LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
DESIGNS, INC.
Pursuant to the Offer to Purchase
Dated November 14, 2000
------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON THURSDAY, DECEMBER 14, 2000, UNLESS THE OFFER IS EXTENDED.
------------------------------------------------------------------------------
The Depositary for the Offer is:
EQUISERVE TRUST COMPANY
By Registered or
By Hand Delivery: By Overnight Delivery: Certified Mail:
Securities Transfer and Equiserve Trust Company Equiserve Trust Company
Reporting Services, Inc. Corporate Actions Corporate Actions
c/o Equiserve Trust Company 40 Campanelli Drive P.O. Box 9573
100 Williams Street/Galleria Braintree, MA 02184 Boston, MA 02205-9573
New York, NY 10038
By Facsimile Transmission Confirm Receipt of
(For Eligible Institutions Only): Facsimile by Telephone:
(781) 575-4826 (781) 575-4816
You should read this Letter of Transmittal, including the
accompanying instructions, carefully before completing it.
Delivery of this Letter of Transmittal to an address other than as set
forth above will not constitute a valid delivery. Deliveries to Designs, Inc.
will not be forwarded to the Depositary and therefore will not constitute valid
delivery. Deliveries to the Book-Entry Transfer Facility will not constitute
valid delivery to the Depositary.
This Letter of Transmittal is to be completed only if (a) certificates
representing shares are to be forwarded herewith, or (b) unless an Agent's
Message (as defined in the Offer to Purchase) is used or the acknowledgement
required by the Book-Entry Transfer Facility's ATOP (as defined in the Offer to
purchase) is provided, a tender of shares is to be made concurrently by
book-entry transfer to the account maintained by the Depositary at the
Book-Entry Transfer Facility as described in Section 3 of the Offer to Purchase.
Stockholders who desire to tender shares pursuant to the offer, but whose share
certificates are not immediately available or who cannot deliver the
certificates and all other documents required by this Letter of Transmittal to
<PAGE>
the Depositary on or before the Expiration Date (as defined in the Offer to
Purchase), or who cannot comply with the procedure for book-entry transfer on a
timely basis, may nevertheless tender their shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
|_| CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
----------------------------------------
Account Number:
--------------------------------------------------------
Transaction Code Number:
-----------------------------------------------
If the tendered shares are being tendered on behalf of customers, please
state the number of customer accounts for whose benefit the tender is
made:
|_| CHECK HERE IF CERTIFICATE(S) 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 Holder(s):
---------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------
Name of Institution which Guaranteed Delivery:
-------------------------
Account Number (if delivered by book-entry transfer):
o CHECK HERE IF YOU ARE TENDERING LOST, STOLEN, DESTROYED OR MUTILATED
CERTIFICATE[S]. SEE INSTRUCTION 15.
--------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
--------------------------------------------------------------------------------
Name(s) and Address(es) of Certificate(s) Tendered
Registered Holder(s) (Attach additional signed list if
(Please fill in exactly as name(s) necessary)
appear(s) on the certificate(s))
--------------------------------------------------------------------------------
Total Number Number of
of Shares Shares
Represented Tendered**
Certificate by
Number(s)* Certificate(s)*
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total Shares:
--------------------------------------------------------------------------------
2
<PAGE>
--------------------------------------------------------------------------------
Indicate in this box the order (by certificate number) in which shares are to
be purchased in the event of proration.***
Attach additional signed list if necessary. See Instruction 9.
1st: __________ 2nd: __________ 3rd: __________ 4th: __________ 5th: _______
--------------------------------------------------------------------------------
* DOES NOT need to be completed by stockholders tendering shares by
book-entry transfer.
** Unless otherwise indicated, it will be assumed that all shares evidenced
by each certificate delivered to the Depositary are being tendered hereby.
See Instruction 4.
*** If you do not designate an order, shares will be selected for purchase by
the Depositary in the event less than all shares tendered are purchased
due to proration.
