<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 15, 1997
REGISTRATION NO. 333-36213
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
------------------------
JONES APPAREL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
PENNSYLVANIA 06-0935166
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
250 RITTENHOUSE CIRCLE
KEYSTONE PARK
BRISTOL, PA 19007
(215) 785-4000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
SIDNEY KIMMEL
250 RITTENHOUSE CIRCLE
KEYSTONE PARK
BRISTOL, PA 19007
(215) 785-4000
(Name, address, including zip code and telephone number,
including area code, of agent for service)
------------------------------
COPIES TO:
<TABLE>
<CAPTION>
<S> <C>
BRIAN BRODRICK, ESQ.
PHILLIPS NIZER BENJAMIN KRIM & IRA M. DANSKY, ESQ. WILLIAM J. GRANT, JR., ESQ.
BALLON LLP JONES APPAREL GROUP, INC. WILLKIE FARR & GALLAGHER
666 FIFTH AVENUE 1411 BROADWAY 153 EAST 53RD STREET
NEW YORK, NEW YORK 10103-0084 NEW YORK, NEW YORK 10018 NEW YORK, NEW YORK 10022
(212) 977-9700 (212) 536-9526 (212) 821-8000
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 15, 1997
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
PROSPECTUS
4,500,000 SHARES
JONES APPAREL GROUP, INC.
COMMON STOCK
----------------
All of the 4,500,000 shares of Common Stock of the Company offered hereby
are being sold by a Selling Shareholder of the Company. The Company is not
selling shares of Common Stock in the Offerings and will not receive any of the
proceeds from the sale of shares of Common Stock offered hereby. Of the
4,500,000 shares of Common Stock being offered hereby, 3,600,000 shares are
being offered for sale initially in the United States and Canada by the U.S.
Underwriters and 900,000 shares are being offered for sale initially in a
concurrent offering outside the United States and Canada by the International
Managers. The initial public offering price and the aggregate underwriting
discount per share will be identical for both Offerings. See "Underwriting."
The Common Stock is listed on the New York Stock Exchange under the symbol
"JNY." On September 29, 1997, the last sale price of the Common Stock as
reported on the New York Stock Exchange was $53 1/16 per share. See "Price Range
of Common Stock."
SEE "RISK FACTORS," BEGINNING ON PAGE 8, FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING SELLING
PUBLIC DISCOUNT(1) SHAREHOLDER(2)
<S> <C> <C> <C>
Per Share................................................ $ $ $
Total(3)................................................. $ $ $
</TABLE>
(1) The Company and the Selling Shareholder have agreed to indemnify the several
Underwriters against certain liabilities, including certain liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting expenses payable by the Selling Shareholder estimated at
$340,000.
(3) The Selling Shareholder has granted the U.S. Underwriters and the
International Managers options to purchase up to an additional 540,000
shares and 135,000 shares of Common Stock, respectively, in each case
exercisable within 30 days after the date hereof, solely to cover
over-allotments, if any. If such options are exercised in full, the total
Price to Public, Underwriting Discount and Proceeds to Selling Shareholder
will be $ , $ and $ , respectively. See
"Underwriting."
------------------------
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made in New York, New York on or
about , 1997.
------------------------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
------------------------
The date of this Prospectus is , 1997.
<PAGE>
[PICTURES OF CERTAIN OF THE COMPANY'S APPAREL PRODUCTS]
Certain persons participating in the Offerings may engage in transactions
that stabilize, maintain or otherwise affect the price of the Common Stock. Such
transactions may include stabilizing, the purchase of Common Stock to cover
syndicate short positions and the imposition of penalty bids. For a description
of these activities, see "Underwriting."
2
<PAGE>
THE COMPANY
Jones Apparel Group, Inc. (the "Company") is a leading designer and marketer
of better priced women's sportswear, suits and dresses. The Company has pursued
a multi-brand strategy marketing its products under several nationally known
brands, including JONES NEW YORK, EVAN-PICONE and RENA ROWAN, and the LAUREN BY
RALPH LAUREN brand licensed from Polo Ralph Lauren Corporation. Each of the
Company's brands is positioned by style and price point to address a distinct
segment of the women's better priced market. In addition, the Company recently
announced the formation of a JONES NEW YORK men's sportswear division with
products to be shipped in the second half of 1998. The Company has leveraged the
strong consumer recognition of its brand names through 35 licenses for a range
of products including footwear, outerwear, men's suits and accessories under the
JONES NEW YORK brand name and 18 licenses under the EVAN-PICONE brand name with
select manufacturers of women's and men's apparel and accessories.
The Company has grown significantly over the last five years, with net sales
increasing from $436.6 million in 1992 to over $1.0 billion in 1996,
representing compound annual growth of 23.7%. During this period, the Company's
operating income increased from $67.6 million to $130.3 million, representing
compound annual growth of 17.8%, and net income increased from $41.3 million to
$80.9 million, representing compound annual growth of 18.3%. For the first half
of 1997, net sales and earnings per share increased to $581 million and $0.90,
representing a 28.1% and 42.9% increase, respectively, over the comparable
period of 1996.
In July 1996, the Company commenced shipping its first collection of women's
career and casual sportswear under the LAUREN BY RALPH LAUREN brand in the
United States under an exclusive licensing alliance. The Company's LAUREN BY
RALPH LAUREN lifestyle collection offers the classic styling, concepts and
elegance associated with internationally known designer Ralph Lauren to a new
group of consumers in the "better" market. This product line was initially
shipped to 275 department store concept shops and has expanded to 680 concept
shops as of August 1997. For Fall 1997, the Company added a petite collection
which is being offered in an additional 270 concept shops within petite
departments. The Company also recently expanded this lifestyle collection
through the addition of coats and suits.
In addition to its nationally-recognized brand names, the Company believes
it enjoys a number of competitive strengths. The Company believes that its
competitive advantages include its ability to design, merchandise, source and
distribute superior products at price points within the better market. Through
the combination of its worldwide network of quality contract manufacturers and
highly efficient information and distribution systems, the Company has developed
a reputation among retailers for customer service. The Company also believes it
has benefitted from a trend among its major retail accounts to concentrate their
apparel buying among a narrowing group of established brand name vendors. As one
of the primary apparel resources for many of its retail accounts, the Company is
able to influence the mix and timing of orders. As a result, the Company is able
to more effectively market complete lines of sportswear and minimize excess
inventory.
The Company seeks to capitalize on its competitive advantages through a
growth strategy that focuses on five principal areas: (i) continuing to expand
the LAUREN BY RALPH LAUREN lines by adding new store locations, increasing the
amount of retail space devoted to this label in existing store locations and
introducing additional product classifications; (ii) continuing to expand the
JONES NEW YORK brand by increasing the amount of retail space devoted to this
label in existing store locations and by leveraging its brand name recognition
to introduce new product lines such as the recently announced JONES NEW YORK
men's sportswear line; (iii) continuing to expand the RENA ROWAN and EVAN-PICONE
brands by adding new store locations and increasing the amount of retail space
devoted to these brands in existing store locations; (iv) seeking new
opportunities to license its brand names to increase the market presence and
enhance the consumer awareness of its brands, such as the recent licenses for
women's swimwear and men's and women's watches; and (v) selectively pursuing
acquisitions to provide new brands, products or channels of distribution.
3
<PAGE>
The Company distributes its products through approximately 1,550 customers,
including department stores, specialty retailer accounts and direct catalog
companies throughout the United States and Canada, representing 7,700 locations.
In addition, as of September 1, 1997, the Company operated a total of 215
factory outlet stores and five full price stores.
The Company was incorporated in Pennsylvania in 1975. The Company's
executive offices are located at 250 Rittenhouse Circle, Keystone Park, Bristol,
Pennsylvania 19007.
RECENT DEVELOPMENTS
On September 30, 1997 the Company announced that revenues for its third
quarter ended September 28, 1997 will be in the range of $440 million to $450
million. Earnings per share for the quarter should fall in a range of $.86 to
$.88, as compared to $.58 per share in the third quarter of 1996. In addition,
the Company's order backlog at September 28, 1997 is 49% ahead of the same point
in 1996. The Company's growth has been fueled by growth in its JONES NEW YORK
brand, as well as stronger than anticipated growth in the LAUREN BY RALPH LAUREN
brand. Based on the current order backlog, the Company now anticipates that
LAUREN BY RALPH LAUREN sales will exceed $250 million for 1997.
4
<PAGE>
THE OFFERINGS
The offering of 3,600,000 shares of Common Stock being offered in the United
States and Canada (the "U.S. Offering") and the offering of 900,000 shares of
Common Stock being offered outside the United States and Canada (the
"International Offering") are collectively referred to herein as the
"Offerings."
<TABLE>
<S> <C>
Common Stock to be offered by the Selling
Shareholder(1)............................. 4,500,000 shares
Common Stock outstanding before and after the
Offerings(2)............................... 51,699,806 shares
Use of Proceeds.............................. The Company will not receive any of the
proceeds from the Offerings.
New York Stock Exchange Symbol............... JNY
</TABLE>
- ------------------------
(1) Assumes the Underwriters' over-allotment options are not exercised.
(2) Excludes an aggregate of (i) 3,806,541 shares of Common Stock issuable upon
exercise of outstanding employee stock options as of June 29, 1997, and (ii)
2,692,734 shares of Common Stock reserved as of June 29, 1997 for issuance
upon exercise of stock options which may be granted under the Company's
stock option plans.
5
<PAGE>
SELECTED FINANCIAL INFORMATION
The following financial information is qualified by reference to, and should
be read in conjunction with, the Company's Consolidated Financial Statements and
the Notes thereto, and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 and the Company's
quarterly report on Form 10-Q for the fiscal quarter ended June 29, 1997
incorporated by reference in this Prospectus. The selected consolidated
financial information for each of the five years in the period ended December
31, 1996 is derived from the Company's audited Consolidated Financial Statements
for the five fiscal years ended December 31, 1996. The selected consolidated
financial information as of June 29, 1997 and June 30, 1996 and the periods
ended June 29, 1997 and June 30, 1996 is derived from financial statements that
are unaudited but which, in the opinion of management, include all adjustments,
consisting only of normal recurring accruals, necessary for a fair presentation
of financial condition and the results of operations. The results for interim
periods may not be indicative of results for the full fiscal year.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED
----------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
JUNE 30, JUNE 29,
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA
Net sales.................................... $ 436,572 $ 541,152 $ 633,257 $ 776,365 $1,021,042 $ 453,626 $ 580,978
Licensing income(1).......................... 1,564 4,907 8,487 10,314 13,036 5,235 6,766
--------- --------- --------- --------- --------- --------- ---------
Total revenues............................... 438,136 546,059 641,744 786,679 1,034,078 458,861 587,744
Cost of goods sold........................... 285,844 363,742 438,572 546,413 717,250 319,800 393,426
--------- --------- --------- --------- --------- --------- ---------
Gross profit(2).............................. 152,292 182,317 203,169 240,266 316,828 139,061 194,318
Selling, general and administrative
expenses................................... 84,740 103,392 115,307 139,135 186,572 84,874 115,729
--------- --------- --------- --------- --------- --------- ---------
Operating income............................. 67,552 78,925 87,862 101,131 130,256 54,187 78,589
Interest expense............................. 1,156 716 1,212 1,908 3,040 1,249 1,145
Interest income.............................. (221) (810) (695) (445) (547) (265) (516)
--------- --------- --------- --------- --------- --------- ---------
Income before provision for income taxes..... 66,617 79,019 87,345 99,668 127,763 53,203 77,960
Provision for income taxes................... 25,314 30,660 32,425 36,183 46,889 19,526 29,141
--------- --------- --------- --------- --------- --------- ---------
Income before cumulative effect of change
in accounting principle.................... 41,303 48,359 54,920 63,485 80,874 33,677 48,819
Cumulative effect on prior years of change
in accounting for income taxes(3).......... -- 1,376 -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income................................... $ 41,303 $ 49,735 $ 54,920 $ 63,485 $ 80,874 $ 33,677 $ 48,819
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
PER SHARE DATA(4)
Earnings per share--primary
Income before cumulative effect of change
in accounting principle.................. $0.79 $0.92 $1.04 $1.20 $1.51 $0.63 $0.90
Cumulative effect on prior years of change
in accounting for income taxes(3)........ -- $0.03 -- -- -- -- --
Net income................................. $0.79 $0.95 $1.04 $1.20 $1.51 $0.63 $0.90
Earnings per share--fully diluted
Income before cumulative effect of change
in accounting principle.................. $0.79 $0.92 $1.04 $1.19 $1.50 $0.63 $0.90
Cumulative effect on prior years of change
in accounting for income taxes(3)........ -- $0.03 -- -- -- -- --
Net income................................. $0.79 $0.95 $1.04 $1.19 $1.50 $0.63 $0.90
Weighted average number of common shares
and share equivalents outstanding
Primary.................................... 52,040 52,365 52,924 53,046 53,665 53,749 53,979
Fully diluted.............................. 52,379 52,413 52,925 53,458 54,077 53,844 54,250
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
----------------------------------------------------- AT JUNE 30, AT JUNE 29,
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Working capital................................ $ 122,376 $ 159,175 $ 204,221 $ 260,853 $ 293,970 $ 285,444 $ 328,229
Total assets................................... 184,639 266,594 318,286 400,959 488,109 474,712 568,693
Short-term debt, including current portion
of capital lease obligations................. 1,131 1,722 1,859 2,327 3,067 2,890 3,655
Long-term debt, including capital lease
obligations.................................. 4,783 9,545 8,029 10,151 12,141 13,401 19,927
Stockholders' equity........................... 134,791 189,120 248,678 314,975 376,729 345,573 421,690
</TABLE>
FOOTNOTES ON FOLLOWING PAGE
6
<PAGE>
FOOTNOTES FROM PRIOR PAGE
(1) Represents license fees received by the Company (net of related expenses).
(2) Historically, the Company had included licensing income as a separate line
item in operating income. In accordance with current industry practice, the
Company has included this amount in total revenues and gross profit. All
periods presented reflect this reclassification of licensing income.
(3) For the year ended December 31, 1993, the Company recorded a cumulative
effect of a change in accounting principle for income taxes as a result of
the adoption of SFAS 109, which increased net income by $1,376,000.
(4) On July 30, 1996, the Company's Board of Directors approved a two-for-one
stock split of the Company's Common Stock in the form of a 100% stock
dividend for shareholders of record as of September 12, 1996. Concurrently,
the number of authorized shares of Common Stock was increased to
100,000,000. On October 2, 1996, a total of 26,744,580 shares of Common
Stock were issued in connection with the split. The stated par value of each
share remained at $0.01. All share and per share amounts have been restated
to retroactively reflect the stock split.
7
<PAGE>
RISK FACTORS
PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON STOCK OFFERED HEREBY SHOULD
CAREFULLY CONSIDER ALL OF THE INFORMATION SET FORTH IN THIS PROSPECTUS AND THE
DOCUMENTS INCORPORATED HEREIN BY REFERENCE, AND, IN PARTICULAR, SHOULD EVALUATE
THE FOLLOWING RISKS IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK OFFERED
HEREBY.
THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN INCLUDE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT") WHICH REPRESENT THE
COMPANY'S EXPECTATIONS OR BELIEFS CONCERNING FUTURE EVENTS THAT INVOLVE RISKS
AND UNCERTAINTIES, INCLUDING THOSE ASSOCIATED WITH THE EFFECT OF NATIONAL AND
REGIONAL ECONOMIC CONDITIONS, THE OVERALL LEVEL OF CONSUMER SPENDING, THE
PERFORMANCE OF THE COMPANY'S PRODUCTS WITHIN THE PREVAILING RETAIL ENVIRONMENT,
CUSTOMER ACCEPTANCE OF BOTH NEW DESIGNS AND NEWLY-INTRODUCED PRODUCT LINES, AND
FINANCIAL DIFFICULTIES ENCOUNTERED BY CUSTOMERS. ALL STATEMENTS OTHER THAN
STATEMENTS OF HISTORICAL FACTS INCLUDED IN THIS PROSPECTUS, AND THE DOCUMENTS
INCORPORATED BY REFERENCE HEREIN INCLUDING, WITHOUT LIMITATION, THE STATEMENTS
UNDER "THE COMPANY," AND ELSEWHERE HEREIN, ARE FORWARD-LOOKING STATEMENTS.
ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-
LOOKING STATEMENTS ARE REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH
EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT. IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S EXPECTATIONS ("CAUTIONARY
STATEMENTS") ARE DISCLOSED IN THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN INCLUDING, WITHOUT LIMITATION, IN CONJUNCTION WITH THE
FORWARD-LOOKING STATEMENTS OR INCORPORATED BY REFERENCE INCLUDED IN THIS
PROSPECTUS AND UNDER "RISK FACTORS." ALL SUBSEQUENT WRITTEN AND ORAL
FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY OR PERSONS ACTING ON ITS
BEHALF ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS.
CYCLICALITY OF APPAREL INDUSTRY
The apparel industry is a cyclical industry heavily dependent upon the
overall level of consumer spending, with purchases of apparel and related goods
tending to decline during recessionary periods when disposable income is low. A
difficult retail environment could result in higher than normal levels of
promotional sales which could adversely impact the Company's gross profit
margins. Although the retail segment in which the Company operates improved
moderately in 1996 and 1997, there can be no assurance that the improved retail
environment will continue or that the retail environment will not deteriorate.
CONCENTRATION OF CUSTOMERS
Department stores account for approximately two-thirds of the Company's
sales, and its ten largest customers accounted for approximately 64% and 65% of
sales in 1996 and the first half of 1997, respectively. Although no single
customer accounted for more than 10% of net sales, certain of the Company's
customers are under common ownership. When considered together as a group under
common ownership, sales to the seven department store customers currently owned
by Federated Department Stores Inc. and sales to eight department store
customers currently owned by The May Department Store Company each accounted for
approximately 20% of 1996 sales, and 21% and 20% of sales for the first half of
1997, respectively. Although the Company believes that purchasing decisions are
generally made independently by each department store customer within a
commonly-controlled group, in some cases the trend may be toward more
centralized purchasing decisions. If such decisions become more centralized, the
risk to the Company of such concentration would become greater than is presently
the case. The loss of any of the Company's ten largest customers, or any such
customer's insolvency, bankruptcy or material financial difficulty, could have a
material adverse effect upon the Company.
8
<PAGE>
FASHION TRENDS
The Company believes that its success depends in substantial part on its
ability to anticipate, gauge and respond to changing consumer demands and
fashion trends in a timely manner. There can be no assurance, however, that the
Company will continue to be successful in this regard. If the Company misjudges
the market for a number of products or product groups, it may be faced with a
significant amount of unsold finished goods inventory, which could have an
adverse effect on the Company's operations.
LAUREN BY RALPH LAUREN LICENSE AGREEMENTS
The Company has an exclusive license to manufacture and market women's
career and casual sportswear under the LAUREN BY RALPH LAUREN trademark in the
United States pursuant to license and design service agreements with Polo Ralph
Lauren Corporation which expire on December 31, 2001. The license agreement
provides for the payment by the Company of a percentage of net sales against
guaranteed minimum royalty and design service payments, as set forth in the
agreements. Upon the expiration of the initial term, the Company has the right
to renew the license for an additional three year term provided that it meets
certain minimum sales level requirements. In the event that the license is
terminated or not renewed as a result of the Company's failure to comply with
the terms of these agreements, including the minimum sales level requirements,
such termination could have a material adverse effect upon the Company.
DEPENDENCE UPON KEY PERSONNEL
The success of the Company is dependent upon the personal efforts and
abilities of Sidney Kimmel (Chairman), Jackwyn Nemerov (President), and Irwin
Samelman (Executive Vice President, Marketing). The Company does not have
employment agreements with Mr. Kimmel, Ms. Nemerov, or Mr. Samelman. The Company
believes that the loss of the services of any of Mr. Kimmel, Ms. Nemerov, or Mr.
Samelman could have an adverse effect on the Company. See "Management."
FOREIGN OPERATIONS AND MANUFACTURING
During 1996 approximately 35% of the Company's products were manufactured in
the United States and Mexico and approximately 65% in Asia and, to a lesser
extent, other parts of the world. As a result, the Company's operations may be
adversely affected by political instability resulting in the disruption of trade
from foreign countries in which the Company's contractors and suppliers are
located, the imposition of additional regulations relating to imports or duties,
taxes and other charges on imports, any significant fluctuation of the value of
the dollar against foreign currencies and restrictions on the transfer of funds.
In addition, the Company's import operations are subject to constraints imposed
by bilateral textile agreements between the United States and a number of
foreign countries. These agreements impose quotas on the amount and type of
goods which can be imported into the United States from these countries.
Furthermore, because the Company's foreign manufacturers are located at greater
geographic distances from the Company than its domestic manufacturers, the
Company is generally required to allow greater lead time for foreign orders.
