| As filed with the Securities and Exchange Commission on April 18, 2003 | ||
| Registration No. 333-_____ | ||
| SECURITIES AND EXCHANGE COMMISSION | ||
| Washington, D.C. 20549 | ||
| FORM S-4 | ||
| REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | ||
| LIMITED BRANDS, INC. | ||
| (Exact name of registrant as specified in its charter) | ||
| Delaware | 5621 | 31-1029810 |
| (State of other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
| Three Limited Parkway P.O. Box 16000 Columbus, Ohio 43216 (614) 415-7076 | ||
| (Address, including zip code, and telephone number including area code, of Registrant’s principal executive offices) | ||
| SAMUEL P. FRIED, ESQ. Senior Vice President, General Counsel & Secretary Limited Brands, Inc. Three Limited Parkway P.O. Box 16000 Columbus, Ohio 43216 (614) 415-7076 | ||
| (Name, address, including zip code, and telephone number, including area code, of agent for service) | ||
Copies to: Sarah Beshar, Esq. Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 (212) 450-4000 Fax: (212) 450-3800 | ||
Approximate date of commencement of proposed sale to the public: As soon as
practicable From time to time after the effective date of this Registration Statement is declared effective and the
conditions to the consummation of the offer described herein have been
satisfied or, to the extent permitted, waived.Statement.
If the securities being registered on this formForm are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: [_]o
If this Formform is filed to register additional securities for an offering pursuant to Rule 462(b) 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. [_]o
If this Formform is a post-effective amendment filed pursuant to Rule 462(d) 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. [_]
CALCULATION OF REGISTRATION FEE
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o
| CALCULATION OF REGISTRATION FEE | ||||
| Title of Each Class of Securities to be Registered | Amount to be Registered | Proposed Maximum Offering Price Per Unit(1) | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee |
| 6.95% Exchange Debentures due 2033 | $350,000,000 | 100% | $350,000,000 | $28,315 |
| (1) Estimated solely for the purpose of | ||||
The Limited, Inc., issuable upon the consummation
of the exchange offer and merger.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended, based on
the product of (i) $17.25 per share, the average of the high and low prices
of Intimate Brands Class A common stock, par value $0.01 per share, as
reported on The New York Stock Exchange on January 29, 2002 and (ii) the
maximum number of shares of Class A common stock of Intimate Brands that
may be acquired in the exchange offer (including shares outstanding and
vested stock options).
(3) In accordance with Rule 457, 0.0092% of the Proposed Maximum Aggregate
Offering Price.
The Registrantregistrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrantregistrant 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, as amended or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
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Information contained in this prospectus may change.
| The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted. |
PROSPECTUS (SUBJECT TO COMPLETION)
LIMITED BRANDS, INC.
Offer to Exchange
6.95% Exchange Debentures due 2033
for
6.95% Debentures due 2033
We may not complete the
exchange offer and issue these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer is not permitted.
[LOGO] THE LIMITED, INC.
OFFER TO EXCHANGE
1.046 SHARES OF COMMON STOCK
OF
THE LIMITED, INC.
FOR
EACH OUTSTANDING SHARE
OF CLASS A COMMON STOCK OF INTIMATE BRANDS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON MARCH 11, 2002, UNLESS EXTENDED.
The Limited, Inc., through its wholly-owned subsidiary, Intimate Brands
Holding Co., Inc., isare offering to exchange 1.046 sharesup to $350,000,000 of its common stockour new 6.95% Exchange Debentures due 2033 for each outstanding shareup to $350,000,000 of Class A common stockour existing 6.95% Debentures due 2033. The terms of Intimate Brands, Inc. that is
validly tendered and not properly withdrawn on or priorthe new debentures are identical in all material respects to the expirationterms of the offer, uponold debentures, except that the termsnew debentures have been registered under the Securities Act, and subjectthe transfer restrictions and registration rights relating to the conditions specified inold debentures do not apply to the new debentures.
To exchange your old debentures for new debentures:
- you are required to make the representations described on page 6 to us
- you must complete and send the letter of transmittal that accompanies this prospectus
and the related letter of transmittal. This exchange ratio has been set so that you will have approximately the same ownership interest in Intimate Brands' businesses immediately after the completion of the offer and the merger as you currently hold. In addition, as a Limited stockholder, you will also have an ownership interest in The Limited's other businesses and assets. The exchange ratio also represents a 6.1% premiumto theclosing priceexchange agent, The Bank ofIntimate Brands Class A common stock on February 4, 2002, the last trading day prior to the commencement of this offer. We currently own approximately 83.7% of the outstanding common stock of Intimate Brands. Our offer is conditioned on (1) the tender of a sufficient number of shares of Intimate Brands Class A common stock such that, after closing the offer, we would own at least 90% of the outstanding common stock of Intimate Brands and (2) approval by our stockholders of the issuance of Limited common stock in the offer and the merger referred to in the following paragraph. Our offer is also subject to other conditions described in "Conditions of the Offer." If the conditions to the offer are met and the offer is completed, we will own at least 90% of the outstanding common stock of Intimate Brands. As soon as practicable after the completion of the offer, we will effect a short-form merger of Intimate Brands and Intimate Brands Holding Co., unless it is not lawful to do so. If you have not validly tendered your Intimate Brands shares in the offer (unless you perfect your appraisal rights under Delaware law), your shares will be exchanged in the merger for the same number of shares of Limited common stock that you would have received if you had tendered your shares in the offer. If the offer is completed, no further Intimate Brands stockholder or board action is required for us to complete the merger. See "The Offer--Purpose of the Offer; The Merger; Appraisal Rights." As a result of the offer and the merger, Intimate Brands will become a wholly-owned subsidiary of The Limited and the former public stockholders of Intimate Brands will own shares in The Limited. Intimate Brands shares will no longer trade publicly on any stock exchange. The Limited common stock is listed on theNew York,Stock Exchange and the London Stock Exchange under the symbol "LTD." Intimate Brands Class A common stock is listed on theby 5:00 p.m., New YorkStocktime, on , 2003 - you should read the section called “The Exchange
under the symbol "IBI."Offer” for further information on how to exchange your old debentures for new debentures
See "Risk Factors"“Risk Factors” beginning on page 138 for a discussion of issuesrisk factors that should be considered by you should consider with respectprior to tendering your old debentures in the offer and the merger.
-----------------
exchange offer.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Limited common stocksecurities to be issued in the exchange offer andor passed upon the mergeradequacy or determined ifaccuracy of this prospectus is truthful or
complete.Prospectus. Any representation to the contrary is a criminal offense.
The Dealer Managers for the offer are:
Goldman, Sachs & Co. Banc of America Securities LLC
The date of this prospectus is February 5, 2002.
THIS DOCUMENT INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT THE LIMITED AND INTIMATE BRANDS FROM DOCUMENTS FILED WITH THE SEC THAT
HAVE NOT BEEN INCLUDED IN OR DELIVERED WITH THIS DOCUMENT. THIS INFORMATION IS
AVAILABLE AT A WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV, AS WELL AS FROM
OTHER SOURCES. SEE "WHERE YOU CAN FIND MORE INFORMATION" BEGINNING ON PAGE 5.
YOU MAY ALSO REQUEST COPIES OF THESE DOCUMENTS FROM US, WITHOUT CHARGE, UPON
WRITTEN OR ORAL REQUEST TO OUR INFORMATION AGENT, D.F. KING & CO.
, INC., 77
WATER STREET, NEW YORK, NEW YORK 10005, 1-800-628-8532. IN ORDER TO ENSURE
TIMELY DELIVERY OF THESE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY MARCH 4,
2002. IF YOU REQUEST ANY SUCH DOCUMENTS FROM US, WE WILL MAIL THEM TO YOU BY
FIRST CLASS MAIL, OR ANOTHER EQUALLY PROMPT MEANS, WITHIN ONE BUSINESS DAY
AFTER WE RECEIVE YOUR REQUEST.
TABLE OF CONTENTS
2003
Table of Contents |
Each broker-dealer that receives new debentures for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new debentures. The Merger; Appraisal Rights....... 38
Certain Legal and Regulatory Matters....................... 40
Financing of the Offer and the Merger...................... 41
Plans for Intimate Brands.................................. 41
In this prospectus priorthe terms “Limited Brands,” “we,” “us,” and “our” refer to the date we accept your shares for exchange pursuant to the offer.
Your notice of withdrawal must comply as to form with the requirements
set forth in this prospectus. See "The Offer--Withdrawal Rights."
Q: How will IntimateLimited Brands, employee stock options and restricted stock be
treated in connection with the offer and merger?
A: If the offer and merger are completed, Intimate Brands employee stock
options and restricted stock will be exchanged for Limited stock options
and restricted stock with substantially similar terms.
Q: Inc.
2
Where can I find more information about The Limited and Intimate Brands?
A: You can find more information about The Limited and Intimate Brands from
various sources described under "Where You Can Find More Information."
Q: Who do I call if IInformation
We have any questionsfiled with the SEC, Washington, D.C. 20549, a registration statement on howForm S-4 under the Securities Act with respect to tender my sharesour offering of Intimate Brands common stock or any other questions relatingthe new debentures. This prospectus does not contain all of the information included in the registration statement and the exhibits and schedules thereto. You will find additional information about us and the new debentures in the registration statement. Certain items are omitted from this prospectus in accordance with the rules and regulations of the SEC. For further information with respect to the exchange offer?
A: Questionscompany and requests for assistance may be directedthe new debentures, reference is made to D.F. King &
Co., Inc., the information agent ofregistration statement and the offer, or to Goldman, Sachs &
Co. or Banc of America Securities LLC, the dealer managers of the offer,
at their respective addressesexhibits and telephone numbers set forth on the
back cover of this prospectus. Requests for additional copies ofany schedules filed therewith. Statements contained in this prospectus andas to the lettercontents of transmittal may be directed to D.F. King or
to brokers, dealers, commercial banks, trust companiesany contract or other nominees.
4
WHERE YOU CAN FIND MORE INFORMATION
The Limiteddocument referred to are not necessarily complete and Intimate Brandsin each instance, if such contract or document is filed as an exhibit to the registration statement, reference is made to the copy of such contract or other document filed as an exhibit, each statement being qualified in all respects by such reference.
We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange
Commission underSEC. Our SEC filings are available to the Securities Exchange Act of 1934, as amended. You may read
and copy these reports and other information filed by The Limited and Intimate
Brandspublic over the Internet at the Public Reference Section of the SEC, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, at prescribed rates. You may obtain information
on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.
The SEC also maintains an Internet world wideSEC’s web site that contains
reports, proxy statements and other information about issuers, like The Limited
and Intimate Brands, who file electronically with the SEC through the
Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. The address
of this site isat http://www.sec.gov. You may also inspect reports, proxy statementsread and other information about
The Limited and Intimate Brandscopy any document we file at the offices of the New York Stock Exchange,
20 Broad Street,SEC’s public reference rooms in Washington, D.C., New York, New York 10005.
This prospectus constitutes a part of a registration statement on Form S-4
we filed withand Chicago, Illinois. Please call the SEC to register our common stock to be issued pursuant toat 1-800-SEC-0330 for further information on the offer and the merger. As allowed by SEC rules, this prospectus does not contain
all the information set forth in the registration statement or the exhibits to
the registration statement. In addition, we filed with the SEC a statement on
Schedule TO pursuant to Rule 14d-3 under the Securities Exchange Act of 1934,
as amended, to furnish certain information about the offer. You may obtain
copies of the Form S-4 and the Schedule TO (and any amendments to those
documents) in the manner described above.
Intimate Brands is required to file with the SEC a
Solicitation/Recommendation Statement on Schedule 14d-9 regarding the offer
within ten business days from the commencement date of the offer and to
disseminate this statement to Intimate Brands stockholders. You may obtain a
copy of the Schedule 14d-9 (and any amendments to that document) after it is
filed in the manner described above.public reference rooms.
The SEC allows us to "incorporateincorporate by reference"reference the information into this
prospectus,we file with them, which means that we can disclose important information to you by referring you to another document filed separately with the SEC.those documents. The information incorporated by reference is deemed to bean important part of this prospectus, except for anyand information superseded by information in, or incorporated by
reference in,that we file later with the SEC will automatically update and supersede this prospectus. This prospectus incorporatesinformation. We incorporate by reference the documents set forth below that The Limited and Intimate Brands have previously
filed with the SEC. These documents contain important information about The
Limited and Intimate Brands and their financial condition.
The Limited, Inc. SEC
Filings (Commission File
No. 1-8344) Period
-------------------------- --------------------------
listed below:
Annual Report on Form 10-K
Fiscal Yearfor the year ended February3, 2001 Quarterly Reports1, 2003 (including the portions of the proxy statement for our annual meeting of stockholders to be held onForm Fiscal Quarters endedMay10-Q 5, 2001, August 4, 2001 and November 3, 2001 Proxy Statement Filed on April 20, 2001 Intimate Brands, Inc. SEC Filings (Commission File No. 1-13814) Period -------------------------- -------------------------- Annual Report on Form 10-K Fiscal Year ended February 3, 2001 Quarterly Reports on Form Fiscal Quarters ended May 10-Q 5, 2001, August 4, 2001 and November 3, 200119, 2003 incorporated by reference therein).Current Report on Form 8-K
Filedfiled onSeptember 19, 2001 Proxy Statement FiledFebruary 12, 2003.Current Report on Form 8-K filed on March 4, 2003.
Current Report on Form 8-K filed on April
20, 20017, 2003.
All documents filed by The Limited and Intimate Brands with the SEC pursuant
to Sectionsus under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, from the date of this prospectus and prior to the date that
5
shares are accepted fortermination of the exchange pursuant to our offer (or the date that our
offer is terminated) shall also be deemed to be incorporated by reference into
this prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in this prospectus by reference.
You may request a copy of these filings, at no cost, by writing or in a documenttelephoning us at our principal executive offices at the following address:
Limited Brands, Inc.
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
(614) 415-7076
You should rely only on the information incorporated by reference shall be deemed to be modified or superseded to the
extent that a statement containedprovided in this prospectus or in any other
subsequently filed document incorporated by reference, 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.
COPIES OF DOCUMENTS INCORPORATED BY REFERENCE ARE AVAILABLE FROM US WITHOUT
CHARGE UPON REQUEST TO OUR INFORMATION AGENT, D.F. KING & CO., INC., 77 WATER
STREET, NEW YORK, NEW YORK 10005, 1-800-628-8532. IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY MARCH 4, 2002. IF YOU
REQUEST ANY SUCH DOCUMENTS FROM US, WE WILL MAIL THEM TO YOU BY FIRST CLASS
MAIL, OR ANOTHER EQUALLY PROMPT MEANS, WITHIN ONE BUSINESS DAY AFTER WE RECEIVE
YOUR REQUEST. We have not authorized anyone else to giveprovide you with different information. We are not making an exchange offer of the debentures in any information or make any
representation aboutstate where the exchange offer oris not permitted. You should not assume that the merger that is different from, or in
addition to, that containedinformation in this prospectus is accurate as of any date other than the date on the front of this prospectus. Investors should read all information supplementing this prospectus.
3
Disclosure About Forward-Looking Statements
This prospectus contains or incorporates by reference forward-looking statements. Investors are cautioned that such forward-looking statements are subject to risks and uncertainties, including those described under “Risk Factors,” many of which are beyond our control. Accordingly, actual results may differ materially from those expressed or implied in any such forward-looking statements. Words such as “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend” and similar expressions may identify forward-looking statements.
All forward-looking statements are qualified by the risks described under “Risk Factors” which, if they develop into actual events, could have a material adverse effect on our businesses, financial condition or results of operations. In addition, investors should consider the materials that
we haveother information contained in or incorporated by reference into this prospectus. Therefore,
We are not under any obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this prospectus to reflect circumstances existing after the date of this prospectus or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.
4
| Summary | |
| This summary highlights the more detailed information in this prospectus and you should read the entire prospectus carefully. | |
Debentures Offered | We are offering up to $350,000,000 aggregate principal amount of 6.95% Exchange Debentures due 2033, which have been registered under the Securities Act. |
The Exchange Offer | We are offering to issue the new debentures in exchange for a like principal amount of your old debentures. We are offering to issue the new debentures to satisfy our obligations contained in the registration rights agreement entered into when the old debentures were sold in transactions permitted by Rule 144A under the Securities Act and therefore not registered with the SEC. For procedures for tendering, see “The Exchange Offer.” |
Tenders, Expiration Date, Withdrawal | The exchange offer will expire at 5:00 p.m. New York City time on , 2003 unless it is extended. If you decide to exchange your old debentures for new debentures, you must acknowledge that you are not engaging in, and do not intend to engage in, a distribution of the new debentures. If you decide to tender your old debentures in the exchange offer, you may withdraw them at any time prior to , 2003. If we decide for any reason not to accept any old debentures for exchange, your old debentures will be returned to you without expense to you promptly after the exchange offer expires. |
Federal Income Tax Consequences | Your exchange of old debentures for new debentures in the exchange offer will not be a taxable exchange for Federal income tax purposes. See “Material United States Federal Income Tax Consequences of the Exchange Offer.” |
Use of Proceeds | We will not receive any proceeds from the issuance of the new debentures in the exchange offer. |
Exchange Agent | The Bank of New York is the exchange agent for the exchange offer. |
Failure to Tender Your Old Debentures | If you fail to tender your old debentures in the exchange offer, you will not have any further rights under the registration rights agreement, including any right to require us to register your old debentures or to pay you additional interest. |
5
You will be able to resell the new debentures without registering them with the SEC if you meet the requirements described below.
Based on interpretations by the SEC’s staff in no‑action letters issued to third parties, we believe that new debentures issued in exchange for old debentures in the exchange offer may be offered for resale, resold or otherwise transferred by you without registering the new debentures under the Securities Act or delivering a prospectus, unless you are a broker-dealer receiving debentures for your own account, so long as:
you are not one of our “affiliates,” which is defined in Rule 405 of the Securities Act;
you acquire the new debentures in the ordinary course of your business;
you do not have any arrangement or understanding with any person to participate in the distribution of the new debentures; and
you are not engaged in, and do not intend to engage in, a distribution of the new debentures.
If you are an affiliate of Limited Brands, or you are engaged in, intend to engage in or have any arrangement or understanding with respect to, the distribution of new debentures acquired in the exchange offer, you (1) should not rely on our interpretations of the position of the SEC’s staff and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any other information.resale transaction.
If you are in a jurisdiction where offers to
exchange or sell, or solicitations of offers to exchange or purchase, the
securities offered by this document are unlawful, or if you are a person to
whom it is unlawful to direct these types of activities, then the offer
presented in this document does not extend to you. The information contained in
this document speaks only as of the date of this document unless the
information specifically indicates that another date applies.
6
SUMMARY
This summary highlights selected information from this prospectusbroker–dealer and may
not contain all of the information that is important to you. To better
understand the proposed offer and merger, you should read this entire document
carefully, as well as those additional documents to which we refer you. See
"Where You Can Find More Information."
Introduction
We are offering to exchange 1.046 shares of Limited common stockreceive new debentures for each
share of Intimate Brands Class A common stock validly tendered and not properly
withdrawnyour own account in the offer. This exchange ratio has been set sooffer:
you must represent that you do not have any arrangement with us or any of our affiliates to distribute the new debentures;
you must acknowledge that you will
have approximately the same ownership interestdeliver a prospectus inIntimate Brands' businesses immediately after the completionconnection with any resale of theoffernew debentures you receive from us in the exchange offer; the letter of transmittal states that by so acknowledging andthe merger as you currently hold. In addition, asby delivering aLimited stockholder,prospectus, you willalso havenot be deemed to admit that you are anownership interest in The Limited's other businesses and assets. This exchange ratio represents a 6.1% premium to“underwriter” within theclosing price of Intimate Brands Class A common stock on February 4, 2002, the last full trading day before the commencementmeaning of theoffer. It also represents an approximate 6.3% premiumSecurities Act; and- you may use this prospectus, as it may be amended or supplemented from time to time, in connection with the
average ratioresale ofIntimate Brands and Limited closing stock pricesnew debentures received in exchange forthe six months ended February 4, 2002 and an approximate 8.8% premium to the average ratio of Intimate Brands and Limited closing stock prices for the one year ended February 4, 2002. The purpose of the offer and the merger referred to in the following paragraph is to acquire all of the Intimate Brands Class A common stock that we do not currently own. We currently own approximately 83.7% of the outstanding common stock of Intimate Brands. Our offer is conditioned on (1) the tender of a sufficient number of shares of Intimate Brands Class A common stock such that, after the offer is completed, we would own at least 90% of the outstanding shares of Intimate Brands common stock and (2) approvalold debentures acquired byour stockholders of the issuance of Limited common stock in the offer and the merger. Our offer is also subject to other conditions referred to below. If the conditions to the offer are met and the offer is completed, we will own at least 90% of the outstanding common stock of Intimate Brands. As soonyou aspracticable after the completion of the offer, we will effect a short-form merger of Intimate Brands and our wholly-owned subsidiary, Intimate Brands Holding Co., unless it is not lawful to do so. If you have not validly tendered your Intimate Brands shares in the offer (unless you properly perfect your appraisal rights under Delaware law), your shares will be exchanged in the merger for the same number of shares of Limited common stock that you would have received if you had tendered your shares in the offer. See "The Offer--Purpose of the Offer; The Merger; Appraisal Rights." If the offer is completed, no further Intimate Brands stockholder or board action is required for us to complete the merger. Asa result of market making or other trading activities.
Each broker-dealer that receives new debentures for its own account in exchange for old debentures, where such old debentures were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new debentures. See “Plan of Distribution.”
Summary Description of the offerExchange Debentures
The terms of the new debentures and the merger,
Intimateold debentures are identical in all material respects, except that the new debentures have been registered under the Securities Act, and the transfer restrictions and registrations rights relating to old debentures do not apply to the new debentures.
Interest Payment Dates | March 1 and September 1 of each year |
Optional Redemption | We may redeem the debentures, in whole or in part, at any time at the “make-whole” prices described in “Description of Debentures—Optional Redemption.” |
Ranking | The debentures will be our senior unsecured obligations and |
| will rank on a parity with all our other senior unsecured unsubordinated indebtedness, including all other unsubordinated debt securities issued under the indenture. The indenture provides for the issuance from time to time of senior unsecured indebtedness by us in an unlimited amount. See “Description of the Exchange Debentures.” | |
Use of Proceeds | We will not receive any proceeds from the exchange of new debentures for old debentures. |
Limited Brands, will becomeInc., a wholly-owned subsidiary ofDelaware corporation formerly known as The Limited, Inc., sells women’s and the
former public stockholders of Intimate Brands will own shares in The Limited.
Intimate Brands shares will no longer trade publicly on any stock exchange.
The Companies
The Limited, Inc.
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
(614) 415-7000
The Limited sells women's and men'smen’s apparel, women'swomen’s intimate apparel and personal care products under various brandtrade names through its specialty retail stores and direct response (catalog and e-commerce) businesses. The Limited's
merchandiseMerchandise is targeted to appeal to customers in various market segments that have distinctive consumer characteristics. 7
Limited Brands was re-incorporated as The Limited, conductsInc. under the laws of Delaware in 1982, changed its businessname to Limited Brands, Inc. in two primary segments: (1) the apparel
segment, which derivesMay 2002, and has its revenues from the sale of women's and men's apparel;
and (2) Intimate Brands, which derives its revenues from the sale of women's
intimate and other apparel, personal care products and accessories.
The following is a brief description of each of The Limited's significant
operating businesses (other than Intimate Brands), including their respective
target markets:
Express--is a leading specialty retailer of women's sportswear and
accessories. Express' strategy is to offer new, international fashion to its
base of young, style-driven women. Launched in 1980, Express had net sales
of approximately $1.6 billion in 2000 and,principal executive offices at the end of fiscal 2000,
operated 667 stores in 48 states.
Structure--is a leading specialty retailer of men's apparel and is being
rebranded as Express Men's. Structure had net sales of approximately $570
million in 2000 and, at the end of fiscal 2000, operated 469 stores in 43
states.
Lerner New York--is a leading mall-based specialty retailer of women's
apparel. The business' strategy is to offer competitively priced women's
fashion with its New York & Company brand. Originally founded in 1918,
Lerner New York was purchased by The Limited in 1985. Lerner New York had
net sales of approximately $1.0 billion in 2000 and, at the end of fiscal
2000, operated 560 stores in 43 states.
Limited Stores--is a mall-based specialty store retailer founded in 1963.
The business' strategy is to focus on sophisticated sportswear for modern
American women. Limited Stores had net sales of approximately $670 million
in 2000 and, at the end of fiscal 2000, operated 389 stores in 46 states.
In addition, The Limited owns minority equity stakes in various businesses,
including approximately 20% of Alliance Data Systems Corp. (formerly World
Financial Network National Bank), 24% of Galyan's Trading Company, Inc. and 9%
of Charming Shoppes, Inc. Based on the closing stock prices of these companies
on February 4, 2002, these holdings had a market value of over $415 million in
the aggregate. In addition, The Limited's management estimates that, as of the
end of fiscal 2001, The Limited will have approximately $1.4 billion in cash.
Intimate Brands Holding Co., Inc.
4441 South Polaris Avenue
Las Vegas, Nevada 89103
(702) 798-1919
Intimate Brands Holding Co., Inc., a Delaware corporation and a wholly-owned
subsidiary of The Limited, is a holding company which owns 100% of Intimate
Brands' Class B common stock. The Class B common stock currently represents
83.7% of the economic interest in, and approximately 93.9% of the voting power
of, Intimate Brands. Intimate Brands' Class B common stock is identical to its
Class A common stock, except that the Class A common stock has one vote per
share and the Class B common stock has three votes per share. The Class B
common stock is convertible at any time into Class A common stock at the
election of Intimate Brands Holding Co. Intimate Brands Holding Co. currently
owns no Class A common stock. The Limited does not own any Intimate Brands
common stock directly.
Intimate Brands, Inc. Three Limited Parkway, P.O. Box 16000, Columbus, Ohio 43216
(614) 415-6900
Intimate43216. Our Investor Relations telephone number is 614-415-7076. Internet users can obtain information about Limited Brands operates specialty retail stores and direct response
(catalogits services at www.limitedbrands.com. However, the information on our website and e-commerce) businesses, which offer women's intimate and other
apparel, personal care products and accessories. Intimate Brands consistson the Victoria’s Secret website is not a part of Victoria's Secret Stores, Victoria's Secret Beauty, Victoria's Secret Direct
and Bath & Body Works.
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Victoria's Secret Stores--is the leading specialty retailerthis prospectus.
On February 3, 2003, we announced:
a 33% increase in our common stock annual cash dividend to $0.40 from $0.30 cents per share. The quarterly dividend of
women's intimate apparel and related products. Victoria's Secret Stores had net sales$0.10 per share is payable on March 18, 2003 to shareholders ofapproximately $2.3 billion in 2000 and,record at theendclose offiscal 2000, operated 958 storesbusiness on March 7, 2003.authorization by our Board of Directors of a repurchase of up to $150 million of our outstanding shares. We may repurchase shares from time to time in
49 states. Victoria's Secret Beauty--is a leading specialty retailerthe open market or through privately negotiated transactions, depending on prevailing market conditions.
On February 7, 2003, we announced the creation of high quality
beauty products. In 2000, Victoria's Secret Beauty had net salesan Office of approximately $530 million generated in 80 stand-alone storesthe Chief Executive and 400
side-by-side locations.appointed Dr. Leonard A. Schlesinger as Vice Chairman. In addition, beauty products are sold within niches
in Victoria's Secret lingerie stores. The amounts for Victoria's Secret
Beauty are included inDr. Schlesinger will retain his position as Chief Operating Officer.
On February 10, 2003, we announced the corresponding data for Victoria's Secret Stores
inappointment of Neil Fiske to the preceding paragraph.
Victoria's Secret Direct--is a leading catalog and e-commerce retailerposition of intimate and other women's apparel. Through its web site,
www.VictoriasSecret.com, certain of its products may be purchased worldwide.
Victoria's Secret Direct mailed approximately 368 million catalogues and had
net sales of approximately $960 million in 2000.
Bath & Body Works--is the leading specialty retailer of personal care
products. Launched in 1990,Chief Executive Officer, Bath & Body Works which also operates the White
Barn Candle Company, had net sales of approximately $1.8 billion(BBW). Mr. Fiske joins Ken Stevens, whose role was elevated to President in 2000
and, at the end of fiscal 2000, operated 1,432 stores in 49 states.
Summary of the Offer
We are offering, upon the terms and subject to the conditions set forth in
this prospectus and in the related letter of transmittal, to exchange 1.046
shares of Limited common stock for each outstanding share of Class A common
stock of Intimate Brands that is validly tendered on or prior to the expiration
date and not properly withdrawn.
The term "expiration date" means 5:00 p.m., New York City time, on March 11,
2002, unless we extend the period of time for which this offer is open, in
which case the term "expiration date" means the latest time and date on which
the offer, as so extended, expires.