-------------------------------------------------------------------------------
PRICE AT WHICH SHARES ARE TENDERED
Shares Tendered at Price Determined by Stockholder
(See Instruction 5)
By checking one of the following boxes below instead of the box under
"Shares Tendered at Price Determined by Dutch Auction," the undersigned hereby
tenders shares at the price checked. This action could result in none of the
shares being purchased if the Purchase Price (as defined in the Offer to
Purchase) determined by Designs, Inc. for the shares is less than the price
checked below. A stockholder who desires to tender shares at more than one price
must complete a separate Letter of Transmittal for each price at which shares
are tendered. The same shares cannot be tendered at more than one price. CHECK
ONLY ONE BOX.
Price (In Dollars) Per Share at Which Shares Are Being Tendered:
-------------------------------------------------------------
|_| $2.20 |_| $2.50 |_| $2.80
-------------------------------------------------------------
-------------------------------------------------------------
|_| $2.30 |_| $2.60 |_| $2.90
-------------------------------------------------------------
-------------------------------------------------------------
|_| $2.40 |_| $2.70 |_| $3.00
-------------------------------------------------------------
OR
Shares Tendered at Price Determined by Dutch Auction
(See Instruction 5)
|_| The undersigned wants to maximize the chance that Designs, Inc. will
purchase all of the shares the undersigned is tendering (subject to the
possibility of proration). Accordingly, by checking this one box instead
of one of the price boxes above, the undersigned hereby tenders shares and
is willing to accept the Purchase Price determined by Designs, Inc. in
accordance with the terms of the offer. This action could result in
receiving a price per share of as low as $2.20.
3
<PAGE>
ODD LOTS
(See Instruction 8)
To be completed only if shares are being tendered by or on behalf of a
person owning, beneficially or of record, an aggregate of fewer than 100 shares.
The undersigned either (check one box):
|_| is the beneficial or record owner of an aggregate of fewer than 100
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), shares with respect to which
it is the registered holder, and (b) believes, based upon representations
made to it by the beneficial owner(s), that each such person is the
beneficial owner of an aggregate of fewer than 100 shares and is tendering
all of the shares.
In addition, the undersigned is tendering shares either (check one box):
|_| at the Purchase Price, as the same will be determined by Designs, Inc.
in accordance with the terms of the offer (persons checking this box
need not indicate the price per share above); or
|_| at the price per share indicated above in the section captioned "Shares
Tendered at Price Determined by Stockholder."
CONDITIONAL TENDER
(See Instruction 16)
You may condition your tender of shares upon the purchase by Designs, Inc.
of a specified minimum number of the shares tendered, all as described in
Section 6 of the Offer to Purchase. Unless Designs, Inc. purchases at least that
minimum number of shares you indicate below pursuant to the terms of the offer,
none of the shares tendered will be purchased. It is your responsibility to
calculate the minimum number of shares that must be purchased if any are
purchased, and you are urged to consult your own tax advisor. Unless this box
has been checked and a minimum specified, the tender will be deemed
unconditional.
|_| The minimum number of shares that must be purchased, if any are
purchased, is: ___________ shares.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, Designs, Inc. 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. In any event, the
undersigned understands that certificate(s) for any shares not tendered or not
purchased will be returned to the undersigned at the address indicated above,
unless otherwise indicated under the box entitled "Special Payment Instructions"
or the box entitled "Special Delivery Instructions" below.
4
<PAGE>
The undersigned understands that acceptance of shares by Designs, Inc.
for payment will constitute a binding agreement between the undersigned and
Designs, Inc. upon the terms and subject to the conditions of the offer.
The check for the aggregate net Purchase Price for the shares tendered and
purchased will be issued to the order of the undersigned and mailed to the
address indicated above, unless otherwise indicated under the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" below. The undersigned acknowledges that Designs, Inc. has no
obligation, pursuant to the "Special Payment Instructions," to transfer any
shares from the name of their registered holder(s), or to order the registration
or transfer of any shares tendered by book-entry transfer, if Designs, Inc. does
not purchase any of the shares.
