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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-4
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ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
WESTPOINT STEVENS INC.
(NAME OF ISSUER)
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
961238 102
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
CHRISTOPHER N. ZODROW
VICE PRESIDENT AND SECRETARY
WESTPOINT STEVENS INC.
507 WEST TENTH STREET
WEST POINT, GEORGIA 31833
(706) 645-4000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
------------------------
Copies of Communications to:
HOWARD CHATZINOFF, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
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OCTOBER 29, 1999
(DATE TENDER OFFER FIRST PUBLISHED,
SENT OR GIVEN TO SECURITY HOLDERS)
CALCULATION OF FILING FEE
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Transaction Value:* Amount of Filing Fee:*
$66,000,000 $13,200
</TABLE>
* Based on $22.00 cash price per share for 3,000,000 shares.
/ / Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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Amount previously paid: None Filing party: N/A
Form or registration no. N/A Date filed: N/A
</TABLE>
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ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is WestPoint Stevens Inc., a Delaware
corporation (the "Company"). The Company's principal executive offices are
located at 507 West Tenth Street, West Point, Georgia 31833.
(b) This statement relates to a tender offer by the Company to purchase up
to 3,000,000 shares of its Common Stock, par value $.01 per share ("Shares"), at
prices specified by its shareholders, not greater than $22.00 nor less than
$19.00 per share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated October 29, 1999, and in
the related Letter of Transmittal (which together constitute the "Offer"),
copies of which are attached hereto as Exhibits (a)(l) and (a)(2), respectively.
Reference is hereby made to the "Introduction," Section 1, "Number of Shares;
Proration; Extension of the Offer," Section 8, "Background and Purpose of the
Offer," and Section 12, "Transactions and Arrangements Concerning the Shares" of
the Offer to Purchase, each of which is herein incorporated by reference.
(c) Reference is hereby made to the "Introduction" and Section 7, "Price
Range of Shares; Dividends," of the Offer to Purchase, each of which is herein
incorporated by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is hereby made to Section 10, "Source and Amount of
Funds," of the Offer to Purchase, which Section is herein incorporated by
reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
Reference is hereby made to the "Introduction," Section 6, "Certain
Conditions of the Offer," Section 8, "Background and Purpose of the Offer,"
Section 9, "Certain Information Concerning the Company," Section 10, "Source and
Amount of Funds," Section 12, "Transactions and Arrangements Concerning the
Shares," and Section 14, "Effects of the Offer on the Market for Shares;
Registration under the Exchange Act," of the Offer to Purchase, each of which is
herein incorporated by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Reference is hereby made to the "Introduction," Section 8, "Background and
Purpose of the Offer" and Section 12, "Transactions and Arrangements Concerning
the Shares," of the Offer to Purchase, each of which is herein incorporated by
reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE ISSUER'S SECURITIES.
Reference is hereby made to the "Introduction," Section 8, "Background and
Purpose of the Offer," and Section 12, "Transactions and Arrangements Concerning
the Shares," of the Offer to Purchase, each of which is herein incorporated by
reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the "Introduction" and Section 16, "Fees and
Expenses," of the Offer to Purchase, each of which is herein incorporated by
reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) Reference is hereby made to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1998, the Company's Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 1999, the Company's Report
on Form 8-K filed with the Commission on October 27, 1999 and to the information
in Section 9, "Certain Information Concerning the Company," of the Offer to
Purchase, which information is herein incorporated by reference.
2
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ITEM 8. ADDITIONAL INFORMATION.
(a) Reference is hereby made to Section 12, "Transactions and Arrangements
Concerning the Shares," of the Offer to Purchase, which Section is herein
incorporated by reference.
(b) Reference is hereby made to Section 13, "Certain Legal Matters;
Regulatory Approvals," of the Offer to Purchase, which Section is herein
incorporated by reference.
(c) Reference is hereby made to Section 14, "Effects of the Offer on the
Market for Shares; Registration under the Exchange Act," of the Offer to
Purchase, which Section is herein incorporated by reference.
(d) None.
(e) Reference is hereby made to the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively, and are herein incorporated by reference in their
entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
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(a)(1) Offer to Purchase, dated October 29, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7) Letter to the Company's Shareholders from the Chairman of the Board of the Company.
(a)(8) Text of Press Release, dated October 27, 1999.
(a)(9) Text of Press Release, dated October 29, 1999.
(a)(10) Form of Summary Advertisement.
(b) Second Amended and Restated Credit Agreement, dated as of June 9, 1998, as amended, among the
Company, WestPoint Stevens (Europe) Limited, Nationsbank, N.A., as agent and the other financial
institutions party thereto, incorporated by reference to Exhibit 10.59 of the Company's Registration
Statement on Form S-4 (Reg No. 333-59817), filed with the Commission on July 24, 1998.
(c) None.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
WESTPOINT STEVENS INC.
By: /s/ CHRISTOPHER N. ZODROW
----------------------------------
Christopher N. Zodrow
Vice President and Secretary
Date: October 29, 1999
4
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OFFER TO PURCHASE FOR CASH
BY
WESTPOINT STEVENS INC.
up to
3,000,000 Shares of its Common Stock
at a Purchase Price Not Greater Than $22.00 Nor Less Than $19.00 Per Share
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 30, 1999, UNLESS THE
OFFER IS EXTENDED.
WestPoint Stevens Inc., a Delaware corporation (the "Company"), is offering
to purchase up to 3,000,000 shares of its Common Stock, par value $.01 per share
("Shares"), at prices specified by its stockholders, not greater than $22.00 nor
less than $19.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which together constitute the "Offer"). The Company will
determine a single per Share price (not greater than $22.00 nor less than $19.00
per Share) that it will pay for the Shares validly tendered pursuant to the
Offer (the "Purchase Price"), taking into account the number of Shares so
tendered and the prices specified by tendering stockholders. The Company will
select the Purchase Price that will allow it to purchase 3,000,000 Shares (or
such lesser number as are validly tendered at prices not greater than $22.00 nor
less than $19.00 per Share) pursuant to the Offer. Upon the terms and subject to
the conditions of the Offer, including the provisions thereof relating to
proration and odd lot tenders, the Company will purchase all Shares validly
tendered at prices at or below the Purchase Price and not validly withdrawn. The
Company reserves the right, in its sole discretion, to purchase more than
3,000,000 Shares pursuant to the Offer, subject to any required extension of the
period of time during which the Offer is open. See Section 15.
------------------------
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
------------------------
The Shares are listed and principally traded on the New York Stock Exchange
(the "NYSE") under the symbol "WXS". The last reported sale price of the Shares
on the NYSE on October 26, 1999, the last full trading day preceding public
announcement of the Offer, was $17 15/16 per Share. The last reported sale price
of the Shares on the NYSE on October 28, 1999, the last full trading day
preceding commencement of the Offer, was $18 1/16 per Share. See Section 7.
Stockholders are urged to obtain a current market quotation for the Shares.
------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
AS TO WHETHER ANY STOCKHOLDER SHOULD TENDER ANY OR ALL OF SUCH STOCKHOLDER'S
SHARES PURSUANT TO THE OFFER OR AS TO THE PRICE OF ANY TENDER. EACH STOCKHOLDER
MUST MAKE SUCH STOCKHOLDER'S OWN DECISION WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER OR AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED THAT
NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO TENDER SHARES PURSUANT TO
THE OFFER.
STOCKHOLDERS ARE URGED TO CAREFULLY AND IMMEDIATELY REVIEW THIS OFFER TO
PURCHASE AND THE OTHER MATERIALS ENCLOSED HEREWITH, AND IF THEY DETERMINE TO
PARTICIPATE IN THE OFFER, TO TENDER THEIR SHARES PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON TUESDAY, NOVEMBER 30, 1999, TO ENSURE PARTICIPATION IN THE OFFER.
------------------------
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
October 29, 1999
<PAGE>
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) properly complete and duly sign the Letter of
Transmittal or a facsimile thereof in accordance with the instructions in the
Letter of Transmittal, including any required signature guarantees, mail or
deliver it and any other documents required by the Letter of Transmittal to The
Bank of New York, the depositary for the Offer (the "Depositary"), and either
mail or deliver the certificates for such Shares to the Depositary along with
the Letter of Transmittal or follow the procedure for book-entry transfer set
forth in Section 3, or (2) request such stockholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
stockholder. A stockholder having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if such
stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available (or who cannot follow the procedure for
book-entry transfer on a timely basis) or who cannot transmit the Letter of
Transmittal and all other required documents to the Depositary before the
Expiration Date (as defined in Section 1) should tender such Shares by following
the procedure for guaranteed delivery set forth in Section 3.
------------------------
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at the addresses and telephone numbers set forth on
the back cover of this Offer to Purchase. Requests for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent.
------------------------
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER (OR AT WHAT PRICE) OR REFRAIN
FROM TENDERING SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER
OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF
TRANSMITTAL. IF MADE OR GIVEN, SUCH RECOMMENDATION AND SUCH INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY.
------------------------
Statements included in this Offer to Purchase may contain forward-looking
statements. Such forward-looking statements are made pursuant to the safe-harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such
statements may relate, but are not limited, to projections of revenues, income
or loss, capital expenditures, fluctuations in insurance reserves, plans for
growth and future operations, competition and regulation as well as assumptions
relating to the foregoing. Forward-looking statements are inherently subject to
risk and uncertainties, many of which cannot be predicted or quantified. When
used in this Offer to Purchase, the words "estimates", "expects", "anticipates",
"believes", "plans", "intends" and variations of such words and similar
expressions are intended to identify forward-looking statements that involve
risks and uncertainties. Future events and actual results could differ
materially from those set forth in, contemplated by or underlying the
forward-looking statements. The factors that could cause actual results to
differ materially from those suggested by any such statements include, but are
not limited to, those discussed or identified from time to time in the Company's
public filings. Undue reliance should not be placed on these forward-looking
statements, which are applicable only as of the date hereof. The Company
undertakes no obligation to revise or update these forward-looking statements to
reflect events or circumstances that arise after the date of this Offer to
Purchase or to reflect the occurrence of unanticipated events.
i
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TABLE OF CONTENTS
<TABLE>
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PAGE
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SUMMARY ................................................................................................... 1
INTRODUCTION .............................................................................................. 2
THE OFFER ................................................................................................. 4
1. Number of Shares; Proration; Extension of the Offer.................................................. 4
2. Tenders by Holders of Fewer than 100 Shares.......................................................... 5
3. Procedure for Tendering Shares....................................................................... 6
4. Withdrawal Rights.................................................................................... 9
5. Acceptance for Payment of Shares and Payment of Purchase Price....................................... 9
6. Certain Conditions of the Offer...................................................................... 10
7. Price Range of Shares; Dividends..................................................................... 12
8. Background and Purpose of the Offer.................................................................. 13
9. Certain Information Concerning the Company........................................................... 14
10. Source and Amount of Funds........................................................................... 21
11. Certain Federal Income Tax Considerations............................................................ 21
12. Transactions and Arrangements Concerning the Shares.................................................. 24
13. Certain Legal Matters; Regulatory Approvals.......................................................... 25
14. Effects of the Offer on the Market for Shares; Registration under the Exchange Act................... 25
15. Extension of Tender Period; Termination; Amendments.................................................. 25
16. Fees and Expenses.................................................................................... 26
17. Miscellaneous........................................................................................ 27
</TABLE>
<PAGE>
SUMMARY
The following summary is solely for the convenience of the Company's
stockholders and is qualified in its entirety by reference to the full text of,
and more specific details contained in, this Offer to Purchase.
<TABLE>
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Purchase Price............................ The Company will determine a single Purchase Price not greater than
$22.00 nor less than $19.00 per Share, net to the seller in cash,
that it will pay for Shares properly tendered and not validly
withdrawn pursuant to the Offer, taking into account the number of
Shares so tendered and the prices specified by tendering
stockholders. All Shares properly tendered at prices at or below the
Purchase Price and not validly withdrawn will be purchased at the
Purchase Price, upon the terms and subject to the conditions of the
Offer, including the proration and odd lot provisions. Each
stockholder desiring to tender Shares must specify in the Letter of
Transmittal the price (not greater than $22.00 nor less than $19.00
per Share) at which such stockholder is willing to have such
stockholder's Shares purchased by the Company or that such
stockholder is willing to accept a Purchase Price resulting from
Dutch Auction.
Number of Shares to be Purchased.......... Up to 3,000,000 Shares (or such lesser number of Shares as are
validly tendered and not validly withdrawn). The Company reserves the
right, in its sole discretion, to purchase more than 3,000,000 Shares
pursuant to the Offer. See Section 1.
Proration................................. If more than 3,000,000 Shares have been validly tendered and not
validly withdrawn prior to the Expiration Date, the Company may
purchase validly tendered Shares on a pro rata basis, after the
purchase of odd lot Shares. See Section 1.
How to Tender Shares...................... See Section 3. For further information, call the Information Agent or
the Dealer Manager or consult your broker for assistance.
Stock Transfer Tax........................ None, if payment is made to the registered stockholder.
Expiration Date........................... 5:00 p.m., New York City time, on Tuesday, November 30, 1999, unless
extended by the Company.
Payment Date.............................. As promptly as practicable after the Expiration Date.
Position of the Company and its
Directors............................... Neither the Company nor its Board of Directors makes any
recommendation to any stockholder as to whether to tender or refrain
from tendering Shares or as to the purchase price of any tender. The
Company has been advised that none of its directors or executive
officers intends to tender any Shares pursuant to the Offer.
Withdrawal Rights......................... Tendered Shares may be withdrawn at any time until 5:00 p.m., New
York City time, on Tuesday, November 30, 1999, unless the Offer is
extended by the Company, and, unless accepted for payment by the
Company, after 12:00 Midnight, New York City time, on Tuesday,
December 28, 1999. See Section 4.
Odd Lots.................................. There will be no proration of Shares tendered by any stockholder
owning beneficially less than 100 Shares who tenders all such Shares
prior to the Expiration Date and who completes the "Odd Lots" box in
the Letter of Transmittal. See Section 1.
</TABLE>
<PAGE>
INTRODUCTION
WestPoint Stevens Inc., a Delaware corporation (the "Company"), is offering
to purchase up to 3,000,000 shares of its Common Stock, par value $.01 per share
(such shares, together with all other outstanding shares of Common Stock of the
Company, are referred to herein as the "Shares"), at prices specified by the
stockholders, not greater than $22.00 nor less than $19.00 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer").
The Company will determine a single per Share price (not greater than
$22.00 nor less than $19.00 per Share) that it will pay for the Shares validly
tendered pursuant to the Offer (the "Purchase Price"), taking into account the
number of Shares so tendered and the prices specified by tendering stockholders.
The Company will select the Purchase Price that will allow it to purchase
3,000,000 Shares (or such lesser number as are validly tendered at prices not
greater than $22.00 nor less than $19.00 per Share) pursuant to the Offer. Upon
the terms and subject to the conditions of the Offer, including the provisions
relating to proration and odd lot tenders described below, the Company will
purchase all Shares validly tendered at prices at or below the Purchase Price
and not validly withdrawn prior to the Expiration Date (as defined below). The
Purchase Price will be paid net to the seller in cash with respect to all Shares
purchased. Shares tendered at prices in excess of the Purchase Price and Shares
not purchased because of proration will be returned as promptly as practicable
following the Expiration Date or, in the case of Shares tendered by book-entry
transfer at the Book-Entry Transfer Facility (as defined below), such Shares
will be credited to the appropriate account maintained by the tendering
stockholder at the Book-Entry Transfer Facility, in each case without expense to
such stockholder. Stockholders must complete the section of the Letter of
Transmittal relating to the price at which they are tendering Shares in order to
validly tender Shares.
Tendering stockholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to Instruction 9 of the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by the Company pursuant to the
Offer. The Company will pay all fees and expenses incurred in connection with
the Offer, including those of Merrill Lynch & Co. ("Merrill Lynch" or the
"Dealer Manager"), The Bank of New York (the "Depositary") and Innisfree M&A
Incorporated (the "Information Agent"). See Section 16.
If before the Expiration Date a greater number of Shares is validly
tendered and not validly withdrawn than will be accepted for purchase by the
Company, the Company will accept Shares for purchase, first, from all Shares
properly tendered by any Odd Lot Holder (as defined in Section 1) who tenders
all Shares beneficially owned by such Odd Lot Holder and complies with the
requirements set forth in Section 2 and, then, from all other Shares validly
tendered on a pro rata basis. See Sections 1 and 2. All Shares not purchased
pursuant to the Offer, including Shares not purchased because of proration, will
be returned to the tendering stockholders at the Company's expense as promptly
as practicable following the Expiration Date or, in the case of Shares tendered
by book-entry transfer at the Book-Entry Transfer Facility, such Shares will be
credited to the appropriate account maintained by the tendering stockholder at
the Book-Entry Transfer Facility, in each case without expense to such
stockholder.
As of October 25, 1999, there were 53,325,926 Shares outstanding and
4,689,783 Shares reserved for issuance in connection with outstanding stock
options under the Company's stock option plans. The 3,000,000 Shares that the
Company is offering to purchase in the Offer represent approximately 5.6% of the
Shares outstanding as of October 25, 1999 and approximately 5.2% of the
fully-diluted Shares outstanding as of such date. As of October 25, 1999, there
were approximately 39 record holders who each owned fewer than 100 Shares and,
as of such date, they held in the aggregate approximately 992 Shares.
Stockholders should be aware that, as a result of his beneficial ownership
of Shares, Mr. Holcombe T. Green, Jr., (Chairman of the Board and Chief
Executive Officer of the Company) may be deemed to have certain interests with
respect to the Offer. If stockholders validly tender not less than the maximum
number of Shares for which the Offer is being made (3,000,000 Shares) and the
Company accepts such 3,000,000 Shares for purchase, then (i) the 3,000,000
Shares purchased would represent approximately 5.6% of the total number of
Shares outstanding at October 25, 1999, constituting approximately 8.4% of the
total number of Shares beneficially owned by stockholders other than Mr. Green
at October 25, 1999, and (ii) Mr. Green's beneficial ownership of
2
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Shares would increase from an aggregate of approximately 33% to an aggregate of
approximately 35% of the outstanding Shares.
The Board of Directors of the Company (the "Board of Directors")
(Mr. Green abstaining) has approved the making of the Offer. Mr. Green abstained
from voting on the making of the Offer to avoid any conflict of interest which
might arise from the increase in Mr. Green's beneficial ownership of Shares that
will result from stockholders tendering Shares in the Offer. Neither the Company
nor the Board of Directors makes any recommendation to any holder of options as
to whether to exercise any or all such options or to tender any or all Shares
issuable upon such exercise.