Conditions to the Completion of the Offer
Our obligation to exchange shares of our common stock for Intimate Brands
shares pursuant to the offer is subject to a number of conditions described
under "Conditions of the Offer," including the following:
. the tender of a sufficient number of shares in the offer such that,
after the offer is completed, we would own at least 90% of the
outstanding Class A common stock of Intimate Brands (assuming conversion
of the Intimate Brands Class B common stock we currently own into
Intimate Brands Class A common stock);
. the approval by our stockholders of the issuance of the shares of
Limited common stock necessary to complete the offer and the merger;
. the shares of Limited common stock to be issued in the offer and the
merger having been approved for listing on the New York Stock Exchange,
subject to official notice of issuance;
. the registration statement of which this prospectus is a part having
been declared effective by the SEC;
. the absence of any threatened or pending litigation or other legal
action relating to the offer or the merger;
. there not having occurred any material adverse change in the financial
markets, any disruption in the banking system or any commencement of a
war involving the United States;
. any offer to acquire The Limited or Intimate Brands shall not have been
proposed;
. there not having occurred any event that, in our judgment, would result
in an actual or threatened adverse change in the business, condition or
prospects of The Limited or Intimate Brands; and
. the absence of any event which would prevent us from effecting the
merger after the completion of the offer.
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We will not waive the minimum tender condition or any other conditions of
the offer which, if not satisfied, would prevent us from effecting the merger.
If the conditions of the offer are satisfied, or, to the extent permitted,
waived, we will complete the offer and, unless it is unlawful to do so, we will
effect the merger as soon as practicable thereafter.
Timing of the Offer
Our offer is currently scheduled to expire on March 11, 2002; however, we
may extend our offer from time to time as necessary until all the conditions to
the offer have been satisfied or, where permissible, waived. See "The
Offer--Extension, Termination and Amendment."
Extension, Termination and Amendment
We expressly reserve the right, in our sole discretion, at any time or from
time to time, to extend the period of time during which our offer remains open
if any condition to the offer has not been satisfied, and we can do so by
giving oral followed by written notice of such extension to the exchange agent.
If we decide to extend our offer, we will make an announcement to that effect
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date. We are not making any assurances that we
will exercise our right to extend our offer, although we may do so until all
conditions have been satisfied, or where permissible, waived. During any such
extension, all Intimate Brands shares previously tendered and not properly
withdrawn will remain subject to the offer, subject to your right to withdraw
your Intimate Brands shares.
Subject to the SEC's applicable rules and regulations, we also reserve the
right, in our sole discretion, at any time or from time to time, (1) to delay
our acceptance for exchange or our exchange of any Intimate Brands shares
pursuant to the offer, regardless of whether we previously accepted Intimate
Brands shares for exchange, or to terminate our offer and not accept for
exchange or exchange any Intimate Brands shares not previously accepted for
exchange or exchanged, upon the failure of any of the conditions of the offer
to be satisfied and (2) to waive any condition (subject to the limits on waiver
described under "Conditions of the Offer") or otherwise to amend the offer in
any respect, by giving oral followed by written notice of such delay,
termination or amendment to the exchange agent and by making a public
announcement. We will follow any extension, termination, amendment or delay, as
promptly as practicable, with a public announcement. In the case of an
extension, any such announcement will be issued no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
expiration date. Subject to applicable law (including Rules 14d-4(d) and
14d-6(c) under the Securities Exchange Act of 1934, which require that any
material change in the information published, sent or given to the stockholdersJanuary in connection with the offer be promptly sent to stockholders in a manner
reasonably designed to inform stockholdersretirement of such change)former BBW President and without limiting
the manner in which we may choose to make any public announcement, we assume no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a releaseCEO Beth Pritchard.
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In addition to the Dow Jones News Service.
Exchange of Shares; Delivery of Limited Common Stock
Upon the terms and subject to the conditions of our offer, we will accept
for exchange, and will exchange, shares validly tendered and not properly
withdrawn as promptly as practicable after the expiration date and promptly
after they are tendered during any subsequent offering period.
Withdrawal Rights
Intimate Brands shares tendered pursuant to the offer may be withdrawn at
any time prior to the expiration date, and, unless we previously accepted them
for exchange pursuant to the offer, may also be withdrawn at any time after
April 5, 2002.
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Procedure for Tendering Shares
To validly tender your Intimate Brands shares pursuant to the offer, (1) you
must complete, execute and transmit a letter of transmittal, along with any
required signature guarantees,other information contained in or an agent's message, in connection with a
book-entry transfer, and any other required documents, to the exchange agent at
one of the addresses set forth on the back cover of this prospectus and
certificates for tendered Intimate Brands shares must be received by the
exchange agent at such address, or those Intimate Brands shares must be
tendered pursuant to the procedures for book-entry tender set forth in "The
Offer" (and a confirmation of receipt of such tender received), in each case
before the expiration date, or (2) you must comply with the guaranteed delivery
procedures set forth in "The Offer--Guaranteed Delivery."
If you are a participant in the Savings and Retirement Plan or the Intimate
Brands' Stock Purchase Plan, you will receive separate forms to be used to
tender the Intimate Brands shares held in your accounts under the relevant
plan. You may not use the letter of transmittal referred to above to tender
shares held under the plans. See "The Offer--Special Procedures for Savings and
Retirement Plan and Stock Purchase Plan Participants; Stock Options."
The Merger
If the conditions to the offer are met and the offer is completed, we will
own at least 90% of the outstanding common stock of Intimate Brands. As soon as
practicable after the completion of the offer, we will effect a short-form
merger of Intimate Brands and Intimate Brands Holding Co., unless it is not
lawful to do so. If you have not validly tendered your Intimate Brands shares
in the offer (unless you perfect your appraisal rights under Delaware law),
your shares will be exchanged in the merger for the same number of shares of
Limited common stock that you would have received if you had tendered your
shares in the offer. See "The Offer--Purpose of the Offer; The Merger;
Appraisal Rights." If the offer is completed, no further Intimate Brands
stockholder or board action is required for us to complete the merger.
Appraisal Rights
You are not entitled to appraisal rights in connection with the offer.
However, at the time of the merger, Intimate Brands stockholders who did not
tender their shares in the offer will have the right under Delaware law to
dissent and demand appraisal rights with respect to their Intimate Brands
shares, if they comply with certain statutory requirements. We will send such
stockholders information regarding these requirements. See "The Offer--Purpose
of the Offer; The Merger; Appraisal Rights."
Certain Federal Income Tax Consequences
Your receipt of Limited common stock in connection with the offer and the
merger will be tax-free for United States federal income tax purposes. However,
you will be subject to tax upon any cash received instead of fractional shares
of Limited common stock and for cash received if you perfect appraisal rights.
Accounting Treatment
The Limited's acquisition of the Intimate Brands minority interest through
the offer and the merger will be accounted for using the purchase method of
accounting, as prescribed by Statement of Financial Accounting Standards
("SFAS") No. 141, "Business Combinations." Accordingly, the purchase price will
be allocated to the minority interest portion of the estimated fair value of
identifiable net assets acquired. Any excess purchase price remaining after
this allocation will be accounted for as goodwill, which will not be amortized.
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Risk Factors
In deciding whether to tender your shares pursuant to the offer, you should
carefully read this prospectus, including the risk factors, as well as the
documents incorporated by reference into this prospectus. See "Risk Factors"
beginning on page 13 for a more complete discussion of these and otherprospectus, you should carefully consider the following risk factors to consider in connection with the offer and the merger.
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RISK FACTORS
In deciding whether to tenderexchange your shares pursuantdebentures.
Risks Relating to the offer, you should
read this prospectus and the documents incorporated into this prospectus
carefully. You should also consider the risk factors described below. These
risks and uncertainties could result in a material adverse effect on our
businesses, financial condition and results of operations and could result in a
material decline in the trading price of Limited common stock.
Risks Related to the Offer and the Merger
Because the number of Limited shares that you receive in the offer is fixed,
the value of Limited shares at the time you receive them could be less than
their value at the time you tender your Intimate Brands shares.
In the offer, each Intimate Brands share will be exchanged for 1.046 shares
of Limited common stock. This is a fixed exchange ratio. The offer does not
provide for an adjustment in the exchange ratio even if there is a decrease in
the market price of Limited common stock between the date of this prospectus
and the expiration date of the offer. The market price of Limited common stock
will likely be different on the date of the expiration of the offer than it is
today because of ordinary trading fluctuations as well as changes in the
business, operations or prospects of The Limited, market reactions to this
offer, possible other acquisitions or dispositions by The Limited, issuances by
The Limited of equity or debt securities, general market and economic
conditions and other factors. Tendering stockholders are urged to obtain
current market quotations for Limited common stock and Intimate Brands common
stock. See "Comparative Stock Prices and Dividends" on page 26.
The Limited owns a number of businesses other than Intimate Brands.
Accordingly, as a holder of Limited common stock, you will be subject to the
risks and liabilities inherent in The Limited's other businesses, as well as
the risks and liabilities inherent in Intimate Brands' businesses. These risks
and liabilities could cause The Limited's stock price to decline.
Upon consummation of the offer and the merger, holders of Intimate Brands
common stock will become holders of Limited common stock. The Limited owns a
number of businesses which, in addition to being subject to the risks and
liabilities affecting all of The Limited's businesses (including Intimate
Brands), are subject to a wide range of risks and liabilities that are
different from those of Intimate Brands' businesses. Certain of these
businesses have suffered losses over the past several years and are subject to
significant lease and other obligations. Accordingly, although Intimate Brands
contributes the substantial majority of The Limited's earnings, the trading
price of Limited common stock could decline as a result of factors different
from those affecting the trading price of Intimate Brands common stock,
including the results, liabilities and prospects of The Limited's businesses
other than Intimate Brands.
Anticipated benefits of the combination may not be realized.
We believe that a combination of Intimate Brands and The Limited is the
organizational structure that will put us in the best position to fully
leverage the leading retail brands of both companies and thereby generate
additional value for all stockholders. However, for various reasons, we may not
be able to achieve these anticipated benefits or achieving them may require
more time than we currently anticipate.
Officers and directors of Intimate Brands have potential conflicts of interest
in the offer.
You should be aware that certain significant conflicts of interest exist
among members of the Intimate Brands Board of Directors with respect to The
Limited. Three members of the Intimate Brands Board also serve as directors of
The Limited, including Leslie H. Wexner, who serves as Chairman and Chief
Executive Officer of both companies. The two directors that comprise the
compensation committee of the Intimate Brands Board also constitute the
compensation committee of The Limited Board. In addition, two members of the
Intimate Brands Board are employees of Intimate Brands, whose compensation is
ultimately determined by the compensation committee of the Intimate Brands
Board. Although we cannot predict the Intimate Brands Board process, because of
these conflicts of interest facing certain directors of Intimate Brands, we
expect that the offer and the merger will be evaluated solely by Intimate
Brands directors who are independent of The Limited. See "Relationship Between
Intimate Brands and The Limited" on page 48.
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Risks Related to Our Businesses, Including Intimate Brands
its Business
Our revenue and profit results are sensitive to general economic conditions, consumer confidence and spending patterns.
Our growth, sales and profitability may be adversely affected by negative local, regional, national or nationalinternational economic trends that shake consumer confidence.confidence, including the effects of war, terrorism or the threat thereof. Purchases of women'swomen’s and men'smen’s apparel, women'swomen’s intimate apparel, personal care products and accessories often decline during periods when economic or market conditions are unsettled or weak. In such circumstances, we may increase the number of promotional sales, which would further adversely affect profitability.
Our net sales, operating income and inventory levels fluctuate on a seasonal basis.
Our businesses experience major seasonal fluctuations in their net sales and operating income, with a significant portion of their operating income typically realized during the fourth quarter holiday season. Any decrease in sales or margins during this period could have a disproportionate effect on our financial condition and results of operations.
Seasonal fluctuations also affect our inventory levels, since we usually order merchandise in advance of peak selling periods and sometimes before new fashion trends are confirmed by customer purchases. We must carry a significant amount of inventory, especially before the holiday season selling period. If we are not successful in selling the inventory during the holiday period, we may have to sell the inventory at significantly reduced prices or we may not be able to sell the inventory at all.
We may be unable to compete favorably in the highly competitive segment of the retail industry.
The sale of intimate and other apparel, personal care products and accessories is highly competitive. Increased competition could result in price reductions, increased marketing expenditures and loss of market share, all of which wouldcould have a material adverse effect on our financial condition and results of operations.
We compete for sales with a broad range of other retailers, including individual and chain fashion specialty stores and department stores. In addition to the traditional store-based retailers, we also compete with direct marketers that sell similar lines of merchandise, who target customers through catalogs and e-commerce. Direct marketers also include traditional store-based retailers like us who are competing in the catalog and e-commerce distribution channels. Our direct response business competes with numerous national and regional catalog and e-commerce merchandisers. Brand image, marketing, fashion design, price, service, quality, image presentation and fulfillment are all competitive factors in catalog and e-commerce sales.
Some of our competitors may have greater financial, marketing and other resources available to them. In many cases, our primary competitors sell their products in department stores that are located in the same shopping malls as our stores. In addition to competing for sales, we compete for favorable site locations and lease terms in shopping malls.
We may not be able to keep up with fashion trends and may not be able to launch new product lines successfully.
Our success depends in part on management'smanagement’s ability to effectively anticipate and respond to changing fashion tastes and consumer demands and to translate market trends into appropriate, saleable product offerings far in advance. Customer tastes and fashion trends change rapidly. If we are unable to successfully anticipate, identify or react to changing styles or trends and misjudge the market for our products or any new product lines, our sales will
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be lower and we may be faced with a significant amount of unsold finished goods inventory. In response, we may be forced to increase our marketing promotions or price markdowns, which wouldcould have a material adverse effect on our profitability. Our brand image may also suffer if customers believe merchandise misjudgments indicate that we are no longer able to offer the latest fashions.
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We may lose key personnel.
We believe that we have benefited substantially from the leadership and experience of our senior executives, including Leslie H. Wexner (our Chairman of the Board of Directors and Chief Executive Officer). The loss of the services of any of these individuals wouldcould have a material adverse effect on our business and prospects. Our future success will also depend on our ability to recruit, train and retain other qualified personnel. Competition for key personnel in the retail industry is intense.
Ourunaffiliatedmanufacturers may be unable to manufacture and deliver products in a timely manner or meet quality standards.
We purchase apparel through our wholly owned subsidiary, Mast, a contract manufacturer and apparel importer, as well as through other contract manufacturers and importers and directly from affiliated and unaffiliatedthird-party manufacturers. Personal care, fragrance and beauty products are also purchased through other contract manufacturers and importers and directly from unaffiliatedthird-party manufacturers. Similar to most other specialty retailers, we have narrow sales windows for much of our inventory. Factors outside our control, such as manufacturing or shipping delays or quality problems, could disrupt merchandise deliveries and result in lost sales, cancellation charges or excessive markdowns.
We rely significantly on foreign sources of production.
We purchase apparel merchandise directly in foreign markets and in the domestic market, some of which is manufactured overseas. We do not have any long-term merchandise supply contracts and many of our imports are subject to existing or potential duties, tariffs or quotas. We compete with other companies for production facilities and import quota capacity.
We also face a variety of other risks generally associated with doing business in foreign markets and importing merchandise from abroad, such as:
.
political instability;
.imposition of new legislation relating to import quotas that may limit the quantity of goods which may be imported into the United States from countries in
thata particular region;.imposition of duties, taxes, and other charges on imports;
.currency and exchange risks;
and .local business practice and political issues, including issues relating to compliance with domestic or international labor standards which may result in adverse
publicity.publicity; andpotential delays or disruptions in shipping and related pricing impacts.
New initiatives may be proposed that may have an impact on the trading status of certain countries and may include retaliatory duties or other trade sanctions which, if enacted, would increase the cost of products purchased from suppliers in such countries. In addition, the recent outbreak of severe acute respiratory syndrome (SARS) in the People’s Republic of China and concerns over its spread in Asia and elsewhere could have a negative effect on the economies, financial markets and business activity in Asia and elsewhere. The Company’s purchases of merchandise from Asian manufacturing operations may be exposed to this risk. The future performance of our businesses will depend upon thisthese and the other factors listed above which are beyond our control. These factors may have a material adverse effect on the business of the Company.
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We depend on a high volume of mall traffic and the availability of suitable lease space.
Many of our stores are located in shopping malls. Sales at these stores are derived, in part, from the high volume of traffic in those malls. Our stores benefit from the ability of the mall's "anchor"mall’s “anchor” tenants, generally large department stores, and other area attractions to generate consumer traffic in the vicinity of our stores and the continuing popularity of malls as shopping destinations. Sales volume and mall traffic may be adversely affected by economic downturns in a particular area, competition from non-mall retailers and other malls where we do not have stores and the closing of anchor department stores. In addition, a decline in the desirability of the shopping 15
Part of our future growth is significantly dependent on our ability to open new stores in desirable locations with capital investment and lease costs that allow us to earn a reasonable return. We cannot be sure as to when or whether such desirable locations will become available at reasonable costs.
Increases in costs of mailing, paper andprinting.printing may affect our business.
Postal rate increases and paper and printing costs will affect the cost of our order fulfillment and catalog and promotional mailings. We rely on discounts from the basic postal rate structure, such as discounts for bulk mailings and sorting by zip code and carrier routes. Future paper and postal rate increases wouldcould adversely impact our earnings if we are unable to pass such increases directly onto our customers or offset such increases by raising prices or by implementing more efficient printing, mailing, delivery and order fulfillment systems.
Risk Relating to the Exchange Debentures
We depend on payments from our subsidiaries and claims of exchange debenture holders rank junior to those of creditors of our subsidiaries.
We are a holding company that conducts substantially all of our operations through our subsidiaries. We perform management, legal, financial, tax, consulting, administrative and other services for our subsidiaries. Our stock priceprincipal sources of cash are from external financings, dividends and advances from our subsidiaries, investments, payments by our subsidiaries for services rendered, and interest payments from our subsidiaries on cash advances. The amount of dividends available to us from our subsidiaries largely depends upon each subsidiary’s earnings and operating capital requirements. In addition, the ability of our subsidiaries to make any payments to us may be volatile.
Our stock price may fluctuate substantially asaffected by tax considerations and legal restrictions.
As a result of periodic
variationsour holding company structure, the exchange debentures will effectively rank junior to all existing and future debt, trade payables and other liabilities of our subsidiaries. Our or our creditors’ right to participate in the actual or anticipated financial results (including monthly
sales comparisons and quarterly earnings)assets of any of our businessessubsidiaries upon any liquidation or other companies
in the retail industry or markets served by us. In addition, the stock market
has experienced price and volume fluctuations that have affected the market
pricereorganization of many retail stocks and that have often been unrelated or
disproportionateany such subsidiary will be subject to the operating performanceprior claims of these companies.
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FORWARD-LOOKING STATEMENTS
This prospectus containsthat subsidiary’s creditors, including trade creditors, except to the extent that we may be a creditor of such a subsidiary.
There may not be an active market for the old debentures orincorporates by reference forward-looking statements. Investors are cautioned that such forward-looking statements are subject to risks and uncertainties, including those described under "Risk Factors" on pages 13 through 16, many of which are beyond our control. Accordingly, actual results may differ materially from those expressed or implied in any such forward-looking statements. Words such as "estimate," "project," "plan," "believe," "expect," "anticipate," "intend" and similar expressions may identify forward-looking statements. All forward-looking statements are qualified bytherisks described under "Risk Factors" which, if they develop into actual events, could have a material adverse effect on the offernew debentures.
The old debentures and the merger or on our businesses, financial
condition or resultsnew debentures constitute new issues of operations. In addition, investors should consider the
other information contained in or incorporated by reference into this
prospectus.securities with no established public trading market. We are not under any obligation and do not intend to make publicly available
any update or other revisions to anyapply for listing of the forward-looking statements
containednew debentures on any securities exchange or for inclusion of the new debentures in any automated quotation system. There can be no assurance that an active public market for the new debentures will develop or as to the liquidity of any market that may develop for the new debentures, the ability of holders to sell the new debentures, or the price at which holders would be able to sell the new debentures. Future trading prices of the new debentures will depend on many factors, including among other things, prevailing interest rates, our operating results and the market for similar securities.
Any old debentures not tendered or accepted in the exchange offer will remain outstanding. To the extent that old debentures are tendered and accepted in the exchange offer, your ability to sell untendered, and tendered but unaccepted, old debentures could be adversely affected. Following consummation of the exchange offer, the holders of old debentures will continue to be subject to the existing restrictions on transfer thereof and we will have no
10
further obligation to those holders, under the registration rights agreement, to provide for the registration under the Securities Act of the old debentures. There may be no trading market for the old debentures.
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We will not receive any cash proceeds from the issuance of the new debentures. The new debentures will be exchanged for old debentures as described in this prospectus upon our receipt of old debentures. We will cancel all of the old debentures surrendered in exchange for the new debentures.
Our net proceeds from the sale of the old debentures were approximately $346 million, after deduction of the initial purchasers’ discounts and commissions and other expenses of the offering. We used the net proceeds of the old debentures for general corporate purposes, which included redemption of $250 million aggregate principal amount of our 7-1/2% Debentures due March 2023.
RATIOS OF EARNINGS TO FIXED CHARGES
The table below sets forth our ratios of earnings to reflect circumstances existing afterfixed charges for the dateperiods indicated. The ratios have been calculated based upon earnings from continuing operations before fixed charges and taxes on income. Fixed charges include interest and an estimate of this prospectusthe portion of minimum rentals that represents interest.
For the Fiscal Years Ended | ||||
February 1, 2003 | February 2, 2002 | February 3, 2001 | January 29, 2000 | January 30, 1999 |
5.31 | 5.82 | 4.63 | 4.40 | 10.79 |
For the purpose of calculating the ratios of earnings to fixed charges, we calculate earnings by adding fixed charges to pre-tax income from continuing operations before minority interests in consolidated subsidiaries and income or loss from equity investees. Fixed charges include total interest and a portion of rentals, which we believe is representative of the interest factor of our rental expense. The ratios presented above have been adjusted to reflect the occurrencereclassification of future events even if
experience or future events make it clear that any expected results expressed
or impliedlandlord allowances, which resulted in a reduction of rent expense for all periods presented. See our Annual Report on Form 10-K for the year ended February 1, 2003, incorporated by those forward-looking statements will not be realized. However,
The Limited is scheduled to report January sales on February 7, fourth quarter
2001 earnings on February 28, and February sales on March 7, 2002.
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
We are providingreference herein, for further discussion of this reclassification.
Pre-tax income includes the effect of the following informationspecial items:
In the fiscal year ended February 1, 2003: (1) a $33.8 million non-cash, special and nonrecurring charge resulting from the Intimate Brands, Inc. recombination and (2) a $6.1 million gain resulting from the sale of our interest in Charming Shoppes, Inc. common stock.In the fiscal year ended February 2, 2002: (1) a $170.0 million gain from the sale of Lane Bryant and (2) an aggregate gain of $62.1 million from the initial public offerings of Galyan’s Trading Company Inc. and Alliance Data Systems Corp.In the fiscal year ended February 3, 2001: a $9.9 million charge toassist youclose Bath & Body Works’ nine stores inanalyzingthefinancial aspectsUnited Kingdom.In the fiscal year ended January 29, 2000: (1) the reserve reversal of $36.6 million related to downsizing costs for Henri Bendel; (2) an $11.0 million gain from theoffersale of our 60% majority interest in Galyan’s Trading Company Inc.; and (3) a $13.1 million charge for transaction costs related to themerger.Limited Too spin-off.In the fiscal year ended January 30, 1999: (1) a $l.651 billion tax-free gain on the split-off of Abercrombie & Fitch; (2) a $93.7 million gain from the sale of our remaining interest in Brylane, Inc.; and (3) a $5.1 million charge for associate termination costs of Henri Bendel.
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Selected Consolidated Financial Data
The following selected historicalconsolidated financial data should be read in conjunction with the historical financial statements and related notes contained in the annual, quarterly and
other reportsour Annual Report on Form 10-K filed by The Limited and Intimate Brands with the SEC and incorporated by reference into this prospectus. See "Where“Where You Can Find More Information."”
The information for The Limited for the thirty-nine weeks ended November 3,
2001 and October 28, 2000 was derived from the unaudited consolidated financial
statements included in The Limited's Quarterly Report on Form 10-Q for the
quarterly period ended November 3, 2001. The Limited's results for the
thirty-nine weeks ended November 3, 2001 are not necessarily indicative of the
results to be expected for the fiscal year ending February 2, 2002. The
information for The Limited for each of the five fiscal years in the period
ended February 3,1998, 1999, 2000, 2001 and 2002 was derived from the audited consolidated financial statements included in The Limited'sour Annual Reports on Form 10-K and reflects
The Limited's historical ownership interests in Intimate Brands.
The information for Intimate Brands for the thirty-nine weeks ended November
3, 2001 and October 28, 2000 was derived from the unaudited consolidated
financial statements included in Intimate Brands' Quarterly Report on Form 10-Q
for the quarterly period ended November 3, 2001. The Intimate Brands' results
for the thirty-nine weeks ended November 3, 2001 are not necessarily indicative10-K.
Fiscal Years | |||||||||||||||
2002 | (b) 2001 | (a) 2000 | (b) 1999 | (b) 1998 | |||||||||||
| Summary of Operations (c) | (Dollars in millions except per share amounts) | ||||||||||||||
| Net sales | $ | 8,445 | $ | 8,423 | $ | 9,080 | $ | 8,765 | $ | 8,436 | |||||
| Gross income | $ | 3,094 | $ | 3,016 | $ | 3,185 | $ | 3,051 | $ | 2,742 | |||||
| Operating income (d) | $ | 838 | $ | 896 | $ | 832 | $ | 881 | $ | 2,426 | |||||
| Operating income as a percentage of sales (d) | 9.9 | % | 10.6 | % | 9.2 | % | 10.1 | % | 28.8 | % | |||||
| Net income from continuing operations (e) | $ | 496 | $ | 506 | $ | 407 | $ | 431 | $ | 2,048 | |||||
| Net income from continuing operations as a percentage of sales (e) | 5.9 | % | 6.0 | % | 4.5 | % | 4.9 | % | 24.3 | % | |||||
| Per Share Results | |||||||||||||||
| Income per basic share: Continuing operations (c) (e) | $ | 0.97 | $ | 1.18 | $ | 0.95 | $ | 0.98 | $ | 4.25 | |||||
| Income per diluted share: Continuing operations (c) (e) | $ | 0.95 | $ | 1.16 | $ | 0.91 | $ | 0.93 | $ | 4.15 | |||||
| Dividends | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.26 | |||||
| Book value | $ | 9.28 | $ | 6.39 | $ | 5.44 | $ | 5.00 | $ | 4.78 | |||||
| Weighted average diluted shares outstanding | 522 | 435 | 443 | 456 | 493 | ||||||||||
| Other Financial Information | |||||||||||||||
| Total assets | $ | 7,246 | $ | 5,094 | $ | 4,487 | $ | 4,557 | $ | 5,034 | |||||
| Return on average assets (e) | 8 | % | 11 | % | 9 | % | 10 | % | 42 | % | |||||
| Working capital | $ | 2,347 | $ | 1,330 | $ | 1,034 | $ | 1,049 | $ | 1,127 | |||||
| Current ratio | 2.9 | 1.9 | 1.9 | 1.8 | 1.9 | ||||||||||
| Capital expenditures | $ | 306 | $ | 377 | $ | 487 | $ | 426 | $ | 401 | |||||
| Long-term debt | $ | 547 | $ | 250 | $ | 400 | $ | 400 | $ | 550 | |||||
| Debt-to-equity ratio | 11 | % | 9 | % | 17 | % | 19 | % | 25 | % | |||||
| Shareholders’ equity | $ | 4,860 | $ | 2,744 | $ | 2,316 | $ | 2,147 | $ | 2,167 | |||||
| Return on average shareholders’ equity (e) | 13 | % | 21 | % | 19 | % | 21 | % | 99 | % | |||||
| Comparable store sales increase (decrease) (f) | 3 | % | (3 | %) | 5 | % | 8 | % | 6 | % | |||||
| Stores and Associates at End of Year | |||||||||||||||
| Total number of stores open | 4,036 | 4,614 | 5,129 | 5,023 | 5,382 | ||||||||||
| Selling square feet | 16,297 | 20,146 | 23,224 | 23,592 | 26,316 | ||||||||||
| Number of associates | 98,900 | 100,300 | 123,700 | 114,600 | 126,800 | ||||||||||
| (a) | Fifty-three-week fiscal year. |
13
| (b) | Includes the results of the following companies up until their disposition/separation date: 1) Lane Bryant effective August 16, 2001; 2) Galyan’s Trading Co. (“Galyan’s”) effective August 31, 1999; 3) Limited Too effective August 23, 1999; and 4) Abercrombie & Fitch effective May 19, 1998. |
| (c) | As a result of its sale on November 27, 2002, Lerner New York’s (“Lerner”) operating results have been reflected as discontinued operations. Accordingly, Lerner’s results are excluded for all periods presented (see Note 3 to the Consolidated Financial Statements incorporated by reference herein). |
| (d) | Operating income includes the effect of special and nonrecurring items of ($33.8) million in 2002, $170.0 million in 2001, ($9.9) million in 2000 (see Note 4 to the Consolidated Financial Statements incorporated by reference herein), $23.5 million in 1999, and $1.740 billion in 1998. |
| (e) | In addition to the items discussed in (d) above, net income includes the effect of the following non-operating gains: 1) $6.1 million related to Charming Shoppes, Inc. in 2002; 2) $62.1 million related to Alliance Data Systems and Galyan’s in 2001 (see Note 1 to the Consolidated Financial Statements incorporated by reference herein); and 3) $11.0 million related to Galyan’s in 1999. |
| (f) | A store is typically included in the calculation of comparable store sales when it has been open 12 months or more and it has not had a change in selling square footage of 20% or more. Additionally, stores of a given brand are excluded if total selling square footage for the brand in the mall changes by 20% or more through the opening or closing of a second store. |
14
Description of the results to be expected for the fiscal year ending February 2, 2002.Exchange Debentures
General
The information for Intimate Brands for eachfollowing is a summary of the five fiscal years in the period
ended February 3, 2001 was derived from the audited consolidated financial
statements included in Intimate Brands' Annual Reports on Form 10-K.