---------------------------------------- ---------------------------------------
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 10) (SEE INSTRUCTIONS 1, 6, 7 AND 10)
To be completed only if certificate(s) To be completed only if
for shares not tendered or not certificate(s) for shares not
purchased and/or any check for the tendered or not purchased and/or any
Purchase Price are to be issued in the check for the Purchase Price is to be
name of someone other than the mailed or sent to someone other than
undersigned, or if shares tendered the undersigned, or to the
hereby and delivered by book-entry undersigned at an address other than
transfer which are not purchased are that designated above.
to be returned by credit to an account
at the Book-Entry Transfer Facility
other than that designated above.
Issue check and/or share Mail check and/or share
certificate(s) to: certificate(s) to:
Name: Name:
------------------------------- ------------------------------
(Please Print) (Please Print)
Address: Address:
------------------------------- ------------------------------
------------------------------- ------------------------------
(Include Zip Code) (Include Zip Code)
Tax Identification or Social Security Tax Identification or Social Security
Number: Number:
------------------------------------ -------------------------------------
Credit shares delivered by book-entry
transfer and not purchased to the account
set forth below:
Account Number:
----------------------------------------
5
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
To Equiserve Trust Company:
The undersigned hereby tenders to Designs, Inc., a Delaware corporation,
the above-described shares of Designs, Inc. common stock, par value $0.01 per
share, at the price per share indicated in this Letter of Transmittal, net to
the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated November 14, 2000, receipt
of which is hereby acknowledged, and in this Letter of Transmittal which, as
amended or supplemented from time to time, together constitute the offer.
Subject to, and effective upon, acceptance for payment of the shares
tendered 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 agrees to sell, assign and
transfer to, or upon the order of, Designs, Inc. all right, title and interest
in and to all shares tendered and orders the registration of all shares if
tendered by book-entry transfer and irrevocably constitutes and appoints the
Depositary as the true and lawful agent and attorney-in-fact of the undersigned
with respect to the shares with full knowledge that the Depositary also acts as
the agent of Designs, Inc., with full power of substitution (the power of
attorney being deemed to be an irrevocable power coupled with an interest), to:
o deliver certificate(s) representing the shares or transfer ownership
of the shares on the account books maintained by the Book-Entry
Transfer Facility, together, in either case, with all accompanying
evidences of transfer and authenticity, to or upon the order of
Designs, Inc. upon receipt by the Depositary, as the undersigned's
agent, of the Purchase Price with respect to the shares;
o present certificates for the shares for cancellation and transfer on
Designs, Inc.'s books; and
o 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 and subject to the conditions of the
offer.
The undersigned covenants, represents and warrants to Designs, Inc.
that:
o the undersigned has full power and authority to tender, sell, assign
and transfer the shares tendered hereby and when and to the extent
accepted for payment, Designs, Inc. will acquire good, marketable
and unencumbered title to the tendered shares, free and clear of all
security interests, liens, restrictions, charges, encumbrances,
conditional sales agreements or other obligations relating to the
sale or transfer of the shares, and not subject to any adverse
claims;
o 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 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," within the meaning of Rule 14e-4 under
the Securities Exchange
6
<PAGE>
Act of 1934, in the shares or equivalent securities at least equal
to the shares being tendered, and (ii) the tender of shares complies
with Rule 14e-4;
o the undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or Designs, Inc. to be
necessary or desirable to complete the sale, assignment and transfer
of the shares tendered; and
o the undersigned has read, understands and agrees to all of the terms
of the offer.
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 will constitute a binding agreement between the undersigned and
Designs, Inc. upon the terms and subject to the conditions of the offer. The
undersigned acknowledges that under no circumstances will Designs, Inc. pay
interest on the Purchase Price, including without limitation, by reason of any
delay in making payment.
