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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 17, 1996
REGISTRATION NO. 333-13923
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C>
ANNTAYLOR STORES CORPORATION DELAWARE 13-3499319
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR IDENTIFICATION NUMBER)
ORGANIZATION)
</TABLE>
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142 WEST 57TH STREET, NEW YORK, NEW YORK 10019, (212) 541-3300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JOCELYN F.L. BARANDIARAN, ESQ.
ANNTAYLOR STORES CORPORATION
142 WEST 57TH STREET, NEW YORK, NEW YORK 10019, (212) 541-3300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPY TO:
PATRICIA MORAN CHUFF, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
ONE RODNEY SQUARE, P.O. BOX 636, WILMINGTON, DE 19899, (302) 651-3000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
------------------------
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, please check the
following box. X
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
PROSPECTUS
[LOGO]
2,348,145 SHARES
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COMMON STOCK
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This Prospectus relates to the resale of 2,348,145 shares of common
stock, par value $.0068 per share (the "Company Common Stock"), of AnnTaylor
Stores Corporation, a Delaware corporation (the "Company"), originally issued
to Cygne Designs, Inc., a Delaware corporation ("Cygne" or the "Selling
Stockholder"), and its wholly owned subsidiary Cygne Group (F.E.) Limited, a
Hong Kong corporation ("CGFE"), in connection with the acquisition by
AnnTaylor, Inc., a Delaware corporation and wholly owned subsidiary of the
Company ("Ann Taylor"), of (i) the entire interest of Cygne and CGFE in Ann
Taylor's direct sourcing joint venture with Cygne, known as CAT US Inc. and
C.A.T. (Far East) Limited (together, "CAT") and (ii) the assets (the
"Assets") of Cygne's AnnTaylor Woven Division (the "Division") formerly used
for sourcing merchandise for Ann Taylor (the "CAT/Cygne Transaction"). See
"Description of the CAT/Cygne Transaction". The Company will not receive any
of the proceeds from the sale of shares by the Selling Stockholder. The
Company Common Stock is quoted on the New York Stock Exchange ("NYSE") under
the symbol "ANN." On October 16, 1996, the last reported sale price of the
Company Common Stock on the NYSE Composite Tape was $18 5/8.
The Company Common Stock issued to Cygne and CGFE pursuant to the CAT/Cygne
Transaction (the "Offered Securities") may be offered and sold from time to time
by the Selling Stockholder pursuant to this Prospectus directly to purchasers or
through agents, underwriters or dealers. See "Selling Stockholder" and "Plan of
Distribution." If required, the names of any such agents or underwriters
involved in the sale of the Offered Securities and the applicable agent's
commission, dealer's purchase price or underwriter's discount, if any, will be
set forth in an accompanying supplement to this Prospectus (the "Prospectus
Supplement"). The Selling Stockholder will receive all of the net proceeds from
the sale of the Offered Securities and will pay all underwriting discounts,
selling commissions and transfer taxes, if any, applicable to any such sale. The
Company is responsible for payment of all other expenses incident to the
registration of the Offered Securities. The Selling Stockholder and any
broker-dealers, agents or underwriters that participate in the distribution of
the Offered Securities may be deemed to be "underwriters" within the meaning of
the Securities Act, and any commission received by them and any profit on the
resale of the Offered Securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. See "Plan of
Distribution" for a description of indemnification arrangements.
------------------------
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER THE
"RISK FACTORS" BEGINNING ON PAGE 5.
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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.
The date of this Prospectus is October 17, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information reporting requirements of the
Exchange Act, and in accordance therewith files periodic reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC" or "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the Commission
located at Seven World Trade Center, 13th Floor, New York, New York 10048 and
Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, Illinois 60661.
Copies of all or part of such materials may also be obtained at prescribed rates
from the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Such materials
can also be inspected at the offices of the New York Stock Exchange, at 20 Broad
Street, New York, New York 10005. The Commission also maintains a Web site at
http://www.sec.gov. that contains reports, proxy statements and other
information.
The Company has filed with the Commission a Registration Statement (which
term shall encompass any amendments thereto) on Form S-3 under the Securities
Act with respect to the securities offered by this Prospectus (the "Registration
Statement"). This Prospectus, which constitutes part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain items of which are contained in exhibits to the Registration
Statement as permitted by the rules and regulations of the Commission. For
further information with respect to the Company and the securities offered by
this Prospectus, reference is made to the Registration Statement, including the
exhibits thereto, and the financial statements and notes thereto filed or
incorporated by reference as a part thereof, which are on file at the offices of
the Commission and may be obtained upon payment of the fee prescribed by the
Commission, or may be examined without charge at the offices of the Commission.
Statements made in this Prospectus concerning the contents of any document
referred to herein are not necessarily complete, and, in each such instance, are
qualified in all respects by reference to the applicable documents filed with
the Commission. The Registration Statement and the exhibits thereto filed by the
Company with the Commission may be inspected and copied at the locations
described above.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act (Commission File No. 1-10738) are incorporated herein by
reference:
(a) Annual Report on Form 10-K for the year ended February 3, 1996;
(b) Proxy Statement relating to the 1996 Annual Meeting of Stockholders;
(c) Proxy Statement relating to the Special Meeting of Stockholders held on
August 15, 1996;
(d) Quarterly Reports on Form 10-Q for the quarters ended May 4, 1996 and
August 3, 1996;
(e) Current Reports on Form 8-K, filed on April 8, 1996, May 2, 1996, June
10, 1996, June 21, 1996, August 30, 1996 and September 26, 1996; and
(f) The description of the Company Common Stock, contained in the Company's
registration statement on Form 8-A, which became effective May 16,
1991.
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 filing of a post-effective amendment that indicates the termination of this
offering shall be deemed to be incorporated in this Prospectus by reference and
to be a part hereof from the date of filing of such documents.
Any statements contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this offering to the extent that a statement contained 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 to whom this
Prospectus has been delivered, a copy of any or all of the documents referred to
above that have been or may be incorporated by reference herein other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference therein). Requests for such copies should be directed to AnnTaylor
Stores Corporation, 142 West 57th Street, New York, New York 10019, Attention:
Jocelyn F.L. Barandiaran, Corporate Secretary. Telephone requests may be
directed to the Corporate Secretary at (212) 541-3300.
