As Filed with the Securities and Exchange Commission on May 22, 1997
Registration No. 333-_____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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MOTHERS WORK, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 13-3045573
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification
Organization) Number)
456 North 5th Street
Philadelphia, Pennsylvania 19103
(215) 873-2200
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Rebecca C. Matthias, President
456 North 5th Street
Philadelphia, Pennsylvania 19103
(215) 873-2200
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effectiveness 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 registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
<PAGE>
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 number of the earlier effective
registration 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. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities To Be Price Per Offering Registration
To be Registered Registered(1) Share (2) Price (2) Fee
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 217,365 $6.625 $ 1,440,044 $437
===============================================================================================
</TABLE>
(1) The shares being registered hereunder are for the account of a certain
selling stockholder.
(2) Estimated pursuant to Rule 457(c) under the Securities Act of 1933
solely for the purpose of calculating the registration fee.
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 of 1933 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>
SUBJECT TO COMPLETION, DATED MAY 22, 1997
PROSPECTUS
MOTHERS WORK, INC.
This Prospectus relates to the resale by a Selling Stockholder of a total
of 217,365 shares of Common Stock, $.01 par value per share (the "Common Stock")
of Mothers Work, Inc. (the "Company").
The Company will not receive any proceeds from the sale of shares of Common
Stock by the Selling Stockholder. See "Selling Stockholder."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
PROSPECTIVE PURCHASERS SHOULD CONSIDER THE RISKS SET FORTH UNDER "RISK
FACTORS" COMMENCING ON PAGE 2.
The shares offered by the Selling Stockholder hereby will be sold at market
prices on The Nasdaq Stock Market ("Nasdaq") or in private sales at prevailing
market prices or negotiated prices. The Selling Stockholder may pay commissions
or other compensation to broker-dealers in connection with such sales, which may
be in excess of customary commissions charged for Nasdaq transactions. See
"Selling Stockholder."
The Common Stock is traded on Nasdaq under the symbol MWRK. On May 16,
1997, the closing sales price of the Common Stock, as reported by Nasdaq, was
$6.625 per share.
The date of this Prospectus is May ___, 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>
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following factors should be considered carefully in evaluating an investment in
the Common Stock offered by this Prospectus.
Recent Operating Losses; Maternity Business Restructuring
The Company incurred a loss of $7.9 million for the second fiscal quarter
ended March 31, 1997 before considering preferred dividends, or a loss of $2.30
per share. Results for the quarter include unusual charges of $7.6 million or
$1.40 per share, the cash portion of which is approximately $1.3 million to be
paid out through the second quarter of fiscal 1998, taken in conjunction with
the Company's restructuring of its core maternity business to combine
overlapping product lines and close approximately 30 retail locations serviced
by other Company stores. Although operating cash flow (operating income
excluding amortization and depreciation expense) for the Company's core
maternity business for the first six months of fiscal 1997 (and exclusive of the
unusual charges) of $13.5 million was comparable to the same period in fiscal
1996, there can be no assurance that the Company's restructuring efforts will be
successful or that the Company can return to profitable operations.
Risk of Episode Operations
Since the acquisition of certain leases and assets of Episode USA, Inc. on
May 30, 1996, the Company has been engaged in the marketing and retailing of
upscale "bridge" women's apparel and accessories. The Company has introduced its
own "bridge" line, Daniel and Rebecca(R), and at March 31, 1997, the Company
operated 33 Episode(R)* stores. The Company's Episode division has operated at a
loss since the acquisition, and the losses for the second quarter of fiscal 1997
exclusive of the unusual charges discussed above in "Recent Operating Losses,"
are primarily attributable to the Episode operations. Although Episode's sales
levels improved in March and April, Episode revenues remain below management's
initial estimates and are currently at levels which would not support profitable
operations of the Episode division. The Company's management has limited
experience in the bridge women's apparel business and the integration of Episode
into the rest of the Company's operations has required substantial management
time and other resources. Further, the operations of a bridge women's fashion
business are subject to numerous risks, unanticipated operating problems, and
greater competition and fashion risk than the Company's core maternity business.