18
The Limited, Inc. Selected Historical Consolidated Financial Data
As of or For the
Thirty-nine Weeks
Ended(a) As of or For the Fiscal Years Ended(a)
----------------------- -----------------------------------------------
November 3, October 28,
2001 2000 2000(b) 1999 1998 1997 1996
----------- ----------- ------- ------ ------ ------ ------
(in millions, except per share data)
Statement of Income Data
Net sales.................................. $6,225 $6,583 $10,105 $9,766 $9,365 $9,200 $8,652
Net income................................. $ 192 (c) $ 190 $ 428(c) $ 461(c) $2,046(c) $ 212(c) $ 434(c)
Per Share Data
Basic net income........................... $0.45 (c) $ 0.44 $ 1.00(c) $ 1.05(c) $ 4.25(c) $ 0.39(c) $ 0.78(c)
Diluted net income......................... $0.44 (c) $ 0.42 $ 0.96(c) $ 1.00(c) $ 4.15(c) $ 0.39(c) $ 0.77(c)
Dividends.................................. $0.225 $0.225 $ 0.30 $ 0.30 $ 0.26 $ 0.24 $ 0.20
Diluted weighted average shares outstanding 435 444 443 456 493 549 564
Balance Sheet Data
Total assets............................... $4,157 $4,016 $ 4,088 $4,126 $4,550 $4,301 $4,120
Long-term debt............................. $ 250 $ 400 $ 400 $ 400 $ 550 $ 650 $ 650
Shareholders' equity....................... $2,428 $2,088 $ 2,316 $2,147 $2,167 $1,986 $1,869
- --------
(a) Includes the resultsterms of the following companies upexchange debentures. The exchange debentures will be issued under an indenture dated as of February 19, 2003 between us and The Bank of New York, as Trustee. This description is not complete and investors should refer to their separation
date: 1) Lane Bryant sale effective August 16, 2001; 2) Limited Too
spin-off effective August 23, 1999; 3) Galyan's Trading Co. salethe indenture, a copy of a
majority interest effective August 31, 1999;which is available from us upon request and 4) Abercrombie & Fitch
split-off effective May 19, 1998.
(b) Fifty-three-week fiscal year.
(c) Net income includeswhich has also been filed as an exhibit to the effectregistration statement. In the summary below, we have included references to section numbers of the following special items:
Forindenture so that you can easily locate these provisions.
Maturity, Interest, Form and Denomination
The 6.95% exchange debentures due 2033 will initially be limited to $350,000,000 in aggregate principal amount. These debentures will mature on March 1, 2033 and will bear interest at the nine-months ended November 3, 2001: 1) a $170.0 million gain from
the salerate of Lane Bryant and 2) an aggregate gain of $62.1 million from the
initial public offerings of Galyan's and Alliance Data Systems.
In 2000: a $9.9 million charge to close Bath & Body Works' nine stores in
the United Kingdom.
In 1999: 1) the reserve reversal of $36.6 million related to downsizing
costs for Henri Bendel; 2) an $11.0 million gain from the sale of a 60%
majority interest in Galyan's; and 3) a $13.1 million charge for transaction
costs related to the Limited Too spin-off.
In 1998: 1) a $1.651 billion tax-free gain on the split-off of Abercrombie
& Fitch; 2) a $93.7 million gain from the sale of the Company's remaining
interest in Brylane, Inc.; and 3) a $5.1 million charge for associate
termination costs at Henri Bendel.
In 1997: 1) a $276.0 million charge related to implementation of
initiatives to strengthen the Company's various retail brands; 2) a $62.8
million net gain related to the sale of one-half of the Company's investment
in Brylane, Inc.; 3) a $13.0 million Henri Bendel inventory liquidation
charge; and 4) an $8.6 million gain in connection with the initial public
offering of Brylane, Inc.
In 1996: 1) a $118.2 million gain resulting from the initial public
offering of a 15.8% interest in Abercrombie & Fitch and 2) a $12.0 million
charge for the revaluation of certain assets in connection with the sale of
Penhaligon's.
19
Intimate Brands, Inc. Selected Historical Consolidated Financial Data
As of or For the
Thirty-nine Weeks Ended As of or For the Fiscal Years Ended
----------------------- ----------------------------------------
November 3, October 28,
2001 2000 2000(a) 1999 1998 1997 1996
----------- ----------- ------- ------ ------ ------ ------
(in millions, except per share data)
Statement of Income Data
Net sales.................................. $3,084 $3,180 $5,117 $4,632 $3,989 $3,719 $3,093
Net income................................. $ 93 $ 211 $ 432 (b) $ 459 $ 394 $ 284(b) $ 257(b)
Per Share Data
Basic net income........................... $ 0.19 $ 0.43 $0.88 (b) $ 0.92 $ 0.75 $ 0.54(b) $ 0.48(b)
Diluted net income......................... $ 0.19 $ 0.42 $0.87 (b) $ 0.90 $ 0.74 $ 0.53(b) $ 0.48(b)
Dividends.................................. $ 0.21 $ 0.21 $ 0.28 $ 0.27 $ 0.27 $ 0.25 $ 0.23
Diluted weighted average shares outstanding 494 501 499 508 530 532 531
Balance Sheet Data
Total assets............................... $1,725 $1,685 $1,457 $1,384 $1,448 $1,348 $1,135
Long-term debt............................. $ 100 $ 100 $ 100 $ 100 $ 250 $ 350 $ 350
Shareholders' equity....................... $ 659 $ 464 $ 665 $ 545 $ 609 $ 531 $ 377
- --------
(a) Fifty-three-week fiscal year.
(b) Net income includes the effect of the following special items:
In 2000: a $9.9 million charge to close Bath & Body Works' nine stores in
the United Kingdom.
In 1997: a $67.6 million charge related to the closing of the Cacique
business.
In 1996: a $12.0 million charge for the revaluation of certain assets in
connection with the sale of Penhaligon's.
20
RECENT DEVELOPMENTS; ANNOUNCEMENT OF ESTIMATED FOURTH QUARTER 2001 FINANCIAL
RESULTS, JANUARY SALES AND 2002 OUTLOOK
On February 4, 2002, The Limited issued a press release announcing its
current estimates of fourth quarter 2001 financial results and January 2002
sales for The Limited and Intimate Brands and its current view of the 2002
outlook for those companies. Among other things, the press release included the
following information:
Fourth Quarter Results and January Sales
The Limited expects that comparable store sales for the four weeks ended
February 2, 2002 increased 6% compared to the four weeks ended February 3,
2001. The Limited reported estimated net sales of $576.4 million for the
four-week period ended February 2, 2002 compared to sales of $766.2 million for
the five-week period ended February 3, 2001. Excluding the sales from Lane
Bryant and the extra week in January last year, the sales increase from the
comparable four-week period last year was 11%.
January sales and margins were significantly above The Limited's initial
expectations. The last two weeks in December were also strong. As a result, The
Limited expects fourth quarter earnings6.95% per share to be between $0.72 and
$0.74, compared to $0.55 per share last year (which excludes a $.01 per share
special and non-recurring charge to close Bath & Body Works' nine stores in the
United Kingdom) and the current First Call consensus of $0.59 per share.
Additionally, The Limited expects that Intimate Brands will report that
comparable store sales for the four weeks ended February 2, 2002 increased 7%
compared to the four weeks ended February 3, 2001 and that estimated net sales
were $341.9 million for the four-week period ended February 2, 2002 compared to
sales of $407.3 million for the five-week period ended February 3, 2001.
Excluding the extra week in January last year, the sales increase from the
comparable four-week period last year was 16%.
The Limited also expects Intimate Brands to report fourth quarter earnings
per share between $0.58 and $0.60, compared to $0.46 per share last year (which
excludes a $.01 per share special and non-recurring charge to close Bath & Body
Works' nine stores in the United Kingdom) and the current First Call consensus
of $0.49 per share.
Actual January sales for both companiesannum.
Interest will be reported on February 7, 2002.
Outlook for 2002
With respect to 2002, The Limited expects the economic and retail
environment, particularly in the first half, to be challenging, and therefore
will continue to manage inventories, expenses and capital spending
conservatively.
At Intimate Brands, The Limited expects comparable store sales to be
slightly negative and earnings per share to be basically flat in the first
half, reflecting an expectation that Victoria's Secret Stores will maintain its
recent momentum and Bath & Body Works will continue to be challenged. For the
year, The Limited expects Intimate Brands' 2002 comparable store sales to be
flat to up in the low single digits and earnings per share to be flat to up in
the mid-single digit percentage range.
At The Limited, The Limited also expects comparable store sales to be
slightly negative in the first half and for earnings per share to be basically
flat to Spring 2001 earnings per share of $0.10 (excludes a $0.05 per share
from Lane Bryant, which was sold to Charming Shoppes in August 2001 and a
non-operating gain of $0.08 per share related to the IPO's of Galyan's and
Alliance Data Systems). In addition to the Intimate Brands brand results
described above, The Limited anticipates that Express will improve on its
disappointing result in the first half of 2001.
For the year, The Limited expects 2002 comparable store sales to be flat to
up in the low single digits and earnings per share, excluding special items and
Lane Bryant operating income in 2001, to be flat to up in the mid-single digit
percentage range.
21
The outlook for The Limited and Intimate Brands described above does not
include the financial impact of the offer and the merger. It was prepared by
The Limited's management for internal purposes only and not with a view to
public disclosure or compliance with published guidelines of the SEC or the
guidelines established by the American Institute of Certified Public
Accountants regarding projections or forecasts. The outlook described above is
not fact and should not be relied upon as being indicative of future results,
and you are cautioned not to place undue reliance on it.
The outlook constitutes a forward-looking statement that is subject to
various risks and uncertainties that could cause actual results to differ
materially from the outlook and should be read with caution. The outlook is
subjective in many respects and thus susceptible to interpretations and
periodic revisions based on actual experience and recent developments. See
"Risk Factors" and "Forward-Looking Statements."
The outlook is based upon a variety of assumptions relating to the
businesses of The Limited and Intimate Brands including the ability of The
Limited and Intimate Brands to achieve strategic goals, objectives and targets
over the applicable period. These assumptions involve judgments with respect to
the impact of general economic and business conditions, the competitive
environment in which each operates and other factors, all of which are
difficult or impossible to predict accurately and many of which are beyond the
control of the management of The Limited and Intimate Brands. We cannot assure
you that the assumptions reflected in the outlook for both companies will prove
accurate, and actual results may be materially greater or less than those
contained in the outlook.
You should understand that many important factors, in addition to those
discussed elsewhere in this prospectus, could cause The Limited's or Intimate
Brands' results to differ materially from those expressed in forward looking
statements and may cause the outlook or the underlying assumptions to be
inaccurate.
For these reasons, you should not regard our inclusion of statements
regarding the outlook for both companies in this prospectus as an indication
that The Limited or any of its affiliates, including Intimate Brands, or
representatives considers that the outlook is or will prove to be correct, and
should not be relied on as such.
The Limited is not under any obligation and does not intend to make publicly
available any update or other revisions to any of the statements regarding the
outlook for either company included in this prospectus to reflect circumstances
existing after the date of this prospectus or to reflect the occurrence of
future events even if experience or future events make it clear that any
expected results expressed or implied above will not be realized. However, The
Limited is scheduled to report January sales on February 7, fourth quarter 2001
earnings on February 28, and February salespayable semiannually on March 7, 2002.
22
SELECTED UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
We are providing the following selected unaudited pro forma consolidated
financial data to give you a better picture of what the results of operations1 and financial position of The Limited might have been had the offer and the
merger been completed at an earlier date. The unaudited pro forma consolidated
income statement data for the thirty-nine weeks ended November 3, 2001 and for
the fiscal year ended February 3, 2001 give effect to the offer and the merger
as if they had been completed on January 30, 2000. The unaudited pro forma
consolidated balance sheet data as of November 3, 2001 give effect to the offer
and the merger as if they had been completed on that date.
We have prepared the selected unaudited pro forma consolidated financial
data based on available information using assumptions that The Limited's
management believes are reasonable. The selected unaudited pro forma financial
data are being provided for informational purposes only. They do not purport to
represent The Limited's actual financial position or results of operations had
the offer and merger occurred on the dates specified nor do they project The
Limited's results of operations or financial position for any future period or
date.
The selected unaudited pro forma consolidated statement of income data do
not reflect any adjustments for nonrecurring items or operating synergies
arising as a result of the offer and the merger. The Limited currently expects
to incur a one-time, after-tax non-cash charge of approximately $20.4 million
relating to the exchange of vested Intimate Brands stock awards in connection
with the offer and the merger that is not reflected in the selected unaudited
pro forma consolidated financial data. See "Notes to Unaudited Pro Forma
Consolidated Financial Statements." In addition, pro forma adjustments are
based on certain assumptions and other information that are subject to change
as additional information becomes available. Accordingly, the adjustments
included in The Limited's financial statements published after the completion
of the offer and merger will vary from the adjustments included in the
unaudited pro forma consolidated financial data included in this prospectus.
The selected unaudited pro forma consolidated financial data should be read
in conjunction with The Limited's and Intimate Brands' audited and unaudited
historical financial statements and related notes, as well as "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
incorporated by reference into this prospectus. See "Where You Can Find More
Information."
As of or For the
Thirty-nine Weeks Ended For the Fiscal Year Ended
November 3, 2001(a) February 3, 2001(b)
----------------------- -------------------------
(in millions, except per share data)
Statement of Income Data
Net sales.................................. $6,225 $10,105
Net income................................. $ 198(c) $ 483(d)
Per Share Data(e)
Basic net income........................... $ 0.39(c) $ 0.95(d)
Diluted net income......................... $ 0.38(c) $ 0.91(d)
Dividends.................................. $0.225 $ 0.30
Diluted weighted average shares outstanding 521 532
Balance Sheet Data
Total assets............................... $5,592
Long-term debt............................. $ 248
Shareholders' equity....................... $3,928
- --------
(a) Includes the results of Lane Bryant through its sale date on August 16,
2001.
(b) Fifty-three-week fiscal year.
(c) Net income includes the effect of a $170.0 million gain from the sale of
Lane Bryant and an aggregate gain of $62.1 million from the initial public
offerings of Galyan's Trading Co. and Alliance Data Systems.
(d) Net income includes the effect of a $9.9 million charge to close Bath &
Body Works' nine stores in the United Kingdom.
(e) Reflects an adjustment for the conversion of Intimate Brands historical
weighted average Class A common stock outstanding for the periods presented
using an exchange ratio of 1.046 to 1.
23
COMPARATIVE PER SHARE DATA
The following comparative per share data has been derived from and should be
read in conjunction with "The Limited, Inc. and Subsidiaries Unaudited Pro
Forma Consolidated Financial Statements." The comparative per share data should
also be read in conjunction with the audited and unaudited historical financial
statements of The Limited and Intimate Brands, including the related notes,
incorporated by reference into this prospectus, and the selected historical
consolidated financial data including the related notes included in this
prospectus. See "Where You Can Find More Information." The pro forma per share
data have been included for comparative purposes only and do not purport to be
indicative of (1) the results of operations or financial position of The
Limited had the offer and the merger been completed at the beginning of the
period or as of the date indicated or (2) the results of operations or
financial position of The Limited for any future period or date.
The Limited Intimate Brands
The Limited Intimate Brands Unaudited Pro Forma Unaudited Pro Forma
Historical Historical Consolidated Equivalent (a)
----------- --------------- ------------------- -------------------
As of or for the Thirty-nine Weeks
Ended November 3, 2001
(Unaudited) (b)
Earnings per diluted share........... $ 0.44(c) $0.19 $ 0.38 $ 0.40
Cash dividends declared per share.... $0.225 $0.21 $0.225 $0.236
Book value per share................. $ 5.67 $1.34 $ 9.15 $ 9.57
As of or for the Fiscal Year Ended
February 3, 2001 (d)
Earnings per diluted share........... $ 0.96(e) $0.87(e) $ 0.91 $ 0.95
Cash dividends declared per share (f) $ 0.30 $0.28 $ 0.30 $0.314
Book value per share................. $ 5.44 $1.36 N/A N/A
- --------
(a) The Intimate Brands unaudited pro forma per share equivalent amounts
represent The Limited unaudited pro forma consolidated per share amounts
multiplied by the exchange ratio of 1.046.
(b) Includes the results of Lane Bryant through its sale date on August 16,
2001.
(c) Net income includes the effect of a $170.0 million gain from the sale of
Lane Bryant and an aggregate gain of $62.1 million from the initial public
offerings of Galyan's Trading Co. and Alliance Data Systems.
(d) Fifty-three-week fiscal year.
(e) Net income includes the effect of a $9.9 million charge to close Bath &
Body Works' nine stores in the United Kingdom.
(f) The Limited unaudited pro forma consolidated cash dividends per share
reflects the historical cash dividend per share of The Limited.
N/A Not applicable.
24
COMPARATIVE MARKET VALUE
The following table sets forth the closing prices per share and aggregate
market value of Limited common stock and Intimate Brands Class A common stock
on the New York Stock Exchange on February 4, 2002, the last trading day prior
to the commencement of this offer, and the equivalent price per share and
equivalent market value of Intimate Brands Class A common stock, based on the
exchange ratio.
Intimate Brands Intimate Brands
Limited Common Class A Common Class A Common
Stock Stock Stock Equivalent (1)
-------------- --------------- --------------------
Closing price per share of common stock $ 17.75 $ 17.50 $ 18.57
Market value of common stock (2)....... $7,616,182,691 $1,401,499,453 $1,487,191,133
- --------
(1) The Intimate Brands equivalent data is based on an exchange ratio of 1.046
shares of Limited common stock for each share of Intimate Brands Class A
common stock.
(2) Market value is based on 429,080,715 shares of Limited common stock
outstanding and 80,085,683 shares of Intimate Brands Class A common stock
outstanding as of January 30, 2002.
The market prices of shares of Limited common stock and Intimate Brands
common stock are subject to fluctuation. You are urged to obtain current market
quotations. See the risk factor entitled "Because the number of Limited shares
that you receive in the offer is fixed, the value of the Limited shares at the
time you receive them could be less than their value at the time you tender
your Intimate Brands shares."
25
COMPARATIVE STOCK PRICES AND DIVIDENDS
Limited common stock and Intimate Brands Class A common stock are both
listed on the New York Stock Exchange. Limited common stock is also listed on
the London Stock Exchange. The Limited's ticker symbol is "LTD" and Intimate
Brands' ticker symbol is "IBI." The following table shows, for the calendar
quarters indicated, based on published financial sources (1) the high and low
sales prices per share of Limited common stock as reported on the New York
Stock Exchange Composite Transaction Tape, (2) the high and low sales prices
per share of Intimate Brands Class A common stock as reported on the New York
Stock Exchange Composite Transaction Tape and (3) the cash dividends per shareSeptember 1 of each of Limited and Intimate Brands Class A common stock.
Intimate Brands Class A
Limited Common Stock Common Stock
---------------------- -----------------------
High Low Dividend High Low Dividend
------ ------ -------- ------ ------ --------
2000
First Quarter. $25.88 $14.44 $0.075 $23.50 $14.00 $0.07
Second Quarter $25.84 $20.94 $0.075 $24.19 $17.50 $0.07
Third Quarter. $25.00 $18.31 $0.075 $22.13 $15.94 $0.07
Fourth Quarter $27.88 $14.50 $0.075 $24.31 $12.31 $0.07
2001
First Quarter. $20.00 $14.60 $0.075 $18.50 $13.90 $0.07
Second Quarter $17.50 $14.90 $0.075 $16.90 $14.20 $0.07
Third Quarter. $17.60 $ 9.00 $0.075 $16.80 $ 8.50 $0.07
Fourth Quarter $19.00 $11.60 $0.075 $18.70 $11.80 $0.07
On February 4, 2002, the last full trading day before The Limited commenced
its exchange offer, the last reported closing prices per share of Limited and
Intimate Brands common stock were $17.75 and $17.50, respectively. Stockholders
are urged to obtain current market quotations prior to making any decision with
respect to the offer.
On January 30, 2002, there were approximately 4,156 holders of record of
Intimate Brands Class A common stock and approximately 67,349 holders of record
of Limited common stock.
The Limited's Dividend Policy
The holders of Limited common stock receive dividends if and when declared
by our Board of Directors out of legally available funds. We currently pay
dividends at an annual rate of $0.30 per share. Following the completion of the
offer and the merger, we expect to continue to pay quarterly dividends on a
basis consistent with our past practice. However, our Board's declaration and
payment of dividends will depend upon business conditions, operating results
and other relevant factors. We cannot give any assurance that we will continue
to pay dividends on Limited common stock at the current annual rate.
Additional Information Relating to Dividends
Intimate Brands has approved the payment of a regular quarterly dividend of
$0.07 per shareyear to holders of record of Intimate Brands common stockthe exchange debentures on the preceding February 15 and August 15, respectively. If an interest payment date falls on a day that is not a business day, interest will be payable on the next succeeding business day with the same force and effect as if made on such interest payment date. Interest on the exchange debentures will be calculated on the basis of a 360-day year of twelve 30-day months.
The exchange debentures will be issued in fully registered form in denominations of $1,000 and in integral multiples of $1,000.
Further Issues of the Same Series
We may, from time to time, without the consent of the existing holders of the exchange debentures, issue additional debentures under the indenture having the same terms as the exchange debentures in all respects, except for the issue date, the issue price and the initial interest payment date. Any such additional debentures will be consolidated with and form a single series with the exchange debentures being offered by this prospectus.
In addition to the exchange debentures, we may issue other series of debt securities under the indenture. There is no limit on the total aggregate principal amount of debt securities that we can issue under the indenture.
Ranking
The exchange debentures will be our senior unsecured obligations and will rank on a parity with all our other senior unsecured unsubordinated indebtedness, including any other debt securities issued under the indenture.
Optional Redemption
The exchange debentures will be redeemable in whole or in part, at our option, at any time at a redemption price equal to the greater of (l) 100% of the principal amount of the exchange debentures to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the closeTreasury Rate as defined below, plus 35 basis points, plus accrued interest thereon to the date of business on March 8, 2002. Payment isredemption.
“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to a maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount equal to the Comparable Treasury Price for such redemption date).
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the exchange debentures to be made on March 19, 2002.
Holdersredeemed that would be utilized, at the time of Intimate Brands common stockselection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such exchange debentures.
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“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if we obtain fewer than four such Reference Treasury Dealer Quotations, the average of all such Quotations.
“Independent Investment Banker” means one of the Reference Treasury Dealers that we appoint.
“Reference Treasury Dealers” means (1) J.P. Morgan Securities Inc. and its respective successors; provided, however, that if the foregoing shall cease to be a Primary Treasury Dealer, we shall substitute another nationally recognized investment banking firm that is a Primary Treasury Dealer, and (2) at our option, additional primary U.S. Government securities dealers (“Primary Treasury Dealers”) selected by us.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by us, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to us by such Reference Treasury Dealer at 5:00 p.m. on the recordthird business day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date will receiveto each holder of exchange debentures to be redeemed.
Unless we default in payment of the dividend regardlessredemption price, on and after the redemption date interest will cease to accrue on the exchange debentures or portions thereof called for redemption.
Payment and Transfer
The holders of whetherexchange debentures may transfer or exchange their exchange debentures (other than exchange debentures represented by global debentures) for exchange debentures of the offersame series at the office of the transfer agent or agents as we may designate. Neither we nor the Trustee will impose any service charge for any transfer or exchange of an exchange debenture. However, we may ask the holders to pay any taxes or other governmental charges in connection with a transfer or exchange of exchange debentures. (Section 3.05)
Covenants
We have agreed to some restrictions on our activities for the benefit of holders of debt securities issued under the indenture. The restrictive covenants summarized below will apply, unless the covenants are waived or amended, so long as any of the exchange debentures are outstanding. We have defined below the capitalized words used in describing the covenants. In the covenants, all references to us are to Limited Brands, Inc. only.
“Subsidiary” means any corporation of which securities entitled to elect at least a majority of the corporation’s directors shall at the time be owned, directly or indirectly, by us or one or more other Subsidiaries, or by us and merger are completed.
The Limited has approvedone or more other Subsidiaries. (Section 1.01)
“Significant Subsidiary” means a Subsidiary (treated for purposes of this definition on a consolidated basis together with its Subsidiaries) which meets any of the paymentfollowing conditions: (i) our and our other Subsidiaries’ combined investments in and advances to the Subsidiary exceed ten percent of our and our Subsidiaries’ combined total assets consolidated as of the end of the most recently completed fiscal year; (ii) our and our Subsidiaries’ combined proportionate share of the total assets (after intercompany eliminations) of the Subsidiary exceeds ten percent of our and our Subsidiaries’ combined total assets consolidated as of the end of the most recently completed fiscal year; or (iii) our and our other Subsidiaries’ equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a regular quarterly dividendchange in accounting principles of $0.075 per share tothe Subsidiary exceeds ten percent of our and our Subsidiaries’ combined income consolidated for the most recently completed fiscal year. (Section 5.04)
“Voting Stock” means capital stock the holders of recordwhich have general voting power under ordinary circumstances to elect at least a majority of Limited commonthe board of directors of a corporation; provided that, for the purpose of
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such definition, capital stock which carries only the right to vote conditioned on the occurrence of an event is not considered voting stock whether or not such event has occurred. (Section 5.04)
Limitation on Liens. We have agreed that we will not, and we will not permit any Subsidiary to incur, issue, assume or guarantee any indebtedness for money borrowed if such indebtedness is secured by a pledge of, lien on or security interest in any shares of Voting Stock of any Significant Subsidiary, without providing that each series of debt securities issued under the indenture (together with any other of our or our Subsidiary’s debts or obligations ranking equally with such debt securities and then existing or created afterward) will be secured equally and ratably with such indebtedness. The foregoing limitation will not apply to indebtedness secured by a pledge of, lien on or security interest in any shares of Voting Stock of any corporation at the closetime it becomes a Significant Subsidiary. (Section 5.04)
Limitation on Mergers and Sales of businessAssets. We have agreed not to consolidate with or merge into any other corporation or convey or transfer substantially all of our properties and assets to any other corporation, unless:
we are the successor corporation or the successor corporation expressly assumes by a supplemental indenture the obligations of the debt securities (in which case, except in the case of a lease, we will be discharged from the debt securities); and
immediately afterward, we or the successor corporation would not be in default in the performance of any covenant or condition of the indenture. (Sections 5.05 and 14.01)
Modification of the Indenture
We and the Trustee may establish the forms and terms of any series of debt securities issuable under the indenture through one or more supplemental indentures without the consent of the holders of debt securities. With the consent of the holders of a majority of the aggregate principal amount of debt securities of a series, we and the Trustee may modify the indenture or any supplemental indenture to change the rights of the holders of the debt securities of the affected series. We may not make the following modifications unless the holder of each affected exchange debenture consents:
extend the fixed maturity of the exchange debenture;
reduce the interest rate or extend the time of interest payments;
reduce the principal or premium amount;
reduce the amount of the principal of original issue discount securities payable on
March 8, 2002. Paymentany date;change the currency in which principal, premium or interest payments are made; or
impair the right to bring lawsuits to enforce principal, premium or interest payments.
No modification reducing the percentage required for modifications is to be made on March 19, 2002. Holderseffective without the consent of Intimate Brands common stock will not participate in this dividend regardlessthe holders of whetherall debt securities of such series. No modification affecting the offer and merger are completed priorrights, duties or immunities of the Trustee is effective without the consent of the Trustee. (Sections 13.01 & 13.02)
Events of Default
An Event of Default with respect to the payment date.
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BACKGROUND AND REASONS FOR THE OFFER AND THE MERGER
Backgroundexchange debentures occurs if:
we fail to pay interest when due on any exchange debenture for 30 days;
- we fail to pay the principal or any premium on any exchange debenture when due;
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we fail to perform any other covenant in the indenture and this failure continues for 90 days after we receive written notice of it (unless the
Offer and Merger On October 23, 1995, Intimate Brands, whichcovenant wasthen a wholly-owned subsidiarysolely for the benefit ofThe Limited, completed an initial public offering of approximately 16% of its common stock. This transaction, which was the first ina series oftransactions undertakendebt securities other than the exchange debentures); orwe or a court take certain actions relating to our bankruptcy or insolvency. (Section 6.01)
The supplemental indenture or the form of security for a particular series of debt securities may include additional Events of Default or changes to the Events of Default described above. If an Event of Default for any series of debt securities occurs and continues, the Trustee or the holders of at least 25% in aggregate principal amount of the debt securities of the series may require us to repay immediately the entire principal of the debt securities of such series. (Section 6.02) We are required to annually provide the Trustee with a statement of an officer stating that we were in compliance with the indenture during the preceding year. (Section 5.06)
A default under our other indebtedness will not be a default under the indenture, and a default under one series of debt securities under the indenture will not necessarily be a default under another series. (Section 6.02)
Under the indenture, the holders of a majority of the aggregate principal amount of the debt securities of any outstanding series can control certain actions of the Trustee and waive any past defaults with respect to such series. (Sections 6.02 and 6.06) Subject to the provisions in the indenture relating to its duties, the Trustee is not obligated to exercise any of its rights or powers under the indenture at the request, order or direction of any holders, unless the holders offer the Trustee reasonable security or indemnity. (Section 10.01)
If an Event of Default occurs and continues, the Trustee under the indenture may apply any sums it holds or receives to reimburse itself for reasonable compensation and expenses it incurred prior to any payments to the holders of debt securities of any series. (Section 6.05)
Before they can institute an action for a remedy under the indenture, the holders of a series of debt securities must provide the Trustee the following:
written notice of the occurrence of an Event of Default;
a request to take action from the holders of not less than 25% of the aggregate principal amount of the debt securities of such series; and
an offer satisfactory to the Trustee to provide security and indemnity against liabilities that might be incurred by taking action.
