactures and markets men's and boys' basic and fashion
underwear, activewear, casualwear, licensed sports apparel, women's
and girls' underwear, infants' and toddlers' apparel and family
socks. Activewear consists primarily of screen print T-shirts and
fleecewear and also includes casualwear (principally a broad range
of lightweight knit tops and fleece styles sold directly to
retailers) and licensed sports apparel. The Company is a fully
integrated manufacturer, performing its own spinning, knitting,
cloth finishing, cutting, sewing and packaging. Management
believes that the Company is a low cost producer in the markets it
serves. Management considers the Company's primary strengths to be
its excellent brand recognition, low cost production, strong
relationships with merchandisers and discount chains and its
ability to effectively service its customer base. The Company was
incorporated under the laws of the State of Delaware in 1985 and is
the successor to Northwest Industries, Inc. Its principal
executive offices are located at 5000 Sears Tower, 233 South Wacker
Drive, Chicago, Illinois 60606 and its telephone number is (312)
876-1724.
USE OF PROCEEDS
None of the proceeds from the sale of the Shares will be
received by the Company. All of the proceeds will be received by
the Selling Stockholder. See "Selling Stockholder."
SELLING STOCKHOLDER
The Selling Stockholder serves as Chairman of the Board, Chief
Executive Officer and a director of the Company and Farley Inc. The
Selling Stockholder or pledgee may, from time to time, publicly
offer the Shares for sale. The Shares are being registered in
connection with the Selling Stockholder's pledge of the Pledged
Shares as collateral for a loan made to him and to enable the
Selling Stockholder, or the pledgee to which the Pledged Shares are
pledged as collateral, to publicly sell all or a portion of the
Shares to pay the principal of or interest on the loan or in the
event of a default in connection with the loan. The Selling
Stockholder has advised the Company that he has no present
intention to sell any of the Shares.
Before the offering of the Shares (the "Offering"), the
Selling Stockholder owned directly 318,000 shares of Class A
Common Stock and directly and indirectly, through Farley Inc., a
corporation he controls, 6,690,976 shares of Class B Common Stock.
This ownership represents approximately 9.2% of the total common
stock and approximately 32.9% of the total voting power of the
Company. If all of the 1,600,000 Shares are sold, and no
additional shares are sold, the above percentages would be reduced
to 7.1% and 26.8%, respectively. The Shares are being registered
pursuant to the terms of a Registration Rights Agreement, dated
December 30, 1992, amended as of March 21, 1994 between the Company
and the Selling Stockholder (the "Registration Rights Agreement").
The Selling Stockholder has agreed to bear all expenses in
connection with the registration of the Shares.
The Company has agreed that it will use its best efforts to
keep the Registration Statement of which this Prospectus is a part
"Continuously Effective" (as defined in the Registration Rights
Agreement) through the fifth anniversary of the effective date of
this Prospectus. The benefits of the Registration Rights Agreement
may be invoked by the pledgee.
PLAN OF DISTRIBUTION
Resales of the Shares may, from time to time, be made on the
NYSE, in privately negotiated transactions or otherwise. The Shares
covered by this Prospectus are being registered to enable the
Selling Stockholder to pledge the Pledged Shares as collateral for
a loan made to him and to enable the Selling Stockholder, or
pledgee to which the Pledged Shares are pledged as collateral, to
publicly sell all or a portion of the Shares in order to pay the
principal of or interest on the loan or in the event of a default
in connection with the loan. If at any time any of the Pledged
Shares are beneficially owned by any person other than the Selling
Stockholder or any entity controlled by the Selling Stockholder,
such shares automatically convert into an equal number of shares of
Class A Common Stock. The Selling Stockholder or pledgee may from
time to time offer such Shares through underwriters, dealers or
agents. Usual and customary or specifically negotiated brokerage
fees or commissions may be paid by the Selling Stockholder or the
pledgee in connection with such sales of common stock. The Selling
Stockholder, pledgee and intermediaries through whom such
securities are sold may be deemed "underwriters" within the meaning
of the Securities Act with respect to the common stock offered, and
any profits realized or commissions received may be deemed
underwriting compensation. The Shares have been approved for
listing on the NYSE, subject to prior notice.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 230 million
shares of common stock, $.01 par value per share, divided into
Class A and Class B, and 35 million shares of preferred stock, $.01
par value per share. The following is a summary of the provisions
of the Company's Restated Certificate of Incorporation, as amended,
and is qualified in its entirety by reference thereto.
Class A Common Stock and Class B Common Stock
The authorized common stock of the Company consists of (i) 200
million shares of Class A Common Stock, of which 69,108,749 were
outstanding as of March 10, 1994 and (ii) 30 million shares of
Class B Common Stock, of which 6,690,976 were outstanding as of
March 10, 1994. All shares of common stock currently outstanding
are fully paid and nonassessable, not subject to redemption and
without preemptive or other rights to subscribe for or purchase any
proportionate part of any new or additional issues of stock of any
class or of securities convertible into stock of any class.
