EXHIBIT (a)(1)(A)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase Preferred Stock)
of
PREMIUMWEAR, INC.
at
$13.50 net per share
by
PENGUIN SUB, INC.,
a wholly owned subsidiary of
NEW ENGLAND BUSINESS SERVICE, INC.
The Offer and Withdrawal Rights Will Expire at 5:00 p.m., New York
City Time, on Friday, July 7, 2000, Unless the Offer Is Extended.
This Offer is being made in connection with an Agreement and Plan of Merger,
dated as of May 26, 2000 (the "Merger Agreement"), by and among New England
Business Service, Inc. ("Parent"), Penguin Sub, Inc. ("Purchaser") and
PremiumWear, Inc. ("PremiumWear"). The Offer is conditioned upon, among other
things, (i) there being validly tendered and not withdrawn before the Offer
expires a number of shares of common stock, par value $.01 per share, of
PremiumWear, including any associated rights to purchase preferred stock
(collectively, the "Shares"), that represent at least a majority of the Shares
outstanding on a fully diluted basis and (ii) the satisfaction of any
conditions to Parent's borrowing under its credit facility an amount sufficient
to purchase all of the outstanding Shares and to pay for the cancellation of
all outstanding options to purchase Shares. The Offer is also subject to other
terms and conditions set forth in this Offer to Purchase. See Sections 10 and
14.
The board of directors of PremiumWear has unanimously approved the Offer,
the Merger Agreement and the merger of Purchaser with and into PremiumWear and
has determined that the Offer and the merger are advisable, fair to and in the
best interests of the stockholders of PremiumWear, and recommends that the
stockholders accept the Offer and tender their Shares pursuant to the Offer and
approve and adopt the Merger Agreement.
IMPORTANT
Any stockholder wishing to tender Shares in the Offer must either: (i)
complete and sign the enclosed Letter of Transmittal (or an exact copy of the
letter) according to the instructions in the Letter of Transmittal, mail or
deliver it and any other required documents to the depositary and either
deliver the certificates for such Shares to the depositary along with the
Letter of Transmittal or tender the Shares pursuant to the procedure for book-
entry transfer set forth in Section 3 or (ii) request such stockholder's
broker, dealer, bank, trust company, or other nominee to effect the transaction
for the stockholder.
Any stockholder having Shares registered in the name of a broker, dealer,
bank, trust company, or other nominee must contact such broker, dealer, bank,
trust company, or other nominee in order to tender such Shares. Any stockholder
who desires to tender Shares and whose certificates for Shares are not
immediately available, or who cannot comply with the procedures for book-entry
transfer described in this Offer to Purchase on a timely basis, may tender such
Shares by following the procedure for guaranteed delivery set forth in Section
3.
Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the Letter of Transmittal, or other tender offer materials,
may be directed to the Information Agent or Parent at the addresses and
telephone numbers on the back cover of this Offer to Purchase. Stockholders may
also contact brokers, dealers, banks, or trust companies for assistance
concerning the Offer.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THIS TRANSACTION, PASSED UPON THE
FAIRNESS OR MERITS OF THIS TRANSACTION OR PASSED UPON THE ACCURACY OR ADEQUACY
OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The information agent for the Offer is:
The Altman Group, Inc.
The date of this Offer to Purchase is June 9, 2000.
TABLE OF CONTENTS
Page
----
SUMMARY TERM SHEET....................................................... i
INTRODUCTION............................................................. 1
THE OFFER................................................................ 3
1. Terms of the Offer........................................... 3
2. Acceptance for Payment and Payment........................... 4
3. Procedures for Tendering Shares.............................. 5
4. Withdrawal Rights............................................ 8
5. Material United States Federal Income Tax Consequences....... 9
6. Price Range of the Shares.................................... 10
7. Certain Effects of the Offer; Nasdaq and Exchange Act
Registration................................................. 10
8. Information Concerning PremiumWear........................... 11
9. Information Concerning Parent and Purchaser.................. 13
10. Source and Amount of Funds................................... 14
11. Background of the Transaction; Purpose of the Offer and the
Merger; the Merger Agreement and Other Arrangements.......... 15
12. Plans for PremiumWear after the Offer and the Merger......... 28
13. Dividends and Distributions.................................. 30
14. Conditions of the Offer...................................... 30
15. Legal Matters; Regulatory Approvals.......................... 32
16. Fees and Expenses............................................ 34
17. Miscellaneous................................................ 34
Schedule I Directors and Executive Officers of Parent and Purchaser
SUMMARY TERM SHEET
Penguin Sub, Inc. is offering to purchase all of the outstanding shares of
common stock of PremiumWear and the rights to purchase preferred stock
associated with those shares for $13.50 per share in cash. The following are
some of the questions you, as a stockholder of PremiumWear, may have and our
answers to those questions. Additional important information is contained in
the remainder of this Offer to Purchase and the enclosed Letter of Transmittal.
We urge you to read carefully the entire Offer to Purchase and the Letter of
Transmittal.
Who is offering to buy my securities?
Our name is Penguin Sub, Inc. We are a Delaware corporation formed for the
purpose of making a tender offer for all of the outstanding shares of common
stock of PremiumWear and the rights to purchase preferred stock associated with
those shares. We are a wholly owned subsidiary of New England Business Service,
Inc., a Delaware corporation. See the "Introduction" and Section 9.
What are the classes and amounts of securities sought in the offer?
We are seeking to purchase all of the outstanding shares of common stock of
PremiumWear and the rights to purchase preferred stock associated with those
shares. See the "Introduction" and Section 1.
How much are you offering to pay, what is the form of payment, and will I have
to pay any fees or commissions?
We are offering to pay $13.50 per share, net to you, in cash. If you are a
registered stockholder and you tender your shares directly to the depositary,
you will not have to pay brokerage fees or similar expenses. If you hold shares
through a broker or other nominee, and your broker or nominee tenders your
shares on your behalf, your broker or nominee may charge you a fee for doing
so. You should consult your broker or nominee to determine whether any charges
will apply. See the "Introduction."
Do you have the financial resources to make payment?
New England Business Service, our Parent company, will provide us with
sufficient funds to purchase all shares validly tendered and not withdrawn in
the offer and to provide funding for the merger which is expected to follow the
successful completion of the offer. New England Business Service will use funds
borrowed under its credit facility to finance the purchase. The offer is
conditioned upon satisfaction of the conditions to New England Business
Service's borrowing funds under its credit facility. See Section 10.
Is your financial condition relevant to my decision to tender in the offer?
We do not think our financial condition is relevant to your decision whether
to tender in the offer because the form of consideration consists solely of
cash. New England Business Service has arranged for all of our funding to come
from its credit facility. New England Business Service's ability to borrow
under this facility is subject to certain conditions. See Section 10.
How long do I have to decide whether to tender in the offer?
You will have until 5:00 p.m., New York City time, on Friday, July 7, 2000,
to tender your shares in the offer, unless the offer is extended. If you cannot
deliver everything that is required to make a valid tender by that time, you
may be able to use the guaranteed delivery procedure described later in this
Offer to Purchase. See Section 3.
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Can the offer be extended, and, if so, under what circumstances?
Subject to certain conditions, we can extend the offer for any reason
through September 23, 2000. See Sections 1 and 10.
How will I be notified if the offer is extended?
If we extend the offer, we will inform EquiServe Trust Company (which is the
depositary for the Offer) of that fact and will make a public announcement of
the extension no later than 9:00 a.m., New York City time, on the next business
day after the day on which the offer was scheduled to expire. See Section 1.
What are the most significant conditions to the offer?
. We are not obligated to purchase any shares that are validly tendered
unless the number of shares validly tendered and not withdrawn before the
expiration date of the offer represents at least a majority of the then
outstanding shares on a fully diluted basis. We call this condition the
"minimum condition." For purposes of the offer, "on a fully diluted
basis" means, as of any time, on a basis that includes the number of
shares of PremiumWear common stock that are actually issued and
outstanding plus the maximum number of such shares that PremiumWear may
be required to issue under stock options, warrants and other rights or
securities exercisable or exchangeable for, or convertible into, shares
of PremiumWear common stock, whether or not currently exercisable,
exchangeable or convertible.
. We are not obligated to purchase shares that are validly tendered if
there is a material adverse change in PremiumWear or its business.
. We are not obligated to purchase shares that are validly tendered if any
applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act has not expired or been terminated or if any required
governmental or third party approval of the offer or the merger is not
obtained.
. We are not obligated to purchase shares that are validly tendered if the
conditions to New England Business Service's borrowing funds under its
credit facility to purchase tendered shares are not satisfied. See
Section 10.
The offer is also subject to a number of other conditions. We can waive any
of the conditions to the offer without PremiumWear's consent, other than the
minimum condition. See Sections 1 and 14.
How do I tender my shares?
If you hold your shares in your own name, you may tender your shares by
completing the enclosed Letter of Transmittal and mailing your stock
certificates along with the Letter of Transmittal and any other documents
required by the Letter of Transmittal to EquiServe Trust Company, the
depositary for the offer, in the enclosed envelope no later than the time the
offer expires. See Section 3.
If you are unable to deliver any required document or instrument to the
depositary by the expiration of the offer, you may obtain additional time by
having a broker, a bank or other fiduciary that is a member of the Securities
Transfer Agents Medallion Program or other eligible institution guarantee that
the missing items will be received by the depositary within three Nasdaq
National Market trading days. For the tender to be valid, however, the
depositary must receive the missing items within that three trading day period.
See Section 3.
If your shares are held in the name of your broker, bank or other nominee,
you must instruct your nominee to tender your shares on your behalf by
completing the form sent to you by the nominee and returning the form to it.
See Section 3.
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Until what time may I withdraw previously tendered shares?
You may withdraw previously tendered shares at any time until the offer has
expired and, if we have not accepted your shares for payment by August 7, 2000,
you may withdraw them at any time after that date until we accept shares for
payment. This right to withdraw will not apply to any subsequent offering
period discussed in Section 1. See Section 4.
What is the procedure for withdrawing previously tendered shares?
To withdraw previously tendered shares, you must deliver a written notice of
withdrawal, or a facsimile of one, with the required information to the
depositary while you still have the right to withdraw the shares. See Section
4.
What does PremiumWear's board of directors think of the offer?
We are making the offer pursuant to an agreement and plan of merger between
us and PremiumWear, which has been approved by PremiumWear's board of
directors. PremiumWear's board unanimously:
. determined that the terms of the merger agreement and the transactions
contemplated by the merger agreement, including the offer and the merger,
are advisable, fair to and in the best interests of PremiumWear's
stockholders;
. approved the merger agreement, our tender offer and the merger; and
. recommends that PremiumWear's stockholders accept the offer and tender
their shares pursuant to the offer and approve and adopt the merger
agreement.
See the "Introduction."
If a majority of the shares are tendered and accepted for payment, will
PremiumWear continue as a public company?