Based on the foregoing factors, there can be no assurance that the Company's
Episode Operations will become profitable.
Leverage and Liquidity
The Company became highly leveraged after completion of the offering of
12 5/8% Senior Unsecured Notes (the "Notes") in 1995. As of March 31, 1997, the
Company's total indebtedness was approximately $100,169,000, its stockholder's
equity was approximately $27,142,000 and the Company's total assets were
approximately $156,411,000, of which approximately $44,782,000 are intangible
assets. After excluding the Company's unusual charges of $7.6 million discussed
above, for the six-month period ending March 31, 1997, the Company's
consolidated EBITDA was approximately $10,280,000; fixed charges exceeded
earnings available to cover fixed charges by approximately $2,859,000 and the
ratio of EBITDA to interest expense, net was 1.56.
- --------------
*Episode America, a division of Mothers Work, Inc., is licensed to use the
Episode(R) trademark by Episode USA, Inc.
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<PAGE>
Concurrent with the Episode acquisition, and in order to provide the
Company with additional borrowing capacity under its working capital revolving
line of credit facility with CoreStates Bank, N.A. ("Working Capital Facility"),
the Working Capital Facility was increased from $15.0 million to $20.0 million.
In addition, the Company also had $4.0 million in a letter of credit issued by
CoreStates Bank to collateralize an Industrial Revenue Bond. The Company had
$2,883,000 in borrowings and $5.5 million in letters of credit issued under the
Working Capital Facility at March 31, 1997. In April 1997, the Working Capital
Facility was extended to August 1999 and provides for a revolving credit and
letter of credit facility.
The Company's ability to satisfy its obligations will be dependent upon its
future performance, which is subject to general economic conditions and to
financial, business and other factors, including factors beyond the Company's
control, and the Company's ability to obtain additional borrowings, if any, when
needed. There can be no assurance that internally generated funds, trade credit,
and the borrowing capacity under the Working Capital Facility will provide
sufficient capital resources to finance the Company's operations in the future,
or that, if there is a need for additional borrowings, that alternative sources
of financing would be available.
Dependence on Key Personnel
The success of the Company's business will continue to be dependent upon
Dan and Rebecca Matthias, the Chairman and Chief Executive Officer and the
President and Chief Operating Officer of the Company, respectively, and on other
key personnel. The Company believes that to succeed in the future it must
continue to attract, retain and motivate additional highly skilled management
personnel and store managers. The loss of key personnel or the inability to
attract and retain key employees in the future could have a material adverse
effect on the Company.
Competition
The maternity apparel industry and women's bridge apparel industry are
highly competitive with respect to price, quality and style of merchandise and
store location. The Company faces competition for customers and store locations
from various full-price maternity clothing chains, a number of off-price
specialty retailers and catalog retailers, as well as from local, regional and
national department stores and women's and, to some extent, men's clothing
stores, many of which have significantly greater financial and other resources
than the Company. The retailing business is affected by changes in consumer
tastes, demographic trends and the type, number and location of competing
stores. Additionally, since there are few barriers to entry into the retail
clothing business, the Company may face future competition from participants not
currently in the maternity market, such as certain large national specialty
stores and department store chains.
Fashion Risk
The women's apparel business (both maternity and bridge apparel) is
affected by changes in consumer tastes requiring the Company to keep up to date
on, and to some extent anticipate, emerging fashion trends. The failure to do so
may adversely affect the Company's operating results. With respect to maternity
apparel, the regular women's apparel market occasionally shifts toward
looser-fitting styles. During these times, pregnant women have a greater
opportunity to substitute regular market apparel for maternity wear. Such a
shift may adversely affect the Company's operating results.
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<PAGE>
Other Business Factors
The Company's future performance will be subject to a number of factors
beyond its control, including economic downturns and demographic changes. The
Company's business depends upon sustained demand for maternity clothing. In the
event that such demand were to decline for any reason, such as a decrease in the
number of pregnancies among women in the Company's customer base, the Company's
operating results could be adversely affected.
USE OF PROCEEDS
The Company will receive no proceeds from any sales of Common Stock
hereunder by the Selling Stockholder.