These conditions do not apply to the right of the holders of debt securities to enforce principal, premium and interest payments when due.
Satisfaction and Discharge of the Indenture
At our request, the Trustee will cancel the indenture if all sums due to the Trustee have been paid in full and:
all debt securities previously issued under the indenture have been cancelled or delivered to the Trustee for cancellation;
all outstanding principal, premium and interest payments have been paid; and
funds have been deposited with the Trustee at the maturity of the debt securities sufficient to pay in full the principal, premium and interest payments on all debt securities then outstanding. (Sections 11.01 and 11.02)
Defeasance
We will be able to discharge all of our obligations under the exchange debentures, other than certain administrative obligations, by depositing cash and/or U.S. government obligations with the Trustee in an amount
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sufficient to make all remaining payments of principal, premium and interest on the exchange debentures when those payments are due. In the alternative, we can avoid having to comply with the restrictive covenants described above by making the same kind of deposit with the Trustee. We can exercise these defeasance and covenant defeasance rights if there is no ongoing Event of Default with respect to the exchange debentures at that time and upon compliance with certain other conditions specified in the indenture.
Concerning the Trustee
The Trustee has loaned money to us and provided other services to us in the past and may do so in the future as a part of its regular business.
Governing Law
The indenture and the exchange debentures will be governed by, and construed in accordance with, the laws of the State of New York.
Restrictions on Transfer
The exchange debentures will not be subject to restrictions on transfer.
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In a comprehensive realignment of
our organizational structure and businesses, was intended to achieve several
key objectives:
. To enable Intimate Brands to more independently focus on its intimate
apparel and personal care businesses while allowing Theregistration rights agreement between Limited to focus
on its retail apparel businesses.
. To make the respective financial and operating results of Intimate Brands and the apparel businesses more visibleinitial purchasers of the old debentures, we agreed to:
(1) use our reasonable best efforts to
investors. . To promote entrepreneurial spirit and create new career opportunities by allowing executives and associates to participate more directly infile with theperformance of their business. Intimate Brands has enjoyed considerable success since its initial public offering. FromSEC within 90 days after the initialpublic offering through fiscal 2000, Intimate Brands' annual revenues have increased 96% from $2.6 billion to $5.1 billion, net income has increased 113% from $203 million to $432 million and the number of stores operated by its businesses has increased 85% from 1,293 to 2,390. Over the past several years, our senior management has periodically evaluated whether, in light of a number of developments since the timeissuance of theinitial public offering,old debentures a registration statement relating to an offer to exchange thecurrent separation of The Limitedold debentures for securities with principal amount andIntimate Brands remains optimal or should be modified. These developments include: . Increased focus on a smaller number of key businessesterms identical in all material respects to the principal amount andbrands. Since 1995, we have completed a number of transactions intended to allow us to focus on strengthening a smaller number of key brands by divesting or closing certain non-core or underperforming operations. Among other things, we have: . Sold all of, or controlling interests in, Brylane, Alliance Data Systems Corp. (formerly World Financial Network National Bank), Galyan's Trading Co., Penhaligon's and Lane Bryant, as well as various non-core real estate assets. . Successfully developed and established Abercrombie & Fitch and Limited Too as independent companies. . Closed over 1,500 stores. . Substantially downsized Henri Bendel. . Repositioned Structure as the menswear business of Express, rebranding it as Express Men's. . Increased focus on fully exploiting key retail brands: the creation of "360(degrees) brands." Over the past several years, we have increasingly focused our strategic thinking on fully exploiting the key brands of The Limited and Intimate Brands across merchandise categories (including apparel, intimate apparel and personal care products) and distribution channels. . The potential advantages of a recombination of The Limited and Intimate Brands in fully exploiting its key retail brands. Our senior management has considered from time to time whether a recombination would facilitate the full exploitationterms of thekey brands and ultimately generate greater stockholder value as compared to maintaining Intimate Brands and The Limited as separate public 27companies. In particular, a recombination would provide greater flexibility in allocating resources and expertise, including closer coordination between executives within different brands and businesses. . Additional potential benefits of a recombination. Our senior management also considered whether a recombination might provide additional potential benefits, including: . Elimination of management distraction as a result of the time spent maintaining two separate public companies. . Elimination of uncertainty regarding The Limited's future plans for Intimate Brands, including uncertainty on the part of lenders and rating agencies. . The opportunity for modest cost-savings through the elimination of certain duplicative functions. . A beliefold debentures, except that thekey objectives of the initial public offering of Intimate Brands have been substantially achieved. Our senior management has in recent years come to the view that the objectives of the initial public offering have been substantially achieved. Specifically, our senior management believes that the separation has, among other things: . Facilitated the development of the brands and businesses of Intimate Brands by highlighting their significance and focusing attention and resources on their development. . Allowed Intimate Brands to be successful in recruiting and retaining talented executives and associates. . Focused the investor community on the performance and prospects of the Intimate Brands' businesses. . Encouraged the entrepreneurial spirit of Intimate Brands executives and associates by allowing them to participate more directly in the performance of Intimate Brands. However, as the two companies become more similar and the scope of the opportunities provided by a recombination of the two companies becomes more apparent, the need to maintain Intimate Brands as a separate company appears to be substantially reduced. . Lack of differentiation in the investor community between The Limited and Intimate Brands. Our senior management observed that investors are increasingly viewing The Limited and Intimate Brands as very similar companies, as a result of, among other things, the convergence of the growth rates of the two companies and the fact that Intimate Brands has contributed an increasingly large part of The Limited's earnings. For example, we estimate that Intimate Brandsnew debentures willcontribute approximately 90% of The Limited's operating income for fiscal 2001. This lack of differentiation is also evidenced by the fact that the market capitalizations of The Limited and Intimate Brands are virtually identical. As of February 4, 2002, Intimate Brands represented approximately 95% of The Limited's market value. In the course of their review of alternative organizational structures of the two companies, members of our senior management consulted from time to time with financial and legal advisors, although no specific transaction was pursued or presented to our Board of Directors. In November 2001, we held discussions with Goldman, Sachs & Co. to assist our management in its evaluation of a range of transactions involving a number of our businesses, including Intimate Brands. In December 2001, our senior management, together with Goldman Sachs and our legal advisors, Davis Polk & Wardwell, continued its evaluation of alternativesnot contain terms with respect toIntimate Brands. We subsequently engaged Goldman Sachs and Banctransfer restrictions under the Securities Act or the payment ofAmericaadditional interest;(2) use our reasonable best efforts to cause the exchange offer registration statement to be declared effective under the Securities
LLC as financial advisors to assist in senior management's evaluation of these alternatives. 28During January 2002, Leslie H. Wexner, our Chairman and Chief Executive Officer, and other members of our senior management, held informal discussions with a number of our directors regarding various alternatives with respect to Intimate Brands. On January 28, 2002,Act within 180 days after theFinance Committee of our Board of Directors held a telephonic meeting to consider these matters, including the offer and the merger. On January 31 and February 1, 2002, our Board of Directors met to consider the offer and the merger. After presentations from senior management, our financial advisors, Goldman Sachs and Banc of America Securities, and our counsel, Davis Polk & Wardwell, and discussion among directors, on February 1, the offer and the merger were unanimously approved by our Board of Directors, subject to final approvalinitial issuance of thetransactions by a committeeold debentures;(3) commence the exchange offer promptly after the exchange offer registration statement has been declared effective;
(4) use our reasonable best efforts to keep the exchange offer registration statement effective until six months following the closing of the
Board consisting of Mr. Wexnerexchange offer; andAllan R. Tessler, Chairman(5) use our reasonable best efforts to cause the exchange to be completed within 210 days after the initial issuance of the
Finance Committee of our Board. On February 4, 2002, Messrs. Wexner and Tessler held a telephonic conference and approved commencing the offer and, upon completion of the offer, effecting the merger. Later on February 4, Mr. Wexner and other members of our senior management held a telephonic conference with several members of the Intimate Brands Board of Directors to inform them of the offer and the merger. Shortly afterold debentures.
The registration rights agreement provides that call, The Limited issued a press release announcing the transaction and
addressing several other matters, and Mr. Wexner delivered the following letter
to all members of the Intimate Brands Board of Directors who are not also
members of The Limited's Board of Directors:
February 4, 2002
Board of Directors
Intimate Brands, Inc.
Dear Intimate Brands Directors:
I am writing on behalf of the Board of Directors of The Limited to confirm
the key aspects of our call earlier this evening.
As we discussed, The Limited's Board of Directors has determined that it is
desirable to recombine Intimate Brands and The Limited. We believe this step is
strategically and operationally compelling and should yield a number of
significant benefits. Most importantly, we believe it would put the Limited and
IBI in a better position to exploit fully both companies' key brands and
thereby create greater value for all stockholders.
As a result, tomorrow morning The Limited will commence an offer to IBI
stockholders in which we will offer to exchange 1.046 shares of Limited common
stock for each share of Intimate Brands common stock if
- we do not
own. We have setfile with the SEC a registration statement which we are required to file under the registration rights agreement within the applicable 90‑day period specified in the registration rights agreement and described above; the SEC does not declare a registration statement effective within the applicable 180‑day period specified in the registration rights agreement and described above;
we do not consummate the exchange
ratio so that Intimate Brands stockholders will have approximatelyoffer within 210 days after thesame ownership interest in Intimate Brands' businesses immediately after completioninitial issuance of thetransaction that they currently hold while also gettingold debentures; orwe have filed, and the
same interest in The Limited's other businessesSEC has declared effective, a shelf registration statement andassets. The exchange ratio also represents an approximately 6.1% premium over the Intimate Brands common stock closing price on February 4, 2002. Assuming that the conditionsat any time prior to theoffer are satisfied (includingearlier of two years from the date the shelf registration is declared effective and such time as all the old debentures covered by the shelf registration statement have been disposed of under the shelf registration statement, the shelf registration statement ceases to be effective, or fails to be usable for its intended purpose without being succeeded within two business days by anon-waivable condition that The Limited own at least 90% ofpost‑effective amendment which cures thecommon stock of Intimate Brands)failure and thatthe offeriscompleted, weitself immediately declared effective;
then additional interest will then effect a
"short-form" merger in which the remaining Intimate Brands public stockholders
will receive the same consideration unless it is not legal to do so. The share
exchange in both the offer and the merger will be tax-free to IBI stockholders
for U.S. federal income tax purposes.
We believe that the recombination should be well received by Intimate
Brands' stockholders. It is strategically sound, and we hope it will facilitate
meaningful growth in the years ahead. I believe this is truly a win-win
transaction for both companies and their stockholders.
Although we are not seeking to reach a formal agreement with youaccrue on the transaction, we are aware that you will need to review the transaction and make
a recommendation to your stockholders. We also understand that it would be
customary in transactions of this type for a special committee of independent
directors to be established
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to review the transaction and make its recommendation and for that committee to
retain independent financial and legal advisors. Needless to say, The Limited
supports the creation of such a committee and the retention by it of
independent advisors.
On a personal note, I want to express my thanks to each of you for your
efforts in helping build IBI into the extraordinary business that it is and for
the work to be done in evaluating this transaction.
Please do not hesitate to call Ann Hailey or me with any questions or if we
can be of any assistance.
We look forward to moving ahead on this exciting transaction that we believe
will generate value for Limited and Intimate Brands stockholders alike.
Sincerely,
/s/ LESLIE H. WEXNER
Leslie H. Wexner
Chairman and Chief Executive Officer
On February 5, 2002, The Limited commenced the offer.
The Limited's Reasons for the Offer and the Merger
At its meeting on February 1, 2002, our Board of Directors unanimously
determined to pursue the offer and the merger, subject to final approval of the
offer and the merger by a committee of the Board consisting of Leslie H. Wexner
and Allan R. Tessler. In reaching its conclusion, the Board considered the
following material factors, among others:
. Our increased strategic focus on strengthening a smaller number of key
businesses and brands and fully exploiting the key brands across
different merchandise categories and distribution channels.
. The potential advantages of the recombination of Intimate Brands and The
Limited in fully capitalizing on the strength of the key brands of both
companies by providing greater flexibility in allocating resources and
expertise.
. The other potential benefits of a recombination, including elimination
of management distraction as a result of time spent maintaining two
public companies, elimination of uncertainty regarding The Limited's
future plans for Intimate Brands and the opportunity for modest cost
savings.
. Their belief that the key objectives of the initial public offering of
Intimate Brands have been substantially achieved, including the fact
that the separation facilitated the development of its businesses and
brands and allowed Intimate Brands to attract talented executives and
associates.
. Their belief that investors are increasingly viewing The Limited and
Intimate Brands as very similar companies, as evidenced by the
convergence of the growth rates of the two companies and the
substantially similar market capitalizations of the two companies.
. Their belief that the anticipated strategic and operational benefits of
the recombination outweighed the estimated earnings dilution,
particularly after considering the non-cash, largely one-time nature of
the additional expenses.
. The various factors outlined under "--Additional Factors for
Consideration by Intimate Brands Stockholders."
The foregoing discussion of the information and factors considered by our
Board of Directors is not intended to be exhaustive, but includes the material
factors they considered. In view of the variety of factors considered in
connection with its evaluation of the offer and the merger, our Board of
Directors did not find it practicable to, and did not, quantify or otherwise
assign relative weights to the specific factors considered in reaching its
determination and recommendation. In addition, individual directors may have
given differing weights to different factors.
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Additional Factors For Consideration by Intimate Brands Stockholders
In deciding whether or not to tender your Intimate Brands shares, you should
consider the following factorsold debentures in addition to the factors set forth under "Risk
Factors"rate of 6.95%, from and including the date on which any such registration default shall occur to, but excluding, the date on which the registration default has been cured, at the rate of 0.25% per year, plus an additional 0.25% per year from and during any period in which the registration default has continued for more than 90 days, up to a maximum rate of 0.50% per year. In no event will the additional interest on the old debentures exceed 0.50% per year. Once we complete this exchange offer, we will no longer be required to pay additional interest on the old debentures.
The exchange offer is not being made to, nor will we accept tenders for exchange from, holders of old debentures in any jurisdiction in which the exchange offer or acceptance of the exchange offer would violate the securities or blue sky laws of that jurisdiction.
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Terms of the Exchange Offer; Period for Tendering Old Debentures
This prospectus and the other factors set forthaccompanying letter of transmittal contain the terms and conditions of the exchange offer. Upon the terms and subject to the conditions included in this prospectus.
We believe the offer should be attractive to you as an Intimate Brands
stockholder for the following reasons:
. The exchange ratio has been set so that you will have approximately the
same ownership interest in Intimate Brands' businesses immediately after
the completion of the offerprospectus and the merger as you currently hold. In
addition, as a Limited stockholder, you will also have an ownership
interest in The Limited's other businesses and assets.
. You will have the opportunity to continue to participate in Intimate
Brands' growth through your ownership of Limited shares, the value of
which is predominantly represented by our ownership stake in Intimate
Brands, which have traded similarly to Intimate Brands shares over the
last 3 years. For example, as of the day prior to commencement of the
offer, Intimate Brands represented approximately 95% of The Limited's
market capitalization.
. The exchange ratio in the accompanying letter of transmittal, which together are the exchange offer, 1.046, equals the highest ratio of the
closing prices of Intimate Brands and Limited common stock,we will accept for exchange old debentures which are properly tendered on or the
"trading ratio," over the two year period prior to the announcementexpiration date, unless you have previously withdrawn them.
When you tender to us old debentures as provided below, our acceptance of the
offer. Additionally, the exchange ratio reflects approximatelyold debentures will constitute a6.3%binding agreement between you and8.8% premium over the six month and twelve month historical average trading ratios, respectively. . Based on the $17.75 closing price per share of Limited common stock on February 4, 2002, the last trading day prior to the commencement of the offer, the exchange ratio reflected a value per Intimate Brands share of approximately $18.57, a 6.1% premium over the closing price on February 4, 2002, a 27.5% premium over the average closing price of Intimate Brands Class A common stock over the past year and a 37.1% premium over the average closing price of Intimate Brands Class A common stock over the past six months. . We believe that the combined company will be better positioned to achieve meaningful long-term earnings growth than Intimate Brands on a stand-alone basis due to opportunities to leverage brands across the two companies, as well as the elimination of management distraction as a result of the time spent maintaining two separate entities. . We expect there will be a more liquid trading market for the Limited shares you will receive in the offer and the merger than there is for the Intimate Brands shares you now hold. Based on the number of shares of Limited common stock and Intimate Brands common stock outstanding as of January 30, 2002, there will be approximately 512.9 million shares of The Limited common stock outstanding if the offer and the merger are completed, compared to approximately 80.1 million shares of Intimate Brands Class A common stock outstanding as of January 30, 2002. . The offer and the merger will be tax-free for U.S. Federal income tax purposes for participating Intimate Brands stockholders. 31THE OFFER General The Limited, through its wholly-owned subsidiary, Intimate Brands Holding Co., Inc. (which is sometimes referred to as "IB Holdings"), is offering,us upon the terms and subject to the conditionsdescribedin this prospectus and in therelatedaccompanying letter of transmittal.For each $1,000 principal amount of old debentures surrendered to us in the exchange offer, we will give you $1,000 principal amount of new debentures.
We will keep the exchange offer open for not less than 20 business days, or longer if required by applicable law, after the date that we first mail notice of the exchange offer to the holders of the old debentures. We are sending this prospectus, together with the letter of transmittal,
to exchange 1.046 shares of Limited common stock for each outstanding share of Intimate Brands Class A common stock validly tenderedon orpriorabout the date of this prospectus to all of the registered holders of old debentures at their addresses listed in the trustee’s security register with respect to theexpiration date and not properly withdrawn. Thisold debentures.The exchange
ratio has been set so that you will have approximately the same ownership interest in Intimate Brands' businesses immediately after the completion of theofferand the merger as you currently hold. In addition, as a Limited stockholder, you will also have an ownership interest in The Limited's other businesses and assets. This exchange ratio represents a 6.1% premium to the closing price of Intimate Brands Class A common stock on February 4, 2002. It also represents an approximate 6.3% premium to the average ratio of the closing stock prices of Intimate Brands and Limited common stock for the six months ended February 4, 2002 and an approximate 8.8% premium to the average ratio of the closing stock prices of Intimate Brands and Limited common stock for the one year ended February 4, 2002. Our obligation to exchange shares of Limited common stock for Intimate Brands shares pursuant to the offer is subject to several conditions referred to below under "Conditions of the Offer." The term "expiration date" meansexpires at 5:00 p.m., New York City time, onMarch 11, 2002, unless, 2003; provided, however, that we, in our sole discretion, may extend the period of time for which the exchange offer isopen, in which case theopen. The term"expiration date"“expiration date” means , 2003 or, if extended by us, the latest time and dateonto which theoffer, as so extended, expires. If you are the record owner of your Intimate Brands shares and you tender your shares directly to theexchangeagent, you will not be obligated to pay any charges or expenses of the exchange agent or any brokerage commissions. If you own your shares through a broker or other nominee, and your broker tenders the shares on your behalf, your broker may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply. If you own Intimate Brands shares through the Savings and Retirement Plan or the Intimate Brands' Stock Purchase Plan, and the agent for the relevant plan tenders the shares on your behalf, you will not have to pay any fees or commissions. Except as set forth in the instructions to the letter of transmittal, transfer taxes on the exchange of Intimate Brands common stock pursuant to our offer will be paid by us or on our behalf. We will, as soon as practicable after consummation of the offer, cause Intimate Brands to merge with and into IB Holdings (with IB Holdings surviving the merger and being renamed "Intimate Brands"), unless it is not lawful to do so. In the merger, each remaining outstanding share of Intimate Brands Class A common stock (except for shares held in the treasury of Intimate Brands, shares that we own and shares held by any stockholder properly exercising appraisal rights) will be converted into the right to receive the same number of shares of Limited common stock that you would have received if you had tendered your shares in the offer. See "--Purpose of the Offer; The Merger; Appraisal Rights." If theoffer iscompleted, no further Intimate Brands stockholder or board action is required for us to complete the merger. If the offer and merger are completed, Intimate Brands employee stock options and restricted stock will be exchanged for Limited stock options and restricted stock with substantially similar terms. As of January 30, 2002, there were 80,085,683 shares of Class A common stock and 411,635,902 shares of Class B common stock outstanding.extended.As of the date of this prospectus,
The Limited, through IB Holdings, owns 411,635,902 shares of Intimate Brands Class B common stock, which is convertible into an equal number of shares of Class A common stock at our option at any time, and no shares of Intimate Brands Class A common stock. Based on this information and the number of shares of Limited common stock as of January 30, 2002, if the offer and the merger are completed, the historical Intimate Brands stockholders (other than IB Holdings) would receive approximately 16.3%$350,000,000 in aggregate principal amount of theoutstanding shares of Limited common stock. 32Timing of the Offerold debentures were outstanding. The exchange offer iscurrently schedulednot conditioned upon any minimum principal amount of old debentures being tendered.Our obligation to
expire on March 11, 2002; however, we may extendaccept old debentures for exchange in the exchange offerfrom time to time as necessary until all conditionsis subject to theoffer have been satisfied or waived. For more information, you should read the discussion under "--Extension, Termination and Amendment." We intend to promptly call a special meeting of our stockholders to vote on the proposal to issue shares of our common stockconditions that we describe in theoffer andsection called “Conditions to themerger. We will solicit proxies in favor of approval of the proposal by our stockholders. Extension, Termination and AmendmentExchange Offer” below.We expressly reserve the right,
in our sole discretion,at anytime or from time totime, to extend the period of time during whichourthe exchange offerremainsis open,ifand thereby delay acceptance of anycondition to the offer has not been satisfied, and we can do soold debentures, by giving oral or written notice ofsuchan extension to the exchangeagent.agent and notice of that extension to the holders as described below. During any extension, all old debentures previously tendered will remain subject to the exchange offer unless withdrawal rights are exercised with respect to such debentures. Any old debentures not accepted for exchange for any reason will be returned without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer.We expressly reserve the right to amend or terminate the exchange offer, and not to accept for exchange any old debentures that we have not yet accepted for exchange, if any of the conditions of the exchange offer specified below under “Conditions to the Exchange Offer” are not satisfied.
We will give oral or written notice of any extension, amendment, termination or non-acceptance described above to holders of the old debentures as promptly as practicable. If we
decide toextendour offer,the expiration date, we willmake angive notice by means of a press release or other public announcementto that effectno later than 9:00 a.m., New York City time, on thenextbusiness day after the previously scheduled expiration date.We are not making any assurances that we will exercise our right to extend our offer, although we may do so until all conditions have been satisfied or, where permissible, waived. During any such extension, all Intimate Brands shares previously tendered and not properly withdrawn will remain subject to the offer, subject to your right to withdraw your Intimate Brands shares. See "--Withdrawal Rights." Subject to the SEC's applicable rules and regulations, we also reserve the right, in our sole discretion, at any time or from time to time, (1) to delay our acceptance for exchange or our exchange of any Intimate Brands shares pursuant to the offer, regardless of whether we previously accepted Intimate Brands shares for exchange, or to terminate our offer and not accept for exchange or exchange any Intimate Brands shares not previously accepted for exchange or exchanged, upon the failure of any of the conditions of the offer to be satisfied and (2) to waive any condition (subject to the limits on waiver described under "Conditions of the Offer") or otherwise to amend the offer in any respect, by giving oral followed by written notice of such delay, termination or amendment to the exchange agent and by making a public announcement. We will follow any extension, termination, amendment or delay, as promptly as practicable, with a public announcement. In the case of an extension, any such announcement will be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the Securities Exchange Act of 1934, or the "Exchange Act," which require that any material change in the information published, sent or given to the stockholders in connection with the offer be promptly sent to stockholders in a manner reasonably designed to inform stockholders of such change) and withoutWithout limiting the manner in which we may choose to make any public announcement and subject to applicable law, weassumewill have no obligation to publish, advertise or otherwise communicate anysuchpublic announcement other than bymakingissuing a release to the Dow Jones News Service.We confirmHolders of old debentures do not have any appraisal or dissenters’ rights in connection with the exchange offer.
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Old debentures which are not tendered for exchange or are tendered but not accepted in connection with the exchange offer will remain outstanding and be entitled to
you that if we make a material change inthetermsbenefits of the indenture, but will not be entitled to any further registration rights under the registration rights agreement.We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC thereunder.
By executing, or otherwise becoming bound by, the letter of transmittal, you will be making the representations described below to us. See “—Resale of the New Debentures.”
Important rules concerning the exchange offer
You should note that:
All questions as to the validity, form, eligibility, time of receipt and acceptance of old debentures tendered for exchange will be determined by Limited Brands in its sole discretion, which determination shall be final and binding.
We reserve the absolute right to reject any and all tenders of any particular old debentures not properly tendered or to not accept any particular old debentures which acceptance might, in our judgment or the
information concerningjudgment of our counsel, be unlawful.We also reserve the
offer,absolute right to waive any defects orif we waive a material conditionirregularities or conditions of the exchange offerwe will extend the offeras tothe extent required under the Exchange Act. If, prior toany particular old debentures either before or after the expiration date,we decrease the percentage of Intimate Brands shares being sought or increase or decrease the consideration offered to holders of Intimate Brands shares, such increase or decrease will be applicable to all holders whose Intimate Brands shares are accepted for exchange pursuant to the offer, and if, at the time notice of any such increase or decrease is first published, sent or given to holders of Intimate Brands shares, the offer is scheduled to expire at any time earlier than the tenth business day from andincludingthe date that such notice is first so published, sent or given, the offer will be extended until the expiration of such ten business day period. For purposes of the offer, a "business day" means any day other than a Saturday, Sunday or a federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. 33Exchange of Intimate Brands Shares; Delivery of Limited Common Stock Upon the terms and subject to the conditions of the offer (including, if the offer is extended or amended, the terms and conditions of any such extension or amendment), The Limited will cause IB Holdings to accept for exchange, and will cause IB Holdings to exchange, Intimate Brands shares validly tendered and not properly withdrawn as promptly as practicable after the expiration date. In addition, subject to applicable rules of the SEC, we expressly reservethe right todelay acceptancewaive the ineligibility oforany holder who seeks to tender old debentures in the exchange offer. Unless we agree to waive any defect or irregularity in connection with the tender ofIntimate Brands shares in order to comply with any applicable law. For purposes of the offer, IB Holdings will be deemed to have acceptedold debentures for exchange,Intimate Brands shares validly tendered and not properly withdrawnyou must cure any defect or irregularity within any reasonable period of time asif and when it notifies the exchange agentwe shall determine.Our interpretation of
its acceptance of the tenders of those Intimate Brands shares pursuant to the offer. The exchange agent will deliver the Limited common stock in exchange for Intimate Brands shares pursuant to the offer and cash instead of fractional shares of Limited common stock as soon as practicable after receipt of IB Holdings' notice. The exchange agent will act as agent for tendering stockholders for the purpose of receiving Limited common stock from IB Holdings and transmitting such stock to you. If The Limited causes IB Holdings not to accept any tendered Intimate Brands shares for exchange pursuant tothe terms and conditions of the exchange offerforas to anyreason,particular old debentures either before orif certificates are submitted for more Intimate Brands shares than are tendered, The Limited will cause IB Holdings to return certificates for such unexchanged Intimate Brands shares without expense to the tendering stockholder or, in the case of Intimate Brands shares tendered by book-entry transfer of such Intimate Brands shares into the exchange agent's account at The Depository Trust Company (which we refer to as the "DTC") pursuant to the procedures set forth below under "--Procedure for Tendering," those Intimate Brands shares will be credited to an account maintained within DTC as soon as practicable following expiration or termination of the offer. Cash Instead of Fractional Shares of Limited Common Stock The Limited will not issue certificates representing fractional shares of Limited common stock pursuant to the offer. The exchange agent, acting as agent for Intimate Brands stockholders otherwise entitled to receive fractional shares of Limited common stock, will aggregate all fractional shares and sell them for the accounts of such stockholders. The proceeds realized by the exchange agent upon the sale of such fractional shares will be distributed, net of commissions, to such stockholders on a pro rata basis. Such cash payments will be made through the exchange agent if the related shares of Intimate Brands common stock are tendered to the exchange agent or, if such shares are tendered through DTC, through DTC. NONE OF THE EXCHANGE AGENT, THE LIMITED, IB HOLDINGS OR THE DEALER MANAGERS WILL GUARANTEE ANY MINIMUM PROCEEDS FROM THE SALE OF SHARES OF LIMITED COMMON STOCK, AND NO INTEREST WILL BE PAID ON ANY SUCH PROCEEDS. Withdrawal Rights Intimate Brands shares tendered pursuant to the offer may be withdrawn at any time prior toafter the expiration dateand, unless we previously accepted them for exchange pursuant to the offer, may also be withdrawn at any time after April 5, 2002. For your withdrawal to be effective, the exchange agent must receive from you a written or facsimile transmission notice of withdrawal at one of its addresses set forth on the back cover of this prospectus, and your notice must include your name, address, social security number, the certificate number(s) and the number of Intimate Brands shares to be withdrawn as well as the name of the registered holder, if it is different from that of the person who tendered those Intimate Brands shares. 34An eligible institution (as defined below) must guarantee all signatures on the notice of withdrawal, unless the Intimate Brands shares to be withdrawn have been tendered for the account of any eligible institution. Most banks, savings and loan associations and brokerage houses are able to effect these signature guarantees for you. An "eligible institution" is a financial institution that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchange Medallion Program. If Intimate Brands shares have been tendered pursuant to the procedures for book-entry tender as set forth below under "Procedure for Tendering," any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Intimate Brands shares and must otherwise comply with DTC's procedures. If certificates have been delivered or otherwise identified to the exchange agent, the name of the registered holder and the serial numbers of the particular certificates evidencing the Intimate Brands shares withdrawn must also be furnished to the exchange agent, as stated above, prior to the physical release of the certificates. We will decide all questions as to the form and validity (including time of receipt) of any notice of withdrawal, in our sole discretion, and our decisionshall be final andbinding.binding on all parties.Neither
we,Limited Brands, the exchange agentthe information agent, the dealer managersnor any other personwillshall be under any duty to give notification of anydefectsdefect orirregularities inirregularity with respect to anynoticetender ofwithdrawal or willold debentures for exchange, nor shall any of them incur any liability for failure to give anysuchnotification.Any Intimate Brands shares properly withdrawn will be deemed not to have been validly tendered for purposes of the offer. However, you may retender withdrawn Intimate Brands shares by following one of the procedures described under "--Procedure for Tendering" or "--Guaranteed Delivery" at any time prior to the expiration date. Procedure
Procedures for Tendering ForOld Debentures
What to submit and how
If you, as the registered holder of an old debenture, wish to validly tender Intimate Brands shares pursuant toyour old debentures for exchange in the exchange offer, (1)you must transmit a properly completed and duly executed letter of transmittal together with any
required signature guarantees, or an agent's message in connection with a
book-entry transfer, and any other required documents, must be transmitted to and received byThe Bank of New York at the exchange agent at one of its addressesaddress set forth below under “Exchange Agent” on or prior to the back cover of this prospectus and either (x)expiration date.