This reduces the Company's manufacturing flexibility, which increases the risk
that the Company will be required to mark down unsold inventory as a result of
misjudging the market for a foreign sourced product. Although the Company seeks
to actively monitor the compliance of its contractors with applicable labor and
wage standards, violations of these standards and the resulting publicity
relating to such violations could have an adverse effect on the Company.
9
<PAGE>
COMPETITION
There is intense competition in the sectors of the apparel industry in which
the Company participates. The Company competes with many other apparel
companies, some of which are larger and have greater resources than the Company.
The Company believes in order to be successful in its industry, it must be able
to evaluate and respond to changing consumer demand and taste and to remain
competitive in the areas of style, quality and price while operating within the
significant domestic and foreign production and delivery constraints of the
industry.
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the Company's Common Stock may be highly volatile.
Factors such as quarter-to-quarter variations in the Company's revenues and
earnings could cause the market price of the Company's Common Stock to fluctuate
significantly. In addition, in recent years the stock markets have experienced
significant volatility, which often may have been unrelated to the operating
performance of the affected companies. Such volatility may adversely affect the
market price of the Company's Common Stock. See "Price Range of Common Stock."
SHARES ELIGIBLE FOR FUTURE SALE
The prevailing market price of Common Stock after this offering could be
adversely affected by future sales of substantial amounts of Common Stock by
existing shareholders. There will be 51,699,806 shares of Common Stock
outstanding immediately following the Offerings, 44,350,756 of which will be
tradeable without restriction and 7,349,050 of which may be sold subject to the
restrictions of Rule 144 under the Securities Act of 1933 (the "Securities
Act"). However, the Company, its executive officers and directors, including
General Partner and the Selling Shareholder, have agreed, subject to certain
exceptions, not to directly or indirectly (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of or otherwise dispose
of or transfer any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock, whether now owned or thereafter
acquired by the person executing the agreement or with respect to which the
person executing the agreement thereafter acquires the power of disposition, or
file a registration statement under the Securities Act with respect to the
foregoing or (ii) enter into any swap or other agreement that transfers, in
whole or in part, the economic consequence of ownership of the Common Stock
whether any such swap or transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, without the prior written
consent of Merrill Lynch on behalf of the Underwriters for a period of 90 days
after the date of this Prospectus, in the case of the Selling Shareholder and
the General Partner, or 30 days after the date of this Prospectus, in the case
of the other executive officers and directors of the Company. See "Shares
Eligible for Future Sale."
10
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at June 29,
1997. The sale of the shares of Common Stock offered hereby will not affect the
Company's capitalization.
<TABLE>
<CAPTION>
JUNE 29, 1997
--------------
<S> <C>
(IN THOUSANDS)
Short-term debt:
Current portion of long-term debt .............................................................. $ 10
Current portion of capital lease obligations.................................................... 3,645
--------------
Total short-term debt....................................................................... $ 3,655
--------------
--------------
Long-term debt:
Obligations under capital leases................................................................ $ 19,925
Long-term debt.................................................................................. 2
--------------
Total long-term debt........................................................................ 19,927
Stockholders' equity:
Common Stock, par value $0.01 per share: 100,000,000 shares authorized: 54,053,000 shares issued
and outstanding(1)............................................................................ 541
Additional paid-in capital...................................................................... 109,444
Retained earnings .............................................................................. 366,011
Cumulative foreign currency translation adjustment.............................................. (1,216)
Treasury stock (1,976,000 shares at cost) ...................................................... (53,090)
--------------
Total stockholders' equity.................................................................. 421,690
--------------
Total capitalization...................................................................... $ 441,617
--------------
--------------
</TABLE>
- ------------------------
(1) As of the date of this Prospectus, there were 51,699,806 shares of Common
Stock outstanding which excludes an aggregate of (i) 3,806,541 shares of
Common Stock issuable upon exercise of outstanding employee stock options as
of June 29, 1997, and (ii) 2,692,734 shares of Common Stock reserved as of
June 29, 1997 for issuance upon exercise of stock options which may be
granted under the Company's stock option plans.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the Offerings. All of
the expenses of the Offerings will be paid by the Selling Shareholder.
11
<PAGE>
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the New York Stock Exchange under
the symbol "JNY." The following table sets forth, for the periods indicated, the
high and low sale prices per share of the Company's Common Stock as reported on
the New York Stock Exchange Composite Tape.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
1995
First Quarter................................................................................... $13 15/16 $11 5/16
Second Quarter.................................................................................. 15 7/16 12 15/16
Third Quarter................................................................................... 18 3/8 14 7/8
Fourth Quarter.................................................................................. 19 3/4 15 3/16
1996
First Quarter................................................................................... 24 1/4 17 13/16
Second Quarter.................................................................................. 27 3/4 23 1/4
Third Quarter................................................................................... 37 3/8 22 9/16
Fourth Quarter.................................................................................. 37 3/8 29 5/8
1997
First Quarter................................................................................... 41 3/8 32 1/8
Second Quarter.................................................................................. 49 1/8 36 1/8
Third Quarter (through September 29, 1997) ..................................................... 57 3/16 46 5/8
</TABLE>
The last reported sale price per share of the Company's Common Stock as
reported on the New York Stock Exchange Composite Tape on September 29, 1997 was
$53 1/16.
DIVIDEND POLICY
The Company has not paid any cash dividends on shares of its Common Stock.
The Company presently anticipates that all of its future earnings will be
retained for development of its business and does not anticipate paying cash
dividends on its Common Stock in the foreseeable future. The payment of any
future dividends will be at the discretion of the Company's Board of Directors
and will depend upon, among other things, future earnings, operations, capital
requirements, the general financial condition of the Company and general
business conditions.
12
<PAGE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE OFFICE
- --------------------------------------------------- --- ---------------------------------------------------
<S> <C> <C>
Sidney Kimmel...................................... 69 Chairman and Director
Herbert J. Goodfriend.............................. 71 Vice Chairman and Director
Jackwyn Nemerov.................................... 46 President
Irwin Samelman..................................... 66 Executive Vice President, Marketing and Director
Wesley R. Card..................................... 49 Chief Financial Officer
Gary R. Klocek..................................... 47 Controller
Geraldine Stutz.................................... 69 Director
Howard Gittis...................................... 63 Director
</TABLE>
SIDNEY KIMMEL founded the Jones Apparel Division of W.R. Grace & Co. in
1970. Mr. Kimmel has served as Chairman since 1975. Prior to 1975, Mr. Kimmel
occupied various executive offices, including President of JONES NEW YORK and
Vice President of John Meyer of Norwich. Prior to founding the Company, Mr.
Kimmel was employed by W.R. Grace & Co. and was President of Villager, Inc., a
sportswear company.
HERBERT J. GOODFRIEND joined the Company in 1990 after serving as the
Company's legal counsel for the previous three years and has served as a
director since July 1991. Before joining the Company, Mr. Goodfriend served as a
director of Villager, Inc. and Venice Industries, Inc. In addition, Mr.
Goodfriend is engaged in the practice of law and is of counsel to the firm of
Phillips Nizer Benjamin Krim & Ballon LLP, which performs legal services for the
Company.
JACKWYN NEMEROV was appointed President of the Company in January 1997. She
joined the Company in 1985 and served as President of the Company's casual
sportswear divisions and LAUREN BY RALPH LAUREN division. Prior to joining the
Company, Ms. Nemerov was President of the Gloria Vanderbilt division of Murjani,
Inc. from 1980 through 1985.
IRWIN SAMELMAN has been Executive Vice President, Marketing of the Company
since 1991 and has served as a director since July 1991. In addition, from 1987
to 1991, Mr. Samelman provided marketing consulting services to the Company
through Samelman Associates, Inc., a private consulting company controlled by
him. Prior thereto, Mr. Samelman was Regional Marketing Manager of Russ Togs,
Inc. and a Vice President of Villager, Inc.
WESLEY R. CARD joined the Company in 1990 as Chief Financial Officer. Prior
to joining the Company, Mr. Card held the positions of Executive Vice President
and Chief Financial Officer of Carolyne Roehm, Inc., and Corporate Vice
President, Controller and Assistant Secretary of Warnaco, Inc.
GARY R. KLOCEK has been Controller of the Company since August 1987. Prior
to joining the Company, Mr. Klocek held various positions with Atlantic
Richfield Company ("ARCO") from 1979 through 1987, his last position being
Manager of Cost and Inventory Control for one of ARCO's subsidiaries.
GERALDINE STUTZ has been a director of the Company since July 1991. Since
1993, Ms. Stutz has been a principal partner of Panache Productions, a fashion
and marketing service. During the previous five years, she was Publisher of
Panache Press at Random House, a book publisher. From 1960 until 1986, Ms. Stutz
was President of Henri Bendel. Ms. Stutz serves on the Board of Directors of
Tiffany & Co., Hanover Direct, The Theatre Development Fund and The Actors'
Fund.
13
<PAGE>
HOWARD GITTIS has been a director of the Company since April 1992. During
the past five years, Mr. Gittis' principal occupation has been Director and Vice
Chairman of MacAndrews & Forbes Holdings Inc., a diversified holding company. In
addition, Mr. Gittis is a director of Andrews Group Incorporated, Consolidated
Cigar Corporation, First Nationwide Holdings Inc., First Nationwide Bank, a
Federal Savings Bank, Loral Corporation, Mafco Consolidated Group Inc., Mafco
Worldwide Corporation, NWCG Holdings Corporation, New World Communications Group
Incorporated, New World Television Incorporated, Power Control Technologies
Inc., Revlon, Inc., Revlon Consumer Products Corporation, and Revlon Worldwide
Corporation.
KEY EMPLOYEES
The following persons, although not executive officers of the Company, make
significant business contributions to the Company:
RENA ROWAN was the original creator of the JONES NEW YORK line and served as
the division's Chief Designer from 1970 to 1982. She is currently Vice
President, Design of the Company. From 1991 to 1993, Ms. Rowan was an executive
vice president of the Company. Prior to the inception of the Company, Ms. Rowan
was employed by Villager, Inc. and Rosenau, Inc.
ANITA BRITT, Director of Investor Relations and Financial Planning, joined
the Company in December 1993. Prior to joining the Company, Ms. Britt was
Director of Internal Audit of American Reliance Group, Inc.
HOWARD BUERKLE has been President of Retail Operations for the Company since
1989. From 1986 through 1989, Mr. Buerkle was President of the retail division
of Inwear/Matinique.
ELLEN DANIEL joined the Company in 1994 in the dual capacity of Senior Vice
President--Corporate Merchandising Manager and President of the EVAN-PICONE
division. From 1982 through 1994, Ms. Daniel was employed by Liz Claiborne, most
recently as Senior Vice President--Corporate Design Director.
IRA DANSKY joined the Company in 1996 as General Counsel. Prior to joining
the Company, Mr. Dansky was engaged in private law practice from 1987 though
1996, prior to which he served as Associate General Counsel of Xerox
Corporation.
RONALD HARRISON, Vice President of Manufacturing, joined the Company in
1981. Mr. Harrison had been Plant Manager for Chief Apparel, Inc. from 1965
through 1981.
JOSEPH HIESS was appointed President of the JONES NEW YORK Men's Sportswear
division in August 1997. Prior to his appointment, Mr. Hiess served as head of
Design and Marketing of JJ Farmer, a menswear company he founded in 1986 and
subsequently sold to Salant Corporation in 1993.
BARBARA KENNEDY has been President of the JONES NEW YORK Dress Division
since August 1991. From 1983 through August 1991, Ms. Kennedy was employed by
Bloomingdale's in various capacities, most recently as Vice President,
Merchandise Manager.
RICHARD SHAW, President of JONES APPAREL GROUP CANADA, INC., joined the
Company in May, 1997. Prior to joining the Company, Mr. Shaw served as President
of Liz Claiborne Canada which he helped launch in 1987.
JEFFREY LEVY, President of RENA ROWAN, joined the Company in 1990. Prior to
joining the Company, Mr. Levy was Vice President of Sales and National Sales
Manager, of Russ Togs, Inc. from 1984 through 1990.
BENNY LIN joined the Company in December 1995 as Creative Director of the
LAUREN BY RALPH LAUREN division. Mr. Lin had been Fashion Director at Macy's
East prior to joining the Company.
14
<PAGE>
MARTIN MARLOWE joined the Company in 1992 as Vice President of Foreign
Manufacturing. Prior to joining the Company, Mr. Marlowe was President of Jodi
International, an apparel importer, from 1988 to 1992.
HELEN MERRIL, President of the EVAN-PICONE Dress Divisions, joined the
Company in October 1993. Prior to joining the Company, Ms. Merril held the
positions of President of Scassi Dress of De Peche Corporation and President of
Nipon Boutique of Albert Nipon Inc.
SUSAN METZGER, Vice President of Sales for the LAUREN BY RALPH LAUREN
division, joined the Company in May 1996. Prior to joining the Company, Ms.
Metzger held the positions of Vice President of Sales of Chaus, Inc and Sales
Manager of JH Collectibles.
DEANNA RANDALL, who joined the Company in 1981, has held various sales and
marketing positions with the Company, and is currently President of the JONES
NEW YORK career division.
JOHN SAMMARITANO, Vice President of Distribution, joined the Company in
1975. Mr. Sammaritano had been Vice President of Distribution for Villager, Inc.
from 1964 through 1975.
15
<PAGE>
SELLING SHAREHOLDER
The following tables sets forth certain information with respect to the
beneficial ownership of Common Stock as of the date of this Prospectus by
Bristol Rittenhouse Investments, L.P. (the "Selling Shareholder") and as
adjusted to reflect the sale of 4,500,000 shares by the Selling Shareholder in
the Offerings. Mr. Sidney Kimmel, as the sole general partner (the "General
Partner") of the Selling Shareholder, has sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by it except
as set forth in the footnotes below.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERINGS SHARES AFTER OFFERINGS
------------------------- BEING ---------------------------
NAME SHARES PERCENT (1) OFFERED SHARES PERCENT (1)
- ---------------------------------------------- ---------- ------------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Bristol Rittenhouse Investments, L.P.(3)(4)... 5,400,000 10.4% 4,500,000(2) 900,000(2) 1.7%
</TABLE>
- ------------------------
(1) Based upon 51,699,806 shares of Common Stock issued and outstanding as of
October 12, 1997.
(2) Assumes the Underwriters' over-allotment options are not exercised. If such
over-allotment options are exercised in full, an additional 675,000 shares
will be sold by the Selling Shareholder. See "Underwriting."
(3) The Selling Shareholder is a recently organized Delaware limited partnership
in which Sidney Kimmel is the sole general partner with a 99% partnership
interest, with the remaining 1% held by a limited partner.
(4) Does not include (i) 6,449,050 shares of Common Stock (12.5% of the
outstanding Common Stock) owned directly by the General Partner, and (ii)
400,000 shares of Common Stock which are issuable to the General Partner
upon exercise of stock options, which do not become exercisable until July
1998.
16
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
The General Partner of the Selling Shareholder will beneficially own
7,349,050 shares of the Company's Common Stock subsequent to the completion of
the Offerings (6,674,050 shares if the Underwriters' over-allotment options are
exercised in full). The General Partner of the Selling Shareholder has agreed
not to sell any such shares for a period of 90 days from the date of this
Prospectus without the prior written consent of Merrill Lynch on behalf of the
Underwriters. Subsequently, such shares may be eligible for sale pursuant to
Rule 144 under the Securities Act of 1933 or otherwise. In addition, the
Company, its executive officers and directors, including the General Partner and
the Selling Shareholder, have agreed, subject to certain exceptions, not to
directly or indirectly (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of or otherwise dispose of or transfer
any shares of Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or thereafter acquired by the
person executing the agreement or with respect to which the person executing the
agreement thereafter acquires the power of disposition, or file a registration
statement under the Securities Act with respect to the foregoing or (ii) enter
into any swap or other agreement that transfers, in whole or in part, the
economic consequence of ownership of the Common Stock whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, without the prior written consent of Merrill Lynch on behalf
of the Underwriters for a period of 90 days after the date of this Prospectus,
in the case of the Selling Shareholder and the General Partner, or 30 days after
the date of this Prospectus, in the case of the other executive officers and
directors of the Company. See "Underwriting."
Pursuant to Rule 144, each shareholder who is deemed to be an "affiliate" of
the Company may sell, within any three-month period, a number of shares that
does not exceed the greater of (a) 1% of the shares of Common Stock then
outstanding or (b) the average weekly trading volume in the Common Stock during
the four calendar weeks preceding such sale.
No predictions can be made as of the effect, if any, that sales of shares
under Rule 144 or the availability of shares for sale will have on the market
price prevailing from time to time after the Offerings. Nevertheless, sales of
substantial amounts of Common Stock in the public market could adversely affect
the market price of the Common Stock.
17
<PAGE>
CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF COMMON STOCK
The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a holder who is not a United States person (a "Non-U.S. Holder") and
who acquires and owns such Common Stock as a capital asset within the meaning of
Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). For
this purpose, the term "Non-U.S. Holder" generally is defined as any person
other than (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in the United States or under
the laws of the United States or of any state, or (iii) an estate whose income
is included in gross income for United States federal income tax purposes
regardless of its source, or (iv) a trust if, (a) a court within the United
States is able to exercise primary jurisdiction supervision over the
administration of the trust and (b) one or more United States fiduciaries have
the authority to control all substantial decisions of the trust.
This discussion does not consider specific facts and circumstances that may
be relevant to a particular Non-U.S. Holder's tax position, does not address all
aspects of United States federal income, gift and estate taxes and does not deal
with foreign and United States state and local consequences that may be relevant
to such Non-U.S. Holders in light of their personal circumstances. Further, it
does not discuss the rules applicable to Non-U.S. Holders subject to special tax
treatment under the federal tax laws (including, but not limited to, banks and
insurance companies, dealers in securities, and holders of securities held as
part of a "straddle," "hedge," or "conversion transaction"). Furthermore, this
discussion is based on current provisions of the Code, existing, proposed and
newly issued regulations which are not yet effective promulgated thereunder and
administrative and judicial interpretations thereof, all of which are subject to
change, possibly on a retroactive basis.
ACCORDINGLY, PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS
REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL AND NON-UNITED STATES INCOME
AND OTHER TAX CONSEQUENCES OF OWNING AND DISPOSING OF SHARES OF COMMON STOCK.
An individual may, subject to certain exceptions, be deemed to be a resident
alien (as opposed to a nonresident alien) by virtue of being present in the
United States on at least thirty-one (31) days in the calendar year and for an
aggregate of at least one hundred eighty-three (183) days during a three-year
period ending in the current calendar year (counting for such purposes all of
the days present in the current year, one-third of the days present in the
immediately preceding year, and one-sixth of the days present in the second
preceding year). In addition to the "substantial presence test" described in the
immediately preceding sentence, an alien may be treated as a resident alien if
he (i) meets a lawful permanent residence test (a so-called "green card" test)
or (ii) elects to be treated as a U.S. resident and meets the "substantial
presence test" in the immediately following year. Resident aliens are subject to
United States federal income tax as if they were United States citizens.
DIVIDENDS
In general, dividends paid to a Non-U.S. Holder of Common Stock will be
subject to withholding of U.S. federal income tax at a thirty (30%) percent rate
(or such lower rate as may be specified by an applicable income tax treaty),
unless the dividends are (i) effectively connected with the conduct of a trade
or business of the Non-U.S. Holder within the United States ("United States
trade or business income") or (ii) if an applicable treaty so provides,
attibutable to a United States permanent establishment maintained by the
Non-U.S. Holder. If the dividend is United States trade or business income or
attributable to a United States permanent establishment, the dividend would be
subject to United States federal income tax on a net income basis at applicable
graduated individual or corporate rates and would be exempt from the thirty
(30%) percent withholding tax described above (if the Non-U.S. Holder files
certain forms, including United States Internal Revenue Service ("Service") Form
4224 or such other certification required by the Service, with the payor of the
dividend). Any such dividends that are United States trade or business
18
<PAGE>
income received by a foreign corporation may, under certain circumstances, be
subject to an additional "branch profits tax" at a thirty (30%) percent rate (or
such lower rate as may be specified by an applicable income tax treaty).
Under current United States Treasury regulations, dividends paid to a
shareholder at an address in a foreign country are presumed to be paid to a
resident of such country for purposes of the withholding discussed above (unless
the payor has knowledge to the contrary) and, under the current interpretation
of United States Treasury regulations, for purposes of determining the
applicability of a tax treaty rate, unless an applicable tax treaty requires
some other method for determining a shareholder's residence. Under newly issued
United States Treasury regulations which will be effective for payments made
after December 31, 1998, however, a Non-U.S. Holder of Common Stock who wishes
to claim the benefit of an applicable treaty rate would be required to satisfy
applicable certification and other requirements, including the requirement
generally to file Service Form W-8. In addition, under the newly issued
regulations, in the case of Common Stock held by a foreign partnership the
certification requirement generally would be applied to the partners of the
partnership and the partnership may be required to provide certain information.