No. Following the purchase of shares in the offer, we expect to consummate
the merger of us with and into PremiumWear. If the merger takes place,
PremiumWear will no longer be publicly owned. Even if for some reason the
merger does not take place, if we purchase all of the tendered Shares, there
may be so few remaining stockholders and publicly held shares that PremiumWear
common stock will no longer be eligible to be traded through the Nasdaq
National Market or any other securities exchange, there may not be a public
trading market for PremiumWear common stock and PremiumWear may cease making
filings with the Securities and Exchange Commission or otherwise cease being
required to comply with the Securities and Exchange Commission rules relating
to publicly held companies. See Section 7.
Will the tender offer be followed by a merger if all shares are not tendered in
the offer?
Yes. If we accept for payment and pay for at least a majority of the shares
of PremiumWear on a fully diluted basis, we, Penguin Sub, Inc., will be merged
with and into PremiumWear. If the merger takes place, New England Business
Service will own all of the shares of PremiumWear and all remaining
stockholders of PremiumWear (other than stockholders properly exercising
dissenters' rights) will receive $13.50 per share in cash (or any higher price
that is paid in the offer). See the "Introduction" and Section 11.
If I decide not to tender, how will the offer affect my shares?
If you do not tender your shares and the merger described above takes place,
your shares will be cancelled and you will receive the same amount of cash per
share which you would have received had you tendered your
iii
shares in the offer, subject to any dissenters' rights properly exercised under
Delaware Law. Therefore, if the merger takes place, the only differences to you
between tendering your shares and not tendering your shares is that you will be
paid earlier and not have dissenters' rights if you tender your shares. If,
however, for some reason the merger does not take place, the number of
stockholders and the number of shares that are still publicly held may be so
small that there no longer will be an active public trading market (or,
possibly, any public trading market) for PremiumWear common stock. Also, as
described above, PremiumWear may cease making filings with the Securities and
Exchange Commission or otherwise cease being required to comply with the
Securities and Exchange Commission rules relating to publicly held companies.
See the "Introduction" and Section 7.
What is the market value of my shares as of a recent date?
On May 26, 2000, the last trading day before we announced that the merger
agreement was signed and that we would be commencing a tender offer, the
closing price of PremiumWear common stock reported on the Nasdaq National
Market was $9.875. On June 8, 2000, the last trading day before we commenced
the tender offer, the closing price of PremiumWear stock reported on the Nasdaq
National Market was $13.25. We encourage you to obtain a recent quotation for
shares of PremiumWear common stock in deciding whether to tender your shares.
See Section 6.
What are the U.S. federal income tax consequences of tendering shares?
The receipt of cash for shares pursuant to the offer or the merger will be a
taxable transaction for United States federal income tax purposes and possibly
for state and local income tax purposes as well. In general, a stockholder who
sells shares pursuant to the offer or receives cash in exchange for shares
pursuant to the merger will recognize gain or loss for United States federal
income tax purposes equal to the difference, if any, between the amount of cash
received and the stockholder's adjusted tax basis in the shares sold pursuant
to the offer or exchanged for cash pursuant to the merger. In general, capital
gains recognized by an individual will be subject to a maximum United States
federal income tax rate of 20% if the shares were held for more than one year,
and if held for one year or less they will be subject to tax at ordinary income
tax rates. Because individual circumstances may differ, you should consult your
tax advisor to determine the particular tax effects to you. See Section 5.
To whom may I speak if I have questions about the offer?
You may call The Altman Group, Inc. collect at (800) 206-0007 or collect at
(212) 681-9600. The Altman Group, Inc. is acting as the information agent for
our tender offer. See the back cover.
iv
To the Holders of Common Stock of PremiumWear, Inc.:
INTRODUCTION
Penguin Sub, Inc., a Delaware corporation ("Purchaser") and a wholly owned
subsidiary of New England Business Service, Inc., a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $.01 per share (the "Common Stock"), of PremiumWear, Inc., a Delaware
corporation ("PremiumWear"), including any associated rights to purchase
preferred stock (the "Rights") issued pursuant to the Rights Agreement, dated
as of July 25, 1997 (the "Rights Agreement") by and between PremiumWear and the
Norwest Bank of Minnesota, N.A. (the shares of Common Stock and any associated
Rights are herein referred to as the "Shares"), upon the terms and subject to
the conditions in this Offer to Purchase and in the enclosed Letter of
Transmittal (which, as they may be amended and supplemented from time to time,
together constitute the "Offer"), at the purchase price of $13.50 per Share
(the "Offer Price"), net to the tendering stockholder in cash, without
interest.
The Offer is being made pursuant to the terms of the Agreement and Plan of
Merger, dated as of May 26, 2000 (the "Merger Agreement"), by and among Parent,
PremiumWear and Purchaser. The Merger Agreement provides, among other things,
for the making of the Offer by Purchaser, and further provides that, following
the purchase of Shares pursuant to the Offer and promptly after the
satisfaction or waiver of certain other conditions, Purchaser will be merged
with and into PremiumWear (the "Merger"). PremiumWear will continue as the
surviving corporation after the Merger (the "Surviving Corporation"). At the
effective time of the Merger (the "Effective Time"), each outstanding Share,
except for Shares owned by Parent or any subsidiary of Parent and Shares held
by stockholders exercising their appraisal rights under the Delaware General
Corporation Law (the "DGCL"), will be converted into the right to receive the
Offer Price, net to the holder in cash, without interest. The Merger Agreement
is more fully described in Section 11.
The board of directors of PremiumWear (the "PremiumWear Board") unanimously:
. determined that the terms of the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, are advisable,
fair to and in the best interests of PremiumWear's stockholders;
. approved the Merger Agreement, the Offer and the Merger; and
. recommends that the stockholders of PremiumWear accept the Offer and
tender their Shares pursuant to the Offer and approve and adopt the
Merger Agreement.
Peter J. Solomon Company Limited, financial advisor to the PremiumWear
Board, has delivered a written opinion to the PremiumWear Board, dated May 26,
2000 (the "Solomon Opinion"), that, as of that date, the consideration to be
received by the stockholders of PremiumWear pursuant to the Offer and the
Merger is fair to them from a financial point of view. The full text of the
Solomon Opinion, which describes the assumptions made, procedures followed,
matters considered and limitations of the review undertaken, is included as an
annex to PremiumWear's Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") that is being mailed to stockholders of PremiumWear.
Stockholders are urged to read the full text of the Solomon Opinion carefully
in its entirety.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn before the Offer expires a majority of the Shares
outstanding on a fully diluted basis (the "Minimum Condition") and (ii) the
satisfaction of any conditions to Parent's borrowing under its credit facility
an amount sufficient to purchase all of the outstanding Shares and to pay for
the cancellation of all outstanding options to purchase Shares (the "Financing
Condition"). The Offer is also subject to other terms and conditions set forth
in this Offer to Purchase. See Sections 10 and 14.
For purposes of the Offer, "on a fully diluted basis" means, as of any time,
on a basis that includes the number of Shares that are actually issued and
outstanding plus the maximum number of such Shares that PremiumWear may be
required to issue under stock options, warrants and other rights or securities
exercisable
1
or exchangeable for, or convertible into, Shares, whether or not currently
exercisable, exchangeable or convertible. PremiumWear has represented and
warranted to Parent and Purchaser that, as of May 26, 2000, there were
2,567,485 Shares issued and outstanding and 382,775 Shares issuable upon the
exercise of options. Neither Parent, Purchaser nor any person listed on
Schedule I hereto beneficially owns any Shares. Based on the foregoing,
Purchaser believes that the Minimum Condition would be satisfied if
approximately 1,475,131 Shares are validly tendered and not withdrawn prior to
the expiration of the Offer.
The Offer will expire at 5:00 p.m. New York City time, on Friday, July 7,
2000, unless extended.
Stockholders of record who tender Shares directly will not be obligated to
pay brokerage fees or commissions or, except as set forth in Instruction 6 of
the Letter of Transmittal, stock transfer taxes on the purchase of Shares by
Purchaser pursuant to the Offer. Stockholders who hold their Shares through a
bank or broker should check with such institution as to whether they charge any
service fees. Purchaser will not pay such service fees. Purchaser will pay all
fees and expenses of The Altman Group, Inc., as Information Agent (the
"Information Agent") and EquiServe Trust Company, N.A., as Depositary (the
"Depositary").
Following the purchase of Shares pursuant to the Offer and promptly after
the satisfaction or waiver of certain other conditions, Purchaser will be
merged with and into PremiumWear. PremiumWear will continue as the Surviving
Corporation after the Merger. Among the other conditions to the merger is the
approval and adoption, if required, of the Merger Agreement by the affirmative
vote of the holders of a majority of the outstanding Shares. If the Minimum
Condition is satisfied, Purchaser would have sufficient voting power to approve
the Merger by written consent or at a stockholder meeting without the
affirmative vote of any other stockholder. PremiumWear has agreed, if
stockholder approval is required and cannot be effected by written consent of
Purchaser as majority stockholder of PremiumWear, to cause a meeting of its
stockholders to be held as promptly as practicable following consummation of
the Offer for the purpose of considering and taking action upon the approval
and adoption of the Merger Agreement. Parent has agreed to vote the Shares
owned by Parent, Purchaser and any other subsidiaries of Parent in favor of the
approval and adoption of the Merger Agreement. See Section 11.
In addition, under Section 253 of the DGCL, if a corporation owns at least
90% of the outstanding shares of each class of a subsidiary corporation, the
corporation holding such stock may merge such subsidiary into itself, or itself
into such subsidiary, without any action or vote on the part of the board of
directors or the stockholders of such other corporation (a "short-form
merger"). In the event that Purchaser acquires in the aggregate at least 90% of
the outstanding Shares pursuant to the Offer or otherwise, then, at the
election of Parent, a short-form merger could be effected without any further
approval of the PremiumWear Board or PremiumWear's stockholders. Even if
Purchaser does not own 90% of the outstanding Shares following consummation of
the Offer, Parent or Purchaser could seek to purchase additional Shares in the
open market or otherwise in order to reach the 90% threshold and employ a
short-form merger. The per Share consideration paid for any Shares so acquired
in open market purchases may be greater or less than the Offer Price.
The Merger Agreement provides that, upon the purchase by Purchaser of at
least a majority of the Shares pursuant to the Offer and from time to time
thereafter, Parent will be entitled to designate such number of directors,
rounded up to the next whole number, on the PremiumWear Board so that the
percentage of Parent's nominees on the PremiumWear Board equals the percentage
of outstanding Shares beneficially owned by Purchaser, Parent and their
affiliates; provided, however, that until the Effective Time there shall be at
least two members of the PremiumWear Board who were directors as of the date of
the Merger Agreement.
PremiumWear and Norwest Bank of Minnesota, N.A., as the Rights Agent under
the Rights Agreement have amended the Rights Agreement to provide that a
Distribution Date (as defined in the Rights Agreement) will not be triggered,
and neither Parent nor Purchaser will become an Acquiring Person (as defined in
the Rights Agreement), as a result of the announcement of consummation of the
Offer, the Merger or the consummation of any of the other transactions
contemplated by the Merger Agreement.
This Offer to Purchase and the related Letter of Transmittal contain
important information which you should read carefully before making any
decision with respect to the Offer.