THE COMPANY
Mothers Work, Inc. together with its subsidiaries is the largest specialty
retailer of maternity clothing in the United States. As of March 31, 1997, the
Company operated 560 retail locations, including 33 Episode(R)** upscale bridge
apparel specialty stores and 527 locations offering a full range of career,
casual and special occasion maternity wear consisting of 224 Motherhood
Maternity(R) stores, 73 Maternite(R) stores, 49 Mimi Maternity(R) stores, 46
Maternity Works(R) outlet stores, 39 A Pea in the Pod(R) stores and 94 leased
departments. The Company situates its stores primarily in regional shopping
malls and, to a lesser extent, in central business districts within major
metropolitan areas, and in factory-direct outlet centers. The Company is
vertically-integrated, performing design, manufacturing, distribution and sales
functions in-house.
The Company currently operates maternity retail stores under five store
concepts which, although having different merchandising and marketing
strategies, all sell clothing that is designed to meet an expecting mother's
entire lifestyle needs including her career requirements, as well as her casual
and special occasion needs. Maternite, the Company's original concept, markets
traditional clothing. Mimi Maternity, which was developed in 1990, is designed
to meet the needs of fashion forward women who are willing to spend more to make
a fashion statement. A Pea in the Pod markets the most upscale of the Company's
fashions including a premium or "bridge" merchandise selection manufactured by
the Company, including the Company's Mimi Maternity line of clothing, and
certain designer labels. Motherhood markets a moderately-priced line of
maternity clothing in regional malls and department stores. Finally, Maternity
Works, a chain of factory-direct outlet stores, serves the woman who seeks
upscale apparel during her pregnancy but cannot or will not purchase at full
retail prices.
On May 31, 1996, the Company entered into a new line of business involving
bridge women's apparel and accessories through the acquisition of certain leases
and other assets of Episode U.S.A., Inc., a company involved in that line of
business. As of March 31, 1997, the Company operated 33 retail locations under
the Episode concept.
The principal executive office of the Company is located at 456 North 5th
Street, Philadelphia, Pennsylvania 19103 and its telephone number is (215)
873-2200.
- --------------
**Episode America, a division of Mothers Work, Inc., is licensed to use
the Episode(R) trademark by Episode USA, Inc.
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<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 with the
Securities and Exchange Commission (the "Commission") relating to the shares of
Common Stock offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted pursuant to the rules and regulations of the Commission.
Reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
securities offered hereby.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports and other information with the Commission. Proxy statements concerning
the Company, reports and other information filed by the Company can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices in New York (7 World Trade Center, Suite 1300, New York, New York 10048)
and Chicago (Citicorp Center, 500 W. Madison St., Suite 1400, Chicago, Illinois
60661-2511). Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, registration statements and certain other filings
made with the Commission through its Electronic Data Gathering, Analysis and
Retrieval ("EDGAR") system are publicly available through the Commission's site
on the Internet's World Wide Web located at http://www.sec.gov. This
Registration Statement, including all exhibits thereto and amendments thereof,
has been filed with the Commission through EDGAR.
The Company will furnish, without charge, to any person to whom a copy of
this Prospectus is delivered, upon such person's written request, a copy of any
and all of the documents that have been incorporated by reference in the
Registration Statement and herein (not including exhibits to such documents,
unless such exhibits are specifically incorporated by reference into such
documents). Any such request should be directed to the Chief Financial Officer,
Mothers Work, Inc., 456 North 5th Street, Philadelphia, Pennsylvania 19103,
phone number: (215) 873-2200.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in this Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the year ended September
30, 1996.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1996 and March 31, 1997.
(c) The Company's Current Reports on Form 8-K filed on March 18, 1997 and
April 30, 1997.
(d) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed with the Commission, including any
amendments or reports filed for the purpose of updating such description.
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<PAGE>
(e) In addition, all documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering shall be deemed to be incorporated by reference
herein from their respective dates of filing.
Any statements contained in a document 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 contained herein or in any other
subsequently filed document which also is incorporated or 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.