Such regulations also provide for look through rules for tiered partnerships.
Prospective investors should consult their tax advisors concerning the newly
issued regulations and the effect that such regulations could have on an
investment in the Common Stock.
A Non-U.S. Holder of Common Stock eligible for a reduced rate of United
States withholding tax pursuant to a tax treaty or whose dividends have
otherwise been subjected to withholding in an amount which exceeds such Non-U.S.
Holder's United States federal income tax liability, may obtain a refund or
credit of any excess amounts withheld by filing an appropriate claim for refund
with the Service.
GAIN ON DISPOSITION OF COMMON STOCK
A Non-U.S. Holder generally will not be subject to United States federal
income tax with respect to gain recognized on a sale or other disposition of
Common Stock unless (i) the gain is effectively connected with a trade or
business of the Non-U.S. Holder in the United States or, if an applicable income
tax treaty so provides, attributable to a permanent establishment maintained by
the Non-U.S. Holder in the United States, (ii) in the case of a Non-U.S. Holder
who is a nonresident alien individual and holds the Common Stock as a capital
asset, such holder is present in the United States for 183 or more days in the
taxable year of the sale or other disposition and certain other conditions are
met, (iii) the Non-U.S. Holder is subject to tax pursuant to provisions of
United States tax law that apply to certain expatriates, or (iv) under certain
circumstances if the Company is or has been during certain time periods a "U.S.
real property holding corporation" for United States federal income tax purposes
and, if the Common Stock is "regularly traded on an established securities
market," the Non-U.S. Holder held, directly or indirectly, during certain time
periods more than 5% of the Common Stock. The Company believes that it has not
been, is not currently and is not likely to become, a "U.S. real property
holding corporation."
If an individual Non-U.S. Holder falls under clause (i) above, he will be
taxed on his net gain derived from the sale under regular graduated United
States federal income tax rates. If the individual falls under clause (ii)
above, he will be subject to a flat thirty (30%) percent tax on his United
States source capital gains for the taxable year which may be offset by United
States source capital losses for such year (notwithstanding the fact that he is
not considered a resident of the United States). Thus, Non-U.S. Holders who
spend 183 days or more in the United States in the taxable year in which they
contemplate the sale of the Common Stock are urged to consult their tax advisors
as to the tax consequences of such sale.
If the Non-U.S. Holder that is a foreign corporation falls under clause (i)
above, it will be taxed on its gain on a net income basis at applicable
graduated corporate rates and, in addition, may be subject to the branch profits
tax equal to thirty (30%) percent of its "effectively connected earnings and
profits" within the meaning of the Code for the taxable year, as adjusted for
certain items, unless it qualifies for a lower rate under an applicable income
tax treaty.
19
<PAGE>
FEDERAL ESTATE TAXES
Common Stock that is owned, or treated as owned, by an individual who is not
a citizen or resident (as specifically determined under residence rules for
United States federal estate tax purposes) of the United States at the time of
death or that has been the subject of certain lifetime transfers will be
included in such holder's gross estate for United States federal estate tax
purposes, unless an applicable estate tax treaty provides otherwise.
U.S. INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING
The Company must report annually to the Service and to each Non-U.S. Holder
the amount of dividends paid to such Non-U.S. Holder and any tax withheld with
respect to such dividends. These information reporting requirements apply
regardless of whether withholding is required. Copies of the information returns
reporting such dividends and withholding may also be made available under the
provisions of an applicable treaty or agreement, to the tax authorities in the
country in which the Non-U.S. Holder resides.
United States backup withholding tax (which generally is a withholding tax
imposed at the rate of thirty-one (31%) percent on certain payments to persons
that fail to furnish certain information under the United States information
reporting requirements) and information reporting generally will not apply to
dividends paid on Common Stock to a Non-U.S. Holder at an address outside of the
United States, provided that the payor does not have actual knowledge that the
holder is a United States person. However, under the newly issued regulations
dividend payments will be subject to backup withholding and information
reporting unless applicable certification requirements are satisfied. See the
discussion above with respect to rules applicable to foreign partnerships under
the newly issued regulations.
In general, the payment of proceeds from the disposition of Common Stock to
or through a United States office of a broker will be subject to information
reporting and backup withholding unless the owner, under penalties of perjury,
certifies, among other things, its status as a Non-U.S. Holder or otherwise
establishes an exemption. The payment of proceeds from the disposition of Common
Stock to or through a non-U.S. office of a non-U.S. broker generally will not be
subject to backup withholding and information reporting except as noted below.
In the case of proceeds from the disposition of Common Stock paid to or through
a non-U.S. office of a broker that is (i) a United States person, (ii) a
"controlled foreign corporation" for United States federal income tax purposes
or (iii) a foreign person 50% or more of whose gross income (from all sources)
from certain periods is effectively connected with a United States trade or
business (or, after the newly issued regulations are effective, a foreign
partnership, if at any time during its tax year one or more of its partners are
United States persons who in the aggregate hold more than 50% of its income or
capital or if, at any time during its tax year the partnership is engaged in the
conduct of a trade or business), information reporting (but not backup
withholding) will apply unless the broker receives a certification that the
owner is a Non-U.S. Holder (and the broker has no knowledge to the contrary).
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules from a payment to a Non-U.S. Holder will be allowed as
a refund or as a credit against such Non-U.S. Holder's United States federal
income tax liability, provided that the required information is furnished to the
Service.
THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY.
ACCORDINGLY, EACH PROSPECTIVE PURCHASER IS URGED TO CONSULT WITH HIS TAX ADVISOR
WITH RESPECT TO THE UNITED STATES FEDERAL INCOME TAX AND FEDERAL ESTATE TAX
CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF COMMON STOCK, INCLUDING THE
APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, LOCAL, FOREIGN, OR OTHER TAXING
JURISDICTION.
20
<PAGE>
UNDERWRITING
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Bear,
Stearns & Co. Inc. and Goldman, Sachs & Co. are acting as representatives (the
"U.S. Representatives") of each of the Underwriters named below (the "U.S.
Underwriters"). Subject to the terms and conditions set forth in a U.S. purchase
agreement (the "U.S. Purchase Agreement") among the Company, the Selling
Shareholder, the General Partner and the U.S. Underwriters, and concurrently
with the sale of 900,000 shares of Common Stock to the International Managers
(as defined below), the Selling Shareholder has agreed to sell to the U.S.
Underwriters, and each of the U.S. Underwriters severally has agreed to purchase
from the Selling Shareholder, the number of shares of Common Stock set forth
opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
-----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..........................................
Bear, Stearns & Co. Inc.........................................
Goldman, Sachs & Co.............................................
-----------
Total................................................. 3,600,000
-----------
-----------
</TABLE>
The Company, the Selling Shareholder and the General Partner have also
entered into an international purchase agreement (the "International Purchase
Agreement") with certain underwriters outside the United States and Canada (the
"International Managers" and, together with the U.S. Underwriters, the
"Underwriters") for whom Merrill Lynch International, Bear, Stearns
International Limited and Goldman Sachs International are acting as lead
managers (the "Lead Managers"). Subject to the terms and conditions set forth in
the International Purchase Agreement, and concurrently with the sale of
3,600,000 shares of Common Stock to the U.S. Underwriters pursuant to the U.S.
Purchase Agreement, the Selling Shareholder has agreed to sell to the
International Managers, and the International Managers severally have agreed to
purchase from the Selling Shareholder, an aggregate of 900,000 shares of Common
Stock. The initial public offering price per share and the total underwriting
discount per share of Common Stock are identical under the U.S. Purchase
Agreement and the International Purchase Agreement.
In the U.S. Purchase Agreement and the International Purchase Agreement, the
several U.S. Underwriters and the several International Managers, respectively,
have agreed, subject to the terms and conditions set forth therein, to purchase
all of the shares of Common Stock being sold pursuant to each such agreement if
any of the shares of Common Stock being sold pursuant to such agreement are
purchased. Under certain circumstances, under the U.S. Purchase Agreement and
the International Purchase Agreement, the commitments of non-defaulting
Underwriters may be increased. The closings with respect to the sale of shares
of Common Stock to be purchased by the U.S. Underwriters and the International
Managers are conditioned upon one another.
The U.S. Representatives have advised the Company and the Selling
Shareholder that the U.S. Underwriters propose initially to offer the shares of
Common Stock to the public at the initial public offering price set forth on the
cover page of this Prospectus, and to certain dealers at such price less a
concession not in excess of $ per share of Common Stock. The U.S. Underwriters
may allow, and such dealers may reallow, a discount not in excess of $ per
share of Common Stock on sales to certain other dealers. After the initial
public offering, the public offering price, concession and discount may be
changed.
The Selling Shareholder has granted an option to the U.S. Underwriters,
exercisable for 30 days after the date of this Prospectus, to purchase up to an
aggregate of 540,000 additional shares of Common Stock
21
<PAGE>
at the initial public offering price set forth on the cover page of this
Prospectus, less the underwriting discount. The U.S. Underwriters may exercise
this option only to cover over-allotments, if any, made on the sale of the
Common Stock offered hereby. To the extent that the U.S. Underwriters exercise
these options, each U.S. Underwriter will be obligated, subject to certain
conditions, to purchase a number of additional shares of Common Stock
proportionate to such U.S. Underwriter's initial amount reflected in the
foregoing table. The Selling Shareholder also has granted an option to the
International Managers, exercisable for 30 days after the date of this
Prospectus, to purchase up to an aggregate of 135,000 additional shares of
Common Stock to cover over-allotments, if any, on terms similar to those granted
to the U.S. Underwriters.
The Company, its executive officers and directors, including the General
Partner and the Selling Shareholder, have agreed, subject to certain exceptions,
not to directly or indirectly (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant for the sale of or otherwise dispose of or
transfer any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock, whether now owned or thereafter
acquired by the person executing the agreement or with respect to which the
person executing the agreement thereafter acquires the power of disposition, or
file a registration statement under the Securities Act with respect to the
foregoing or (ii) enter into any swap or other agreement that transfers, in
whole or in part, the economic consequence of ownership of the Common Stock
whether any such swap or transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, without the prior written
consent of Merrill Lynch on behalf of the Underwriters for a period of 90 days
after the date of this Prospectus, in the case of the Selling Shareholder and
the General Partner, or 30 days after the date of this Prospectus, in the case
of the other executive officers and directors of the Company. See "Shares
Eligible for Future Sale."
The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Pursuant to the Intersyndicate Agreement, the
U.S. Underwriters and the International Managers are permitted to sell shares of
Common Stock to each other for purposes of resale at the initial public offering
price, less an amount not greater than the selling concession. Under the terms
of the Intersyndicate Agreement, the U.S. Underwriters and any dealer to whom
they sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to persons who are non-U.S. or non-Canadian persons or to persons they
believe intend to resell to persons who are non-U.S. or non-Canadian persons,
and the International Managers and any dealer to whom they sell shares of Common
Stock will not offer to sell or sell shares of Common Stock to U.S. persons or
to Canadian persons or to persons they believe intend to resell to U.S. or
Canadian persons, except in the case of transactions pursuant to the
Intersyndicate Agreement.
The Company, the Selling Shareholder and the General Partner have agreed to
indemnify the U.S. Underwriters and the International Managers against certain
liabilities, including certain liabilities under the Securities Act, or to
contribute to payments the U.S. Underwriters and International Managers may be
required to make in respect thereof.
Until the distribution of the Common Stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the Underwriters and
certain selling group members to bid for and purchase the Common Stock. As an
exception to these rules, the U.S. Representatives are permitted to engage in
certain transactions that stabilize the price of the Common Stock. Such
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Common Stock.
If the Underwriters create a short position in the Common Stock in
connection with the Offerings, i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus, the U.S.
Representatives may reduce that short position by purchasing Common Stock in the
open market. The U.S. Representatives may also elect to reduce any short
position by exercising all or part of the over-allotment option described above.
22
<PAGE>
The U.S. Representatives may also impose a penalty bid on certain
Underwriters and selling group members. This means if the U.S. Representatives
purchase shares of Common Stock in the open market to reduce the Underwriters'
short position or to stabilize the price of the Common Stock, they may reclaim
the amount of the selling concession from the Underwriters and selling group
members who sold those shares as part of the Offerings.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of the Common Stock to the extent that it
were to discourage resales of the Common Stock.
Neither the Company, the Selling Shareholder nor any of the Underwriters
makes any representation or prediction as to the direction or magnitude of any
effect that the transactions described above may have on the price of the Common
Stock. In addition, neither the Company, the Selling Shareholder nor any of the
Underwriters makes any representation that the U.S. Representatives will engage
in such transactions or that such transactions, once commenced, will not be
discontinued without notice.
Merrill Lynch has from time to time provided investment banking financial
advisory services to the Company, for which it has received customary
compensation, and may continue to do so in the future.
LEGAL MATTERS
Certain legal matters in connection with the Common Stock offered hereby
will be passed upon for the Company by Phillips Nizer Benjamin Krim & Ballon
LLP, 666 Fifth Avenue, New York, New York 10103. Phillips Nizer Benjamin Krim &
Ballon LLP will rely upon Mesirov Gelman Jaffe Cramer & Jamieson, 1735 Market
Street, Philadelphia, Pennsylvania, with respect to certain matters concerning
Pennsylvania law. Herbert J. Goodfriend, Vice Chairman of the Company, is of
counsel to Phillips Nizer Benjamin Krim & Ballon LLP. Certain legal matters
relating to the Offerings will be passed upon for the Underwriters by Willkie
Farr & Gallagher, 153 East 53rd Street, New York, New York 10022.
EXPERTS
The financial statements and schedule of the Company incorporated by
reference in this Prospectus have been audited by BDO Seidman, LLP, independent
certified public accountants, to the extent and for the periods set forth in
their reports incorporated herein by reference, and are incorporated by
reference herein in reliance upon such reports given upon the authority of said
firm as experts in accounting and auditing.
23
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information concerning the Company can be inspected and copied at the
public reference room maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549. In addition, upon request such reports, proxy
statements and other information will be made available for inspection and
copying at the Commission's public reference facilities at the Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and
at Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material can be obtained at prescribed rates upon request from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. Such material may also be accessed electronically at the Commission's
site on the World Wide Web located at http:\\www.sec.gov. The Company's Common
Stock is listed on the New York Stock Exchange, and reports, proxy statements
and other information concerning the Company may be inspected and copied at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Company has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement on Form S-3 under the Securities Act
with respect to the Common Stock offered hereby. For further information about
the Company and the securities offered hereby, reference is made to the
Registration Statement and to the financial statements, schedules and exhibits
filed as a part hereof. Statements contained in this Prospectus as to the
contents of any contract or any other document are not necessarily complete, and
in each instance, reference is made to the copy of such contract or document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. The Registration Statement,
including exhibits thereto, may be inspected without charge at the Commission's
principal office in Washington, D.C. and copies of all or any part thereof may
be obtained from such office after payment of the fees prescribed by the
Commission.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus (i) the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996, as amended (the "1996 Form 10-K"), (ii) the Company's Quarterly Reports on
form 10-Q for the fiscal quarters ended March 30, 1997 (the First Quarter Form
10-Q") and June 29, 1997 (the "Second Quarter Form 10-Q" and, together with the
First Quarter Form 10-Q, the "1997 Form 10-Qs"); and (iii) the description of
the Company's Common Stock contained in the Company's Registration Statement on
form 8-A, dated April 5, 1991, including any amendments filed for the purpose of
updated such description. All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this Offering shall be deemed
incorporated by reference into this Prospectus from the date of filing of such
documents. Any statement contained herein or in a document, all or a portion of
which is incorporated or deemed to be incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contain herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus. The Company will provide without charge to
each person, including any beneficial owner, to whom this Prospectus is
delivered, upon the request of such person, a copy of the foregoing documents
incorporated herein by reference, other than exhibits to such documents (unless
such exhibits are incorporated by reference in such document). Requests shall be
directed to Jones Apparel Group, Inc., 250 Rittenhouse Circle, Keystone Park,
Bristol, Pennsylvania 19007; Attn: Wesley R. Card.
24
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offering covered by this Prospectus. If given or made, such
information or representations must not be relied upon as having been authorized
by the Company, the Selling Shareholder or the Underwriters. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, the
Common Stock in any jurisdiction where, or to any person to whom, it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has not been any change in the facts set forth in this Prospectus or
in the affairs of the Company since the date hereof.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
The Company.................................... 3
The Offerings.................................. 5
Selected Financial Information................. 6
Risk Factors................................... 8
Capitalization................................. 11
Use of Proceeds................................ 11
Price Range of Common Stock.................... 12
Dividend Policy................................ 12
Management..................................... 13
Selling Shareholder............................ 16
Shares Eligible for Future Sale................ 17
Certain United States Federal Tax Consequences
to Non-U.S. Holders of Common Stock.......... 18
Underwriting................................... 21
Legal Matters.................................. 23
Experts........................................ 23
Available Information.......................... 24
Incorporation of Documents
by Reference................................. 24
</TABLE>
4,500,000 SHARES
JONES APPAREL
GROUP, INC.
COMMON STOCK
------------------------
PROSPECTUS
------------------------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ALTERNATE PAGE TO INTERNATIONAL PROSPECTUS
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 15, 1997
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
PROSPECTUS
4,500,000 SHARES
JONES APPAREL GROUP, INC.
COMMON STOCK
-----------
All of the shares of Common Stock of the Company offered hereby are being
sold by a Selling Shareholder of the Company. The Company is not selling shares
of Common Stock in the Offerings and will not receive any of the proceeds from
the sale of shares of Common Stock offered hereby. Of the 4,500,000 shares of
Common Stock being offered, 900,000 shares are being offered for sale initially
outside the United States and Canada by the International Managers and 3,600,000
shares are being offered for sale initially in a concurrent offering in the
United States and Canada by the U.S. Underwriters. The initial public offering
price and the aggregate underwriting discount per share will be identical for
both Offerings. See "Underwriting."
The Common Stock is listed on the New York Stock Exchange under the symbol
"JNY." On September 29, 1997, the last sale price of the Common Stock as
reported on the New York Stock Exchange was $53 1/16 per share. See "Price Range
of Common Stock."
SEE "RISK FACTORS," BEGINNING ON PAGE 8, FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING SELLING
PUBLIC DISCOUNT(1) SHAREHOLDER(2)
<S> <C> <C> <C>
Per Share............................................... $ $ $
Total(3)................................................ $ $ $
</TABLE>
(1) The Company and the Selling Shareholder have agreed to indemnify the several
Underwriters against certain liabilities, including certain liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting expenses payable by the Selling Shareholder estimated at
$340,000.
(3) The Selling Shareholder has granted the International Managers and the U.S.
Underwriters options to purchase up to an additional 135,000 shares and
540,000 shares of Common Stock, respectively, in each case exercisable
within 30 days after the date hereof, solely to cover over-allotments, if
any. If such options are exercised in full, the total Price to Public,
Underwriting Discount and Proceeds to Selling Shareholder will be $
, $ and $ , respectively. See "Underwriting."
----------------
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made in New York, New York on or
about , 1997.
----------------
MERRILL LYNCH INTERNATIONAL
BEAR, STEARNS INTERNATIONAL LIMITED
GOLDMAN SACHS INTERNATIONAL
----------------
The date of this Prospectus is , 1997.
<PAGE>
UNDERWRITING
Merrill Lynch International, Bear, Stearns International Limited and Goldman
Sachs International are acting as lead managers (the "Lead Managers") for each
of the International Managers named below (the "International Managers").
Subject to the terms and conditions set forth in an international purchase
agreement (the "International Purchase Agreement") among the Company, the
Selling Shareholder, the General Partner and the International Managers, and
concurrently with the sale of 3,600,000 shares of Common Stock to the U.S.
Underwriters (as defined below), the Selling Shareholder has agreed to sell to
the International Managers, and each of the International Managers severally has
agreed to purchase from the Selling Shareholder the number of shares of Common
Stock set forth opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL MANAGERS SHARES
-----------
<S> <C>
Merrill Lynch International.....................................
Bear, Stearns International Limited.............................
Goldman Sachs International.....................................
-----------
Total................................................. 900,000
-----------
-----------
</TABLE>
The Company, the Selling Shareholder and the General Partner have also
entered into a U.S. purchase agreement (the "U.S. Purchase Agreement") with
certain underwriters in the United States and Canada (the "U.S. Underwriters"
and, together with the International Managers, the "Underwriters") for whom
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Bear,
Stearns & Co. Inc. and Goldman, Sachs & Co. are acting as representatives (the
"U.S. Representatives"). Subject to the terms and conditions set forth in the
U.S. Purchase Agreement, and concurrently with the sale of 900,000 shares of
Common Stock to the International Managers pursuant to the International
Purchase Agreement, the Selling Shareholder has agreed to sell to the U.S.
