FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: August 23, 1996
(Date of earliest event reported)
ANNTAYLOR STORES CORPORATION ANNTAYLOR, INC.
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
DELAWARE 1-10738 13-3499319 DELAWARE 1-11980 51-0297083
(State or (Commissi (IRS (State (Commis (IRS
other on File Employer or other sion Employer
jurisdict Number) Identifica jurisdic File Identifica
ion of tion No.) tion of Number) tion No.)
incorpora incorpor
tion) ation)
142 WEST 57TH STREET
NEW YORK, NEW YORK 10019
(Address, including zip code, of Registrants'
principal executive offices)
Registrants' telephone number, including area code: (212) 541-3300
Item 5. Other Events.
On August 23, 1996, AnnTaylor Stores Corporation,
a Delaware corporation (the "Company"), announced that
Sally Frame Kasaks resigned as Chairman and Chief Executive
Officer and a Director of the Company and its wholly owned
subsidiary, AnnTaylor, Inc., a Delaware corporation ("Ann
Taylor"), and J. Patrick Spainhour, the Company's President
and Chief Operating Officer, was promoted to Chairman and
Chief Executive Officer. Since joining the Company in
February 1996, Mr. Spainhour has been responsible for
overseeing business operations including finance,
information systems, logistics, human resources, store
planning and real estate. He has also been responsible for
worldwide sourcing for Ann Taylor, including the planned
integration of certain assets of Cygne Designs, Inc.
("Cygne") and Ann Taylor's direct sourcing joint
venture with Cygne, known as CAT U.S., Inc. and C.A.T. (Far
East) Limited (collectively, "CAT"), into a new sourcing
division of Ann Taylor. The planned acquisition by Ann
Taylor of such assets and the stock of CAT is more fully
described below.
The Company and Ann Taylor also announced, on
August 28, 1996, that they entered into an amendment (the
"Amendment") to their previously announced Stock and Asset
Purchase Agreement, dated as of June 7, 1996 (the "Agreement"),
with Cygne and Cygne Group (F.E.) Limited, a subsidiary of Cygne
("CGFE"). The Agreement provides for the acquisition (the
"Acquisition") by Ann Taylor of (i) Cygne's entire interest
in CAT and (ii) the assets of Cygne's Ann Taylor Woven
Division (the "Division") that are used for sourcing
merchandise for Ann Taylor.
As partial consideration for the Acquisition, the
Agreement provides that the Company will issue to Cygne, on
its behalf and on behalf of CGFE, shares of common stock,
par value $.0068 per share, of the Company (the "Common
Stock") having an aggregate value of $36,000,000 (based on
the market price during the ten trading days prior to
closing), but, except as described below pursuant to the
Amendment, in no event more than 2.5 million shares (the
"2.5 Million Cap").
The Amendment provides, among other things, that
if, on the closing date of the Acquisition, (x) the 2.5
Million Cap is triggered and (y) the aggregate value of the
Common Stock to be issued to Cygne is less than
$32,500,000, then the Company will issue to Cygne shares of
Common Stock having an aggregate value of $32,500,000
(based on the market price during the ten trading days
prior to closing), but in no event more than 3.0 million
shares. Ann Taylor, at its option, may deliver cash (the
"Additional Cash") equal to the aggregate market value of
all or a portion of any shares issuable in excess of the
2.5 Million Cap (the "Additional Shares"). In addition,
the Amendment provides that Cygne may terminate the
Agreement if, at the time of the closing, the aggregate
value of the Common Stock to be issued to Cygne, including
any Additional Shares issuable or Additional Cash payable
in lieu thereof, is less than $32,500,000.
On August 20, 1996, the Company released 1996 second
quarter and six month operating results. For the quarter ended
August 3, 1996, the Company reported net sales, gross profit,
operating income, net income and net income per share of $187.9
million, $80.7 million, $8.3 million, $627,000 and $.03 per share,
respectively. For the six months ended August 3, 1996, the
Company reported net sales, gross profit, operating income,
net income and net income per share of $372.3 million, $163.9
million, $18.9 million, $2.4 million and $.11, respectively.