NEITHER THE COMPANY NOR THE BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY STOCKHOLDER SHOULD TENDER ANY OR ALL OF SUCH STOCKHOLDER'S SHARES
PURSUANT TO THE OFFER OR AS TO THE PRICE OF ANY TENDER. EACH STOCKHOLDER MUST
MAKE SUCH STOCKHOLDER'S OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW
MANY SHARES TO TENDER OR AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED THAT NONE
OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO TENDER SHARES PURSUANT TO THE
OFFER.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
The Board of Directors believes that the Company's financial position,
outlook and current market conditions make this an attractive time to repurchase
a portion of the outstanding Shares. In the view of the Board of Directors, the
Offer represents an acceleration of the Company's existing share repurchase
program.
The Offer is designed to afford to stockholders who are considering the
sale of all or a portion of their Shares an opportunity to sell such Shares for
a higher price than that available in the open market immediately prior to the
announcement of the Offer, without the usual transaction costs associated with
market sales.
The Offer will also allow qualifying stockholders beneficially owning fewer
than 100 Shares to avoid the payment of brokerage commissions and the applicable
odd lot discount payable on a sale of Shares in a transaction on a securities
exchange. Correspondingly, the costs to the Company for servicing the accounts
of Odd Lot Holders (as defined below) will be reduced. See Section 2.
The Shares are traded on the New York Stock Exchange (the "NYSE") under the
symbol "WXS". On October 26, 1999, the last full trading day before the
announcement of the terms of the Offer, the last reported sale price of the
Shares, as reported on the NYSE, was $17 15/16 per Share. On October 28, 1999,
the last full trading day before the commencement of the Offer, the last
reported sale price of the Shares, as reported on the NYSE was $18 1/16 per
Share. See Section 7. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET
QUOTATION FOR THE SHARES.
In considering the Offer, the Board of Directors also took into account the
expected financial impact of the Offer, including the Company's increased debt
as a result of the Offer and the resulting increased interest expense. See the
information under the caption "Pro Forma Unaudited Financial Data" in
Section 9. The Company believes that, following completion of the Offer, its
cash, short-term investments and access to credit facilities, together with its
anticipated cash flow from operations, will be adequate for its needs for the
foreseeable future. However, the Company's actual experience may differ from the
expectations set forth in the preceding sentence. Future events, such as
unexpected operating losses or capital or other expenditures, might have the
effect of reducing the Company's available cash balances or might reduce or
eliminate the availability of external financial resources.
Shares acquired by the Company pursuant to the Offer will be held in the
Company's treasury and will be available for the Company to issue without
further stockholder action (except as required by applicable law or the rules of
the NYSE on which the Shares are traded). These Shares could be issued for
general or other corporate purposes, including, for acquisitions, raising
additional capital, stock splits or dividends, employee incentives or savings
and compensation plans.
3
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THE OFFER
1. NUMBER OF SHARES; PRORATION; EXTENSION OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and will thereby purchase) up to 3,000,000 Shares or such
lesser number of Shares as are validly tendered (and not validly withdrawn in
accordance with Section 4) prior to the Expiration Date at a price (determined
in the manner set forth below) not greater than $22.00 nor less than $19.00 per
Share. The term "Expiration Date" means 5:00 p.m., New York City time, on
Tuesday, November 30, 1999, unless and until the Company shall have extended the
period of time for which the Offer is open, in which event the term "Expiration
Date" shall refer to the latest time and date at which the Offer, as so extended
by the Company, shall expire. For a description of the Company's rights to
extend the period of time during which the Offer is open and to delay, terminate
or amend the Offer, see Section 15. See also Section 6. Subject to the purchase
of Shares validly tendered and not validly withdrawn by Odd Lot Holders as set
forth in Section 2, if the Offer is oversubscribed, Shares validly tendered
before the Expiration Date will be subject to proration. The proration period
also expires on the Expiration Date.
The Company will determine the Purchase Price taking into account the
number of Shares tendered and the prices specified by tendering stockholders.
The Company will select the lowest Purchase Price within the stated range that
will allow it to purchase 3,000,000 Shares (or such lesser number as are validly
tendered at prices not greater than $22.00 nor less than $19.00 per Share)
pursuant to the Offer. The Offer is not conditioned upon any minimum number of
Shares being tendered. The Offer is, however, subject to certain other
conditions. See Section 6. The Company reserves the right, in its sole
discretion, to purchase more than 3,000,000 Shares pursuant to the Offer.
In accordance with Instruction 5 of the Letter of Transmittal, each
stockholder who wishes to tender Shares must specify the price (not greater than
$22.00 nor less than $19.00 per Share) at which such stockholder is willing to
have the Company purchase such Shares or that such stockholder is willing to
accept the Purchase Price resulting from Dutch Auction. As promptly as
practicable following the Expiration Date, the Company will determine the
Purchase Price (not greater than $22.00 nor less than $19.00 per Share) that it
will pay for Shares validly tendered pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
stockholders. All Shares purchased pursuant to the Offer will be purchased at
the Purchase Price. All Shares not purchased pursuant to the Offer, including
Shares tendered at prices greater than the Purchase Price and Shares not
purchased because of proration, will be returned to the tendering stockholders
at the Company's expense as promptly as practicable following the Expiration
Date or, in the case of Shares tendered by book-entry transfer at the Book-Entry
Transfer Facility, such Shares will be credited to the appropriate account
maintained by the tendering stockholder at the Book-Entry Transfer Facility, in
each case without expense to such stockholder.
The Company reserves the right, in its sole discretion, at any time or from
time to time, to extend the period of time during which the Offer is open by
giving oral or written notice of such extension to the Depositary and making a
public announcement thereof. See Section 15. There can be no assurance, however,
that the Company will exercise its right to extend the Offer. The Company also
reserves the right (but shall not be obligated) to accept for payment more than
3,000,000 Shares pursuant to the Offer.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. The Offer is, however, subject to certain other conditions. See
Section 6.
All Shares purchased pursuant to the Offer will be purchased at the
Purchase Price, net to the seller in cash. See Section 5.
If (a) the Company (i) increases or decreases the price to be paid for
Shares tendered pursuant to the Offer, (ii) increases the number of Shares being
sought in the Offer and any such increase exceeds 2% of the outstanding Shares
or (iii) decreases the number of Shares being sought, and (b) the Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from and including the date that notice of such
increase or decrease is first published, sent or given in the manner specified
in Section 15, the Offer will be extended until the expiration of such ten (10)
business day period.
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For the purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or Federal holiday and consists of the time period from 12:01
a.m. through 12:00 Midnight, New York City time.
All Shares not purchased pursuant to the Offer, including Shares not
purchased because of proration, will be returned to the tendering stockholders
at the Company's expense as promptly as practicable following the Expiration
Date or, in the case of Shares tendered by book-entry transfer at the Book-Entry
Transfer Facility, such Shares will be credited to the appropriate account
maintained by the tendering stockholder at the Book-Entry Transfer Facility, in
each case without expense to such stockholder. See Section 5.
If the number of Shares validly tendered at or below the Purchase Price and
not validly withdrawn prior to the Expiration Date is less than or equal to
3,000,000 Shares (or such greater number of Shares as the Company may elect to
purchase pursuant to the Offer), the Company, upon the terms and subject to the
conditions of the Offer, will purchase at the Purchase Price all Shares so
tendered and not validly withdrawn.
If the number of Shares validly tendered at or below the Purchase Price and
not validly withdrawn prior to the Expiration Date is greater than 3,000,000
Shares (or such greater number of Shares as the Company may elect to purchase
pursuant to the Offer) the Company, upon the terms and subject to the conditions
of the Offer, will accept Shares for purchase in the following order of
priority:
(a) first, all Shares validly tendered and not validly withdrawn prior
to the Expiration Date by any stockholder who beneficially owned as of the
close of business on October 29, 1999 an aggregate of fewer than 100 Shares
(each an "Odd Lot Holder") who:
(1) tenders all Shares beneficially owned by such Odd Lot Holder
(partial tenders will not qualify for this preference); and
(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(b) then, after purchase of all the foregoing Shares validly tendered
by Odd Lot Holders, all other Shares validly tendered and not validly
withdrawn prior to the Expiration Date on a pro rata basis, if necessary
(with appropriate adjustments to avoid purchases of fractional Shares).
If proration of tendered Shares is required, because of the difficulty in
determining the number of Shares validly tendered (including Shares tendered by
the guaranteed delivery procedure described in Section 3) and as a result of the
"odd lot" procedure described above and in Section 2, the Company does not
expect that it will be able to commence the final proration factor or to
commence payment for any Shares purchased pursuant to the Offer until
approximately five (5) NYSE trading days after the Expiration Date. Proration
for each stockholder tendering Shares other than Odd Lot Holders will be based
on the ratio of the number of Shares tendered by such stockholder to the total
number of Shares tendered by all stockholders other than Odd Lot Holders. This
ratio will be applied to stockholders tendering Shares other than Odd Lot
Holders to determine the number of Shares that will be purchased from each
stockholder pursuant to the Offer. Preliminary results of proration will be
announced by press release as promptly as practicable after the Expiration Date.
Holders of Shares may obtain such preliminary information from the Information
Agent and may also be able to obtain such information from their brokers or
financial advisors.
2. TENDERS BY HOLDERS OF FEWER THAN 100 SHARES
The Company, upon the terms and subject to the conditions of the Offer,
will accept for purchase, without proration, all Shares validly tendered at or
below the Purchase Price and not validly withdrawn prior to the Expiration Date
by or on behalf of Odd Lot Holders. See Section 1. To avoid proration, however,
an Odd Lot Holder must validly tender all Shares that such Odd Lot Holder
beneficially owns. Partial tenders will not qualify for this preference. This
preference is not available to owners of 100 or more Shares even if such owners
have separate stock certificates for fewer than 100 Shares.
By accepting the Offer and tendering Shares directly to the Depositary, an
Odd Lot Holder will avoid the payment of brokerage commissions and any
applicable odd lot discount payable in a sale of such Shares in a transaction
effected on a securities exchange.
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As of October 25, 1999, there were approximately 259 Holders of record of
Shares. Approximately 39 of these Holders of record held individually fewer than
100 Shares and held in the aggregate 992 Shares. Because of the large number of
Shares held in the names of brokers and nominees, the Company is unable to
estimate the number of beneficial owners of fewer than 100 Shares or the
aggregate number of Shares they own.
ANY ODD LOT HOLDER WISHING TO TENDER ALL SHARES BENEFICIALLY OWNED BY SUCH
ODD LOT HOLDER PURSUANT TO THE OFFER AND QUALIFY FOR THIS PREFERENCE MUST
COMPLETE THE BOX CAPTIONED "ODD LOTS" ON THE LETTER OF TRANSMITTAL AND, IF
APPLICABLE, ON THE NOTICE OF GUARANTEED DELIVERY. SEE SECTION 3.
3. PROCEDURE FOR TENDERING SHARES
Proper Tender of Shares. To validly tender Shares pursuant to the Offer,
either (a) a properly completed and duly executed Letter of Transmittal or a
manually signed facsimile thereof, together with any required signature
guarantees and any other documents required by the Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase and either (i) certificates for the Shares to be
tendered must be received by the Depositary at one of such addresses or
(ii) such Shares must be delivered pursuant to the procedures for book-entry
transfer described below (and a confirmation of such delivery received by the
Depositary, including an Agent's Message (as defined below) if the tendering
stockholder has not delivered a Letter of Transmittal, or pursuant to ATOP (as
defined below)), in each case prior to the Expiration Date, or (b) the tendering
holder of Shares must comply with the guaranteed delivery procedure described
below.
Odd Lot Holders who tender all Shares must complete the section entitled
"Odd Lots" on the Letter of Transmittal and, if applicable, on the Notice of
Guaranteed Delivery, in order to qualify for the preferential treatment
available to Odd Lot Holders as set forth in Section 2.
IN ACCORDANCE WITH INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, IN ORDER TO
TENDER SHARES PURSUANT TO THE OFFER, A STOCKHOLDER MUST EITHER (A) CHECK THE BOX
IN THE SECTION OF THE LETTER OF TRANSMITTAL CAPTIONED "SHARES TENDERED AT PRICE
DETERMINED BY DUTCH AUCTION" OR (B) CHECK ONE OF THE BOXES IN THE SECTION OF THE
LETTER OF TRANSMITTAL CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY
STOCKHOLDER".
A STOCKHOLDER WHO WISHES TO MAXIMIZE THE CHANCE THAT HIS OR HER SHARES WILL
BE PURCHASED AT THE RELEVANT PURCHASE PRICE SHOULD CHECK THE BOX ON THE RELEVANT
LETTER OF TRANSMITTAL MARKED, "SHARES TENDERED AT PRICE DETERMINED BY DUTCH
AUCTION". NOTE THAT THIS ELECTION COULD RESULT IN SUCH STOCKHOLDER'S SHARES
BEING PURCHASED AT THE MINIMUM PRICE OF $19.00 PER SHARE. A STOCKHOLDER WHO
WISHES TO INDICATE A SPECIFIC PRICE (IN MULTIPLES OF $0.25) AT WHICH SUCH
STOCKHOLDER'S SHARES ARE BEING TENDERED MUST CHECK A BOX UNDER THE SECTION
CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER" ON THE LETTER OF
TRANSMITTAL IN THE TABLE LABELED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES
ARE BEING TENDERED". A STOCKHOLDER WHO WISHES TO TENDER SHARES AT MORE THAN ONE
PRICE MUST COMPLETE SEPARATE LETTERS OF TRANSMITTAL FOR EACH PRICE AT WHICH SUCH
SHARES ARE BEING TENDERED. THE SAME SHARES CANNOT BE TENDERED AT MORE THAN ONE
PRICE.
A TENDER OF SHARES WILL BE PROPER IF, AND ONLY IF, ON THE APPROPRIATE
LETTER OF TRANSMITTAL EITHER THE BOX IN THE SECTION CAPTIONED "SHARES TENDERED
AT PRICE DETERMINED BY DUTCH AUCTION" OR ONE OF THE BOXES IN THE SECTION
CAPTIONED "SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDERS" IS CHECKED.
Tender Constitutes an Agreement. It is a violation of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), for a person, directly or indirectly, to tender Shares for his or her own
account unless, at the time of the tender and at the end of the proration
period, the person so tendering (a) has a net long position equal to or greater
than the amount of (i) Shares tendered or (ii) other securities immediately
convertible into, exercisable or exchangeable for the amount of Shares tendered
and will
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acquire such Shares for tender by conversion, exercise or exchange of such other
securities and (b) will cause such Shares to be delivered in accordance with the
terms of the Offer. Rule 14e-4 provides a similar restriction applicable to the
tender or guarantee of a lender on behalf of another person. The tender of
Shares pursuant to any one of the procedures set forth herein will constitute
the tendering stockholders' acceptance of the terms and conditions of the Offer,
as well as the tendering stockholder's representation and warranty that
(a) such stockholder has a net long position in the Shares being tendered within
the meaning of Rule 14e-4, and (b) the tender of such Shares complies with
Rule 14e-4. The Company's acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the tendering stockholder
and the Company upon the terms and subject to the conditions of the Offer.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two (2) business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
the Book-Entry Transfer Facility's system may make book-entry delivery of Shares
by causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the transfer procedures of the
Book-Entry Transfer Facility. Although delivery of Shares may be effected
through book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility, a properly completed and duly executed Letter of Transmittal
or a manually signed facsimile thereof, together with any required signature
guarantees, or an Agent's Message, or, in the case of a tender through the
Book-Entry Transfer Facility's Automated Tender Offer Program ("ATOP"), the
specific acknowledgment, and, in each case, any other required documents, must,
in any case, be transmitted to and received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering stockholder must comply with the guaranteed
delivery procedure described below. The confirmation of a book-entry transfer of
Shares into the Depositary's account at the Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." DELIVERY
OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Participants in the Book-Entry Transfer Facility may tender their Shares in
accordance with ATOP, to the extent it is available to such participants for the
Shares they wish to tender. A stockholder tendering through ATOP must expressly
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.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against the participant.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
the Book Entry Transfer Facility's systems whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (ii) if such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each, an
"Eligible Institution" and, collectively, "Eligible Institutions"). In all other
cases, all signatures on Letters of Transmittal must be guaranteed by an
Eligible Institution. See Instructions 1 and 8 to the Letter of Transmittal. If
a certificate representing Shares is registered in the name of a person other
than the signer of a Letter of Transmittal, or if payment is to be made, or
Shares not purchased or tendered are to be issued to a person other than the
registered holder, the certificate must be endorsed or accompanied by an
appropriate stock power, in either case signed exactly as the name of the
registered holder appears on the certificate with the signature on the
certificate or stock power guaranteed by an Eligible Institution.
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Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and cannot deliver certificates for such Shares and all other required
documents to the Depositary prior to the Expiration Date or the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, such Shares may nevertheless be tendered if all of the following
conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Company (with any
required signature guarantees) is received by the Depositary as provided
below prior to the Expiration Date; and
(iii) the certificates for the tendered Shares (or a confirmation of a
book-entry transfer of such Shares delivered electronically into the
Depositary's account at the Book-Entry Transfer Facility), together with a
properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof or a proper tender through ATOP), with any
required signature guarantees, or in the case of a book-entry transfer, an
Agent's Message, or, in the case of a tender through ATOP, the specific
acknowledgment, and any other documents required by the Letter of
Transmittal, are received by the Depositary no later than 5:00 p.m., New
York City time, on the third trading day after the date of execution of the
Notice of Guaranteed Delivery. A "trading day" is any day on which the NYSE
is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile transmission or mail to the Depositary and must include a guarantee
by an Eligible Institution in the form set forth in such Notice of Guaranteed
Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER.
SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES SUFFICIENT TIME SHOULD BE ALLOWED TO
ASSURE TIMELY DELIVERY.
U.S. Federal Income Tax Withholding. To avoid Federal income tax backup
withholding equal to 31% of the gross payments made to stockholders for Shares
purchased pursuant to the Offer, each stockholder must notify the Depositary of
such stockholder's correct taxpayer identification number and provide certain
other information by properly completing the Substitute Form W-9 included in the
Letter of Transmittal. Foreign stockholders (as defined in Section 11) may be
required to submit a properly completed form W-8, certifying non-United States
status, in order to avoid backup withholding. In addition, foreign stockholders
may be subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer (as discussed in Section 11). For a discussion of
certain Federal income tax consequences to tendering stockholders, see Section
11. Each stockholder is urged to consult with his or her own tax advisor.
Determination of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the form of documents and the validity, eligibility (including
time of receipt) and acceptance for payment of any tender of Shares will be
determined by the Company, in its sole discretion, and its determination shall
be final and binding on all parties. The Company reserves the absolute right to
reject any or all tenders of Shares that it determines are not in proper form or
the acceptance for payment of or payment for which may be unlawful. The Company
also reserves the absolute right to waive any condition of the Offer (except as
otherwise provided in Section 6) or any defect or irregularity in any tender of
Shares. No tender of Shares will be deemed properly made until all defects or
irregularities have been cured by the tendering stockholder or waived by the
Company. None of the Company, the Dealer Manager, the Depositary, the
Information Agent or any other person will be under any duty to give notice of
any defect or irregularity in tenders, nor shall any of them incur any liability
for failure to give any such notice.