Underwriters, and the U.S. Underwriters severally have agreed to purchase from
the Selling Shareholder, an aggregate of 3,600,000 shares of Common Stock. The
initial public offering price per share and the total underwriting discount per
share of Common Stock are identical under the International Purchase Agreement
and the U.S. Purchase Agreement.
In the International Purchase Agreement and the U.S. Pursuant Agreement, the
several International Managers and the several U.S. Underwriters, respectively,
have agreed, subject to the terms and conditions set forth therein, to purchase
all of the shares of Common Stock being sold pursuant to each such agreement if
any of the shares of Common Stock being sold pursuant to such agreement are
purchased. Under certain circumstances, under the U.S. Purchase Agreement and
the International Purchase Agreement, the commitments of non-defaulting
Underwriters may be increased. The closings with respect to the sale of shares
of Common Stock to be purchased by the International Managers and the U.S.
Underwriters are conditioned upon one another.
The Lead Managers have advised the Company and the Selling Shareholder that
the International Managers propose initially to offer the shares of Common Stock
to the Public at the initial public offering price set forth on the cover page
of this Prospectus, and to certain dealers at such price less a concession not
in excess of $ per share of Common Stock. The International Managers may
allow, and such dealers may reallow, a discount not in excess of $ per share
of Common Stock on sales to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.
The Selling Shareholder has granted an option to the International Managers,
exercisable for 30 days after the date of this Prospectus, to purchase up to an
aggregate of 135,000 additional shares of Common Stock at the initial public
offering price set forth on the cover page of this Prospectus, less the
underwriting discount. The International Managers may exercise this option
solely to cover over-allotments, if any, made on the sale of the Common Stock
offered hereby. To the extent that the International Managers exercise this
option, each International Manager will be obligated, subject to certain
conditions, to
21
<PAGE>
purchase a number of additional shares of Common Stock proportionate to such
International Manager's initial amount reflected in the foregoing table. The
Selling Shareholder has also granted an option to the U.S. Underwriters,
exercisable for 30 days after the date of this Prospectus, to purchase up to an
aggregate of 540,000 additional shares of Common Stock to cover over-allotments,
if any, on terms similar to those granted to the International Managers.
The Company, and its executive officers and directors, including the General
Partner and the Selling Shareholder, have agreed, subject to certain exceptions,
not to directly or indirectly (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant for the sale of or otherwise dispose of or
transfer any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock, whether now owned or thereafter
acquired by the person executing the agreement or with respect to which the
person executing the agreement thereafter acquires the power of disposition, or
file a registration statement under the Securities Act with respect to the
foregoing or (ii) enter into any swap or other agreement that transfers, in
whole or in part, the economic consequence of ownership of the Common Stock
whether any such swap or transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, without the prior written
consent of Merrill Lynch on behalf of the Underwriters for a period of 90 days
after the date of this Prospectus, in the case of the Selling Shareholder and
the General Partner, or 30 days after the date of this Prospectus, in the case
of the other executive officers and directors of the Company. See "Shares
Eligible for Future Sale."
The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Pursuant to the Intersyndicate Agreement, the
International Managers and the U.S. Underwriters are permitted to sell shares of
Common Stock to each other for purposes of resale at the initial public offering
price, less an amount not greater than the selling concession. Under the terms
of the Intersyndicate Agreement, the U.S. Underwriters and any dealer to whom
they sell shares of Common Stock will not offer to sell or sell shares of Common
Stock to persons who are non-U.S. or non-Canadian persons or to persons they
believe intend to resell to persons who are non-U.S. or non-Canadian persons,
and the International Managers and any dealer to whom they sell shares of Common
Stock will not offer to sell or sell shares Common Stock to U.S. persons or to
Canadian persons or to persons they believe intend to resell to U.S. or Canadian
persons, except in the case of transactions pursuant to the Intersyndicate
Agreement.
The Company, the Selling Shareholder and the General Partner have agreed to
indemnify the International Managers and the U.S. Underwriters against certain
liabilities, including certain liabilities under the Securities Act, or to
contribute to payments the U.S. Underwriters and International Managers may be
required to make in respect thereof.
Until the distribution of the Common Stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the Underwriters and
certain selling group members to bid for and purchase the Common Stock. As an
exception to these rules, the U.S. Representatives are permitted to engage in
certain transactions that stabilize the price of the Common Stock. Such
transactions consist of bids of purchases for the purpose of pegging, fixing or
maintaining the price of the Common Stock.
If the Underwriters create a short position in the Common Stock in
connection with the Offerings, i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus, the U.S.
Representatives may reduce that short position by purchasing Common Stock in the
open market. The U.S. Representatives may also elect to reduce any short
position by exercising all or part of the over-allotment option described above.
The U.S. Representatives may also impose a penalty bid on certain
Underwriters and selling group members. This means that if the U.S.
Representatives purchase shares of Common Stock in the open market to reduce the
Underwriters' short position or to stabilize the price of the Common Stock, they
may reclaim the amount of the selling concession from the Underwriters and
selling group members who sold those shares as part of the Offerings.
22
<PAGE>
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a the Common Stock to the extent that
it were to discourage resales of the Common Stock.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition, neither
the Company nor any of the Underwriters makes any representation that the U.S.
Representatives will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
Merrill Lynch has from time to time provided investment banking financial
advisory services to the Company, for which it has received customary
compensation, and may continue to do so in the future.
Each International Managers has agreed that (i) it has not offered or sold
and, prior to the expiration of the period of six months from the Closing Date,
will not offer or sell any shares of Common Stock to persons in the United
Kingdom, except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which do not
constitute an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 with
respect to anything done by it in relation to the Common Stock in, from or
otherwise involving the United Kingdom; and (iii) it has only issued or passed
on and will only issue or pass on in the United Kingdom any document received by
it in connection with the issuance of Common Stock to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or pass on.
No action has been or will be taken in any jurisdiction (except in the
United States) that would permit a public offering of the shares of Common
Stock, or the possession, circulation or distribution of this Prospectus or any
other material relating to the Company, the Selling Shareholder or shares of
Common Stock in any jurisdiction where action for that purpose is required.
Accordingly, the shares of Common Stock may not be offered or sold, directly or
indirectly, and neither this Prospectus nor any other offering material or
advertisements in connection with the shares of Common Stock may be distributed
or published, in or from any country or jurisdiction except in compliance with
any applicable rules and regulations of any such country or jurisdiction.
Purchasers of the shares offered hereby may be required to pay stamp taxes
and other charges in accordance with the laws and practices of the country of
purchase in addition to the offering price set forth on the cover page hereof.
LEGAL MATTERS
Certain legal matters in connection with the Common Stock offered hereby
will be passed upon for the Company by Phillips Nizer Benjamin Krim & Ballon
LLP, 666 Fifth Avenue, New York, New York 10103. Phillips Nizer Benjamin Krim &
Ballon LLP will rely upon Mesirov Gelman Jaffe Cramer & Jamieson, 1735 Market
Street, Philadelphia, Pennsylvania, with respect to certain matters concerning
Pennsylvania law. Herbert J. Goodfriend, Vice Chairman of the Company, is of
counsel to Phillips Nizer Benjamin Krim & Ballon LLP. Certain legal matters
relating to the Offerings will be passed upon for the Underwriters by Willkie
Farr & Gallagher, 153 East 53rd Street, New York, New York 10022.
EXPERTS
The financial statements and schedule of the Company incorporated by
reference in this Prospectus have been audited by BDO Seidman, LLP, independent
certified public accountants, to the extent and for the periods set forth in
their reports incorporated herein by reference, and are incorporated by
reference herein in reliance upon such reports given upon the authority of said
firm as experts in accounting and auditing.
23
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information concerning the Company can be inspected and copied at the
public reference room maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549. In addition, upon request such reports, proxy
statements and other information will be made available for inspection and
copying at the Commission's public reference facilities at the Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and
at Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material can be obtained at prescribed rates upon request from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. Such material may also be accessed electronically at the Commission's
site on the World Wide Web located at http:\\www.sec.gov. The Company's Common
Stock is listed on the New York Stock Exchange, and reports, proxy statements
and other information concerning the Company may be inspected and copied at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Company has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement on Form S-3 under the Securities Act
with respect to the Common Stock offered hereby. For further information about
the Company and the securities offered hereby, reference is made to the
Registration Statement and to the financial statements, schedules and exhibits
filed as a part hereof. Statements contained in this Prospectus as to the
contents of any contract or any other document are not necessarily complete, and
in each instance, reference is made to the copy of such contract or document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. The Registration Statement,
including exhibits thereto, may be inspected without charge at the Commission's
principal office in Washington, D.C. and copies of all or any part thereof may
be obtained from such office after payment of the fees prescribed by the
Commission.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference in this Prospectus (i) the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996, as amended (the "1996 Form 10-K"), (ii) the Company's Quarterly Reports on
form 10-Q for the fiscal quarters ended March 30, 1997 (the First Quarter Form
10-Q") and June 29, 1997 (the "Second Quarter Form 10-Q" and, together with the
First Quarter Form 10-Q, the "1997 Form 10-Qs"); and (iii) the description of
the Company's Common Stock contained in the Company's Registration Statement on
form 8-A, dated April 5, 1991, including any amendments filed for the purpose of
updated such description. All documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of this Offering shall be deemed
incorporated by reference into this Prospectus from the date of filing of such
documents. Any statement contained herein or in a document, all or a portion of
which is incorporated or deemed to be incorporated by reference herein, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contain herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus. The Company will provide without charge to
each person, including any beneficial owner, to whom this Prospectus is
delivered, upon the request of such person, a copy of the foregoing documents
incorporated herein by reference, other than exhibits to such documents (unless
such exhibits are incorporated by reference in such document). Requests shall be
directed to Jones Apparel Group, Inc., 250 Rittenhouse Circle, Keystone Park,
Bristol, Pennsylvania 19007; Attn: Wesley R. Card.
24
<PAGE>
ALTERNATE PAGE TO INTERNATIONAL PROSPECTUS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations not contained in this Prospectus in
connection with the offering covered by this Prospectus. If given or made, such
information or representations must not be relied upon as having been authorized
by the Company, the Selling Shareholder or the Underwriters. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, the
Common Stock in any jurisdiction where, or to any person to whom, it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has not been any change in the facts set forth in this Prospectus or
in the affairs of the Company since the date hereof.
In the Prospectus, reference to "dollars" and "$" are to United States
dollars.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
The Company.................................... 3
The Offerings.................................. 5
Selected Financial Information................. 6
Risk Factors................................... 8
Capitalization................................. 11
Use of Proceeds................................ 11
Price Range of Common Stock.................... 12
Dividend Policy................................ 12
Management..................................... 13
Selling Shareholder............................ 16
Shares Eligible for Future Sale................ 17
Certain United States Federal Tax Consequences
to Non-U.S. Holders of Common Stock.......... 18
Underwriting................................... 21
Legal Matters.................................. 23
Experts........................................ 23
Available Information.......................... 24
Incorporation of Documents
by Reference................................. 24
</TABLE>
4,500,000 SHARES
JONES APPAREL
GROUP, INC.
COMMON STOCK
------------------------
PROSPECTUS
------------------------
MERRILL LYNCH INTERNATIONAL
BEAR, STEARNS INTERNATIONAL LIMITED
GOLDMAN SACHS INTERNATIONAL
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Filing Fee-Securities Exchange Commission......................... $ 85,800
NASD Fee.......................................................... 28,817
Accounting Fees and Expenses...................................... 50,000
Legal Fees and Expenses........................................... 50,000
Blue Sky Fees and Expenses........................................ 10,000
Printing Fees and Expenses........................................ 100,000
Transfer Agent and Registrar's Fee................................ 2,500
Miscellaneous Expenses............................................ 12,883
---------
Total..................................................... $ 340,000
---------
---------
</TABLE>
All expenses other than the Securities and Exchange Commission and NASD
filing fees are estimated. All expenses will be borne by the Selling
Shareholder.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Pennsylvania Business Corporation Law, Section 8.1 of
the Company's By-laws provides that a director of the Company shall not be
personally liable for monetary damages for any action taken or failed to be
taken, other than as expressly provided in the Pennsylvania Business Corporation
Law. Furthermore, Section 8.2 of the Company's By-laws provides that the Company
shall indemnify each officer and director to the full extent permitted by the
Pennsylvania Business Corporation Law, and shall pay and advance expenses for
any matters covered by such indemnification.
Section 1741 of the Pennsylvania Business Corporation Law provides that the
Company shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation), by reason of the fact that he
is or was a representative of the corporation, or is or was serving at the
request of the corporation as a representative of another domestic or foreign
corporation for profit or not-for-profit, partnership, joint venture, trust or
other enterprise, against expenses (including attorney's fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action or proceeding if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the corporation and, with respect to any criminal proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any action or
proceeding by judgment, order, settlement or conviction or upon a plea of nolo
contendere or its equivalent shall not of itself create a presumption that the
person did not act in good faith and in a manner that he reasonably believed to
be in, or not opposed to, the best interests of the corporation and, with
respect to any criminal proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 1742 of the Pennsylvania Business Corporation Law provides that the
Company shall have the power to indemnify any person who was or is a party, or
is threatened to be made a party, to any threatened, pending or completed action
by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a representative of the corporation or is
or was serving at the request of the corporation as a representative of another
domestic or foreign corporation for profit or not-for-profit, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of the action if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of
II-1
<PAGE>
the corporation. Indemnification shall not be made under this section in respect
of any claim, issue or matter as to which the person has been adjudged to be
liable to the corporation unless and only to the extent that the court of common
pleas of the judicial district embracing the county in which the registered
office of the corporation is located or the court in which the action was
brought determined upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for the expenses that the court of common pleas
or other court deems proper.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
1.1* Form of U.S. Purchase Agreement
1.2* Form of International Purchase Agreement
5.1* Opinion of Mesirov Gelman Jaffe Cramer & Jamieson.
23.1** Consent of BDO Seidman, LLP.
23.2* Consent of Mesirov Gelman Jaffe Cramer & Jamieson (included as part of Exhibit 5.1).
23.3* Consent of Phillips Nizer Benjamin Krim & Ballon LLP.
24.1** Power of Attorney (included in Part II of this Registration Statement).
24.2* Certified resolutions of the Board of Directors authorizing signature pursuant to power of attorney.
</TABLE>
- ------------------------
* Filed herewith.
** Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Act;
(ii) To reflect in the Prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this registration statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Exchange Act by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
II-2
<PAGE>
(4) That, for purposes of determining any liability under the Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(5) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(6) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(7) (i) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective; and
(ii) For the purpose of determining any liability under the Securities
Act of 1933,each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York on the 14th day of
October, 1997.
JONES APPAREL GROUP, INC.
By: *
------------------------------------------
Sidney Kimmel, Chairman
II-4
<PAGE>
Pursuant to the requirements of the Securities Act, this Amendment to the
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ ------------------------------------ -------------------
<C> <S> <C>
*
------------------------------------------- Chairman and Director (Chief October 14, 1997
(Sidney Kimmel) Executive Officer)
*
------------------------------------------- Chief Financial Officer (Principal October 14, 1997
(Wesley R. Card) Financial Officer)
*
------------------------------------------- Controller (Principal Accounting October 14, 1997
(Gary R. Klocek) Officer)
*
------------------------------------------- Vice Chairman and Director October 14, 1997
(Herbert J. Goodfriend)
*
------------------------------------------- Executive Vice President, Marketing, October 14, 1997
(Irwin Samelman) and Director
*
------------------------------------------- Director October 14, 1997
(Geraldine Stutz)
*
------------------------------------------- Director October 14, 1997
(Howard Gittis)
*By: /s/
--------------------------------------
Ira Dansky
Attorney-in-Fact
</TABLE>
- ------------------------
* Executed pursuant to a power of attorney contained in the Registration
Statement.
II-5
<PAGE>
EXHIBIT 1.1
WF&G DRAFT
9/30/97
3,600,000 Shares
JONES APPAREL GROUP, INC.,
(a Pennsylvania corporation)
Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
[October __, 1997]
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co. Inc.
Goldman, Sachs & Co.
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Dear Sirs:
Jones Apparel Group, Inc., a Pennsylvania corporation (the
"Company"), Bristol Rittenhouse Investments, L.P., a Delaware limited
partnership (the "Selling Shareholder") and Sidney Kimmel, the sole general
partner of the Selling Sharholder (the "General Partner"), confirm their
respective agreements with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill Lynch"), and each of the other Underwriters
named in Schedule A hereto (collectively, the "U.S. Underwriters," which term
shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Merrill Lynch, Bear, Stearns & Co. Inc. and
Goldman, Sachs & Co. are acting as representatives (in such capacity, the
"U.S. Representatives"), with respect to (i) the sale by the Selling
Shareholder of 3,600,000 shares of Common Stock, par value $.01 per share,
of the Company ("Common Stock") and the purchase by the U.S. Underwriters,
acting severally and not jointly, of the respective number of shares of
Common Stock set forth in said Schedule A; and (ii) the grant by the Selling
Shareholder to the U.S. Underwriters, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
540,000 additional shares of Common Stock solely to cover over-allotments, if
any. The 3,600,000 shares Of Common Stock (the "Initial U.S. Securities")
and all or any part of the 540,000 shares of Common Stock subject to the
option described in Section 2(b) hereof (the "U.S. Option Securities") to be
purchased by the U.S.
<PAGE>
Underwriters are collectively hereinafter called the "U.S. Securities."
It is understood that the Company, the Selling Shareholder and the
General Partner are concurrently entering into an agreement dated the date
hereof (the "International Purchase Agreement") providing for the offering by
the Selling Shareholder of 900,000 shares of Common Stock (the "Initial
International Securities") through arrangements with certain managers outside
the United States and Canada (the "International Managers") for which Merrill
Lynch International, Bear, Stearns International Limited and Goldman Sachs
International are acting as lead managers (the "Lead Managers") and the grant
by the Selling Shareholder to the International Managers, acting severally
and not jointly, of an option to purchase all or any part of the
International Managers' pro rata portion of the 135,000 additional shares of
Common Stock solely to cover over-allotments, if any (the "International
Option Securities" and, together with the U.S. Option Securities, the "Option
Securities"). The Initial International Securities and the International
Option Securities are hereinafter called the "International Securities." It
is understood that the Selling Shareholder is not obligated to sell, and the
U.S. Underwriters are not obligated to purchase, any Initial U.S. Securities
unless all of the Initial International Securities are contemporaneously
purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities."
The Company, the Selling Shareholder and the General Partner understand
that the Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Merrill Lynch (in such capacity, the "Global Coordinator").
The Company, the Selling Shareholder and the General Partner understand
that the U.S. Underwriters propose to make a public offering of the U.S.
Securities as soon as the U.S. Representatives deem advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-36213) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and
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<PAGE>
paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if
the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act
Regulations, prepare and file a term sheet (a "Term Sheet") in accordance with
the provisions of Rule 434 and Rule 424(b). Two forms of prospectus are to be
used in connection with the offering and sale of the Securities: one relating
to the U.S. Securities (the "Form of U.S. Prospectus") and one relating to the
International Securities (the "Form of International Prospectus"). The Form of
International Prospectus is identical to the Form of U.S. Prospectus, except for
the front cover and back cover pages and the information under the caption
"Underwriting." The information included in any such prospectus or in any such
Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective (a) pursuant to paragraph
(b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to
paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each Form
of U.S. Prospectus and Form of International Prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the forms first furnished to the Underwriters for use in
connection with the offering of the Securities are herein called the "U.S.
Prospectus" and the "International Prospectus," respectively, and collectively,
the "Prospectuses." If Rule 434 is relied on, the terms "U.S. Prospectus" and
"International Prospectus" shall refer to the preliminary U.S. Prospectus dated
[_____, 1997] and preliminary International Prospectus dated [____, 1997,]
respectively, each together with the applicable Term Sheet and all references in
this Agreement to the date of such Prospectuses shall mean the date of the
applicable Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the U.S. Prospectus, the
International Prospectus or any Term Sheet or any amendment or supplement to any
of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
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<PAGE>
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus (including the Form of U.S.
Prospectus and Form of International Prospectus) or the Prospectuses (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus
(including the Form of U.S. Prospectus and Form of International Prospectus) or
the Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and
warrants to each U.S. Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each U.S. Underwriter, as
follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any amendments or
supplements thereto were issued and at the Closing Time (and, if any U.S.