Based on preliminary six month operating results of
the Division and CAT, if the Acquisition had been consummated on
February 4, 1996 and accounted for under the "purchase" method
of accounting, ATSC's pro forma net sales, gross profit,
operating income, net income and net income per share for the
six months ended August 3, 1996, would have been $372.3 million,
$170.9 million, $25.1 million, $4.7 million and $.18,
respectively. The preliminary pro forma information set forth
above has been derived from (i) the unaudited financial
statements of the Company and (ii) the unaudited combined
financial statements of the Division and CAT (the "Combined
Entity"). The Company's financial statements include all
adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the Company's results for
the unaudited six months. The financial statements of the
Combined Entity, in the opinion of the current management of the
Combined Entity, include all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation
of the Combined Entity's results for the unaudited six months.
The preliminary pro forma information is presented for
illustrative purposes only, and is not necessarily indicative of
the operating results that might have been achieved had the
Acquisition occurred as of an earlier date, nor is it
necessarily indicative of operating results that may occur in
the future.
The information set forth above is qualified in
its entirety by reference to (i) a press release issued by
the Company on August 23, 1996, a copy of which is attached
hereto as Exhibit 1 and incorporated herein by reference,
(ii) a press release issued by the Company on August 28,
1996, a copy of which is attached hereto as Exhibit 2 and
incorporated herein by reference and (iii) the Amendment, a
copy of which is attached hereto as Exhibit 3 and
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
1. Press release issued by the Company on
August 23, 1996.
2. Press release issued by the Company on
August 28, 1996.
2. Amendment to Stock and Asset Purchase
Agreement, dated as of August 27, 1996, by
and between the Company, Ann Taylor, Cygne
and CGFE.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ANNTAYLOR STORES CORPORATION
By: /s/ Jocelyn F.L. Barandiaran
Jocelyn F.L. Barandiaran
Vice President
Date: August 29, 1996
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ANNTAYLOR, INC.
By: /s/ Jocelyn F.L. Barandiaran
Jocelyn F.L. Barandiaran
Vice President
Date: August 29, 1996
EXHIBIT INDEX
Exhibit Description
Number
1 Press release issued by the Company
on August 23, 1996.
2 Press release issued by the Company
on August 28, 1996.
3 Amendment to Stock and Asset Purchase
Agreement, dated as of August 27,
1996, by and between the Company,
Ann Taylor, Cygne and CGFE.
FOR IMMEDIATE RELEASE EXHIBIT 1
ANNTAYLOR STORES CORPORATION CHAIRMAN RESIGNS
Spainhour Elected Chairman and Chief Executive Officer
NEW YORK, NY. August 23, 1996 -- Sally Frame Kasaks
has resigned as Chairman and Chief Executive Officer and a
Director of AnnTaylor Stores Corporation (NYSE: ANN), the
company announced today. The company also announced the
election of J. Patrick Spainhour, currently Ann Taylor's
President and Chief Operating Officer, as Chairman of the
Board and Chief Executive Officer.
"We are grateful to Sally Frame Kasaks for her
extraordinary contributions to Ann Taylor over the last 4-
1/2 years since rejoining the company as Chief Executive
Officer," said Gerald S. Armstrong, an Ann Taylor director.
"She reestablished the Ann Taylor brand while significantly
expanding the company's product offerings and geographic
reach."
Since joining Ann Taylor in February 1996, Mr.
Spainhour has been responsible for overseeing business
operations including finance, information systems,
logistics, human resources, store planning and real estate.
He has also been responsible for worldwide sourcing for the
company, which includes the planned integration of certain
assets of Cygne Designs, Inc. and Ann Taylor's joint venture
with Cygne, known as CAT, into a new sourcing division of
the company.
Mr. Spainhour commented, "Ann Taylor is a marvelous
company with a strong and talented management team. I look
forward to working with this team and the dedicated
associates in our stores to continue to provide a superb
product and excellent service to our customers." Mr.