In addition,
(1) certificates fortendered Intimate Brands sharesold debentures must be received by the exchange agent along with the letter of transmittal, or(2) a timely confirmation of a book-entry transfer of old debentures, if such procedure is available, into the exchange agent’s account atsuch address or (y) such Intimate Brands sharesDTC using the procedure for book-entry transfer described below, must betendered pursuantreceived by the exchange agent prior tothe procedures for book-entry tender set forth below (and a confirmation of receipt of such tender received (we refer to this confirmation below as a "book-entry confirmation")), in each case beforethe expiration date or(2)(3) you must comply with the guaranteed deliveryprocedureprocedures described below.Participants
The method of delivery of old debentures, letters of transmittal and notices of guaranteed delivery is at your election and risk. If delivery is by mail, we recommend that registered mail, properly insured, with
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return receipt requested, be used. In all cases, sufficient time should be allowed to assure timely delivery. No letters of transmittal or old debentures should be sent to Limited Brands.
How to sign your letter of transmittal and other documents
Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the old debentures being surrendered for exchange are tendered
(1) by a registered holder of the old debentures who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal or(2) for the account of an eligible institution.
If signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, the guarantees must be by any of the following eligible institutions:
a firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
SavingsUnited States.
If the letter of transmittal is signed by a person or persons other than the registered holder or holders of old debentures, the old debentures must be endorsed or accompanied by appropriate powers of attorney, in either case signed exactly as the name or names of the registered holder or holders that appear on the old debentures and Retirement Planwith the signature guaranteed.
If the letter of transmittal or any old debentures or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers or corporations or others acting in a fiduciary or representative capacity, the Intimateperson should so indicate when signing and, unless waived by Limited Brands, Stock Purchase Plan may also participateproper evidence satisfactory to Limited Brands of its authority to so act must be submitted.
Acceptance of Old Debentures for Exchange; Delivery of New Debentures
Once all of the conditions to the exchange offer are satisfied or waived, we will accept, promptly after the expiration date, all old debentures properly tendered and will issue the new debentures promptly after acceptance of the old debentures. See “Conditions to the Exchange Offer” below. For purposes of the exchange offer, our giving of oral or written notice of our acceptance to the exchange agent will be considered our acceptance of the exchange offer.
In all cases, we will issue new debentures in exchange for old debentures that are accepted for exchange only after timely receipt by the exchange agent of:
certificates for old debentures, or
a timely book-entry confirmation of transfer of old debentures into the exchange agent’s account at DTC using the book-entry transfer procedures described below, and
a properly completed and duly executed letter of transmittal.
If we do not accept any tendered old debentures for any reason included in the terms and conditions of the exchange offer and should followor if you submit certificates representing old debentures in a greater principal amount than you wish to exchange, we will return any unaccepted or non-exchanged old debentures without expense to the tendering holder or, in the case of old debentures tendered by book-entry transfer into the exchange agent’s account at DTC using the book-entry transfer procedures described under "--Special
Proceduresbelow, non-exchanged old debentures will be credited to an account maintained with DTC as promptly as practicable after the expiration or termination of the exchange offer.
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Book-Entry Transfer
The exchange agent will make a request to establish an account with respect to the old debentures at DTC for Savingspurposes of the exchange offer promptly after the date of this prospectus. Any financial institution that is a participant in DTC’s systems may make book-entry delivery of old debentures by causing DTC to transfer old debentures into the exchange agent’s account in accordance with DTC’s Automated Tender Offer Program procedures for transfer. However, the exchange for the old debentures so tendered will only be made after timely confirmation of book-entry transfer of old debentures into the exchange agent’s account, and Retirement Plan and Stock Purchase Plan
Participants; Stock Options" to tender their Intimate Brands shares.
The term "agent's message" means atimely receipt by the exchange agent of an agent’s message, transmitted by the Depository
Trust Company, or DTC to, and received by the exchange agent and forming a part of a book-entry confirmation, which statesconfirmation. The agent’s message must state that DTC has received an express acknowledgment from the participant in DTC tendering the Intimate
Brands shares whichold debentures that are the subject of thethat book-entry confirmation that the participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce thatthe agreement against thethat participant.
The exchange agent will establish accounts with respect to the Intimate
Brands shares at DTC for purposes of the offer within two business days after
the date of this prospectus, and any financial institution that is a
participant in DTC may make book-entry
Although delivery of the Intimate Brands shares
by causing DTC to transfer such Intimate Brands shares into the exchange
agent's account in accordance with DTC's procedures for such transfer. However,
although delivery of Intimate Brands sharesold debentures may be effected through book-entry transfer into the exchange agent’s account at DTC, the letter of transmittal, (oror a manually signed facsimile of such
document),copy, properly completed and duly executed, with any required signature guarantees, or an agent's message in
connection with a book-entry transfer, and any other required documents, must in any case be transmitteddelivered to and received by the exchange agent at one or
more of its addresses specified on the back cover of this prospectus prior to
the expiration date, or the guaranteed delivery procedures described below must
be followed.
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Signatures on all letters of transmittal must be guaranteed by an eligible
institution, except in cases in which Intimate Brands shares are tendered
either by a registered holder of Intimate Brands shares who has not completed
the box entitled "Special Issuance Instructions" on the letter of transmittal
or for the account of an eligible institution.
If the certificates for Intimate Brands shares are registered in the name of
a person other than the person who signs the letter of transmittal, the
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered owner or
owners appear on the certificates, with the signature(s) on the certificates or
stock powers guaranteed in the manner we have described above.
Participants in the Savings and Retirement Plan and the Intimate Brands
Stock Purchase Plan may also participate in the offer and should follow the
procedures set forth in "--Special Procedures for Savings and Retirement Plan
and Stock Purchase Plan Participants; Stock Options" to tender their Intimate
Brands shares.
THE METHOD OF DELIVERY OF INTIMATE BRANDS SHARE CERTIFICATES AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT YOUR OPTION AND RISK,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, WE RECOMMEND REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED. IN ALL CASES, YOU SHOULD ALLOW
SUFFICIENT TIME TO ENSURE TIMELY DELIVERY.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO CASH
RECEIVED PURSUANT TO OUR OFFER, YOU MUST PROVIDE THE EXCHANGE AGENT WITH YOUR
CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY WHETHER YOU ARE SUBJECT TO
BACKUP WITHHOLDING OF FEDERAL INCOME TAX BY COMPLETING THE SUBSTITUTE FORM W-9
INCLUDED IN THE LETTER OF TRANSMITTAL. SOME STOCKHOLDERS (INCLUDING, AMONG
OTHERS, ALL CORPORATIONS) ARE NOT SUBJECT TO THESE BACKUP WITHHOLDING
REQUIREMENTS. SEE "MATERIAL FEDERAL INCOME TAX CONSEQUENCES."
Guaranteed Delivery
If you wish to tender your Intimate Brands shares pursuant to the offer and
your certificates are not immediately available or you cannot deliver the
certificates and all other required documents to the exchange agent prior to
the expiration date or cannot complete the procedure for book-entry transfer on
a timely basis, your Intimate Brands shares may nevertheless be tendered, so
long as all of the following conditions are satisfied:
(1) you make your tender by or through an eligible institution;
(2) a properly completed and duly executed notice of guaranteed delivery,
substantially in the form made available by us, is received by the exchange
agent as provided belowaddress listed under “—Exchange Agent” on or prior to the expiration date;date.
If your old debentures are held through DTC, you must complete a form called “Instruction to Registered Holder and/or Book-Entry Participant,” which will instruct the DTC participant through whom you hold your debentures of your intention to tender your old debentures or not tender your old debentures. Please note that delivery of documents to DTC in accordance with its procedures does not constitute delivery to the exchange agent and (3)we will not be able to accept your tender of debentures until the certificates for all tendered Intimate Brands shares (orexchange agent receives a confirmationletter of transmittal and a book-entry transferconfirmation from DTC with respect to your debentures. A copy of such securities intothat form is available from the exchange agent's account at DTC as described above), in proper formagent.
Guaranteed Delivery Procedures
If you are a registered holder of old debentures and you want to tender your old debentures but your old debentures are not immediately available, or time will not permit your old debentures to reach the exchange agent before the expiration date, or the procedure for book-entry transfer together withcannot be completed on a timely basis, a tender may be effected if
(1) the tender is made through an eligible institution,(2) prior to the expiration date, the exchange agent receives, by facsimile transmission, mail or hand delivery, from that eligible institution a properly completed and duly executed letter of transmittal(or a manually signed facsimileand notice ofsuch document), with any required signature guarantees (or,guaranteed delivery, substantially in thecaseform provided by us, stating:
the name and address of the holder of old debentures
the amount of old debentures tendered
- the tender is being made by delivering that notice and guaranteeing that within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the certificates of all physically tendered old debentures, in proper form for transfer, or a book-entry confirmation, as the case may be, will be deposited by that eligible institution with the exchange agent, and
(3) the certificates for all physically tendered old debentures, in proper form for transfer,an agent's message) and all other documents required byor a book-entry confirmation, as theletter of transmittalcase may be, are received by the exchange agent within threeNYSENew York Stock Exchange trading days after the date of execution ofsuchthe Notice of Guaranteed Delivery.
Withdrawal Rights
You can withdraw your tender of old debentures at any time on or prior to the expiration date.
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For a withdrawal to be effective, a written notice of guaranteed delivery.
You may deliverwithdrawal must be received by the exchange agent at one of the addresses listed below under “Exchange Agent.” Any notice of guaranteed delivery by hand or transmit it by
facsimile transmission or mail itwithdrawal must specify:
the name of the person having tendered the old debentures to be withdrawn
the old debentures to be withdrawn
the principal amount of the old debentures to be withdrawn
if certificates for old debentures have been delivered to the exchange agent, the name in which the old debentures are registered, if different from that of the withdrawing holder
if certificates for old debentures have been delivered or otherwise identified to the exchange agent, then, prior to the release of those certificates, you must also submit the serial numbers of the particular certificates to be withdrawn and
must includeaguaranteesigned notice of withdrawal with signatures guaranteed by an eligible institutioninunless you are an eligible institution.if old debentures have been tendered using the
form set forth in that notice. 36In all cases, The Limited will cause IB Holdings to exchange Intimate Brands shares tendered and acceptedprocedure forexchange pursuant to the offer only after timely receipt by the exchange agent of certificates for Intimate Brands shares (or timely confirmation of abook-entry transfer described above, any notice ofsuch securities intowithdrawal must specify theexchange agent'sname and number of the account at DTCas described above), properly completed and duly executed letter(s) of transmittal, or an agent's message in connection with a book-entry transfer, and any other required documents. Special Procedures for Savings and Retirement Plan and Stock Purchase Plan Participants; Stock Options Savings and Retirement Plan. Participants in the Savings and Retirement Plan who wishtoparticipate in the offer may instruct the trustee of such plan to tender Intimate Brands shares attributable to their plan accounts by completing, executing and returning to such trustee the election form included in the Letter from the Savings and Retirement Plan Administrative Committee sent to such participants. Stock Purchase Plan. Participants in the Stock Purchase Plan who wish to participate in the offer may instruct the agent for such plan to tender Intimate Brands shares attributable to their plan accounts by notifying such agent of the election as provided in the Notice to Stock Purchase Plan Participants sent to such participants. Intimate Brands Stock Options. Holders of vested but unexercised options to purchase Intimate Brands shares may exercise such options for cash in accordancebe credited with theterms of the Intimate Brands stock option planwithdrawn old debentures andtender the Intimate Brands shares received upon such exercise pursuant to the general instructions for tendering shares discussed in "--Procedure for Tendering." In connectionotherwise comply with themerger, unvested options to purchase Intimate Brands shares will be exchanged for Limited stock options with substantially similar terms. PARTICIPANTS IN THE STOCK PURCHASE PLAN OR THE SAVINGS AND RETIREMENT PLAN MAY NOT USE THE LETTER OF TRANSMITTAL TO DIRECT THE TENDER OF INTIMATE BRANDS SHARES, BUT MUST USE THE SEPARATE ELECTION FORM SENT TO THEM. STOCK PURCHASE PLAN AND SAVINGS AND RETIREMENT PLAN PARTICIPANTS ARE URGED TO READ THE SEPARATE ELECTION FORM AND RELATED MATERIALS CAREFULLY. Effectprocedures ofTender By executing a letter of transmittal as set forth above, you irrevocably appoint our designees as your attorneys-in-fact and proxies, each with full power of substitution, to the full extent of your rights with respect to your Intimate Brands shares tendered and accepted for exchange by us and with respect to any and all other Intimate Brands shares and other securities issued or issuable in respect of the Intimate Brands shares on or after February 5, 2002. Such appointment is effective, and voting rights will be affected, when and only to the extentthatIB Holdings (or The Limited acting on behalf of IB Holdings) accepts for exchange the Intimate Brands sharesfacility.
Please note that you have
tendered with the exchange agent. All such proxies shall be considered coupled
with an interest in the tendered Intimate Brands shares and therefore shall not
be revocable. Upon the effectiveness of such appointment, all prior proxies
given by you will be revoked, and no subsequent proxies may be given (and, if
given, will not be deemed effective). Our designees will, with respect to the
Intimate Brands shares for which the appointment is effective, be empowered,
among other things, to exercise all of your voting and other rights as they, in
their sole discretion, deem proper at any annual, special or adjourned meeting
of Intimate Brands stockholders, by written consent in lieu of any such meeting
or otherwise. We reserve the right to require that, in order for Intimate
Brands shares to be deemed validly tendered, immediately upon our exchange of
such Intimate Brands shares, we must be able to exercise full voting rights
with respect to such Intimate Brands shares.
We will determine all questions as to the validity, form, eligibility (includingand time of receipt) and acceptance for exchangereceipt of any tendernotices of Intimate Brands shares, in our sole discretion,withdrawal will be determined by us, and our determination shall be final and binding. We reserve the absolute right to reject any andbinding on all tenders
of Intimate Brands shares
37
determined by us not to be in proper form or the acceptance of or exchange for
which may, in the opinion of our counsel, be unlawful. Subject to the
applicable rules and regulations of the SEC, we also reserve the absolute right
to waive any of the conditions of the offer (other than the minimum tender
condition, the condition relating to obtaining Limited stockholder approval and
all other conditions, failure to satisfy which would prevent us from effecting
the merger), or any defect or irregularity in the tender of any Intimate Brands
shares. No tender of Intimate Brands sharesparties. Any old debentures so withdrawn will be deemedconsidered not to have been validly made until all defects and irregularities in tenderstendered for exchange for purposes of Intimate Brands shares
have been cured or waived. Neither we, the exchange agent, the information
agent, the dealer managers nor any other person will be under any dutyoffer.
If you have properly withdrawn old debentures and wish to give
notification of any defects or irregularities in the tender of any Intimate
Brands shares or will incur any liability for failure to give any such
notification. Our interpretation of the terms and conditions of the offer
(including the letter of transmittal and instructions thereto) will be final
and binding.
The tender of Intimate Brands shares pursuant to anyre-tender them, you may do so by following one of the procedures described under “Procedures for Tendering Old Debentures” above will constitute a binding agreement between you and us upon the
terms and subject to the conditions of the offer.
Purpose of the Offer; The Merger; Appraisal Rights
Purpose of the Offer and the Merger
We are making the offer in order to acquire all of the outstanding shares of
Intimate Brands common stock not owned by us. We intend, as soon as practicable
after completion of the offer, to cause Intimate Brands to merge with and into
IB Holdings. IB Holdings will be the surviving corporation after the merger and
will be renamed "Intimate Brands." The purpose of the merger is to acquire all
publicly-held Intimate Brands shares not tendered and exchanged pursuant to the
offer. In the merger, each then outstanding Intimate Brands share (except for
shares held in the treasury of Intimate Brands, shares that we own and shares
held byat any stockholder properly exercising appraisal rights) would be
converted into the right to receive the same number of shares of Limited common
stock that you would have received if you had tendered your shares in the offer.
The Merger
Assuming the conditions to the offer are satisfiedtime on or waived and the offer
is completed, we could consummate the merger without any additional vote of the
holders of our common stock or any vote of Intimate Brands stockholders under
Section 253 of the Delaware General Corporation Law because we would own at
least ninety percent (90%) of the Class A common stock of Intimate Brands
(assuming conversion of our Intimate Brands Class B common stock into Class A
common stock). We currently intend to complete the offer as soon as the
conditions to the offer are satisfied, and we will consummate the merger as
soon as practicable after the offer is completed.
Appraisal Rights
Under Delaware law, Intimate Brands stockholders do not have appraisal
rights in connection with the offer. However, Intimate Brands stockholders do
have appraisal rights in connection with the merger under Delaware law.
Intimate Brands stockholders at the time of the merger will have the right to
dissent and demand appraisal of their Intimate Brands shares. Dissenting
stockholders who comply with certain statutory procedures will be entitled to
receive judicial determination of the fair value of their Intimate Brands
shares and to receive payment of such fair value in cash, together with a rate
of interest, if any. This discussion is qualified in its entirety by reference
to Section 262 of the Delaware General Corporation Law, which contains the
Delaware appraisal statute. A copy of this provision is attached to this
document as Annex A. If you fail to take any action required by Delaware law,
your rights to an appraisal may be waived or terminated.
Notification of Merger's Effectiveness
Either before the effective time of the merger or within ten days
thereafter, Intimate Brands will send notice of the effectiveness of the merger
and the availability of appraisal rights to each Intimate Brands stockholder
(other than The Limited or its subsidiaries).
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Electing Appraisal Rights
To perfect appraisal rights, the record holder of Intimate Brands common
stock must within 20 days after the date of mailing of such notice deliver a
written demand for appraisal to Intimate Brands. This demand must reasonably
inform Intimate Brands of the identity of the holder of record and that the
stockholder demands appraisal of his, her or its shares of Intimate Brands
common stock.
A demand for appraisal must delivered to: Corporate Secretary, Intimate
Brands, Inc., Three Limited Parkway, Columbus, Ohio 43216.
Only Record Holders May Demand Appraisal Rights
Only a record holder of Intimate Brands common stock is entitled to demand
appraisal rights. The demand must be executed by or for the record holder,
fully and correctly, as the holder's name appears on the holder's stock
certificates.
. If the Intimate Brands common stock is owned of record in a fiduciary
capacity, such as by a trustee, guardian or custodian, the demand should
be executed in that capacity.
. If the Intimate Brands common stock is owned of record by more than one
person, as in a joint tenancy or tenancy in common, the demand should be
executed by or for all owners.
. An authorized agent, including one or two or more joint owners, may
execute the demand for appraisal for a holder of record. The agent must
identify the owner or owners of record and expressly disclose the fact
that, in executing the demand, the agent is acting as agent for the
owner or owners of record.
. A holder of record, such as a broker, who holds common stock as nominee
for beneficial owners, may perfect a holder's right of appraisal with
respect to common stock held for all or less than all of such beneficial
owners. In that case, the written demand should set forth the number of
shares of common stock held for all or less than all of such beneficial
owners. In that case, the written demand should set forth the number of
shares of common stock covered by the demand. If no number of shares of
common stock is expressly mentioned, the demand will be presumed to
cover all shares of common stock registered in the name of the record
holder.
Court Petition Must Be Filed
Within 120 days after the effective time of the merger, the surviving
corporation in the merger or any stockholder who has satisfied the foregoing
conditions may file a petition in the Delaware Court of Chancery demanding a
determination of the fair value of the Intimate Brands common stock.
Stockholders seeking to perfect appraisal rights should initiate all necessary
action to perfect their rights within the time periods prescribed by Delaware
law.
Appraisal Proceeding by Delaware Court
If a petition for an appraisal is timely filed, after a hearing on the
petition, the Delaware Court of Chancery will determine which of the
stockholders are entitled to appraisal rights. The court will appraise the
common stock owned by the stockholders and determine its fair value. In
determining fair value, the court may consider any generally accepted valuation
techniques, but will exclude the element of value arising from the
accomplishment and expectation of the merger. The court will also determine the
amount of interest, if any, to be paid upon the value of the common stock to
the stockholders entitled to appraisal.
The value determined by the court for Intimate Brands common stock could be
more than, less than, or the same as the merger consideration, but the form of
the consideration payable as a result of the appraisal proceeding would be
cash. The court may also order that all or a portion of any stockholder's
expenses incurred
39
in connection with an appraisal proceeding, including reasonable attorney's
fees and expenses and reasonable fees and expenses of experts utilized in the
appraisal proceeding, be charged against the value of all common stock entitled
to appraisal.
Effect of Appraisal Demand on Voting and Right to Dividends
Any stockholder who has duly demanded an appraisal in compliance with
Delaware law will not, after the effective time of the merger, be entitled to
vote the shares subject to the demand for any purpose. The shares subject to
the demand will not be entitled to dividends or other distributions, other than
those payable or deemed to be payable to stockholders of record as of a date prior to the effective time.
Loss, Waiver or Withdrawal of Appraisal Rights
Holders of Intimate Brands common stock lose the right to appraisal if no
petition for appraisal is filed within 120 days after the effective time of the
merger. A stockholder will also lose the right to an appraisal by deliveringexpiration date.
Conditions to the surviving corporation a written withdrawal of such stockholder's demand for
an appraisal, provided, however, that any attempt to withdraw that is made more
than 60 days after the effective time requires the written approval of the
surviving corporation. If appraisal rights are not perfected or a demand for
appraisal rights is timely withdrawn, a stockholder will be entitled to receive
the consideration otherwise payable pursuant to the merger, without interest.
The number of shares of Limited common stock, and cash instead of a fraction of
a share of Limited common stock, delivered to such stockholder will be based on
the same exchange ratio utilized in the offer and the merger, regardless of the
market price of Limited shares at the time of delivery.
Dismissal of Appraisal Proceeding
If an appraisal proceeding is timely instituted, such proceeding may not be
dismissed as to any stockholder who has perfected a right of appraisal without
the approval of the court.
Certain Legal and Regulatory Matters
Except as set forth in this prospectus, we are not aware of any material
filing, approval or other action by or with any governmental authority or
administrative or regulatory agency that would be required for our acquisition
or ownership of Intimate Brands shares. We intend to make all required filings
under the Securities Act of 1933 and the Securities Exchange Act of 1934.
State Takeover Laws
A number of states have adopted takeover laws and regulations which purport,
to varying degrees, to be applicable to attempts to acquire securities of
corporations which are incorporated in such states or which have substantial
assets, stockholders, principal executive offices or principal places of
business therein. We have not attempted to comply with state takeover statutes
in connection with the offer, except that we do intend to comply with certain
filing requirements under the laws of the State of Ohio. We reserve the right
to challenge the validity or applicability of any state law allegedly
applicable to the offer, and nothing in this prospectus nor any action taken in
connection herewith is intended as a waiver of that right. In the event that it
is asserted that one or more takeover statutes apply to the offer, and it is
not determined by an appropriate court that such statute or statutes do not
apply or are invalid as applied to the offer, as applicable, we may be required
to file certain documents with, or receive approvals from, the relevant state
authorities, and we might be unable to accept for payment or purchase shares
tendered pursuant to the offer or be delayed in continuing or consummating the
offer. In such case, we may not be obligated to accept for purchase, or pay
for, any shares tendered. See "Conditions of the Offer--Other Conditions of the
Offer" below.
40
Intimate Brands Charter
Article Eleventh of Intimate Brands' Amended and Restated Certificate of
Incorporation provides that the approval or authorization of a "business
combination" (defined as a variety of transactions, including mergers) with an
"interested person" (defined generally as a person beneficially owning capital
stock entitled to cast at least 5% of the voting power of Intimate Brands)
requires the vote of not less than 75% of the outstanding shares of voting
stock held by stockholders other than the interested stockholder. Although The
Limited is an "interested person", this provision does not apply to the offer
or the merger because (i) the offer is not a "business combination" within the
meaning of Article Eleventh and (ii) a "short form" merger effected under
Section 253 of the Delaware General Corporation Law, which in accordance with
that section does not require stockholder approval, is not subject to the
requirements of Article Eleventh of Intimate Brands' Amended and Restated
Certificate of Incorporation.
Financing of the Offer and the Merger
The securities required to consummate the offer and the merger are available
from The Limited's authorized but unissued shares. Fees and expenses in
connection with the offer and the merger are estimated to be approximately $14
million, including the SEC filing fee and the fees of the information agent,
the exchange agent, the dealer managers, financial advisors, the financial
printer, counsel, accountants and other professionals. We will obtain all of
such funds from The Limited's available capital resources.
Plans for Intimate Brands
Although we have no plans to make any significant changes at this time,
following the completion of the offer and the merger, we expect to review
Intimate Brands and its assets, corporate structure, capitalization,
operations, property, management, personnel and policies to determine what
changes, if any, are desirable or appropriate to better organize, integrate and
coordinate its businesses with those of The Limited. We may in the future also
consider transactions such as acquisitions or dispositions of material assets,
formation of alliances, joint ventures or other forms of cooperation with third
parties or other extraordinary transactions affecting Intimate Brands or its
operations.
41
CONDITIONS OF THE OFFER
Notwithstanding any other provisionprovisions of the exchange offer, and without prejudice to
The Limited's and IB Holdings' other rights, neither The Limited nor IB
Holdingswe will not be required to accept for exchange, or subject to issue new debentures in exchange for, any applicable
rules of the SEC, exchange any shares of Intimate Brands common stock,old debentures and The
Limited and IB Holdings may terminate extend or amend the exchange offer, if at any time before the expiration date, anyacceptance of old debentures for exchange or the exchange of the following offer conditions have not been satisfiednew debentures for old debentures, that acceptance or to the extent permitted, waived. We will not waive the minimum tender,
Limited stockholder approval, the New York Stock Exchange, or "NYSE," listing
and registration statement effectiveness conditionsissuance would violate applicable law or any other condition
failure to satisfy which would prevent us from effecting the merger.
Minimum Tender Condition
There must be validly tendered and not properly withdrawn prior to the
expirationinterpretation of the offer a number of Intimate Brands shares which, together with
the Intimate Brands shares we currently own (which will be converted into Class
A common stock of Intimate Brands), will constitute at least 90%staff of the total
number of outstanding shares of Class A common stock of Intimate Brands as of
the date that IB Holdings accepts the Intimate Brands shares for exchange
pursuant to the offer. As of January 30, 2002, there were 80,085,683 shares of
Intimate Brands Class A common stock outstanding and 13,083,366 shares of
Intimate Brands Class A common stock were issuable pursuant to outstanding
employee stock options. Assuming that no additional shares of Intimate Brands
common stock are issued prior to the expiration of the offer (whether upon
exercise of employee stock options or otherwise), we believe that the minimum
tenderSEC.