SELLING STOCKHOLDER
The following table sets forth the name of the sole Selling Stockholder and
certain information regarding the beneficial ownership of the Company's Common
Stock by the Selling Stockholder as of May 19, 1997, and as adjusted to
reflect the sale of the shares offered by this Prospectus:
<TABLE>
<CAPTION>
Beneficial Ownership
Number of Shares After Offering
Beneficially Owned --------------------
Prior To Number of Shares Number of Percentage of
Name Offering Offered Shares Class
- ---- ------------------ ---------------- --------- -------------
<S> <C> <C> <C> <C>
Toppy International Ltd. 217,365(1) 217,365 0 --
</TABLE>
- -----------------
(1) The Shares were acquired by the Selling Stockholder in connection with the
Company's acquisition of certain leases and other assets of Episode USA,
Inc., an affiliate of the Selling Stockholder.
PLAN OF DISTRIBUTION
The Selling Stockholder or its pledgees, donees, transferees or other
successors in interest, may sell all, a portion or none of the securities
offered by it hereby from time to time. Any such sales may be in one or more
transactions on Nasdaq or any other securities market on which the securities
are then listed or traded at prices prevailing at the times of such sales or in
private sales of the securities at prices related to the prevailing market
prices or at negotiated prices. The sales may involve (a) a block transaction in
which the broker or dealer so engaged will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction, (b) a purchase by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus, (c) ordinary
brokerage transactions in which the broker solicits purchasers, (d) exchange
distributions and/or secondary distributions in accordance with the rules of the
Nasdaq Stock Market, or (e) privately negotiated transactions. Broker-dealers
may receive compensation in the form of underwriting discounts, concessions or
commissions (which compensation may be in excess of customary commissions). The
Selling Stockholder and any broker-dealers that participate in the distribution
of the shares may be deemed to be underwriters and any commissions received by
them and any profit on the resale positioned by them might be deemed to be
underwriting discounts and commissions under the Securities Act of 1933, as
amended (the "Act"). The Selling Stockholder may from time to time deliver all
or a portion of the securities offered hereby to cover a short sale or sales or
upon exercise of a put
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<PAGE>
equivalent position. In addition, any such shares that qualify for sale under
Rule 144 or Rule 144A under the Act may be sold under any such rules rather than
pursuant to this Prospectus.
There can be no assurance that the Selling Stockholder will sell any or all
of their shares of Common Stock offered hereby. The Company will receive no
proceeds from any sales of Common Stock hereunder by the Selling Stockholder.
The Registration Statement of which this Prospectus is a part has been
filed with the Commission by the Company in accordance with certain subscription
agreements between the Company and certain of the Selling Stockholder, pursuant
to which the Company has agreed to pay the filing fees, costs and expenses
associated with such Registration Statement. The Company has also agreed to
indemnify such Selling Stockholder for certain civil liabilities in connection
with such Registration Statement and the securities offered hereby, including
liabilities under the Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon for
the Company by Pepper, Hamilton & Scheetz LLP, 3000 Two Logan Square,
Philadelphia, PA 19103. Elam M. Hitchner, III, a partner of Pepper, Hamilton &
Scheetz, LLP and a member of the Company's Board of Directors, owns 20,000
shares of Common Stock and options to purchase an additional 8,000 shares of
Common Stock.
EXPERTS
The consolidated financial statements of Mothers Work, Inc. included in
Mothers Work, Inc.'s Annual Report on Form 10-K for the year ended September 30,
1996, have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
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<PAGE>
==============================================================
No dealer, salesman or other person has been authorized to
give any information or to make any representations other
than those contained in this Prospectus in connection with
the offer made hereby, and, if given or made, such
information or representations must not be relied upon as
having been authorized by the Company. This Prospectus does
not constitute an offer to sell, or a solicitation of an
offer to buy, the securities offered hereby to any person in
any state or other jurisdiction in which such offer or
solicitation is unlawful. The delivery of this Prospectus at
any time does not imply that information contained herein is
correct as of any time subsequent to its date.
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TABLE OF CONTENTS
Page
----
Risk Factors............................................2
Use of Proceeds.........................................4
The Company.............................................4
Available Information...................................5
Incorporation of Certain
Documents by Reference................................5
Selling Stockholder.....................................6
Plan of Distribution....................................6
Legal Matters...........................................7
Experts.................................................7
MOTHER'S WORK, INC.