Voting. Holders of Class A Common Stock are entitled to one
vote per share. Holders of Class B Common Stock are entitled to
five votes per share. All actions submitted to a vote of
stockholders are voted on by holders of Class A Common Stock and
Class B Common Stock voting together as a single class, except for
the election of directors and as otherwise set forth below or as
provided by law. With respect to the election of directors,
holders of the Class A Common Stock vote as a separate class and
are entitled to elect 25% of the total number of directors
constituting the entire Board of Directors (the "Class A
Directors") and, if not a whole number, then the holders of the
Class A Common Stock are entitled to elect the nearest higher whole
number of directors that is at least 25% of the total number of
directors, so long as the number of shares of Class A Common Stock
outstanding is at least 10% of the total number of shares of both
classes of the common stock outstanding. If, at the record date
for any stockholder meeting at which directors are elected, the
number of shares of Class B Common Stock outstanding is less than
12.5% of the total number of shares of both classes of common
stock outstanding, then the holders of Class A Common Stock would
vote together with the holders of Class B Common Stock to elect the
remaining directors to be elected at such meeting, with the holders
of Class A Common Stock having one vote per share and the holders
of Class B Common Stock having five votes per share. Holders of
the Class B Common Stock also vote separately as a class on the
issuance of additional shares of Class B Common Stock and on any
amendment to the Restated Certificate of Incorporation which would
adversely affect such holders.
If, at the record date for any stockholder meeting at which
directors are to be elected, the number of shares of Class B
Common Stock outstanding is at least 12.5% of the total number of
shares of both classes of common stock outstanding, then the
holders of Class A Common Stock, voting as a separate class, would
continue to elect a number of Class A Directors equal to 25% of the
total number of directors constituting the whole Board of
Directors, but the holders of the Class B Common Stock, voting as
a separate class, would be entitled to elect the remaining
directors.
If, however, at the record date for any stockholder meeting at
which directors are to be elected, the number of shares of Class
A Common Stock outstanding is less than 10% of the total number of
shares of both classes of common stock outstanding, the holders of
Class A Common Stock and Class B Common Stock would vote together
as a single class with respect to the election of directors. In
that event, the holders of the Class A Common Stock would not have
the right to elect 25% of the number of directors, but would have
one vote per share for all directors and the holders of the Class
B Common Stock would have five votes per share for all directors.
Conversion. Class A Common Stock has no conversion rights.
Class B Common Stock is convertible into Class A Common Stock, in
whole or in part, at any time and from time to time on the basis of
one share of Class A Common Stock for each share of Class B Common
Stock. If at any time any shares of Class B Common Stock are
beneficially owned by any person other than Mr. Farley or any
entity controlled by Mr. Farley, such shares automatically convert
into an equal number of shares of Class A Common Stock.
Dividends. Holders of Class A Common Stock are entitled to
receive, on a cumulative basis, the first dollar per share of cash
dividends if and when declared by the Board of Directors from funds
legally available therefor. Thereafter, holders of Class A Common
Stock and Class B Common Stock are entitled to receive cash
dividends equally on a per share basis if and when such dividends
are declared by the Board of Directors of the Company from funds
legally available therefor. In the case of any dividend paid in
stock, holders of Class A Common Stock are entitled to receive the
same percentage dividend (payable in shares of Class A Common
Stock) as the holders of Class B Common Stock receive (payable in
shares of Class B Common Stock).
Liquidation. Holders of Class A Common Stock and Class B
Common Stock share with each other on a ratable basis as a single
class in the net assets of the Company available for distribution
in respect of Class A Common Stock and Class B Common Stock in the
event of liquidation.
Other Terms. Neither the Class A Common Stock nor the Class
B Common Stock may be subdivided, consolidated, reclassified or
otherwise changed unless contemporaneously therewith the other
class of shares is subdivided, consolidated, reclassified or
otherwise changed in the same proportion and in the same manner.
In any merger, consolidation or business combination, the
consideration to be received per share by holders of either Class
A Common Stock or Class B Common Stock must be identical to that
received by holders of the other class of common stock, except that
in any such transaction in which shares of capital stock are
distributed, the dividend preference of the Class A Common Stock
must be retained and such shares may differ as to voting rights
only to the extent that voting rights now differ between Class A
Common Stock and Class B Common Stock.
Transfer Agent. The Company's Transfer Agent and Registrar
for the Class A Common Stock is Chemical Bank.
Preferred Stock
The authorized preferred stock consists of 35 million shares.
There are currently no shares of preferred stock outstanding. The
preferred stock may be issued by resolutions of the Company's Board
of Directors from time to time without any action of the
stockholders. Such resolutions may authorize issuances in one or
more classes or series of the preferred stock, and may fix and
determine dividend and liquidation preferences, voting rights,
conversion privileges, redemption terms and other privileges and
rights of the stockholders of each class or series so authorized.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Shares
will be passed upon for the Company and the Selling Stockholder by
Katten Muchin & Zavis, a partnership including professional
corporations, Chicago, Illinois.
EXPERTS
The consolidated financial statements and schedules of the Company
appearing in the Company's Annual Report (Form 10-K) for the year
ended December 31, 1993 have been audited by Ernst & Young,
independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated
financial statements referred to above are incorporated herein by
reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