Spainhour also said, "I look forward to working closely with
the Board over the coming weeks in accomplishing our first
priority, which is to attract a proven merchant as President
of Ann Taylor. This search will start immediately."
Ann Taylor is one of the country's leading women's
specialty retailers, operating 306 stores in 40 states and
the District of Columbia.
* * *
Contact: Jocelyn Barandiaran
Investor Relations
(212) 541-3226
FOR IMMEDIATE RELEASE EXHIBIT 2
ANN TAYLOR ANNOUNCES AMENDMENT TO ACQUISITION
AGREEMENT WITH CYGNE DESIGNS
NEW YORK, NEW YORK, August 28, 1996 -- AnnTaylor
Stores Corporation (NYSE: ANN) and its wholly owned
subsidiary AnnTaylor, Inc. announced today that they
amended their previously announced agreement with Cygne
Designs, Inc. ("Cygne") and its wholly owned subsidiary
Cygne Group (F.E.) Limited, regarding the Company's
acquisition of Cygne's entire interest in Ann Taylor's
direct sourcing joint venture with Cygne known as CAT,
and the assets of what is known as the Ann Taylor Woven
Division of Cygne, the division of Cygne that is
responsible for sourcing merchandise for Ann Taylor.
As previously announced, a portion of the purchase
price for Cygne's interest in CAT and the Ann Taylor
Woven Division assets consists of shares of Ann Taylor
Common Stock having an aggregate value of $36 million at
the time of closing, provided that in no event is the
Company required to issue more than 2.5 million shares.
Under the amended terms announced today, if at the time
of closing the aggregate value of 2.5 million shares of
the Company's common stock is less than $32.5 million,
Cygne will receive shares of the Company's common stock
having an aggregate value of $32.5 million, provided that
in no event will the Company be required to issue more
than 3 million shares. At Ann Taylor's option, it may
deliver cash in lieu of some or all of any shares
issuable in excess of 2.5 million shares.
Ann Taylor and Cygne also amended the agreement to
provide, among other things, that Cygne may terminate the
agreement if the aggregate value of the Company's common
stock to be issued at closing, including any additional
shares issuable or additional cash payable under the
amendment, is less than $32.5 million, and that either
party may terminate the agreement if the closing has not
occurred by September 30, 1996.
It is currently anticipated that the transaction
will close in September 1996 following approval by
Cygne's stockholders at its annual stockholders meeting.
There can be no assurance, however, that the transaction
will be consummated or, if consummated, that it will be
consummated within the currently anticipated time frame.
Ann Taylor is one of the country's leading women's
specialty retailers, operating 306 stores in 40 states
and the District of Columbia.
* * *
Contact: Jocelyn Barandiaran Gina Iaderosa
Investor Relations Marketing/Public Relations
(212) 541-3226 (212) 541-3347
EXHIBIT 3
AMENDMENT
to
STOCK AND ASSET PURCHASE AGREEMENT
AMENDMENT to Stock and Asset Purchase
Agreement, dated as of August 27, 1996, by and among
CYGNE DESIGNS, INC., a Delaware corporation ("Seller"),
CYGNE GROUP (F.E.) LIMITED, a Hong Kong corporation and
wholly owned subsidiary of Seller ("CGFE"), ANNTAYLOR
STORES CORPORATION, a Delaware corporation ("ATSC") and
ANNTAYLOR, INC., a Delaware corporation and wholly owned
subsidiary of ATSC ("Buyer"). Capitalized terms used but
not otherwise defined herein shall have the respective
meanings set forth in the Purchase Agreement (as defined
below).