Option Securities are purchased, at the Date of Delivery), included or will
include
-4-
<PAGE>
an untrue statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. If
Rule 434 is used, the Company will comply with the requirements of Rule
434. The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the U.S.
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any U.S. Underwriter through the
U.S. Representatives expressly for use in the Registration Statement or the
U.S. Prospectus.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectuses, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectuses, at the time the
Registration Statement became effective, at the time the Prospectuses were
issued and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements included in the
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the Company
and its subsidiaries as of the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
subsidiaries for the periods specified; except as otherwise stated in the
Registration Statement,
-5-
<PAGE>
said financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
GAAP the information required to be stated therein. The selected financial
data and the summary financial information included in the Prospectuses
present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included in
the Registration Statement.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein; (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"); (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise; and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Pennsylvania with corporate power and
authority to own, lease and operate its properties and to conduct its
business as now being conducted and as described in the Prospectuses and to
enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each of the operating
subsidiaries of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of
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property or the conduct of business, except where the failure to so qualify
or be in good standing would not have a Material Adverse Effect; all of the
issued and outstanding capital stock of each such operating subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable;
the capital stock of each of the operating subsidiaries owned by the
Company, directly or through subsidiaries, is owned free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity;
and none of the outstanding securities of any subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
subsidiary. The only subsidiaries of the Company are (a) the subsidiaries
(the "Operating Subsidiaries") listed on Schedule B hereto and (b) certain
other subsidiaries which, considered in the aggregate as a single
Subsidiary, do not constitute a "significant subsidiary" as defined in Rule
1-02 of Regulation S-X.
(viii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses under
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements or employee benefit plans); the shares of issued
and outstanding capital stock of the Company including the Securities to be
purchased by the U.S. Underwriters and the International Managers from the
Selling Shareholder, have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of capital
stock, including the Securities to be purchased by the U.S. Underwriters,
of the Company was issued in violation of the preemptive or other similar
rights of any security holder of the Company; the Common Stock conforms to
all statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments defining
the same; the outstanding stock options relating to the Company's Common
Stock have been duly authorized and validly issued and the description
thereof contained in the Registration Statement and the Prospectuses is
true and accurate; no holder of the Securities will be subject to personal
liability by reason of being such a holder.
(ix) AUTHORIZATION OF AGREEMENT. This Agreement and the International
Purchase Agreement have been duly authorized, executed and delivered by the
Company.
(x) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other instrument or agreement to
which the Company or any of
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its subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of its
subsidiaries is subject (collectively, "Agreements and Instruments"),
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement and
the International Purchase Agreement and the consummation of the
transactions contemplated in this Agreement and the International Purchase
Agreement and in the Registration Statement have been duly authorized by
all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or by-laws of the Company
or any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
(xi) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent; and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any of its
subsidiaries' principal suppliers, manufacturers, customers or contractors
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xii) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or
any of its subsidiaries, that is required to be disclosed in the
Registration Statement, or that might result in a Material Adverse Effect,
or that might materially and adversely affect the properties or assets
thereof or that might materially and adversely affect the consummation of
the transactions contemplated by this Agreement and the International
Purchase Agreement or the performance by the
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Company of its obligations hereunder or thereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any of
its subsidiaries is a party or of which any of their respective properties
or assets is the subject that are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names and other intellectual property
presently employed by them in connection with the business now operated by
them or necessary in order to conduct such business, and neither the
Company nor any of its subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xv) ABSENCE OF FURTHER REQUIREMENTS. No filing with,
authorization, approval, consent, license, order, registration,
qualification or decree of any court or governmental authority or agency is
necessary or required for the performance by the Company or any of its
subsidiaries in connection with the offering or sale of the Securities
under this Agreement and the International Purchase Agreement or the
transactions contemplated by this Agreement and the International Purchase
Agreement, except such as may be required under the 1933 Act or the 1933
Act Regulations and foreign or state securities or blue sky laws.
(xvi) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such authorizations, approvals, consents, licenses,
orders, registrations, qualifications, decrees or permits (collectively,
"Governmental Licenses") issued by the appropriate state, federal or
foreign regulatory agencies or bodies, necessary to conduct the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any
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notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xvii) NO REGISTRATION RIGHTS. No holder of securities of the
Company has rights to the registration of securities of the Company because
of the filing of the Registration Statement.
(xviii) ACCOUNTING CONTROLS. The Company and its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xix) COMPLIANCE WITH CUBA ACT. The Company has complied with,
and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba, codified as
Section 517.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(xx) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(b) The Selling Shareholder and the General Partner, jointly and
severally, represent and warrant to, and agree with, each U.S. Underwriter
as of the date hereof, as of the Closing Time and as of each Date of
Delivery, each of subparagraphs (i) through (xx), inclusive, of subsection
(a) of this Section 1 and each of subparagraphs (i) through (vii), inclusive,
of this subsection (b) as follows:
(i) For a period 90 days from the date of the Prospectuses, such
Selling Shareholder or General Partner, as the case may be, will not,
without the prior written consent of Merrill Lynch (i) offer, pledge,
sell, contract to sell, sell any option or contract to
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purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to the Securities to be sold
hereunder or under the International Purchase Agreement.
(ii) The execution and delivery of this Agreement and the
International Purchase Agreement and the consummation of the transactions
contemplated hereby and thereby will not result in a breach by such Selling
Shareholder or General Partner, as the case may be, of, or constitute a
default by such Selling Shareholder or General Partner, as the case may be,
under,any material indenture, deed or trust, contract or other agreement or
instrument or any decree, judgment or order to which such Selling
Shareholder or General Partner, as the case may be, is a party or by
which such Selling Shareholder or General Partner, as the case may be,
may be bound.
(iii) Such Selling Shareholder has and will have, at the Closing
Time and on each Date of Delivery, good and marketable title to the U.S.
Securities to be sold by such Selling Shareholder hereunder, free and clear
of any pledge, lien, security interest, encumbrance, claim or equity,
created by or arising through the Selling Shareholder other than pursuant
to this Agreement; such Selling Shareholder has full right, power and
authority to sell, transfer and deliver the U.S. Securities to be sold by
such Selling Shareholder hereunder; and upon delivery of the U.S.
Securities to be sold by such Selling Shareholder hereunder and payment of
the purchase price therefor as herein contemplated, each of the U.S.
Underwriters will receive good and marketable title to its ratable share of
the U.S. Securities purchased by it from such Selling Shareholder, free and
clear of any pledge, lien, security interest, encumbrance, claim or equity.
(iv) Such Selling Shareholder has duly executed and delivered in the
form heretofore furnished to the U.S. Underwriters, a power of attorney and
custody agreement (the "U.S. Power of Attorney and Custody Agreement") with
Ira Dansky, as the attorney-in-fact and the custodian (the "Attorney-in-
Fact" and the "Custodian," respectively); the Attorney-in-Fact is authorized
to execute and deliver this Agreement, and the certificates referred to in
Section 5(d) or that may be required pursuant to Section 5(j) on behalf of
such Selling
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Shareholder, to determine the purchase price to be paid by the U.S.
Underwriters to such Selling Shareholder as provided in Section 2(a)
hereof, to authorize the delivery of the U.S. Securities to be sold by such
Selling Shareholder hereunder, to duly endorse (in blank or otherwise) the
certificate or certificates representing such U.S. Securities, to accept
payment therefor, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.
(v) All authorizations, approvals, consents, licenses, orders,
registrations, qualifications, decrees or permits necessary for the
execution and delivery by such Selling Shareholder of the U.S. Power of
Attorney and Custody Agreement and the International Power of Attorney and
Custody Agreement, the execution and delivery by or on behalf of such
Selling Shareholder or General Partner, as the case may be, of this
Agreement and the International Purchase Agreement, and the sale and
delivery of the Securities to be sold by such Selling Shareholder
hereunder and thereunder (other than, at the time of the execution hereof,
the issuance of the order of the Commission declaring the Registration
Statement effective and such authorizations, approvals, consents, licenses,
orders, registrations, qualifications, decrees or permits as may be
necessary under state securities laws), have been obtained and are in full
force and effect; and such Selling Shareholder or General Partner, as the
case may be, has the full right, power and authority to enter into this
Agreement and the International Purchase Agreement and such U.S. Power of
Attorney and Custody Agreement and International Power of Attorney and
Custody Agreement to sell, transfer and deliver the Securities to be sold
by such Selling Shareholder hereunder.
(vi) Such Selling Shareholder or General Partner, as the case may
be, has not taken, and will not take, directly or indirectly,
any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security or the Company to facilitate
the sale or resale of the Securities.
(vii) Certificates in negotiable form for all Securities to be sold by
such Selling Shareholder hereunder and under the International Purchase
Agreement have been placed in custody with the Custodian by or for the
benefit of such Selling Shareholder with irrevocable conditional
instructions for the purposes of effecting delivery by such Selling
Shareholder hereunder and under the International Purchase Agreement.
(c) Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to the Global Coordinator, U.S. Representatives or to
counsel for the U.S. Underwriters shall be deemed a representation and warranty
by the Company to each U.S. Underwriter as to the matters covered thereby; and
any
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<PAGE>
certificate signed by or on behalf of the Selling Shareholder or General
Partner, as the case may be, and delivered to the Global Coordinator, U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by such Selling Shareholder or General Partner, as
the case may be, to each U.S. Underwriter as to matters covered thereby.
SECTION 2 SALE AND DELIVERY TO U.S. UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholder agrees to sell to each U.S. Underwriter,
severally and not jointly, and each U.S. Underwriter, severally and not jointly,
agrees to purchase from the Selling Shareholder, at the price per share set
forth in Schedule C, the number of Initial U.S. Securities set forth in Schedule
A opposite the name of such U.S. Underwriter, plus any additional number of
Initial U.S. Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholder hereby grants an option to the U.S.
Underwriters, severally and not jointly, to purchase up to an additional 540,000
shares of Common Stock at the price per share set forth in Schedule C, less an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial U.S. Securities upon notice by the Global
Coordinator to the Company and the Selling Shareholder setting forth the number
of U.S. Option Securities as to which the several U.S. Underwriters are then
exercising the option and the time and date of payment and delivery for such
U.S. Option Securities. Any such time and date of delivery for the U.S. Option
Securities (a "Date of Delivery") shall be determined by the Global Coordinator,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the U.S. Option Securities,
each of the U.S. Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of U.S. Option Securities then being
purchased which the number of Initial U.S. Securities set forth in Schedule A
opposite the name of such U.S. Underwriter bears to the total number of Initial
U.S. Securities, subject in each case to such adjustments as the Global
Coordinator in its discretion shall make to eliminate any sales or purchases of
fractional shares.
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(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Willkie
Farr & Gallagher, 153 East 53rd Street, New York, New York, or at such other
place as shall be agreed upon by the Global Coordinator and the Company and the
Selling Shareholder, at 9:00 A.M. (Eastern time) on the third (fourth, if the
pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Global Coordinator, the Company and the Selling
Shareholder (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator, the Company and the Selling Shareholder, on each Date of
Delivery as specified in the notice from the Global Coordinator to the Company
and the Selling Shareholder.
Payment shall be made to the Selling Shareholder by wire transfer of
immediately available funds to a bank account designated by the Selling
Shareholder or the Custodian pursuant to the Selling Shareholder's U.S. Power of
Attorney and Custody Agreement, as the case may be, against delivery to the U.S.
Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. Merrill Lynch, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
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SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each U.S.
Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable and will notify the Global Coordinator
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectuses or any amended Prospectuses shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectuses or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the Prospectus
included in the Registration Statement at the time it became effective or
the Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
U.S. Representatives or counsel for the U.S. Underwriters shall reasonably
object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company will deliver to
the U.S. Representatives and counsel for the U.S. Underwriters, without
charge, signed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) and signed copies of all consents and
certificates of experts;
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and will also deliver to the U.S. Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the U.S.
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the U.S. Representatives or counsel for the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to each U.S. Underwriter, without charge, during
the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the U.S. Prospectus (as
amended or supplemented) as such U.S. Underwriter may reasonably request.
The U.S. Prospectus and any amendments or supplements thereto furnished to
the U.S. Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement, the International
Purchase Agreement and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel for the U.S.
Underwriters or for the Company, to amend the Registration Statement or
amend or supplement any Prospectus in order that the Prospectuses will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or amend
or supplement any Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare
and file with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or the Prospectuses comply with such
requirements, and the Company will furnish to the U.S.
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Underwriters such number of copies of such amendment or supplement as the
U.S. Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts,
in cooperation with the U.S. Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Global Coordinator may
designate and to maintain such qualifications in effect for a period of not
less than one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided, however,
that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements
and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one year from
the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(g) RULE 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Securities to be sold hereunder or under the International
Purchase Agreement, (B) any shares of Common Stock issued by the Company
upon the exercise of an option or warrant or the
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conversion of a security outstanding on the date hereof and referred to in
the Prospectuses, (C) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit plans
of the Company referred to in the Prospectuses or (D) any shares of Common
Stock issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(i) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
(j) LISTING. The Company will file with the New York Stock Exchange
all documents and notices required by the New York Stock Exchange of
companies that have securities listed on such exchange and will use every
reasonable effort to maintain the listing of the Securities on the New York
Stock Exchange.
SECTION 4. PAYMENT OF EXPENSES. (a) The Company, the Selling
Shareholder and the General Partner will pay all expenses incident to the
performance of the obligations of the Company and the Selling Shareholder
under this Agreement, including (i) the printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation,
printing and delivery to the Underwriters of this Agreement, any Agreement
among Underwriters and such other documents as may be required in connection
with the offering, purchase, sale, issuance or delivery of the Securities,
(iii) the preparation and delivery of the certificates for the U.S.
Securities to the U.S. Underwriters, including any stock or other transfer
taxes and any stamp or other duties payable upon the sale or delivery of the
Securities to the Underwriters and the transfer of the Securities between the
U.S. Underwriters and the International Managers, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f), including filing fees and the fees and
disbursements of counsel for the U.S. Underwriters (which shall not exceed
$10,000) in connection therewith and in connection with the preparation of
the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheets and of the Prospectuses and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities and the
Custodians, (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review
by the
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National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Securities and (x) the fees and expenses incurred in connection
with the listing of the Securities on the New York Stock Exchange.
(b) EXPENSES OF THE SELLING SHAREHOLDER AND GENERAL PARTNER. The
Selling Shareholder and General Partner will pay all expenses incident to the
performance of his obligations under, and the consummation of the
transactions contemplated by this Agreement, including (i) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale of the
Securities to the Underwriters, and their transfer between the Underwriters
pursuant to an agreement between such Underwriters or between the U.S.
Underwriters and International Managers, and (ii) the fees and disbursements
of his counsel and accountants, if any.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11, the Company, the Selling Shareholder and General Partner shall
reimburse the U.S. Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the U.S.
Underwriters.
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company, the Selling Shareholder and the
General Partner may make for the sharing of such costs and expenses.
SECTION 5. CONDITIONS OF THE U.S. UNDERWRITERS' OBLIGATIONS. The
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company, the Selling
Shareholder and the General Partner herein contained or in certificates of
any officer of the Company or any of its subsidiaries or on behalf of the
Selling Shareholder or General Partner delivered pursuant to the provisions
hereof, to the performance by the Company, the Selling Shareholder and the
General Partner of their respective covenants and obligations hereunder, and
to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the U.S. Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet
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shall have been filed with the Commission in accordance with Rule 424(b).
(b) At Closing Time, the U.S. Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time, of Phillips
Nizer Benjamin Krim & Ballon LLP, counsel for the Company, in form and
substance satisfactory to counsel for the U.S. Underwriters, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect that:
(i) The Company is validly existing as a corporation in good
standing under the laws of the Commonwealth of Pennsylvania.
(ii) The Company has the corporate power and authority to own,
lease and operate its properties and to conduct its business as now
being conducted and as described in the Registration Statement and to
enter into and perform its obligations under this Agreement and the
International Purchase Agreement.
(iii) To the best of their knowledge and information, the
Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify or
be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses under "Capitalization"
(except for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans referred to in the Prospectuses),
and the shares of issued and outstanding Common Stock, including the
Securities to be purchased by the U.S. Underwriters and the
International Managers from the Selling Shareholder have been duly
authorized and validly issued and are fully paid and nonassessable and
no holder of the Securities is or will be subject to personal
liability by reason of being such a holder.
(v) The outstanding stock options relating to the Company's
Common Stock have been duly authorized and validly issued and the
description thereof contained in the Registration Statement and the
Prospectuses is true and accurate.
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(vi) This Agreement and the International Purchase Agreement have
each been duly authorized, executed and delivered by the Company.
(vii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933
Act; any required filing of the Prospectuses pursuant to Rule 424(b)
has been made in the manner and within the time period required by
Rule 424(b); and, to the best of their knowledge, no stop order
suspending the effectiveness of the Registration Statement or any Rule
462(b) Registration Statement has been issued under the 1933 Act and
no proceedings for that purpose have been instituted or are pending or
threatened by the Commission.
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectuses, excluding the documents
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and the Prospectuses, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein or omitted therefrom, as to
which we need express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(ix) The documents incorporated by reference in the
Prospectuses (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which we need
express no opinion), when they were filed with the Commission complied
as to form in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder.
(x) To the best of their knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or
foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the U.S. Purchase
Agreement and International
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Purchase Agreement or the performance by the Company of its
obligations thereunder.
(xi) The Common Stock conforms to the description thereof
contained in the Prospectuses, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies with
all applicable statutory requirements and the requirements of the New
York Stock Exchange.
(xii) Each of the Company's operating subsidiaries is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its organization, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement, and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which it owns or leases real property except
where the failure to so qualify would not have a Material Adverse
Effect; all of the issued and outstanding capital stock of each such
corporate subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any mortgage, pledge, lien,
encumbrance, claim or equity.
(xiii) The information in the Prospectuses under the heading
"Certain United States Federal Tax Consequences to Non-U.S. Holders of
Common Stock" and the description of the Company's capital stock
incorporated by reference in the Registration Statement and in the
Registration Statement under Item 15 to the extent that it constitutes
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by them and is correct in all material
respects.
(xiv) To the best of their knowledge after due inquiry, there are
no contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or agreements required to be described or referred
to in the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed as exhibits
thereto; the descriptions thereof or references thereto are correct;
and no default exists in the due performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument or agreement so described, referred to or filed, which
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default or defaults, singly or in the aggregate, are material to the
condition, financial or otherwise, or earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise.
(xv) No authorization, approval, consent or order of any court or
governmental authority or agency is required in connection with the
sale of the U.S. Securities to the U.S. Underwriters hereunder or the
International Securities to the International Managers under the
International Purchase Agreement, except such as may be required under
the 1933 Act or the 1933 Act Regulations or state securities law; and,
to the best of their knowledge and information, the execution and
delivery of this Agreement and the International Purchase Agreement
and the consummation of the transactions contemplated herein and
therein will not conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument or agreement to which the
Company or any of its subsidiaries is a party or by which any of them
may be bound, or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the charter or by-laws of the
Company, or any applicable law, rule, regulation, order or
administrative or court decree.
In rendering the foregoing opinion, Phillips Nizer Benjamin Krim &
Ballon LLP may rely as to matters of law of the Commonwealth of
Pennsylvania upon the opinion of Mesirov, Gelman, Jaffe, Cramer &
Jamieson, which opinion shall state that Willkie Farr & Gallagher may
rely on such opinion. Baker & McKenzie shall render an opinion
relating to Vestamex S.A. de C.V. and Camisas de Juarez S.A. de C.V.
as to matters of the laws of Mexico. Cassells Brock & Blackwell shall
render an opinion relating to Jones Apparel Group Canada, Inc. as to
matters of law of the Canadian province of Ontario. All such opinions
shall be satisfactory in form and in substance to counsel for the U.S.
Underwriters.
(2) The favorable opinion, dated as of Closing Time, of Phillips
Nizer Benjamin Krim & Ballon LLP, counsel for the Selling Shareholder and
the General Partner, in form and substance satisfactory to counsel for the
U.S. Underwriters, to the effect that:
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(i) This Agreement and the International Purchase Agreement have
been duly authorized, executed and delivered by or on behalf of the
Selling Shareholder and the General Partner.
(ii) The U.S. Power of Attorney and Custody Agreement has been
duly authorized, executed and delivered by the Selling Shareholder and
constitutes the valid and binding obligation of the Selling
Shareholder in accordance with its terms.
(iii) The U.S. Securities to be purchased by the U.S.
Underwriters from the Selling Shareholder have been validly issued and
are fully paid and non-assessable.
(iv) To the best of their knowledge after due inquiry, the
Selling Shareholder has good and marketable title to the U.S.
Securities to be sold by such Selling Shareholder hereunder and full
power, right and authority to sell such U.S. Securities as herein
contemplated, each of the U.S. Underwriters will receive good and
marketable title to the U.S. Securities purchased by it from the
Selling Shareholder, free and clear of any mortgage, pledge, lien,
security interest, encumbrance, claim or equity created by or arising
through the Selling Shareholder. In rendering such opinion, counsel
may assume that the U.S. Underwriters are without notice of any defect
in the title of the Selling Shareholder to the Securities being
purchased from such Selling Shareholder.
(v) No authorization, approval, consent, or order of any court
or governmental authority or agency is required in connection with the
sale of the U.S. Securities from the Selling Shareholder to the U.S.