2
THE OFFER
1. Terms of the Offer.
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), Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not properly withdrawn in accordance
with Section 4 of this Offer to Purchase. The term "Expiration Date" shall mean
5:00 p.m., New York City time, on Friday, July 7, 2000, unless and until
Purchaser, in accordance with the terms of the Merger Agreement, shall have
extended the period of time for which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date at which the Offer,
as so extended by Purchaser, shall expire.
The Offer is conditioned upon the satisfaction of the Minimum Condition, the
Financing Condition and the other conditions set forth in Section 14. See also
Section 10. If such conditions are not satisfied prior to the Expiration Date,
Purchaser reserves the right, subject to the terms of the Merger Agreement and
the applicable rules and regulations of the Securities and Exchange Commission
(the "SEC"), to (i) decline to purchase any Shares tendered in the Offer,
terminate the Offer and return all tendered Shares to the tendering
stockholders, (ii) waive any or all conditions to the Offer (other than the
Minimum Condition) and, to the extent permitted by applicable law, purchase all
Shares validly tendered and not withdrawn, (iii) extend the Offer and, subject
to the right of stockholders to withdraw Shares until the Expiration Date,
retain all Shares which have been validly tendered and not withdrawn during the
period or periods for which the Offer is extended or (iv) modify the terms of
the Offer. The Merger Agreement provides that Purchaser will not waive the
Minimum Condition, reduce the Offer Price, impose additional conditions to the
Offer, change the form of consideration to be paid in the Offer, reduce the
number of Shares subject to the Offer, or make any other change to the Offer
which is materially adverse to the holders of the Shares without the prior
written consent of PremiumWear.
Subject to the terms of the Merger Agreement, Purchaser may, from time to
time, in its sole discretion, extend the Expiration Date of the Offer;
provided, however, that the Expiration Date may not be extended beyond
September 23, 2000. In addition, Purchaser may (but is not obligated to)
increase the amount it offers to pay per Share in the Offer, and the Offer may
be extended to the extent required by law in connection with such increase, in
each case without the consent of PremiumWear.
Rule 14d-11 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") permits Purchaser, subject to certain conditions, to provide a
subsequent offering period following the expiration of the Offer on the
Expiration Date (a "Subsequent Offering Period"). A Subsequent Offering Period
is an additional period of time from three business days to 20 business days in
length, beginning after Purchaser purchases Shares tendered in the Offer,
during which stockholders may tender, but not withdraw, their Shares and
receive the Offer Price. During a Subsequent Offering Period, Purchaser will
promptly purchase and pay for all Shares tendered at the same price paid in the
Offer.
Subject to the applicable rules and regulations of the SEC and the terms of
the Merger Agreement, Purchaser also expressly reserves the right, in its sole
discretion, at any time or from time to time, (i) to terminate the Offer if any
of the conditions set forth in Section 14 have not been satisfied and (ii) to
waive any condition to the Offer (other than the Minimum Condition) or
otherwise amend the Offer in any respect, in each case by giving oral or
written notice of such extension, termination, waiver or amendment to the
Depositary and by making a public announcement thereof. If Purchaser accepts
for payment any Shares pursuant to the Offer, it will accept for payment all
Shares validly tendered prior to the Expiration Date and not properly
withdrawn, and will promptly pay for all Shares so accepted for payment.
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement thereof, the announcement in the
case of an extension to be issued no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date in
3
accordance with the public announcement requirements of Rules 14d-4(c), 14d-
6(d) and 14e-1(d) under the Exchange Act. As used in this Offer to Purchase,
"business day" has the meaning set forth in Rule 14d-1(g) under the Exchange
Act. Without limiting the obligation of Purchaser under such Rule or the manner
in which Purchaser may choose to make any public announcement, Purchaser
currently intends to make announcements by issuing a press release to Business
Wire.
If Purchaser extends the Offer, or if Purchaser (whether before or after its
acceptance for payment of Shares) is delayed in its purchase of, or payment
for, Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of Purchaser, and such Shares
may not be withdrawn except to the extent tendering stockholders are entitled
to withdrawal rights as described in Section 4. However, the ability of
Purchaser to delay the payment for Shares that Purchaser has accepted for
payment is limited by Rule 14e-l(c) under the Exchange Act, which requires that
a bidder pay the consideration offered or return the securities deposited by,
or on behalf of, holders of securities promptly after the termination or
withdrawal of the Offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(d), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances then existing, including
the relative materiality of the changed terms or information. In a public
release, the SEC has stated that in its view an offer must remain open for a
minimum period of time following a material change in the terms of the Offer
and that waiver of a material condition, such as the Minimum Condition, is a
material change in the terms of the Offer. The release states that an offer
should remain open for a minimum of five business days from the date a material
change is first published, sent or given to security holders and that, if
material changes are made with respect to information not materially less
significant than the offer price and the number of Shares being sought, a
minimum of ten business days may be required to allow adequate dissemination
and investor response. The requirement to extend the Offer will not apply to
the extent that the number of business days remaining between the occurrence of
the change and the then-scheduled Expiration Date equals or exceeds the minimum
extension period that would be required because of such amendment. If, prior to
the Expiration Date, Purchaser increases the consideration offered to holders
of Shares pursuant to the Offer, such increased consideration will be paid to
all holders whose Shares are purchased in the Offer whether or not such Shares
were tendered prior to such increase.
PremiumWear has provided Purchaser with PremiumWear's stockholder lists and
security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
will be mailed by Purchaser to record holders of Shares and will be furnished
by Purchaser to brokers, dealers, banks and similar persons whose names, or the
names of whose nominees, appear on the stockholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing,
for subsequent transmittal to beneficial owners of Shares.
2. Acceptance for Payment and Payment.
Upon the terms and subject to the conditions to the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and will pay, promptly after the
Expiration Date, for all Shares validly tendered prior to the Expiration Date
and not properly withdrawn in accordance with Section 4.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
for such Shares (or a timely Book-Entry Confirmation (as defined below) with
respect thereto), (ii) a Letter of Transmittal (or an exact copy thereof),
properly completed and
4
duly executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message (as defined in Section 3 below) and
(iii) any other documents required by the Letter of Transmittal. The per Share
consideration paid to any holder of Shares pursuant to the Offer will be the
highest per Share consideration paid to any other holder of such Shares
pursuant to the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Purchaser and not
withdrawn, if and when Purchaser gives oral or written notice to the Depositary
of Purchaser's acceptance for payment of such Shares. Payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the Offer
Price therefor with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from Purchaser and
transmitting payment to tendering stockholders.
Under no circumstances will interest be paid on the Offer Price to be paid
by Purchaser for the Shares, regardless of any extension of the Offer or any
delay in making such payment.
Purchaser reserves the right, in its sole discretion, to delay acceptance
for payment of, or payment for, Shares in order to comply with any applicable
law. If Purchaser is delayed in its acceptance for payment of, or payment for,
Shares or is unable to accept for payment, or pay for, Shares pursuant to the
Offer for any reason, then, without prejudice to Purchaser's rights under the
Offer (including such rights as are set forth in Sections 1 and 14, but subject
to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares
may not be withdrawn except to the extent tendering stockholders are entitled
to exercise, and duly exercise, withdrawal rights as described in Section 4.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted representing more Shares than are
tendered, certificates evidencing Shares not tendered or not accepted for
purchase will be returned to the tendering stockholder, or such other person as
the tendering stockholder shall specify in the Letter of Transmittal, as
promptly as practicable following the expiration, termination or withdrawal of
the Offer. In the case of Shares delivered by book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility (as defined below)
pursuant to the procedures set forth in Section 3, such Shares will be credited
to such account maintained at the Book-Entry Transfer Facility as the tendering
stockholder shall specify in the Letter of Transmittal, as promptly as
practicable following the expiration, termination or withdrawal of the Offer.
If no such instructions are given with respect to Shares delivered by book-
entry transfer, any such Shares not tendered or not purchased will be returned
by crediting the account at the Book-Entry Transfer Facility designated in the
Letter of Transmittal as the account from which such Shares were delivered.
Purchaser reserves the right to transfer or assign, in whole or in part, to
Parent or to any direct or indirect wholly owned subsidiary of Parent, the
right to purchase Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering stockholders to receive
payment for Shares validly tendered and accepted for payment pursuant to the
Offer.
3. Procedures for Tendering Shares.
Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or an
exact copy thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message (as defined below), and any
other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, and either certificates for tendered Shares must be received
by the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a Book-
Entry Confirmation (as defined below) received by the Depositary), in each case
prior to the Expiration Date or (ii) the tendering stockholder must comply with
the guaranteed delivery procedures set forth below.
5
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at The Depository Trust Company (the "Book-Entry Transfer Facility")
for purposes of the Offer within two business days after the date of this Offer
to Purchase. Any financial institution that is a participant in the Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with the Book-Entry Transfer Facility's procedure for
such transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility, the Letter of Transmittal (or an exact copy), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message,
and any other required documents must be transmitted to, and received by, the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Date, or the tendering stockholder must comply
with the guaranteed delivery procedures described below. The confirmation of a
book-entry transfer of Shares into the Depositary's account at the Book-Entry
Transfer Facility as described above is referred to herein as a "Book-Entry
Confirmation." Delivery of documents to the Book-Entry Transfer Facility in
accordance with such Book-Entry Transfer Facility's procedures does not
constitute delivery to the Depositary.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
The method of delivery of Shares, the Letter of Transmittal and all other
required documents, including delivery through the Book-Entry Transfer
Facility, is at the election and risk of the tendering stockholder. Shares will
be deemed delivered only when actually received by the Depositary (including,
in the case of a book-entry transfer, by Book-Entry Confirmation). If delivery
is by mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) of Shares (which term, for purposes of this Section, includes any
participant in the Book Entry Transfer Facility's systems whose name appears on
a security position listing as the owner of the Shares) tendered therewith and
that registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on
the Letter of Transmittal or (ii) if such Shares are tendered for the account
of a financial institution (including most commercial banks, savings and loan
associations and brokerage houses) which is a participant in good standing in
the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution"). In all other cases, all signatures on
Letters of Transmittal must be guaranteed by an Eligible Institution. See
Instructions 3 and 5 to the Letter of Transmittal.
If the certificates for Shares are registered in the name of a person other
than the signer of the Letter of Transmittal, or if payment is to be made, or
certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the certificates
surrendered, then the tendered certificates for such Shares must be endorsed or
accompanied by appropriate stock powers, signed exactly as the name or names of
the registered holders or owners appear on the certificates, with the
signatures on the certificates or stock powers guaranteed as stated above. See
Instruction 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary
6
prior to the Expiration Date, such stockholder's tender may be effected if all
of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser, is received by
the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect
to) such Shares, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents, are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the Nasdaq National Market is
open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth
in such Notice of Guaranteed Delivery.
Upon the acceptance of Shares for payment pursuant to the Offer, the valid
tender of Shares pursuant to one of the procedures described above will
constitute a binding agreement between the tendering stockholder and Purchaser,
upon the terms and subject to the conditions of the Offer.