Return of Unpurchased Shares. If any tendered Shares are not purchased, or
if less than all Shares evidenced by a stockholder's certificate(s) are
tendered, certificate(s) for unpurchased Shares will be returned as promptly as
practicable after the expiration or termination of the Offer or, in the case of
Shares tendered by book-
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entry transfer at the Book-Entry Transfer Facility, such Shares will be credited
to the appropriate account maintained by the tendering stockholder at the
Book-Entry Transfer Facility, in each case without expense to such stockholder.
4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after 12:00 Midnight, New York City time, on December
28, 1999, unless theretofore accepted for payment as provided in this Offer to
Purchase. If the Company extends the period of time during which the Offer is
open, is delayed in accepting for payment or paying for Shares or is unable to
accept for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to the Company's rights under the Offer, the Depositary may,
on behalf of the Company, retain all Shares tendered, and such Shares may not be
withdrawn except as otherwise provided in this Section 4, subject to Rule
13e-4(f)(5) under the Exchange Act, which provides that the issuer making the
tender offer shall either pay the consideration offered or return the tendered
securities promptly after the termination or withdrawal of the tender offer. To
be effective, a written or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase and must specify the name of the person who
tendered the Shares to be withdrawn and the number of Shares to be withdrawn. If
the Shares to be withdrawn have been delivered to the Depositary, a signed
notice of withdrawal with signatures guaranteed by an Eligible Institution
(except in the case of Shares tendered by an Eligible Institution) must be
submitted prior to the release of such Shares. In addition, such notice must
specify, in the case of Shares tendered by delivery of certificates, the name of
the registered holder (if different from that of the tendering stockholder) and
the serial numbers shown on the particular certificates evidencing the Shares to
be withdrawn or, in the case of Shares tendered by book-entry transfer, the name
and number of the account at the Book-Entry Transfer Facility to be credited
with the withdrawn Shares. Withdrawals may not be rescinded, and Shares
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 3 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding. None of the Company,
the Dealer Manager, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defect or irregularity in any
notice of withdrawal or incur any liability for failure to give any such
notification.
5. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer, as soon as
practicable after the Expiration Date, the Company will purchase and pay the
Purchase Price for 3,000,000 Shares (subject to increase or decrease as provided
in Sections 1 and 15) or such lesser number of Shares as are validly tendered
and not validly withdrawn as permitted in Section 4. For purposes of the Offer,
the Company will be deemed to have accepted for payment (and thereby purchased),
subject to proration, Shares which are validly tendered and not validly
withdrawn when, as and if the Company gives oral or written notice to the
Depositary of the Company's acceptance of such Shares for payment pursuant to
the Offer.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made promptly (subject to possible delay in the event of
proration) but only after timely receipt by the Depositary of certificates for
Shares (or of a timely Book-Entry Confirmation of such Shares into the
Depositary's account at the Book-Entry Transfer Facility), a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), or, in the case of a book-entry transfer, an Agent's Message, or, in
the case of a tender through ATOP, the specific acknowledgment, and in each
case, any other required documents.
If proration of tendered Shares is required, because of the difficulty in
determining the number of Shares validly tendered (including Shares tendered by
the guaranteed delivery procedure described in Section 3) and as a result of the
odd lot procedure described above and in Section 2, the Company does not expect
that it will be able to commence the final proration factor or to commence
payment for any Shares purchased pursuant to the Offer
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until approximately five (5) NYSE trading days after the Expiration Date.
Proration for each stockholder tendering Shares other than Odd Lot Holders will
be based on the ratio of the number of Shares tendered by such stockholder to
the total number of Shares tendered by all stockholders other than Odd Lot
Holders. This ratio will be applied to stockholders tendering Shares other than
Odd Lot Holders to determine the number of Shares that will be purchased from
each stockholder pursuant to the Offer. Preliminary results of proration will be
announced by press release as promptly as practicable after the Expiration Date.
Holders of Shares may obtain such preliminary information from the Information
Agent and may also be able to obtain such information from their brokers or
financial advisors.
Certificates for all Shares not purchased pursuant to the Offer, including
Shares not purchased because of proration, will be returned to the tendering
stockholders (or, in the case of Shares delivered by book-entry transfer, such
Shares will be credited to the account maintained with one of the Book-Entry
Transfer Facilities by the participant therein who so delivered such Shares) at
the Company's expense as promptly as practicable following the Expiration Date.
Payment for Shares purchased pursuant to the Offer will be made by the
Company by depositing the aggregate Purchase Price therefor with the Depositary.
The Depositary will act as agent for tendering stockholders for the purpose of
receiving payment from the Company and transmitting payment to the tendering
stockholders.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE
SHARES TO BE PAID BY THE COMPANY, REGARDLESS OF ANY DELAY IN MAKING SUCH
PAYMENT.
Payment for Shares may be delayed in the event of difficulty in determining
the number of Shares validly tendered or if proration is required. See
Section 1. In addition, if certain events occur, the Company may not be
obligated to purchase Shares pursuant to the Offer. See Section 6.
The Company will pay or cause to be paid any stock transfer taxes with
respect to the transfer and sale of any Shares to it or its order pursuant to
the Offer. If, however, payment is to be made to, or Shares not purchased or
tendered are to be registered in the name of, any person other than the
registered holder, or if tendered Shares are registered in the name of any
person other than the person(s) signing the Letter of Transmittal, the amount of
any stock transfer taxes (whether imposed on the registered holder, such other
person or otherwise) payable on account of the transfer to such person will be
deducted from the Purchase Price unless satisfactory evidence of the payment of
such taxes, or exemption therefrom, is submitted. See Instruction 9 to the
Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND
SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE
CASE OF A NONCORPORATE FOREIGN STOCKHOLDER, A FORM W-8, WHICH IS OBTAINABLE FROM
THE DEPOSITARY) MAY BE SUBJECT TO A FEDERAL BACKUP WITHHOLDING TAX OF 31% OF THE
GROSS PROCEEDS TO BE PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE
OFFER. SEE SECTIONS 3 AND 11.
6. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, and in addition to (and
not in limitation of) the Company's right to extend, amend or terminate the
Offer at any time in its sole discretion, the Company shall not be required to
accept for payment or pay for any Shares tendered, and may terminate or amend
the Offer if, before acceptance for payment of or payment for any Shares, any of
the following shall have occurred (or shall have been determined by the Company
to have occurred):
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, or before any court, authority, agency or tribunal
that (i) challenges the making of the Offer or the acquisition of Shares
pursuant to the Offer, or otherwise, directly or indirectly, relates in any
manner to or affects the Offer or (ii) in the sole judgment of the Company,
could materially affect the business, condition (financial or otherwise),
income, operations or prospects of the Company and its subsidiaries, taken
as a whole, or otherwise materially impair in any way the contemplated
future conduct of the business
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of the Company or any of its subsidiaries or materially impair the Offer's
contemplated benefits to the Company;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company or
any of its subsidiaries, by any legislative body, court, authority, agency
or tribunal, domestic or foreign, which, in the Company's sole judgment,
would or might, directly or indirectly, (i) make the acceptance for payment
of, or payment for, some or all of the Shares illegal or otherwise restrict
or prohibit consummation of the Offer, (ii) delay or restrict the ability
of the Company, or render the Company unable, to accept for payment or pay
for, some or all of the Shares, (iii) materially impair the contemplated
benefits of the Offer to the Company or (iv) materially affect the
business, condition (financial or otherwise), income, operations or
prospects of the Company and its subsidiaries, taken as a whole, or
otherwise materially impair in any way the contemplated future conduct of
the business of the Company or any of its subsidiaries;
(c) it shall have been publicly disclosed or the Company shall have
learned that (i) any person or group (within the meaning of Section
13(d)(3) of the Exchange Act) has acquired or proposes to acquire
beneficial ownership of more than 5% of the outstanding Shares whether
through the acquisition of stock, the formation of a group, the grant of
any option or right, or otherwise (other than as disclosed in a Schedule
13D or 13G on file with the Securities and Exchange Commission (the "SEC")
on or prior to October 26, 1999), (ii) any such person or group that on or
prior to October 26, 1999 had filed a Schedule 13D or 13G with the SEC
thereafter shall have acquired or shall propose to acquire whether through
the acquisition of stock, the formation of a group, the grant of any option
or right, or otherwise, beneficial ownership of additional Shares
representing 2% or more of the outstanding Shares, or (iii) any person,
entity or group shall have filed a Notification and Report Form under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, or made a public
announcement reflecting an intent to acquire the Company or any of its
assets or securities;
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market, (ii) any significant decline in
the market price of the Shares, (iii) any change in the general political
market, economic or financial condition in the United States or abroad that
could, in the sole judgment of the Company, have a material adverse effect
on the business, condition (financial or otherwise), income, operations or
prospects of the Company and its subsidiaries, taken as a whole, or the
trading in the Shares, (iv) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or any
limitation on, or any event which, in the Company's sole judgment, might
affect, the extension of credit by lending institutions in the United
States, (v) the commencement of a war, armed hostilities or other
international or national calamity or crisis, directly or indirectly,
involving the United States, or (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer, in the Company's
sole judgment, a material acceleration or worsening thereof;
(e) a tender or exchange offer with respect to some or all of the
Shares (other than the Offer), or a merger, acquisition or other business
combination proposal for the Company, shall have been proposed, announced
or made by any person;
(f) there shall have occurred any event or events that have resulted,
or may in the sole judgment of the Company result, in an actual or
threatened change in the business, condition (financial or otherwise),
income, operations, stock ownership or prospects of the Company and its
subsidiaries, taken as a whole;
(g) there shall be a reasonable likelihood that the purchase of Shares
pursuant to the Offer will cause the Shares not to be authorized to be
quoted on the NYSE;
and, in the sole judgment of the Company, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance for
payment or payment.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company, regardless of the circumstances (including any action
or inaction by the Company) giving rise to any such condition, and, except as
set forth in the next sentence, any such condition may be waived by the Company,
in
11
<PAGE>
whole or in part, at any time and from time to time, in its sole discretion,
whether or not any other condition of the Offer is also waived. The Company will
not under any circumstances waive the condition set forth in paragraph (g)
above. The Exchange Act requires that all conditions to the Offer must be
satisfied or waived before the final Expiration Date. In certain circumstances,
waiver of a condition to the Offer would require an extension of the Offer. See
Section 15.
The failure by the Company at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by the Company concerning the events described above
will be final and binding on all parties.
7. PRICE RANGE OF SHARES; DIVIDENDS
Commencing on October 15, 1999, the Shares have been principally traded on
the NYSE under the symbol "WXS". Prior to such date the Shares were principally
traded on the Nasdaq National Market under the symbol "WPSN". The table below
sets forth, for the calendar periods indicated, the high (ask) and low (bid)
sales prices per Share (on a post-split basis) on the consolidated transaction
reporting system, as reported by Nasdaq and the NYSE for the applicable periods.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1997:
First Quarter............................................................................. $20 $14 1/2
Second Quarter............................................................................ 20 1/4 17 9/16
Third Quarter............................................................................. 21 1/2 18 5/6
Fourth Quarter............................................................................ 24 1/16 19
1998:
First Quarter............................................................................. 29 1/4 21 3/4
Second Quarter............................................................................ 34 3/4 28 1/4
Third Quarter............................................................................. 37 7/8 25 15/16
Fourth Quarter............................................................................ 32 1/2 24 5/8
1999:
First Quarter............................................................................. 32 23 1/4
Second Quarter............................................................................ 37 9/16 26 1/2
Third Quarter............................................................................. 33 22 1/4
Fourth Quarter (through October 28, 1999)................................................. 24 1/2 17 13/16
</TABLE>
On October 26, 1999, the last full trading day before the announcement of
the Offer, the last reported sale price of the Shares, as reported on the NYSE,
was $17 15/16 per Share. On October 28, 1999, the last full trading day before
the commencement of the Offer, the last reported sale price of the Shares, as
reported on the NYSE, was $18 1/16 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE SHARES.
The Company paid a cash dividend of $.02 per Share on June 1, 1999 and
September 1, 1999, the Company has announced its intention to pay a cash
dividend of $.02 per Share on December 1, 1999 to holders of record on November
15, 1999. All holders of record on November 15, 1999 will be entitled to receive
this dividend whether or not they tender any Shares in the Offer. The payment of
dividends in the future is subject to the discretion of the Board and will
depend upon general business conditions, legal and contractual restrictions on
the payment of dividends and other factors that the Board may deem to be
relevant.
In connection with the declaration of dividends or the making of
distributions on, or the purchase, redemption of other acquisition of Shares,
the Company is required to comply with certain restrictions contained in certain
of its debt instruments.
12
<PAGE>
8. BACKGROUND AND PURPOSE OF THE OFFER
The Board of Directors believes that the Company's financial position,
outlook and current market conditions make this an attractive time to repurchase
a portion of the outstanding Shares. In the view of the Board of Directors, the
Offer represents an acceleration of the Company's existing share repurchase
program.
The Company is making the Offer primarily to provide its stockholders who
are considering the sale of all or a portion of their Shares an opportunity to
sell such Shares for a higher price than that available in the open market
immediately prior to the announcement of the Offer, without the usual
transaction costs associated with market sales. In addition, the Offer will
allow qualified Odd Lot Holders whose Shares are purchased pursuant to the Offer
to avoid the payment of brokerage commissions and any applicable odd lot
discount payable on a sale of Shares that otherwise could apply to open market
transactions. To the extent the purchase of Shares in the Offer results in a
reduction in the number of stockholders of record, the costs to the Company for
services to stockholders will be reduced.
NEITHER THE COMPANY NOR THE BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY STOCKHOLDER SHOULD TENDER ANY OF OR ALL SUCH STOCKHOLDER'S SHARES
PURSUANT TO THE OFFER OR AS TO THE PRICE OF ANY TENDER. THE COMPANY HAS BEEN
ADVISED THAT NONE OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTEND TO TENDER ANY
SHARES PURSUANT TO THE OFFER. STOCKHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL
INFORMATION IN THE OFFER AND TO CONSULT THEIR OWN INVESTMENT AND TAX ADVISORS.
EACH STOCKHOLDER MUST MAKE SUCH STOCKHOLDER'S OWN DECISION WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY SHARES TO TENDER OR AT WHAT PRICE.
The Board of Directors believes that the Offer represents an appropriate
use of a portion of the Company's available working capital. The Company
believes its Shares are a good investment and has a policy of seeking to
purchase its Shares when market conditions are favorable. The Board of Directors
has in the past authorized the Company to repurchase Shares in the open market.
During 1999, the Board of Directors increased to 23,000,000 the maximum number
of Shares that the Company could repurchase in open-market transactions. Through
December 31, 1998, the Company repurchased in the open market 14,051,100 Shares
for an aggregate cost of approximately $242,365,800. From January 1, 1999
through October 26, 1999, the Company acquired 3,826,450 Shares for an aggregate
cost of approximately $99,383,500. See Section 12.
The Offer temporarily suspends the Company's open-market repurchases of
Shares previously authorized by the Board of Directors. The Company may in the
future purchase additional Shares on the open market, in private transactions,
through tender offers or otherwise. Any such purchases may be on the same terms
or on terms that are more or less favorable to stockholders than the terms of
the Offer. However, under the Exchange Act (including Rule 13e-4(f)(6)
thereunder), the Company and its affiliates are prohibited from purchasing any
Shares, other than pursuant to the Offer, until at least ten (10) business days
after the expiration or termination of the Offer. Any possible future purchases
by the Company of Shares will depend on many factors, including the market price
of the Shares, the results of the Offer, the Company's financial position and
resources, and general economic and market conditions.
The Offer allows stockholders to sell a portion of their Shares while
retaining a continuing equity interest in the Company if they so desire.
Stockholders who determine not to accept the Offer or whose Shares are not
purchased in the Offer will obtain an increase in their ownership interest in
the Company. After consummation of the Offer, increases or decreases in the
Company's net income will likely be reflected in greater increases or decreases
in earnings per Share than is presently the case because of the smaller number
of Shares outstanding thereafter.
As of October 25, 1999, there were 53,325,926 Shares outstanding and
4,689,783 Shares reserved for issuance in connection with outstanding stock
options under the Company's stock option plans. The 3,000,000 Shares that the
Company is offering to purchase in the Offer represent approximately 5.6% of the
Shares outstanding as of October 25, 1999 and approximately 5.2% of the
fully-diluted Shares outstanding on such date.
Stockholders should be aware that, as a result of his beneficial ownership
of Shares, Mr. Holcombe T. Green, Jr. (Chairman of the Board and Chief Executive
Officer of the Company) may be deemed to have certain
13
<PAGE>
interests with respect to the Offer. If stockholders validly tender not less
than the maximum number of Shares for which the Offer is being made (3,000,000
Shares) and the Company accepts such 3,000,000 Shares for purchase, then
(i) the 3,000,000 Shares purchased would represent approximately 5.6% of the
total number of Shares outstanding at October 25, 1999, constituting
approximately 8.4% of the total number of Shares beneficially owned by
stockholders other than Mr. Green at October 25, 1999, and (ii) Mr. Green's
beneficial ownership of Shares would increase from an aggregate of approximately
33% to an aggregate of approximately 35% of the outstanding Shares.
Shares acquired by the Company pursuant to the Offer will be held in the
Company's treasury and will be available for the Company to issue without
further stockholder action (except as required by applicable law or the rules of
the NYSE on which the Shares are traded). These Shares could be issued for
general or other corporate purposes, including, for acquisitions, raising
additional capital, stock splits or dividends, employee incentives or savings
and compensation plans. Except as set forth herein, the Company has no present
plan to use any authorized but unissued Shares or Shares held in the Company's
treasury for any purpose.
Except as disclosed in this Offer to Purchase, the Company has no plans or
proposals which relate to or would result in: (a) the acquisition by any person
of additional securities of the Company or the disposition of securities of the
Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(c) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (d) any change in the present Board of Directors or management
of the Company; (e) any material change in the present dividend rate policy, or
indebtedness or capitalization of the Company; (f) any other material change in
the Company's corporate structure or business; (g) any change in the Company's
Articles of Incorporation or By-laws, or any action which may impede the
acquisition of control of the Company by any person; (h) a class of equity
security of the Company being delisted from a national securities exchange; (i)
a class of equity security of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) the
suspension of the Company's obligation to file reports pursuant to
Section 15(d) of the Exchange Act.
The Offer is not intended to result in the deregistration of the Shares
under the Exchange Act or to cause the Shares not to be listed on the NYSE or on
another national securities exchange or an inter-dealer quotation system of a
registered national securities association. See Section 14.
9. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company manufactures, markets and distributes bed and bath home
fashions products directly and indirectly through its subsidiaries. The Company
manufactures and markets home fashions products for distribution to chain and
department stores, mass merchants and specialty stores. The Company manufactures
and markets these products under its own trademarks and under various licensing
agreements.
The Company estimates that it has the largest market share, approximately
35%, in the domestic sheet and pillowcase market and the largest market share,
approximately 42%, in the domestic bath towel market. The Company calculates
these estimates based on United States government data, specifically the United
States Census Bureau Current Industrial Report dated February 8, 1999, publicly
available information about its competitors and information in trade
publications. In addition, according to United States government data, each of
these markets had over $1 billion in annual sales during each of the past five
years.
The Company manufactures and markets a broad range of bed and bath
products, including:
o decorative sheets and towels,
o designer sheets and accessories,
o blankets,
o private label sheets and towels,
o bedskirts, bedspreads, comforters and duvet covers,
o drapes and valances,
o throw pillows, bed pillows and mattress pads, and
o shower curtains and table covers.
14
<PAGE>
These products are made from a variety of fabrics, such as chambray, twill,
sateen, flannel, linen, cotton and cotton blends. They are available in a wide
assortment of colors and patterns. The Company has positioned itself as a
single-source supplier to retailers of bed and bath products, offering a broad
assortment of products across multiple price points. This product and price
point breadth allows the Company to provide a comprehensive product offering for
each major distribution channel.
The Company markets its products under well-known and firmly established
trademarks, brand names and private labels. The Company uses these trademarks,
brand names and private labels as merchandising tools to assist its customers in
coordinating their product offerings and differentiating their products from
those of their competitors. The Company's home fashions trademarks include GRAND
PATRICIAN(Registered), MARTEX(Registered), UTICA(Registered),
STEVENS(Registered), LADY PEPPERELL(Registered), and VELLUX(Registered). In
addition, the Company manufactures and sells home fashion products under
licensing agreements using designer names that include, among others, Ralph
Lauren Home Collection, Sanderson, Joe Boxer, Esprit, Star Wars and Serta
Perfect Sleeper.
The Company is a Delaware corporation with its principal executive offices
located at 507 West Tenth Street, West Point, Georgia 31833. Its telephone
number at that address is (706) 645-4000.
The foregoing description of the Company's business is qualified in its
entirety by the more detailed discussion thereof contained in the Company's
Annual Report on Form 10-K for its fiscal year ended December 31, 1998 (the
"1998 Form 10-K") and its other filings made with the SEC pursuant to the
Exchange Act. These reports and filings are available for inspection and copies
thereof are obtainable in the manner set forth below under the caption
"Additional Information".
Additional Information. The Company is subject to the informational
reporting requirements of the Exchange Act and, in accordance therewith, files
reports, proxy statements and other information with the SEC relating to its
business, financial condition and other matters. The Company is required to
disclose in such proxy statements and reports certain information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal owners of the
Company's securities and any material interest of such persons in transactions
with the Company. The Company has also filed an Issuer Tender Offer Statement on
the Schedule 13E-4 with the SEC which includes certain additional information
relating to the Offer. The reports, proxy statements and other information filed
by the Company with the SEC should be available for inspection at the public
reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the SEC at Seven
World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center,
500 West Madison Street (Suite 1400), Chicago, Illinois 60661. Copies of such
information should be obtainable by mail, upon payment of the SEC's customary
charges, by writing to the SEC's principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC also maintains a website at http://www.sec.gov
that contains reports, proxy statements and other information relating to the
Company which have been filed via the EDGAR system.
Selected Historical Financial Information. The selected historical
financial data presented below for 1998 and 1997 were derived from the Audited
Consolidated Financial Statements of the Company and its subsidiaries for the
years ended December 31, 1998 and December 31, 1997 (the "Consolidated Financial
Statements"), and should be read in conjunction therewith, including the notes
thereto and the other financial information included in the 1998 Form 10-K. This
selected financial information is qualified in its entirety by reference to 1998
Form 10-K and all financial statements and related notes contained therein. The
selected historical financial data presented below for the nine months ended
September 30, 1999 and September 30, 1998 were derived from the Condensed
Consolidated Financial Statements (Unaudited) of the Company and its
subsidiaries included on the Company's Report on Form 8-K filed on October 27,
1999, and should be read in conjunction therewith, including the notes thereto
and other information contained therein. The statement of operations data
reflect the discontinuance of the Alamac Knit Fabrics subsidiary and accordingly
only reflect the operations of Home Fashions. The Company's 1998 Form 10-K and
Form 8-K are incorporated herein by reference. More comprehensive financial
information is included in such reports and the financial information which
follows is qualified in its entirety by reference to such reports and all of the
financial statements and related notes contained therein, copies of which may be
obtained as set forth above under "Additional Information."
15
<PAGE>
WESTPOINT STEVENS INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
(UNAUDITED)
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------- -------------------
(IN MILLIONS, EXCEPT PER SHARE DATA) 1999 1998 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net Sales............................................................ $1,398.1 $1,308.9 $1,779.0 $1,657.5
Gross earnings....................................................... 375.5 347.2 474.7 419.8
Operating earnings................................................... 192.2 176.3 248.3 214.9
Interest expense..................................................... 75.7 79.1 105.7 102.2
Income from continuing operations before income tax expense and
extraordinary item................................................. 114.7 96.3 141.7 110.2
Income from continuing operations before extraordinary item.......... 73.3 61.6 90.6 69.3
Net income........................................................... 73.3 11.0 40.0 78.0
Diluted net income (loss) per common share:
Continuing operations.............................................. 1.28 1.02 1.51 1.11
Discontinued operations............................................ -- -- -- .14
Extraordinary item--loss on extinguishment of debt (1)............. -- (.84) (.84) --
-------- -------- -------- --------
Net income per common share........................................ 1.28 .18 .67 1.25
Diluted average common shares outstanding............................ 57.3 60.4 59.9 62.7
<CAPTION>
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
-------------------- --------------------
(IN MILLIONS) 1999 1998 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets.................................................... $1,504.8 $1,383.4 $1,391.2 $1,291.1
Working capital (2)............................................. 185.9 226.5 178.2 212.2
Total debt...................................................... 1,429.2 1,333.7 1,335.4 1,187.7
Stockholders' equity (deficit).................................. (493.8) (496.8) (487.5) (425.0)
<CAPTION>
(UNAUDITED)
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
-------------------- --------------------
(IN MILLIONS, EXCEPT RATIOS) 1999 1998 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
OTHER DATA:
Depreciation and amortization:
Continuing operations......................................... $ 64.4 $ 62.6 $ 80.6 $ 71.7
Discontinued operations....................................... -- -- -- 5.5
Capital expenditures:
Continuing operations......................................... 78.3 101.6 147.5 148.9
Discontinued operations....................................... -- -- -- 3.2
Ratio of earnings to fixed charges.............................. 2.34x 2.08x 2.19x 1.96x
</TABLE>
- ------------------
(1) The Company recorded an extraordinary item of $50.6 million, net of income
taxes of $28.5 million, for the early extinguishment of debt. The
extraordinary charge consisted primarily of tender premiums and the write-
off of deferred debt costs.
(2) Working capital at September 30, 1999 and 1998 and at December 31, 1998 and
1997 includes the current portion of bank indebtedness and other long-term
debt of $154.2 million, $58.7 million, $60.4 million and $41.4 million,
respectively.
16
<PAGE>
Pro Forma Unaudited Financial Data. The following pro forma unaudited
consolidated financial statements present the Company's pro forma balance sheets
as of December 31, 1998 and September 30, 1999 and the Company's pro forma
results of operations for the year ended December 31, 1998 and for the nine
months ended September 30, 1999 giving effect to (1) the purchase by the Company
of 3,000,000 Shares for $22 per share, (2) the incurrence of revolver borrowings
under the Company's senior credit facility to finance the transaction, (3) the
payment of related transaction fees and expenses and (4) the income tax effects
of the preceding transactions, all as if they had occurred as of January 1, 1998
with respect to results of operations data and December 31, 1998 and
September 30, 1999 with respect to balance sheet data.
These pro forma unaudited consolidated results of operations do not purport
to represent what the Company's actual results of operations would have been had
such events occurred on January 1, 1998 and should not serve as a forecast of
the Company's results of operations for any future periods.
The pro forma adjustments are based upon currently available information
and upon certain assumptions that management believes are reasonable under the
circumstances. These pro forma unaudited consolidated financial statements
should be read in conjunction with the Company's Consolidated Financial
Statements, Condensed Consolidated Financial Statements and the Notes thereto
incorporated herein by reference.
PRO FORMA UNAUDITED FINANCIAL DATA
CONDENSED CONSOLIDATED PRO FORMA RESULTS OF OPERATIONS
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
<S> <C> <C> <C>
Net sales............................................................... $1,778,991 $1,778,991
Cost of goods sold...................................................... 1,304,231 1,304,231
---------- ----------
Gross earnings........................................................ 474,760 474,760
Selling, general and administrative expenses............................ 226,437 226,437
---------- ----------
Operating earnings.................................................... 248,323 248,323
Interest expense........................................................ 105,677 4,306 (1) 109,983
Other expense-net....................................................... 968 968
---------- ------- ----------
Income before income tax expense and extraordinary item............... 141,678 (4,306) 137,372
Income tax expense...................................................... 51,125 (1,550)(2) 49,575
---------- ------- ----------
Income before extraordinary item...................................... $ 90,553 $(2,756) $ 87,797
---------- ------- ----------
---------- ------- ----------
Basic income per common share:
Income before extraordinary item...................................... $ 1.57 $ 1.60
---------- ----------
---------- ----------
Diluted income per common share:
Income before extraordinary item...................................... $ 1.51 $ 1.54
---------- ----------
---------- ----------
Basic average common shares outstanding................................. 57,791 (3,000)(3) 54,791
Dilutive effect of stock options and stock bonus plan................. 2,158 2,158
---------- ------- ----------
Diluted average common shares outstanding............................... 59,949 (3,000) 56,949
---------- ------- ----------
---------- ------- ----------
Ratio of earnings to fixed charges...................................... 2.19x 2.11x
---------- ----------
---------- ----------
</TABLE>
17
<PAGE>
CONDENSED CONSOLIDATED PRO FORMA RESULTS OF OPERATIONS
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
<S> <C> <C> <C>
Net sales............................................................ $1,398,102 $1,398,102
Cost of goods sold................................................... 1,022,579 1,022,579
---------- ----------
Gross earnings..................................................... 375,523 375,523
Selling, general and administrative expenses......................... 183,284 183,284
---------- ----------
Operating earnings................................................. 192,239 192,239
Interest expense..................................................... 75,662 2,826 (1) 78,488
Other expense--net................................................... 1,834 1,834
---------- ------- ----------
Income before income tax expense................................... 114,743 (2,826) 111,917
Income tax expense................................................... 41,400 (1,017)(2) 40,383
---------- ------- ----------
Net income........................................................... $ 73,343 $(1,809) $ 71,534
---------- ------- ----------
---------- ------- ----------
Basic net income per share........................................... $ 1.32 $ 1.36
---------- ----------
---------- ----------
Diluted net income per share......................................... $ 1.28 $ 1.32
---------- ----------
---------- ----------
Basic average common shares outstanding.............................. 55,569 (3,000)(3) 52,569
Dilutive effect of stock options and stock bonus plan.............. 1,689 1,689
---------- ------- ----------
Diluted average common shares outstanding............................ 57,258 (3,000) 54,258
---------- ------- ----------
---------- ------- ----------
Ratio of earnings to fixed charges................................... 2.34x 2.26x
---------- ----------
---------- ----------
</TABLE>
18
<PAGE>
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
(UNAUDITED)
DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents......................................... $ 527 $ 527
Accounts receivable............................................... 70,086 70,086
Inventories....................................................... 381,022 381,022
Prepaid expenses and other current assets......................... 18,051 18,051
---------- ------- ----------
Total current assets................................................ 469,686 469,686
Property, Plant and Equipment, net.................................. 776,939 776,939
Other Assets
Deferred financing fees........................................... 21,102 21,102
Prepaid pension and other assets.................................. 52,257 52,257
Goodwill.......................................................... 71,227 71,227
---------- ------- ----------
$1,391,211 $1,391,211
---------- ------- ----------
---------- ------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Senior Credit Facility............................................ $ 60,400 $ 60,400
Accrued interest payable.......................................... 4,777 4,777
Trade accounts payable............................................ 85,908 85,908
Other accounts payable and accrued liabilities.................... 140,423 140,423
---------- ------- ----------
Total current liabilities........................................... 291,508 291,508
Long-Term Debt...................................................... 1,275,000 66,450 (4) 1,341,450
Noncurrent Liabilities
Deferred income taxes............................................. 236,328 236,328
Other liabilities................................................. 75,827 75,827
---------- ------- ----------
Total noncurrent Liabilities........................................ 312,155 -- 312,155
Stockholders' Equity (Deficit)...................................... (487,452) (66,450)(4) (553,902)
---------- ------- ----------
$1,391,211 $1,391,211
---------- ------- ----------
---------- ------- ----------
</TABLE>
19
<PAGE>
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents......................................... $ 161 $ 161
Accounts receivable............................................... 110,980 110,980
Inventories....................................................... 436,666 436,666
Prepaid expenses and other current assets......................... 20,137 20,137
---------- ------- ----------
Total current assets................................................ 567,944 567,944
Property, Plant and Equipment, net.................................. 791,198 791,198
Other Assets
Deferred financing fees........................................... 20,100 20,100
Prepaid pension and other assets.................................. 55,628 55,628
Goodwill.......................................................... 69,890 69,890
---------- ------- ----------
$1,504,760 $1,504,760
---------- ------- ----------
---------- ------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Senior Credit Facility............................................ $ 154,181 $ 154,181
Accrued interest payable.......................................... 24,228 24,228
Trade accounts payable............................................ 57,611 57,611
Other accounts payable and accrued liabilities.................... 145,993 145,993
---------- ------- ----------
Total current liabilities........................................... 382,013 382,013
Long-Term Debt...................................................... 1,275,000 66,450 (4) 1,341,450
Noncurrent Liabilities
Deferred income taxes............................................. 270,848 270,848
Other liabilities................................................. 70,678 70,678
---------- ------- ----------
Total noncurrent Liabilities........................................ 341,526 341,526
Stockholders' Equity (Deficit)...................................... (493,779) (66,450)(4) (560,229)
---------- ------- ----------
$1,504,760 $1,504,760
---------- ------- ----------
---------- ------- ----------
</TABLE>
20
<PAGE>
NOTES TO THE CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEETS AND
CONDENSED CONSOLIDATED PRO FORMA RESULTS OF OPERATIONS
(UNAUDITED)
(1) To adjust interest expense to reflect additional revolver borrowings as
follows (in thousands of dollars):
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
INTEREST RATE DECEMBER 31, 1998 SEPTEMBER 30, 1999
------------- ----------------- ------------------
<S> <C> <C> <C>
Senior Credit Facility:
$66,450 Additional Revolver Borrowings.................... 6.48% $ 4,306
$66,450 Additional Revolver Borrowings.................... 5.67% $2,826
Costs and expenses of the transaction are as follows
(in thousands of dollars):
3 million shares @ $22 per share............................ $66,000
Fees and expenses........................................... 450
-------
$66,450
</TABLE>
(2) To adjust income tax expense for the tax effect of pro forma adjustments.
(3) To adjust weighted average shares outstanding for the 3,000,000 shares
purchased by the Company.
(4) To adjust long-term debt to reflect additional revolver borrowings and
adjust stockholders' equity to reflect additional stock purchases.
10. SOURCE AND AMOUNT OF FUNDS
The Offer is not conditioned upon any financing arrangements. The total
amount of funds required by the Company to consummate the Offer, including the
fees and expenses of the Offer, is estimated to be approximately $66.5 million.
The Company will derive all funds necessary to purchase the Shares pursuant to
the Offer from borrowings under its existing credit facility. The Company's
existing credit facility with certain lenders and Nationsbank N.A. (now known as
Bank of America, N.A.), as agent (collectively, the "Banks"), consists of a
$800 million revolving credit facility due November 30, 2004. The Company's
credit agreements contain a number of customary covenants including, among
others, restrictions on the incurrence of indebtedness, transactions with
affiliates, and certain asset dispositions. Certain provisions require the
Company to maintain specified financial ratios, a minimum interest coverage
ratio and a minimum consolidated net worth (as defined therein). At the option
of the Company, interest under the credit facility will be payable monthly,
either at the prime rate or at LIBOR plus 0.75%. Upon the Company achieving
certain ratios of EBITDA (as defined therein) to cash interest expense, interest
rates can be reduced up to 0.5%. At December 31, 1998, the interest rates under
this facility were LIBOR plus 0.5% and at September 30, 1999 the interest rates
were LIBOR plus 0.25%. The Company pays a facility fee in an amount equal to
0.25% of each Bank's commitment under the Revolver. The loans under the credit
facility are secured by the pledge of all the stock of the Company's material
subsidiaries and a first priority lien on substantially all of the assets of the
Company, other than the Company's accounts receivable. The Company intends to
repay borrowings under the credit facility with its operating cash flow.
11. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
In General. Set forth below is a summary of the principal Federal income
tax consequences of a sale of Shares pursuant to the Offer under the Internal
Revenue Code of 1986, as amended to date (the "Code").
The summary is based on the Code, existing and proposed Treasury
regulations, administrative pronouncements and judicial decisions now in effect,
all of which are subject to change (possibly on a retroactive basis). The
summary deals only with Shares held as capital assets within the meaning of
Section 1221 of the Code and does not address foreign, state or local tax
consequences, or estate or gift tax considerations. Furthermore, the summary
does not address all aspects of federal income taxation that may be relevant to
investors in light of their particular circumstances or to certain types of
investors subject to special treatment under the federal income tax laws (such
as dealers in securities or currencies, tax-exempt organizations, insurance
21
<PAGE>
companies, other financial institutions, pass-through entities, regulated
investment companies or stockholders holding the Shares as part of a "straddle",
"hedge" or "conversion transaction," or other integrated transaction or persons
that have a "functional currency" other than the U.S. dollar).
Each stockholder is urged to consult and rely on the stockholder's own tax
advisor with respect to the tax consequences to the stockholder of tendering
Shares pursuant to the Offer.
A stockholder's exchange of Shares for cash pursuant to the Offer will be a
taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local, foreign and other tax laws.
Treatment as a Sale or Exchange. Generally, a transfer of Shares to the
Company pursuant to the Offer will be treated as a sale or exchange of the
Shares (rather than as a dividend distribution) if the receipt of cash upon the
sale (a) is "substantially disproportionate" with respect to the stockholder,
(b) results in a "complete termination" of the stockholder's interest in the
Company, or (c) is "not essentially equivalent to a dividend" with respect to
the stockholder. These tests (the "Section 302 tests") are discussed more fully
below.