Underwriters, except such as may be required under the 1933 Act of the
1933 Act Regulations or state securities law.
(3) The favorable opinion, dated as of Closing Time, of Willkie Farr
& Gallagher, counsel for the U.S. Underwriters, with respect to the matters
set forth in (i), (vi) to (ix), inclusive, and (xi) of subsection (b)(1) of
this Section and (i) and (iii) of subsection (b)(2) of this Section. Such
counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon
certificates of the Company and its subsidiaries and certificates of public
officials. In addition, in rendering the foregoing opinion, Willkie Farr &
Gallagher may rely as to matters of law of the Commonwealth of Pennsylvania
upon the opinion of Mesirov, Gelman, Jaffe, Cramer and Jamieson.
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(4) In giving their opinions required by subsections (b) (1), (b) (2)
and (b) (3) of this Section, Phillips Nizer Benjamin Krim & Ballon LLP and
Willkie Farr & Gallagher shall each additionally state that nothing has
come to their attention that would lead them to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included or incorporated
by reference therein or omitted therefrom, as to they need make no
statement), at the time such Registration Statement or any such amendment
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectuses or
any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference
therein or omitted therefrom, as to which they need make no statement), at
the time the Prospectuses were issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(c) At Closing Time, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement and the Prospectuses, any Material Adverse Effect, and the U.S.
Representatives shall have received a certificate of the Chairman or President
of the Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has been no such
Material Adverse Effect, (ii) the representations and warranties in Section 1(a)
hereof are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission.
(d) At the Closing Time the U.S. Representatives shall have received a
certificate of (x) the Attorney in Fact for the Selling Shareholder, dated as of
Closing Time, to the effect that (i) the representations and warranties of the
Selling Shareholder contained in Section 1(b) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time and
(ii) the Selling Shareholder has complied with all agreements and satisfied all
conditions on his part to be performed or satisfied hereunder at or prior to
Closing Time and (y) of the General Partner to the same effect, but with
respect to the General Partner.
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The Attorney in Fact shall be entitled to rely upon a certificate of the Selling
shareholder in giving its certificate.
(e) At the time of the execution of this Agreement, the U.S.
Representatives shall have received from BDO Seidman, LLP a letter dated such
date, in form and substance satisfactory to the U.S. Representatives, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
(f) At the Closing Time, the U.S. Representatives shall have received from
BDO Seidman, LLP a letter, dated as of the Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (e)
of this Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(g) At Closing Time, the Securities shall have been approved for listing
on the New York Stock Exchange, subject only to official notice of issuance.
(h) At the date of this Agreement, the U.S. Representatives shall have
received an agreement substantially in the form of Exhibit A hereto signed by
the persons listed on Schedule D hereto.
(i) In the event the U.S. Underwriters and the General Partner exercise
the option granted in Section 2(b) hereof to purchase all or any portion of
the U.S. Option Securities, the representations and warranties of the Company,
the Selling Shareholder and the General Partner contained herein and the
statements in any certificates furnished by the Company, the Selling
Shareholder or the General Partner hereunder shall be true and correct as
of the relevant Date of Delivery, and the U.S. Representatives shall have
received:
(1) A certificate, dated such Date of Delivery, of the Chairman or
President of the Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate delivered at Closing
Time pursuant to Section 5(c) remains true as of the Date of Delivery.
(2) A certificate, dated such Date of Delivery, of an Attorney in
Fact on behalf of the Selling Shareholder confirming that the certificate
delivered at Closing Time pursuant to Section 5(d) remains true and correct
as of such Date of Delivery.
(3) The favorable opinions of Phillips Nizer Benjamin Krim & Ballon
LLP, counsel for the Company, the Selling Shareholder and General
Partner, in the form and substance
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reasonably satisfactory to counsel for the U.S. Underwriters, dated such
Date of Delivery, relating to the U.S. Option Securities and otherwise to
the same effect as the opinions required by Section 5(b)(1) and 5(b)(2).
(4) The favorable opinion of Willkie Farr & Gallagher, counsel for
the U.S. Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities and otherwise to the same effect as the opinion required
by Section 5(b)(3).
(5) A letter from BDO Seidman, LLP, in form and substance
satisfactory to the U.S. Underwriters and dated such Date of Delivery,
substantially the same in scope and substance as the letter furnished to
the U.S. Representatives pursuant to Section 5(f) except that any
"specified date" in the letter furnished pursuant to this Section (5)(i)(5)
shall be a date not more than three days prior to the Date of Delivery.
(j) At Closing Time and at each Date of Delivery, if any, counsel for
the U.S. Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as contemplated herein, in the
International Purchase Agreement and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the agreements or conditions, herein contained; and all
proceedings taken by the Company, the Selling Shareholder and the General
Partner in connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the U.S.
Representatives and counsel for the U.S. Underwriters.
(k) Contemporaneously with the purchase by the U.S. Underwriters of the
Initial U.S. Securities under this Agreement, the International Managers shall
have purchased the Initial International Securities under the International
Purchase Agreement.
(l) If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or in the case
of any condition to the purchase of U.S. Option Securities on a Date of Delivery
which is after the Closing Time, the obligations of the several U.S.
Underwriters to purchase the relevant U.S. Option Securities, may be terminated
by the U.S. Representatives by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such termination
shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 hereof shall survive any such
termination and remain in full force and effect.
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SECTION 6. INDEMNIFICATION. (a) The Company, the Selling Shareholder
and the General Partner agree to indemnify and hold harmless each U.S.
Underwriter, its directors, officers and employees, and each person, it any
who controls any U.S. Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act to the extent and in the manner set
forth in clauses (i), (ii) and (iii) below.
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arisingof any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or
any amendment thereto), including the Rule 430A Information and Rule 434
Information, if applicable, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arisingof any untrue statement or
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arisingof any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if
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applicable, or any preliminary prospectus or the U.S. Prospectus (or any
amendment or supplement thereto).
(b) Each U.S. Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, the Selling Shareholder, the General
Partner and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary U.S. prospectus or the U.S. Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such U.S. Underwriter through
the U.S. Representatives expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the U.S. Prospectus
(or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account
of this indemnity agreement. In the case of parties indemnified pursuant
to Section 6(a) above, counsel to the indemnified parties shall be selected
by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by
the Company. An indemnifying party may participate at its own expense in
the defense of any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel
for all indemnified parties in connection with any one action or separate
but similar or related actions in the same jurisdiction arisingof the same
general allegations or circumstances. No indemnifying party shall, without
the prior written consent of the indemnified parties, settle or compromise
or consent to the entry of any judgment with respect to any litigation, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or
Section 7 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such
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settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arisingof such litigation,
investigation, proceeding or claim and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on
behalf of any indemnified party.
(d) In the event of a claim for indemnity pursuant to the provisions
of this Section 6, each indemnified party severally agrees to seek such
indemnity in full from the Company. If, after seeking such indemnity, any
indemnified party is unable, for any reason, to obtain such indemnity from
the Company, such indemnified party may seek indemnity from the Selling
Shareholder and the General Partner, whose obligations hereunder shall be
joint and several, in accordance with the provisions of subsection (a) of
this Section.
(e) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a) effected without its
written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
(f) The provisions of this Section shall not affect any agreement
between the Company, the Selling Shareholder and General Partner with
respect to indemnification.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, Selling Shareholder and the General Partner on the one hand and
the U.S. Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, the Selling Shareholder and the
General Partner on the one hand and of the U.S. Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
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<PAGE>
The relative benefits received by the Company, the Selling Shareholder
and the General Partner on the one hand and the U.S. Underwriters on the
other hand in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Securities pursuant to this
Agreement (before deducting expenses) received by the Company, the Selling
Shareholder and the General Partner and the total underwriting discount
received by the U.S. Underwriters, in each case as set forth on the cover of
the Prospectus, or, if Rule 434 is used, the corresponding location on the
Term Sheet bear to the aggregate initial public offering price of the
Securities as set forth on such cover. In addition, for purposes of this
section, the General Partner shall be deemed to have received any net proceeds
received by the Selling Shareholder.
The relative fault of the Company, the Selling Shareholder and the
General Partner on the one hand and the U.S. Underwriters on the other hand
shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Selling Shareholder or the General Partner or by the U.S.
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholder, the General Partner and the U.S.
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if
the U.S. Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
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<PAGE>
For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth opposite
their respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement between
the Company, the Selling Shareholder and the General Partner with respect to
contribution.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries or the Selling Shareholder or General Partner submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company, the Selling Shareholder or General
Partner and shall survive delivery of the Securities to the U.S. Underwriters.
SECTION 9. TERMINATION OF AGREEMENT. (a) The U.S. Representatives may
terminate this agreement, by notice to the Company and the Selling Shareholder,
at any time at or prior to Closing Time (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the U.S. Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the U.S. Representatives, impracticable
to market the Securities or to enforce contracts for the sale of the Securities,
or (iii) if trading in any of the securities of the Company has been suspended
or materially limited by the Commission or the New York Stock Exchange, or if
trading generally on either the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said Exchanges or by order of
the Commission,
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<PAGE>
the NASD or any governmental authority, or if a banking moratorium has been
declared by either Federal, New York or Pennsylvania authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8
hereof shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE U.S. UNDERWRITERS. If one or
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the U.S. Securities which it or they are obligated to purchase under
this Agreement (the "Defaulted Securities"), the U.S. Representatives shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting U.S. Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth. If, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of U.S. Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the U.S. Underwriters to purchase and of the Selling
Shareholder to sell the U.S. Option Securities to be purchased and sold on
such Date of Delivery, shall terminate without liability on the part of any
non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Selling Shareholder to sell the relevant U.S.
Option Securities, as the case may be, either the U.S. Representatives or the
Company shall have the right to postpone Closing Time or the relevant Date of
Delivery for a period not
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<PAGE>
exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectuses or in any other documents or arrangements. As used
herein, the term "U.S. Underwriter" includes any person substituted for a U.S.
Underwriter under this Section 10.
SECTION 11. DEFAULT BY THE SELLING SHAREHOLDER. If the Selling
Shareholder shall fail at Closing Time or a Date of Delivery to sell and deliver
the number of U.S. Securities which such Selling Shareholder is obligated to
sell hereunder, then the U.S. Representatives may, at their option, by notice to
the Company and the Selling Shareholder, terminate this Agreement without
liability on the part of any non-defaulting party except that the provisions of
Section 1, 4, 6, 7 and 8 shall remain in full force and effect.
In the event of a default by the Selling Shareholder as referred to in this
Section 11, the U.S. Underwriters shall have the right to postpone Closing Time
or a Date of Delivery for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or the Prospectuses or in any
other documents or arrangements.
No action taken pursuant to this Section 11 shall relieve the Company or
the Selling Shareholder from liability, if any, in respect of such default.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives c/o Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, North Tower, World
Financial Center, New York, N.Y. 10281-1201, attention of Mary Beth Henson,
Managing Director; and notices to the Company, the Selling Shareholder and
the General Partner shall be directed to 1411 Broadway, New York, New York
10018, attention of Sidney Kimmel or Herbert J. Goodfriend.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the U.S. Underwriters, the Company, the Selling
Shareholder and the General Partner and their respective successors, heirs
and legal representatives. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation,
other than the U.S. Underwriters, the Company, the Selling Shareholder and
the General Partner and their respective successors, heirs and legal
representatives and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their respective successors, heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein or therein contained.
This Agreement and all conditions and provisions hereof are intended to be
for the sole and exclusive benefit of the U.S. Underwriters, the Company, the
Selling
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<PAGE>
Shareholder and the General Partner and their respective successors, heirs
and legal representatives, and said controlling persons and officers and
directors and their respective successors, heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
U.S. Securities from any U.S. Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified times of day refer
to New York City time.
SECTION 15. EFFECT OF HEADINGS. The section headings herein contained are
for convenience only and shall not affect the construction hereof.
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to each of the Company, the Selling
Shareholder and the General Partner a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement
between the U.S. Underwriters, the Company, the Selling Shareholder and the
General Partner in accordance with its terms.
Very truly yours,
JONES APPAREL GROUP, INC.
By:_______________________
Name:
Title:
SELLING SHAREHOLDER
By:_______________________
Attorney in Fact, acting
on behalf of Bristol
Rittenhouse Investments, L.P.
GENERAL PARTNER
___________________________
SIDNEY KIMMEL
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BEAR, STEARNS & CO. INC.
GOLDMAN, SACHS & CO.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _________________________________
Authorized Signatory:
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
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<PAGE>
SCHEDULE A
NUMBER OF INITIAL U.S.
NAME OF THE U.S. UNDERWRITER SECURITIES TO BE
PURCHASED
Merrill, Lynch, Pierce, Fenner & Smith
Incorporated. . . . . . . .
Bear, Stearns & Co. Inc. . . . . . . . .
Goldman, Sachs & Co. . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . 3,600,000
---------
---------
<PAGE>
SCHEDULE B
List of subsidiaries
Melru Corporation
Jones Apparel Group Canada Inc.
Jones Investment Co., Inc.
Jones Holding Corporation
Camisas de Juarez S.A. De C.V.
<PAGE>
SCHEDULE C
Jones Apparel Group, Inc.
3,600,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the U.S. Securities,
determined as provided in said Section 2, shall be $[___].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $__, being an amount equal to the initial public
offering price set forth above less $__ per share; provided that the purchase
price per share for any U.S. Option Securities purchased upon the exercise of
the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities.
<PAGE>
SCHEDULE D
NAME LOCK-UP PERIOD
Jones Apparel Group, Inc. 90 days
Sidney Kimmel 90 days
The Sidney Kimmel Foundation 90 days
Herbert J. Goodfriend 30 days
Irwin Samelman 30 days
Wesley R. Card 30 days
Gary R. Klocek 30 days
Geraldine Stutz 30 days
Howard Gittis 30 days
Rena Rowan 30 days
<PAGE>
[Form of lock-up from directors, officers or other stockholders]
Exhibit A
[October ___, 1997]
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co. Inc.
Goldman, Sachs & Co.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
Merrill Lynch International
Bear, Stearns International Limited
Goldman Sachs International
as Lead Managers of the several
International Managers to be named in the
within-mentioned International Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: PROPOSED PUBLIC OFFERING BY JONES APPAREL GROUP, INC.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of Jones
Apparel Group, Inc., Pennsylvania corporation (the "Company"), understands
(i) that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Bear, Stearns & Co. Inc. and Goldman, Sachs &
Co., as U.S. Representatives of the several U.S. Underwriters to be named in
Schedule A to the U.S. Purchase Agreement (as defined herein), propose to
enter into a U.S. Purchase Agreement (the "U.S. Purchase Agreement") with the
Company, Bristol Rittenhouse Investments, L.P., a Delaware limited
partnership (the "Selling Shareholder") and Sidney Kimmel, sole general
partner of the Selling Shareholder (the "General Partner") and (ii) that
Merrill Lynch International, Bear, Stearns International Limited and Goldman
Sachs International, as Lead Managers of the several International Managers
to be named in Schedule A to the International Purchase Agreement (as defined
herein), propose to enter into an International Purchase Agreement (the
"International Purchase Agreement" and collectively with the U.S. Purchase
Agreement, the "Purchase Agreements") with the Company, the Selling
Shareholder and the General Partner, in each case providing for the public
offering of shares (the "Securities") of the Company's common stock, par
value $.01 per share (the "Common Stock"). The U.S. Underwriters and the
International Managers to be named in Schedule A to each of the U.S. Purchase
Agreement and the International Purchase Agreement, respectively, are
collectively referred to herein as the "Underwriters."
In recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder [and an officer and/or director] of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each of the
Underwriters that, during a period of [___________ days]
[SEE SCHEDULE D TO U.S. PURCHASE AGREEMENT FOR NUMBER OF DAYS] from the date
of the Purchase Agreements, the undersigned will not, without the prior
written consent of Merrill Lynch, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any share of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the 1933
<PAGE>
Act with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
Very truly yours,
Signature: _________________
Print Name:_________________
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<PAGE>
EXHIBIT 1.2
WF&G DRAFT
9/30/97
900,000 Shares
JONES APPAREL GROUP, INC.,
(a Pennsylvania corporation)
Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
[October __, 1997]
Merrill Lynch International
Bear, Stearns International Limited
Goldman Sachs International
as Lead Managers of the several International Managers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Ladies and Gentlemen:
Jones Apparel Group, Inc., a Pennsylvania corporation (the "Company"),
Bristol Rittanhouse Investments, L.P., a Delaware limited partnership, (the
"Selling Shareholder") and Sidney Kimmel, the sole general partner of the
Selling Shareholder (the "General Partner"), confirm their respective
agreements with Merrill Lynch International ("Merrill Lynch"), and each of
the other international underwriters named in Schedule A hereto
(collectively, the "International Managers," which term shall also include
any underwriter substituted as hereinafter provided in Section 10 hereof),
for whom Merrill Lynch, Bear, Stearns International Limited and Goldman Sachs
International are acting as representatives (in such capacity, the "Lead
Managers"), with respect to (i) the sale by the Selling Shareholder of
900,000 shares of Common Stock, par value $.01 per share, of the Company
("Common Stock") and the purchase by the International Managers, acting
severally and not jointly, of the respective number of shares of Common Stock
set forth in said Schedule A; and (ii) the grant by the Selling Shareholder
to the International Managers, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of
135,000 additional shares of Common Stock solely to cover over-allotments, if
any. The 900,000 shares of Common Stock (the "Initial International
Securities") and all or any part of the 135,000 shares of Common Stock
subject to the option described in Section 2(b) hereof (the "International
Option Securities") to be purchased by the International Managers are
collectively hereinafter called the "International Securities."
<PAGE>
It is understood that the Company, the Selling Shareholder and the
General Partner are concurrently entering into an agreement dated the date
hereof (the "U.S. Purchase Agreement") providing for the offering by the
Selling Shareholder of 3,600,000 shares of Common Stock (the "Initial U.S.
Securities") through arrangements with certain managers in the United States
and Canada (the "U.S. Underwriters") for which Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Bear, Stearns & Co. Inc. and Goldman, Sachs & Co. are
acting as representatives (the "U.S. Representatives") and the grant by the
Selling Shareholder to the U.S. Underwriters, acting severally and not
jointly, of an option to purchase all or any part of the U.S. Underwriters'
pro rata portion of the 540,000 additional shares of Common Stock solely to
cover over-allotments, if any (the "U.S. Option Securities" and, together
with the International Option Securities, the "Option Securities"). The
Initial U.S. Securities and the U.S. Option Securities are hereinafter called
the "U.S. Securities." It is understood that the Selling Shareholder is not
obligated to sell, and the International Managers are not obligated to
purchase, any Initial International Securities unless all of the Initial U.S.
Securities are contemporaneously purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities," and the International Securities and U.S. Securities are
hereinafter collectively called the "Securities."
The Company, the Selling Shareholder and the General Partner understand
that the Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing
for the coordination of certain transactions among the Underwriters under the
direction of Merrill Lynch (in such capacity, the "Global Coordinator").
The Company, the Selling Shareholder and the General Partner understand
that the International Managers propose to make a public offering of the
International Securities as soon as the Lead Managers deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-36213) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a
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<PAGE>
term sheet (a "Term Sheet") in accordance with the provisions of Rule 434 and
Rule 424(b). Two forms of prospectus are to be used in connection with the
offering and sale of the Securities: one relating to the International
Securities (the "Form of International Prospectus") and one relating to the U.S.
Securities (the "Form of U.S. Prospectus"). The Form of International Prospectus
is identical to the Form of U.S. Prospectus, except for the front cover and back
cover pages and the information under the caption "Underwriting." The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each Form of International
Prospectus and Form of U.S. Prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto, schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final Form of International Prospectus and the final
Form of U.S. Prospectus, including the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "International Prospectus" and "U.S. Prospectus" shall
refer to the preliminary International Prospectus dated [_____, 1997] and
preliminary U.S. Prospectus dated [____, 1997,] respectively, each together with
the applicable Term Sheet and all references in this Agreement to the date of
such Prospectuses shall mean the date of the applicable Term Sheet. For purposes
of this Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus
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<PAGE>
(including the Form of U.S. Prospectus and Form of International Prospectus) or
the Prospectuses (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which is incorporated by reference in the Registration Statement, any
preliminary prospectus (including the Form of U.S. Prospectus and Form of
International Prospectus) or the Prospectuses, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectuses shall be deemed to
mean and include the filing of any document under the Securities Exchange Act of
1934 (the "1934 Act") which is incorporated by reference in the Registration
Statement, such preliminary prospectus or the Prospectuses, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES. (a) The Company represents and
warrants to each International Manager as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each International
Manager, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Neither of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time
(and, if any International Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the
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<PAGE>
light of the circumstances under which they were made, not misleading. If
Rule 434 is used, the Company will comply with the requirements of Rule
434. The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the
International Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any International
Manager through the Lead Managers expressly for use in the Registration
Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectuses, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectuses, at the time the
Registration Statement became effective, at the time the Prospectuses were
issued and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), did not and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements included in the
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the Company
and its subsidiaries as of the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
subsidiaries for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity
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with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present fairly
in accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included in
the Prospectuses present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein; (A) there has been
no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"); (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered
as one enterprise; and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Pennsylvania with corporate power
and authority to own, lease and operate its properties and to conduct its
business as now being conducted and as described in the Prospectuses and
to enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or be in
good standing would not have a Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each of the operating
subsidiaries of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the
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failure to so qualify or be in good standing would not have a Material
Adverse Effect; all of the issued and outstanding capital stock of each
such operating subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable; the capital stock of each of the operating
subsidiaries owned by the Company, directly or through subsidiaries, is
owned free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; and none of the outstanding securities of
any subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such subsidiary. The only subsidiaries of the
Company are (a) the subsidiaries (the "Operating Subsidiaries") listed on
Schedule B hereto and (b) certain other subsidiaries which, considered in
the aggregate as a single Subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses under
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements or employee benefit plans); the shares of issued
and outstanding capital stock of the Company including the Securities to
be purchased by the International Managers and the U.S. Underwriters from
the Selling Shareholder, have been duly authorized and validly issued and
are fully paid and non-assessable; none of the outstanding shares of
capital stock, including the Securities to be purchased by the
International Managers, of the Company was issued in violation of the
preemptive or other similar rights of any security holder of the Company;
the Common Stock conforms to all statements relating thereto contained in
the Prospectuses and such description conforms to the rights set forth in
the instruments defining the same; the outstanding stock options relating
to the Company's Common Stock have been duly authorized and validly issued
and the description thereof contained in the Registration Statement and
the Prospectuses is true and accurate; no holder of the Securities will be
subject to personal liability by reason of being such a holder.