Appointment. By executing the Letter of Transmittal as set forth above
(including delivery through an Agent's Message), the tendering stockholder will
irrevocably appoint designees of Purchaser as such stockholder's attorneys-in-
fact and proxies, in the manner set forth in the Letter of Transmittal, each
with full power of substitution, to the full extent of such stockholder's
rights with respect to the Shares tendered by such stockholder and accepted for
payment by Purchaser, and with respect to any and all other Shares or other
securities or rights issued or issuable in respect of such purchased Shares.
All such powers of attorney and proxies will be considered coupled with an
interest in the tendered Shares. Such appointment will be effective if, as and
when, and only to the extent that, Purchaser accepts for payment Shares
tendered by such stockholder as provided herein. Upon such appointment, all
prior powers of attorney, proxies and consents given by such stockholder with
respect to such Shares or other securities or rights will, without further
action, be revoked and no subsequent powers of attorney, proxies, consents or
revocations may be given by such stockholder and, if given, will not be deemed
effective. The designees of Purchaser will thereby be empowered to exercise all
voting and other rights with respect to such Shares and other securities or
rights, including, without limitation, in respect of any annual, special or
adjourned meeting of PremiumWear's stockholders, actions by written consent in
lieu of any such meeting or otherwise, as they in their sole discretion deem
proper. Purchaser reserves the right to require that, in order for Shares to be
deemed validly tendered, immediately upon Purchaser's acceptance for payment of
such Shares, Purchaser must be able to exercise full voting, consent and other
rights with respect to such Shares and other related securities or rights,
including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by Purchaser, in its sole discretion, which determination
will be final and binding. Purchaser reserves the absolute right to reject any
or all tenders of any Shares determined by it not to be in proper form or the
acceptance for payment of which, or payment for which, may, in the opinion of
Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right,
in its sole discretion, subject to the provisions of the Merger Agreement, to
waive any defect or irregularity in the tender of any Shares of any particular
stockholder, whether or not similar defects or irregularities are waived in the
case of other stockholders. No tender of Shares will be deemed to have been
validly made until all defects or irregularities relating thereto have been
cured or waived. None of Purchaser, Parent, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in tenders or incur any liability for failure to give
any such notification. Subject to the terms of the
7
Merger Agreement, Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the instructions thereto) will
be final and binding.
Backup Withholding. Under the "backup withholding" provisions of United
States federal income tax law, the Depositary may be required to withhold 31%
of the amount of any payments of cash pursuant to the Offer. In order to
prevent backup federal income tax withholding with respect to payment to
certain stockholders of the purchase price of Shares purchased pursuant to the
Offer, each such stockholder must provide the Depositary with such
stockholder's correct taxpayer identification number ("TIN") and certify that
such stockholder is not subject to backup withholding by completing the
Substitute Form W-9 in the Letter of Transmittal. Certain stockholders
(including, among others, all corporations and certain foreign individuals and
entities) are not subject to backup withholding. If a stockholder does not
provide its correct TIN or fails to provide the certifications described above,
the Internal Revenue Service may impose a penalty on the stockholder and
payment of cash to the stockholder pursuant to the Offer may be subject to
backup withholding. All stockholders surrendering Shares pursuant to the Offer
should complete and sign the Substitute Form W-9 included in the Letter of
Transmittal to provide the information necessary to avoid backup withholding.
Non-corporate foreign stockholders should complete and sign a Form W-8,
Certificate of Foreign Status (a copy of which may be obtained from the
Depositary), in order to avoid backup withholding. See Instruction 9 of the
Letter of Transmittal.
4. Withdrawal Rights.
Except as otherwise provided in this Section 4, or as provided by applicable
law, tenders of Shares are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn pursuant to the procedures set forth below at any time prior
to the Expiration Date and, unless previously accepted for payment and paid for
by Purchaser pursuant to the Offer, may also be withdrawn at any time after
August 7, 2000.
For a withdrawal to be effective, a written or faxed transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase and must specify the name
of the person having tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and the name of the registered holder of the Shares to be
withdrawn, if different from the name of the person who tendered the Shares. If
certificates for Shares have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the
serial numbers shown on such certificates must be submitted to the Depositary,
and unless such Shares have been tendered by an Eligible Institution, the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for book-
entry transfer as set forth in Section 3, any notice of withdrawal must also
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares and otherwise comply with such Book-
Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by again following
one of the procedures described in Section 3 any time prior to the Expiration
Date.
No withdrawal rights will apply to Shares tendered during a Subsequent
Offering Period and no withdrawal rights apply during a Subsequent Offering
Period with respect to Shares tendered in the Offer and accepted for payment.
See Section 1.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares,
and such Shares may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as described herein.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding. None of
8
Purchaser, Parent, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities in
any notice of withdrawal or incur any liability for failure to give any such
notification.
5. Material United States Federal Income Tax Consequences.
The following is a summary of certain United States federal income tax
consequences of the Offer and the Merger to stockholders of Premium Wear whose
Shares are tendered and accepted for payment pursuant to the Offer or whose
Shares are converted into cash in the Merger. The discussion is based upon the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations,
judicial authorities, published positions of the Internal Revenue Service and
other applicable authorities, all as in effect on the date hereof and all of
which are subject to change (possibly with retroactive effect). The discussion
does not address all of the tax consequences that may be relevant to a
particular stockholder of PremiumWear or to stockholders of PremiumWear subject
to special treatment under federal income tax laws (e.g., banks and certain
other financial institutions, insurance companies and tax-exempt
organizations). This discussion is limited to stockholders of PremiumWear who
hold their Shares as capital assets and may not apply to Shares received
pursuant to the exercise of employee stock options or otherwise as
compensation. This discussion does not discuss the United States federal income
tax consequences to any stockholder of PremiumWear who, for United States
federal income tax purposes, is a non-resident alien individual, a foreign
corporation, a foreign partnership or a foreign estate or trust, nor does it
consider the effect of any foreign, state or local tax laws.
Stockholders of PremiumWear must consult their own tax advisors as to the
United States federal income tax consequences of the Offer and the Merger, as
well as the effects of state, local and foreign tax laws.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for United States federal income tax purposes and likely be
a taxable event for state and local income tax purposes as well. In general, a
stockholder who sells Shares pursuant to the Offer or receives cash in exchange
for Shares pursuant to the Merger will recognize gain or loss for United States
federal income tax purposes equal to the difference, if any, between the amount
of cash received and the stockholder's adjusted tax basis in the Shares sold
pursuant to the Offer or exchanged for cash pursuant to the Merger. Gain or
loss will be determined separately for each block of Shares (i.e., Shares
acquired at the same cost in a single transaction) tendered pursuant to the
Offer or exchanged for cash pursuant to the Merger. Such gain or loss will be
long-term capital gain or loss if a stockholder's holding period for such
Shares is more than one year at the time of consummation of the Offer or the
Merger, as the case may be. Capital gains recognized by an individual upon a
disposition of a Share that has been held for more than one year generally will
be subject to a maximum United States federal income tax rate of 20% or, in the
case of a Share that has been held for one year or less, will be subject to tax
at ordinary income tax rates. Certain limitations apply to the use of a
stockholder's capital losses.
A stockholder whose Shares are purchased in the Offer may be subject to 31%
backup withholding unless certain information is provided to the Depositary or
an exemption applies. See Section 3.
9
6. Price Range of the Shares.
The Shares are traded on the Nasdaq National Market under the symbol "WEAR."
Prior to December 15, 1999, the Shares were traded on the New York Stock
Exchange under the symbol "PWA". The following table reflects the high and low
sales prices of the Shares as reported by the Nasdaq National Market and the
New York Stock Exchange, as the case may be, for the periods indicated.
PremiumWear, Inc.
High Low
------ ------
Year Ended January 2, 1999
First Quarter............................................... $6.000 $4.688
Second Quarter.............................................. 5.688 4.563
Third Quarter............................................... 8.000 4.875
Fourth Quarter.............................................. 7.875 5.875
Year Ended January 1, 2000
First Quarter............................................... 7.188 4.750
Second Quarter.............................................. 5.875 4.250
Third Quarter............................................... 6.250 4.438
Fourth Quarter.............................................. 6.000 5.000
Year Ending January 6, 2001
First Quarter............................................... 9.625 5.250
Second Quarter through June 8, 2000......................... 13.438 6.625
On May 26, 2000, the last full day of trading before the execution of the
Merger Agreement was publicly announced, the closing price of the Shares on the
Nasdaq National Market was $9.875 per Share. On June 8, 2000, the last full day
of trading before the commencement of the Offer, the closing price of the
Shares on the Nasdaq National Market was $13.25 per Share.
You are urged to obtain a current market quote for the Shares.
7. Certain Effects of the Offer; Nasdaq and Exchange Act Registration.
The purchase of Shares by Purchaser pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and will reduce the number
of holders of Shares and could thereby adversely affect the liquidity and
market value of the remaining publicly held Shares.
Nasdaq Listing. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements of the National
Association of Securities Dealers, Inc. (the "NASD") for continued inclusion on
the Nasdaq National Market, which requires that an issuer either (i) have at
least 750,000 publicly held shares, held by at least 400 round-lot
stockholders, with a market value of at least $5,000,000, net tangible assets
(total assets (excluding goodwill) minus liabilities) of at least $4,000,000
and have a minimum bid price of $1, or (ii) have at least 1,100,000 publicly
held shares, held by at least 400 round-lot stockholders, with a market value
of at least $15,000,000, have a minimum bid price of $5 and have either (A) a
market capitalization of at least $50,000,000 or (B) total assets and revenues
each of at least $50,000,000. Shares held directly or indirectly by an officer
or director of PremiumWear or by a beneficial owner of more than 10% of the
Shares will ordinarily not be considered as being publicly held for purposes of
these standards. Parent currently intends to cause PremiumWear to delist the
Shares from the Nasdaq National Market as soon as reasonably practicable after
consummation of the Offer and the Merger. If the Nasdaq National Market were to
cease to publish quotations for the Shares, it is possible that the Shares
would continue to trade in the over-the-counter market and that price or other
quotations would be reported by other sources. The extent of the public market
for such Shares and the availability of such quotations would depend, however,
upon such factors as the number of stockholders and/or the aggregate market
value of such securities remaining at such time, the
10
interest in maintaining a market in the Shares on the part of securities firms,
the possible termination of registration under the Exchange Act, as described
below, and other factors. Purchaser cannot predict whether the reduction in the
number of Shares that might otherwise trade publicly would have an adverse or
beneficial effect on the market price for, or marketability of, the Shares or
whether it would cause future market prices to be greater or lesser than the
Offer Price.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of such Shares for the purpose of
buying, carrying, or trading in securities ("Purpose Loans"). Depending upon
factors similar to those described above regarding the continued listing,
public trading, and market quotations of the Shares, it is possible that,
following the purchase of the Shares pursuant to the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for Purpose Loans made by brokers.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. This registration may be terminated upon application by
PremiumWear to the SEC if the Shares are not listed on a national securities
exchange and there are fewer than 300 record holders. Termination of the
registration of the Shares under the Exchange Act would substantially reduce
the information required to be furnished by PremiumWear to holders of Shares
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), the requirements
of furnishing a proxy statement pursuant to Section 14(a) in connection with
stockholders meetings and the requirements of Rule 13e-3 under the Exchange Act
with respect to "going private" transactions, no longer applicable to the
Shares. In addition, "affiliates" of PremiumWear and persons holding
"restricted securities" of PremiumWear may be deprived of the ability to
dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin securities"
or be eligible for stock exchange listing or Nasdaq National Market reporting.