A stockholder must take into account not only Shares actually owned by the
stockholder, but also Shares that are constructively owned pursuant to Section
318 of the Code. Under Section 318, a stockholder may constructively own Shares
actually owned, and in some cases constructively owned, by certain related
individuals or entities and Shares which may be acquired by exercise of an
option or by conversion. Substantially contemporaneous dispositions or
acquisitions of Shares by a stockholder or related individuals or entities
(including market purchases and sales) may be deemed to be part of a single
integrated transaction to be taken into account in determining whether any of
the Section 302 tests has been satisfied. In the event that the Offer is
oversubscribed, the Company will accept Shares for purchase first from any Odd
Lot Holder who properly tenders all of its Shares (as described in Section 1
above), and then from all other stockholders on a pro rata basis. Thus, in such
case, even if all the Shares actually and constructively owned by a stockholder
are tendered pursuant to the Offer, it is possible that not all of the Shares
will be purchased by the Company, which in turn may affect the stockholder's
ability to satisfy any of the Section 302 tests.
The Section 302 tests are as follows:
(a) SUBSTANTIALLY DISPROPORTIONATE TEST. The receipt of cash by a
stockholder will be substantially disproportionate with respect to the
stockholder if the percentage of the outstanding Shares actually and
constructively owned by the stockholder immediately following the sale of
Shares pursuant to the Offer (treating Shares sold pursuant to the Offer as
not outstanding) is less than 80% of the percentage of the outstanding
Shares actually and constructively owned by the stockholder immediately
before the sale of Shares pursuant to the Offer (treating Shares sold
pursuant to the Offer as outstanding).
(b) COMPLETE TERMINATION TEST. The receipt of cash by a stockholder
will be a complete termination of the stockholder's interest if either (i)
all of the Shares actually and constructively owned by the stockholder are
sold pursuant to the Offer or (ii) all of the Shares actually owned by the
stockholder are sold pursuant to the Offer and the stockholder is eligible
to waive, and effectively waives, the attribution of Shares constructively
owned by the stockholder in accordance with the procedures described in
Section 302(c)(2) of the Code. Stockholders considering terminating their
interest in accordance with Section 302(c)(2) of the Code should consult
with their own tax advisors.
(c) NOT ESSENTIALLY EQUIVALENT TO A DIVIDEND TEST. The receipt of cash
by a stockholder will be not essentially equivalent to a dividend if the
stockholder's sale of Shares pursuant to the Offer results in a "meaningful
reduction" in the stockholder's interest in the Company (both actual and
constructive) as compared to such stockholder's interest immediately before
the Offer is consummated. Whether the receipt of cash by a stockholder will
be "not essentially equivalent to a dividend" will depend upon the
individual stockholder's facts and circumstances. The Internal Revenue
Service (the "IRS") has indicated in published rulings that even a small
reduction in the proportionate interest of a small minority stockholder in
a publicly held corporation who exercises no control over corporate affairs
may constitute such a "meaningful reduction." The IRS held in Rev. Rul.
76-385, 1976-2 C.B. 92, that a reduction in the percentage ownership
interest of a stockholder in a publicly held corporation from .0001118% to
.0001081% (only a 3.3% reduction of the stockholder's prior percentage
ownership interest) would
22
<PAGE>
constitute a "meaningful reduction." Stockholders expecting to rely upon
the "not essentially equivalent to a dividend" test should consult their
own tax advisors as to its application in their particular situation.
If any of the Section 302 tests is satisfied, and the sale of the Shares is
therefore treated as a "sale or exchange" for federal income tax purposes, the
tendering stockholder will recognize gain or loss equal to the difference
between the amount of cash received by the stockholder and the stockholder's tax
basis in the Shares sold pursuant to the Offer. Any such gain or loss will be
capital gain or loss, and will be long term capital gain or loss if the Shares
have been held for more than one year.
Treatment as a Dividend. If none of the Section 302 tests is satisfied,
the amount of cash received by a tendering stockholder will be treated as a
dividend taxable as ordinary income (without reduction for the tax basis of the
Shares sold pursuant to the Offer) to the extent of the stockholder's share of
the Company's earnings and profits. The stockholder's basis in the Shares sold
pursuant to the Offer would be added to such stockholder's basis in its
remaining Shares, if any. If none of the Section 302 tests is satisfied, any
cash received by the stockholders for Shares pursuant to the Offer in excess of
the allocable portion of the Company's earnings and profits will be treated,
first, as a non-taxable return of capital to the extent of the stockholder's
basis for all of such stockholder's Shares, and, thereafter, as a capital gain
to the extent it exceeds such basis.
Special Rules for Corporate Stockholders. If a sale of Shares by a
corporate stockholder is treated as a dividend, the corporate stockholder may be
entitled to claim a deduction equal to 70% of the dividend under Section 243 of
the Code, subject to applicable limitations. Corporate stockholders should,
however, consider the effect of Section 246(c) of the Code, which disallows the
70% dividends-received deduction with respect to dividends on any share of stock
(i) that is held for 45 days or less during the 90 day period beginning 45 days
before the date the stock becomes ex-dividend with respect to the relevant
dividend or (ii) to the extent the stockholder is under an obligation to make
related payments with respect to substantially similar or related property. For
this purpose, the length of time a taxpayer is deemed to have held stock may be
reduced by periods during which the taxpayer's risk of loss with respect to the
stock is diminished by reason of the existence of certain options or other
transactions. Moreover, under Section 246A of the Code, if a corporate
stockholder has incurred indebtedness directly attributable to an investment in
Shares, the 70% dividends-received deduction may be reduced. In addition,
because the Offer will result in a non-pro-rata redemption of Shares, any amount
received by a corporate stockholder pursuant to the Offer that is treated as a
dividend would constitute an "extraordinary dividend" under Section 1059 of the
Code. For this purpose, all dividends received by a stockholder within, and
having their ex-dividend date within, an 85-day period (expanded to a 365-day
period in the case of dividends received in such period that in the aggregate
exceed 20% of the stockholder's adjusted tax basis in the Shares) are aggregated
and may also be treated as extraordinary dividends. Accordingly, if applicable,
a corporate stockholder would be required under Section 1059(a) of the Code to
reduce its basis (but not below zero) in its Shares by the non-taxed portion of
the dividend (i.e. the portion of the dividend for which a deduction is
allowed), and if such portion exceeds the stockholder's tax basis for its
Shares, to treat the excess as gain from the sale of such Shares in the year in
which Shares are sold pursuant to the Offer.
Foreign Stockholders. The Company will withhold United States federal
income tax at a rate of 30% from gross proceeds paid pursuant to the Offer to a
foreign stockholder or his agent, unless the Company determines either that a
reduced rate of withholding is applicable pursuant to a tax treaty or that an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business by the foreign
stockholder within the United States. For this purpose, a foreign stockholder is
any stockholder that is not (a) a citizen or resident of the United States,
including an alien individual who is a lawful permanent resident of the United
States or meets the "substantial presence" test under Section 7701(b) of the
Code, (b) a corporation, partnership or other entity created or organized in or
under the laws of the United States or of any state thereof (including the
Distrtict of Columbia), (c) an estate whose income is includible in gross income
for United States federal income tax purposes regardless of its source, or
(d) a trust, if a U.S. court is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust.
Without definite knowledge to the contrary, the Company will determine
whether a stockholder is a foreign stockholder and determine the applicable
withholding rate by reference to the stockholder's address except if facts and
circumstances indicate such reliance is not warranted or if applicable law
requires some other method
23
<PAGE>
for determining residence. A foreign stockholder may be eligible to file for a
refund of such tax or a portion of such tax if such stockholder (a) meets any of
the Section 302 tests described above, (b) is entitled to a reduced rate of
withholding pursuant to a treaty and the Company withheld at a higher rate, or
(c) is otherwise able to establish that no tax or a reduced amount of tax was
due. In order to claim an exemption from withholding on the ground that gross
proceeds paid pursuant to the Offer are effectively connected with the conduct
of a trade or business by a foreign stockholder within the United States, the
foreign stockholder must deliver to the Depositary a properly executed statement
claiming such exemption or benefits. Such statements may be obtained from the
Depositary. Foreign stockholders are urged to consult their own tax advisors
regarding the application of United States federal income tax withholding,
including eligibility for a withholding tax reduction or exemption and the
refund procedures.
Backup Withholding. Each tendering stockholder must provide certain
information through the Letter of Transmittal to avoid the 31% federal "backup
withholding" tax on the gross proceeds payable pursuant to the Offer. See
Section 3.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF SALES MADE
BY THEM PURSUANT TO THE OFFER IN VIEW OF THEIR OWN PARTICULAR CIRCUMSTANCES.
12. TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and affiliates, neither the Company
nor, to the best of the Company's knowledge, any of the directors or executive
officers of the Company, nor any associates of any of the foregoing, has
effected any transactions in the Shares during the 40 business days prior to the
date hereof.
The Board of Directors has in the past authorized the Company to repurchase
Shares in the open market. During 1999, the Board of Directors increased to
23,000,000 the maximum number of Shares that the Company could repurchase in
open-market transactions. Through December 31, 1998, the Company repurchased in
the open market 14,051,100 Shares for an aggregate cost of approximately
$242,365,800. From January 1, 1999 through October 26, 1999, the Company
acquired 3,826,450 Shares for an aggregate cost of approximately $99,385,500.
This Offer temporarily suspends the Company's open-market repurchases of
Shares previously authorized by the Board of Directors. The Company may in the
future purchase additional Shares on the open market, in private transactions,
through tender offers or otherwise. Any such purchases may be on the same terms
or on terms that are more or less favorable to stockholders than the terms of
the Offer. However, under the Exchange Act (including Rule 13e-4(f)(6)
thereunder), the Company and its affiliates are prohibited from purchasing any
Shares, other than pursuant to the Offer, until at least ten (10) business days
after the expiration or termination of the Offer. Any possible future purchases
by the Company of Shares will depend on many factors, including the market price
of the Shares, the results of the Offer, the Company's financial position and
resources, and general economic and market conditions.
Except as set forth in this Offer to Purchase and except for options to
purchase Shares granted to employees, (including executive officers) pursuant to
the Company's stock option plans or pursuant to employment agreements, neither
the Company nor, to the best of the Company's knowledge, any of its affiliates,
directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, consents or
authorizations).
The Company has been advised that none of its directors and executive
officers intends to tender Shares pursuant to the Offer.
24
<PAGE>
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its
acquisition of Shares as contemplated in the Offer or of any approval or other
action by any government or governmental, administrative or regulatory authority
or agency, domestic or foreign, that would be required for the Company's
acquisition or ownership of Shares pursuant to the Offer. Should any such
approval or other action be required, the Company currently contemplates that it
will seek such approval or other action. The Company cannot predict whether it
may determine that it is required to delay the acceptance for payment of Shares
tendered pursuant to the Offer pending the outcome of any such matter. There can
be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions or that the failure
to obtain any such approval or other action might not result in adverse
consequences to the Company's business. The Company intends to make all required
filings under the Exchange Act. The Company's obligation under the offer to
accept Shares for payment is subject to certain conditions. See Section 6.
14. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and is likely to reduce the
number of stockholders. Nonetheless, the Company will not under any
circumstances waive the condition set forth in paragraph (g) of Section 6 above
which, in effect, requires that the Offer will not cause the Shares not to be
authorized to be listed and traded on the NYSE. The Shares are currently "margin
securities" under the rules of the Federal Reserve Board. This has the effect,
among other things, of allowing brokers to extend credit on the collateral of
the Shares. The Company believes that, following the purchase of Shares pursuant
to the Offer, the Shares will continue to be "margin securities" for purposes of
the Federal Reserve Board's margin regulations. Eligibility for treatment as
margin securities will, however, continue to depend on maintenance of minimum
daily trading volume.
The Shares are registered under the Exchange Act which requires, among
other things, that the Company furnish certain information to its stockholders
and to the SEC and comply with the SEC's proxy rules in connection with meetings
of the Company's stockholders. As noted above, pursuant to the terms and
conditions of the Offer, the Company intends that its purchase of Shares
pursuant to the Offer will not result in the Shares becoming eligible for
deregistration under the Exchange Act. The Company has no reason to believe that
the purchase of the Shares pursuant to the Offer will result in the termination
of registration of the Shares under the Exchange Act.
15. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion, at any
time or from time to time and regardless of whether or not any of the events set
forth in Section 6 shall have occurred or shall be deemed by the Company to have
occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of any Shares by giving oral or written
notice of such extension to the Depositary and making a public announcement
thereof. During any such extension, all Shares previously tendered and not
purchased or withdrawn will remain subject to the Offer, except to the extent
that such Shares may be withdrawn as set forth in Section 4. The Company also
expressly reserves the right, in its sole discretion, to terminate the Offer and
not accept for payment or pay for any Shares not theretofore accepted for
payment or paid for or, subject to applicable law, to postpone payment for
Shares upon the occurrence of any of the conditions specified in Section 6 or
otherwise by giving oral or written notice of such termination or postponement
to the Depositary and making a public announcement thereof. The Company's
reservation of the right to delay payment for Shares which it has accepted for
payment is limited by Rule 13e-4(f)(5) promulgated under the Exchange Act, which
requires that the Company must pay the consideration offered or return the
Shares tendered promptly after termination or withdrawal of a tender offer.
Subject to compliance with applicable law, the Company further reserves the
right, in its sole discretion, and regardless of whether or not any of the
events set forth in Section 6 shall have occurred or shall be deemed by the
Company to have occurred, to amend the Offer in any respect (including, without
limitation, by decreasing or increasing the consideration offered in the Offer
to owners of Shares or by decreasing the number of Shares being sought in the
Offer) or to waive the limitation on the maximum number of shares to be
purchased pursuant to the Offer. Amendments to the Offer may be made at any
25
<PAGE>
time or from time to time effected by public announcement thereof, such
announcement, in the case of an extension, to be issued no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Any disclosure of a material change in the
information published, sent or given to stockholders will be disseminated
promptly to stockholders in a manner reasonably designed to inform stockholders
of such change. Without limiting the manner in which the Company may choose to
make a public announcement pursuant to or concerning the Offer, except as
required by applicable law, the Company shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Company will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) promulgated
under the Exchange Act. The minimum period during which an offer must remain
open following material changes in the terms of the offer or information
concerning the offer (other than a change in price or a change in percentage of
securities sought) will depend on the facts and circumstances then existing,
including the relative materiality of the changed terms or information. In a
published release, the SEC has stated that in its view an offer should remain
open for a minimum of five business days from the date that notice of such a
material change is first published, sent or given. If (a) the Company (i)
increases or decreases the price to be paid for Shares tendered pursuant to the
Offer, (ii) increases the number of Shares being sought in the Offer and such
increase exceeds 2% of the outstanding Shares or (iii) decreases the number of
Shares being sought, and (b) the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from
and including the date that notice of such increase or decrease is first
published, sent or given, the Offer will be extended until the expiration of
such ten business day period.
16. FEES AND EXPENSES
The Company has retained Merrill Lynch to act as financial advisor and
Dealer Manager in connection with the Offer. Merrill Lynch will receive an
advisory fee for its services of $50,000 plus $.05 for each Share purchased by
the Company pursuant to the Offer. The Company also has agreed to reimburse
Merrill Lynch for certain out-of-pocket expenses incurred in connection with the
Offer, and to indemnify Merrill Lynch against certain liabilities in connection
with the Offer, including liabilities under the Federal securities laws. Merrill
Lynch has been retained by the Company to render, and in the past has rendered,
various investment banking and other advisory services to the Company, for which
it has received compensation, and may render similar services to the Company in
the future.
The Company has retained Innisfree M&A Incorporated to act as Information
Agent and The Bank of New York to act as Depositary in connection with the
Offer. The Information Agent may contact stockholders by mail, telephone,
facsimile, telex, telegram or personal interview, and may request brokers,
dealers, commercial banks, trust companies and other nominees to forward
materials relating to the Offer to beneficial owners of Shares. The Information
Agent and the Depositary will each receive reasonable and customary compensation
for its services in connection with the Offer and will be reimbursed for its
reasonable out-of-pocket expenses, including the reasonable fees and expenses of
counsel. The Company has agreed to indemnify the Information Agent and the
Depositary against certain liabilities in connection with the Offer, including
certain liabilities under the Federal securities laws.
The Company will not pay any fees or commissions to any broker, dealer,
commercial bank, trust company or other person (other than the Dealer Manager,
the Depositary and Information Agent) for soliciting Shares pursuant to the
Offer. The Company will, however, on request, reimburse such persons for
customary handling and mailing expenses incurred in forwarding materials in
respect of the Offer to the beneficial owners for which they act as nominees. No
broker, dealer, commercial bank, trust company or other nominee has been
authorized to act as an agent for the Company for the purpose of the Offer. The
Company will not pay (or cause to be paid) any stock transfer taxes on its
purchase of Shares pursuant to the Offer, except as otherwise provided in
Instruction 9 of the Letter of Transmittal.
26
<PAGE>
17. MISCELLANEOUS
The Offer is not being made to, nor will the Company accept tenders from or
on behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or its acceptance would not be in compliance with the laws of such
jurisdiction. The Company is not aware of any jurisdiction where the making of
the Offer or the tender of Shares would not be in compliance with applicable
law. If the Company becomes aware of any jurisdiction where the making of the
Offer or the tender of Shares is not in compliance with any applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares residing in such jurisdiction. In any jurisdiction in which the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer will be deemed to be made on the Company's behalf by
Merrill Lynch, Pierce, Fenner & Smith Incorporated or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
WESTPOINT STEVENS INC.
October 29, 1999
27
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or such stockholder's broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of its addresses set forth
below.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT DELIVERY
(for Eligible Institutions Only)
(212) 815-6213
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR CONFIRMATION BY TELEPHONE:
(800) 507-9357
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at the addresses and the telephone numbers set forth
below. Requests for additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be directed to the
Information Agent. Stockholders may also contact their broker, dealer,
commercial bank, trusts company or other nominee for assistance concerning the
Offer. To confirm delivery of your Shares, stockholders are directed to contact
the Depositary.
The Information Agent for the Offer is:
Innisfree
M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Bankers and Brokers Call Collect: (212) 750-5833
All Others Call Toll Free: (888) 750-5834
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281
(212) 236-3790 (call collect)
<PAGE>
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON TUESDAY, NOVEMBER 30, 1999, UNLESS THE OFFER IS
EXTENDED
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
WESTPOINT STEVENS INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED OCTOBER 29, 1999
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT DELIVERY
(for Eligible Institutions Only)
(212) 815-6213
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR CONFIRMATION BY TELEPHONE:
(800) 507-9357
</TABLE>
Delivery of this instrument to an address other than as set forth above will
not constitute a valid delivery.