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THIS PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE CERTAIN FORWARD
LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF
OPERATIONS AND BUSINESS OF THE COMPANY, INCLUDING, WITHOUT LIMITATION,
STATEMENTS UNDER THE CAPTIONS "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K
(THE "FORM 10-K"), "UNAUDITED HISTORICAL AND PRO FORMA COMBINED FINANCIAL
STATEMENTS" IN EXHIBIT 99 TO THE COMPANY'S FORM 10-K, "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF OPERATIONS" IN THE COMPANY'S QUARTERLY REPORTS ON FORM 10-Q AND
"UNAUDITED HISTORICAL AND PRO FORMA COMBINED BALANCE SHEETS, STATEMENTS OF
OPERATIONS AND NOTES THERETO" IN THE COMPANY'S CURRENT REPORTS ON FORM 8-K FILED
ON JUNE 21, 1996, AUGUST 30, 1996, AND SEPTEMBER 26, 1996. THESE FORWARD LOOKING
STATEMENTS INVOLVE CERTAIN RISKS AND UNCERTAINTIES. NO ASSURANCE CAN BE GIVEN
THAT ANY OF SUCH
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MATTERS WILL BE REALIZED. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE CONTEMPLATED BY SUCH FORWARD LOOKING STATEMENTS INCLUDE,
AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (1) COMPETITIVE PRESSURE IN THE
RETAIL APPAREL INDUSTRY INCREASES SIGNIFICANTLY; (2) CUSTOMERS DO NOT RESPOND
FAVORABLY TO THE COMPANY'S MERCHANDISE OFFERINGS; (3) COSTS OR DIFFICULTIES
RELATED TO THE ASSIMILATION OF THE SOURCING FUNCTIONS AND EMPLOYEES ACQUIRED IN
CONNECTION WITH THE CAT/CYGNE TRANSACTION ARE GREATER THAN EXPECTED; (4) THE
COMPANY'S SUBSTANTIAL DEGREE OF LEVERAGE HINDERS ITS ABILITY TO OBTAIN
ADDITIONAL FINANCING, REDUCES FUNDS AVAILABLE FOR OPERATIONS OR HINDERS ITS
ABILITY TO ADJUST RAPIDLY TO CHANGING MARKET CONDITIONS; (5) THE COMPANY'S
FINANCIAL CONDITION IS MATERIALLY AND ADVERSELY AFFECTED BY THE OUTCOME OF
CERTAIN LITIGATION DESCRIBED IN THE COMPANY'S CURRENT REPORT ON FORM 8-K FILED
ON MAY 2, 1996; (6) GENERAL ECONOMIC CONDITIONS ARE LESS FAVORABLE THAN
EXPECTED; AND (7) THE REGULATORY ENVIRONMENT CHANGES SIGNIFICANTLY, OR THE RATE
OF IMPORT DUTIES OR EXPORT QUOTAS INCREASES SIGNIFICANTLY WITH RESPECT TO THE
COMPANY'S MERCHANDISE. FURTHER INFORMATION ON OTHER FACTORS THAT COULD AFFECT
THE FINANCIAL RESULTS OF THE COMPANY AND SUCH FORWARD LOOKING STATEMENTS IS
INCLUDED IN THE SECTION HEREIN ENTITLED "RISK FACTORS".
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RISK FACTORS
Prospective purchasers of the Offered Securities should consider carefully
the information set forth or incorporated by reference in this Prospectus and,
in particular, should evaluate the following risks in connection with an
investment in the Company Common Stock being offered hereby.
COMPETITION AND OTHER BUSINESS FACTORS
The women's retail apparel industry is highly competitive. Ann Taylor
competes primarily with better department stores, specialty retailers and
boutiques engaged in the retail sale of better quality women's apparel, many of
which are larger and have greater resources than the Company. Sales and earnings
of the Company depend to a significant extent upon its ability to respond to
changes in fashion trends. As with other retail businesses, the Company's
operations may be adversely affected by a number of factors beyond its control,
including economic downturns, cyclical variations in the retail market for
better quality women's apparel and rapid changes in fashion preferences. The
Company believes that the decrease in its comparable store sales in Fiscal 1995
is attributable to the poor consumer response to Ann Taylor's merchandise
offerings, as well as weakness in demand for women's apparel generally. There
can be no assurance that a prolonged economic downturn and weakness in demand
for women's apparel would not have a material adverse impact on the Company and
Ann Taylor.
INTEGRATION OF CAT AND THE CYGNE SOURCING BUSINESS
In Fiscal 1995, Ann Taylor purchased approximately 16% of its merchandise
directly from Cygne and an additional 38% of its merchandise through CAT, the
direct sourcing joint venture which was 40% owned by Ann Taylor and 60% owned by
Cygne. On September 20, 1996, Ann Taylor acquired Cygne's interest in CAT and
the Assets of the Division. As a result of the CAT/Cygne Transaction, CAT became
an indirect wholly owned subsidiary of the Company and will perform all of Ann
Taylor's direct sourcing functions, including those previously provided by the
Division, under the name Ann Taylor Global Sourcing. The direct sourcing
business differs from the Company's traditional retail business and requires
certain skills that traditionally have not been required of Ann Taylor
personnel. The Company may face challenges in assimilating CAT's and the
Division's sourcing functions and their employees into the Ann Taylor
organization and will require management to focus a portion of its time
overseeing the integration process. To facilitate such integration, Ann Taylor
has entered into three-year consulting agreements with Cygne for the services of
Mr. Bernard Manuel, Chairman and Chief Executive Officer of Cygne, and Mr.
Irving Benson, President of Cygne. In addition, Mr. Dwight Meyer, formerly
president of CAT, has entered into a three-year employment agreement with Ann
Taylor pursuant to which he will serve as Executive Vice President--Sourcing of
Ann Taylor Global Sourcing. Mr. Meyer has significant experience running direct
sourcing operations, including the last 4 years as President of CAT. Despite
these steps, there can be no assurance that Ann Taylor will be able to
successfully integrate CAT's and the Division's sourcing operations with its
existing operations or realize certain of the benefits expected to be obtained
from the CAT/Cygne Transaction.