(ix) AUTHORIZATION OF AGREEMENT. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(x) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other instrument or agreement to
which the Company or any of its subsidiaries is a party or by which it or
any of them
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may be bound, or to which any of the property or assets of the Company or
any of its subsidiaries is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated in this Agreement and the U.S. Purchase
Agreement and in the Registration Statement have been duly authorized by
all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or any of their assets, properties
or operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its subsidiaries.
(xi) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees of
the Company or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent; and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any of its
subsidiaries' principal suppliers, manufacturers, customers or contractors
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any of its
subsidiaries, that is required to be disclosed in the Registration
Statement, or that might result in a Material Adverse Effect, or that
might materially and adversely affect the properties or assets thereof or
that might materially and adversely affect the consummation of the
transactions contemplated by this Agreement and the U.S. Purchase
Agreement or the performance by the Company of its obligations hereunder
or thereunder; the aggregate of all
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pending legal or governmental proceedings to which the Company or any of
its subsidiaries is a party or of which any of their respective properties
or assets is the subject that are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names and other intellectual property
presently employed by them in connection with the business now operated by
them or necessary in order to conduct such business, and neither the
Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
any of the foregoing which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xv) ABSENCE OF FURTHER REQUIREMENTS. No filing with, authorization,
approval, consent, license, order, registration, qualification or decree
of any court or governmental authority or agency is necessary or required
for the performance by the Company or any of its subsidiaries in
connection with the offering or sale of the Securities under this
Agreement and the U.S. Purchase Agreement or the transactions contemplated
by this Agreement and the U.S. Purchase Agreement, except such as may be
required under the 1933 Act or the 1933 Act Regulations and foreign or
state securities or blue sky laws.
(xvi) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such authorizations, approvals, consents, licenses,
orders, registrations, qualifications, decrees or permits (collectively,
"Governmental Licenses") issued by the appropriate state, federal or
foreign regulatory agencies or bodies, necessary to conduct the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly
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or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xvii) NO REGISTRATION RIGHTS. No holder of securities of the
Company has rights to the registration of securities of the Company
because of the filing of the Registration Statement.
(xviii)ACCOUNTING CONTROLS. The Company and its subsidiaries maintain
a system of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xix) COMPLIANCE WITH CUBA ACT. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xx) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(b) The Selling Shareholder and the General Partner, jointly and
severally, represent and warrant to, and agree with, each International
Manager as of the date hereof, as of the Closing Time and as of each Date of
Delivery, each of subparagraphs (i) through (xx), inclusive, of subsection
(a) of this Section 1 and each of subparagraphs (i) through (vii), inclusive,
of this subsection (b) as follows:
(i) For a period 90 days from the date of the Prospectuses, such
Selling Shareholder or General Partner, as the case may be, will not,
without the prior written consent of Merrill Lynch (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer
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or dispose of, directly or indirectly, any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock or file any registration statement under the 1933 Act with respect
to any of the foregoing or (ii) enter into any swap or any other agreement
or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to the
Securities to be sold hereunder or under the U.S. Purchase Agreement.
(ii) The execution and delivery of this Agreement and the U.S.
Purchase Agreement and the consummation of the transactions contemplated
hereby and thereby will not result in a breach by such Selling Shareholder
or General Partner, as the case may be, of, or constitute a default by
such Selling Shareholder or General Partner, as the case may be, under,
any material indenture, deed or trust, contract or other agreement or
instrument or any decree, judgment or order to which such Selling
Shareholder or General Partner, as the case may be, is a party or by
which such Selling Shareholder or General Partner, as the case may be,
may be bound.
(iii) Such Selling Shareholder has and will have, at the Closing Time
and on each Date of Delivery, good and marketable title to the
International Securities to be sold by such Selling Shareholder hereunder,
free and clear of any pledge, lien, security interest, encumbrance, claim
or equity, created by or arising through the Selling Shareholder other
than pursuant to this Agreement; such Selling Shareholder has full right,
power and authority to sell, transfer and deliver the International
Securities to be sold by such Selling Shareholder hereunder; and upon
delivery of the International Securities to be sold by such Selling
Shareholder hereunder and payment of the purchase price therefor as herein
contemplated, each of the International Managers will receive good and
marketable title to its ratable share of the International Securities
purchased by it from such Selling Shareholder, free and clear of any
pledge, lien, security interest, encumbrance, claim or equity.
(iv) Such Selling Shareholder has duly executed and delivered in the
form heretofore furnished to the International Managers, a power of
attorney and custody agreement (the "International Power of Attorney and
Custody Agreement") with Ira Dansky, as the attorney-in-fact and the
custodian (the "Attorney-in-Fact" and the "Custodian," respectively); the
Attorney-in-Fact is authorized to execute and deliver this Agreement, and
the certificates referred to in Section 5(d) or that may be required
pursuant to Section 5(j) on behalf of such Selling Shareholder, to
determine the purchase price to be
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paid by the International Managers to such Selling Shareholder as provided
in Section 2(a) hereof, to authorize the delivery of the International
Securities to be sold by such Selling Shareholder hereunder, to duly
endorse (in blank or otherwise) the certificate or certificates
representing such International Securities, to accept payment therefor,
and otherwise to act on behalf of such Selling Shareholder in connection
with this Agreement.
(v) All authorizations, approvals, consents, licenses, orders,
registrations, qualifications, decrees or permits necessary for the
execution and delivery by such Selling Shareholder of the International
Power of Attorney and Custody Agreement and the U.S. Power of Attorney and
Custody Agreement, the execution and delivery by or on behalf of such
Selling Shareholder or General Partner, as the case may be, of this
Agreement and the U.S. Purchase Agreement, and the sale and delivery of
the Securities to be sold by such Selling Shareholder hereunder and
thereunder (other than, at the time of the execution hereof, the issuance
of the order of the Commission declaring the Registration Statement
effective and such authorizations, approvals, consents, licenses, orders,
registrations, qualifications, decrees or permits as may be necessary
under state securities laws), have been obtained and are in full force
and effect; and such Selling Shareholder or General Partner, as the case
may be, has the full right, power and authority to enter into this
Agreement and the U.S. Purchase Agreement and such International Power
of Attorney and Custody Agreement and U.S. Power of Attorney and Custody
Agreement to sell, transfer and deliver the Securities to be sold by such
Selling Shareholder hereunder.
(vi) Such Selling Shareholder or General Partner, as the case may
be, has not taken, and will not take, directly or indirectly, any action
which is designed to or which has constituted or which might reasonably
be expected to cause or result in stabilization or manipulation of the
price of any security or the Company to facilitate the sale or resale of
the Securities.
(vii) Certificates in negotiable form for all Securities to be sold
by such Selling Shareholder hereunder and under the U.S. Purchase
Agreement have been placed in custody with the Custodian by or for the
benefit of such Selling Shareholder with irrevocable conditional
instructions for the purposes of effecting delivery by such Selling
Shareholder hereunder and under the U.S. Purchase Agreement.
(c) Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to the Global Coordinator, Lead Managers or to
counsel for the International Managers shall be deemed a representation and
warranty by the Company to each International Manager as to the matters covered
thereby; and any certificate signed by or on behalf of the Selling Shareholder
or the General Partner, as the case may be, and
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delivered to the Global Coordinator, Lead Managers or to counsel for the
International Managers shall be deemed a representation and warranty by such
Selling Shareholder or General Partner, as the case may be, to each
International Manager as to matters covered thereby.
SECTION 2. SALE AND DELIVERY TO U.S. UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholder agrees to sell to each International Manager,
severally and not jointly, and each International Manager, severally and not
jointly, agrees to purchase from the Selling Shareholder, at the price per share
set forth in Schedule C, the number of Initial International Securities set
forth in Schedule A opposite the name of such International Manager, plus any
additional number of Initial International Securities which such International
Manager may become obligated to purchase pursuant to the provisions of Section
10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholder hereby grants an option to the International
Managers, severally and not jointly, to purchase up to an additional 135,000
shares of Common Stock at the price per share set forth in Schedule C, less an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial International Securities but not payable on the
International Option Securities. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial International Securities upon
notice by the Global Coordinator to the Company and the Selling Shareholder
setting forth the number of International Option Securities as to which the
several International Managers are then exercising the option and the time and
date of payment and delivery for such International Option Securities. Any such
time and date of delivery for the International Option Securities (a "Date of
Delivery") shall be determined by the Global Coordinator, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the International Option Securities, each
of the International Managers, acting severally and not jointly, will purchase
that proportion of the total number of International Option Securities then
being purchased which the number of Initial International Securities set forth
in Schedule A opposite the name of such International Manager bears to the total
number of Initial International Securities, subject in each case to such
adjustments as the Global Coordinator in its discretion shall make to eliminate
any sales or purchases of fractional shares.
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(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Willkie
Farr & Gallagher, 153 East 53rd Street, New York, New York, or at such other
place as shall be agreed upon by the Global Coordinator and the Company and the
Selling Shareholder, at 9:00 A.M. (Eastern time) on the third (fourth, if the
pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Global Coordinator, the Company and the Selling
Shareholder (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator, the Company and the Selling
Shareholder, on each Date of Delivery as specified in the notice from the Global
Coordinator to the Company and the Selling Shareholder.
Payment shall be made to the Selling Shareholder by wire transfer of
immediately available funds to a bank account designated by the Selling
Shareholder or the Custodian pursuant to the Selling Shareholder's International
Power of Attorney and Custody Agreement, as the case may be, against delivery to
the Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such International Manager from its obligations
hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not
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later than 10:00 A.M. (Eastern time) on the business day prior to the Closing
Time or the relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
International Manager as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable and will notify the Global
Coordinator immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
Prospectus included in the Registration Statement at the time it became
effective or the Prospectuses, whether pursuant to the 1933 Act, the 1934
Act or otherwise, will furnish the Global Coordinator with copies of any
such documents a reasonable amount of time prior to such proposed filing
or use, as the case may be, and will not file or use any such document to
which the Global Coordinator or counsel for the International Managers
shall reasonably object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company will deliver to
the Lead Managers and counsel for the International Managers, without
charge, signed copies of the Registration Statement as originally filed
and of each
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amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated
by reference therein) and signed copies of all consents and certificates
of experts; and will also deliver to the Lead Managers, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the International
Managers. The copies of the Registration Statement and each amendment
thereto furnished to the Lead Managers or counsel for the International
Managers will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted
by the 1933 Act. The Company will furnish to each International Manager,
without charge, during the period when the International Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number
of copies of the International Prospectus (as amended or supplemented) as
such International Manager may reasonably request. The International
Prospectus and any amendments or supplements thereto furnished to the
International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement, the U.S.
Purchase Agreement and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel for the
International Managers or for the Company, to amend the Registration
Statement or amend or supplement any Prospectus in order that the
Prospectuses will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement any Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be
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necessary to correct such statement or omission or to make the
Registration Statement or the Prospectuses comply with such requirements,
and the Company will furnish to the International Managers such number of
copies of such amendment or supplement as the International Managers may
reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions (domestic or foreign) as the Global
Coordinator may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective
date of the Registration Statement and any Rule 462(b) Registration
Statement; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) RULE 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise.
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The foregoing sentence shall not apply to (A) the Securities to be sold
hereunder or under the U.S. Purchase Agreement, (B) any shares of Common
Stock issued by the Company upon the exercise of an option or warrant or
the conversion of a security outstanding on the date hereof and referred
to in the Prospectuses, (C) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to existing employee benefit
plans of the Company referred to in the Prospectuses or (D) any shares of
Common Stock issued pursuant to any non-employee director stock plan or
dividend reinvestment plan.
(i) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
(j) LISTING. The Company will file with the New York Stock Exchange
all documents and notices required by the New York Stock Exchange of
companies that have securities listed on such exchange and will use every
reasonable effort to maintain the listing of the Securities on the New
York Stock Exchange.
SECTION 4. PAYMENT OF EXPENSES. (a) The Company, the Selling Shareholder
and the General Partner will pay all expenses incident to the performance of
the obligations of the Company and the Selling Shareholder under this
Agreement, including (i) the printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed
and of each amendment thereto, (ii) the preparation, printing and delivery to
the Underwriters of this Agreement, any Agreement among Underwriters and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the preparation and
delivery of the certificates for the International Securities to the
International Managers, including any stock or other transfer taxes and any
stamp or other duties payable upon the sale or delivery of the Securities to
the Underwriters and the transfer of the Securities between the U.S.
Underwriters and the International Managers, (iv) the fees and disbursements
of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f), including filing fees and the fees and
disbursements of counsel for the International Managers (which shall not
exceed $10,000) in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheets and of the Prospectuses and any amendments or
supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue
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Sky Survey and any supplement thereto, (viii) the fees and expenses of
any transfer agent or registrar for the Securities and the Custodians, (ix) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the International Managers in connection with, the review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Securities and (x) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.
(b) EXPENSES OF THE SELLING SHAREHOLDER AND THE GENERAL PARTNER. The
Selling Shareholder and the General Partner will pay all expenses incident to
the performance of his obligations under, and the consummation of the
transactions contemplated by this Agreement, including (i) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale of the
Securities to the Underwriters, and their transfer between the Underwriters
pursuant to an agreement between such Underwriters or between the
International Managers and the U.S. Underwriters, and (ii) the fees and
disbursements of his counsel and accountants, if any.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11, the Company, the Selling Shareholder and the General Partner
shall reimburse the International Managers for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
International Managers.
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company, the Selling Shareholder and the
General Partner may make for the sharing of such costs and expenses.
SECTION 5. CONDITIONS OF THE INTERNATIONAL MANAGERS' OBLIGATIONS. The
obligations of the several International Managers hereunder are subject to
the accuracy of the representations and warranties of the Company, the
Selling Shareholder and the General Partner herein contained or in
certificates of any officer of the Company or any of its subsidiaries or on
behalf of the Selling Shareholder or General Partner delivered pursuant to
the provisions hereof, to the performance by the Company, the Selling
Shareholder and the General Partner of their respective covenants and
obligations hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the International Managers. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in
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accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) At Closing Time, the Lead Managers shall have received:
(1) The favorable opinion, dated as of Closing Time, of Phillips
Nizer Benjamin Krim & Ballon LLP, counsel for the Company, in form and
substance satisfactory to counsel for the International Managers, together
with signed or reproduced copies of such letter for each of the other
International Managers to the effect that:
(i) The Company is validly existing as a corporation
in good standing under the laws of the Commonwealth of
Pennsylvania.
(ii) The Company has the corporate power and authority to own,
lease and operate its properties and to conduct its business as now
being conducted and as described in the Registration Statement and
to enter into and perform its obligations under this Agreement and
the U.S. Purchase Agreement.
(iii) To the best of their knowledge and information, the Company
is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such
qualification is required, except where the failure to so qualify
or be in good standing would not result in a Material Adverse
Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses under "Capitalization"
(except for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans referred to in the
Prospectuses), and the shares of issued and outstanding Common
Stock, including the Securities to be purchased by the
International Managers and the U.S. Underwriters from the Selling
Shareholder have been duly authorized and validly issued and are
fully paid and nonassessable and no holder of the Securities is or
will be subject to personal liability by reason of being such a
holder.
(v) The outstanding stock options relating to the Company's
Common Stock have been duly authorized and validly issued and the
description thereof contained in the Registration Statement and the
Prospectuses is true and accurate.
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(vi) This Agreement and the U.S. Purchase Agreement have each
been duly authorized, executed and delivered by the Company.
(vii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933
Act; any required filing of the Prospectuses pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); and, to the best of their knowledge, no
stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectuses, excluding the
documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and the Prospectuses,
excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or omitted
therefrom, as to which we need express no opinion) complied as to
form in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations.
(ix) The documents incorporated by reference in the
Prospectuses (other than the financial statements and supporting
schedules included therein or omitted therefrom, as to which we
need express no opinion), when they were filed with the Commission
complied as to form in all material respects with the requirements
of the 1934 Act and the rules and regulations of the Commission
thereunder.
(x) To the best of their knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation,
to which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or
foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the International
Purchase Agreement and the U.S.
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Purchase Agreement or the performance by the Company of its
obligations thereunder.
(xi) The Common Stock conforms to the description thereof
contained in the Prospectuses, and the form of certificate used to
evidence the Common Stock is in due and proper form and complies
with all applicable statutory requirements and the requirements of
the New York Stock Exchange.
(xii) Each of the Company's operating subsidiaries is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its organization, has corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Registration Statement, and is duly
qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which it owns or leases real
property except where the failure to so qualify would not have a
Material Adverse Effect; all of the issued and outstanding capital
stock of each such corporate subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned
by the Company, directly or through subsidiaries, free and clear of
any mortgage, pledge, lien, encumbrance, claim or equity.
(xiii) The information in the Prospectuses under the heading
"Certain United States Federal Tax Consequences to Non-U.S. Holders
of Common Stock" and the description of the Company's capital stock
incorporated by reference in the Registration Statement and in the
Registration Statement under Item 15 to the extent that it
constitutes summaries of legal matters, documents or proceedings,
or legal conclusions, has been reviewed by them and is correct in
all material respects.
(xiv) To the best of their knowledge after due inquiry, there
are no contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments or agreements required to be described
or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein
or filed as exhibits thereto; the descriptions thereof or
references thereto are correct; and no default exists in the due
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument or agreement so
described, referred to or filed, which
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default or defaults, singly or in the aggregate, are material to
the condition, financial or otherwise, or earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xv) No authorization, approval, consent or order of any court
or governmental authority or agency is required in connection with
the sale of the International Securities to the International
Managers hereunder or the U.S. Securities to the U.S. Underwriters
under the U.S. Purchase Agreement, except such as may be required
under the 1933 Act or the 1933 Act Regulations or state securities
law; and, to the best of their knowledge and information, the
execution and delivery of this Agreement and the U.S. Purchase
Agreement and the consummation of the transactions contemplated
herein and therein will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument or agreement to which the Company or any of its
subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the
Company, or any applicable law, rule, regulation, order or
administrative or court decree.
In rendering the foregoing opinion, Phillips Nizer Benjamin Krim
& Ballon LLP may rely as to matters of law of the Commonwealth of
Pennsylvania upon the opinion of Mesirov, Gelman, Jaffe, Cramer &
Jamieson, which opinion shall state that Willkie Farr & Gallagher
may rely on such opinion. Baker & McKenzie shall render an opinion
relating to Camisas de Juarez S.A. de C.V. as to matters of the
laws of Mexico. Cassells Brock & Blackwell shall render an opinion
relating to Jones Apparel Group Canada, Inc. as to matters of law
of the Canadian province of Ontario. All such opinions shall be
satisfactory in form and in substance to counsel for the
International Managers.
(2) The favorable opinion, dated as of Closing Time, of Phillips
Nizer Benjamin Krim & Ballon LLP, counsel for the Selling Shareholder
and the General Partner, in form and substance satisfactory to counsel
for the International Managers, to the effect that:
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(i) This Agreement and the U.S. Purchase Agreement
have been duly authorized, executed and delivered by or an behalf
of the Selling Shareholder and the General Partner.
(ii) The International Power of Attorney and Custody Agreement
has been duly authorized, executed and delivered by the Selling
Shareholder and constitutes the valid and binding obligation of the
Selling Shareholder in accordance with its terms.
