As filed with the Securities and Exchange Commission on July 17, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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 19123
(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 19123
(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. / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Shares to be Amount to Aggregate Aggregate Amount of
Registered be Registered Price Per Share (1) Offering Price (1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 26,784 $7.56 $202.487.00 $60.00
per share
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</TABLE>
(1) Estimated solely for purposes of determining the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933.
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>
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 July 17, 1998
PROSPECTUS
MOTHERS WORK, INC.
26,784 Shares of Common Stock,
$.01 par value per share
This Prospectus relates to the resale by Selling Stockholders of a
total of 26,784 shares (the "Shares") of Common Stock, $.01 par value per share
(the "Common Stock") of Mothers Work, Inc. (the "Company"). The shares were
initially acquired by the Selling Stockholders in a private placement as part of
the consideration for their consent, as holders of the Company's 12 5/8% Senior
Notes due 2005 (the "Notes"), to an amendment of the indenture relating to the
Notes.
The Company will not receive any proceeds from the sale of shares of
Common Stock by the Selling Stockholders. See "Selling Stockholders." The
Company has agreed, among other things, to bear all filing fees and other costs
and expenses in connection with the registration of the Shares covered by this
Prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
PASSED UPON THE ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTIVE PURCHASERS SHOULD CONSIDER THE RISKS SET FORTH UNDER
"RISK FACTORS" COMMENCING ON PAGE 4.
The shares offered by the Selling Stockholders hereby will be sold at
market prices on The Nasdaq Stock Market ("Nasdaq") or in private sales at
prevailing market prices or negotiated prices. See "Plan of Distribution."
Broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions. The Selling Stockholders 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 received by them on the
resale of the Shares might be deemed to be underwriting discounts and
commissions under the Securities Act of 1933, as amended (the "Securities Act").
The Common Stock is traded on Nasdaq under the symbol MWRK. On July 16,
1998, the closing sales price of the Common Stock, as reported by Nasdaq, was
$7.88 per share.
The date of this Prospectus is , 1998
<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, 1997.
(b) The Company's Quarterly Reports on Form 10-Q for the
quarters ended December 31, 1997 and March 31, 1998.
(c) The Company's Current Report on Form 8-K filed on July 9,
1998.
(d) The description of the Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the Commission on
February 4, 1993, including any amendments or reports filed for the purpose of
updating such description.
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.
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<PAGE>
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.
THE COMPANY
The Company is the largest specialty retailer of maternity clothing in
the United States. As of March 31, 1998, the Company operated 448 stores under
the Mimi Maternity(R), A Pea in the Pod(R), Motherhood Maternity(R) and
Maternity Works(R) concepts offering a full range of career, casual and special
occasion maternity wear. In addition, the Company operated 130 leased maternity
departments in stores such as Lazarus, Rich's, Famous Barr and Macy's. The
Company locates 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 retail sales functions primarily
in-house.
The Company's maternity wear retail stores, although having different
merchandising and marketing strategies, are all targeted to those women seeking
to purchase moderate to upscale maternity fashions. All of the Company's
maternity store concepts sell clothing that is designed to meet an expectant
mother's entire lifestyle fashion needs including her career requirements, as
well as her casual and special occasion needs. In April 1997 the Company
restructured its core maternity business by combining the Mimi Maternity and
Maternite lines and consolidating store operations in selected markets. 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, which was acquired in April 1995, markets the most upscale of the
Company's maternity fashions and offers a premium or bridge merchandise
selection manufactured by the Company, including the Company's Mimi Maternity
line of clothing, and certain designer labels. Mimi Maternity and A Pea in the
Pod collectively constitute the Company's "high end" product line. Motherhood
Maternity, the oldest national chain specialty retailer of maternity clothing in
the United States, was acquired in August 1995 in order for the Company to enter
the moderately-priced maternity clothing market. 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.
In June 1996 the Company expanded into upscale "bridge" women's
apparel (i.e., similar to designer fashions but with a lower price point)
through the acquisition of certain leases and other assets of Episode USA, Inc.