W I T N E S S E T H
WHEREAS, Seller, CGFE, ATSC and Buyer are
parties to that certain Stock and Asset Purchase
Agreement, dated as of June 7, 1996 (the "Purchase
Agreement"), providing for, among other things, the sale
by Seller to Buyer of the Assets and the sale by Seller
and CGFE to Buyer of the CAT Shares for the aggregate
Purchase Price specified in the Purchase Agreement;
WHEREAS, under the terms of the Purchase
Agreement, a portion of the Purchase Price to be paid to
Seller, on its behalf and on behalf of CGFE, consists of
the number of validly issued, fully paid and
nonassessable shares of ATSC Common Stock having an
aggregate market price (based on the Average Trading
Price) of $36.0 million, but in no event greater than 2.5
million shares;
WHEREAS, under the terms of the Purchase
Agreement, either Seller or Buyer may terminate the
Purchase Agreement if the transactions contemplated
thereby are not consummated on or before August 30, 1996;
and
WHEREAS, the parties are desirous of amending
and supplementing the Purchase Agreement as set forth
herein.
NOW, THEREFORE, in consideration of the mutual
agreements set forth herein and for good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Section 1.2(a)(i) of the Purchase
Agreement is hereby amended in its entirety to read as
follows:
"(i) the number of validly issued, fully
paid and nonassessable shares of common stock,
par value $.0068 per share, of ATSC ("ATSC
Common Stock"), rounded to the nearest whole
share, equal to the quotient obtained by
dividing (a) $36.0 million by (b) the Average
Trading Price of the ATSC Common Stock (the
"Stock Consideration"); provided, however,
that, except as provided in the next sentence
of this Section 1.2(a)(i), the number of shares
of ATSC Common Stock to be issued shall in no
event exceed 2.5 million shares (the
"2.5 Million Cap"). In the event that on the
Closing Date (x) the 2.5 Million Cap is
triggered and (y) the aggregate value, based on
the Average Trading Price, of 2.5 million
shares of ATSC Common Stock is less than
$32.5 million, then ATSC shall issue as the
Stock Consideration the number of shares of
ATSC Common Stock, rounded to the nearest whole
share, equal to the quotient obtained by
dividing (A) $32.5 million by (B) the Average
Trading Price of the ATSC Common Stock;
provided, however, that the number of shares of
ATSC Common Stock to be issued shall in no
event exceed 3 million shares. The number of
shares of ATSC Common Stock, if any, issued in
excess of the 2.5 Million Cap shall be
hereinafter referred to as the "Additional
Shares". Notwithstanding the foregoing, in
lieu of the issuance by ATSC of all or a
portion of the Additional Shares, if
applicable, Buyer may, in its sole discretion,
deliver the dollar amount in cash (the
"Additional Cash") equal to the product
obtained by multiplying (aa) the number of
Additional Shares not to be issued by ATSC by
(bb) the Average Trading Price. As used in
this Agreement, the term "Stock Consideration"
shall include the amount of the Additional
Cash, if any, delivered in lieu of Additional
Shares. As used in this Agreement, the
"Average Trading Price" shall mean the average
of the high and low sale prices of the ATSC
Common Stock on the New York Stock Exchange
Composite Tape (or as reported on any other
exchange on which the ATSC Common Stock is then
listed) on each of the 10 consecutive trading
days ending on the trading day immediately
prior to the Closing Date;"
2. The Purchase Agreement is hereby amended
to add a new Section 1.5(q) which reads in its entirety
as follows:
"(q) a wire transfer of Federal or other
immediately available funds in an amount equal
to the Additional Cash, if applicable."
3. The last paragraph of Section 1.5 of the
Purchase Agreement is hereby amended in its entirety to
read as follows:
"The wire transfers pursuant to
subparagraphs (b) (c) (d) (e) and (q) above
shall be made by a single wire transfer to an
account designated in writing at least two (2)
business days prior to the Closing Date by
Seller."
4. Section 5.17(a) clause (ii) of the
Purchase Agreement is hereby amended in its entirety to
read as follows:
"(ii) promptly and duly call, give notice of,
convene and hold an annual meeting of stockholders
of Seller ("Annual Meeting") and shall hold such
meeting as soon as practicable after the date on
which the Proxy Statement (as hereinafter defined)
is cleared with the Commission;"
5. Section 5.17(b) of the Purchase Agreement
is hereby amended to delete the date "August 15, 1996"
from the last line thereof and to insert in lieu thereof
the date "September 26, 1996".