That condition would be satisfied if at least an aggregate of 30,913,525
shares of Intimate Brands Class A common stock are validly tendered pursuant to
the offer and not properly withdrawn.
Approval of The Limited Stockholders
Rule 312.03 of the New York Stock Exchange requires us to obtain the
approval of our stockholders for the issuance of shares of Limited common stock
in the offer and the merger since the number of shares to be issued will exceed
20% of the shares of Limited common stock outstanding immediately prior to the
issuance. Our offer is conditioned upon the approval of the issuance of shares
of Limited common stock pursuant to the offer and the merger by the affirmative
vote of a majority of the votes cast by the holders of Limited common stock at
a meeting of such holders subject to compliance with all applicable quorum
requirements. We intend to promptly call a meeting of our stockholders to vote
on the proposal to issue shares of Limited common stock in the offer and the
merger. We will solicit proxies in favor of approval of the proposal.
NYSE Listing of Limited Common Stock
Our offer is conditioned upon the shares of Limited common stock which will
be issued to the Intimate Brands stockholders in the offer and the merger being
approved for listing on the NYSE, subject to official notice of issuance.
Registration Statement Effectiveness
Our offer is conditioned upon the registration statement on Form S-4 of
which this prospectus is a part being declared effective under the Securities
Act of 1933, as amended, and not being subject to any stop order suspending its
effectiveness or any proceedings seeking a stop order.
42
Other Conditions of the Offer
Our offer is also subject to the conditions that, at the time of the
expiration date of the offer, none of the following shall have occurred and be
continuing which, in our good faith judgment, regardless of the circumstances,
makes it impossible or inadvisable to proceed with the offer or the merger:
(a) There shall have been (1) any action, proceeding or litigation, pending
or threatened, seeking to enjoin, make illegal or otherwise prevent or
materially delay consummation of the offer or the merger or otherwise relating
in any manner to the offer or the merger instituted before any court or other
regulatory or administrative authority, or (2) any order, stay, judgment or
decree shall have been issued by any court, government, governmental authority
or other regulatory or administrative authority and be in effect, or any
statute, rule, regulation, governmental order or injunction shall have been
proposed, enacted, enforced or deemed applicable to the offer, any of which
would or might restrain, prohibit or delay consummation of, or alter or
otherwise affect, the offer or the merger or materially impair the contemplated
benefits of the offer or the merger to The Limited;
(b) There shall have occurred (and the adverse effect of such occurrence
shall, in the good faith judgment of The Limited, be continuing) (1) any
general suspension of trading in, or limitation on prices for, securities on
any national exchange or in the over-the-counter market in the United States,
(2) any extraordinary or material adverse change in U.S. financial markets
generally, including, without limitation, a decline of at least 20% in either
the Dow Jones average of industrial stocks or the Standard & Poor's 500 Index
from February 4, 2002, (3) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (4) any
limitation (whether or not mandatory) by any governmental entity on, or any
other event that would reasonably be expected to materially adversely affect,
the extension of credit by banks or other lending institutions, (5) a
commencement of a war or armed hostilities or other national or international
calamity directly or indirectly involving the United States, which would
reasonably be expected to affect materially and adversely (or to delay
materially) the consummation of the offer or the merger, or (6) in the case of
any of the foregoing existing at the time of the commencement of the offer, a
material acceleration or worsening thereof;
(c) Any tender or exchange offer with respect to some or all of the
outstanding Limited common stock or the Intimate Brands common stock (other
than this offer), or a merger, acquisition or other business combination
proposal for The Limited or Intimate Brands (other than this offer and the
merger), shall have been proposed, announced or made by any person or entity;
(d) There shall have occurred any event or events that have resulted, or
may, in the good faith judgment of The Limited, result in an actual or
threatened adverse change in the business, condition (financial or other),
income, operations, stock ownership or prospects of The Limited and its
subsidiaries, taken as a whole, or of Intimate Brands and its subsidiaries,
taken as a whole; and
(e) There shall have occurred or be in existence any other event,
circumstance or condition which, in the good faith judgment of The Limited,
would prevent IB Holdings or Intimate Brands from effecting the merger
following the completion of the offer.
The foregoing conditions are solely for our sole benefit and we may assert thembe asserted by us regardless of the circumstances giving rise to any such conditions. We may
also, in our reasonable discretion, waive these conditions in whole or in part
(subject to the limitations on waiver described in the first paragraph of this
section). The determination as to whether any condition has been satisfied
shall be conclusive and binding on all parties. Thethat condition. Our failure by us at any time to exercise any of the foregoing rights shall not be deemedconsidered a waiver by us of any
such right and each such right shall be deemed a continuing rightthat right. Our rights described in the prior paragraph are ongoing rights which we may be
assertedassert at any time and from time to time.
43
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following are the material United States federal income tax consequences
of the offer
In addition, we will not accept for exchange any old debentures tendered, and the merger. This discussion is based on the Internal Revenue
Code of 1986, as amended, applicable Treasury regulations, administrative
interpretations and court decisions as in effect as of the date of this
prospectus, all of which may change, possibly with the retroactive effect.
This discussion only addresses persons who hold their Intimate Brands shares
as capital assets. It does not address all aspects of federal income taxation
that may be relevant to an Intimate Brands stockholder in light of that
stockholder's particular circumstances or to an Intimate Brands stockholder
subject to special rules, such as:
. a stockholder who is not a citizen or resident of the United States;
. a stockholder that is a foreign corporation, foreign estate or foreign
trust;
. a financial institution or insurance company;
. a tax-exempt organization;
. a dealer or broker in securities;
. a stockholder that holds its Intimate Brands stock as part of a hedge,
appreciated financial position, straddle or conversion transaction; or
. a stockholder who acquired its Intimate Brands stock pursuant to the
exercise of options or otherwise as compensation.
Participants in the Savings and Retirement Plan may be subject to tax
consequences in connection with the offer and the merger that are not discussed
below. These consequences are briefly summarized in separate materials
distributed to those participants.
In the opinion of Davis Polk & Wardwell, the offer and the mergerno new debentures will be treated for federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code. This opinion is based on
representations made by The Limited and on the assumption that the offer and
the merger will be consummated in the manner described in this prospectus.
The consequences of treatment of the offer and the merger as a
reorganization are that, for federal income tax purposes:
. A holder of Intimate Brands common stock will not recognize any gain or
loss upon that stockholder's exchange of its shares of Intimate Brands
common stock for shares of Limited common stock in the offer or the
merger.
. To the extent that a holder of Intimate Brands common stock receives
cash instead of a fractional share of Limited common stock, the holder
will be required to recognize gain or loss, measured by the difference
between the amount of cash received instead of that fractional share and
the portion of the tax basis of that holder's shares of Intimate Brands
common stock allocable to that fractional share of Limited common stock.
This gain or loss will be capital gain or loss, and will be long-term
capital gain or loss if the holding period for the share of Intimate
Brands common stock is more than one year as of the expiration date for
the offer or the effective time of the merger, as applicable.
. A holder of Intimate Brands common stock will have a tax basis in the
Limited common stock received in the offer or the merger equal to (1)
the tax basis of Intimate Brands common stock surrendered by that
holder, less (2) any tax basis of the Intimate Brands common stock
surrendered that is allocable to any fractional share of Limited common
stock for which cash is received.
44
. The holding period for shares of Limited common stock receivedissued in exchange for shares of Intimate Brands common stockany old debentures, if at that time any stop order shall be threatened or in effect with respect to the exchange offer to which this prospectus relates or the merger will includequalification of the holding periodindenture under the Trust Indenture Act.
Exchange Agent
The Bank of New York has been appointed as the exchange agent for the sharesexchange offer. All executed letters of Intimate Brands
common stock surrendered in the merger.
The exchange agent willtransmittal should be required to withhold 30% of any cash payment to
which an Intimate Brands stockholder is entitled pursuant to the offer or the
merger, unless such stockholder provides the stockholder's tax identification
number (social security number or employer identification number) and certifies
that such number is correct, or unless an exemption from backup withholding
applies. Each holder of Intimate Brands stock will need to complete and sign
the form W-9 that will be included in the transmittal letter to avoid backup
withholding, unless the holder can establish in a manner satisfactorydirected to the exchange agent that an exemption applies.
The foregoing discussion is intended to provide only a general summaryat one of the material federal income tax consequencesaddresses set forth below. Questions and requests for assistance, requests for additional copies of this prospectus or of the offerletter of transmittal and requests for notices of guaranteed delivery should be directed to the merger,exchange agent, addressed as follows:
25
Deliver To:
The Bank of New York, Exchange Agent
101 Barclay St., Floor 8 West
New York, New York 10286
Attn:
Facsimile Transmissions:
To Confirm by Telephone
or for Information:
Delivery to an address other than as listed above or transmission of instructions via facsimile other than as listed above does not constitute a valid delivery.
Fees and Expenses
The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telephone or in person by our officers, regular employees and affiliates. We will not a complete analysispay any additional compensation to any of our officers and employees who engage in soliciting tenders. We will not make any payment to brokers, dealers, or description of all potential federal income tax
consequencesothers soliciting acceptances of the offer andexchange offer. However, we will pay the merger. This discussion does not address tax
consequences that may vary with, or are contingent on, individual
circumstances. In addition, it does not address any non-income tax or any
foreign, state, or local tax consequences of the offer and the merger.
Accordingly, The Limited urges each Intimate Brands stockholder to consult his
or her own tax advisor to determine the particular United States federal, state
or local or foreign income or other tax consequences to him or her of the offer
and the merger.
45
CERTAIN EFFECTS OF THE OFFER; EXCHANGE ACT REGISTRATION
Following the completion of the offer but before the completion of the
merger, the liquidity and market value of the remaining shares of Intimate
Brands common stock held by the public and the rights of the holders of those
shares may be adversely affected.
The shares of Intimate Brands common stock are currently traded on the NYSE.
Depending on the number of shares of Intimate Brands Class A common stock
exchanged pursuant to the offer, the shares of Intimate Brands Class A common
stock may no longer meet the requirements of the NYSE for continued listing.
For example, published guidelines of the NYSE indicate that the NYSE would
consider delisting the outstanding shares of Intimate Brands Class A common
stock if, among other things, (i) the number of publicly held shares of
Intimate Brands Class A common stock (exclusive of the holdings of directors,
officers, and members of their immediate families and other concentrated
holdings of 10 percent or more) should fall below 600,000, (ii) the number of
record holders of 100 or more shares of Intimate Brands Class A common stock
should fall below 1,200 or (iii) the aggregate market value of publicly held
shares should fall below $5 million. As of January 30, 2002, there were
80,085,683 shares of Intimate Brands Class A common stock outstanding, held by
4,156 holders of record.
If the shares of Intimate Brands common stock are delisted from the NYSE,
the market for them could be adversely affected. It is possible that shares of
Intimate Brands common stock would be traded on other securities exchanges or
in the over-the-counter market, and that price quotations would be reported by
such exchanges, or through the National Association of Securities Dealers,
Inc., Automated Quotations System or by other sources. The extent of the public
market for Intimate Brands shares and the availability of such quotations
would, however, depend upon the number of holders and/or the aggregate market
value of the shares of Intimate Brands common stock remaining at such time, the
interest in maintaining a market in the shares of Intimate Brands common stock
on the part of securities firms, the possible termination of registration of
shares of Intimate Brands common stock under the Exchange Act, as described
below, and other factors.
Shares of Intimate Brands common stock are "margin securities" under the
regulations of the Federal Reserve Board, which has the effect, among other
things, of allowing brokers to extend credit on the collateral of such shares.
Depending on factors similar to those described above with respect to listing
and market quotations, following consummation of the offer the shares of
Intimate Brands common stock may no longer constitute "margin securities" for
the purposes of the Federal Reserve Board's margin regulations, in which event
the shares of Intimate Brands common stock would not be eligible to be used as
collateral for margin loans made by brokers.
Intimate Brands common stock is currently registered under the Exchange Act.
Intimate Brands may terminate that registration upon application to the SEC if
the outstanding shares of Intimate Brands common stock are not listed on a
national securities exchange and if there are fewer than 300 holders of record
of shares of Intimate Brands common stock. Termination of registration of
Intimate Brands common stock under the Exchange Act would reduce the
information Intimate Brands must furnish its stockholders and to the SEC and
would make certain provisions of the Exchange Act, such as the short-swing
profit recovery provisions of Section 16(b) and the requirement of furnishing a
proxy statement in connection with stockholders' meetings pursuant to Section
14(a) and the related requirement of furnishing an annual report to
stockholders, no longer applicable with respect to the shares. Furthermore, the
ability of "affiliates" of Intimate Brands and persons holding "restricted
securities" of Intimate Brands to dispose of such securities pursuant to Rule
144 under the Securities Act may be impaired or eliminated. If registration of
the shares of Intimate Brands common stock under the Exchange Act were
terminated, the shares of Intimate Brands common stock would no longer be
eligible for NYSE reporting or for continued inclusion on the Federal Reserve
Board's list of "margin securities."
After the completion of the merger, shares of Intimate Brands common stock
will no longer be publicly traded or listed on any stock exchange. In addition,
the registration of the Intimate Brands shares and the related reporting
obligations under the Exchange Act will be terminated upon application to the
SEC.
46
FEES AND EXPENSES
We have retained Goldman, Sachs & Co. and Banc of America Securities LLC to
act as co-dealer managers in connection with the offer and to provide certain
financial advisory services in connection with the offer and the merger.
Goldman Sachs and Banc of America Securities will receive customary
compensation for such services and will be reimbursed for reasonable
out-of-pocket expenses incurred in performing its services, including
reasonable fees and expenses for legal counsel. We have agreed to indemnify
Goldman Sachs and Banc of America Securities and related persons and entities
against liabilities in connection with its services, including liabilities
under the federal securities laws.
We have retained D.F. King & Co., Inc. to act as information agent in
connection with the offer. The information agent may contact Intimate Brands
stockholders by mail, telephone, fax, electronic mail and personal interviews
and may request brokers, dealers and other nominee stockholders to forward the
offer materials to beneficial owners of shares of Intimate Brands common stock.
D.F. King & Co. will be paid reasonable and customary fees for such services,
plus reimbursement of reasonable out-of-pocket expenses, and we will indemnify
D.F. King & Co. against certain liabilities and expenses in connection with the
offer, including liabilities under federal securities laws.
In addition, we have retained EquiServe Trust Company, N.A. as exchange
agent. We will pay EquiServe Trust Company reasonable and customary
compensation for its services in connection with the offer and the merger, will reimburse it for its reasonable out-of-pocket expenses and will indemnify it
against certain liabilities and expenses in connection with the offer,
including liabilities under federal securities laws.
ACCOUNTING TREATMENT
The Limited's acquisition of the Intimate Brands minority interest through
the offer and merger will be accountedexchange offer.
Transfer Taxes
Holders who tender their old debentures for using the purchase method of
accounting, as prescribed by Statement of Financial Accounting Standards
("SFAS") No. 141, "Business Combinations." Accordingly, the purchase price will
be allocated to the minority interest portion of the estimated fair value of
identifiable net assets acquired. Any excess purchase price remaining after
this allocation will be accounted for as goodwill, whichexchange will not be amortized.
47
RELATIONSHIP BETWEEN INTIMATE BRANDS AND THE LIMITED
The Limited, through IB Holdings, owns 100%obligated to pay any transfer taxes in connection therewith, except that holders who instruct us to register new debentures in the name of, or request that old debentures not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax thereon.
Resale of the outstanding Class B
common stock of Intimate Brands, which currently represents approximately 93.9%New Debentures
Under existing interpretations of the combined voting powerstaff of the Intimate Brands' outstanding common stock.
Each share of Class B common stock is convertible, atSEC contained in several no-action letters to third parties, the new debentures would in general be freely transferable after the exchange offer without further registration under the Securities Act. The Limited's option at
any time, into one share of Class A common stock of Intimate Brands. By virtue
of its ownership of Class B common stock, The Limited currently owns
approximately 83.7% of Intimate Brands' Class A common stock.
Relationship of Directors and Executive Officers of Intimate Brands with The
Limited
Leslie H. Wexner, Chairman ofrelevant no-action letters include the Board and Chief Executive Officer of
Intimate Brands also serves as Chairman of the Board and Chief Executive
Officer of The Limited. In addition, as of December 31, 2001, Mr. Wexner owned
130,657 shares of Class A common stock and options exercisable within 60 days
to acquire 210,000 shares of Class A common stock of Intimate Brands. Mr.
Wexner also owned 74,671,857 shares of Limited common stock and options
exercisable within 60 days to acquire 2,454,232 shares of Limited common stock.
E. Gordon Gee and Donald Shackelford, directors of Intimate Brands, also
serve as directors of The Limited. Dr. Gee and Mr. Shackelford are the sole
members of the compensation committee of the Intimate Brands Board of Directors
as well as the sole members of the compensation committee of The Limited Board
of Directors.
As of December 31 2001, Dr. Gee owned 5,928 shares of Class A common stock
and options exercisable within 60 days to acquire 10,975 shares of Class A
common stock of Intimate Brands. Dr. Gee also owned 6,011 shares of Limited
common stock and options exercisable within 60 days to acquire 9,026 shares of
Limited common stock.
As of December 31, 2001, Mr. Shackelford owned 14,442 shares of Class A
common stock and options exercisable within 60 days to acquire 10,975 shares of
Class A common stock of Intimate Brands. Mr. Shackelford also owned 108,195
shares of Limited common stock and options exercisable within 60 days to
acquire 9,026 shares of Limited common stock.
Leonard A. Schlesinger, an executive officer of Intimate Brands, also serves
as Executive Vice President and Chief Operating Officer of The Limited. In
addition, as of December 31, 2001, Mr. Schlesinger owned 1,000 shares of Class
A common stock of Intimate Brands. Mr. Schlesinger also owned 22,231 shares of
Limited common stock and options exercisable within 60 days to acquire 112,483
shares of Limited common stock.
In addition, as of December 31, 2001, the following directors and executive
officers of The Limited beneficially own shares of Intimate Brands common
stock: Daniel P. Finkelman, an executive officer of The Limited, owned 4,676
shares of Class A common stock of Intimate Brands; V. Ann Hailey, an executive
officer of The Limited, owned 4,400 shares of Class A common stock of Intimate
Brands; Alex Shumate, a director of The Limited, owned 3,762 shares of Class A
common stock and options exercisable within 60 days to acquire 7,299 shares of
Class A common stock of Intimate Brands; Martin Trust, a director of The
Limited, owned 18,528 shares of Class A common stock of Intimate Brands; and
Raymond Zimmerman, a director of The Limited, owned 3,506 shares of Class A
common stock of Intimate Brands.
Roger D. Blackwell, a director of Intimate Brands, owns 13,600 shares of
Limited common stock according to Intimate Brands' proxy statement filed withExxon Capital Holdings Corporation letter, which was made available by the SEC on April 20, 2001.
Beth M. Pritchard, a director13, 1988, and the Morgan Stanley & Co. Incorporated letter, made available on June 5, 1991.
However, any purchaser of Intimateold debentures who is an “affiliate” of Limited Brands also serves as Presidentor who intends to participate in the exchange offer for the purpose of distributing the new debentures
(1) will not be able to rely on the interpretation of the staff of the SEC,(2) will not be able to tender its old debentures in the exchange offer andChief Executive Officer(3) must comply with the registration and prospectus delivery requirements ofBath & Body Works, Inc., a subsidiarythe Securities Act in connection with any sale or transfer ofIntimate Brands, and her compensationthe debentures unless that sale or transfer isultimately determinedmade using an exemption from those requirements.
By executing, or otherwise becoming bound by, the compensation committeeletter of transmittal each holder of the Intimate Brands Board, whichold debentures will represent that:
(1) it iscomprisednot our “affiliate;”(2) any new debentures to be received by it were acquired in the ordinary course ofDr. Geeits business; andMr. Shackelford, as 48stated above.
26
(3) it has no arrangement or understanding with any person to participate, and is not engaged in and does not intend to engage, in the “distribution,” within the meaning of the Securities Act, of the new debentures.
In addition, according to Intimate Brands' proxy statement filedin connection with any resales of new debentures, any broker-dealer participating in the SEC on April 20, 2001, Ms. Pritchard owns 159,857 sharesexchange offer who acquired debentures for its own account as a result of Class A
common stock and options exercisable within 60 days to acquire 495,254 shares
of Class A common stock of Intimate Brands. Ms. Pritchard also owns 28,677
shares of Limited common stock.
Grace A. Nichols,market-making or other trading activities must deliver a director of Intimate Brands, also serves as President
and Chief Executive Officer of Victoria's Secret Stores, Inc., a subsidiary of
Intimate Brands, and her compensation is ultimately determined byprospectus meeting the compensation committeerequirements of the Intimate Brands Board,Securities Act. The SEC has taken the position in the Shearman & Sterling no-action letter, which is comprised of Dr.
Gee and Mr. Shackelford, as stated above. In addition, according to Intimate
Brands' proxy statement filed with the SECit made available on April 20, 2001, Ms. Nichols owns
219,498 shares of Class A common stock and options exercisable within 60 days
to acquire 360,504 shares of Class A common stock of Intimate Brands. Ms.
Nichols also owns 51,085 shares of Limited common stock and options exercisable
within 60 days to acquire 25,934 shares of Limited common stock.
Tracey Thomas Travis serves as Chief Financial Officer of Intimate Brands
and her compensation is ultimately determined by the compensation committee of
the Intimate Brands Board, which is comprised of Dr. Gee and Mr. Shackelford,
as stated above.
Except as set forth in thisJuly 2, 1993, that participating broker-dealers may fulfill their prospectus neither we nor, to the best of our
knowledge, any of our directors, executive officers or other affiliates (a) has
any contract, arrangement, understanding or relationship with any other persondelivery requirements with respect to any securitiesthe new debentures, other than a resale of Intimate Brands, including, but not limited
to, any contract, arrangement, understanding or relationship concerningan unsold allotment from the transfer or the voting of any securities of Intimate Brands, joint ventures,
loan or option arrangements, puts or calls, guaranties of loans, guaranties
against loss, or the giving or withholding of proxies, (b) has engaged in
contacts, negotiations or transactions with Intimate Brands or its affiliates
concerning a merger, consolidation, acquisition, tender offer or other
acquisition of securities, election of directors or aoriginal sale or other transfer of
a material amount of assets or (c) has had any other transaction with Intimate
Brands or any of its executive officers, directors or affiliates that would
require disclosure under the rules and regulations of the SEC applicableold debentures, with the prospectus contained in the exchange offer registration statement. Under the registration rights agreement, we are required to the
offer. Except for the shares of Intimate Brands common stock that we or our
affiliates own as disclosed inallow participating broker-dealers and other persons, if any, subject to similar prospectus delivery requirements to use this prospectus neither we nor any of our
affiliates beneficially own any Intimate Brands sharesas it may be amended or have effected any
transaction in the shares within the past 60 days.
Intercompany Arrangements
Intimate Brands' relationship with The Limited is governed, in part, by
agreements entered intosupplemented from time to time, in connection with the initial public offeringresale of Intimate Brandsnew debentures.
27
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER
A holder’s exchange of old debentures for new debentures in October 1995, includingthe exchange offer will not be a services agreement,taxable exchange for United States federal income tax purposes. A holder exchanging an old debenture for a corporate
agreement, lease agreements, shared facilities agreementsnew debenture in the exchange offer will have the same adjusted basis and holding period in the new debenture as in the old debenture immediately before the exchange.
Each broker-dealer that receives new debentures for its own account in the exchange offer must acknowledge that it will deliver a tax-sharing
agreement. The following description is a summary of the material terms of
these agreements which was included in Intimate Brands' proxy statement filed
with the SEC on April 20, 2001. Because the following description is only a
summary, it is not necessarily complete and is qualified in its entirety by
reference to the relevant agreements. Copies of the forms of agreements were
filed with the SEC as exhibits to Intimate Brands' registration statement filedprospectus in connection with its initial public offering, and are available for
inspection at the SEC. See "Where You Can Find More Information."
Services Agreement. Intimate Brands and The Limited are partiesany resale of new debentures. This prospectus, as it may be amended or supplemented from time to an
intercompany services and operating agreementtime, may be used by a broker-dealer in connection with respect to services provided
by The Limited (or subsidiariesresales of The Limited) to Intimate Brands. The
services provided by The Limited to Intimate Brands include, among other
things, certain accounting, aircraft, associate benefit plan administration,
audit, cash management, corporate development, corporate secretary,
governmental affairs, human resources and compensation, import and shipping,
information systems, international expansion, investor and public relations,
legal, real estate, risk management, store design/planning, tax and treasury
services. The services agreement provides that such services are to be providednew debentures received in exchange for fees which (based on current costs for such services) we
believe do not exceed fees that would be
49
paid if such servicesold debentures where old debentures were provided by independent third parties. Under the
services agreement, the fees for services provided by us to Intimate Brands
during 2000 were approximately $134,636,000.
In addition to the identified services, during fiscal 2000, we continued
coverage of Intimate Brands under our umbrella liability, property, casualty
and fiduciary insurance policies. Intimate Brands reimburses us for the portion
of our premium cost with respect to such insurance that is attributable to
coverage of Intimate Brands. Either we or Intimate Brands may terminate this
coverage under our policies at any time upon prior written notice during the 90
days prior to the anniversary date of the policy, provided that termination of
coverage by Intimate Brands may only be for nonpayment and only if a
replacement policy, acceptable to us, is entered into by Intimate Brands.
The services agreement further provides for eligible associates of Intimate
Brands to participate in our associate benefit plans. In addition to a monthly
services fee, Intimate Brands reimburses us for our costs (including any
contributions and premium costs and including certain third-party expenses and
allocations of certain personnel expenses of The Limited) relating to
participation by Intimate Brands' associates in any of our benefit plans.
The services agreement has an initial term of five years (commencing on
October 23, 1995) and is renewed automatically thereafter for successive
one-year terms, unless either Intimate Brands or The Limited elects not to
renew the services agreement. The services agreement may be terminated at any
time by either party upon six months' written notice. Furthermore, the
agreement is subject to early termination by either Intimate Brands or The
Limited upon six months' written notice if we cease to own shares of Intimate
Brands common stock representing more than 50% of the combined voting power of
the common stock of Intimate Brands.
Lease Agreements. The businesses operated by Intimate Brands entered into
lease agreements with The Limited or one or more subsidiaries of The Limited.
Under these lease agreements, The Limited, directly or indirectly, leased to
the relevant businesses of Intimate Brands a distribution center and
headquarters office space. The lease agreements provide for the lessee to lease
space at a base annual rental rate equal to $16.15 per square foot, in the case
of office space, and $4.35 per square foot, in the case of the distribution
centers, subject to adjustment based on the consumer price index every year.
Intimate Brands paid The Limited (or subsidiaries of The Limited) approximately
$14,096,000 in lease payments during 2000.
The lease agreements have an initial term of fifteen years (commencing on
January 31, 1999) and will be renewed automatically thereafter for three
successive five-year terms unless either the lessor or lessee (or sublessor or
sublessee) elects not to renew the applicable lease agreement upon at least one
year's notice.
Shared Facilities Agreements. Certain businesses operated by Intimate
Brands and certain businesses operated by The Limited entered into shared
facilities agreements pursuant to which the relevant businesses operated by
Intimate Brands sub-leased facilities from the relevant businesses operated by
The Limited. Under the Shared Facilities Agreement, the sublessee is
responsible for its pro rata share (based on square feet occupied) of all costs
and expenses (principally fixed rent) under the relevant lease, plus the
portion of any performance-based rent attributable to the sublessee. In 2000,
Intimate Brands paid The Limited approximately $31,707,000 for the portion of
the cost and expenses attributable to it under the relevant leases.
Tax-Sharing Agreement. Intimate Brands is included in The Limited's federal
consolidated income tax group and Intimate Brands' federal income tax liability
is included in the consolidated federal income tax liability of The Limited and
its subsidiaries. In certain circumstances, certain subsidiaries of Intimate
Brands are also included with certain subsidiaries of The Limited (other than
subsidiaries of Intimate Brands) in combined, consolidated or unitary income
tax groups for state and local tax purposes. Intimate Brands and The Limited
entered into a tax-sharing agreement pursuant to which Intimate Brands and The
Limited make payments between them such that, with respect to any period, the
amount of taxes to be paid by Intimate Brands, subject to certain adjustments,
will be determined as though Intimate Brands were to file separate federal,
state and local
50
income tax returns (including, except as provided below, any amounts determined
to be dueacquired as a result of market-making activities or other trading activities. We have agreed that, for a redeterminationperiod of six months after the tax liability of The Limited
arising from an auditexpiration date, we will make this prospectus, as amended or otherwise) as the common parent of an affiliated group
of corporations filing combined, consolidated or unitary (as applicable)
federal, state and local returns rather than a consolidated subsidiary of The
Limited with respect to federal, state and local income taxes. Intimate Brands
will be reimbursed, however, for tax attributes that it generates, such as net
operating losses, if and when they are used on a consolidated basis.