Please read the entire Letter of Transmittal, including the accompanying
Instructions, carefully before checking any box below.
You should use this Letter of Transmittal only if (a) you are either
enclosing certificates or (b) are causing the Shares (as defined below) to be
delivered by book-entry transfer to the Depositary's account at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures
set forth in Section 3 of the Offer to Purchase. See Instruction 2.
If you cannot deliver your Shares and all other required documents to the
Depositary by the Expiration Date (as defined in the Offer to Purchase), you
must tender your Shares pursuant to the guaranteed delivery procedure set forth
in Section 3 of the Offer to Purchase. See Instruction 2.
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ----------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARES TENDERED(ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
(PLEASE FILL IN, IF BLANK)
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)(1) CERTIFICATE(S) TENDERED(2)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
|
TOTAL NO. OF SHARES TENDERED |
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Indicate in this box the order (by certificate number) in which Shares are
to be purchased in the event of proration (attach additional list if
necessary)(3) See Instruction 7.
1st: 2nd: 3rd: 4th: 5th:
(1) Need not be completed by stockholders tendering by book-entry.
(2) Unless otherwise indicated, it will be assumed that all Shares represented
by Share certificates delivered to the Depositary are being tendered
hereby. See Instruction 4.
(3) In the event less than all Shares tendered are purchased due to proration,
Shares will be selected for purchase by the Depository (unless you
otherwise designate).
(BOX BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s)
---------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-----------------------------
Name of Institution which Guaranteed Delivery
----------------------------------
If delivery is by book-entry transfer:
Name of Tendering Institution
----------------------------------------------
Account No.
----------------------------------------------------------------
Transaction Code No.
-------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to WestPoint Stevens Inc., a Delaware
corporation (the "Company"), the above-described shares of common stock, par
value $.01 per share (the "Shares"), at prices specified by the Company's
Stockholders, not greater than $22.00 nor less than $19.00 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated October 29, 1999 (the "Offer to Purchase") and in this
Letter of Transmittal (which together constitute the "Offer").
Subject to, and effective upon, acceptance for payment of, and payment for,
the Shares tendered herewith, the undersigned hereby sells, assigns and
transfers to or upon the order of the Company all right, title and interest in
and to all the Shares that are being tendered hereby and appoints The Bank of
New York, as Depositary (the "Depositary), the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (a) deliver certificates for such Shares, or
transfer ownership of such Shares on the account books maintained by the
Book-Entry Transfer Facility, together, in any such case, with all accompanying
evidences of transfer and authenticity, to or upon the order of the Company, (b)
present such Shares for transfer and cancellation on the books of the Company
and (c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares, all in accordance with the terms of the Offer.
The undersigned understands that the Company will determine a single per
Share price (not greater than $22.00 nor less than $19.00 per Share) (the
"Purchase Price") that it will pay for Shares validly tendered and not validly
withdrawn pursuant to the Offer, after taking into account the number of Shares
so tendered and the prices specified by tendering Stockholders. The undersigned
understands that the Company will select the lowest Purchase Price that will
allow it to purchase 3,000,000 Shares (or such lesser number of Shares as are
validly tendered and not withdrawn at prices not greater than $22.00 nor less
than $19.00 per Share) pursuant to the Offer. The undersigned understands that
all Stockholders whose Shares are purchased by the Company will receive the
Purchase Price for each Share purchased in the Offer.
The undersigned hereby represents and warrants that the undersigned has a
net long position in Shares at least equal to the number of Shares being
tendered and has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that, when the same are accepted for payment by
the Company, the Company will acquire good and unencumbered title thereto, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by the Depositary or the Company to be necessary
or desirable to complete the sale, assignment and transfer of the Shares
tendered hereby.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 or 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Shares purchased (less the amount
of any Federal income or backup withholding tax required to be withheld), and
return any Shares not tendered or not purchased, in the name(s) of the
undersigned (or, in the case of Shares tendered by book-entry transfer, by
credit to the account at the Book-Entry Transfer Facility). Similarly, unless
otherwise indicated under "Special Delivery Instructions", please mail the check
for the Purchase Price of any Shares purchased (less the amount of any Federal
income or backup withholding tax required to be withheld) and any certificates
for Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Payment Instructions" and "Special
Delivery Instructions" are completed, please issue the check for the Purchase
Price of any Shares purchased (less the amount of any Federal income or backup
withholding tax required to be withheld) and return any Shares not tendered or
not purchased in the name(s) of, and mail said check and any certificates to,
the person(s) so indicated. The undersigned recognizes that the Company has no
obligation, pursuant to the "Special Payment Instructions," to transfer any
Shares from the name of the registered holder(s) thereof, if the Company does
not accept for payment any of the Shares so tendered.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the Offer, this tender is
irrevocable.
<PAGE>
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED, THERE IS NO VALID
TENDER OF SHARES.
(SEE INSTRUCTION 5)
------------------
SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION
/ / The undersigned wants to maximize the chance of having the Company
purchase all 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 below, the undersigned hereby tenders Shares
and is willing to accept the Purchase Price resulting from the "Dutch
Auction" process. This action will result in receiving a price per Share
of as low as $19.00 or as high as $22.00.
-- OR --
SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER
By checking ONE of the boxes below instead of the box above, the undersigned
hereby tenders Shares at the price checked. This action could result in none of
the Shares being purchased if the Purchase Price for the Shares is less than the
price checked. If the Purchase Price for the Shares is equal to or greater than
the price checked, then the Shares purchased by the Company will be purchased at
the Purchase Price. 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
(unless those Shares were previously tendered and withdrawn).
Price (in dollars) per Share at which Shares are being tendered:
<TABLE>
<S> <C> <C> <C> <C>
$19.00 / / $19.25 / / $19.50 / / $19.75 / / $20.00 / /
$20.25 / / $20.50 / / $20.75 / / $21.00 / / $21.25 / /
$21.50 / / $21.75 / / $22.00 / /
</TABLE>
(check only one box)
<PAGE>
ODD LOTS
(SEE INSTRUCTION 6)
To be completed ONLY if Shares are being tendered by or on behalf of a person
owning beneficially, as of the close of business on October 29, 1999, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
/ / was the beneficial owner as of the close of business on October 29, 1999 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
(i) is tendering, for the beneficial owners thereof, Shares with respect to
which it is the record owner, and (ii) believes, based upon representations,
made to it, by each such beneficial owner, that such beneficial owner owned
beneficially as of the close of business on October 29, 1999 an aggregate of
fewer than 100 Shares, and is tendering all of such Shares.
SPECIAL PAYMENT INSTRUCTIONS
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 7, 8 AND 9)
To be completed ONLY if the check for the Purchase Price of Shares purchased
(less the amount of any federal income and backup withholding tax required to be
withheld) and certificates for Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned.
Issue check and certificate(s) to:
Name ..........................................................................
(Please Print)
Address .......................................................................
.......................................................................
(Include Zip Code)
...............................................................................
(Taxpayer Identification No.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 7, 8 AND 9)
To be completed ONLY if the check for the Purchase Price of Shares purchased
(less the amount of any federal income and backup withholding tax required to be
withheld) and certificates for Shares not tendered or not purchased are to be
mailed to someone other than the undersigned or to the undersigned at an address
other than that shown below the undersigned's signature.
Deliver check and certificates to:
Name ..........................................................................
(Please Print)
Address .......................................................................
.......................................................................
(Include Zip Code)
<PAGE>
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
...............................................................................
...............................................................................
Signature(s) of Owner(s)
Name(s) ........................................................................
(Please Print)
...............................................................................
...............................................................................
Capacity ......................................................................
(full title)
Address .......................................................................
(Include Zip Code)
...............................................................................
...............................................................................
Daytime Area Code and Telephone Number ........................................
Dated .................................................................. , 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by persons(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person operating in a
fiduciary or representative capacity, please set forth full title and see
Instruction 8.)
GUARANTEE OF SIGNATURE(S), IF REQUIRED (SEE INSTRUCTIONS 1 AND 8)
Name of Firm ..................................................................
Address .......................................................................
(Include Zip Code)
Authorized Signature ..........................................................
Name(s) .......................................................................
Area Code and Telephone Number ................................................
Dated .................................................................. , 1999
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks and brokerage houses) which is a participant
in the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution" and, collectively, "Eligible Institutions").
Signatures on this Letter of Transmittal need not be guaranteed (a) if this
Letter of Transmittal is signed by the registered holder(s) of the Shares (which
term, for purposes of this document, shall include any participant in the
Book-Entry Transfer Facility whose name appears on a security position listing
as the owner of Shares) tendered herewith and such holder(s) have not completed
the box entitled "Special Payment Instructions" on this Letter of Transmittal or
(b) if such Shares are tendered for the account of an Eligible Institution. See
Instruction 8.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES; GUARANTEED DELIVERY
PROCEDURE. You should use this Letter of Transmittal only if you are either
forwarding certificates herewith or causing the Shares to be delivered by
book-entry transfer pursuant to the procedures set forth in Section 3 of the
Offer to Purchase. In order for you to validly tender Shares, certificates for
all physically delivered Shares, or a confirmation of a book-entry transfer of
all Shares delivered electronically into the Depositary's account at the
Book-Entry Transfer Facility, as well as a properly completed and duly executed
LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ANY OTHER DOCUMENTS REQUIRED BY
THIS LETTER OF TRANSMITTAL, MUST BE RECEIVED BY THE DEPOSITARY AT ONE OF ITS
ADDRESSES SET FORTH ON THE FRONT PAGE OF THIS LETTER OF TRANSMITTAL BY THE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).
If you cannot deliver your Shares and all other required documents to the
Depositary by the Expiration Date, or the procedure for book-entry transfer
cannot be completed on a timely basis or time will not permit all required
documents to reach the Depositary prior to the Expiration Date, you must tender
your Shares pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender
must be made by or through an Eligible Institution, (ii) a properly completed
and duly executed Notice of Guaranteed Delivery substantially in the form
provided by the Company (with any required signature guarantees) must be
received by the Depositary by the Expiration Date, and (iii) the certificates
for all physically delivered Shares, or a confirmation of a book-entry transfer
of all Shares delivered electronically into the Depositary's account at the
Book-Entry Transfer Facility, together with a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile hereof or a
proper tender through ATOP) with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message, or in the case of a tender
through ATOP, the specific acknowledgement and any other documents required by
this Letter of Transmittal, must be received by the Depositary no later than
5:00 p.m., New York City time, on the third New York Stock Exchange trading day
after the date of execution of such Notice of Guaranteed Delivery, all as
provided in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, IS AT
YOUR OPTION AND RISK. IF YOU CHOOSE TO DELIVER THE DOCUMENTS BY MAIL, THEN
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal (or
facsimile thereof), you waive any right to receive any notice of the acceptance
for payment of the Shares.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Shares Tendered" is inadequate, then you should list the
certificate numbers and/or the number of Shares on a separate signed schedule
attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If you wish to tender (offer to sell) fewer than all of
the Shares represented by any certificates that you deliver to the Depositary,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered". In such case, a new certificate for the remainder
of the Shares represented by the old certificate will be sent to the
person(s) signing this Letter of Transmittal, unless otherwise provided in the
appropriate box on this Letter of Transmittal, as promptly as practicable after
the expiration or termination of the Offer. Unless you indicate otherwise, all
Shares represented by certificates delivered to the Depositary will be deemed to
have been tendered.
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. In order to
validly tender by this Letter of Transmittal, you must either:
(a) check the box under "Shares Tendered at Price Determined by Dutch
Auction"; OR
(b) check the box indicating the price per Share at which you are
tendering Shares under "Shares Tendered at Price Determined by Stockholder".
By checking the box under "Shares Tendered at Price Determined by Dutch
Auction" you agree to accept the Purchase Price resulting from the Dutch Auction
tender process, which may be as low as $19.00 or as high as $22.00 per Share. By
checking ONE of the boxes under "Shares Tendered at Price Determined by
Stockholder," you acknowledge that doing so could result in none of the Shares
being purchased if the Purchase Price for the Shares is less than the price that
you checked.
You may only check one box. If you check more than one box or no boxes, then
you will not be deemed to have validly tendered your Shares. If you wish to
tender portions of your Share holdings at different prices, you must complete a
separate Letter of Transmittal for each price at which you wish to tender each
such portion of your Shares. You cannot tender the same Shares at more than one
price (unless you previously tendered and withdrew those Shares, as provided in
Section 4 of the Offer to Purchase).
<PAGE>
6. ODD LOTS. As described in Section 2 of the Offer to Purchase, if the
Company purchases less than all Shares tendered and not validly withdrawn before
the Expiration Date, the Shares purchased first will consist of all Shares
tendered by any Stockholder who owned beneficially, as of the close of business
on October 29, 1999, an aggregate of fewer than 100 Shares and who tenders all
of such Shares. Even if you otherwise qualify for the "odd lot" preferential
treatment, you will not receive such preferential treatment unless you complete
the box captioned "Odd Lots".
7. ORDER OF PURCHASE IN EVENT OF PRORATION. 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.
8. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the Purchase Price is to be made, or Shares not
tendered or not purchased are to be returned in the name of any person other
than the registered holder(s). Signatures on any such certificates or stock
powers 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 Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Purchaser of the authority of such person so to act must be submitted.
9. STOCK TRANSFER TAXES. Except as provided in the Offer to Purchase and
this Letter of Transmittal, the Company will pay any stock transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the Purchase Price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), or tendered Shares are registered in
the name of a person other than the name of the person(s) signing this Letter of
Transmittal, the amount of any stock transfer taxes (whether imposted on the
registered holder(s), such other person or otherwise) payable on account of the
transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted.
10. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the Purchase
Price of any Shares accepted for payment is to be issued in the name of, and/or
Share certificates for Shares not accepted for payment or not tendered are to be
issued in the name of and/or returned to, a person other than the signer of this
Letter of Transmittal or if a check is to be sent, and/or such certificates are
to be returned, to a person other than the signer of this Letter of Transmittal,
or to an address other than that shown above, the appropriate boxes on this
Letter of Transmittal should be completed. Any stockholder(s) delivering Shares
by book-entry transfer may request that Shares not purchased be credited to such
account maintained at the Book-Entry Transfer Facility as such stockholder(s)
may designate in the box entitled "Special Payment Instructions". If no such
instructions are given, any such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated above as
the account from which such Shares were delivered.
11. FEDERAL INCOME TAX WITHHOLDING. Under the Federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain Stockholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering Stockholder must provide the Depositary with such
Stockholder's correct taxpayer identification number by completing the
Substitute Form W-9 set forth below. In general, if a Stockholder is an
individual, the taxpayer identification number is the social security number of
such individual. If the Depositary is not provided with the correct taxpayer
identification number, the Stockholder may be subject to a $50 penalty imposed
by the Internal Revenue Service and payments that are made to such Stockholder
pursuant to the Offer may be subject to backup withholding. Certain Stockholders
(including, among others, all corporations and certain foreign individuals) are
not subject to these backup withholding and reporting requirements. In order to
satisfy the Depositary that a foreign individual qualifies as an exempt
recipient, such Stockholder must submit an IRS Form W-8, signed under penalties
of perjury, attesting to that individual's exempt status. Such statements can be
obtained from the Depositary. For further information concerning backup
withholding and instructions for completing the Substitute Form W-9 (including
how to obtain a taxpayer identification number if you do not have one and how to
complete the Substitute Form W-9 if Shares are held in more than one name),
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Shares to be deemed invalidly tendered, but may require the Depositary to
withhold 31% of the amount of any payments made pursuant to the Offer. Backup
withholding is not an additional Federal income tax. Rather, the Federal income
tax liability of a person subject to backup withholding will be reduced by the
amount of the tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained.
<PAGE>
NOTE: FAILURE TO COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
Unless the Company determines that a reduced rate of withholding is
applicable pursuant to a tax treaty or that an exemption from withholding is
applicable because gross proceeds paid pursuant to the Offer are effectively
connected with the conduct of a trade or business within the United States, the
Company will be required to withhold Federal income tax at a rate of 30% from
such gross proceeds paid to a foreign Stockholder or his agent. For this
purpose, a foreign Stockholder is any Stockholder that is not: (a) a citizen or
resident of the United States, including an alien individual who is a lawful
permanent resident of the United States or meets the "substantial presence" test
under Section 7701(b) of the Code, (b) a corporation, partnership or other
entity created or organized in or under the laws of the United States or of any
state thereof (including the District of Columbia), (c) an estate whose income
is includible in gross income for United States federal income tax purposes
regardless of its source, or (d) a trust, if a U.S. court is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust.
The Company will determine the applicable rate of withholding by reference
to a Stockholder's address, except if facts and circumstances indicate such
reliance is not warranted or if applicable law (for example, an applicable tax
treaty or Treasury regulations thereunder) requires some other method for
determining a Stockholder's residence. A foreign Stockholder may be eligible to
file for a refund of such tax or a portion of such tax if such Stockholder meets
any of the "Sector 302 tests" described in the Offer to Purchase under the
caption "Certain Federal Income Tax Considerations" or if such Stockholder is
entitled to a reduced rate of withholding pursuant to a treaty and the Company
withheld at a higher rate. In order to claim an exemption from withholding on
the grounds that gross proceeds paid pursuant to the Offer are effectively
connected with the conduct of a trade or business within the United States, a
foreign Stockholder must deliver to the Depositary a properly executed
Form 4224 or Form W-8 ECI claiming exemption. Such forms can be obtained from
Innisfree M&A Incorporated, the Information Agent for the Offer, at the address
and telephone number listed on the bottom of this Letter of Transmittal. Foreign
Stockholders are urged to consult their own tax advisors regarding the
application of Federal income tax withholding, including eligibility for a
withholding tax reduction or exemption and the refund procedure.
12. IRREGULARITIES. All questions as to Purchase Price, the form of
documents and the validity, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares will be determined by the Company
in its sole discretion, which determinations shall be final and binding on all
parties. The Company reserves the absolute right to reject any or all tenders of
Shares it determines not to be in proper form or the acceptance of which or
payment for which may, in the opinion of the Company's counsel, be unlawful. The
Company also reserves the absolute right to waive any of the conditions of the
Offer and any defect or irregularity in the tender of any particular Shares, and
the Company's interpretation of the terms of the Offer (including these
instructions) will be final and binding on all parties. No tender of Shares will
be deemed to be properly made until all defects and irregularities have been
cured or waived. Unless waived, any defects or irregularities in connection with
tenders must be cured within such time as the Company shall determine. None of
the Company, Merrill Lynch & Co., the Dealer Manager for the Offer (the "Dealer
Manager"), the Depositary, the Information Agent 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 such notice.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance should be directed to the Information Agent and the Dealer
Manager at their respective addresses and telephone numbers set forth below.