Parent currently intends to cause PremiumWear to terminate the registration of
the Shares under the Exchange Act as soon as practicable after consummation of
the Offer as the requirements for termination of registration are met.
8. Information Concerning PremiumWear.
General. PremiumWear is a Delaware corporation with its principal offices
located at 5500 Feltl Road, Minnetonka, Minnesota 55343-7902. PremiumWear's
telephone number is (612) 979-1700. PremiumWear designs, sources and markets
knit and woven shirts and other apparel and accessories to the promotional
products/advertising specialty industry and to golf pro and resort shops.
PremiumWear's products are marketed under its Page & Tuttle(R) and Pickering
brands and the licensed Munsingwear(R) and Field & Stream(R) brands.
PremiumWear markets on a commission basis additional, complementary branded
products to the promotional products/advertising specialty industry. These
branded product lines include: California Outerwear, Burk's Bay(TM) leather
outerwear and accessories, Winona Knitting Mills sweaters, CROAKIES(R) eyewear
restraints and other accessories, and Softspikes(R) golf accessories.
Available Information. The Shares are registered under the Exchange Act.
Accordingly, PremiumWear is subject to the information filing requirements of
the Exchange Act and is required to file periodic reports, proxy statements,
and other information with the SEC relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
PremiumWear's directors and officers (including their remuneration, stock
options granted to them, and Shares held by them), the principal holders of
PremiumWear's securities, and any material interest of those persons in
transactions with PremiumWear is required to be disclosed in proxy statements
and annual reports distributed to PremiumWear's stockholders and filed with the
SEC. Such reports, proxy statements, and other information are available for
inspection and copying at the public reference facilities of the SEC located at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of
the SEC located at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661, and Seven
11
World Trade Center, Suite 1300, New York, New York 10048. Copies of this
material may also be obtained by mail, upon payment of the SEC's customary
fees, from the SEC's principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549. The SEC also maintains an Internet site on the World Wide Web at
"http://www.sec.gov" that contains reports, proxy statements, and other
information. In addition, such material should also be available for inspection
at the Nasdaq National Market's offices located at 1735 K Street, N.W.,
Washington, D.C. 20006.
Summary Financial Information. Set forth below is selected consolidated
financial information with respect to PremiumWear, excerpted or derived from
PremiumWear's annual report on Form 10-K for the fiscal year ended January 1,
2000 (the "PremiumWear 10-K") and PremiumWear's quarterly report on Form 10-Q
for the fiscal quarter ended April 1, 2000 (the "PremiumWear 10-Q"), each as
filed with the SEC pursuant to the Exchange Act. Parent and Purchaser make no
representation as to the accuracy of such financial information. More
comprehensive financial information is included in the PremiumWear 10-K, the
PremiumWear 10-Q, and other documents filed by PremiumWear with the SEC,
including the financial information and related notes contained therein. Such
reports and other documents may be examined and copies may be obtained from the
SEC in the manner set forth above.
PREMIUMWEAR, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands of dollars, except per share data)
Fiscal Fiscal
Quarter Ended, Year Ended,
----------------- ---------------------
April 1, April 3, January 1, January 2,
2000 1999 2000 1999
-------- -------- ---------- ----------
(unaudited)
Operating Data:
Net sales.............................. $13,091 $ 8,998 $45,647 $42,445
Commission income...................... 581 49 1,305 --
Operating income....................... 890 453 2,280 1,883
Net income............................. 497 290 1,432 1,453
Basic net income per share............. 0.19 0.12 0.57 0.63
Diluted net income per share........... 0.19 0.12 0.56 0.60
Balance Sheet Data (at end of period):
Total current assets................... 22,566 19,553 23,304 19,846
Total current liabilities.............. 5,757 5,699 8,681 5,022
Total long-term liabilities............ 2,877 695 1,594 695
Stockholders' equity................... 22,391 18,460 21,528 16,803
Financial Projections. PremiumWear does not, as a matter of course, make
public forecasts or projections as to its future financial performance.
However, in connection with Parent's review of the transactions contemplated by
the Merger Agreement, PremiumWear provided Parent with certain projected
financial information concerning PremiumWear. Such information included, among
other things, PremiumWear's projections of total revenue, net income and
earnings per share. These projections reflect PremiumWear's best case estimates
based on numerous assumptions, including the addition of new product lines and
license arrangements and successful execution of several marketing,
distribution and organizational initiatives. Set forth below is a summary of
these projections. These projections should be read together with the financial
statements of PremiumWear that can be obtained from the SEC as described above.
The projections below were not prepared with a view to public disclosure or
in compliance with published guidelines of the SEC regarding projections or the
guidelines established by the American Institute of Certified Public
Accountants regarding projections.
12
The projections, while presented with numerical specificity, are forward-
looking statements that are based on myriad estimates and assumptions,
including, but not limited to, those listed below. These estimates and
assumptions involve judgments with respect to, among other things, future
economic and competitive conditions, inflation rates, and future business
conditions. These estimates and assumptions may not be realized and are
inherently subject to significant business, economic, and competitive
uncertainties, many of which are beyond the control of PremiumWear. Therefore,
there can be no assurance that the projections below will prove to be reliable
estimates of probable future performance. It is quite likely that actual
results will vary materially from these estimates. In light of the
uncertainties inherent in projections of any kind, the inclusion of projections
in this Offer should not be regarded as a representation by any party that the
estimated results will be realized. There can be no assurances in this regard.
The projections were not prepared in accordance with generally accepted
accounting principles and were not audited or reviewed by any independent
accounting firm, nor did any independent accounting firm perform any other
services with respect to these projections. None of Parent, Purchaser,
PremiumWear or any other person assumes any responsibility for the accuracy of
such projections.
Projected Projected Projected Projected
Fiscal Fiscal Fiscal Fiscal
2000 2001 2002 2003
--------- --------- --------- ---------
($ in thousands, except per share data)
Total sales.......................... $55,800 $101,000 $128,550 $160,205
Commission income.................... 1,910 0 0 0
Total revenue........................ 57,710 101,000 128,550 160,205
Total net income..................... 3,261 4,671 6,616 7,047
Earnings per share................... 1.21 1.67 2.28 2.35
9. Information Concerning Parent and Purchaser.
Parent is a Delaware corporation with its principal executive offices
located at 500 Main Street, Groton, Massachusetts 01471. Parent's telephone
number is (978) 448-6111. Parent was founded in 1952, incorporated in
Massachusetts in 1955 and reincorporated in Delaware in 1986. Parent designs,
produces and distributes business forms, checks, envelopes, labels, greeting
cards, signs, stationery and related printed products and distributes
packaging, shipping and warehouse supplies, software, work clothing,
advertising specialties and other business products through direct mail, direct
sales, telesales, dealers and the internet to small businesses throughout the
United States, Canada, the United Kingdom and France.
Purchaser is a Delaware corporation with its principal executive offices
located at 500 Main Street, Groton, Massachusetts 01471. Purchaser's telephone
number is (978) 448-6111. Purchaser was established in April 2000 for the sole
purpose of enabling the transactions contemplated by this Offer and the Merger
Agreement. All of the outstanding capital stock of Purchaser is owned directly
by Parent.
The name, business address, citizenship, present principal occupation or
employment and five-year employment history of each of the executive officers
and directors of Parent and Purchaser is set forth in Schedule I of this Offer
to Purchase.
Except as described above and elsewhere in this Offer to Purchase, (i) none
of Parent or Purchaser or, to the best of Parent's or Purchaser's knowledge,
any of the persons listed in Schedule I or any associate or majority-owned
subsidiary of Parent or any of the persons so listed, beneficially owns or has
any right to acquire directly or indirectly any Shares or has any contract,
arrangement, understanding, or relationship with any other person with respect
to any Shares, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
Shares, joint ventures, loan or option arrangements, puts or calls, guaranties
of loans, guaranties against loss, or the giving or withholding of proxies, and
(ii) none of Parent or Purchaser or, to the best knowledge of Parent or
Purchaser, any of the other persons referred to above, or any of the respective
directors, executive officers, or subsidiaries of any of the foregoing, has
effected any transaction in any Shares during the past 60 days.
13
Except as set forth in this Offer to Purchase, neither Parent or Purchaser
nor, to the best knowledge of Parent or Purchaser, any of the persons listed on
Schedule I, has had any transaction with PremiumWear or any of its executive
officers, directors, or affiliates that is required to be reported under the
rules and regulations of the SEC applicable to the Offer. Except as reflected
in this Offer to Purchase, there have been no contracts, negotiations, or
transactions between Parent, or any of its subsidiaries or, to the best
knowledge of Parent or Purchaser, any of the persons listed in Schedule I to
this Offer, on the one hand, and PremiumWear or its affiliates, on the other
hand, concerning: a merger, consolidation, or acquisition; a tender offer for,
or other acquisition of, securities of any class of PremiumWear, an election of
directors of PremiumWear; or a sale or other transfer of a material amount of
assets of PremiumWear or any of its subsidiaries.
Available Information. Parent is subject to the information filing
requirements of the Exchange Act and is required to file periodic reports,
proxy statements, and other information with the SEC relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning Parent's directors and officers (including their remuneration, stock
options granted to them, and Shares held by them), the principal holders of
Parent's securities, and any material interest of those persons in transactions
with Parent is required to be disclosed in proxy statements and annual reports
distributed to Parent's stockholders and filed with the SEC. Such reports,
proxy statements, and other information are available for inspection and
copying at the public reference facilities of the SEC located at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the SEC
located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and
Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of this
material may also be obtained by mail, upon payment of the SEC's customary
fees, from the SEC's principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549. The SEC also maintains an Internet site on the World Wide Web at
"http://www.sec.gov" that contains reports, proxy statements, and other
information. In addition, such material should also be available for inspection
at the New York Stock Exchange's offices located at 20 Broad Street, New York,
New York 10005.
10. Source and Amount of Funds.
The Offer is conditioned upon, among other things, the Financing Condition.
The total amount of funds required to purchase all of the Shares in the Offer
and the Merger, to pay for the cancellation of all options to purchase Shares
(collectively, the "PremiumWear Options") granted under any of PremiumWear's
stock option plans or arrangements in exchange for a cash payment and pay
related fees and expenses is estimated to be approximately $38,752,000. The
Purchaser expects to obtain all of its funds from equity contributions from
Parent.
Parent expects to fund its equity contribution to the Purchaser from
borrowings under its unsecured Amended and Restated Revolving Credit Agreement
dated as of December 18, 1997, as amended (the "Credit Agreement"), by and
among Parent, Fleet National Bank ("Fleet") and the other lending institutions
party thereto (collectively, the "Banks"), and Fleet, as agent and as
documentation agent for itself and the other Banks. The Credit Agreement
provides for total borrowing commitments from the Banks equal to $200,000,000.