In determining the amount of tax-sharing payments under the tax-sharing
agreement, The Limited prepares for Intimate Brands pro forma returns with
respect to federal and applicable state and local income taxes that reflect the
same positions and elections used by The Limited in preparing the returns for
The Limited's consolidated group and other applicable groups. The Limited
continues to have all the rights of a parent of a consolidated group (and
similar rights provided for by applicable state and local law with respect to a
parent of a combined, consolidated or unitary group), is the sole and exclusive
agent for Intimate Brands in any and all matters relating to the income,
franchise and similar tax liabilities of Intimate Brands, is solely and
exclusively responsible for the preparation and filing of consolidated federal
and consolidated or combined state income tax returns (or amended returns), and
has the power, in its sole discretion, to contest or compromise any asserted
tax adjustment or deficiency and to file, litigate or compromise any claim for
refund on behalf of Intimate Brands. In addition, The Limited provides the
aforementioned services with respect to Intimate Brands' separate state and
local returns and Intimate Brands' foreign returns. Under the tax-sharing
agreement, Intimate Brands must pay The Limited a fee intended to reimburse The
Limited for all direct and indirect costs and expenses incurred with respect to
Intimate Brands' share of the overall costs and expenses incurred by The
Limited with respect to tax-related services.
In general, Intimate Brands will be included in The Limited's consolidated
group for federal income tax purposes for so long as The Limited beneficially
owns at least 80% of the total voting power and value of the outstanding
Intimate Brands common stock. Each member of a consolidated group is jointly
and severally liable for the federal income tax liability of each other member
of the consolidated group. Accordingly, although the tax-sharing agreement
allocates tax liabilities between Intimate Brands and The Limited, during the
period in which Intimate Brands is included in The Limited's consolidated
group, Intimate Brands could be liable in the event that any federal tax
liability is incurred, but not discharged, by any other member of The Limited's
consolidated group.
Corporate Agreement. Intimate Brands and The Limited are parties to a
corporate agreement under which Intimate Brands granted to The Limited a
continuing option, transferablesupplemented, available to any broker-dealer for use in connection with any resale of its subsidiaries, to purchase, under
certain circumstances, additional shares of Intimate Brands Class B common
stock or shares of nonvoting capital stock of Intimate Brands. This corporate
agreement further provides that, upon the request of The Limited, Intimate
Brands will use its best efforts to register under the applicable federal and
state securities laws any of the shares of Class B common stock and nonvoting
capital stock (and any other securities issued in respect of ornew debentures received by it in exchange for either) held by The Limited for saleold debentures. In addition, until _____, 2003, all dealers effecting transactions in accordance with The Limited's intended
method of disposition thereof, and will take such other actions asthe new debentures may be necessaryrequired to permit the sale thereof in other jurisdictions, subject to certain
limitations specified in the corporate agreement. Intimate Brands will pay all
out-of-pocket costs and expenses relating to each such registration that The
Limited requests or in which The Limited participates. The corporate agreement
also restricts Intimate Brands from taking certain actions for so long as The
Limited maintains beneficial ownership ofdeliver a majority of the number of
outstanding shares of Intimate Brands common stock.
51
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTSprospectus.
We are providing the following unaudited pro forma consolidated financial
statements to give you a better picture of what the results of operations and
financial position of The Limited might have been had the offer and the merger
been completed at an earlier date. The unaudited pro forma consolidated
statements of income for the thirty-nine weeks ended November 3, 2001 and for
the fiscal year ended February 3, 2001 give effect to the offer and the merger
as if they had been completed on January 30, 2000. The unaudited pro forma
consolidated balance sheet as of November 3, 2001 gives effect to the offer and
the merger as if they had been completed on that date.
The Limited's acquisition of the Intimate Brands minority interest in the
offer and the merger will be accounted for using the purchase method of
accounting, as prescribed by SFAS No. 141, "Business Combinations."
Accordingly, the purchase price will be allocated to the minority interest
portion of the estimated fair value of identifiable net assets acquired. Any
excess purchase price remaining after this allocation will be accounted for as
goodwill, which will not be amortized.
We have prepared these unaudited pro forma consolidated financial statements
based on available information, using assumptions that The Limited's management
believes are reasonable. These unaudited pro forma consolidated financial
statements are being providedreceive any proceeds from any sale of new debentures by broker-dealers. New debentures received by broker-dealers for informational purposes only. They do not
purport to represent The Limited's actual financial position or results of
operations had the offer and the merger occurred on the dates specified nor do
they project The Limited's results of operations or financial position for any
future period or date.
The unaudited pro forma consolidated statements of income do not reflect any
adjustments for nonrecurring items or operating synergies arising as a result
of the offer and the merger. The Limited currently expects to incur a one-time,
after-tax non-cash charge of approximately $20.4 million relatingtheir own account pursuant to the exchange of vested Intimate Brands stock awards in connection with the offer
and the merger that is not reflected in the unaudited pro forma consolidated
financial statements. See "--Notes to Unaudited Pro Forma Consolidated
Financial Statements." In addition, pro forma adjustments are based on certain
assumptions and other information that are subject to change as additional
information becomes available. Accordingly, the adjustments included in The
Limited's financial statements published after the completion of the offer and
the merger will vary from the adjustments included in the unaudited pro forma
consolidated financial statements included in this prospectus.
The unaudited pro forma consolidated financial statements should be read in
conjunction with The Limited's and Intimate Brands' audited and unaudited
historical financial statements and related notes, as well as "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
incorporated by reference into this prospectus. See "Where You Can Find More
Information."
52
THE LIMITED, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
At November 3, 2001
---------------------------------------------
Pro Forma
Historical Adjustments(1) Pro Forma
---------- -------------- ----------
ASSETS
Current assets:
Cash and equivalents................... $ 317,867 $ 317,867
Accounts receivable.................... 127,152 127,152
Inventories............................ 1,343,329 1,343,329
Other.................................. 304,605 304,605
---------- ----------
Total current assets...................... 2,092,953 2,092,953
Property and equipment, net............... 1,391,215 $ 8,000 (2a) 1,399,215
Deferred income taxes..................... 79,433 (79,433)(2c) --
Other assets.............................. 593,140 1,506,953 (2a) 2,100,093
---------- ---------- ----------
Total assets.............................. $4,156,741 $1,435,520 $5,592,261
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable....................... $ 386,772 $ 386,772
Current portion of long-term debt...... 150,000 150,000
Accrued expenses....................... 550,113 $ 14,000 (2a) 564,113
Income taxes........................... 13,847 13,847
---------- ---------- ----------
Total current liabilities................. 1,100,732 14,000 1,114,732
Long-term debt............................ 250,000 (1,950)(2b) 248,050
Deferred income taxes..................... -- 69,456 (2c) 69,456
Other long-term liabilities............... 235,581 (4,000)(2a) 231,581
Minority interest......................... 142,355 (142,355)(2a) --
Stockholders' equity:
Common stock........................... 216,096 41,885 (2d) 257,981
Paid-in capital........................ 60,923 1,518,942 (2d),(2e) 1,579,865
Retained earnings...................... 2,253,657 (20,390)(2e) 2,233,267
---------- ---------- ----------
2,530,676 1,540,437 4,071,113
Less: treasury stock, at average cost.. (102,603) (40,068)(2e) (142,671)
---------- ---------- ----------
Total stockholders' equity................ 2,428,073 1,500,369 3,928,442
---------- ---------- ----------
Total liabilities and stockholders' equity $4,156,741 $1,435,520 $5,592,261
========== ========== ==========
The accompanying notes are an integral part of these unaudited pro forma
consolidated financial statements.
53
THE LIMITED, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
For the Fiscal Year Ended February 3, 2001
-----------------------------------------
Pro Forma
Historical Adjustments (1) Pro Forma
----------- --------------- -----------
Net sales........................................... $10,104,606 $10,104,606
Costs of goods sold, buying and occupancy costs..... (6,667,389) $ (4,120)(3a) (6,671,509)
----------- -------- -----------
Gross income........................................ 3,437,217 (4,120) 3,433,097
General, administrative and store operating expenses (2,561,201) (17,993)(3b) (2,580,207)
(1,013)(3a)
Special and nonrecurring items, net................. (9,900) (9,900)
----------- -------- -----------
Operating income.................................... 866,116 (23,126) 842,990
Interest expense.................................... (58,244) (93)(3c) (58,337)
Other income, net................................... 20,378 20,378
Minority interest................................... (69,345) 69,345 (3d) --
----------- -------- -----------
Income before income taxes.......................... 758,905 46,126 805,031
Income tax expense (benefit)........................ 331,000 (9,000)(3e) 322,000
----------- -------- -----------
Net income.......................................... $ 427,905 $ 55,126 $ 483,031
=========== ======== ===========
Net income per share:
Basic............................................ $ 1.00 $ 0.95
Diluted.......................................... $ 0.96 $ 0.91
Dividends per share................................. $ 0.30 $ 0.30
Basic weighted average shares outstanding........... 427,604 82,517 (3f) 510,121
Diluted weighted average shares outstanding......... 443,048 89,056 (3f) 532,104
The accompanying notes are an integral part of these unaudited pro forma
consolidated financial statements.
54
THE LIMITED, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
For the Thirty-nine Weeks Ended November 3, 2001
---------------------------------------------
Pro Forma
Historical Adjustments(1) Pro Forma
----------- -------------- -----------
Net sales........................................... $ 6,225,440 $ 6,225,440
Costs of goods sold, buying and occupancy costs..... (4,296,341) $ (3,090)(3a) (4,299,431)
----------- -------- -----------
Gross income........................................ 1,929,099 (3,090) 1,926,009
General, administrative and store operating expenses (1,805,868) (13,495)(3b) (1,820,123)
(760)(3a)
Special and nonrecurring item....................... 170,000 170,000
----------- -------- -----------
Operating income.................................... 293,231 (17,345) 275,886
Interest expense.................................... (25,370) (70)(3c) (25,440)
Other income, net................................... 15,682 15,682
Minority interest................................... (15,253) 15,253 (3d) --
Gains on sale of stock by investees................. 62,102 62,102
----------- -------- -----------
Income before income taxes.......................... 330,392 (2,162) 328,230
Income tax expense (benefit)........................ 138,000 (8,000)(3e) 130,000
----------- -------- -----------
Net income.......................................... $ 192,392 $ 5,838 $ 198,230
=========== ======== ===========
Net income per share:
Basic............................................ $ 0.45 $ 0.39
Diluted.......................................... $ 0.44 $ 0.38
Dividends per share................................. $ 0.225 $ 0.225
Basic weighted average shares outstanding........... 427,506 83,535 (3f) 511,041
Diluted weighted average shares outstanding......... 434,772 86,692 (3f) 521,464
The accompanying notes are an integral part of these unaudited pro forma
consolidated financial statements.
55
THE LIMITED, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The following summary of pro forma adjustments is based on available
information and certain estimates and assumptions. Therefore, the actual
adjustments will differ from the pro forma adjustments. The Limited believes
that such assumptions provide a reasonable basis for presenting the significant
effects of the offer and merger and that the pro forma adjustments give
appropriate effect to those assumptions and are properly applied in the
Statements.
The Limited has accounted for the offer and the merger in accordance with
the requirements of SFAS No. 141, "Business Combinations." Accordingly, The
Limited recognized certain intangible assets acquired separately from goodwill,
which represents the excess of the purchase price over the minority interest
portion of the estimated fair value of identifiable net assets acquired. In
accordance with the provisions of SFAS No. 142, "Goodwill and Other Intangible
Assets," goodwill will not be amortized. Additionally, trademarks, tradenames,
and Internet domain names have been determined to have indefinite lives and
will not be amortized. These assets will be reviewed for impairment in
accordance with the provisions of SFAS No. 142.
Beginning in fiscal 2002 and in accordance with SFAS No. 142, The Limited
will no longer record amortization on its pre-existing goodwill. Goodwill
amortization expense for the thirty-nine weeks ended November 3, 2001 and the
fiscal year ended February 3, 2001 was $2.3 million and $3.0 million,
respectively. This change in expense is not reflected in the Unaudited Pro
Forma Consolidated Statements of Income.
Amounts for The Limited were derived from the historical consolidated
financial statements of The Limited, incorporated herein by reference elsewhere
in this document.
2. Adjustments to the Unaudited Pro Forma Consolidated Balance Sheet
(a) The Unaudited Pro Forma Consolidated Balance Sheet gives effect to the
following transactions and events: (1) the issuance of Limited common stock
in exchange for all outstanding Intimate Brands Class A common stock; (2)
the allocation of the purchase price to the assets acquired and liabilities
assumed based on a preliminary estimate of their respective fair values at
November 3, 2001; (3) the elimination of the Intimate Brands minority
interest in The Limited's consolidated financial statements; (4) the
stockholders' equity impact of exchanging Intimate Brands stock awards for
Limited stock awards; and (5) the recognition of deferred income taxes,
which result from differences in the estimated fair value of net assets
acquired and liabilities assumed for financial reporting purposes and their
respective tax bases.
The market value of Limited common stock to be issued was based upon the
closing market price of $17.75 per share at February 4, 2002. The final
purchase price will be based on the market price of Limited common stock on
the dates of consummation of the offer and the merger.
56
THE LIMITED, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The estimated pro forma allocation of the purchase price is as follows (in
thousands):
Market value of Limited common stock to be issued.................................... $1,486,917
Fees and other direct costs of the offer and merger.................................. 14,000
----------
Total purchase price.............................................................. $1,500,917
----------
Minority interest portion of the estimated fair value of Intimate Brands identifiable
net assets acquired:
Trademarks, tradenames, and Internet domain names.................................... $ 406,250*
Customer relationships and lists..................................................... 4,050*
Property and equipment............................................................... 8,000
Store operating leases............................................................... 8,600*
Long-term debt....................................................................... 1,950
Deferred income taxes on book/tax basis differences in pro forma balance sheet....... (162,341)
Write-off of deferred rent........................................................... 4,000
Write-off of Intimate Brands' historical goodwill.................................... (10,446)*
Minority interest at November 3, 2001................................................ 142,355
----------
Estimated fair value of identifiable net assets acquired............................. $ 402,418
----------
Excess of purchase price over net assets acquired.................................... $1,098,499*
==========
-----
* These amounts are included as pro forma adjustments to 'Other Assets.'
(b) Represents the adjustment of Intimate Brands' long-term debt to fair value,
based on current rates available to The Limited for debt of similar
maturities.
(c) Represents the recognition of long-term deferred income taxes of $162.3
million associated with the allocation of the purchase price and the $13.5
million deferred income tax effect associated with the compensation costs
discussed in Notes 2(e) and 3(b). These adjustments were recorded using The
Limited's effective income tax rate of 39.75%. The adjustment also includes
the reclassification of The Limited's historical long-term deferred income
tax assets of $79.4 million to reflect the net pro forma long-term deferred
income tax liability.
(d) Reflects the issuance of an estimated 83.8 million shares of Limited common
stock, par value $0.50 per share. This is based on Intimate Brands Class A
common stock outstanding of 80.1 million shares at January 30, 2002 and
applying the exchange ratio of 1.046. The excess of the purchase price over
the par value of Limited common stock issued of $1.445 billion was recorded
as an adjustment to paid-in capital.
(e) The retained earnings adjustment represents the $20.4 million nonrecurring,
non-cash after-tax expense for fully vested stock awards discussed in Note
3(b) of the Pro Forma Consolidated Statements of Income. The adjustment to
paid-in capital includes both this charge and $40.1 million of deferred
compensation associated with unvested stock awards as discussed in Note
3(b). The treasury stock adjustment represents the unearned deferred
compensation associated with these unvested stock awards.
3. Adjustments to Unaudited Pro Forma Consolidated Statements of Income
(a) Adjusting Intimate Brands' property and equipment to their estimated fair
value will result in additional depreciation expense. Additionally, the
recognition of certain identifiable intangible assets and the
57
THE LIMITED, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
adjustment to the deferred rent liability will result in additional
amortization and other non-cash expense. The estimated additional
depreciation, amortization and other non-cash expense is as follows (in
thousands):
Non-Cash Expense
----------------------------
Average Year Ended Thirty-nine
Useful February 3, Weeks Ended
Adjustment Life 2001 November 3, 2001
---------- ------- ----------- ----------------
Customer relationships and lists $4,050 4 yrs. $1,013 $ 760
Property and equipment.......... 8,000 5 yrs. 1,600 1,200
Store operating leases.......... 8,600 5 yrs. 1,720 1,290
Deferred rent................... 4,000 5 yrs. 800 600
(b) In connection with the offer and merger, vested and unvested grants of
stock options and restricted stock of Intimate Brands common stock will be
exchanged for awards of stock options and restricted stock of The Limited's
common stock (collectively, the "awards"). The new awards will have the
same vesting provisions, option periods, aggregate intrinsic value, ratio
of exercise price per option to market value per share and other terms as
the Intimate Brands awards exchanged.
Based on Emerging Issues Task Force Issue No. 00-23 consensus views reached
in the last 18 months and Financial Accounting Standards Board
Interpretation No. 44, issued in March, 2000, the exchange of the Intimate
Brands awards for Limited awards as described in the preceding paragraph is
considered a modification of a stock-based compensation arrangement.
Accordingly, a new measurement of compensation cost will be required at the
date of the exchange. To the extent the exchanged awards are fully vested,
any additional compensation cost will be recognized immediately.
Based on the $17.75 closing market price of Limited common stock as of
February 4, 2002, the non-cash after-tax expense for fully vested awards
would be approximately $20.4 million, or $0.04 per diluted share. This
expense is excluded from the Pro Forma Consolidated Statements of Income, as
it is nonrecurring, but will be reflected in The Limited's historical
financial statements upon completion of the offer and the merger. The actual
non-cash expense recorded will be based on the market price of Limited
common stock at the time the awards are exchanged. If the market price
exceeds $17.75, the expense will increase. If the market price is lower, the
expense will decrease. Within a range of $15.00 to $21.00 per share, a $1.00
per share change in The Limited closing market price would have less than a
$3.5 million non-cash impact on net income, or less than $0.01 diluted
earnings per share.
An additional $40.1 million non-cash pre-tax compensation cost relating to
the exchange of unvested Intimate Brands awards for Limited awards will be
recorded as deferred compensation and will be recognized over the remaining
vesting period. Accordingly, the Pro Forma Consolidated Statements of Income
for the year ended February 3, 2001 and the thirty-nine weeks ended November
3, 2001 reflect additional pretax, non-cash compensation expense of $18.0
million and $13.5 million, respectively. These amounts were determined
assuming the exchange of unvested awards occurred at the beginning of the
related fiscal period, and based on the $17.75 market price of Limited
common stock as of February 4, 2002. Within a range of $15.00 to $21.00 per
share, a $1.00 per share change in The Limited closing market price at the
date of exchange of the unvested stock awards would have less than a $2
million non-cash impact on net income, or less than $0.01 diluted earnings
per share.
58
THE LIMITED, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Assuming the exchange of the stock awards occurred at the beginning of
fiscal 2001 at a $17.75 price for Limited common stock, the amount of
non-cash compensation expense is estimated as follows (in thousands):
Non-Cash Compensation Expense
Year Pre-Tax After-Tax
------- --------- -----------
2001 $17,993 $10,841
2002 16,228 9,777
2003 4,463 2,689
2004 1,289 777
2005 95 57
(c) Reflects the amortization expense of the fair value adjustment on long-term
debt using the straight-line method over the remaining term of 21 years.
(d) Represents minority interest in earnings of Intimate Brands for the period
presented.
(e) The assumed effective tax rate of the pro forma adjustments, excluding the
minority interest adjustment, is 40.0% and 39.75% for the year ended
February 3, 2001 and the thirty-nine weeks ended November 3, 2001,
respectively. The minority interest adjustment is net of tax, consistent
with the presentation of minority interest in the historical consolidated
financial statements.
(f) Reflects an adjustment for the conversion of Intimate Brands historical
weighted average Class A common stock outstanding for the periods presented
using an exchange ratio of 1.046 to 1.
59
COMPARISON OF LIMITED-INTIMATE BRANDS STOCKHOLDER RIGHTS
Because Intimate Brands and The Limited are both organized under the laws of
the State of Delaware, the differences in the rights of Intimate Brands
stockholders and the rights of The Limited stockholders arise solely from
differences in the organizational documents of Intimate Brands and The Limited,
rather than from differences of law. The following summary highlights material
differences between the current rights of holders of Intimate Brands common
stock and holders of Limited common stock. This summary does not purport to be
a complete discussion of the certificates of incorporation and by-laws of
Intimate Brands and The Limited and is qualified in its entirety by reference
to these documents. Copies of each company's certificate of incorporation and
by-laws have been filed with the SEC and will be sent to holders of Intimate
Brands common stock upon request. See "Where You Can Find More Information."
Summary of Material Differences Between Current Rights of Intimate Brands
Stockholders Exchanging their Shares of Intimate Brands Common Stock in the
Offer and Rights Those Stockholders Will Have as Stockholders of The Limited
Following the Offer
Intimate Brands Stockholder Rights Limited Stockholder Rights
---------------------------------------- -----------------------------------
Authorized Capital The authorized capital stock of Intimate The authorized capital stock of The
Stock: Brands is 2,255,000,000 shares, which Limited is 1,010,000,000 shares,
consists of: which consists of:
. 55,000,000 shares of preferred . 1,000,000,000 shares of
stock, $.01 par value per share, common stock, $.50 par
value per share, one vote
. 1,100,000,000 shares of Class per share, and
A common stock, $.01 par
value per share, one vote per . 10,000,000 shares of
share; and preferred stock, $1.00 par
value per share.
. 1,100,000,000 shares of Class
B common stock, $.01 par
value per share, three votes per
share.
60
Intimate Brands Stockholder Rights Limited Stockholder Rights
--------------------------------------- ---------------------------------------
Supermajority The approval of at least 75% of the The approval of at least 75% of the
Approvals: outstanding shares of common stock is outstanding shares of common stock
required for the following: is required for the following:
. Subject to Delaware law, any . Subject to Delaware law,
business combination of any proposal that The
Intimate Brands with or sale of Limited combine with, sell
a substantial part of Intimate substantially all its assets to
Brands' assets to any person or issue stock to any
that owns five percent or more corporation that beneficially
of the outstanding voting stock owns five percent or more
of Intimate Brands (provided of Limited voting stock.
that the 75% stockholder vote This provision does not
does not include any interested apply to "short-form"
parties). This provision does mergers under Delaware
not apply to "short-form" law.
mergers under Delaware law.
. Subject to Delaware law,
. Any amendment to the any business combination of
provisions of the Intimate The Limited with or sale of
Brands certificate of a substantial part of The
incorporation relating to: Limited's assets to any
person that owns 20% or
. the powers, preferences more of the outstanding
or special rights voting stock of The Limited
associated with the shares which has not been
of Class A common stock approved by the Limited
or Class B common stock board of directors (provided
(provided the approval of that the 75% stockholder
at least 75% of the vote does not include any
outstanding shares of the interested parties). This
class that would be provision does not apply to
adversely affected by the "short-form" mergers under
proposed amendment is Delaware law.
also obtained); and
. establishment of fiduciary
duties and conduct
guidelines for the officers
and directors of Intimate
Brands in connection
with matters involving
The Limited.
61
DESCRIPTION OF CAPITAL STOCK OF THE LIMITED
The following summary of the terms of Limited capital stock prior to, and
after completion of, the offer and the merger is not meant to be complete and
is qualified by reference to the charter and by-laws of The Limited. Copies of
the charter and by-laws are incorporated by reference and will be sent upon
request to stockholders of Intimate Brands common stock. See "Where You Can
Find More Information."
Authorized Capital Stock
Under our charter, our authorized capital stock consists of:
. 1,000,000,000 shares of common stock with $.50 par value,
. 10,000,000 shares of preferred stock with $1.00 par value, and
. On January 30, 2002, there were outstanding:
. 429,080,715 shares of Limited common stock;
. employee stock options to purchase an aggregate of approximately
30,311,896 shares of Limited common stock;
. no shares of Limited preferred stock.
Common Stock
Common Stock Outstanding. The outstanding shares of common stock are, and
the shares of common stock issued pursuant to the offer and the merger will be,
duly authorized, validly issued, fully paid and nonassessable.
Voting Rights. Each holder of common stock is entitled to one vote for each
share of common stock held of record on the applicable record date on all
matters submitted to a vote of stockholders. Holders of common stock do not
have cumulative voting rights.
Dividend Rights. Subject to the rights of any shares of preferred stock
which may at the time be outstanding, holders of common shares are entitled to
receive dividends as may be declaredsold from time to time by our Board of
Directors out of funds legally available therefor.
Rights upon Liquidation or Dissolution. In the event of liquidation or
dissolution, each share of common stock is entitled to share pro rata in any
distribution of our assets after payment or providing for the payment of
liabilities and the liquidation preference of any outstanding preferred stock.
Holders of our common stock have no preferential, preemptive, conversion or
redemption rights.
Preferred Stock
The following summary contains a description of some of the principal terms
of our preferred stock. The description of the principal provisions of
preferred stock does not purport to be complete and is subject to and qualified
in its entirety by reference to the applicable provisions of our certificate of
incorporation relating to each particular series of preferred stock.
Serial Preferred Stock. Under our charter, without further stockholder
action, our Board of Directors is authorized to provide for the issuance of up
to 10,000,000 shares of preferred stock. Preferred stock may be issued in one or more series, with such designations of titles, dividend rates, any
redemption provisions, special or relative rightstransactions in the eventover-the-counter market, in negotiated transactions, through the writing of liquidation,
dissolution, distributionoptions on the new debentures or winding-upa combination of The Limited,such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any sinking fund
provisions,such broker-dealer and/or the purchasers of any conversion provisions, any voting rights,such new debentures. Any broker-dealer that resells new debentures that were received by it for its own account pursuant to the exchange offer and any other
preferences, privileges, powers, rights, qualifications, limitationsbroker or dealer that participates in a distribution of such new debentures may be deemed to be an “underwriter” within the meaning of the Securities Act and restrictions as shall be set forth as and when established by our Board of
Directors.
62
The sharesany profit of any seriessuch resale of serial preferred stocknew debentures and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be when issued,
fully paiddeemed to admit that it is an “underwriter” within the meaning of the Securities Act.
For a period of six months after the expiration date, we will promptly send additional copies of this prospectus and nonassessable andany amendment or supplement to this prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders will have no preemptive rightsof the old debentures) other than commissions or concessions of any brokers or dealers or any taxes or other governmental charges in connection with a subsequent transfer or exchange of exchange debentures, and we will indemnify the preferred stock.
Blank Check Preferred Stock. Under our charter, our Board of Directors has
the authority, without stockholder approval, to create one or more classes or
series within a class of preferred stock, to issue shares of preferred stock in
such class or series up to the maximum number of sharesholders of the relevant class
or series of preferred stock authorized, and to determineold debentures (including any broker-dealers) against certain liabilities, including liabilities under the preferences,
rights, privileges and restrictions of any such class or series, including the
dividend rights, voting rights, the rights and terms of redemption, the rights
and terms of conversion, liquidation preferences, the number of shares
constituting any such class or series and the designation of such class or
series. Acting under this authority, our Board could create and issue a class
or series of preferred stock with rights, privileges or restrictions, and adopt
a stockholder rights plan, having the effect of discriminating against an
existing or prospective holder of securities as a result of such stockholder
beneficially owning or commencing a tender offer for a substantial amount of
Limited common stock. OneSecurities Act.
The validity of the effects of authorized but unissued and
unreserved shares of capital stock maynew debentures will be to render more difficult or
discourage an attemptpassed upon for us by a potential acquiror to obtain control of The Limited
by means of a merger, tender offer, proxy contest or otherwise, and thereby
protect the continuity of our management. The issuance of such shares of
capital stock may have the effect of delaying, deferring or preventing a change
in control of The Limited without any further action by the stockholders of The
Limited. The Limited has no present intention to adopt a stockholder rights
plan, but could do so without stockholder approval at any future time.
Transfer Agent and Registrar
EquiServe Trust Company, N.A. is the transfer agent and registrar for the
Limited common stock.
Stock Exchange Listing; Delisting and Deregistration of Intimate Brands Common
Stock
It is a condition to the offer that the shares of Limited common stock to be
issued in the offer and merger be approved for listing on the NYSE, subject to
official notice of issuance, under the symbol "LTD." If the offer is completed,
Intimate Brands common stock may cease to be listed on the NYSE and, if the
merger is completed, Intimate Brands common stock will cease to be listed on
the NYSE.
LEGAL MATTERS Davis Polk & Wardwell, special counsel to The Limited, will pass on the
validity of the Limited common stock to be issued to Intimate Brands
stockholders in the offer and the merger and on certain legal matters in
connection with the U.S. federal income tax consequences of the offer and the
merger.
New York, New York.
The financial statements incorporated in this Prospectus by reference to the Annual Report on Form 10-K of The Limited, Inc. for the year ended February 3,
20011, 2003 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.
The financial statements incorporated in this Prospectus by reference to the
Annual Report on Form 10-K of Intimate Brands, Inc. for the year ended February
3, 2001 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
63
SCHEDULE I
CERTAIN INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF THE LIMITED
The following table sets forth the name and the present principal
occupations or employment, and material occupations, positions, offices or
employment for the past five years of each director and executive officer of
The Limited. Unless otherwise indicated, positions held shown in the following
table are positions with The Limited. Except as set forth below, each such
person is a citizen of the United States of America. None of the listed
persons, during the past five years, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws. Except as otherwise noted, the current business address for each person
listed below is c/o The Limited, Inc., Three Limited Parkway, Columbus, Ohio,
43216.