Requests for additional copies of the Offer to Purchase, this Letter of
Transmittal and the Notice of Guaranteed Delivery should be directed to the
Information Agent.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: THE BANK OF NEW YORK
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND
CERTIFY BY SIGNING AND DATING BELOW ------------------------------------------
FORM W-9 Social Security Number
(If awaiting TIN write "Applied For")
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE OR
-----------------------------------------
Employer Identification Number
(If awaiting TIN write "Applied For")
PAYER'S REQUEST FOR TAXPAYER ------------------------------------------------------------------------------------------------------
IDENTIFICATION NUMBER (TIN)
<CAPTION>
<S> <C>
PART 2--Certificate--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued for me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding,
or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding.
------------------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by
the IRS that you are currently subject to backup withholding because of under-reporting
interest or dividends on your tax returns. However, if after being notified by the IRS that
you are subject to backup withholding, you receive another notification from the IRS that
you are no longer subject to backup withholding, do not cross out such item (2). (Also see
instructions in the enclosed Guidelines).
------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
SIGNATURE DATE , 1999
----------------------------- --------
Part 3--
Awaiting TIN / /
------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Officer or
(2) I intend to mail or deliver an application in the near future. I understand
that if I do not provide a Taxpayer Identification Number to the Depositary by
the time of payment, 31% of all reportable payments made to me thereafter will
be withheld, but that such amounts will be refunded to me if I provide a
certified Taxpayer Identifiation Number to the Depositary within sixty
(60) days.
SIGNATURE DATE , 1999
------------------------------------- -------------
<PAGE>
The Information Agent for the Offer is:
Innisfree
M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Bankers and Brokers Call Collect: (212) 750-5833
All Others Call Toll Free: (888) 750-5834
The Dealer Manager for the Offer is
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281
(212) 236-3790 (call collect)
<PAGE>
NOTICE OF GUARANTEED DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
TO TENDER SHARES OF COMMON STOCK
OF
WESTPOINT STEVENS INC.
PURSUANT TO THE OFFER TO PURCHASE DATED OCTOBER 29, 1999
The attached form, or a form substantially equivalent to the attached form,
must be used to accept the Offer (as defined below) if certificates for shares
of common stock, par value $.01 per share (the "Shares"), of the Company and all
other documents required by the Letter of Transmittal cannot be delivered to the
Depositary prior to the expiration of the Offer or the procedures for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach the Depositary prior to the expiration of the Offer.
Such form may be delivered by hand, facsimile transmission, or mail to the
Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT DELIVERY:
(for Eligible Institutions Only)
(212) 815-6213
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR CONFIRMATION BY TELEPHONE:
(800) 507-9357
</TABLE>
Delivery of this Notice of Guaranteed Delivery to an address other than
those shown above or transmission of instructions via a facsimile number other
than that listed above does not constitute a valid delivery.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to WestPoint Stevens Inc., a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated October 29, 1999 (the "Offer to Purchase")
and the related Letter of Transmittal (which together constitute the "Offer"),
receipt of which is hereby acknowledged, the number (indicated below) of shares
of common stock, par value $.01 per share (the "Shares"), at prices specified by
the Company's stockholders, not greater than $22.00 nor less than $19.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase and in the related Letter of Transmittal.
NUMBER OF SHARES BEING TENDERED HEREBY
PRICE (IN DOLLARS) PER SHARE AT
WHICH SHARES ARE BEING TENDERED
------------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED, THERE IS NO VALID TENDER OF SHARES.
------------------------
SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION
/ / The undersigned wants to maximize the chance of having the Company purchase
all the Shares the undersigned is tendering (subject to the possibility of
proration). Accordingly, by checking this one box, the undersigned hereby
tenders Shares and is willing to accept the Purchase Price resulting from
the "Dutch Auction" process. This action will result in receiving a price
per Share of as low as $19.00 or as high as $22.00.
--OR--
SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER
By checking ONE of the boxes below, the undersigned hereby tenders Shares at the
price checked. This action could result in none of the Shares being purchased if
the Purchase Price for the Shares is less than the price checked. If the
Purchase Price for the Shares is equal to or greater than the price checked,
then the Shares purchased by the Company will be purchased at the Purchase
Price. A stockholder who desires to tender Shares at more than one price must
complete a separate Notice of Guaranteed Delivery for each price at which Shares
are tendered. The same Shares cannot be tendered at more than one price (unless
those Shares were previously tendered and withdrawn).
<TABLE>
<S> <C> <C> <C> <C>
$19.00 / / $19.25 / / $19.50 / / $19.75 / / $20.00 / /
$20.25 / / $20.50 / / $20.75 / / $21.00 / / $21.25 / /
$21.50 / / $21.75 / / $22.00 / /
</TABLE>
(check only one box)
2
<PAGE>
<TABLE>
<S> <C>
Number of Shares:
--------------------------------------------- SIGN HERE
-----------------------------------------------------
-----------------------------------------------------
Signatures
Certificate Nos. (if available): Dated:
-----------------------------------------------
- -------------------------------------------------------------- Name of Stockholders:
- -------------------------------------------------------------- -----------------------------------------------------
-----------------------------------------------------
(Please Type or Print)
If Shares will be tendered by book-entry transfer: -----------------------------------------------------
Name of Tendering Institution: -----------------------------------------------------
(Address)
- --------------------------------------------------------------
-----------------------------------------------------
- --------------------------------------------------------------
-----------------------------------------------------
Account Number: at (Zip Code)
--------------------------------------------
-----------------------------------------------------
The Depository Trust Company
-----------------------------------------------------
(Area Code and Telephone No.)
-----------------------------------------------------
-----------------------------------------------------
(Taxpayer ID No. or Social Security No.)
</TABLE>
ODD LOTS
(SEE INSTRUCTION 6 OF THE LETTER OF TRANSMITTAL)
The undersigned either (check one box):
/ / was the beneficial owner as of the close of business on October 29, 1999, 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
(i) is tendering, for the beneficial owners thereof, Shares with respect to
which it is the record owner, and (ii) believes, based upon representations
made to it by each such beneficial owner, that such beneficial owner owned
beneficially as of the close of business on October 29, 1999, an aggregate
of fewer than 100 Shares, and is tendering all of such Shares
3
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm that is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office, branch or agency in the
United States, guarantees (a) that the above named person(s) "own(s)" the Shares
tendered hereby within the meaning of Rule 14e-4 under the Securities Exchange
Act of 1934, as amended, (b) that such tender of Shares complies with
Rule 14e-4 and (c) to deliver to the Depositary the Shares tendered hereby,
together with a properly completed and duly executed Letter(s) of Transmittal
(or facsimile(s) thereof), unless an Agent's Message is utilized, and any other
required documents, all within three New York Stock Exchange trading days of the
date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the same time period herein.
Failure to do so could result in a financial loss to such Eligible Institution.
<TABLE>
<S> <C>
Name of Firm:
------------------------------------------------- -------------------------------------------------
Authorized Signature
Address: Name:
------------------------------------------------------ --------------------------------------------
Please Print
- --------------------------------------------------------------- Title:
Zip Code -------------------------------------------
Area Code & Tel. No:
------------------------------------------- Date: , 1999
-------------------------------------
</TABLE>
DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
4
<PAGE>
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281
(212) 236-3790 (call collect)
OFFER BY
WESTPOINT STEVENS INC.
TO PURCHASE FOR CASH
UP TO 3,000,000 SHARES OF ITS COMMON STOCK
October 29, 1999
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees
We have been appointed by WestPoint Stevens Inc., a Delaware corporation
(the "Company"), to act as exclusive Dealer Manager in connection with the
Company's offer to purchase for cash up to 3,000,000 shares of its common stock,
par value $.01 per share (the "Shares"), at prices specified by the Company's
stockholders, not greater than $22.00 nor less than $19.00 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated October 29, 1999 and in the related Letter of
Transmittal (which together constitute the "Offer").
The Company will determine a single per Share price (not greater than
$22.00 nor less than $19.00 per Share) that it will pay for the Shares validly
tendered pursuant to the Offer and not validly withdrawn (the "Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to purchase 3,000,000 Shares (or such lesser number as are validly
tendered and not withdrawn at prices not greater than $22.00 nor less than
$19.00 per Share) pursuant to the Offer. All stockholders whose Shares are
purchased by the Company will receive the Purchase Price for each Share
purchased in the Offer. The Company will purchase all Shares validly tendered at
prices at or below the Purchase Price and not validly withdrawn, upon the terms
and subject to the conditions set forth in the Offer to Purchase and in the
related Letter of Transmittal, including the provisions relating to "odd lot"
tenders and proration described in the Offer to Purchase.
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is subject, however, to certain conditions set forth in
Section 6 of the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase, dated October 29, 1999;
2. Letter of Transmittal for your use and for the information of your
clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents cannot be delivered to the
Depositary prior to the Expiration Date (as defined in the Offer to
Purchase);
4. Letter, dated October 29, 1999 from the Company to its stockholders;
1
<PAGE>
5. A form of letter that may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to
the Offer;
6. Return envelope addressed to The Bank of New York, the Depositary, for
your use only.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON TUESDAY, NOVEMBER 30, 1999, UNLESS THE OFFER IS EXTENDED.
The Company will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Manager, as described in the Offer to
Purchase) for soliciting tenders of Shares pursuant to the Offer. The Company
will, however, upon request, reimburse brokers, dealers, commercial banks and
trust companies for reasonable and necessary costs and expenses incurred by them
in forwarding materials to their customers. The Company will pay all stock
transfer taxes applicable to its purchase of Shares pursuant to the Offer,
subject to Instruction 9 of the Letter of Transmittal. No broker, dealer, bank,
trust company or fiduciary shall be deemed to be either our agent or the agent
of the Company, the Information Agent or the Depositary for the purposes of the
Offer.
Any questions or request for assistance should be addressed to the
Information Agent or the undersigned at the addresses and telephone numbers set
forth on the back cover of the Offer to Purchase. Requests for additional copies
of the enclosed materials should be directed to the Information Agent.
Very truly yours,
MERRILL LYNCH & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE
DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
OFFER BY
WESTPOINT STEVENS INC.
TO PURCHASE FOR CASH
UP TO 3,000,000 SHARES OF ITS COMMON STOCK
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON TUESDAY, NOVEMBER 30, 1999, UNLESS THE OFFER IS
EXTENDED
October 29, 1999
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated
October 29, 1999 (the "Offer to Purchase") and the related Letter of Transmittal
(which together constitute the "Offer") in connection with the Offer by
WestPoint Stevens Inc., a Delaware corporation (the "Company"), to purchase up
to 3,000,000 shares of its common stock, par value $.01 per share (the
"Shares"), at prices specified by the Company's stockholders, not greater than
$22.00 nor less than $19.00 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase and in the
related Letter of Transmittal.
The Company will determine a single per Share price (not greater than
$22.00 nor less than $19.00 per Share) that it will pay for the Shares validly
tendered pursuant to the Offer and not validly withdrawn (the "Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
allows it to purchase 3,000,000 Shares (or such lesser number as are validly
tendered and not validly withdrawn at prices not greater than $22.00 nor less
than $19.00 per Share) pursuant to the Offer. All stockholders whose Shares are
purchased by the Company will receive the Purchase Price for each Share
purchased in the Offer. The Company will purchase all Shares validly tendered at
prices at or below the Purchase Price and not validly withdrawn, upon the terms
and subject to the conditions of the Offer, including the provisions relating to
"odd lot" tenders and proration described in the Offer to Purchase.
We are the holder of record of Shares held for your account. As the holder
of record of your Shares, only we, pursuant to your instructions, can tender
your Shares. The Letter of Transmittal is furnished to you for your information
only and cannot be used by you to tender Shares held by us for your account.
As described in the Offer to Purchase, the Company reserves the right to
purchase more than 3,000,000 Shares. The Company will return all Shares not
purchased, including Shares not purchased as a result of proration promptly
following the expiration of the Offer, at no cost to stockholders.
We request your instructions as to whether you wish us to tender any or all
of the Shares held by us for your account and at what price, upon the terms and
subject to the conditions set forth in the Offer to Purchase and the Letter of
Transmittal.
Please note carefully the following:
1. PRICE. You may tender (offer to sell) Shares for cash at either the
price specified by you (in multiples of $0.25), not greater than $22.00 nor less
than $19.00 per Share, or the price determined by the "Dutch Auction," as
indicated in the attached instruction form.
2. EXPIRATION DATE. The Offer, the proration period and withdrawal rights
expire at 5:00 p.m., New York City time, on Tuesday, November 30, 1999, unless
the Company extends the Offer.
3. CONDITIONS. The Offer is not conditioned upon any minimum number of
Shares being tendered. The Offer is subject, however, to the conditions set
forth in Section 6 of the Offer to Purchase.
4. TRANSFER TAXES. Any stock transfer taxes applicable to the sale of
Shares to the Company pursuant to the Offer will be paid by the Company, except
as otherwise provided in Instruction 9 of the Letter of Transmittal.
5. SPECIAL TREATMENT FOR "ODD LOT" HOLDERS. If you owned beneficially as
of the close of business on October 29, 1999, an aggregate of fewer than 100
Shares and you timely instruct us to tender (offer to sell) at or below the
Purchase Price on your behalf all such Shares and check the box captioned "Odd
Lots" on the attached instruction form, all such Shares will be accepted for
purchase before proration, if any, of the purchase of other Shares properly
tendered and not withdrawn.
<PAGE>
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the instructions form
on the detachable part hereof. An envelope to return your instructions to us is
enclosed. If you authorize us to tender your Shares, we will tender all of your
Shares unless you specify otherwise on the detachable part hereof.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION OF THE OFFER. THE
OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON TUESDAY, NOVEMBER 30, 1999, UNLESS THE COMPANY EXTENDS THE OFFER.
As described in the Offer to Purchase, if fewer than all Shares validly
tendered at or below the Purchase Price and not validly withdrawn prior to the
expiration of the offer are to be purchased by the Company, the Company will
purchase up to 3,000,000 Shares (or such higher number as it may, in its sole
discretion, elect) in the following order of priority:
(a) all "odd lot" Shares tendered at or below the Purchase Price and
not withdrawn prior to the expiration of the Offer by any stockholder who
owned beneficially as of the close of business on October 29, 1999 an
aggregate of fewer than 100 Shares, and who validly tenders all of such
Shares (partial tenders will not qualify for this preference); and
(b) then, after purchase of all of the foregoing Shares, all other
Shares validly tendered at or below the Purchase Price and not withdrawn
prior to the expiration of the Offer, on a pro rata basis, if necessary
(with appropriate adjustments to avoid purchases of fractional Shares).
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction. In those jurisdictions the laws of which require that the Offer be
made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Company by Merrill Lynch, Pierce, Fenner & Smith Incorporated or
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
OFFER TO PURCHASE FOR CASH
UP TO 3,000,000 SHARES OF COMMON STOCK
OF
WESTPOINT STEVENS INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated October 29, 1999, and the related Letter of Transmittal
(which together constitute the "Offer"), in connection with the Offer by
WestPoint Stevens Inc. (the "Company") to purchase for cash up to 3,000,000
shares of its common stock, par value $.01 per share (the "Shares"), at a price
not greater than $22.00 nor less than $19.00 per Share, net to the undersigned
in cash.
The Company will determine a single per Share price (not greater than
$22.00 nor less than $19.00 per Share) that it will pay for the Shares validly
tendered pursuant to the Offer and not withdrawn (the "Purchase Price") taking
into account the number of Shares so tendered and the prices specified validly
by tendering stockholders. The Company will select the lowest Purchase Price
that will allow it to purchase 3,000,000 Shares (or such lesser number as are
validly tendered at prices not greater than $22.00 nor less than $19.00 per
Share) pursuant to the Offer. All stockholders whose Shares are purchased by the
Company will receive the Purchase Price for each Share purchased in the Offer.
The undersigned hereby instruct(s) you to tender to the Company the number
of Shares indicated below or, if no number is indicated, all Shares held by you
for the account of the undersigned, upon the terms and subject to the conditions
set forth in the Offer to Purchase and the related Letter of Transmittal.
/ / By checking this box, all Shares held by us for your account, excluding
fractional Shares, will be tendered. If fewer than all Shares are to be
tendered, please check the box and indicate below the aggregate number
of Shares to be tendered by us.
____________________________________ Shares*
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
ODD LOTS
/ / By checking this box, the undersigned represents that the undersigned
owned beneficially as of the close of business on October 29, 1999, an
aggregate of fewer than 100 Shares and is tendering all of such Shares.
My indication as to whether I wish to tender my Shares at the price
determined by "Dutch Auction" or at the price I specify is indicated
below.
3
<PAGE>
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
------------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF
NO BOX IS CHECKED, THERE IS NO VALID
TENDER OF SHARES.
------------------
SHARES TENDERED AT PRICE DETERMINED BY DUTCH AUCTION
/ / The undersigned wants to maximize the chance of having the Company
purchase all of the Shares that the undersigned is tendering (subject to
the possibility of proration). Accordingly, by checking this one box
instead of one of the price boxes below, the undersigned hereby tenders
Shares and is willing to accept the Purchase Price resulting from the
"Dutch Auction" process. This action will result in receiving a price
per Share of as low as $19.00 or as high as $22.00.
-- OR --
SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER
By checking ONE of the boxes below instead of the box above, the undersigned
hereby tenders Shares at the price checked. This action could result in none of
the Shares being purchased if the Purchase Price for the Shares is less than the
price checked. If the Purchase Price for the Shares is equal to or greater than
the price checked, then the Shares purchased by the Company will be purchased at
the Purchase Price. A stockholder who desires to tender Shares at more than one
price must complete a separate instruction form for each price at which Shares
are tendered. The same Shares cannot be tendered at more than one price (unless
those Shares were previously tendered and withdrawn).
Price (in dollars) per Share at which Shares are being tendered:
<TABLE>
<S> <C> <C> <C> <C>
$19.00 / / $19.25 / / $19.50 / / $19.75 / / $20.00 / /
$20.25 / / $20.50 / / $20.75 / / $21.00 / / $21.25 / /
$21.50 / / $21.75 / / $22.00 / /
</TABLE>
(check only one box)
SIGN HERE
________________________________________________________________________________
________________________________________________________________________________
SIGNATURES
Dated: _________________________________________________________________________
_______________________________________________________________
, 1999
________________________________________________________________________________
Name of Stockholders:___________________________________________________________
________________________________________________________________________________
(ADDRESS)
________________________________________________________________________________
________________________________________________________________________________
(ZIP CODE)
________________________________________________________________________________
________________________________________________________________________________
(AREA CODE AND TELEPHONE NO.)
________________________________________________________________________________
________________________________________________________________________________
(TAXPAYER ID NO. OR SOCIAL SECURITY NO.)
THIS FORM MUST BE RETURNED TO THE BROKERAGE FIRM MAINTAINING YOUR ACCOUNT.
4
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payor.