INDEBTEDNESS AND ABILITY TO SERVICE INDEBTEDNESS
After giving effect to the CAT/Cygne Transaction, including additional
borrowings made in connection therewith, as of August 3, 1996, the long-term
consolidated indebtedness of the Company and Ann Taylor, including the current
portion of long-term debt, would have been $173.4 million, or approximately 29%
of its total capitalization. This high degree of leverage could have important
consequences to the holders of the Offered Securities, including the following:
(i) the ability of Ann Taylor to obtain additional financing for working
capital, capital expenditures, acquisitions or general corporate purposes may be
impaired in the future; (ii) the Company may be substantially more leveraged
than certain of its competitors, which may place the Company at a competitive
disadvantage;
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and (iii) the Company's substantial degree of leverage may hinder its ability to
adjust rapidly to changing market conditions and could make it more vulnerable
in the event of a downturn in general economic conditions or its business. In
addition, substantially all of Ann Taylor's borrowings other than the 8 3/4%
Notes (as defined herein) are and will continue to be at variable rates of
interest, which exposes Ann Taylor to the risk of increased interest rates.
Unless otherwise extended or refinanced, Ann Taylor will be required in
1998 to repay in full its obligations under the Amended and Restated Credit
Agreement, dated as of September 29, 1995 (as amended, the "Bank Credit
Agreement"), between Ann Taylor and the Lenders named therein, which currently
provides for a $24.5 million Term Loan (the "Term Loan") and a $122 million
Revolving Credit Facility (the "Revolving Credit Facility"). As of August 3,
1996, Ann Taylor's outstanding indebtedness under the Term Loan was $24.5
million and under the Revolving Credit Facility was $4.0 million. After giving
effect to additional borrowings made in connection with the consummation of the
CAT/Cygne Transaction, as of August 3, 1996, Ann Taylor's outstanding
indebtedness under the Term Loan would have been $24.5 million and Ann Taylor's
outstanding indebtedness under the Revolving Credit Facility would have been
$15.0 million. Ann Taylor is also required, commencing in Fiscal 1996, to reduce
outstanding borrowings under the Revolving Credit Facility to $50 million or
less for a 30-day period each fiscal year. This requirement has been met for
Fiscal 1996. Amounts under Ann Taylor's Receivables Facility (the "Receivables
Facility"), under which $26.0 million was outstanding at August 3, 1996, become
due in January 1997. Although there can be no assurance, the Company expects to
negotiate an extension of the maturity of the Receivables Facility during 1996.
AnnTaylor Global Sourcing, Inc. ("ATGS") obtains its principal working
capital financing pursuant to a $40 million loan facility (the "ATGS Credit
Agreement") provided by The Hongkong and Shanghai Banking Corporation Limited
("HKSBC"). The ATGS Credit Agreement terminates on July 29, 1997. Although ATGS
and Ann Taylor are currently in compliance with the terms of their respective
financing agreements, the ATGS Credit Agreement contains a cross-default
provision which relates to defaults under other indebtedness of ATGS and
indebtedness of Ann Taylor, pursuant to which a default by ATGS on other
indebtedness or by Ann Taylor under the Bank Credit Agreement gives HKSBC the
right to cancel ATGS's $40 million credit facility and to demand immediate
repayment of the amounts outstanding under that facility. The ATGS Credit
Agreement requires that the provisions of the Bank Credit Agreement as in effect
at the time of the execution of the ATGS Credit Agreement be complied with,
notwithstanding any future amendments, modifications or waivers. Ann Taylor has
outstanding an $8 million stand-by letter of credit to support ATGS's
obligations to HKSBC. HKSBC has the right under certain circumstances to draw on
such letter of credit to cover unpaid principal and interest owed by ATGS.
Ann Taylor's ability to make scheduled principal payments, or to refinance
its obligations, with respect to its indebtedness, and to pay interest thereon,
will depend on its financial and operating performance, which, in turn, is
subject to prevailing economic conditions and to certain financial, business and
other factors beyond its control. If Ann Taylor's cash flow and capital
resources are insufficient to fund its debt service obligations, Ann Taylor may
be forced to reduce or delay planned capital expenditures, sell assets, seek
additional funds from an equity offering of the Company or refinance or
restructure its debt. There can be no assurance that Ann Taylor's cash flow and
capital resources will be sufficient for payment of its indebtedness in the
future. If Ann Taylor is not able to satisfy its debt service obligations, it
could default on its indebtedness, including the Bank Credit Agreement, the
Receivables Facility, the 8 3/4% Notes (as defined herein) and the Convertible
Debentures (as defined herein), which would entitle the holders of such
indebtedness to accelerate the maturity thereof, thereby permitting acceleration
of debt under other instruments that may contain cross-acceleration or
cross-default provisions. In addition, ATGS may not be able to generate
sufficient cash flow or have sufficient capital resources to fund its debt
service obligations. If such circumstances were to occur and if Ann Taylor could
not provide the necessary funds in order for ATGS to meet its obligations, ATGS
could default on its indebtedness under the ATGS Credit Agreement.
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RESTRICTIVE COVENANTS AND ASSET ENCUMBRANCES
Ann Taylor's ability to pay dividends, as well as repay debt, make
acquisitions, create liens, make capital expenditures and make certain
investments, is restricted by the provisions of the Bank Credit Agreement (and
with respect to certain of the restrictions, the Indenture (the "Note
Indenture") relating to its 8 3/4% Subordinated Notes due 2000 (the "8 3/4%
Notes")), the Receivables Facility, the Indenture (the "Debenture Indenture")
relating to its 8 1/2% Convertible Subordinated Debentures Due 2016 (the
"Convertible Debentures") and the guarantee by the Company of the 8 1/2% Trust
Originated Preferred SecuritiesSM issued by AnnTaylor Finance Trust, a wholly
owned subsidiary of the Company, and is dependent on its financial and operating
performance, which, in turn, is subject to prevailing economic conditions and to
financial, business and other factors beyond its control. There can be no
assurance that financial results that comply with the restrictive covenants and
financial tests in the Bank Credit Agreement and the Receivables Facility will
be achieved, and Ann Taylor's inability to satisfy these covenants, if not
waived by its lenders, could result in a default under one or more of such
financing arrangements. In the event of such a default, the lenders could elect
to declare all amounts borrowed, together with accrued and unpaid interest, due
and payable. In addition, a failure to comply with the obligations contained in
the Bank Credit Agreement, the Receivables Facility, the Note Indenture or the
Debenture Indenture could result in an event of default under the Bank Credit
Agreement, the Receivables Facility or the Note Indenture, respectively, which
could permit acceleration of debt under other instruments that may contain
cross-acceleration or cross-default provisions. If Ann Taylor were unable to pay
such amounts, the lenders could proceed against any collateral securing
obligations due to them. If such indebtedness were to be accelerated, there can
be no assurance that the assets of Ann Taylor would be sufficient to repay in
full such indebtedness and other indebtedness of Ann Taylor.
