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Relates to Form S-1
Registration No. 333-44311
Filed under Rule 424(b) (3) and (c)
SUPPLEMENT TO
PROSPECTUS
OF
LAMONTS APPAREL, INC.
The following information supplements the Prospectus, dated June 15, 1998, of
Lamonts Apparel, Inc. (the "Company") related to 8,746,291 shares of the
Company's Class A Common Stock (the "Common Stock"); 1,810,380 Class A
Warrants, each to purchase 1 share of Common Stock; 581,184 Class B Warrants,
each to purchase 1 share of Common Stock; and 228,639 Class C Warrants, each to
purchase an aggregate of 15 shares of Common Stock, as supplemented by the
Prospectus Supplement, dated December 16, 1998 (the "Prospectus"). Capitalized
terms used in this Supplement and not defined herein have the meaning set forth
in the Prospectus. This Supplement should be read in conjunction with the
Prospectus.
THE DATE OF THIS SUPPLEMENT IS JANUARY 22, 1999
RECENT EVENTS
On January 4, 1999 Troutman Investment Company ("Troutman") filed a
Schedule 13D with the Securities and Exchange Commission (the "Commission")
with respect to its acquisition of all of the shares of Common Stock, Class A
Warrants and Class B Warrants (the "Acquired Securities") which were
previously owned indirectly by FMR Corp. ("FMR") and owned directly by the
Fidelity Funds and various Accounts managed by a wholly-owned subsidiary of
FMR. In connection with such acquisition, Troutman succeeded to the rights of
Fidelity under the Grant of Registration Rights and therefore, is being
included as a Selling Security Holder under the Prospectus. Accordingly, all
references in the Prospectus to securities held by FMR, the Fidelity Funds or
the Accounts are hereby amended to substitute Troutman in place of FMR, the
Fidelity Funds or the Accounts.
Troutman also disclosed in the Schedule 13D that it purchased the
Acquired Securities with the intention of entering into merger negotiations
with the Company. On January 12, 1999, the Company announced that it had
entered into preliminary discussions with Troutman regarding a possible
business combination between the Company and Troutman. There is no assurance
that these discussions will result in any transaction that the Company's
Board of Directors would be willing to accept or approve.
On January 12, 1999, the Company also announced that it had adopted a
Stockholder Rights Plan (the "Rights Plan"). Under the Rights Plan, a
dividend of one Share Purchase Right
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(a "Right") was declared for each share of Common Stock or Class B Common
Stock outstanding at the close of business on January 22, 1999 (the "Record
Date"). In addition, the dividend is payable with respect to shares of Common
Stock issued after the Record Date but prior to the date on which the Rights
separate from the underlying shares of Common Stock in accordance with the
Rights Plan (the "Distribution Date") and, in certain circumstances, with
respect to shares of Common Stock issued after the Distribution Date. In the
event that a person or group acquires securities representing 15% or more of
the aggregate voting power of the Company's stock without advance approval by
the Board of Directors, each Right will entitle the holder, other than the
acquirer, to buy Common Stock with a market value of twice the exercise price
(initially $6.00, subject to adjustment) for the Right's then current
exercise price. In addition, if the Company were to be acquired in a merger
or other transaction where the stockholders of the Company were not treated
equally, stockholders with unexercised Rights could purchase common stock of
the acquirer with a value of twice the exercise price of the Rights.
