As Filed with the Securities and Exchange Commission on August 1, 1997
Registration No. 333-27611
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------
AMENDMENT NO. 1
TO
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 of (I.R.S. Employer
Incorporation or Organization) Identification 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)
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Approximate date of commencement of proposed sale to public: As soon as
practicable after the effectiveness of this Registration Statement.
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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|
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. | |
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.
<PAGE>
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.
SUBJECT TO COMPLETION, DATED AUGUST 1, 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
July 31, 1997, the closing sales price of the Common Stock, as reported by
Nasdaq, was $9.00 per share.
The date of this Prospectus is , 1997
<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. The Company
incurred a loss before extraordinary items and preferred dividends of $2.4
million in fiscal 1995 and income before preferred dividends of $0.9 million in
Fiscal 1996. After recording an extraordinary loss, net of income tax benefit,
of $4.2 million for the early extinguishment of debt and preferred dividends of
$0.2 million, the Company had a net loss of $6.8 million in fiscal 1995. In
fiscal 1996, the Company incurred preferred dividends of $1.0 million resulting
in a net loss of $0.1 million. Total stockholders' equity at March 31, 1997 is
$27.1 million which includes an accumulated deficit of $12.1 million.
Continuing Losses from Episode Operations; Risks Associated with Integration
of Episode Business
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 non-maternity, upscale women's apparel and accessories, similar to
designer fashions but with a price point for dresses and blouses in the $200 to
$500 range and $120 to $200 range, respectively (commonly referred to as
"bridge" fashion). The Company has introduced its own non-maternity "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.
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(1) Episode America, a division of Mothers Work, Inc., is licensed to use
the Episode(R) trademark by Episode USA, Inc.
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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. The Company's annual
aggregate debt service is approximately $13.1 million.
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.
Certain Anti-Takeover Provisions
The Company's Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") and By-Laws (the "By-Laws")
include certain provisions which may have the effect of delaying, deterring or
preventing a future takeover or change in control of the Company unless such
takeover or change in control is approved by the Company's Board of Directors.
Such provisions may also render the removal of directors and management more
difficult. Specifically, the Company's Certificate of Incorporation or By-Laws
provide for a classified Board of Directors serving staggered three-year terms
and restrictions on who may call a special meeting of stockholders. In addition,
the Company's Board of Directors has the authority to issue up to 2,000,000
additional shares of preferred stock (the "Preferred Stock") and to determine
the price, rights, preferences, and privileges of those shares without any
further vote or actions by the stockholders. The rights of the holders of Common
Stock will be subject to, and may be adversely affected by, the rights of the
holders of any Preferred Stock that may be issued in the future. The issuance of
such additional shares of Preferred Stock, while potentially providing desirable
flexibility in connection with possible acquisitions and serving other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire, or may discourage a third party from attempting to acquire, a majority
of the outstanding voting stock of the Company.
On October 5, 1995, the Board of Directors declared a
distribution of one Right for each outstanding share of Common Stock. Subject to
the terms of the Rights Agreement, as amended, each Right
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entitles the holder thereof to purchase from the Company one one-thousandth of a
share of Series B Preferred Stock, par value $.01 per share ("Series B Unit"),
at a Purchase Price of $85.00, subject to adjustment (the "Right"). The Rights
remain attached to and can only be transferred with the Common Stock until the
Distribution Date (as defined in the Rights Agreement). The transfer of a share
of Common Stock will constitute the transfer of the accompanying Right until the
Distribution Date. The Rights are not exercisable until the Distribution Date
which will occur upon the earlier of (i) ten business days following a public
announcement that an Acquiring Person (as defined in the Rights Agreement) has
acquired beneficial ownership of 10% or more of the Company's outstanding common
stock, or (ii) ten business days following the commencement of a tender offer or
exchange offer that would result in a person or group owning 10% or more of the
Company's outstanding Common Stock. The Rights have certain anti-takeover
effects. When the Rights become exercisable, each holder of a Right, except the
Acquiring Person, will have the right to receive Mothers Work common stock or
common stock of the acquiring company having a value equal to two times the
exercise price of the Right. The Rights will cause substantial dilution to a
person or group that attempts to acquire the Company without conditioning the
offer on the redemption of the Rights. The rights can be mandatorily redeemed by
action of a majority of the independent directors at any time prior to the
earlier of the October 9, 2005 and the Distribution Date for $.01 per right. The
Rights are intended to increase the expense of a person seeking to acquire the
Company without Board of Directors' approval and to dilute the stock holdings of
an acquiror.
The Company is also subject to the anti-takeover provisions of
Section 203 of the Delaware General Corporation Law (the "DGCL"), which will
prohibit the Company from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder unless the
business combination is approved in a prescribed manner. The application of
Section 203 also could have the effect of delaying or preventing a change of
control of the Company. Furthermore, certain provisions of the Company's
By-Laws, including provisions that provide that the exact number of directors
shall be determined by a majority of the Board of Directors, that vacancies on
the Board of Directors may be filled by a majority vote of the directors then in
office, though less than a quorum, and that limit the ability of new majority
stockholders to remove directors, all of which may have the effect of delaying
or preventing changes in control or management of the Company, and which could
adversely affect the market price of the Company's Common Stock.
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 maintains and is the
beneficiary under a $5 million key person life insurance on Dan Matthias and a
$5 million key person life insurance on Rebecca Matthias, but not on the lives
of any other officer, director or key employee. 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,
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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.
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
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(2) 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>
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.
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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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(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 July 31, 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>
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(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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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
Stockholders, 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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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
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Risk Factors............................................................ 2
Use of Proceeds......................................................... 5
The Company............................................................. 5
Available Information................................................... 6
Incorporation of Certain Documents by Reference......................... 6
Selling Stockholder..................................................... 8
Plan of Distribution.................................................... 8
Legal Matters........................................................... 9
Experts................................................................. 9
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MOTHERS WORK, INC.
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PROSPECTUS
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, 1997
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<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**
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Total.................................. $ 9,700**
========
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* 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
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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 (included in Exhibit 5).*
24 Power of Attorney.*
- ----------------------
* Previously filed.
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
II-3
<PAGE>
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more 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 PUBLIC ACCOUNTANTS
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.
August 1, 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 (No. 333-27611) to be signed on its behalf by the
undersigned, thereunto duly authorized, in Philadelphia, Pennsylvania, on July
28, 1997.
MOTHERS WORK, INC.
By: /s/ DAN W. MATTHIAS
---------------------------------
Dan W. Matthias
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ DAN W. MATTHIAS Chairman of the Board and July 28, 1997
- ----------------------------- Chief Executive Officer (the
Dan W. Matthias principal executive officer)
/s/ REBECCA C. MATTHIAS President, Chief Operating July 28, 1997
- ----------------------------- Officer and Director
Rebecca C. Matthias
/s/ THOMAS FRANK Chief Financial Officer and Vice July 28, 1997
- ----------------------------- President - Finance (the principal
Thomas Frank financial officer and the principal
accounting officer)
Verna K. Gibson Directors July 28, 1997
Joseph A. Goldblum
Elam M. Hitchner, III
Walter F. Loeb
William L. Rulon-Miller
Marvin S. Traub
By: /s/ REBECCA C. MATTHIAS
------------------------------
Rebecca C. Matthias
Attorney-in-Fact
</TABLE>
II-6