During Fiscal 1995, Ann Taylor was not in compliance with certain of the
financial covenants contained in its then-existing bank credit agreement and
receivables facility on two occasions, which noncompliance was cured by a waiver
under or an amendment to those facilities. Ann Taylor is currently in compliance
with all of the financial covenants contained in the Bank Credit Agreement and
the Receivables Facility. Although based upon its current projections, the
Company believes that it will be able to remain in compliance with all of the
financial covenants in the Bank Credit Agreement and the Receivables Facility,
no assurance can be given that the Company's financial results will provide such
compliance.
CONTROL OF THE COMPANY
As of August 3, 1996, the ML Entities (as defined below) owned
approximately 26.6% of the outstanding Company Common Stock. Consequently, the
ML Entities, which have two designees on the Company's Board of Directors, are
in a position to influence the management and affairs of the Company. After
giving effect to the issuance of approximately 2.3 million shares of Company
Common Stock in connection with the CAT/Cygne Transaction, the ML Entities would
own approximately 24.1% of the outstanding Company Common Stock.
MANAGEMENT OF THE COMPANY
Effective August 23, 1996, Sally Frame Kasaks resigned as the Chairman and
Chief Executive Officer and a Director of the Company and Ann Taylor, and J.
Patrick Spainhour, the Company's President and Chief Operating Officer, was
promoted to Chairman and Chief Executive Officer. The Company has initiated a
search for a President and Chief Operating Officer to direct the Company's
merchandising efforts, which were formerly supervised by Ms. Kasaks.
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THE COMPANY
The Company, through its wholly owned subsidiary Ann Taylor, is a leading
national specialty retailer of better quality women's apparel, shoes and
accessories sold primarily under the Ann Taylor brand name. Ann Taylor
merchandise represents classic styles, updated to reflect current fashion
trends. The Company's stores offer a full range of career and casual separates,
weekend wear, dresses, tops, accessories and shoes, coordinated as part of a
total wardrobing strategy. This total wardrobing strategy is reinforced by an
emphasis on customer service. Ann Taylor sales associates are trained to assist
customers in merchandise selection and wardrobe coordination, helping them
achieve the "Ann Taylor look" while reflecting the customers' personal styles.
As of August 3, 1996, Ann Taylor operated 306 stores in 40 states and the
District of Columbia, under the names Ann Taylor, Ann Taylor Factory Store, Ann
Taylor Loft and Ann Taylor Studio. Of the 257 stores operated under the Ann
Taylor name, approximately three-quarters are located in regional malls and
upscale specialty retail centers, with the balance located in downtown and
village locations. These stores represent Ann Taylor's core merchandise line. In
1993, Ann Taylor converted its four existing clearance centers to Ann Taylor
Factory Stores, and as of August 3, 1996, operated 23 Ann Taylor Factory Stores
located in factory outlet centers. The success of the Ann Taylor Factory Stores
and consumers' continuing emphasis on value led Ann Taylor to begin testing, in
1995, Ann Taylor Loft, a separate moderate-priced store concept for customers
who appreciate the Ann Taylor style but have a smaller budget for apparel, shoes
and accessories. As of August 3, 1996 Ann Taylor operated 17 Ann Taylor Loft
stores, also located in factory outlet centers. In Fall 1994, Ann Taylor began
testing Ann Taylor Studio stores, a free-standing shoe and accessory store
concept offering the broadest assortment of Ann Taylor shoes, as well as Ann
Taylor hosiery, small leather accessories such as belts and handbags, and Ann
Taylor's "destination" fragrance and personal care line. As of August 3, 1996,
Ann Taylor had nine Ann Taylor Studio stores.
The Company believes that "Ann Taylor" is a highly recognized national
brand that defines a distinct fashion point of view. As a result of strong
consumer acceptance of this niche positioning, the Company's sales per square
foot productivity and operating profit margins have historically been among the
highest in the specialty apparel retailing industry. The Company has adopted a
growth strategy of capitalizing on this brand recognition by introducing product
extensions within its stores and entering new channels of distribution, as well
as continuing its retail store expansion program.
The Company is a holding company that was incorporated under the laws of
the State of Delaware in 1988 under the name AnnTaylor Holdings, Inc. The
Company changed its name to AnnTaylor Stores Corporation in April 1991. The
Company was formed at the direction of Merrill Lynch Capital Partners, Inc. ("ML
Capital Partners"), a wholly owned subsidiary of Merrill Lynch & Co., Inc.
("ML&Co."), for the purpose of acquiring Ann Taylor in a leveraged buyout
transaction (the "Acquisition") in 1989. As of August 3, 1996, certain limited
partnerships controlled directly or indirectly by ML Capital Partners, together
with certain other affiliates of ML&Co. (collectively, the "ML Entities"), owned
6,155,118 shares, or approximately 26.6%, of the outstanding Company Common
Stock. After giving effect to the issuance of approximately 2.3 million shares
of Company Common Stock in connection with the CAT/Cygne Transaction, the ML
Entities would own approximately 24.1% of the outstanding Company Common Stock.
The ML Entities have two designees on the Company's Board of Directors and,
therefore, are in a position to influence management of the Company.
The principal executive offices of the Company are located at 142 West 57th
Street, New York, New York 10019, and the telephone number is (212) 541-3300.
Unless the context indicates otherwise, all references herein to the Company
include the Company and its wholly owned subsidiary Ann Taylor.
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CAT/CYGNE TRANSACTION
On September 20, 1996, the Company, through Ann Taylor, acquired (i) the
entire interest of Cygne and CGFE in Ann Taylor's direct sourcing joint venture
with Cygne, known as CAT and (ii) the Assets of Cygne's Ann Taylor Woven
Division formerly used for sourcing merchandise for Ann Taylor. The Assets
included inventory related to the Division ("Inventory") and certain fixed
assets and office equipment, primarily located in New York City.