6. Section 6.1(d) of the Purchase Agreement
is hereby amended to delete the date "June 30, 1996" from
the first sentence thereof and to insert in lieu thereof
"the Closing Date."
7. Section 8.1(g) of the Purchase Agreement
is hereby amended to delete the date "September 29, 1996"
and to insert in lieu thereof the date "September 29,
1995."
8. Section 9.1(b) of the Purchase Agreement
is hereby amended to delete the date "August 30, 1996"
from the first line thereof and to insert in lieu thereof
the date "September 30, 1996."
9. The Purchase Agreement is hereby amended
to add a new Section 9.1(d) which reads in its entirety
as follows:
"(d) by Seller, if, on the Closing Date,
the value of the Stock Consideration, including
the value of any Additional Shares and
Additional Cash issuable or payable pursuant to
Section 1.2(a)(i) hereof, does not equal at
least $32.5 million."
10. The first sentence of Section 9.2 of the
Purchase Agreement is hereby amended in its entirety to
read as follows:
"In the event of the termination of this
Agreement and the abandonment of the
transactions contemplated hereby pursuant to
Section 9.1(b), 9.1(c) or 9.1(d) hereof,
written notice thereof shall forthwith be given
by the party so terminating to the other party,
and this Agreement shall terminate, and the
transactions contemplated hereby shall be
abandoned, without further action by Seller or
Buyer."
11. Seller represents and warrants to ATSC and
Buyer that each of Seller and CGFE has all requisite
corporate power and authority to enter into this
Amendment and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this
Amendment and the consummation of the transactions
contemplated hereby have been duly authorized by all
necessary corporate action on the part of each of Seller
and CGFE. This Amendment has been duly executed and
delivered by each of Seller and CGFE, and this Amendment
constitutes a valid and binding obligation of each of
Seller and CGFE enforceable against each of Seller and
CGFE in accordance with its terms, except that (a) such
enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium, or other laws, now or
hereafter in effect, relating to or limiting creditors'
rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding
therefor may be brought.
12. ATSC and Buyer represent and warrant to
Seller and CGFE that each of ATSC and Buyer has all
requisite corporate power and authority to enter into
this Amendment and to consummate the transactions
contemplated hereby. The execution, delivery and
performance of this Amendment and consummation of the
transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part
of each of ATSC and Buyer. This Amendment has been duly
executed and delivered by each of ATSC and Buyer, and
this Amendment constitutes a valid and binding obligation
of each of ATSC and Buyer, enforceable against each of
ATSC and Buyer in accordance with its terms, except that
(a) such enforcement may be subject to any bankruptcy,
insolvency, reorganization, moratorium, or other laws,
now or hereafter in effect, relating to or limiting
creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and
to the discretion of the court before which any
proceeding therefor may be brought.
13. Except as specifically amended and
supplemented hereby, the Purchase Agreement shall
continue and remain in full force and effect in
accordance with its terms. From and after the date
hereof all references in the Purchase Agreement to the
"Agreement," "hereunder," "hereof," "herein" or words of
similar import shall mean and be a reference to the
Purchase Agreement as amended by this amendment.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have
executed this Amendment to Stock and Asset Purchase
Agreement as of the day and year first above written.
CYGNE DESIGNS, INC.
By: /s/ Irving Benson
Name: Irving Benson
Title: President
CYGNE GROUP (F.E.) LIMITED
By: /s/ Irving Benson
Name: Irving Benson
Title: Director
ANNTAYLOR STORES CORPORATION
By: /s/ Paul E. Francis
Name: Paul E. Francis
Title: Executive Vice President-
Finance and Administration
ANNTAYLOR, INC.
By: /s/ Paul E. Francis
Name: Paul E. Francis
Title: Executive Vice President-
Finance and Administration