Directors of The Limited
Present Principal Occupation or Employment and Material Positions
Name Held During the Past Five Years
- ---------------------- ---------------------------------------------------------------------------------------------------
Eugene M. Freedman Director since 1995. Mr. Freedman has been Senior Advisor and Director of Monitor Clipper
Two Canal Park Partners, Inc. ("Monitor Clipper"), a private equity firm, since January 2000. Since 2001, he has
Cambridge, MA 02141 been Senior Advisor of Monitor Company Group Limited Partnership, an international business
strategy and consulting firm. He was Managing Director and President of Monitor Clipper from
1997 to 1999 and Senior Advisor and Director of Monitor Company Inc. from 1995 to 2000. Until
October 1994, and for more than five years prior thereto, Mr. Freedman was a partner of Coopers
& Lybrand, where he served as Chairman and Chief Executive Officer of Coopers & Lybrand
LLP, U.S. ("C & L, U.S.") since October 1991 and as Chairman of Coopers & Lybrand,
International since 1992. During The Limited's 2000 fiscal year, the successor of C & L, U.S.,
PricewaterhouseCoopers LLP ("PwC"), served as The Limited's independent public accountants.
The amount of compensation paid by The Limited to PwC for such services was less than 1% of
The Limited's and PwC's consolidated gross revenues for their 2000 fiscal years. Mr. Freedman is
also a director of Bernard Technologies, Inc., e-Studio Live, Inc., JNet Enterprises, Inc., Outcome
Sciences, Inc., Pathmark Stores, Inc. and Wheelhouse Corporation.
E. Gordon Gee Director since 1991. Dr. Gee has been Chancellor of Vanderbilt University since August 1, 2000.
211 Kirkland Hall Dr. Gee was the President of Brown University from 1998 to 2000. Dr. Gee was also President of
Nashville, TN 37240 The Ohio State University from 1990 to 1997. Dr. Gee is a director of Allmerica Financial, Dollar
General Corporation, Hasbro, Inc., Intimate Brands and Massey Energy Company.
V. Ann Hailey Director since 2001. Ms. Hailey has been Executive Vice President and Chief Financial Officer of
The Limited since August 1997. Prior to joining The Limited, Ms. Hailey was Senior Vice
President and Chief Financial Officer of The Pillsbury Co. from 1994 to 1997. Ms. Hailey was
appointed to the Board of The Limited on March 1, 2001.
David T. Kollat Director since 1976. Dr. Kollat has been Chairman of 22, Inc., a management consulting firm,
4410 Smothers Road since 1987. He is also a director of Big Lots, Inc., Cone Mills, Inc., Cooker Restaurant
Westerville, OH 43081 Corporation, Select Comfort, Inc. and Wolverine World Wide, Inc.
Leonard A. Schlesinger Director since 1996. Mr. Schlesinger has been Executive Vice President and Chief Operating
Officer of The Limited since March 2001 and was Executive Vice President, Organization,
Leadership and Human Resources of The Limited from October 1999 until March 2001.
Mr. Schlesinger was a Professor of Sociology and Public Policy and Senior Vice President for
Development at Brown University from 1998 to 1999. He also was the George F. Baker, Jr.
Professor of Business Administration at Harvard Business School from 1988 to 1998.
64
Present Principal Occupation or Employment and Material Positions
Name Held During the Past Five Years
- --------------------- ---------------------------------------------------------------------------------------------------
Donald B. Shackelford Director since 1975. Mr. Shackelford has been Chairman of the Board of Fifth Third Bank, Central
21 E. State Street Ohio, a banking business, since 1998. Mr. Shackelford was Chairman of the Board and Chief
Suite 1400 Executive Officer of State Savings Bank from 1972 to 1998. He was Chairman of the Board and
Columbus, OH 43215 Chief Executive Officer of State Savings Co. for five years ending in 1997. Mr. Shackelford is also
a director of Fifth Third Bancorp., Intimate Brands and Progressive Corporation.
Alex Shumate Director since 2000. Mr. Shumate has been the Managing Partner of the Columbus, Ohio office of
41 South High Street the law firm of Squire, Sanders & Dempsey L.L.P. ("Squire, Sanders") since 1991. Squire, Sanders
Columbus, OH 43215 provided legal services to The Limited during fiscal year 2000, and The Limited anticipates that
Squire, Sanders will continue to provide legal services to The Limited from time to time in the
future. Mr. Shumate was a director of Intimate Brands from 1996 to 2000. Mr. Shumate is also a
director of Wm. Wrigley, Jr. Company.
Allan R. Tessler Director since 1987. Mr. Tessler has been Chairman of the Board and Chief Executive Officer of
680 5th Avenue International Financial Group, Inc., an international merchant banking firm, since 1987. He is also
11th Floor Chief Executive Officer and Chairman of the Board of JNet Enterprises, Inc., technology holding
New York, NY 10019 company. From March to August 2001, Mr. Tessler was Acting Chief Executive Officer of
Jasmine Networks. He was Co-Chairman of the Board of Data Broadcasting Corporation, a
provider of financial and business information to institutional and individual investors, from June
1992 until May 2000 and Co-Chief Executive Officer from June 1992 until November 29, 1999.
Mr. Tessler was Chairman of the Board of Enhance Financial Services Group, Inc. from 1986 to
February 2001. Since 2001, he has been Chairman of the Board of InterWorld Corporation. Since
January 1997, Mr. Tessler has also served as Chairman of Checking Holdings Corp. IV. He is also
a director of Allis-Chalmers Corporation.
Martin Trust Director since 1978. Mr. Trust had been President and Chief Executive Officer of Mast Industries,
100 Old River Road Inc., a wholly-owned subsidiary of The Limited, for more than five years. Mast acts as a supplier
P.O.Box 9020 to certain businesses of The Limited and Intimate Brands. He has been a Senior Advisor to The
Andover, MA 01810 Limited since August 2001. Mr. Trust also serves as an officer and director of Brandot
International LTD, in Salem, New Hampshire. He is also a director of The Lilli Group and Staples,
Inc.
Abigail S. Wexner Director since 1997. Mrs. Wexner was an attorney with the New York and London offices of Davis
Polk & Wardwell from 1987 until 1992, where she specialized in mergers and acquisitions. By
appointment of the President of the United States, Mrs. Wexner served as a member of the United
States Holocaust Memorial Council from 1994 to 1999. She is a director of the Children's Defense
Fund and is Chair of the Governing Committee of The Columbus Foundation and a member of the
Boards of Trustees of Children's Hospital, Inc., The Columbus Academy and The Wexner Center
Foundation in Columbus, Ohio. Mrs. Wexner is also the founder and Chair of The Columbus
Coalition Against Family Violence. Mrs. Wexner is the wife of Leslie H. Wexner.
Leslie H. Wexner Director since 1963. Mr. Wexner has been Chief Executive Officer since he founded The Limited
in 1963, and Chairman of the Board for more than five years. Mr. Wexner has also been the
Chairman of the Board and Chief Executive Officer of Intimate Brands, Inc. since 1995. Mr.
Wexner is also a director of Hollinger International, Inc. and Hollinger International Publishing,
Inc. Mr. Wexner is the husband of Abigail S. Wexner.
Raymond Zimmerman Director since 1984. Mr. Zimmerman has been Chairman of the Board of 99c Stuff.com since July
Boca Corporate Plaza 1999. Mr. Zimmerman is a director of Service Merchandise Company, Inc. ("Service
1801 Clint Moore Merchandise") and was Non-Executive Chairman of the Board of Service Merchandise from 1999
Road, Suite 217 to 2000. He was Chairman of the Board of Service Merchandise from 1997 to 1999 and was
Boca Raton, FL 33487 Chairman of the Board and Chief Executive Officer of Service Merchandise from 1981 to 1997. In
March 1999, Service Merchandise filed a reorganization petition under Chapter 11 of the United
States Bankruptcy Code.
65
Executive Officers of The Limited
Present Principal Occupation or Employment and Material Positions
Name Held During the Past Five Years
- ---------------------- -----------------------------------------------------------------------------------------------
V. Ann Hailey *
Leonard A. Schlesinger *
Leslie H. Wexner *
Daniel P. Finkelman Senior Vice President, Brand and Business Planning since 2001. He was a Vice President of The
Limited from 1996 to 2001. Mr. Finkelman was an Executive Vice President of Cardinal Health, a
healthcare business, from 1994 to 1996. Mr. Finkelman is a director and serves on the
compensation committee of Alliance Data Systems in Dallas, Texas.
Mark A. Giresi Senior Vice President, Chief Stores Officer since 2001. Mr. Giresi was Vice President of Store
Operations of The Limited from February of 2000 to September of 2001. He was Senior Vice
President of U.S. Franchise Operations of Burger King from August 1998 to February 2000.
He was Senior Vice President and General Counsel of Burger King from March 1993 to August
1998. Mr. Giresi is a director of Fiduciary Trust International of the South, located in Miami,
Florida.
- --------
* See above under "Directors of The Limited."
66
SCHEDULE II
CERTAIN INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS OF IB HOLDINGS
The following table sets forth the name and the present principal
occupations or employment, and material occupations, positions, offices or
employment for the past five years of each director and executive officer of
Intimate Brands Holding Co., Inc. Unless otherwise indicated, positions held
shown in the following table are positions with IB Holdings. Except as set
forth below, each such person is a citizen of the United States of America.
None of the listed persons, during the past five years, has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which such person was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws.
Directors of IB Holdings
Present Principal Occupation or Employment and Material Positions
Name Held During the Past Five Years
- ---- ------------------------------------------------------------------------
V. Ann Hailey Director since 2001.*
Three Limited Parkway
Columbus, OH 43216
David H. Hasson Director since 2001. Mr. Hasson has been a Vice President-Tax at The
Three Limited Parkway Limited since November 2000. He was Manager, Global Tax & Treasury
Columbus, OH 43216 at GE Medical Systems (a division of GE), a diagnostic medical equipment
business, from July 1991 to November 2000.
Christopher L. Kaempfer Director since 2001. Mr. Kaempfer has been a Partner at Kummer
Seventh Floor Kaempfer Bonnar & Renshaw, a law firm in Las Vegas, Nevada, since
3800 Howard Hughes Parkway March 1994.
Las Vegas, NV 89109
Jackie Smith Director since 2001. Since June 1990, Ms. Smith has been Managing
4441 South Polaris Avenue Partner of Smith & Francis, Certified Public Accountants.
Las Vegas, Nevada 89103
Charles H. Buckingham Director since 2001. Mr. Buckingham is a Certified Public Accountant and
2755 San Lago Court has been a sole practitioner since 1991.
Las Vegas, NV 89121
Executive Officers of IB Holdings
Present Principal Occupation or Employment and Material Positions
Name Held During the Past Five Years
- ---- -----------------------------------------------------------------
V. Ann Hailey **
David H. Hasson **
Christopher L. Kaempfer **
Jackie Smith **
- --------
* See Schedule I under "Directors of The Limited."
** See above under "Directors of IB Holdings."
67
ANNEX A
SECTION 262 OF GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
SEC. 262 APPRAISAL RIGHTS.
(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to sec. 228
of this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of the stockholder's shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the word "stockholder" means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and
the words "depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions
thereof, solely of stock of a corporation, which stock is deposited with the
depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec. 251 (other than a merger effected pursuant to sec.
251(g) of this title), sec. 252, sec. 254, sec. 257, sec. 258, sec. 263 or sec.
264 of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock, or
depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no appraisal
rights shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for its
approval the vote of the stockholders of the surviving corporation as
provided in subsection (f) of sec. 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required by
the terms of an agreement of merger or consolidation pursuant to sec.sec.
251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock
anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec. 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
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(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets
of the corporation. If the certificate of incorporation contains such a
provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are available
pursuant to subsections (b) or (c) hereof that appraisal rights are
available for any or all of the shares of the constituent corporations, and
shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of his shares shall deliver to the
corporation, before the taking of the vote on the merger or consolidation, a
written demand for appraisal of his shares. Such demand will be sufficient
if it reasonably informs the corporation of the identity of the stockholder
and that the stockholder intends thereby to demand the appraisal of his
shares. A proxy or vote against the merger or consolidation shall not
constitute such a demand. A stockholder electing to take such action must do
so by a separate written demand as herein provided. Within 10 days after the
effective date of such merger or consolidation, the surviving or resulting
corporation shall notify each stockholder of each constituent corporation
who has complied with this subsection and has not voted in favor of or
consented to the merger or consolidation of the date that the merger or
consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to sec. 228 or
sec. 253 of this title, each constituent corporation then, either a
constituent corporation before the effective date of the merger or
consolidation, or the surviving or resulting corporation within ten days
thereafter, shall notify each of the holders of any class or series of stock
of such constituent corporation who are entitled to appraisal rights of the
approval of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy of this
section; provided that, if the notice is given on or after the effective
date of the merger or consolidation, such notice shall be given by the
surviving or resulting corporation to all such holders of any class or
series of stock of a constituent corporation that are entitled to appraisal
rights. Such notice may, and, if given on or after the effective date of the
merger or consolidation, shall, also notify such stockholders of the
effective date of the merger or consolidation. Any stockholder entitled to
appraisal rights may, within 20 days after the date of mailing of such
notice, demand in writing from the surviving or resulting corporation the
appraisal of such holder's shares. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the stockholder and
that the stockholder intends thereby to demand the appraisal of such
holder's shares. If such notice did not notify stockholders of the effective
date of the merger or consolidation, either (i) each such constituent
corporation shall send a second notice before the effective date of the
merger or consolidation notifying each of the holders of any class or series
of stock of such constituent corporation that are entitled to appraisal
rights of the effective date of the merger or consolidation or (ii) the
surviving or resulting corporation shall send such a second notice to all
such holders on or within 10 days after such effective date; provided,
however, that if such second notice is sent more than 20 days following the
sending of the first notice, such second notice need only to be sent to each
stockholder who is entitled to appraisal rights and who has demanded
appraisal of such holder's shares in accordance with this subsection. An
affidavit of the secretary or assistant secretary or of the transfer agent
of the corporation that is required to give either notice that such notice
has been given shall, in the absence of fraud, be prima facie evidence of
the facts stated therein. For purposes of determining the stockholders
entitled to receive either notice, each constituent corporation may fix, in
advance, a record date that shall be not more than 10 days prior to the date
the notice is given, provided, that if the notice is given on or after the
effective date of the merger or consolidation, the record date shall be such
effective date. If no record date is
69
fixed and the notice is given prior to the effective date, the record date
shall be the close of business on the next day preceding the day on which
the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw his demand for
appraisal and to accept the terms offered upon the merger or consolidation.
Within 120 days after the effective date of the merger or consolidation, any
stockholder who has complied with the requirements of subsections (a) and (d)
hereof, upon written request, shall be entitled to receive from the corporation
surviving the merger or resulting from the consolidation a statement setting
forth the aggregate number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal have been
received and the aggregate number of holders of such shares. Such written
statement shall be mailed to the stockholder within 10 days after his written
request for such a statement is received by the surviving or resulting
corporation or within 10 days after expiration of the period for delivery of
demands for appraisal under subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as
to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court may,
in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on the
list filed by the surviving or resulting corporation pursuant to subsection (f)
of this section and who has submitted his certificates of stock to the Register
in Chancery, if such is required, may participate fully in all proceedings
until it is finally determined that he is not entitled to appraisal rights
under this section.
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(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to
the stockholders entitled thereto. Interest may be simple or compound, as the
Court may direct. Payment shall be so made to each such stockholder, in the
case of holders of uncertificated stock forthwith, and the case of holders of
shares represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall
deliver to the surviving or resulting corporation a written withdrawal of his
demand for an appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the merger or consolidation
as provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the
Court of Chancery shall be dismissed as to any stockholder without the approval
of the Court, and such approval may be conditioned upon such terms as the Court
deems just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
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Facsimile copies of the letter of transmittal, properly completed and duly
executed, will be accepted. The letter of transmittal, certificates for
Intimate Brands shares and any other required documents should be sent or
delivered by each Intimate Brands stockholder or his broker, dealer, commercial
bank, trust company or other nominee to the exchange agent at one of its
addresses set forth below:
The Exchange Agent for the Offer is:
EQUISERVE TRUST COMPANY, N.A.
By Mail: By Facsimile: By Hand:
PO Box 43034 781-575-4826 c/o Securities Transfer
Providence, RI 02940-3034 or andReporting Services Inc
781-575-4827 100 William
Street--GalleriaNew York,
NY 10038
Confirm Facsimile by
Telephone:781-575-4816
By Overnight Courier:
40 Campanelli Drive
Braintree, MA 02184
Questions or requests for assistance or additional copies of this offer to
exchange and the letter of transmittal may be directed to the information agent
or the dealer managers at their respective addresses and telephone numbers set
forth below. Stockholders may also contact their broker, dealer, commercial
bank or trust company for assistance concerning the offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Call collect: 212-269-5550
Call toll-free: 800-628-8532
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
BANC OF AMERICA SECURITIES
LLC
85 Broad Street 9 West 57th Street
New York, New York 10004 New York, New York 10019
Call collect: 212-902-1000 Call collect: 212-933-2223
Call toll-free: Call toll-free:
800-323-5678 888-521-4492
28
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Indemnification underOfficers
Section 145 of the Charter and By-LawsDelaware General Corporation Law permits a corporation to indemnify any of The Limited and Delaware
Law. Article Sixth, Section 5 of The Limited's charter provides for the
indemnification ofits directors or officers in accordance with the by-laws, to
the fullest extent permitted by the General Corporation Law of the State of
Delaware. Article Five of the by-laws of The Limited provides that The Limited
shall indemnify to the fullest extent permitted by law any directorwho was or officer
madeis a party, or is threatened to be made a party, to any legal actionthird party proceeding by reason of the fact that such person is or was a director or officer employee or other corporate
agent of The Limited or any subsidiary or constituentthe corporation, or served any
other enterprise at the request of The Limited against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by himsuch person in connection with such action, suit or proceeding, if hesuch person acted in good faith and in a manner such person 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 reason to believe that such person’s conduct was unlawful. In a derivative action, i.e., one by or in the right of a corporation, the corporation is permitted to indemnify directors and officers against expenses (including attorneys’ fees) actually and reasonably incurred by them in connection with the defense or settlement of an action or suit if they acted in good faith and in a manner that they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made if such person shall have been adjudged liable to the corporation, unless and only to the extent that the court in which the action or suit was brought shall determine upon application that the defendant directors or officers are fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.
Expenses, including attorneys’ fees, incurred by any such person in defending any such action, suit or proceeding may be paid or reimbursed by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt by it of an undertaking of such person to repay such expenses if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation.
Delaware law does not permit a corporation to indemnify persons against judgments in actions brought by or in the right of the corporation unless the Delaware Court of Chancery approves the indemnification.
The Registrant’s certificate of incorporation provides that a director of the Registrant shall not be personally liable to the Registrant or its stockholders for monetary damages for breach of any fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derives an improper personal benefit. If the Delaware General Corporation Law shall be amended after approval by the stockholders of the relevant section of the bylaws to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Registrant shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.
The Registrant’s bylaws provide that it shall 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, by reason of the fact that this person, his testator or intestate is or was a director or officer of the Registrant, or is or was serving at the request of the Registrant as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, or as a member of any committee or similar body against all expenses (including attorneys’ fees), judgment, penalties, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding (including appeals) or the defense or settlement thereof or any claim, issue, or matter therein, to the fullest extent permitted by the laws of Delaware as they may exist from time to time.
The proper officers of the Registrant, without further authorization by the board of directors, may in their discretion purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of such person, or is or was serving at its request as a director, officer, employee or agent for another corporation, partnership, joint venture, trust or other enterprise, against any liability.
II-1
These provisions of the Registrant’s bylaws shall be deemed to be a contract between the Registrant and each director and officer who serves in such capacity at any time while the relevant section of the bylaws is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state facts.
The foregoing provisions are not exclusive. The Registrant may indemnify, or agree to indemnify, any person against any liabilities and expenses and pay any expenses, including attorneys’ fees, in advance of final disposition of any action, suit or proceeding, under any circumstances, if such indemnification and/or payment is approved by the vote of the stockholders or of the disinterested directors, or is, in the opinion of independent legal counsel selected by the board of directors, to be made on behalf of an indemnitee who acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Registrant.
The Limited,Registrant intends to purchase and with respectmaintain insurance on behalf of any person who is or was one of its directors, officers, employees or agents, or a director, officer, employee or agent of a subsidiary of the Registrant or is or was serving at the request of the Registrant or its subsidiary as a director, officer, employee or agent of another entity against any liability asserted against him or her and incurred by him or her in that capacity, or arising out of his or her status as such, whether or not the Registrant or its subsidiary would have the power or the obligation to any criminal actionindemnify him or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Delaware General
Corporation Law provides forher against that liability under the indemnificationrespective provisions of directors and officers
under certain conditions.
The Limited D&O Insurance. The directors and officersits certificate of The Limited are
insured under a policy of directors' and officers' liability insurance.
incorporation or its bylaws.
Item 21. Exhibits.
Exhibit
Number Description
- ------ -----------
3.1 Certificate of Incorporation of The Limited dated March 8, 1982 (incorporated by reference to
Exhibit 3.1 to The Limited's Annual Report on Form 10-K for the fiscal year ended February 3,
2001).
3.2 Certificate of Amendment of Certificate of Incorporation dated May 19, 1986 (incorporated by
reference to Exhibit 3.2 to The Limited's Annual Report on Form 10-K for the fiscal year ended
February 3, 2001).
3.3 Certificate of Amendment of Certificate of Incorporation dated May 19, 1987 (incorporated by
reference to Exhibit 3.3 to The Limited's Annual Report on Form 10-K for the fiscal year ended
February 3, 2001).
3.4 Certificate of Amendment of Certificate of Incorporation dated May 31, 2001 (incorporated by
reference to Exhibit 3.1 to The Limited's Quarterly Report on Form 10-Q for the period ended
May 5, 2001).
3.5 Restated by-laws of The Limited (incorporated by reference to Exhibit 3.2 to The Limited's Annual
Report on Form 10-K for the fiscal year ended January 30, 1999).
5 Opinion of Davis Polk & Wardwell regarding the validity of the securities being registered.
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants of The Limited.
23.2 Consent of PricewaterhouseCoopers LLP, independent accountants of Intimate Brands.
23.3 Awareness letter of PricewaterhouseCoopers LLP, independent accountants of The Limited.
23.4 Awareness letter of PricewaterhouseCoopers LLP, independent accountants of Intimate Brands.
23.5 Consent of Davis Polk & Wardwell (contained in Exhibit 5).
24 Power of Attorney (included in Signature Page).
II-1
Exhibits and Financial Statement Schedules
99.1 Form of Letter of Transmittal (including the Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9).
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
99.4 Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
99.5 Form of Summary Advertisement.
99.6 Form of Notice to Savings and Retirement Plan Participants.
99.7 Form of Notice to Stock Purchase Plan Participants.
99.8 Form of Notice to Holders of Intimate Brands Stock Options and Restricted Share Awards.
See Exhibit Index.
Item 22. Undertakings.Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceedundertakes that, which was
registered) and any deviation from the estimated maximum aggregate
offering price may be reflected in the form of prospectus filed with the
SEC 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 this registration statement
or any material change to such information in this registration
statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(5) That every prospectus (i) that is filed pursuant to paragraph (4)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act of 1933 and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part
of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new
II-2
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.
(6) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant'sregistrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securitiesdebentures offered therein, and the offering of such securitiesdebentures at that time shall be deemed to be the initial bona fide offering thereof.
(7) To
(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have 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 us of expenses incurred or paid by one of our directors, officers or controlling persons in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the debentures being registered, we 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.
(c) The undersigned hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), or 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
(8) To
(d) The undersigned hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
II-2
Pursuant to the requirements of the Securities Act of 1933, the Registrantregistrant has duly caused this Registration Statementregistration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Columbus, State of Ohio, on February 5, 2002.
The Limited, Inc.
(Registrant)
Date: February 5, 2002
By: /s/__V. ANN HAILEY____________
V. Ann Hailey
Executive Vice President and
Chief Financial Officer
-----------------
POWER OF ATTORNEY
Eachthis 18th day of April, 2003.
| LIMITED BRANDS, INC. | |
| By: | /s/ V. Ann Hailey |
| Name: V. Ann Hailey | |
| Title: Executive Vice President and Chief Financial Officer | |
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Leslie H. Wexner, V. Ann Hailey and Leslie H. Wexner, and each of them,Samuel P. Fried his or her true and lawful attorneys-in-fact and agents, each of them with full power of substitution and resubstitution and full power to act without the other, for him or her and in his or her name, place and stead, in any and all capacities, to sign the Registration Statement and any and all amendments (including post-effective
amendments) and supplementsother documents or instruments relating thereto, with power where appropriate to thisaffix the corporate seal, and to file on behalf of the Company the Registration Statement and to file the
same,any and all amendments with all exhibits thereto, including post-effective amendments and any filings under Rule 462 promulgated under the Securities Act of 1933, as amended, and any and all other information and documents or instruments in connection therewith, with the Securities and Exchange Commission, and hereby grants to suchgranting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform eachany and every actall acts and thingthings requisite, and necessary or advisable to be done in and about the premises as fully as to all intents and purposes as he or she 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 substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statementregistration statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/S/ LESLIE H. WEXNER Chairman and Chief Executive February 5, 2002
- ----------------------------- Officer
Leslie H. Wexner
/S/ LEONARD A. SCHLESINGER Executive Vice President and February 5, 2002
- ----------------------------- Chief Operating Officer
Leonard A. Schlesinger
/S/ V. ANN HAILEY Executive Vice President and February 5, 2002
- ----------------------------- Chief Financial Officer
V. Ann Hailey
/S/ EUGENE M. FREEDMAN Director February 5, 2002
- -----------------------------
Eugene M. Freedman
/S/ E. GORDON GEE Director February 5, 2002
- -----------------------------
E. Gordon Gee
/S/ DAVID T. KOLLAT Director February 5, 2002
- -----------------------------
David T. Kollat
/S/ DONALD B. SHACKELFORD Director February 5, 2002
- -----------------------------
Donald B. Shackelford
/S/ ALEX SHUMATE Director February 5, 2002
- -----------------------------
Alex Shumate
II-4
Signature Title Date
--------- ----- ----
/S/ ALLAN R. TESSLER Director February 5, 2002
- -----------------------------
Allan R. Tessler
/S/ MARTIN TRUST Director February 5, 2002
- -----------------------------
Martin Trust
/S/ ABIGAIL S. WEXNER Director February 5, 2002
- -----------------------------
Abigail S. Wexner
/S/ RAYMOND ZIMMERMAN Director February 5, 2002
- -----------------------------
Raymond Zimmerman
II-5
Signature | Title | Date |
| /s/ Leslie H. Wexner | Chairman of the Board of Directors | April 18, 2003 |
Leslie H. Wexner | ||
| /s/ V. Ann Hailey | Director, Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | April 18, 2003 |
V. Ann Hailey | ||
| /s/ Leonard A. Schlesinger | Director | April 18, 2003 |
Leonard A. Schlesinger | ||
| /s/ Martin Trust | Director | April 18, 2003 |
Martin Trust | ||
| /s/ Eugene M. Freedman | Director | April 18, 2003 |
Eugene M. Freedman |
S-1
Signature | Title | Date |
| /s/ E. Gordon Gee | Director | April 18, 2003 |
E. Gordon Gee | ||
| /s/ James L. Heskett | Director | April 18, 2003 |
James L. Heskett | ||
| /s/ Donna James | Director | April 18, 2003 |
Donna James | ||
| /s/ David T. Kollat | Director | April 18, 2003 |
David T. Kollat | ||
| /s/ Donald B. Shackelford | Director | April 18, 2003 |
Donald B. Shackelford | ||
| /s/ Alex Shumate | Director | April 18, 2003 |
Alex Shumate | ||
| /s/ Allan R. Tessler | Director | April 18, 2003 |
Allan R. Tessler | ||
| /s/ Abigail S. Wexner | Director | April 18, 2003 |
Abigail S. Wexner | ||
| /s/ Raymond Zimmerman | Director | April 18, 2003 |
Raymond Zimmerman |
S-2
Exhibit No. | Document |
| 1 | Registration Rights Agreement dated as of February 19, 2003 between Limited Brands, Inc. and J.P. Morgan Securities Inc., as Representative of the Initial Purchasers |
| 4 | Indenture, dated as of February 19, 2003 between Limited Brands, Inc. and the Trustee |
| 5 | Opinion of Davis Polk & Wardwell with respect to the new debentures |
| 12 | Computation of Ratio of Earnings to Fixed Charges |
| 23.1 | Consent of Davis Polk & Wardwell (contained in their opinion filed as Exhibit 5) |
| 23.2 | Consent of PricewaterhouseCoopers LLP |
| 24 | Power of Attorney (included on signature page) |
| 25 | Statement of Eligibility of The Bank of New York, as Trustee, on Form T-1 |
| 99.1 | Form of Letter of Transmittal |
| 99.2 | Form of Notice of Guaranteed Delivery |
| 99.3 | Form of Letter to Clients |
| 99.4 | Form of Letter to Nominees |
| 99.5 | Form of Instructions to Registered Holder and/or Book-Entry Transfer Participant from Owner |