As consideration for the CAT/Cygne Transaction, (i) the Company issued to
Cygne and CGFE an aggregate of 2,348,145 shares (the "Acquisition Shares") of
Company Common Stock (such shares of Company Common Stock having an aggregate
market value of $36,000,000 based on the market price of the Company Common
Stock during the ten trading days ended September 19, 1996), and (ii) Ann Taylor
paid to Cygne approximately $3.2 million in cash for the fixed assets of the
Division and the Inventory, which amount is subject to post-closing adjustments.
On September 20, 1996, CGFE transferred its shares of Company Common Stock
acquired pursuant to the CAT/Cygne Transaction to Cygne. In addition, Ann Taylor
assumed certain liabilities of Cygne including certain capital lease obligations
and the payment of $1.6 million to the former President of CAT with respect to
amounts due under his previous employment agreement with CAT, and forgave
$7,985,000 of advances made by Ann Taylor to Cygne.
In connection with the CAT/Cygne Transaction, (i) Cygne received an
additional $6,500,000 cash payment from Ann Taylor in settlement of certain
accounts receivables, and (ii) the Company and Ann Taylor entered into
Consulting Agreements (the "Consulting Agreements") with Cygne and each of
Bernard M. Manuel, the Chairman and Chief Executive Officer of Cygne, and Irving
Benson, the President of Cygne. Under the Consulting Agreements, Ann Taylor will
pay Cygne an aggregate of $450,000 annually for three years in consideration for
consulting services to be provided by Messrs. Manuel and Benson.
As a result of the CAT/Cygne Transaction, CAT became an indirect wholly
owned subsidiary of the Company and will perform all of Ann Taylor's direct
sourcing functions, including those previously provided by the Division, under
the name AnnTaylor Global Sourcing, Inc.
The Company entered into a stockholders agreement with Cygne and CGFE (the
"Stockholders Agreement") relating to the Acquisition Shares pursuant to which
the Company is required to, at the Company's expense, (i) file with the SEC
within 15 business days after the closing of the CAT/Cygne Transaction a
registration statement (the "Shelf Registration Statement") covering resales of
the Acquisition Shares, (ii) use its reasonable best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act as
promptly as practicable and (iii) use its reasonable best efforts to keep
effective the Shelf Registration Statement until three years after the date it
is declared effective or such earlier date as all Acquisition Shares, shall have
been disposed of or on which all such shares may be resold without registration
pursuant to Rule 144(k) under the Securities Act. The Company is required to
provide to Cygne copies of the prospectus which is a part of the Shelf
Registration Statement, notify Cygne when the Shelf Registration Statement has
become effective and take certain other actions as are required to permit
resales of the Acquisition Shares. Cygne or any permitted transferee is required
to name the selling security holder in the related Prospectus and to deliver a
Prospectus to purchasers, is subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and is bound
by the provisions of the Stockholders Agreement, including certain
indemnification obligations. This Prospectus is part of the Shelf Registration
Statement.
Under the Stockholders Agreement, Cygne and CGFE are prohibited from, among
other things, (i) making or in any way participating, directly or indirectly, in
any solicitation of proxies with respect to the Company Common Stock or any
securities of the Company's subsidiaries, (ii) initiating, proposing or
participating in the solicitation of the Company's stockholders for the approval
of one or
9
<PAGE>
more stockholder proposals with respect to the Company, or inducing or
encouraging any other individual or entity to initiate any stockholder proposal
relating to the Company, (iii) depositing any Acquisition Shares into a voting
trust or subjecting any Acquisition Shares to any arrangement or agreement with
respect to the voting thereof or (iv) executing any written consents.
Except for certain permitted transfers under the Stockholders Agreement,
including a pro rata dividend or other pro rata distribution to all of Cygne's
stockholders, upon liquidation of Cygne or otherwise, (i) no transfers of more
than two percent (2%) of the then outstanding shares of Company Common Stock may
be made in any two (2)-week period, (ii) no transfers of any Acquisition Shares
may knowingly be made to any person who beneficially owns in excess of five
percent (5%) of the then outstanding shares of Company Common Stock and (iii) no
transfers of Acquisition Shares constituting more than two percent (2%) of the
then outstanding shares of Company Common Stock may knowingly be made to a
single purchaser (or group of related purchasers).
USE OF PROCEEDS
The Selling Stockholder will receive all of the proceeds from the sale of
the Offered Securities. The Company will not receive any proceeds from the sale
of the Offered Securities.
10
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 40,000,000 shares of
Company Common Stock, par value $.0068 per share, and 2,000,000 shares of
preferred stock, par value $.01 per share.
COMMON STOCK
Holders of the Company Common Stock are entitled to one vote per share on
all matters to be voted upon by the stockholders generally, including the
election of directors. Subject to the rights of holders of preferred stock, the
holders of Company Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors out of funds legally
available therefor. In the event of the liquidation, dissolution or winding up
of the Company, holders of Company Common Stock are entitled to share ratably in
all assets remaining after payment of liabilities, subject to the rights of
holders of preferred stock, including any liquidation amount payable with
respect to any outstanding preferred stock. The holders of Company Common Stock
have no preemptive or conversion rights and are not subject to further calls or
assessments by the Company.
PREFERRED STOCK
The Company's Certificate of Incorporation, as amended, authorizes the
Board of Directors (without stockholder approval) to, among other things, issue
shares of preferred stock from time to time in one or more series, each series
to have such powers, designations, preferences and rights, and qualifications,
limitations or restrictions thereof, as may be determined by the Board of
Directors. The Company currently has no shares of preferred stock outstanding.
CERTAIN CERTIFICATE OF INCORPORATION AND BY-LAWS PROVISIONS
Pursuant to the Certificate of Incorporation, the Board of Directors of the
Company is divided into three classes serving staggered three-year terms.
Directors can be removed from office only for cause and only by the affirmative
vote of the holders of a majority of the then-outstanding shares of capital
stock entitled to vote generally in an election of directors. Vacancies on the
Board of Directors may be filled only by the remaining directors and not by the
stockholders.