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PROSPECTUS
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May __, 1997
==============================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC registration fee........................ $ 450 *
Accounting fees and expenses................ $4,000**
Legal fees and expenses..................... $5,000**
Miscellaneous .......................... $ 250**
------
Total ................................. $9,700**
======
* Actual
** Estimated
Item 15. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation 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,
suit 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 such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if such
person acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. In the case of an action other than an action by or in the right
of the corporation, the termination of such action by judgment, order,
settlement, conviction, or upon plea of nolo contendere or its equivalent, does
not, of itself, create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
In the case of an action by or in the right of the corporation, Section 145
empowers a corporation 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 in
any of the capacities set forth above against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit 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
Company, except that indemnification is not permitted in respect of any claim,
issue or matter as to which such person is adjudged to be liable to the
corporation unless and only to the extent that the Delaware Court of Chancery,
or the court in which such action or suit was brought determines upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such
II-1
<PAGE>
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court deems proper.
Section 145 further provides: that a Delaware corporation is required to
indemnify a director, officer, employee or agent against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with any
action, suit or proceeding or in defense of any claim, issue or matter therein
as to which such person has been successful on the merits or otherwise; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; that
indemnification provided for by Section 145 shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of such
person's heirs, executors and administrators; and empowers the corporation to
purchase and maintain insurance on behalf of a director or officer against any
such liability asserted against him in any such capacity or arising out of his
status as such whether or not the corporation would have the power to indemnify
him against liability under Section 145. A Delaware corporation may provide
indemnification only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct. Such
determination is to be made (i) by the board of directors by a majority vote of
a quorum consisting of directors who were not party to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion or (iii) by stockholders.
Article Twelve of the Company's Certificate of Incorporation provides that
the Company shall, to the full extent permitted by the Delaware General
Corporation Law, as amended from time to time, indemnify all persons which it
has the power to indemnify pursuant thereto. In addition, Article V, Section 1
of the Company's By-Laws provides that each person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit 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 or she is or was a director, officer, employee or agent of the
Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another Company or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, shall be indemnified and held harmless by the Company to the
fullest extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of such amendment, only to
the extent that such amendment permits the Company to provide broader
indemnification rights that said law permitted the Company to provide prior to
such amendment), against all expenses (including attorneys' fees, judgments,
fines and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith. Article V, Section 5 of the
By-Laws provides that expenses incurred by an officer or director in defending a
civil, criminal, administrative or investigative action, suit or proceeding may
be paid by the Company in advance of final disposition upon receipt of an
undertaking by or on behalf of such person to repay such amount if it ultimately
is determined that he is not entitled to be indemnified by the Company. The
Company may, by action of its Board of Directors, provide indemnification to
employees and agents of the Company with the same scope and effect as the
foregoing indemnification of directors and officers. The foregoing right to
indemnification and advancement of expenses is not exclusive.
The directors and officers of the Company and its subsidiaries are covered
by policies of insurance under which they are insured, within limits and subject
to certain limitations, against certain expenses in connection with the defense
of actions, suits or proceedings, and certain liabilities which might be imposed
as a result of such actions, suits or proceedings, in which they are parties by
reason of being or having been directors or officers; the Company is similarly
insured, with respect to certain payments it might be required to make to its
directors or officers under the applicable statutes and its charter provisions.
II-2
<PAGE>
Additionally, Article Thirteen of the Company's Certificate of
Incorporation limits the liability of the Company's directors under certain
circumstances. Article Thirteen states that a director of the Company shall have
no personal liability to the Company or its stockholders for monetary damages
for breach of his fiduciary duty as a director, provided, however, that Article
Thirteen does not eliminate or limit the liability of a director (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 a law; (iii) for the unlawful payment of
dividends or unlawful stock repurchases under Section 174 of the General
Corporation Law of the State of Delaware; or (iv) for any transaction from which
the director derived an improper personal benefit.
For the undertakings with respect to indemnification, see Item 17 herein.