All authority conferred or agreed to be conferred will survive the death
or incapacity of the undersigned, and any obligation of the undersigned will be
binding on 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.
The undersigned understands that Designs, Inc. will determine a single per
share price, not greater than $3.00 nor less than $2.20, net to the seller in
cash, that it will pay for shares properly tendered, taking into account the
number of shares tendered and the prices specified by tendering stockholders.
Designs, Inc. will select the lowest Purchase Price that will allow it to buy
1,500,000 shares or, if a lesser number of shares are properly tendered, all
shares that are properly tendered and not withdrawn. All shares acquired in the
offer will be acquired at the same Purchase Price. All shares properly tendered
at prices at or below the Purchase Price and not properly withdrawn will be
purchased, subject to the conditions of the offer and the "odd lot" priority,
proration and conditional tender provisions described in the Offer to Purchase.
Shares tendered at prices in excess of the Purchase Price that is determined by
Designs, Inc. and shares not purchased because of proration or conditional
tenders will be returned.
7
<PAGE>
IMPORTANT
STOCKHOLDERS SIGN HERE
(Please Complete and Return the Attached Substitute Form W-9)
(Must be signed by the registered holder(s) exactly as holder(s) name(s)
appear(s) on certificate(s) for the shares or on a security position listing or
by person(s) authorized to become the registered holder(s) thereof by
certificates 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: , 2000
-----------------------
Name(s):
------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print)
Capacity (full title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
(Include Zip Code)
Daytime Area Code(s) and Telephone Number(s):
-----------------------------------
Tax Identification or Social Security Number:
-----------------------------------
Guarantee of Signature(s), If Required
(See Instructions 1 and 6)
Authorized Signature:
-----------------------------------------------------------
Name(s):
------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print)
Title:
--------------------------------------------------------------------------
Name of Firm:
-------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
(Include Zip Code)
Area Code(s) and Telephone Number(s):
-------------------------------------------
Dated: , 2000
-----------------------
IMPORTANT: COMPLETE AND SIGN THE ATTACHED SUBSTITUTE FORM W-9. NON-UNITED
STATES HOLDERS, HOWEVER, SHOULD OBTAIN AND COMPLETE A FORM W-8.
8
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer.
1. Guarantee of Signatures. No signature guarantee is required if either:
(a) this Letter of Transmittal is signed by the registered holder of the shares
(which term, for these purposes, includes any Book-Entry Transfer Facility
participant whose name appears on a security position listing as the owner of
the shares) tendered exactly as the name of the registered holder appears on the
certificate(s) for the shares tendered with this Letter of Transmittal and
payment and delivery are to be made directly to the owner unless the owner has
completed either the box entitled "Special Payment Instructions" or "Special
Delivery Instructions" above; or (b) the shares are tendered for the account of
a firm that is a member in good standing of the Securities Transfer Agent's
Medallion Program or a firm that is an "eligible guarantor institution," as that
term is defined in Rule 17Ad-15 under the Securities Exchange Act (each of the
foregoing constituting an "Eligible Institution").
In all other cases, an Eligible Institution must guarantee all
signatures on this Letter of Transmittal. See Instruction 6.
2. Delivery of Letter of Transmittal and Share Certificates; Guaranteed
Delivery Procedures. This Letter of Transmittal is to be completed only if share
certificates 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, unless an Agent's Message is utilized, 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, as the case may be,
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile of the Letter of Transmittal), including any required
signature guarantees, an Agent's Message in the case of a book-entry transferor,
the specific acknowledgement in the case of a tender through the Book-Entry
Transfer Facility's ATOP, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at the one of its addresses set
forth in this document on or before the Expiration Date. Delivery of documents
to the Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
Participants in the Book-Entry Transfer Facility may tender their shares
in accordance with the Book-Entry Transfer Facility's automated tender offer
program to the extent it is available to such participants for the shares they
wish to tender. A stockholder tendering through the automated tender offer
program must specifically acknowledge that the stockholder has received and
agreed to be bound by the Letter of Transmittal and that the Letter of
Transmittal may be enforced against such stockholder.