Borrowings under the Credit Agreement mature on December 18, 2002, the date on
which the Credit Agreement expires.
As of June 9, 2000, Parent had approximately $137,000,000 in outstanding
borrowings under the Credit Agreement. Parent has represented and warranted to
PremiumWear that it will keep available undrawn borrowing capacity under the
Credit Agreement in an amount not less than the aggregate amount required to
purchase all of the outstanding Shares and to pay for the cancellation of all
outstanding options to purchase Shares.
Various interest rate options are available under the Credit Agreement,
including rates tied to Fleet's base rate (currently 9.5% per annum),
eurodollar interbank offered rates and competitive bid rates. Accrued interest
is payable quarterly with respect to base rate loans, and for the applicable
interest rate period with respect to the other interest rate options (1 to 6
months for eurodollar interbank offered rates and 7 to 180 days for
14
competitive bid rates). Based on such rates at the date of this Offer and
assuming no change, Parent estimates that the effective interest rate under the
Credit Agreement for borrowings to fund its equity contribution to the
Purchaser would approximate 7.4%.
The Credit Agreement provides for usual and customary conditions to
borrowings, which include (i) no default existing under the Credit Agreement,
(ii) representations and warranties being true and correct, except to the
extent of changes resulting from transactions contemplated or permitted by the
Credit Agreement and changes occurring in the ordinary course of business that
are not materially adverse, (iii) no change having occurred in any law that
would make it illegal for the Banks to make the loans under the Credit
Agreement, and (iv) the Banks having received statements required for the
purpose of compliance with applicable banking regulations.
No alternative financing plans or arrangements have been made in the event
Parent is unable to borrow sufficient funds under the Credit Agreement in
connection with the Offer and the Merger. The Purchaser will not be obligated
to accept Shares for payment pursuant to the Offer if any condition to Parent's
borrowing under the Credit Agreement an amount sufficient to purchase all the
Shares in the Offer and the Merger and make the aggregate payments required in
connection with the cancellation of the Options has not been satisfied.
The Credit Agreement contains certain financial covenants relating to
Parent's consolidated net worth, leverage and fixed charge coverages. It also
contains other affirmative and negative covenants that are customary and usual
for unsecured credit facilities, including limitations on Parent's mergers and
acquisitions activities, except for certain intercompany transactions and
certain "permitted acquisitions." The Offer and the Merger and the transactions
contemplated thereby constitute a "permitted acquisition" under the Credit
Agreement provided that, among other things, the Offer expires on or before
July 15, 2000.
In connection with the Credit Agreement, Parent has agreed to indemnify and
hold harmless the Banks from and against any and all claims, actions, suits,
liabilities, losses damages and expenses arising out of the Credit Agreement
and the transactions contemplated thereby. Parent's obligations under the
Credit Agreement are guaranteed by each of its U.S. operating subsidiaries.
Parent intends to repay borrowings under the Credit Agreement from working
capital and funds provided by future operations, and to refinance any
outstanding borrowings on the maturity date. While Parent has made no specific
arrangements in this regard at present, it believes that it will be able to
obtain such refinancing on commercially reasonable terms.
11. Background of the Transaction; Purpose of the Offer and the Merger; the
Merger Agreement and Other Arrangements.
Background of the Transaction
Throughout 1999, members of Parent's management evaluated various
alternative strategies for securing a reliable source of supply for Parent's
personalized clothing/work wear product line. Parent first identified
PremiumWear as a potential source of supply through its research of public
companies, and in November 1999, Mr. Ron Doyle, division vice president of
Parent's personalized clothing/work wear product line, telephoned Mr. Thomas D.
Gleason, chairman of the PremiumWear Board, seeking to initiate discussions in
this regard.
On November 23, 1999, Mr. Robert J. Murray, chairman and chief executive
officer of Parent, and Mr. Joel S. Hughes, senior vice president, corporate
channel marketing of Parent, telephoned Mr. Gleason to inform him of Parent's
interest in evaluating PremiumWear as a vendor. They described Parent's
personalized clothing/work wear business to Mr. Gleason, and subsequently sent
Mr. Gleason background materials regarding Parent and its businesses. On
November 24, 1999, Messrs. Murray and Hughes spoke again with Mr. Gleason by
telephone, confirmed that Mr. Gleason had received the background materials and
arranged for representatives of Parent to meet with representatives of
PremiumWear at PremiumWear's facilities.
15
On December 8, 1999, Messrs. Hughes and Doyle met with Mr. Timothy C.
Klouda, president of the promotional products division of PremiumWear, at
PremiumWear's Clarksville, Tennessee distribution center. Mr. Klouda gave
Messrs. Hughes and Doyle a tour of the facility and introduced them to the
facility's supervisory staff. Messrs. Hughes, Doyle and Klouda then traveled to
PremiumWear's Minnetonka, Minnesota headquarters, and on December 9, 1999, Mr.
Klouda gave Messrs. Hughes and Doyle a tour of the Minnetonka facility and
introduced them to Mr. David E. Berg, president and chief executive officer of
PremiumWear, Ms. Cynthia L. Boeddeker, vice president of operations of
PremiumWear, and Mr. James S. Bury, chief financial officer of PremiumWear. The
discussions at these meetings related to a possible supply relationship between
PremiumWear and Parent.
Based on a favorable report from Messrs. Hughes and Doyle following this
business trip, Mr. Murray directed Parent's management to begin consideration
of PremiumWear as a potential acquisition candidate. On January 10, 2000, Mr.
Murray telephoned Mr. Gleason to arrange a meeting between the two of them and
sent Mr. Gleason additional information regarding Parent.
On January 25, 2000, Mr. Murray met with Mr. Gleason in Naples, Florida.
They discussed the business plans of both companies, and Mr. Murray asked Mr.
Gleason to consider whether a business combination of PremiumWear and Parent
would be advantageous to both companies. Mr. Gleason agreed that further
exploratory discussions were desirable, and he agreed with Mr. Murray to
arrange a meeting for PremiumWear's senior management to visit Parent's
headquarters in Groton, Massachusetts.
On various occasions between January 25 and February 15, 2000, Mr. Murray
spoke with Mr. Gleason and/or Mr. Berg by telephone with respect to the
logistics of the upcoming meeting, and on February 10, 2000, Parent and
PremiumWear entered into a mutual non-disclosure agreement to facilitate the
discussions between the two companies relating to a possible business
combination transaction.
On February 16, 2000, Messrs. Gleason, Berg and Klouda traveled to Groton,
Massachusetts and met with Messrs. Murray, Hughes and Doyle, Mr. Daniel M.
Junius, senior vice president and chief financial officer of Parent, and other
members of Parent's management. Parent's representatives described its business
and strategic plans. In the course of these discussions representatives of both
companies acknowledged that a business relationship between the two companies,
possibly in the form of a strategic alliance or a business combination, could
be mutually advantageous.
On various occasions between February 17 and March 10, 2000, Mr. Murray
spoke with Mr. Gleason or Mr. Berg by telephone with respect to the logistics
of a planned visit by Messrs. Murray, Hughes and Junius to PremiumWear's
Minnetonka offices on March 11, 2000. At the same time, Mr. Murray spoke by
telephone at various times during this period with Mr. Gleason, Mr. Gleason's
legal representative and representatives of Arthur Andersen LLP, PremiumWear's
independent accountants, regarding the net operating loss carry forward of
PremiumWear and the tax consequences to Mr. Gleason of an acquisition of
PremiumWear by Parent. On April 18, 2000, Mr. Murray sent a package of
background materials describing Parent to each of PremiumWear's outside
directors.
In a telephone conversation on February 20, 2000, Mr. Gleason spoke with Mr.
Murray who indicated that Parent was prepared to submit an acquisition proposal
in the amount of $10 per share in cash. Mr. Gleason indicated to Mr. Murray
that he did not think the PremiumWear Board would be receptive to such a
proposal.
In a telephone conversation on February 22, 2000, Mr. Gleason described to
Messrs. Murray and Junius his ideas about ways to value PremiumWear's business.
At a meeting of the PremiumWear Board held on February 23, 2000, Mr. Gleason
reported on his discussions with Parent, including the price per share Mr.
Murray had indicated Parent was prepared to propose. The PremiumWear Board
advised Mr. Gleason to continue discussions but that a $10 per share price was
unacceptable.
16
At a special telephonic meeting of the PremiumWear Board held on March 1,
2000, Mr. Gleason reported that in discussions subsequent to the February 23rd
meeting of the PremiumWear Board, Mr. Murray had indicated that Parent was
prepared to submit an acquisition proposal in the range of $10-$12 per share in
cash. The PremiumWear Board had a general discussion regarding the merits of
the proposal and a strategic business combination with Parent and instructed
Mr. Gleason to continue discussions with Mr. Murray. The PremiumWear Board also
indicated to Mr. Gleason that the $10-$12 per share price range was still too
low but that it would consider an offer in the range of $13-$14 per share.
Messrs. Berg and Klouda indicated that they would like to investigate the
merits of a management buyout in light of the expression of interest by Parent.
Thereupon, Messrs. Berg and Klouda excused themselves from the meeting.
Following the PremiumWear Board meeting on March 1, 2000, Mr. Gleason spoke
further with Mr. Murray about matters related to a possible business
combination, including base and best case projections for PremiumWear.
Following that discussion, Mr. Bury provided Mr. Junius with the best case
projections, and in a telephone call on March 2, 2000, Mr. Gleason reviewed
those projections with Messrs. Murray and Junius.
At Mr. Gleason's request, on March 8, 2000 Mr. Junius sent a letter (the
"March 8 Letter") addressed to Mr. Gleason containing Parent's non-binding
indication of interest relating to a possible acquisition of PremiumWear. In
the March 8 Letter, Mr. Junius indicated that Parent would be interested in
acquiring 100% of the Shares at a price in the range of $13 to $14 per share,
payable in cash.
In the March 8 Letter, Mr. Junius further indicated that Parent was
confident that it would be able to obtain sufficient funds for the proposed
acquisition from the lenders under its existing credit facility, that before
entering into a definitive agreement Parent would have to be satisfied with its
due diligence review of PremiumWear's business and operations, and that the
definitive agreement would require the approval of Parent's Board of Directors.
At Mr. Gleason's request, on March 10, 2000, Mr. Junius sent a second letter
(the "March 10 Letter") addressed to Mr. Gleason containing substantially the
same terms as the March 8 Letter.
On March 11 and 12, 2000, Messrs. Murray, Hughes and Junius traveled to
PremiumWear's offices in Minnetonka and met with Messrs. Berg, Bury and Klouda
and Ms. Boeddeker. Discussions at these meetings concerned how the two
companies might work together.
As a result of the March 11 and 12 discussions, Mr. Murray spoke with Mr.
Gleason by telephone several times between March 13 and 15, 2000, at which time
he reiterated Parent's interest in submitting an acquisition proposal within
the $13-$14 per share price range for the consideration of the PremiumWear
Board.