The Certificate of Incorporation also provides that any action required or
permitted to be taken by the stockholders of the Company may be effected only at
an annual or special meeting of stockholders, and prohibits stockholder action
by written consent in lieu of a meeting. The Company's By-laws provide that
special meetings of stockholders may be called only by the chairman, the
president or the secretary of the Company and must be called by any such officer
at the request in writing of the Board of Directors. Stockholders are not
permitted to call a special meeting or to require that the Board of Directors
call a special meeting of stockholders.
The By-laws establish an advance notice procedure for the nomination, other
than by or at the direction of the Board of Directors, of candidates for
election as directors as well as for other stockholder proposals to be
considered at annual meetings of stockholders. In general, notice of intent to
nominate a director or raise business at such meetings must be received by the
Company not less than 60 nor more than 90 days prior to the anniversary of the
previous year's annual meeting, and must contain certain specified information
concerning the person to be nominated or the matters to be brought before the
meeting and information concerning the stockholder submitting the proposal.
11
<PAGE>
LIMITATIONS ON DIRECTORS' LIABILITY
The Company's Certificate of Incorporation provides that no director of the
Company shall be liable to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) in respect of certain unlawful
dividend payments or stock redemptions or repurchases or (iv) for any
transaction from which the director derived an improper personal benefit. The
effect of these provisions will be to eliminate the rights of the Company and
its stockholders (through stockholders' derivative suits on behalf of the
Company) to recover monetary damages against a director for breach of fiduciary
duty as a director (including breaches resulting from grossly negligent
behavior), except in the situations described above. These provisions will not
limit the liability of directors under federal securities laws.
12
<PAGE>
SELLING STOCKHOLDER
The following table sets forth information as of October 9, 1996, except as
otherwise noted, with respect to the number of shares of Company Common Stock
beneficially owned by the Selling Stockholder. The Selling Stockholder owns 9.2%
of the outstanding Company Common Stock prior to the sale of all the Offered
Securities and upon the sale of all the Offered Securities, the Selling
Stockholder will own no shares of Company Common Stock. The shares of Company
Common Stock offered hereby were acquired by Cygne in the CAT/Cygne Transaction.
See "CAT/Cygne Transaction."
<TABLE>
<S> <C> <C> <C>
NUMBER OF SHARES
OF COMPANY COMMON
STOCK
BENEFICIALLY NUMBER OF SHARES OF
OWNED PRIOR TO NUMBER OF SHARES COMPANY COMMON STOCK
THE SALE OF ALL OF COMPANY COMMON BENEFICIALLY OWNED AFTER
SELLING SECURITY THE OFFERED STOCK OFFERED THE SALE OF ALL THE
HOLDER SECURITIES HEREBY OFFERED SECURITIES
- ----------------- ----------------- ----------------- -------------------------
Cygne Designs,
Inc. 2,348,145 2,348,145 0
</TABLE>
Prior to the consummation of the CAT/Cygne Transaction, Cygne had sourced
merchandise for Ann Taylor for more than ten years, and Ann Taylor had become
one of Cygne's two largest customers. During Cygne's fiscal 1993, 1994 and 1995
and the first half of fiscal 1996, net sales to Ann Taylor were $121.8 million,
$193.4 million, $231.9 million and $117.1 million, respectively, representing
55.3%, 37.5%, 42.9% and 73.3%, respectively, of Cygne's net sales. Cygne
supplied products to Ann Taylor directly through the Division as well as through
CAT. A substantial portion of the increase in sales to Ann Taylor during this
period resulted from increased sales by CAT, which accounted for 55.3%, 70.9%,
71.6% and 70.8% of Cygne's total net sales to Ann Taylor during Cygne's fiscal
1993, 1994 and 1995 and the first half of fiscal 1996.
In connection with the CAT/Cygne Transaction, Cygne entered into two 3-year
consulting agreements with Ann Taylor for the services of Mr. Bernard Manuel,
Cygne's Chairman of the Board and Chief Executive Officer, and Mr. Irving
Benson, Cygne's President and a director, to facilitate the integration of CAT
and the Division into Ann Taylor's operations. These agreements, which each
provide for an annual fee of $225,000 for the services of Messrs. Benson and
Manuel, respectively, will automatically be assigned to the consultant if his
employment with Cygne is terminated for any reason.
In connection with Cygne's credit facility with HKSBC, Cygne has pledged
the 2,348,145 shares of Company Common Stock to secure the repayment of its
obligations to HKSBC. HKSBC has the right to receive all dividends paid in
respect of the 2,348,145 shares of Company Common Stock and to vote and acquire
ownership of the 2,348,145 shares of Company Common Stock following an event of
default under Cygne's credit facility. In connection therewith, Cygne entered
into an Escrow Agreement, dated as of September 20, 1996, among Cygne, a
subsidiary of Cygne, HKSBC and Marine Midland Bank (the "Escrow Agreement"), and
deposited the 2,348,145 shares of Company Common Stock with Marine Midland Bank
as the Escrow Agent. The Escrow Agreement provides that the 2,348,145 shares of
Company Common Stock will be sold from time to time upon Cygne's instructions
and must be sold to the extent that Cygne's obligations to HKSBC exceed the
lesser of the maximum facility or the borrowing base under the credit facility,
subject, in either case, to the restrictions imposed by the Stockholders
Agreement. See "CAT/Cygne Transaction." In addition, Cygne has granted to HKSBC
an option to exercise Cygne's rights under the Stockholders Agreement, subject
to HKSBC's agreement to be bound by the terms and conditions under such
agreement. Cygne also has granted a security interest in the 2,348,145 shares of
Company Common Stock to Mitsubishi Corporation and Mitsubishi International
Corporation, its subordinated lenders, which security interest is subordinated
to the security interest in favor of HKSBC.
13
<PAGE>
PLAN OF DISTRIBUTION
The Offered Securities may be sold from time to time to purchasers directly
by the Selling Stockholder. Alternatively, the Selling Stockholder may from time
to time offer the Offered Securities to or through underwriters, broker/dealers
or agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the Selling Stockholder or the purchasers of
such securities for whom they may act as agents. The Selling Stockholder and any
underwriters, broker/dealers or agents that participate in the distribution of
Offered Securities may be deemed to be "underwriters" within the meaning of the
Securities Act and any profit on the sale of such securities and any discounts,
commissions, concessions or other compensation received by any such underwriter,
broker/dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act.