("Episode"). At March 31, 1998, the Company operated 51 stores under the
Episode(R)(1) concept, however, as a consequence of the losses incurred in the
Episode division since being acquired in 1996, the Company recently announced
that it will restructure its non-maternity bridge apparel business. As an
initial step in that restructuring, the Company plans to close or convert to
maternity stores approximately 21 Episode store locations. As of May 31, 1998,
the Company had closed four Episode store locations, and was proceeding with
plans to convert three Episode stores to maternity stores and to close the
remaining 14 Episode store locations. See "Risk Factors - Continuing Losses from
Episode Operations; Restructuring of Episode Business."
The Company is incorporated under the laws of the State of Delaware and
entered into the maternity apparel business in 1982. Its principal executive
offices and production facility are located at 456 North Fifth Street,
Philadelphia, Pennsylvania 19123 and its telephone number is (215) 873-2200.
- ------------
(1) Mothers Work, Inc. is licensed to use the Episode(R) trademark by Episode
USA, Inc.
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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.
Continuing Losses from Episode Operations; Restructuring of Episode Business
Since the acquisition of certain leases and assets of Episode(R) on
June 1, 1996, the Company has been engaged in the marketing and retailing of
non-maternity, upscale women's apparel and accessories. The Company's Episode(R)
division has operated at a loss since the acquisition, and the Company's losses
for the second quarter of fiscal 1998 are primarily attributable to the Episode
operations. Episode revenues remain below management's initial estimates and are
currently at levels that would not support profitable operation of the Episode
division. In an effort to eliminate losses from the division, the Company
recently announced that it was restructuring the Episode business. During the
third quarter of fiscal 1998, the Company plans to close or convert to maternity
stores, approximately 21 of its 51 Episode store locations (the majority of
which would be outlet center locations). As of May 31, 1998, the Company had
closed four Episode store locations, and was proceeding with plans to convert
three Episode stores to maternity stores and to close the remaining 14 Episode
store locations.
In connection with the Episode store closings and related actions, the
Company will record restructuring charges of approximately $5.4 million in the
third quarter of fiscal 1998, the cash portion of which is approximately $1.8
million. The Company will also record an additional $2.0 million charge in
connection with its liquidation of Episode inventory in the third quarter of
fiscal 1998. The total one-time charges in the third quarter of fiscal 1998
related to Episode will be $7.4 million. At March 31, 1998, the Episode assets
consist primarily of inventory and furniture, equipment and leasehold
improvements of approximately $13.7 million and $8.7 million, respectively.
Although the Company continues to take steps to improve the Episode
division, the operation of the bridge women's fashion business is subject to
numerous risks and greater competition and fashion risk than the Company's core
maternity business. Based on the foregoing factors, there are no assurances that
the Company's decision to close or convert existing stores will result in the
Episode operations being profitable.
Leverage and Liquidity
The Company became highly leveraged after completion of the offering of
the Notes in 1995. As of March 31, 1998, the Company's total indebtedness was
approximately $115 million, its stockholder's equity was approximately $24.6
million and the Company's total assets were approximately $175.8 million, of
which approximately $42.0 million are intangible assets. For the six-month
period ending March 31, 1998, the Company's consolidated EBITDA was
approximately $10.6 million; fixed charges exceeded earnings available to cover
fixed charges by approximately $2.5 million and the ratio of EBITDA to interest
expense, net was 1.49. The Company's annual aggregate debt service, including
interest, is approximately $15.6 million.
In April 1998, the Company replaced its existing $34.0 million working
capital facility with a $48 million financing agreement with Fleet Capital
Corporation. The new facility, which expires in April 2001, provides for a $44
million working capital facility for borrowings and letters of credit and a $4
million "Special Purpose Credit" which supports the Company's building mortgage.
The new working capital facility increases the Company's borrowing capacity and
reduces interest by 125 basis points and 75 basis points for Base Rate
borrowings and adjusted LIBOR Rate borrowings, respectively. At May 8, 1998, the
Company had $21.6 million in borrowings and $7.0 million in letters of credit
issued under the New Working Capital Facility.