The agreement which implements the Rights Plan (the "Rights Agreement")
contains "grandfathering" provisions which permit Troutman to maintain its
reported beneficial ownership of 2,925,140 shares of Common Stock, Class A
Warrants to purchase 1,810,380 shares of Common Stock and Class B Warrants to
purchase 581,181 shares of Common Stock (collectively, the "Troutman
Grandfathered Securities") and Specialty Investment I LLC ("Specialty
Investment") to maintain its beneficial ownership of Class C Warrants to
purchase 3,429,588 shares of Common Stock (the "Specialty Investment
Grandfathered Securities") without triggering the Rights. In addition, in the
event that Troutman acquires certain securities held by BEA Associates for
the account of Executive Life Insurance Company of New York on or before
February 12, 1999, such securities will also be deemed Troutman Grandfathered
Securities. However, acquisitions by Troutman or Specialty Investment will
trigger the Rights in the event that either of them, subsequent to the first
public announcement of the execution of the Rights Plan, acquires beneficial
ownership of any shares of Common Stock other than those included in or
underlying the Troutman Grandfathered Securities or the Specialty Investment
Grandfathered Securities, as the case may be, which, when aggregated with
such securities, represent 15% or more of the aggregate voting power of the
Company. In addition, if any security holder provides evidence satisfactory
to the Board of beneficial ownership of shares of Common Stock representing
15% or more of the aggregate voting power of the Company as of immediately
prior to the first public announcement of the adoption of the Rights Plan
(including, in the case of Troutman, shares in addition to the Grandfathered
Troutman Securities and, in the case of Specialty Investment, shares in
addition to the Grandfathered Specialty Investment Securities), then such
security holder will not trigger the Rights through its ownership of such
securities.
The acquisition by Troutman of the Troutman Grandfathered Securities
gave rise to a potential event of default under the Amended and Restated
Debtor in Possession and Exit Financing Loan Agreement by and among the
Company, BankBoston, N.A., certain other lending institutions and BankBoston,
N.A., as agent (the "Agent"), dated as of September 26, 1997 (the "Loan
Agreement"). An "event of default" under the Loan Agreement includes the
acquisition of 20% or more of the issued and outstanding capital stock of the
Company by a
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person who was not a stockholder at the time the conditions precedent to the
closing of the Loan Agreement were met (unless such person is reasonably
satisfactory to the Agent). Troutman was not a stockholder at the time the
conditions precedent to the closing of the Loan Agreement were met and, to
the Company's knowledge, has not been declared satisfactory to the Agent. The
Company has received a waiver under the Loan Agreement with respect to this
provision, provided that Troutman does not acquire shares of capital stock of
the Company, other than those reported as having been acquired by Troutman in
the Schedule 13D filed by Troutman with the Commission on January 4, 1999,
plus up to an additional 5% of the Company's Common Stock.
On January 12, 1999, the Board announced that it had adopted certain
amendments to the Bylaws (the "Bylaw Amendments") which, among other things:
(i) add a new Section 12 to Article II of the Bylaws, which provides that
nominations or other matters for consideration at stockholders meetings must
be received by the Company not less than 45 days and not more than 75 days
from the first anniversary of the mailing of the proxy materials for the
previous year's annual meeting (since the Company did not hold an annual
meeting in 1998, the amendment provides that the deadline for notice for the
1999 annual meeting is no earlier than February 28, 1999 and no later than
March 31, 1999); (ii) amend Article II, Section III of the Bylaws to
eliminate the power of stockholders to call a special meeting of stockholders
(though the holders of Class B Common Stock maintain their right to call a
meeting of the holders of Class B Common Stock); (iii) amend Article V,
Section 5 of the Bylaws, related to fixing the record date to determine the
stockholders entitled to consent to corporate action by the stockholders in
writing without a meeting; and (iv) correct a typographical error in Article
VIII, Section 1 by changing the word "indemnity" to "indemnitee."
More information with respect to the Rights Plan and the Bylaw
Amendments is contained in the Form 8-K filed by the Company with the
Commission on January 12, 1999 (the "Form 8-K"). The Form 8-K is available at
the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W. Washington, D.C. 20549, as well as the Regional
Offices of the Commission at 7 World Trade Center, 13th Floor, New York, New
York 10049 and Northwestern Atrium, 400 West Madison Street, Suite 1400,
Chicago, Illinois 60661 or through the Commission's World Wide Web site on
the Internet at http://www.sec.gov. The summary descriptions of the Rights
Plan and the Bylaw Amendments do not purport to be complete and are qualified
in their entirety by reference to the Rights Agreement between the Company
and Norwest Bank Minnesota, N.A., as Rights Agent, dated as of January 12,
1999, and the Bylaw Amendments, a copy of each of which is attached as an
exhibit to the Form 8-K.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
LAMONTS APPAREL, INC.
By: /s/ Debbie A. Brownfield
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Debbie A. Brownfield
Executive Vice President and
Chief Financial Officer
Date: January 22, 1999
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