The Offered Securities may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. The
sale of the Offered Securities may be effected in transactions (which may
involve crosses or block transactions) (i) on any national securities exchange
or quotation service on which the Offered Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or in the over-the-counter market or (iv)
through the writing of options. At the time a particular offering of the Offered
Securities is made, a Prospectus Supplement, if required, will be distributed
which will set forth the aggregate amount and type of Offered Securities being
offered and the terms of the offering, including the name or names of any
underwriters, broker/dealers or agents, any discounts, commissions and other
terms constituting compensation from the Selling Stockholder and any discounts,
commissions or concessions allowed or reallowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the Offered Securities will be offered or sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Offered Securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions or any exemption
from registration or qualification is available and is complied with.
The Selling Stockholder will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Offered Securities by the
Selling Stockholder. The foregoing may affect the marketability of such
securities.
Pursuant to the Stockholders Agreement, all expenses of the registration of
the Offered Securities will be paid by the Company, including, without
limitation, Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that the Selling Stockholder
will pay all underwriting discounts and selling commissions, if any. The Selling
Stockholder will be indemnified by the Company against certain liabilities under
the Securities Act, or will be entitled to contribution in connection therewith.
The Company will be indemnified by the Selling Stockholder against certain civil
liabilities, including certain liabilities under the Securities Act, or will be
entitled to contribution in connection therewith.
14
<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the Offered Securities have been
passed upon for the Company by Jocelyn F.L. Barandiaran, Esquire, Senior Vice
President, General Counsel and Corporate Secretary of the Company, Ms.
Barandiaran beneficially owns 2,000 shares of Company Common Stock and has been
granted options to purchase an additional 52,500 shares of Company Common Stock.
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus of AnnTaylor Stores Corporation as of February 3, 1996 and January
28, 1995 and for each of the fiscal years in the three year period ended
February 3, 1996, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated by reference herein,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
The combined financial statements of the AnnTaylor Woven Division of Cygne
Designs, Inc., CAT US Inc. and C.A.T. (Far East) Limited and Subsidiary as of
February 3, 1996 and January 28, 1995 and for each of the years then ended, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon, incorporated by reference herein in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
15
<PAGE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
2,348,145 SHARES PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION COMMON STOCK OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
ANNTAYLOR STORES CORPORATION, THE SELLING STOCKHOLDER OR ANY OF THEIR
RESPECTIVE AGENTS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY OF THE ANNTAYLOR SECURITIES OFFERED
HEREBY IN ANY JURISDICTION WHERE, STORES CORPORATION 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 AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN
THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF ANNTAYLOR STORES
CORPORATION SINCE THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------------
<S> <C>
Available Information..................... 2
Incorporation of Certain Documents by
Reference................................. 3
Risk Factors.............................. 5
The Company............................... 8
The CAT/Cygne Transaction................. 9
Use of Proceeds........................... 10
Description of Capital Stock.............. 11
Selling Stockholder....................... 13
Plan of Distribution...................... 14
Legal Matters............................. 15
Experts................................... 15
</TABLE>
[LOGO]
------------------------------------
PROSPECTUS
------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses (other than the SEC filing fee) are estimated.
<TABLE>
<S> <C>
SEC registration fee.......................................................... $ 12,363.34
Printing expenses............................................................. $ 15,000.00
Legal fees and expenses....................................................... $ 50,000.00
Accounting fees and expenses.................................................. $ 10,000.00
Miscellaneous................................................................. $ 2,636.66
-------------
Total............................................................... $ 90,000.00
-------------
-------------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As authorized by Section 145 of the General Corporation Law of the State of
Delaware (the "Delaware Corporation Law"), each director and officer of the
Company may be indemnified by the Company against expenses (including attorneys'
fees, judgments, fines and amounts paid in settlement) actually and reasonably
incurred in connection with the defense or settlement of any threatened, pending
or completed legal proceedings in which he is involved by reason of the fact
that he is or was a director or officer of the Company if he acted in good faith
and in a manner that he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, if he had no reasonable cause to believe that his conduct was
unlawful. If the legal proceeding, however, is by or in the right of the
Company, the director or officer may not be indemnified in respect of any claim,
issue or matter as to which he shall have been adjudged to be liable for
negligence or misconduct in the performance of this duty to the Company unless a
court determines otherwise. The designees of the ML Entities who serve on the
Company's board of directors also have certain rights to indemnification by ML &
Co. and the ML Entities for liabilities incurred in connection with actions
taken by them in their capacity as directors of the Company.
Article Seven of the Certificate of Incorporation of the Company provides
that, to the fullest extent permitted by law, directors of the Company will not
be liable for monetary damages to the Company or its stockholders for breaches
of their fiduciary duties.
Under the Stockholders Agreement, the Selling Stockholder is required to
indemnify the officers and directors of the Company against losses caused by any
untrue or alleged untrue statement of material fact contained in this
Registration Statement, any prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission or alleged untrue statement or omission (i) is caused by, results from
or relates to, or is alleged to be omitted from, such information furnished in
writing by the Selling Stockholder or (ii) arises out of or results from the
Selling Stockholder's failure to deliver, or its underwriter's or other agent's
failure to deliver, a copy of this Registration Statement or prospectus or any
amendments or supplements thereto after the Company has furnished the Selling
Stockholder with the requested number of copies of the same; provided, however,
that the Selling Stockholder shall not be liable for any claims hereunder in
excess of the amount of net proceeds received by the Selling Stockholder from
the sale of the Offered Securities pursuant to this Registration Statement.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
A. EXHIBITS
The Exhibits listed in the following Exhibit Index are filed as part of the
Registration Statement:
<TABLE>
<S> <C>
EXHIBIT NUMBER DESCRIPTION
- --------------- ---------------------------------------------------------------------------------------------
4.1* Stockholders Agreement, dated as of September 20, 1996, by and among AnnTaylor Stores
Corporation, Cygne Designs, Inc. and Cygne Group (F.E.) Limited
5.1 Opinion of Jocelyn F.L. Barandiaran, General Counsel of AnnTaylor Stores Corporation, as to
the legality of the Common Stock of AnnTaylor Stores Corporation being registered hereby.
23.1 Consent of Jocelyn F.L. Barandiaran, General Counsel of AnnTaylor Stores Corporation
(included in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Ernst & Young LLP.