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The degree to which the Company is leveraged could have important
consequences to the holders of the Company's securities and the capitalization
and future fiscal operations of the Company, including, but not limited to, the
following: (i) making it more difficult for the Company to satisfy its
obligations; (ii) limiting the Company's ability to obtain additional financing
in the future for acquisitions, capital expenditures, working capital or general
corporate purposes; (iii) increasing the Company's vulnerability to a downturn
in general economic conditions; (iv) requiring the dedication of a substantial
portion of the Company's cash flow from operations to the payment of the
principal of, and interest on, its indebtedness, thereby reducing the
availability of such cash flow to fund working capital, capital expenditures,
acquisitions and other general corporate requirements; (v) limiting the
Company's flexibility in planning for, or reacting to, changes in its business
and the industry; and (vi) the placing of the Company at a competitive
disadvantage with respect to less highly leveraged competitors.
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 beyond the Company's control. If the
Company is unable to service its indebtedness, it will be forced to adopt an
alternative strategy that may include actions such as reducing or delaying
capital expenditures, selling assets, restructuring or refinancing its
indebtedness or seeking additional equity capital. There can be no assurance
that any of these strategies could be effected on satisfactory terms, if at all.
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 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
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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, 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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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 Stockholders.
SELLING STOCKHOLDERS
The Shares were originally acquired by the Selling Stockholders in a
private placement exempt from registration pursuant to Section 4(2) of the
Securities Act as part of the consideration for their consent, as holders of the
Notes, to an amendment of indebtedness covenants in the indenture relating to
the Notes. The Shares have been registered pursuant to the Registration Rights
Agreement dated as of June 9, 1998, by and among the Company and certain of the
Selling Stockholders (the "Registration Rights Agreement") which provides that
the Company file a registration statement with regard to the Shares within 30
days of the expiration of the consent solicitation period relating to the Notes
and keep a registration statement effective until the earlier of (i) the sale of
all of the Shares in accordance with such registration statement or (ii) such
time as the Shares are saleable by the holders thereof pursuant to Rule 144
under the Securities Act. Although none of the Selling Stockholders has advised
the Company that it currently intends to sell all or any of the Shares pursuant
to this Prospectus, the Selling Stockholders may choose to sell the Shares from
time to time upon notice to the Company. See "Plan of Distribution."
Prior to any use of this Prospectus in connection with an
offering of the Shares, this Prospectus will be supplemented to set forth the
name and number of shares beneficially owned by the Selling Stockholders
intending to sell such Shares and the number of Shares to be offered. The
Prospectus Supplement will also disclose whether any Selling Stockholders
selling in connection with such Prospectus Supplement has held any position or
office with, been employed by or otherwise has had a material relationship with,
the Company or any of its affiliates during the three years prior to the date of
the Prospectus Supplement.
PLAN OF DISTRIBUTION
The Selling Stockholders or their pledgees, donees, transferees or
other successors in interest, may sell all, a portion or none of the securities
offered by them hereby from time to time. The sale or distribution of the Shares
may be effected directly to purchasers by the Selling Stockholders as principals
or through one or more brokers, dealers or agents from time to time in one or
more transactions (which may involve crosses or block transactions) (i) or on
any exchange or in the over-the-counter market, (ii) in transactions otherwise
than in the over-the-counter market, or (iii) through the writing of options
(whether such options are listed on an options exchange or otherwise) on, or
settlement of short sale of the Shares. Any of such transactions me be effected
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at varying prices determined at the time of sale or at
negotiated or fixed prices, in each case as determined by the Selling
Stockholders or by agreement between the Selling Stockholders and brokers,
dealers or agents, or purchasers. If the Selling Stockholders effect such
transactions by selling Shares to or through brokers, dealers
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or agents, such brokers, dealers or agents may receive compensation in the form
of discounts, concessions or commissions from the Selling Stockholders or
commissions from purchasers of Shares for whom they may act as agent (which
discounts, concessions or commissions as to particular brokers, dealers or
agents may be in excess of those customary in the types of transactions
involved). The Selling Stockholders and any brokers, dealers or agents that
participate in the distribution of Shares may be deemed to be underwriters, and
any profit on the sale of Shares by them and any discounts, concessions or
commissions received by any such brokers, dealers or agents may be deemed to be
underwriting discounts and commissions under the Securities Act. 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 Stockholders will sell any
or all of their Shares of Common Stock described herein, and any Selling
Stockholder may transfer, devise or gift such Shares by other means not
described herein. The Company will receive no proceeds from any sales of Common
Stock hereunder by the Selling Stockholders.