On March 16, 2000, Mr. Murray sent a letter (the "March 16 Letter")
addressed to Mr. Gleason containing Parent's proposal for the acquisition of
PremiumWear. In the March 16 Letter, Mr. Murray indicated that Parent proposed
to acquire 100% of the Shares for $13.25 in cash per share. The March 16 Letter
also recapitulated the other terms contained in the March 8 Letter and the
March 10 Letter.
At a special meeting on March 21, 2000, the PremiumWear Board met again and,
in light of Messrs. Berg and Klouda's previously expressed interest in
investigating a management buyout of PremiumWear, appointed all directors with
the exception of Messrs. Berg and Klouda to serve on a special committee for
the purpose of evaluating the proposed offer from Parent. Mr. Gleason reported
that he had received from Parent the March 16 Letter. The special committee of
the PremiumWear Board discussed the March 16 Letter in detail and instructed
Mr. Gleason to continue discussions with Parent to determine what other terms
and conditions would be part of any proposed transaction with Parent. The
special committee of the PremiumWear Board also discussed the tax and financial
impact of the proposed transaction price on the officers and directors of
PremiumWear. In light of PremiumWear's recent financial performance, the
special committee of the PremiumWear Board instructed the compensation
committee of the PremiumWear Board to take any necessary action to minimize or
eliminate any adverse financial or tax impact to Messrs. Gleason and Mr. Berg
in the event an agreement was reached within the financial parameters expressed
by Parent.
17
On March 22, 2000, Mr. Murray sent two letters to Mr. Berg outlining the
terms of proposed employment arrangements for Mr. Berg and for Messrs. Bury,
Klouda and Dennis G. Lenz, executive vice president of the promotional products
division of PremiumWear, and Ms. Boeddeker in connection with the proposed
acquisition of PremiumWear by Parent. The letters stated that the proposed
employment arrangements were subject to the negotiation, execution and delivery
of definitive employment agreements containing terms mutually satisfactory to
the executives and Parent.
In a telephone conversation on March 27, 2000 between Mr. Craig Barrows,
Vice President, General Counsel and Secretary of Parent, Mr. Gleason and
representatives of Lindquist & Vennum PLLP, PremiumWear's legal counsel, Mr.
Barrows described Parent's contemplated structure for the proposed acquisition,
consisting of a first-step cash tender offer for all outstanding shares, to be
followed by a second-step merger in which all shares not tendered would be
cashed out at the tender offer price. He also described a stock option that
Parent would be requesting from PremiumWear, pursuant to which Parent would be
granted the right to purchase, under certain circumstances, Shares in an amount
up to 19.9% of the then outstanding Shares.
In late March, 2000, Mr. Junius contacted Mr. Gleason to arrange a due
diligence meeting regarding PremiumWear's business and operations. Mr. Gleason
then coordinated the time for the due diligence meeting.
On April 5 and 6, 2000, Messrs. Junius, Barrows and David G. Foster, vice
president and controller of Parent, and representatives of Deloitte & Touche
LLP, Parent's independent accountants, traveled to Minneapolis, Minnesota to
conduct a due diligence review with respect to PremiumWear's business and
operations. Messrs. Junius, Barrows and Foster reviewed written materials
provided by PremiumWear at the offices of Lindquist & Vennum, and met there
with Messrs. Bury and Thomas H. Bird, controller of PremiumWear. Deloitte &
Touche's representatives met with representatives of Arthur Andersen at the
latter's offices to review materials relating to PremiumWear's recently
completed audit.
On April 11, 2000, Parent's legal representatives, Skadden, Arps, Slate,
Meagher & Flom LLP, distributed to PremiumWear's legal representatives first
drafts of the Merger Agreement and the proposed stock option agreement.
On April 17, 2000, Mr. Murray distributed a draft of Mr. Berg's proposed
employment agreement.
On April 19, 2000, PremiumWear's legal representatives sent a letter to Mr.
Barrows regarding the proposed stock option agreement and the non-solicitation
and termination fee provisions contained in the draft Merger Agreement.
On April 19, 2000, Mr. Gleason sent a letter to Mr. Murray outlining a
proposed employment or consulting agreement to replace his change in control
severance agreement.
On April 20, 2000, PremiumWear's legal representatives distributed
additional comments on the Merger Agreement.
On April 21, 2000, Mr. Junius distributed drafts of the proposed employment
agreements to Messrs. Berg, Bury, Klouda and Lenz and Ms. Boeddeker.
Between April 6 and April 23, 2000, various telephone conversations occurred
between members of Parent's and PremiumWear's management and legal
representatives regarding additional due diligence items and related matters.
At a telephonic meeting of the PremiumWear Board on April 18, 2000, Mr.
Gleason reported that Messrs. Berg and Klouda had terminated their
investigation of a management buyout. Accordingly, the PremiumWear Board
determined to dissolve the previously appointed special committee. Mr. Gleason
then reported on the status of the negotiations with Parent. The compensation
committee of the PremiumWear Board also reported on the impact of the proposed
transaction on management at which time the PremiumWear Board ratified the
18
compensation committee's approval of modifications to Mr. Gleason's change in
control severance agreement and stock option agreement and Mr. Berg's change in
control severance agreement.
Beginning on April 24, 2000, Parent's and PremiumWear's legal
representatives, together with Messrs. Junius, Barrows and Bury, met in the
Boston offices of Skadden, Arps, Slate, Meagher & Flom LLP to negotiate the
terms of the Merger Agreement. Mr. Gleason joined those discussions in the
afternoon of April 24, 2000.
On April 25, 2000, Parent's Board of Directors held a special meeting to
consider the terms of the proposed acquisition of PremiumWear. Members of
Parent's management and Parent's legal representatives briefed the directors on
the status of negotiations concerning the Merger Agreement, the employment
agreements with the named PremiumWear executives, and the consulting
arrangement with Mr. Gleason. Management was directed to continue negotiations,
with the understanding that definitive terms of the transaction would be
presented to the directors for consideration at a subsequent meeting.
Discussions between Parent's and PremiumWear's legal representatives,
together with Messrs. Junius, Barrows and Gleason, resumed on the morning of
April 26, 2000. At this time Mr. Murray joined the discussions, and Mr. Gleason
announced that PremiumWear's Board of Directors had met telephonically and had
determined that they intended to obtain a fairness opinion from an independent
financial advisor with respect to the proposed transaction. The parties
discussed open issues under the Merger Agreement and Mr. Gleason's proposal
regarding a continuing employment or consulting arrangement with Parent.
Between April 26 and May 22, 2000, Parent's and PremiumWear's management and
legal representatives and the named PremiumWear executives' legal
representative continued to negotiate and exchange drafts of the Merger
Agreement, the employment agreements with the named executives and the
consulting agreement with Mr. Gleason.
In a telephone conversation on May 22, 2000, Mr. Murray informed Mr. Gleason
that he believed that the parties had come to a final understanding with
respect to the various agreements, and that he was prepared to submit the
transaction to Parent's Board of Directors for their consideration. At this
time Mr. Gleason informed Mr. Murray that, based on the report prepared by
PremiumWear's independent financial advisor, he was not confident that the
PremiumWear Board would approve a transaction at the proposed $13.25 per share
price. After further discussions, Mr. Murray offered to raise the transaction
price to $13.50 per share, and Mr. Gleason agreed to submit the proposed
transaction at $13.50 per share to PremiumWear's Board of Directors for their
consideration.
At a special meeting held on May 25, 2000, PremiumWear's independent
financial advisor reported that it would deliver an opinion that the $13.50
price is fair to the stockholders. Thereafter, the PremiumWear Board approved
the terms of the Merger Agreement and the employment and consulting agreements
negotiated by Parent with the named executives and Mr. Gleason.
At a special meeting held on May 26, 2000, Parent's Board of Directors
approved the terms of the Merger Agreement and Mr. Gleason's consulting
agreement. Thereafter, Parent's and PremiumWear's legal representatives
finalized the Merger Agreement, and the Merger Agreement, the employment
agreements, the amendments to the named executives' change in control severance
agreements, and Mr. Gleason's consulting agreement were executed and delivered.
On May 30, 2000, Parent and PremiumWear issued press releases announcing the
execution of the Merger Agreement.
On June 9, 2000, in accordance with the Merger Agreement, the Purchaser
commenced the Offer.
19
Purpose of the Offer and the Merger
The purpose of the Offer is to enable Parent to acquire control of, and the
entire equity interest in, PremiumWear. The purpose of the Merger is for Parent
to acquire all of the equity interest in PremiumWear not acquired by Parent
pursuant to the Offer. Upon consummation of the Merger, PremiumWear will become
a wholly owned subsidiary of Parent.
Among the other conditions to the merger is the approval and adoption, if
required, of the Merger Agreement by the affirmative vote of the holders of a
majority of the outstanding Shares. If the Minimum Condition is satisfied,
Purchaser would have sufficient voting power to approve the Merger by written
consent or at a stockholder meeting without the affirmative vote of any other
stockholder. PremiumWear has agreed, if stockholder approval is required and
cannot be effected by written consent of Purchaser as majority stockholder of
PremiumWear, to cause a meeting of its stockholders to be held as promptly as
practicable following consummation of the Offer for the purpose of considering
and taking action upon the approval and adoption of the Merger Agreement.
Parent has agreed to vote the Shares owned by Parent, Purchaser and any other
subsidiaries of Parent in favor of the approval and adoption of the Merger
Agreement.
In addition, under Section 253 of the DGCL, if a corporation owns at least
90% of the outstanding shares of each class of a subsidiary corporation, the
corporation holding such stock may merge such subsidiary into itself, or itself
into such subsidiary, without any action or vote on the part of the board of
directors or the stockholders of such other corporation (a "short-form
merger"). In the event that Purchaser acquires in the aggregate at least 90% of
the outstanding Shares pursuant to the Offer or otherwise, then, at the
election of Parent, a short-form merger could be effected without any further
approval of the PremiumWear Board or PremiumWear's stockholders. Even if
Purchaser does not own 90% of the outstanding Shares following consummation of
the Offer, Parent or Purchaser could seek to purchase additional Shares in the
open market or otherwise in order to reach the 90% threshold and employ a
short-form merger.
Parent has structured this transaction as a cash tender offer to be followed
by a cash merger. Parent believes this structure will effect a prompt and
orderly transfer of ownership of PremiumWear from PremiumWear's public
stockholders to Parent and Purchaser. It will also effect the prompt delivery
of cash to stockholders for all of their Shares.
Stockholders of PremiumWear who sell their Shares in the Offer will cease to
have any equity interest in PremiumWear or to participate in its earnings and
any future growth. If the Merger is consummated, PremiumWear's stockholders
will no longer have an equity interest in PremiumWear and instead will have
only the right to receive cash consideration pursuant to the Merger Agreement.
See Section 12. Similarly, the stockholders of PremiumWear will not bear the
risk of any decrease in the value of PremiumWear after selling their Shares in
the Offer or the subsequent Merger.
The primary benefits of the Offer and the Merger to the stockholders of
PremiumWear are that such stockholders are being afforded an opportunity to
sell all of their Shares for cash at a price which represents a premium of
approximately 37% over the closing market price of the Shares on the last full
trading day prior to the public announcement that PremiumWear, Parent and
Purchaser executed the Merger Agreement.