24* Power of Attorney.
</TABLE>
- ---------------
* Previously filed.
B. FINANCIAL STATEMENTS AND SCHEDULES
All schedules for which provision is made in Regulation S-X of the
Securities and Exchange Commission either are not required under the related
instructions or the information required to be included therein has been
included in the financial statements of the Company.
ITEM 17. UNDERTAKINGS.
(a) 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
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the 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 the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and 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 Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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 a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE>
(b) The undersigned registrant hereby undertakes 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Securities and Exchange
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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all 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 October 16,
1996.
ANNTAYLOR STORES CORPORATION
BY /s/ J. Patrick Spainhour
.....................................
Chairman of the Board, Chief
Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------------------------- --------------------
/s/ J. Patrick Spainhour
.......................................... Chairman of the Board, Chief October 16, 1996
J. Patrick Spainhour Executive Officer and Director
* Executive Vice President--Finance October 16, 1996
.......................................... and Administration, Chief Financial
Paul E. Francis Officer and Director
* Senior Vice President--Finance October 16, 1996
.......................................... and Principal Accounting Officer
Walter J. Parks
* Director October 16, 1996
..........................................
Gerald S. Armstrong
* Director October 16, 1996
..........................................
James J. Burke, Jr.
* Director October 16, 1996
..........................................
Robert C. Grayson
* Director October 16, 1996
..........................................
Rochelle B. Lazarus
* Director October 16, 1996
..........................................
Hanne M. Merriman
*By: /s/ Jocelyn F. L. Barandiaran October 16, 1996
......................................
Jocelyn F. L. Barandiaran
Attorney-in-Fact
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C>
EXHIBIT NUMBER DESCRIPTION
- ---------------
4.1* Stockholders Agreement, dated as of September 20, 1996, by and among AnnTaylor Stores
Corporation, Cygne Designs, Inc. and Cygne Group (F.E.) Limited
5.1 Opinion of Jocelyn F.L. Barandiaran, General Counsel of AnnTaylor Stores Corporation, as to
the legality of the Common Stock of AnnTaylor Stores Corporation being registered hereby.
23.1 Consent of Jocelyn F.L. Barandiaran, General Counsel of AnnTaylor Stores Corporation
(included in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Ernst & Young LLP.
24* Power of Attorney.
</TABLE>
- ---------------
* Previously filed.
<PAGE>
EXHIBIT 5.1
October 17, 1996
AnnTaylor Stores Corporation
142 West 57th Street
New York, New York 10019
Re: AnnTaylor Stores Corporation
Registration Statement on Form S-3
Registration No. 333-13923
- ----------------------------------
Ladies and Gentlemen:
I am Senior Vice President, General Counsel and Secretary of AnnTaylor
Stores Corporation, a Delaware corporation (the "Company"), and am delivering
this opinion in connection with the Registration Statement on Form S-3 of
the Company (Registration No. 333-13923) filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), on October 11, 1996, and Amendment No. 1
thereto, filed with the Commission on October 17, 1996 (such Registration
Statement, as so amended, being hereinafter referred to as the "Registration
Statement"), relating to the registration by the Company of an aggregate of
2,348,145 shares (the "Acquisition Shares") of common stock. par value $.0068
per share, of the Company (the "Company Common Stock"), issued on September
20, 1996 to Cygne Designs, Inc., a Delaware corporation, and Cygne Group
(F.E.) Limited, a Hong Kong corporation (together "Cygne"), in connection
with the closing of the transactions contemplated by the Stock and Asset
Purchase Agreement, dated as of June 7, 1996, as amended as of August 27,
1996, by and among the Company, AnnTaylor, Inc. and Cygne (the "Purchase
Agreement"). The Registration Statement registers the resale by Cygne of the
Acquisition Shares from time to time.
This opinion is being delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act. Capitalized terms
used herein but not otherwise defined herein have the meanings ascribed to
them in the Registration Statement.
<PAGE>
AnnTaylor Stores Corporation
October 17, 1996
Page 2
In connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
(i) the Restated Certificate of Incorporation and By-laws of the Company, as
amended to date, (ii) the Registration Statement, (iii) the applicable
resolutions of the Board of Directors of the Company, (iv) certificates
evidencing the Acquisition Shares and (v) the Purchase Agreement. I have also
examined originals or copies, certified or otherwise identified to my
satisfaction, of such records of the Company and such other documents as I
have deemed necessary or appropriate as a basis for the opinions set forth
below.
In my examination, I have assumed the legal capacity of natural persons,
the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such copies. In making my examination of
documents executed by parties other than the Company, I have assumed that
such parties had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and
binding obligations of such parties. As to any facts material to the opinions
set forth herein that I did not independently establish or verify, I have
relied upon certificates, statements and representations of officers and
other representatives of the Company and others.
I am admitted to the Bar in the State of New York and express no opinion
as to the laws of any other jurisdiction except the General Corporation Law
of the State of Delaware.
Based upon and subject to the foregoing, I am of the opinion that the
Acquisition Shares have been duly authorized and are validly issued, fully
paid and nonassessable shares of Company Common Stock.
<PAGE>
AnnTaylor Stores Corporation
October 17, 1996
Page 3
I hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the reference to me under the
caption "Legal Matters" in the Registration Statement. In giving such
consent, I do not thereby admit that I am in the category of persons whose
consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission promulgated thereunder.
Very truly yours,
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
ANNTAYLOR STORES CORPORATION:
We consent to the incorporation by reference in this Registration Statement
of AnnTaylor Stores Corporation on Form S-3 of our report dated March 11, 1996
(April 8, 1996 as to Note 15), appearing in the Annual Report on Form 10-K of
AnnTaylor Stores Corporation for the fiscal year ended February 3, 1996. We also
consent to the reference to us under the heading "Experts" in the Prospectus,
which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
October 15, 1996
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) of AnnTaylor Stores Corporation and to the
incorporation by reference therein of our report on the combined financial
statements of the AnnTaylor Woven Division of Cygne Designs, Inc., CAT US Inc.
and C.A.T. (Far East) Limited and Subsidiary included in AnnTaylor Stores
Corporation's Form 8-K filed with the Securities and Exchange Commission on June
21, 1996.
ERNST & YOUNG LLP
New York, New York
October 15, 1996