The Registration Statement of which this Prospectus is a part has been
filed with the Commission by the Company in accordance with the Registration
Rights Agreement, 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 Stockholders for certain civil
liabilities in connection with such Registration Statement and the securities
offered hereby, including liabilities under the Securities Act.
The Company has agreed to use its best efforts to cause the
Registration Statement to which this Prospectus relates to become effective as
soon as practicable and to keep the Registration Statement effective until the
earlier of (i) the sale of all of the Shares in accordance with such
Registration Statement or (ii) such time as the Shares are saleable by the
holders thereof pursuant to Rule 144 under the Act. The Registration Rights
Agreement provides that if the Company determines that the filing of any
amendment or supplement would require disclosure of any information which would,
in the good faith determination of the Company's Board of Directors, materially
adversely impact active negotiations or planning for certain proposed or pending
corporate transactions, the Company may defer the filing of such amendment or
supplement until it determines in good faith that no material adverse impact
would result, but in no event longer than 30 days, and the holders will refrain
from making any further offers or sales of Shares pursuant to the Prospectus
during such deferral period.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon
for the Company by Pepper Hamilton LLP. Elam M. Hitchner, III, a partner of
Pepper Hamilton LLP and a member of the Company's Board of Directors, owns
30,000 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,
1997, 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
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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Available Information......................... 2
Incorporation of Certain
Documents by Reference...................... 2
The Company................................... 3
Risk Factors.................................. 4
Use of Proceeds............................... 7
Selling Stockholders.......................... 7
Plan of Distribution.......................... 7
Legal Matters................................. 8
Experts....................................... 8
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Mothers Work, Inc.
26,784 Shares
Common Stock
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PROSPECTUS
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, 1998
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC registration fee......................................... $ 60*
Accounting fees and expenses................................. $ 4,000**
Legal fees and expenses...................................... $ 5,000**
Miscellaneous................................................ $ 250**
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Total................................................... $ 9,310**
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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 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,
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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.
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.
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Item 16. Exhibits
4.1 Registration Rights Agreement, dated as of June 9, 1998, by
and among the Company and certain of the Selling
Stockholders
5.1 Opinion of Pepper Hamilton LLP
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Pepper Hamilton LLP (included in Exhibit 5.1)
24.1 Power of Attorney (see Signatures and Power of Attorney on pages
II-4 and II-5)
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 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.
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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 July 17, 1998.
MOTHERS WORK, INC.
By: /s/ DAN W. MATTHIAS
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Dan W. Matthias
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Dan W. Matthias and Rebecca C.
Matthias, and each or any of them, his true and lawful attorney-in-fact and
agents, 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
attorneys-in-fact and agents, and each of them, 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
attorneys-in-fact and agents, or any of them, or their or his 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 July 17, 1998
in the capacities indicated.
/s/ DAN W. MATTHIAS
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Dan W. Matthias
Chairman of the Board and
Chief Executive Officer (the
principal executive officer)
/s/ REBECCA C. MATTHIAS
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Rebecca C. Matthias
President, Chief Operating Officer
and Director
[EXECUTIONS CONTINUED]
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/s/ THOMAS FRANK
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Thomas Frank
Chief Financial Officer and Vice
President - Finance (the principal
financial officer and the principal
accounting officer)
/s/ VERNA K. GIBSON
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Verna K. Gibson
Director
/s/ JOSEPH A. GOLDBLUM
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Joseph A. Goldblum
Director
/s/ ELAM M. HITCHNER,III
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Elam M. Hitchner, III
Director
/s/ WALTER F. LOEB
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Walter F. Loeb
Director
/s/ WILLIAM L. RULON-MILLER
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William L. Rulon-Miller
Director
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Exhibit 5.1
July 17, 1998
Mothers Work, Inc.
456 N. 5th Street
Philadelphia, PA 19123
Ladies and 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 certain stockholders of the Company
(the "Selling Stockholders") of 26,784 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 LLP
Exhibit 23.1
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 14, 1997 included in Mothers Work, Inc.'s Form 10-K for the year ended
September 30, 1997 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Philadelphia, PA.
July 17, 1998