- --------------------------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the account or,
(joint account) if combined funds, the first
individual on the account(1)
3. Husband and wife The actual owner of the account or,
(joint account) if joint funds, either person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor The adult or, if the minor is the
(joint account) only contributor, the minor(1)
6. Account in the name of guardian or The ward, minor, or incompetent
committee for a designated ward, person(3)
minor, or incompetent person
7. a. The usual revocable savings trust The grantor-trustee(1)
account (grantor is also trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust under
State law
8. Sole proprietorship account The owner(4)
- ----------------------------------------------------------------
- --------------------------------------------------------------------------------
GIVE THE EMPLOYER IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------------------------------
9. A valid trust, estate, or pension The legal entity (Do not furnish the
trust identifying number of the personal
representative or trustee unless the
legal entity itself is not
designated in the account title)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name The partnership
of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district or
prison) that receives agricultural
program payments
- ----------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), an individual retirement
plan or a custodial account under section 403(b)(7).
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or any
agency, or instrumentality thereof.
o An international organization or any agency, or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of 1940.
o A foreign central bank issue.
PAYMENTS NOT GENERALLY SUBJECT TO BACKUP WITHHOLDING
Payment of dividends and patronage dividends not generally subject to backup
withholding include the following:
o Payments to nonresident aliens subject to withholding under section 1441.
o Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
o Payments of patronage dividends where the amount renewed is not paid in money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
o Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payor's trade or business and you have not provided your
correct taxpayer identification number to the payor.
o Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
o Payments described in section 6049(b)(5) to nonresident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
EXEMPT PAYEE DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYOR, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYOR. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments, other than interest, dividends and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 604lA(a),
6045 and 6050A.
PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend, interest,
or other payments to give taxpayer identification numbers to payors who must
report the payments to IRS. IRS uses the numbers for identification purposes.
Payors must be given the numbers whether or not recipients are required to file
tax returns. Payors must generally withhold 31% of taxable interest, dividend,
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payor. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payor, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDER.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
[LOGO]
[WESTPOINT STEVEN LETTERHEAD]
OCTOBER 29, 1999
To Our Stockholders:
WestPoint Stevens Inc. ("WestPoint") is offering to purchase up to
3,000,000 shares of its Common Stock (the "Shares"), representing approximately
5.6% of the currently outstanding Shares, from existing stockholders. WestPoint
is conducting the tender offer through a procedure commonly referred to as a
"Dutch Auction." This allows you to select the price within the specified price
range (not greater than $22.00 nor less than $19.00 per Share) at which you are
interested in selling your Shares to WestPoint. At the conclusion of the offer
and receipt of tenders, WestPoint will determine the lowest price within the
aforementioned price range that will enable it to purchase up to 3,000,000
Shares. The same purchase price will be paid for all Shares purchased in the
offer.
The offer will expire at 5:00 p.m., New York City time, on Tuesday,
November 30, 1999, unless extended. Tenders must be received by The Bank of New
York, the Depositary, prior to the expiration of the offer.
As you may be aware, as part of the offer, qualifying Odd Lot Holders (i.e.
stockholders beneficially owning in the aggregate fewer than 100 Shares) who
validly tender all of their Shares prior to the Expiration Date (as defined in
Section 1 of the enclosed Offer to Purchase) and who do not withdraw any of
their Shares in accordance with the terms of the offer will have their Shares
accepted before proration of the remaining Shares (the "Odd Lot Preference") if
proration is required. Stockholders who wish to participate in the offer and
receive the Odd Lot Preference must tender their entire holdings. Partial
tenders will not receive Odd Lot Preference.
On October 28, 1999, the last trading day prior to the commencement of the
offer, the closing price per Share on the New York Stock Exchange was $18 1/16.
Any stockholder whose Shares are purchased in the offer will receive the
purchase price in cash and will not incur the usual transaction costs associated
with open market sales. Any Odd Lot Holders whose Shares are purchased pursuant
to the offer will avoid the applicable odd lot discounts payable on sales of odd
lots on the securities exchanges.
THE BOARD OF DIRECTORS OF WESTPOINT HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, NEITHER WESTPOINT NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION
AS TO WHETHER ANY STOCKHOLDER SHOULD TENDER ANY OR ALL OF SUCH STOCKHOLDER'S
SHARES PURSUANT TO THE OFFER OR AS TO THE PRICE OF ANY TENDER. EACH STOCKHOLDER
MUST MAKE SUCH STOCKHOLDER'S OWN DECISION WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER OR AT WHAT PRICE. WESTPOINT HAS BEEN ADVISED THAT NONE
OF ITS DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO TENDER SHARES PURSUANT TO THE
OFFER.
We urge stockholders to carefully and immediately review the Offer to
Purchase and the other materials enclosed herewith. If you have any questions or
need assistance, please call Merrill Lynch, the Dealer Manager, at
(212) 236-3790 (call collect) or Innisfree M&A Incorporated, the Information
Agent, toll-free, nationwide, at (888) 750-5834. If you require additional
copies of the Offer to Purchase, the Letter of Transmittal or the Notice of
Guaranteed Delivery, please call the Information Agent. They will be glad to
help you.
Sincerely,
/s/ Holcombe T. Green, Jr.
---------------------------
Holcombe T. Green, Jr.
Chairman of the Board and
Chief Executive Officer
WESTPOINT STEVENS INC. 1185 AVENUE OF THE AMERICAS NEW YORK, NY 10036
TEL: 212 930 2000
<PAGE>
WESTPOINT STEVENS INC.
[LOGO]
Contact: Morgan M. Schuessler
Executive V.P. Finance and CFO
706/645-4230
WESTPOINT STEVENS ANNOUNCES DUTCH AUCTION TENDER OFFER TO
REPURCHASE UP TO 3.0 MILLION SHARES OF ITS COMMON STOCK
WEST POINT, Georgia (October 27, 1999)--WestPoint Stevens Inc. (NYSE:WXS) today
announced that its Board of Directors has authorized a "Dutch Auction" tender
offer for up to 3,000,000 shares of its common stock, representing approximately
6% of its currently outstanding shares. Under terms of the offer, the Company
will invite shareholders to tender their shares at prices specified by the
tendering shareholders within an expected range of $19.00 to $22.00 per share.
The tender offer is expected to begin October 29, 1999, or as soon as
possible thereafter, and will expire at 12:00 Midnight New York City time,
twenty business days thereafter, unless extended by the Company.
Based upon the number of shares tendered and the prices specified by the
tendering shareholders, WestPoint Stevens will select a single per-share
purchase price within the expected price range to be paid for shares which have
been tendered at or below the selected price. If the offer is over-subscribed,
shares will be purchased first from shareholders owning fewer than 100 shares
and tendering all of such shares at or below the purchase price determined by
the Company and then from all other shares tendered at or below such purchase
price on a pro rata basis. The Company reserves the right to purchase more than
3,000,000 shares. The tender offer will not be conditioned on any minimum number
of shares being tendered.
Neither the Company nor the Board of Directors of the Company is making any
recommendation to shareholders as to whether they should tender any shares
pursuant to the offer. None of the directors or executive officers of the
Company intends to tender shares pursuant to the offer. Merrill Lynch will act
as dealer-manager. Innisfree M&A Incorporated will act as information agent.
The Company expects to use funds available under its revolving credit
facility to finance the share repurchase.
Holcolmbe T. Green, Chairman and Chief Executive Officer, remarked, "The
Board of Directors believes that the Company's financial position, outlook and
current market conditions, make this an attractive time to repurchase a portion
of the outstanding shares. In our view, the offer represents an acceleration of
the Company's existing share repurchase program."
WestPoint Stevens Inc. is a home fashions consumer products marketing
company with a comprehensive line of Company-owned and licensed brands for the
bedroom and bathroom. The Company is vertically integrated and is the nation's
leading manufacturer and marketer of bed linens, towels, comforters and other
accessories that are sold in retail outlets throughout the world. WestPoint
Stevens' home fashions and consumer products are marketed under the well-known
brand names of GRAND PATRICIAN, MARTEX, UTICA, STEVENS, LADY PEPPERELL and
VELLUX, and under licensed brands including RALPH LAUREN HOME COLLECTION,
SANDERSON, STAR WARS, ESPRIT, JOE BOXER and SERTA PERFECT SLEEPER. WestPoint
Stevens can be found on the World Wide Web at www.westpointstevens.com
This press release shall not constitute an offer to sell nor the
solicitation of an offer to buy, nor shall there be any sales of these
securities in any states in which such offer, solicitation or sale would be
unlawful prior to the filing of Schedule 13E-4 or qualification under the
securities laws of any such state.
Safe Harbor Statement: Except for historical information contained herein, the
matters set forth in this press release are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and are
subject to the safe harbor provisions of that Act. The forward-looking
statements set forth above involve a number of risks and uncertainties that
could cause actual results to differ materially from any such statements. These
risks and uncertainties, and assumptions concerning the Company's future
operations and performance, could prove inaccurate and, therefore, there can be
no assurance that the forward-looking statements will prove to be accurate.
<PAGE>
[LETTERHEAD OF WESTPOINT STEVENS INC.]
Contact: Morgan M. Schuessler
Executive V.P. Finance and CFO
706/645-4230
WESTPOINT STEVENS COMMENCES DUTCH AUCTION TENDER OFFER
FOR UP TO 3,000,000 SHARES OF COMMON STOCK
WEST POINT, Georgia (October 29, 1999) - WestPoint Stevens Inc. (NYSE:WXS) today
announced that it has commenced its previously announced tender offer for up to
3,000,000 shares of its common stock, representing approximately 6% of the
currently outstanding shares of WestPoint. The offer is being made by means of a
"Dutch Auction" in which WestPoint stockholders have the opportunity to sell a
portion or all of their shares to WestPoint at a price of not greater than
$22.00 nor less than $19.00 per share.
The offer will expire at 5:00 P.M. New York City time, on Tuesday,
November 30, 1999, unless extended by WestPoint.
Based upon the number of shares tendered and the prices specified by the
tendering stockholders, WestPoint will select a single per-share purchase price
within the stated price range to be paid for shares which have been tendered at
or below the purchase price. If the offer is oversubscribed, shares will be
purchased first from stockholders owning fewer than 100 shares and tendering all
of such shares at or below the purchase price determined by WestPoint and then
from all other shares tendered at or below such purchase price on a pro rata
basis. WestPoint reserves the right to purchase more than 3,000,000 shares. The
tender offer will not be conditioned on any minimum number of shares being
tendered, but is subject to certain conditions.
Neither the Company nor the Board of Directors of the Company is making
any recommendation to shareholders as to whether they should tender any shares
pursuant to the offer. None of the directors or executive officers of the
Company intends to tender shares pursuant to the offer.
-MORE-
<PAGE>
WXS Commences Dutch Auction
Page 2
October 29, 1999
WestPoint's common stock closed at $17-15/16 on the New York Stock
Exchange on October 26, 1999, the last full trading day on the NYSE prior to the
announcement of the offer. The last reported sale price of the common stock on
the NYSE on October 28, 1999, the last full trading day preceding commencement
of the offer was, $18-1/16 per Share.
WestPoint Stevens Inc. is a home fashions consumer products marketing
company with a comprehensive line of Company-owned and licensed brands for the
bedroom and bathroom. The Company is vertically integrated and is the nation's
leading manufacturer and marketer of bed linens, towels, comforters and other
accessories that are sold in retail outlets throughout the world. WestPoint
Stevens' home fashions and consumer products are marketed under the well-known
brand names of GRAND PATRICIAN, MARTEX, UTICA, STEVENS, LADY PEPPERELL and
VELLUX, and under licensed brands including RALPH LAUREN HOME COLLECTION.
SANDERSON, STAR WARS, ESPRIT, JOE BOXER and SERTA PERFECT SLEEPER. WestPoint
Stevens can be found on the World Wide Web at www.westpointstevens.com
This news release is neither an offer to purchase nor a solicitation of
offer to sell common stock. The offer is being made only by means of an Offer to
Purchase and related documents, copies of which will be mailed to all
stockholders and filed with the Securities and Exchange Commission, and may also
be obtained from the information agent, Innisfree M&A Incorporated. WestPoint
has retained Merrill Lynch to act as dealer manager for the offer.
Safe Harbor Statement: Except for historical information contained
herein, the matters set forth in this press release are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and are subject to the safe harbor provisions of that Act. The
forward-looking statements set forth above involve a number of risks and
uncertainties that could cause actual results to differ materially from any such
statements. These risks and uncertainties, and assumptions concerning the
Company operations and performance, could prove inaccurate and, therefore, there
can be no at assurance that the forward-looking statements will prove to be
accurate.
-END-
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated
October 29, 1999 and the related Letter of Transmittal and is not
being made to, nor will tenders be accepted from or on behalf
of, holders of Shares in any jurisdiction in which the
making of the Offer or acceptance thereof would not be
in compliance with the laws of such jurisdiction. In
those jurisdictions whose laws require that the
Offer be made by a licensed broker or dealer,
the Offer shall be deemed to be made on
behalf of the Company by Merrill Lynch,
Pierce, Fenner & Smith Incorporated or
one or more registered brokers or
dealers licensed under the laws of
such jurisdictions.
Notice of Offer to Purchase for Cash
by
WESTPOINT STEVENS INC.
Up to 3,000,000 Shares of its Common Stock
at a Purchase Price Not Greater than $22.00
Nor Less than $19.00 Per Share
WestPoint Stevens Inc., a Delaware corporation (the "Company"), invites
holders of its common stock, par value $.01 per share (the "Shares"), to tender
their Shares at prices specified by such stockholders, not greater than $22.00
nor less than $19.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated October 29,
1999 (the "Offer to Purchase") and the related Letter of Transmittal (which
together constitute the "Offer").
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON TUESDAY,
NOVEMBER 30, 1999 ("THE EXPIRATION DATE"), UNLESS THE
OFFER IS EXTENDED.
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is subject, however, to certain conditions. See Section 6 of
the Offer to Purchase for a description of the conditions to the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION AS TO WHETHER ANY STOCKHOLDER SHOULD TENDER ANY OR ALL OF SUCH
STOCKHOLDER'S SHARES PURSUANT TO THE OFFER. EACH STOCKHOLDER MUST MAKE SUCH
STOCKHOLDER'S OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES
TO TENDER AND AT WHAT PRICE. THE COMPANY HAS BEEN ADVISED THAT NONE OF ITS
DIRECTORS OR EXECUTIVE OFFICERS INTENDS TO TENDER SHARES PURSUANT TO THE OFFER.
The Company will determine a single per Share price (not greater than
$22.00 nor less than $19.00 per Share) that it will pay for the Shares validly
tendered pursuant to the Offer and not validly withdrawn (the "Purchase Price"),
taking into account the number of Shares so tendered and the prices specified by
tendering stockholders. The Company will select the lowest Purchase Price that
will allow it to purchase 3,000,000 Shares (or such lesser number of Shares as
are validly tendered at prices not greater than $22.00 nor less than $19.00 per
Share) pursuant to the Offer. All stockholders whose Shares are purchased by
the Company will receive the Purchase Price for each Share purchased in the
Offer. Upon the terms and subject to the conditions of the Offer, including the
provisions thereof relating to proration and "odd lot" tenders, as soon as
practicable after the Expiration Date, the Company will purchase all Shares
validly tendered at prices at or below the Purchase Price and not validly
withdrawn prior to the Expiration Date.
Upon the terms and subject to the conditions of the Offer, if more than
3,000,000 Shares have been validly tendered and not validly withdrawn prior to
the Expiration Date, the Company will purchase Shares in the following order of
priority:
(a) all Shares validly tendered at or below the Purchase Price and not
validly withdrawn prior to the Expiration Date by any stockholder who owned
beneficially an aggregate of fewer than 100 Shares as of the close of business
on October 29, 1999, and who validly tenders all of such Shares (partial tenders
will not qualify for this preference); and
(b) after purchase of all of the foregoing Shares, all other Shares validly
tendered at or below the Purchase Price and not validly withdrawn prior to the
Expiration Date on a pro rata basis, if necessary (with appropriate adjustments
to avoid purchases of fractional Shares).
The Company expressly reserves the right, in its sole discretion, to (i)
extend the period of time during which the Offer is open by giving oral or
written notice of such extension to the Depositary (as defined below) or (ii)
amend the Offer in any respect by making a public announcement of such
amendment.
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after 12:00 Midnight, December 28, 1999 unless
theretofore accepted for payment as provided in the Offer to Purchase. To be
effective, a written, telegraphic or facsimile transmission notice of withdrawal
must be timely received by the Depositary at one of its addresses set forth on
the back cover of the Offer to Purchase and must specify the name of the person
who tendered the Shares to be withdrawn and the number of Shares to be withdrawn
and the name of the registered holder of the Shares, if different from that of
the person who tendered such Shares. If the Shares to be withdrawn have been
delivered to the Depositary, a signed notice of withdrawal (with signatures
guaranteed by an "Eligible Institution" (as defined in the Offer to Purchase),
except in the case of Shares tendered by an Eligible Institution) must be
submitted prior to the release of such Shares. In addition, such notice must
specify, in the case of Shares tendered by delivery of certificates, the name
of the registered holder (if different from that of the tendering stockholder)
and the serial numbers shown on the particular certificates evidencing the
Shares to be withdrawn or, in the case of Shares tendered by book-entry
transfer, the name and number of the account at the Book-Entry Transfer Facility
(as defined in the Offer to Purchase) to be credited with the withdrawn Shares.
Withdrawals may not be rescinded and Shares validly withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. However, withdrawn Shares
may be retendered by again following one of the procedures described in Section
3 of the Offer to Purchase at any time prior to the Expiration Date.
For purposes of the Offer, the Company will be deemed to have accepted for
payment, subject to the proration and "odd lot" provisions of the Offer, Shares
that are validly tendered and not withdrawn as, if and when it gives oral or
written notice to The Bank of New York (the "Depositary") of its acceptance for
payment of such Shares.
The Board of Directors believes that the Company's financial position,
outlook and current market conditions make this an attractive time to
repurchase a portion of the outstanding Shares. In the view of the Board of
Directors, the Offer represents an acceleration of the Company's existing share
repurchase program.
The Offer to Purchase and Letter of Transmittal contain important
information which should be read before any decision is made with respect to the
Offer.
The information required to be disclosed by Rule 13e-4(d)(1) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended, is
contained in the Offer to Purchase and is incorporated herein by reference.
The Offer to Purchase and the related Letter of Transmittal are being
mailed to record holders of Shares of the Company and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
Requests for copies of the Offer to Purchase and the related Letter of
Transmittal and other tender offer materials may be directed to the Information
Agent as set forth below, and copies will be furnished promptly at the Company's
expense.
The Information Agent for the Offer is:
[LOGO]
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
All Others Call Toll-Free: (888) 750-5834
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
North Tower
New York, New York 10281
(212) 236-3790 (Call Collect)
October 29, 1999