Stockholders 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
tender their shares by or through an Eligible Institution by properly completing
and duly executing and delivering a Notice of Guaranteed Delivery (or facsimile
of the Notice of Guaranteed Delivery) and by otherwise complying with the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Pursuant to that procedure, certificates for all physically tendered shares or
book-entry confirmations, as
9
<PAGE>
the case may be, as well as this properly completed and duly executed Letter of
Transmittal (or manually signed facsimile of this Letter of Transmittal), an
Agent's Message in the case of a book-entry transfer or the specific
acknowledgement in the case of a tender through the Book-Entry Transfer
Facility's ATOP, and all other documents required by this Letter of Transmittal,
must be received by the Depositary within 3 business 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
guarantee by an Eligible Institution in the form set forth therein. 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 stockholder. If delivery is by mail, Designs,
Inc. recommends that you use registered mail with return receipt requested,
properly insured. In all cases, sufficient time should be allowed to ensure
timely delivery.
Designs, Inc. will not accept any alternative, conditional or contingent
tenders, except as expressly provided in Section 6 of the Offer to Purchase. All
tendering stockholders, by execution of this Letter of Transmittal (or a
facsimile of this Letter of Transmittal), waive any right to receive any notice
of the acceptance of their tender.
3. Inadequate Space. If the space provided in the box entitled
"Description of Shares Tendered" above is inadequate, the certificate numbers
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 (not applicable to stockholders
who tender by book-entry transfer). If fewer than all of the 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 entitled
"Description of Shares Tendered" above. In that 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 box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" in this Letter of Transmittal, as soon as practicable after the
Expiration Date. Unless otherwise indicated, all shares represented by the
certificate(s) set forth above and delivered to the Depositary will be deemed to
have been tendered.
5. Indication of Price at Which Shares are Being Tendered. For shares to
be properly tendered, the stockholder must either (1) check the box next to the
section captioned "Shares Tendered at Price Determined by Dutch Auction" in this
Letter of Transmittal or (2) check one of the boxes in the section captioned
"Shares Tendered at Price Determined by Stockholder" in this Letter of
Transmittal indicating the price at which the stockholder is tendering shares.
Only one box may be checked. If more than one box is checked or if no box is
checked, the shares will not be properly tendered. A stockholder wishing to
tender portions of the holder's shares at different prices must complete a
separate Letter of Transmittal for each price at which the holder wishes to
tender each portion of the holder's shares. The same shares
10
<PAGE>
cannot be tendered (unless previously and properly withdrawn as provided in
Section 4 of the Offer to Purchase) at more than one price.
6. Signatures on Letter of Transmittal; Stock Powers and
Endorsements.
o If this Letter of Transmittal is signed by the registered holder(s)
of the shares tendered, the signature(s) must correspond exactly
with the name(s) as written on the face of the certificate(s)
without any change whatsoever.
o If the shares tendered are registered in the names of two or more
joint holders, each holder must sign this Letter of Transmittal.
o If any tendered shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles) as there are
different registrations of certificates.
o When this Letter of Transmittal is signed by the registered
holder(s) of the shares tendered, no endorsement(s) of
certificate(s) representing the shares or separate stock power(s)
are required unless payment is to be made or the certificate(s) for
shares not tendered or not purchased are to be issued to a person
other than the registered holder(s). Signature(s) on the
certificate(s) must be guaranteed by an Eligible Institution. If
this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, or if payment is
to be made or certificate(s) for shares not tendered or not
purchased are to be issued 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),
and the signature(s) on the certificate(s) or stock power(s) must be
guaranteed by an Eligible Institution. See Instruction 1.
o If this Letter of Transmittal or any certificate(s) or stock
power(s) is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or any other person
acting in a fiduciary or representative capacity, that person should
so indicate when signing this Letter of Transmittal and must submit
proper evidence satisfactory to Designs, Inc. of his or her
authority so to act.