(iii) The International Securities to be purchased by the
International Managers from the Selling Shareholder have been
validly issued and are fully paid and non-assessable.
(iv) To the best of their knowledge after due inquiry, the
Selling Shareholder has good and marketable title to the
International Securities to be sold by such Selling Shareholder
hereunder and full power, right and authority to sell such
International Securities as herein contemplated, each of the
International Managers will receive good and marketable title to
the International Securities purchased by it from the Selling
Shareholder, free and clear of any mortgage, pledge, lien, security
interest, encumbrance, claim or equity created by or arising
through the Selling Shareholder. In rendering such opinion, counsel
may assume that the International Managers are without notice of
any defect in the title of the Selling Shareholder to the
Securities being purchased from such Selling Shareholder.
(v) No authorization, approval, consent, or order of any court
or governmental authority or agency is required in connection with
the sale of the International Securities from the Selling
Shareholder to the International Managers, except such as may be
required under the 1933 Act of the 1933 Act Regulations or state
securities law.
(3) The favorable opinion, dated as of Closing Time, of Willkie Farr
& Gallagher, counsel for the International Managers, with respect to the
matters set forth in (i), (vi) to (ix), inclusive, and (xi) of subsection
(b)(1) of this Section and (i) and (iii) of subsection (b)(2) of this
Section. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem
proper, upon certificates of the Company and its subsidiaries and
certificates of public officials. In addition, in rendering the foregoing
opinion, Willkie Farr & Gallagher may rely as to matters of law of the
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Commonwealth of Pennsylvania upon the opinion of Mesirov, Gelman, Jaffe,
Cramer and Jamieson.
(4) In giving their opinions required by subsections (b) (1), (b) (2)
and (b) (3) of this Section, Phillips Nizer Benjamin Krim & Ballon LLP and
Willkie Farr & Gallagher shall each additionally state that nothing has
come to their attention that would lead them to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for
financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to they need
make no statement), at the time such Registration Statement or any such
amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated
by reference therein or omitted therefrom, as to which they need make no
statement), at the time the Prospectuses were issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(c) At Closing Time, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Registration
Statement and the Prospectuses, any Material Adverse Effect, and the Lead
Managers shall have received a certificate of the Chairman or President of the
Company and of the chief financial or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such Material
Adverse Effect, (ii) the representations and warranties in Section 1(a) hereof
are true and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission.
(d) At Closing Time, the Lead Managers shall have received a
certificate of (x) the Attorney in Fact for the Selling Shareholder, dated as
of Closing Time, to the effect that (i) the representations and warranties of
the Selling Shareholder contained in Section 1(b) hereof are true and correct
with the same force and effect as though expressly made at and as of
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Closing Time and (ii) the Selling Shareholder has complied with all
agreements and satisfied all conditions on his part to be performed or
satisfied hereunder at or prior to Closing Time and (y) of the General
Partner to the same effect, but with respect to the General Partner. The
Attorney in Fact shall be entitled to rely upon a certificate of the Selling
Shareholder in giving its certificate.
(e) At the time of the execution of this Agreement, the Lead Managers
shall have received from BDO Seidman, LLP a letter dated such date, in form and
substance satisfactory to the Lead Managers, together with signed or reproduced
copies of such letter for each of the other International Managers containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectuses.
(f) At Closing Time, the Lead Managers shall have received from BDO
Seidman, LLP a letter, dated as of the Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (e)
of this Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(g) At Closing Time, the Securities shall have been approved for listing
on the New York Stock Exchange, subject only to official notice of issuance.
(h) At the date of this Agreement, the Lead Managers shall have received
an agreement substantially in the form of Exhibit A hereto signed by the persons
listed on Schedule D hereto.
(i) In the event the International Managers exercise the option granted
in Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company, the
Selling Shareholder and the General Partner contained herein and the
statements in any certificates furnished by the Company, the Selling
Shareholder or the General Partner hereunder shall be true and correct as of
the relevant Date of Delivery, and the Lead Managers shall have received:
(1) A certificate, dated such Date of Delivery, of the Chairman or
President of the Company and of the chief financial or chief accounting
officer of the Company confirming that the certificate delivered at
Closing Time pursuant to Section 5(c) remains true as of the Date of
Delivery.
(2) A certificate, dated such Date of Delivery, of an Attorney in
Fact on behalf of the Selling Shareholder confirming that the certificate
delivered at Closing Time pursuant to Section 5(d) remains true and
correct as of such Date of Delivery.
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(3) The favorable opinions of Phillips Nizer Benjamin Krim & Ballon
LLP, counsel for the Company, for the Selling Shareholder and the General
Partner, in the form and substance reasonably satisfactory to counsel for
the International Managers, dated such Date of Delivery, relating to the
International Option Securities and otherwise to the same effect as the
opinions required by Section 5(b)(1) and 5(b)(2).
(4) The favorable opinion of Willkie Farr & Gallagher, counsel for
the International Managers, dated such Date of Delivery, relating to the
International Option Securities and otherwise to the same effect as the
opinion required by Section 5(b)(3).
(5) A letter from BDO Seidman, LLP, in form and substance
satisfactory to the International Managers and dated such Date of
Delivery, substantially the same in scope and substance as the letter
furnished to the International Managers pursuant to Section 5(f) except
that any "specified date" in the letter furnished pursuant to this Section
(5)(i)(5) shall be a date not more than three days prior to the Date of
Delivery.
(j) At Closing Time and at each Date of Delivery, if any, counsel for
the International Managers shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as contemplated herein, in the U.S.
Purchase Agreement and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of
any of the agreements or conditions, herein contained; and all proceedings
taken by the Company, the Selling Shareholder and the General Partner in
connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the Lead Managers
and counsel for the International Managers.
(k) Contemporaneously with the purchase by the International Managers of
the Initial International Securities under this Agreement, the U.S. Underwriters
shall have purchased the Initial U.S. Securities under the U.S. Purchase
Agreement.
(l) If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or in the case
of any condition to the purchase of International Option Securities on a Date of
Delivery which is after the Closing Time, the obligations of the several
International Managers to purchase the relevant International Option Securities,
may be terminated by the Lead Managers by notice to the Company at any time at
or prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8
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hereof shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION. (a) The Company, the Selling Shareholder
and the General Partner agree to indemnify and hold harmless each
International Manager, its directors, officers and employees, and each
person, if any who controls any International Manager within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act to the extent and in
the manner set forth in clauses (i), (ii) and (iii) below.
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use
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in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto).
(b) Each International Manager agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, the Selling Shareholder, the General
Partner and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if
applicable, or any preliminary international prospectus or the International
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7
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hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) In the event of a claim for indemnity pursuant to the provisions of
this Section 6, each indemnified party severally agrees to seek such
indemnity in full from the Company. If, after seeking such indemnity, any
indemnified party is unable, for any reason, to obtain such indemnity from
the Company, such indemnified party may seek indemnity from the Selling
Shareholder and the General Partner, whose obligations hereunder shall be
joint and several, in accordance with the provisions of subsection (a) of
this Section.
(e) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(f) The provisions of this Section shall not affect any agreement
between the Company, the Selling Shareholder and the General Partner with
respect to indemnification.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, Selling Shareholder and the General Partner on the one hand and the
International Managers on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i)
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, the Selling Shareholder and the
General Partner on the one hand and of the International Managers on the
other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
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<PAGE>
The relative benefits received by the Company, the Selling Shareholder
and the General Partner on the one hand and the International Managers on the
other hand in connection with the offering of the International Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the International
Securities pursuant to this Agreement (before deducting expenses) received by
the Company, the Selling Shareholder and the General Partner and the total
underwriting discount received by the International Managers, in each case as
set forth on the cover of the International Prospectus, or, if Rule 434 is
used, the corresponding location on the Term Sheet bear to the aggregate
initial public offering price of the International Securities as set forth on
such cover. In addition, for purposes of this section, the General Partner
shall be deemed to have received any net proceeds received by the Selling
Shareholder.
The relative fault of the Company, the Selling Shareholder and the
General Partner on the one hand and the International Managers on the other
hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
the Company, the Selling Shareholder or the General Partner or by the
International Managers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholder, the General Partner and the
International Managers agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the International Managers were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which International Manager has otherwise been required to pay by reason
of any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
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<PAGE>
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
The provisions of this Section shall not affect any agreement between
the Company, the Selling Shareholder and the General Partner with respect to
contribution.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries or the Selling Shareholder submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any International Manager or
controlling person, or by or on behalf of the Company, the Selling
Shareholder or the General Partner and shall survive delivery of the
Securities to the International Managers.
SECTION 9. TERMINATION OF AGREEMENT. (a) The Lead Managers may terminate
this agreement, by notice to the Company and the Selling Shareholder, at any
time at or prior to Closing Time (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the International Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Lead Managers, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any of the securities of the Company has been suspended or
materially limited by the Commission or the New York Stock Exchange, or if
trading generally on either the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said Exchanges or by order of
the Commission,
-32-
<PAGE>
the NASD or any governmental authority, or if a banking moratorium has been
declared by either Federal, New York or Pennsylvania authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8
hereof shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE INTERNATIONAL MANAGERS. If one
or more of the International Managers shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Lead Managers shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting International Managers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth. If, however, the Lead
Managers shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of International Securities to be purchased on such date, each of
the non-defaulting International Managers shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of International Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the International Managers to purchase and of the
Selling Shareholder to sell the International Option Securities to be
purchased and sold on such Date of Delivery, shall terminate without
liability on the part of any non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Selling Shareholder to sell the
relevant International Option Securities, as the case may be, either the Lead
Managers or the Company shall have the right to postpone Closing Time or the
relevant Date of Delivery for a period not
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<PAGE>
exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectuses or in any other documents or arrangements. As used
herein, the term "International Manager" includes any person substituted for an
International Manager under this Section 10.
SECTION 11. DEFAULT BY THE SELLING SHAREHOLDER. If the Selling Shareholder
shall fail at Closing Time or a Date of Delivery to sell and deliver the number
of International Securities which such Selling Shareholder is obligated to sell
hereunder, then the Lead Managers may, at their option, by notice to the Company
and the Selling Shareholder, terminate this Agreement without liability on the
part of any non-defaulting party except that the provisions of Section 1, 4, 6,
7 and 8 shall remain in full force and effect.
In the event of a default by the Selling Shareholder as referred to in
this Section 11, the International Managers shall have the right to postpone
Closing Time or a Date of Delivery for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectuses or in any other documents or arrangements.
No action taken pursuant to this Section 11 shall relieve the Company or
the Selling Shareholder from liability, if any, in respect of such default.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers c/o Merrill
Lynch & Co., Merrill Lynch International, North Tower, World Financial
Center, New York, N.Y. 10281-1201, attention of Mary Beth Henson, Managing
Director; and notices to the Company, the Selling Shareholder and the General
Partner shall be directed to 1411 Broadway, New York, New York 10018,
attention of Sidney Kimmel or Herbert J. Goodfriend.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the International Managers, the Company, the Selling
Shareholder and the General Partner and their respective successors, heirs
and legal representatives. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation,
other than the International Managers, the Company, the Selling Shareholder
and the General Partner and their respective successors, heirs and legal
representatives and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their respective successors, heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein or therein contained.
This Agreement and all conditions and provisions hereof are intended to be
for the sole and exclusive benefit of the International Managers, the
Company, the Selling Shareholder and the General Partner and their respective
successors, heirs
-34-
<PAGE>
and legal representatives, and said controlling persons and officers and
directors and their respective successors, heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of
International Securities from any International Manager shall be deemed to be a
successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified times of day refer
to New York City time.
SECTION 15. EFFECT OF HEADINGS. The section headings herein contained are
for convenience only and shall not affect the construction hereof.
-35-
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to each of the Company, the Selling
Shareholder and the General Partner a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement
between the International Managers, the Company, the Selling Shareholder and
the General Partner in accordance with its terms.
Very truly yours,
JONES APPAREL GROUP, INC.
By: ______________________
Name:
Title:
SELLING SHAREHOLDER
By:_______________________
Attorney in Fact, acting
on behalf of Bristol Rittenhouse
Investments, L.P.
GENERAL PARTNER
___________________________
Sidney Kimmel
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH INTERNATIONAL
BEAR, STEARNS INTERNATIONAL LIMITED
GOLDMAN SACHS INTERNATIONAL
By: MERRILL LYNCH INTERNATIONAL
By: _________________________________
Authorized Signatory
For themselves and as Lead Managers of the other International Managers named in
Schedule A hereto.
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<PAGE>
SCHEDULE A
NUMBER OF INITIAL INTERNATIONAL
NAME OF THE INTERNATIONAL MANAGER SECURITIES TO BE PURCHASED
Merrill Lynch International......
Bear, Stearns International
Limited .........................
Goldman Sachs International......
Total............................ 900,000
=======
<PAGE>
SCHEDULE B
List of subsidiaries
Melru Corporation
Jones Apparel Group Canada Inc.
Jones Investment Co., Inc.
Jones Holding Corporation
Camisas de Juarez S.A. De C.V.
<PAGE>
SCHEDULE C
Jones Apparel Group, Inc.
900,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the International
Securities, determined as provided in said Section 2, shall be $[___].
2. The purchase price per share for the International Securities to be
paid by the several International Managers shall be $__, being an amount
equal to the initial public offering price set forth above less $__ per
share; provided that the purchase price per share for any International
Option Securities purchased upon the exercise of the over-allotment option
described in Section 2(b) shall be reduced by an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial International Securities but not payable on the International Option
Securities.
<PAGE>
SCHEDULE D
NAME LOCK-UP PERIOD
- ---- --------------
Jones Apparel Group, Inc. 90 days
Sidney Kimmel 90 days
The Sidney Kimmel Foundation 90 days
Herbert J. Goodfriend 30 days
Irwin Samelman 30 days
Wesley R. Card 30 days
Gary R. Klocek 30 days
Geraldine Stutz 30 days
Howard Gittis 30 days
Rena Rowan 30 days
<PAGE>
[Form of lock-up from directors, officers or other stockholders]
Exhibit A
[October __, 1997]
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Bear, Stearns & Co. Inc.
Goldman, Sachs & Co.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
Merrill Lynch International
Bear, Stearns International Limited
Goldman Sachs International
as Lead Managers of the several
International Managers to be named in the
within-mentioned International Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: PROPOSED PUBLIC OFFERING BY JONES APPAREL GROUP, INC.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
Jones Apparel Group, Inc., Pennsylvania corporation (the "Company"),
understands (i) that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Bear, Stearns & Co. Inc. and Goldman,
Sachs & Co., as U.S. Representatives of the several U.S. Underwriters to be
named in Schedule A to the U.S. Purchase Agreement (as defined herein),
propose to enter into a U.S. Purchase Agreement (the "U.S. Purchase
Agreement") with the Company, Bristol Rittenhouse Investments, L.P., a
Delaware limited partnership (the "Selling Shareholder") and Sidney Kimmel,
the sole general partner of the Selling Shareholder (the "General Partner"),
and (ii) that Merrill Lynch International, Bear, Stearns International
Limited and Goldman Sachs International, as Lead Managers of the several
International Managers to be named in Schedule A to the International
Purchase Agreement (as defined herein), propose to enter into an
International Purchase Agreement (the "International Purchase Agreement" and
collectively with the U.S. Purchase Agreement, the "Purchase Agreements")
with the Company the Selling Shareholder and the General Partner, in each
case providing for the public offering of shares (the "Securities") of the
Company's common stock, par value $.01 per share (the "Common Stock"). The
U.S. Underwriters and the International Managers to be named in Schedule A to
each of the U.S. Purchase Agreement and the International Purchase Agreement,
respectively, are collectively referred to herein as the "Underwriters."
In recognition of the benefit that such an offering will confer upon
the undersigned as a stockholder [and an officer and/or director] of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with
each of the Underwriters that, during a period of [___________ days]
[SEE SCHEDULE D TO INTERNATIONAL PURCHASE AGREEMENT FOR NUMBER OF DAYS] from
the date of the Purchase Agreements, the undersigned will not, without the
prior written consent of Merrill Lynch, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or indirectly, any
share of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition, or file any registration statement under
the 1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement
<PAGE>
or any transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock, whether any such swap
or transaction described in clause is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise.
Very truly yours,
Signature:
------------------
Print Name:
------------------
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<PAGE>
EXHIBIT 5.1
MESIROV GELMAN JAFFE CRAMER & JAMIESON
October 14, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: JONES APPAREL GROUP, INC. REGISTRATION STATEMENT ON FORM S-3
Dear Sirs:
As special counsel to Jones Apparel Group, Inc., a Pennsylvania corporation
(the "Company"), we have been requested to render this opinion for filing as
Exhibit 5.1 to the Company's Registration Statement on Form S-3, which was filed
with the Securities and Exchange Commission on September 24, 1997 (the
"Registration Statement").
The Registration Statement covers 4,500,000 shares (the "Selling
Shareholder's Shares") of Common Stock of the Company to be sold by Bristol
Rittenhouse Investments, L.P., a Delaware limited partnership (the "Selling
Shareholder"), as set forth in the Prospectuses comprising part of the
Registration Statement under the caption "Selling Shareholder", and an
additional 675,000 shares (the "Over-Allotment Shares") of Common Stock which
may be sold by the Selling Shareholder if the Underwriters' over-allotment
option is exercised.
We have examined the Company's Articles of Incorporation, as amended, the
Company's By-Laws, as amended, and such other documents as we deem necessary for
the purpose of this opinion.
Based upon the foregoing, we are of the opinion that the Selling
Shareholder's Shares and the Over-Allotment Shares, if any, are validly issued,
fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. We also consent to the reference to this firm under the
heading "Legal Matters" in the Prospectuses constituting a part of the
Registration Statement.
Very truly yours,
/s/ Richard P. Jaffe
<PAGE>
EXHIBIT 23.3
PHILLIPS NIZER BENJAMIN KRIM & BALLON LLP
Jones Apparel Group, Inc.
1411 Broadway
New York, New York
Re: Registration Statement on Form S-3
-------------------------------------------------
Dear Sirs:
We hereby consent to the reference to our firm under "Legal Matters" in the
Prospectus which forms a part of the above-referenced Registration Statement.
Very truly yours,
PHILLIPS NIZER BENJAMIN
KRIM & BALLON LLP
By /s/_Alan Shapiro__________________
Alan Shapiro
October 14, 1997
<PAGE>
EXHIBIT 24.2
CERTIFICATE OF GENERAL COUNSEL
I, Ira Dansky, do hereby certify that I am the General Counsel of Jones
Apparel Group, Inc., a Pennsylvania corporation (the "Company"), and do hereby
further certify that:
Attached hereto as EXHIBIT A are true and correct copies of resolutions duly
adopted by written consent of the Board of Directors of the Company dated as
of September 23, 1997. Such resolutions remain in full force and effect in
the form adopted, not having been rescinded or amended in any manner
whatsoever.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
Jones Apparel Group, Inc. this 14th day of October, 1997.
/s/ Ira Dansky
General Counsel
<PAGE>
EXHIBIT A
RESOLVED: that the Company is authorized to register with the Securities
and Exchange Commission ("SEC") up to 5,175,000 shares (the "Shares") of Common
Stock, $.01 par value per share (the "Common Stock"), for sale by Sidney Kimmel
or any entity controlled by Sidney Kimmel (the "Selling Shareholder"), pursuant
to a registration statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933 (the "1933 Act"), including a related Registration
Statement pursuant to Rule 462(b) under the 1933 Act.
RESOLVED: that the preparation and execution on behalf of the Company by
the officers and directors of the Company and the filing by them of the
Registration Statement to register the Shares for sale by the Selling
Shareholder, be and it hereby is, ratified, confirmed and approved.
RESOLVED: that each officer and/or director of the Company authorized under
the 1933 Act to sign the Registration Statement on behalf of the Company be, and
he hereby is, authorized to sign such Registration Statement, including any
pre-effective or post-effective amendments thereto, by his attorney-in-fact or
agent thereunder duly empowered by power of attorney, executed by such officer
and/or director.
RESOLVED: that the Chairman of the Board, the Vice Chairman, the President,
the Executive Vice President, the Chief Financial Officer, the General Counsel
and Secretary of the Company (the "Authorized Persons"), are each authorized to
execute and deliver such additional documents, including further amendments,
including without limitation post-effective amendments to, or other filings in
connection with, the Registration Statement, including a related Registration
Statement pursuant to Rule 462(b) under the 1933 Act, and to take such
additional action, as they may deem necessary or appropriate, with such further
changes in and additions thereto as the Authorized Persons may approve, such
approval to be conclusively evidenced by the execution of any such document.
RESOLVED: that the Chairman of the Board, the Chief Financial Officer and
the General Counsel of the Company, are designated as the persons authorized to
receive notices and communications from the SEC with respect to the Registration
Statement and any amendments, and they each are designated agents for service of
process under the 1933 Act in connection with the Registration Statement, with
all powers relating to such designation.