Item 16. Exhibits
5 Opinion of Pepper, Hamilton & Scheetz LLP
23.1 Consent of Arthur Andersen LLP (included on page II-5).
23.2 Consent of Pepper, Hamilton & Scheetz LLP (to be included in Exhibit 5).
24 Power of Attorney (included on pages II-6 and II-7).
- ----------------------
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions discussed in Item 15 of this
Registration Statement, or otherwise, the Company 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 Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person with the securities being registered, the Company 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.
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 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 (notwithstanding the foregoing, any increase or decrease
in volume of Securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more
II-3
<PAGE>
than 20 percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement); and (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 clauses (i) and (ii) above do not apply if the information
required to be included in a post-effective amendment by those clauses is
contained in periodic reports filed by the Company pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated 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; and (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.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or 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.
II-4
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 of our report dated
November 15, 1996 included in Mothers Work, Inc.'s Form 10-K for the year ended
September 30, 1996 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.
May 21, 1997
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Philadelphia, Pennsylvania, on May 21, 1997.
MOTHERS WORK, INC.
By: /s/ DAN W. MATTHIAS
----------------------------------
Dan W. Matthias, Chairman of
the Board and Chief Executive
Officer (the principal executive
officer)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Dan W. Matthias and Rebecca C. Matthias, and each
or any of them, as his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, or any registration
statement for the same offering that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on May 21, 1997
in the capacities indicated.
/s/ DAN W. MATTHIAS
-------------------------------
Dan W. Matthias, Chairman of
the Board and Chief Executive
Officer (the principal
executive officer)
/s/ REBECCA C. MATTHIAS
-----------------------------------
Rebecca C. Matthias, President,
Chief Operating Officer and Director
[EXECUTIONS CONTINUED]
II-6
<PAGE>
/s/ THOMAS FRANK
-----------------------------------
Thomas Frank, Chief Financial Officer
and Vice President - Finance
(the principal financial officer and
the principal accounting officer)
/s/ VERNA K. GIBSON
-----------------------------------
Verna K. Gibson, Director
/s/ JOSEPH A. GOLDBLUM
-----------------------------------
Joseph A. Goldblum, Director
/s/ ELAM M. HITCHNER, III
-----------------------------------
Elam M. Hitchner, III, Director
/s/ WALTER F. LOEB
-----------------------------------
Walter F. Loeb, Director
/s/ WILLIAM L. RULON-MILLER
-----------------------------------
William L. Rulon-Miller, Director
/s/ MARVIN S. TRAUB
-----------------------------------
Marvin S. Traub, Director
II-7
Exhibit 5
May 22, 1997
Mothers Work, Inc.
456 N. 5th Street
Philadelphia, PA 19103
Gentlemen:
We have acted as special counsel to Mothers Work, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") of a registration
statement (the "Registration Statement") of the Company on Form S-3 under the
Securities Act of 1933, as amended (the "Act"). The Registration Statement
registers the proposed offer and sale by a certain stockholder of the Company
(the "Selling Stockholder") of 217,365 shares (the "Shares") of the Company's
Common Stock, par value $.01 per share (the "Common Stock").
In connection with our representation of the Company, we have examined the
Registration Statement, including the exhibits thereto, the originals or copies,
certified or otherwise identified to our satisfaction, of the Certificate of
Incorporation and the By-Laws of the Company, as amended to date, resolutions of
the Company's Board of Directors and such other documents and corporate records
relating to the Company and the initial issuance and sale of the Shares as we
have deemed appropriate. In the foregoing examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as copies of originals. The opinion expressed herein is based exclusively on the
applicable provisions of the laws of the United States of America and the
Delaware General Corporation Law as in effect on the date hereof.
On the basis of the foregoing, we are of the opinion that the Shares have
been validly issued and are fully paid and nonassessable.
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the Registration Statement and to the filing of this opinion as an
exhibit to the Registration Statement. Such consent does not constitute a
consent under Section 7 of the Act, since we have not certified any part of such
Registration Statement and do not otherwise come within the categories of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder.
Very truly yours,
PEPPER, HAMILTON & SCHEETZ LLP