7. Stock Transfer Taxes. Except as provided in this Instruction 7, no
stock transfer tax stamps or funds to cover tax stamps need accompany this
Letter of Transmittal. Designs, Inc. will pay any stock transfer taxes payable
on the transfer to it of shares purchased pursuant to the offer. If, however,
(a) payment of the Purchase Price for shares tendered and accepted for purchase
is to be made to any person other than the registered holder(s); (b) shares not
tendered or rejected for purchase are to be registered in the name(s) of any
person(s) other than the registered holder(s); or (c) certificate(s)
representing tendered shares 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 from the Purchase Price the amount of any stock transfer taxes
(whether imposed on the registered holder(s), other person(s) or otherwise)
payable on account of the transfer to that person, unless satisfactory evidence
of the payment of the taxes or any exemption therefrom is submitted.
11
<PAGE>
8. Odd Lots. As described in Section 1 of the Offer to Purchase, if
Designs, Inc. is to purchase fewer than all shares tendered before the
Expiration Date and not properly withdrawn, the shares purchased first will
consist of all shares properly tendered by any stockholder who owned,
beneficially or of record, an aggregate of fewer than 100 shares and who validly
tendered such shares at or below the Purchase Price (an "odd lot holder"). This
preference will not be available unless the section captioned "Odd Lots" is
completed.
9. Order of Purchase in Event of Proration. As described in Section 1 of
the Offer to Purchase, stockholders may designate the order in which their
shares 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. See Sections 1 and 15 of the Offer to Purchase.
10. 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 this Letter of Transmittal or if the
certificate(s) and/or check(s) are to be sent to someone other than the person
signing this Letter of Transmittal or to the signer at a different address, the
box entitled "Special Payment Instructions" and/or the box entitled "Special
Delivery Instructions" on this Letter of Transmittal should be completed as
applicable and signatures must be guaranteed as described in Instruction 1.
11. Irregularities. All questions as to the number of shares to be
accepted, the price to be paid for the shares and the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of shares will be determined by Designs, Inc. in its sole discretion. Designs,
Inc.'s determination will be final and binding on all parties. Designs, Inc.
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 Designs, Inc.'s counsel, be unlawful. Designs, Inc. also reserves
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 stockholder. Designs, Inc.'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 by the tendering stockholder or waived by
Designs, Inc. Unless waived, any defects or irregularities in connection with
tenders must be cured within a time period that Designs, Inc. will determine.
None of Designs, Inc., 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 defect or irregularity.
12. Questions and Requests for Assistance and Additional Copies. You may
request additional copies of the Offer to Purchase, the Letter of Transmittal or
the Notice of Guaranteed Delivery from the Information Agent at its address and
telephone numbers set forth on the back cover of the Offer to Purchase.
13. Tax Identification Number and Backup Withholding. Federal income tax
law generally requires that a stockholder whose tendered shares are accepted for
purchase, or the stockholder's assignee (in either case, the "payee"), provide
the Depositary with the payee's correct Taxpayer Identification Number ("TIN"),
which, in the case of a payee who is an individual, is the payee's social
security number. If the Depositary is not provided with the correct TIN or an
adequate basis for an exemption, the payee may be subject to penalties
12
<PAGE>
imposed by the Internal Revenue Service and backup withholding in an amount
equal to 31% of the gross proceeds received pursuant to the offer. If
withholding results in an overpayment of taxes, a refund may be obtained.
To prevent backup withholding, each payee must provide the payee's correct
TIN by completing the Substitute Form W-9 set forth in this document, certifying
that the TIN provided is correct (or that the payee is awaiting a TIN) and that
(i) the payee is exempt from backup withholding, (ii) the payee has not been
notified by the Internal Revenue Service that the payee is subject to backup
withholding as a result of a failure to report all interest or dividends, or
(iii) the Internal Revenue Service has notified the payee that the payee is no
longer subject to backup withholding.
If the payee lacks a TIN, the payee should (i) consult the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for instructions on applying for a TIN, (ii) check the box "Awaiting
TIN" in Part I of the Substitute Form W-9, and (iii) sign and date the
Substitute Form W-9 and the Certificate of Awaiting Taxpayer Identification
Number set forth in this document. If the payee does not provide the payee's TIN
to the Depositary within 60 days, backup withholding will begin and continue
until the payee furnishes the payee's TIN to the Depositary. Note that checking
the box "Awaiting TIN" on the Substitute Form W-9 means that the payee has
already applied for a TIN or that the payee intends to apply for one in the near
future.
If shares are held in more than one name or are not in the name of the
actual owner, consult the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for information on which TIN to
report.
Exempt payees (including, among others, all corporations and certain
foreign individuals) are not subject to backup withholding and reporting
requirements. To prevent possible erroneous backup withholding, an exempt payee
should write "Exempt" in Part II of the Substitute Form W-9. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on the Substitute
Form W-9 for additional instructions. In order for a nonresident alien or
foreign entity to qualify as exempt, that person must submit a completed IRS
Form W-8 Certificate of Foreign Status or a Substitute Form W-8, signed under
penalty of perjury attesting to the exempt status. This form may be obtained
from the Depositary.
14. Withholding for Non-United States Holders. Even if a non-United States
holder (as defined in Section 15 of the Offer to Purchase) has provided the
required certification to avoid backup withholding, the Depositary will withhold
United States federal income taxes equal to 31% of the gross payments payable to
a non-United States holder or his or her agent unless the Depositary determines
that a reduced rate of withholding is available under a tax treaty or that an
exemption from withholding is applicable because the gross proceeds are
effectively connected with the conduct of a trade or business within the United
States. To obtain a reduced rate of withholding under a tax treaty, a non-United
States holder must deliver to the Depositary before the payment a properly
completed and executed IRS Form 1001. To obtain an exemption from withholding on
the grounds that the gross proceeds paid pursuant to the offer are effectively
connected with the conduct of a trade or business within the United States, a
non-United States holder must deliver to the Depositary a properly completed and
executed IRS Form 4224. A non-United States holder that qualifies for an
exemption from withholding by delivering IRS Form 4224 will generally be
required to file a United States federal income tax return and will be subject
to United States federal income tax on income derived from the sale of
13
<PAGE>
shares pursuant to the offer in the manner and to the extent described in
Section 15 of the Offer to Purchase as if it were a United States holder. The
Depositary will determine a stockholder's status as a non-United States holder
and eligibility for a reduced rate of, or exemption from, withholding by
reference to any outstanding certificates or statements concerning eligibility
for a reduced rate of, or exemption from, withholding (e.g., IRS Form 1001 or
IRS Form 4224) unless facts and circumstances indicate that reliance is not
warranted. A non-United States holder may be eligible to obtain a refund of all
or a portion of any tax withheld if the non-United States holder meets those
tests described in Section 15 of the Offer to Purchase that would characterize
the exchange as a sale (as opposed to a dividend) or is otherwise able to
establish that no tax or a reduced amount of tax is due.
Non-United States holders are urged to consult their tax advisors
regarding the application of United States federal income tax withholding,
including eligibility for a withholding tax reduction or exemption, and the
refund procedure.
15. Lost, Stolen, Destroyed or Mutilated Certificates. Stockholders whose
certificates for all or part of their shares have been lost, stolen, destroyed
or mutilated must notify Equiserve Trust Company. Equiserve Trust Company will
instruct stockholders as to the procedures to be followed in order to replace
the certificate.
16. Conditional Tenders. As described in Section 6 of the Offer to
Purchase, stockholders may condition their tenders on all or a minimum number of
their tendered shares being purchased. If Designs, Inc. will purchase less than
all of the shares tendered before the Expiration Date and not withdrawn, the
Depositary will perform a preliminary proration, and any shares tendered at or
below the Purchase Price pursuant to a conditional tender for which the
condition was not satisfied by the preliminary proration will be deemed
withdrawn, subject to reinstatement if such conditionally tendered shares are
subsequently selected by random lot for purchase subject to Section 6 of the
Offer to Purchase. Conditional tenders will be selected by lot only from
stockholders who tender all of their shares. All tendered shares will be deemed
unconditionally tendered unless the "Conditional Tender" box is completed. The
conditional tender alternative is made available so that a stockholder may
assure that the purchase of shares from the stockholder pursuant to the offer
will be treated as a sale of the shares by the stockholder, rather than the
payment of a dividend to the stockholder, for federal income tax purposes. Odd
lot shares, which will not be subject to proration, cannot be conditionally
tendered. It is the tendering stockholder's responsibility to calculate the
minimum number of shares that must be purchased from the stockholder in order
for the stockholder to qualify for sale (rather than dividend) treatment, and
each stockholder is urged 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 thereby will be deemed withdrawn.
This Letter of Transmittal, properly completed and duly executed (or a
manually signed facsimile of this Letter of Transmittal), together with
certificates representing shares being tendered (or confirmation of book-entry
transfer by the Depositary) and all other required documents, or a Notice of
Guaranteed Delivery, must be received before 5:00 p.m., Eastern time, on the
Expiration Date. Stockholders are encouraged to return a completed Substitute
Form W-9 with this Letter of Transmittal.
14
<PAGE>
PLEASE PROVIDE YOUR SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER ON
THIS SUBSTITUTE FORM W-9 AND CERTIFY THEREIN THAT YOU ARE NOT SUBJECT TO BACKUP
WITHHOLDING. FAILURE TO DO SO MAY SUBJECT YOU TO 31% U.S. FEDERAL INCOME TAX
BACKUP WITHHOLDING.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE
Form W-9 PART I-- PLEASE PROVIDE YOUR TIN ___________________________________
Department of the IN THE BOX AT RIGHT AND CERTIFY BY Social Security Number(s) or
Treasury Internal SIGNING AND DATING BELOW Employer Identification Number
Revenue Service
---------------------------------------------------------------------------------------------
PAYER'S REQUEST FOR
TAXPAYER PART 2 -- Certification -- Under penalties of perjury, I certify that:
IDENTIFICATION (1) The number shown on this form is my correct Taxpayer NUMBER
(TIN) Identification Number ("TIN") (or I am waiting for a number to be
issued to me) and (2) I am not subject to back-up
withholding because I have not been notified by the
Internal Revenue Service ("IRS") that I am subject to
back-up withholding as a result of a failure to report all
interest or dividends, or the IRS has notified me that I
am no longer subject to back-up withholding.
---------------------------------------------------------------------------------------------
PART 3 -- Awaiting TIN -- You must check the box below if
you are awaiting a TIN to be assigned to you. See also the
Certificate of Awaiting Taxpayer Identification Number
below.
[ ] Awaiting TIN
---------------------------------------------------------------------------------------------
Certification Instructions -- You must cross out item (2)
above if you have been notified by the IRS that you are
subject to back-up withholding because of under reporting
interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to
back-up withholding you received another notification from
the IRS that you are no longer subject to back-up
withholding, do not cross out item (2)
SIGNATURE: __________________________ DATE: _________________
---------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
*(TO BE COMPLETED ONLY IF THE BOX IN PART 3 ABOVE IS CHECKED)
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 within 60 days, 31 percent
of all reportable payments made to me thereafter will be withheld until I
provide such a number.
SIGNATURE: ______________________________ DATE: ___________________________
---------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269- 5550
All Others Call Toll Free: (800) 755-7520
16