The Merger Agreement
The following is a summary of the material provisions of the Merger
Agreement. The summary is qualified in its entirety by reference to the full
text of the Merger Agreement, which is incorporated herein by reference and a
copy of which has been filed with the Securities and Exchange Commission as an
exhibit to the Tender Offer Statement on Schedule TO filed by Parent and
Purchaser with the SEC in connection with the Offer (the "Schedule TO"). The
Merger Agreement may be examined, and copies obtained, as set forth in Section
9.
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The Offer. The Merger Agreement provides that, upon the terms and subject to
the prior satisfaction or waiver of the conditions of the Offer, Purchaser will
accept for payment and pay for Shares tendered and not withdrawn on or prior to
the Expiration Date. The Merger Agreement provides that Purchaser will not: (i)
waive the Minimum Condition; (ii) reduce the number of Shares to be purchased
in the Offer; (iii) reduce the Offer Price; (iv) impose additional conditions
to the Offer; (v) change the form of consideration payable in the Offer; or
(vi) make any other change in the terms or conditions of the Offer which is
materially adverse to the holders of Shares. Except as described in the
preceding sentence, Parent and Purchaser may, without the consent of
PremiumWear, waive any of the conditions to the Offer or modify the terms of
the Offer, including to extend the Offer from time to time; provided, however,
that the Offer shall not be extended beyond September 23, 2000.
Designation of Directors. The Merger Agreement provides that, promptly upon
the acceptance for payment of, and payment by Purchaser for at least 51% of the
outstanding Shares entitled to vote on any matter at a meeting of stockholders
pursuant to the Offer, Purchaser will be entitled to designate such number of
directors, rounded up to the nearest whole number, as will give Purchaser
representation on the PremiumWear Board equal to at least that number of
directors which equals the product of the total number of directors on the
PremiumWear Board (giving effect to the directors designated by Parent pursuant
to this sentence) multiplied by a fraction, the numerator of which shall be the
number of Shares beneficially owned by Purchaser and Parent and the denominator
of which shall be the number of Shares then outstanding. In furtherance
thereof, PremiumWear and the PremiumWear Board shall, at such time, take any
and all such action needed to cause each of Purchaser's designees to be
appointed to the PremiumWear Board in such class of directors as shall ensure
the longest possible term for such designee as a member of the PremiumWear
Board, including, without limitation, increasing the size of the PremiumWear
Board (subject to the limitations set forth in the certificate of incorporation
and by-laws of PremiumWear) and using its reasonable efforts to secure the
resignation of directors.
The Merger Agreement provides that at least two of the PremiumWear directors
who were directors on May 26, 2000 will continue to serve until the Effective
Time. Notwithstanding anything in the Merger Agreement to the contrary, in the
event that Purchaser's designees are elected to the PremiumWear Board prior to
the Effective Time, the affirmative vote of a majority of the Directors then in
office who were also directors on May 26, 2000 will be required for PremiumWear
to (i) amend or terminate the Merger Agreement or the certificate of
incorporation or by-laws of PremiumWear, (ii) extend the time for performance
of Parent's and Purchaser's respective obligations or waive any of
PremiumWear's rights under the Merger Agreement or (iii) take any other action
by the PremiumWear Board under or in connection with the Merger Agreement.
The Merger. The Merger Agreement provides that at the Effective Time,
Purchaser will be merged with and into PremiumWear in accordance with the DGCL.
As a result of the Merger, the separate existence of Purchaser will cease, and
PremiumWear will be the Surviving Corporation.
The Merger Agreement provides that at the Effective Time, each issued and
outstanding Share, other than (i) Shares owned by PremiumWear as treasury
stock, (ii) Shares owned by Parent, Purchaser or any other subsidiary of Parent
and (iii) Shares held by stockholders exercising their appraisal rights under
the DGCL, shall be converted into the right to receive the Offer Price in cash.
Options. The Merger Agreement provides that immediately following the
Effective Time, each PremiumWear Option, whether or not exercisable, will be
cancelled and, in exchange therefor, each holder of a PremiumWear Option will
receive from Parent an amount in cash, equal to the excess of (i) the product
of (A) the excess, if any, of (x) the Offer Price over (y) the per share
exercise price of such PremiumWear Stock Option multiplied by (B) the number of
Shares subject to such PremiumWear Stock Option over (ii) any income tax or
employment tax withholding required under the Code.
Representations and Warranties. In the Merger Agreement, PremiumWear has
made customary representations and warranties to Parent and Purchaser with
respect to, among other things, corporate existence
21
and power; authorization and validity of the Merger Agreement; capitalization;
consents and approvals; filings with the SEC and financial statements; absence
of certain changes (including any material adverse effect on the business,
results of operations, assets, or financial condition of PremiumWear); title to
properties; compliance with laws; litigation; employee matters; taxes;
liabilities; intellectual property; material contracts; accuracy of certain
disclosures; environmental matters; state takeover statutes; voting
requirements; the Rights Agreement; insurance; product warranty and liability;
business practices; and the opinion of PremiumWear's financial advisor.
In the Merger Agreement, Parent and Purchaser have each made customary
representations and warranties to PremiumWear with respect to, among other
things, corporate organization and good standing; authorization and validity of
the Merger Agreement; consents and approvals; accuracy of certain disclosures;
financing and litigation.
Certain representations and warranties in the Merger Agreement made by
PremiumWear and Parent and Purchaser are qualified as to "materiality" or
"Material Adverse Effect." For purposes of the Merger Agreement and this Offer
to Purchase, the term "Material Adverse Effect" means a material adverse effect
on (i) the ability of such PremiumWear or Parent, as the case may be, to
perform its obligations under the Merger Agreement or to consummate the
transactions contemplated thereby or (ii) the business, properties, assets,
liabilities, prospects, results of operations or condition (financial or
otherwise) of PremiumWear or Parent, as the case may be, and their respective
subsidiaries, taken as a whole (without regard to the effect of changes in
economic or market conditions affecting PremiumWear's or Parent's respective
industries generally on PremiumWear's or Parent's respective business,
properties, assets, liabilities, prospects, results of operations or condition
(financial or otherwise)).
Conduct of Business. Except as expressly contemplated by the Merger
Agreement or consented to in writing by Parent, prior to the Effective Time,
PremiumWear and each of its subsidiaries shall conduct their operations only
according to their ordinary and usual course of business consistent with past
practice and shall use their reasonable best efforts to preserve intact their
present business organizations, keep available the services of their officers
and employees, and maintain satisfactory relationships with licensors,
suppliers, manufacturers, distributors, customers, joint venture partners and
others having business relationships with them.
Additionally, except as contemplated by the Merger Agreement or agreed in
writing by Parent, prior to the Effective Time neither PremiumWear nor any of
its subsidiaries shall:
(i) make any change in or amendment to PremiumWear's certificate of
incorporation or PremiumWear's by-laws (or the comparable governing
documents of any PremiumWear subsidiary);
(ii) issue or sell, or authorize the issuance or sale of, any shares of
its capital stock or any other securities, or issue or sell, or authorize
the issuance or sale of, any securities convertible into, or options,
warrants or rights to purchase or subscribe to, or enter into any
arrangement or contract with respect to the issuance or sale of, any shares
of its capital stock or any other securities, or make any other changes in
its capital structure, except for the issuance and sale of Shares upon the
exercise of PremiumWear Stock Options outstanding on the date of the Merger
Agreement;
(iii) sell or pledge or agree to sell or pledge any stock or other
equity interest owned by it in any other person;
(iv) declare, pay or set aside any dividend or other distribution or
payment with respect to, or split, combine, redeem or reclassify, or
purchase or otherwise acquire, any shares of its capital stock or its other
securities;
(v) (A) enter into any contract or commitment with respect to capital
expenditures with a value in excess of, or requiring expenditures by
PremiumWear and its subsidiaries in excess of, $500,000, individually, (B)
enter into contracts or commitments with respect to capital expenditures
with a value in
22
excess of, or requiring expenditures by PremiumWear and its subsidiaries in
excess of, $750,000, in the aggregate or (C) enter into any other contract
or commitment (other than licensing agreements entered into in the ordinary
course of business) with a value in excess of, or requiring expenditures by
PremiumWear and its subsidiaries in excess of, $250,000;
(vi) acquire, by merging or consolidating with, by purchasing an equity
interest in or a portion of the assets of, or by any other manner, any
business or any person, or otherwise acquire any assets of any person
(other than the purchase of assets in the ordinary course of business
consistent with past practice);
(vii) except to the extent required under existing employee and director
benefit plans, agreements or arrangements as in effect on the date of the
Merger Agreement, increase the compensation or fringe benefits of any of
its directors, officers or employees or grant any severance or termination
pay not currently required to be paid under existing severance plans or
enter into any employment, consulting or severance agreement or arrangement
with any present or former director, officer or other employee of
PremiumWear or any of its subsidiaries, or establish, adopt, enter into or
amend or terminate any collective bargaining, bonus, "hold in place,"
retention, profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment, termination,
change in control or other severance agreement or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any directors,
officers or employees;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge,
dispose of, encumber or subject to any lien, any material assets or incur
or modify any indebtedness or other material liability, other than in the
ordinary course of business consistent with past practice, or issue any
debt securities or assume, guarantee or endorse or otherwise as an
accommodation become responsible for the obligations of any person or,
other than in the ordinary course of business consistent with past
practice, make any loan or other extension of credit;
(ix) sell, assign, transfer, license or modify or amend any rights to
any PremiumWear Intellectual Property (as such term is defined in the
Merger Agreement), except in the ordinary course of business consistent
with past practice;
(x) agree to the settlement of any material claim or litigation;
(xi) make or rescind any material tax election or settle or compromise
any material tax liability;
(xii) except as required by applicable law or generally accepted
accounting principles, make any material change in its accounting
principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, other than in respect of indebtedness
owing by PremiumWear to any of its subsidiaries or in respect of
indebtedness owing by any of PremiumWear's subsidiaries to PremiumWear or
another such subsidiary or (B) make any loans or advances to any other
person, other than to PremiumWear or to any direct or indirect wholly-owned
subsidiary of PremiumWear, except, in the case of clause (A), for
borrowings under existing credit facilities described in the SEC filings of
PremiumWear in the ordinary course of business consistent with past
practice for working capital purposes;
(xiv) accelerate the payment, right to payment or vesting of any bonus,
severance, profit sharing, retirement, deferred compensation, stock option,
insurance or other compensation or benefits;
(xv) pay, discharge or satisfy any liabilities other than the payment,
discharge or satisfaction (A) of any liabilities in the ordinary course of
business and consistent with past practice or (B) of liabilities set forth
in the consolidated balance sheet of PremiumWear as of January 1, 2000
contained in SEC filings of PremiumWear;
(xvi) delay or postpone the payment of accounts payable or other
liabilities, other than in the ordinary course of business consistent with
past practice;
23
(xvii) enter into any agreement, understanding or commitment that
restrains, limits or impedes PremiumWear's or any of its subsidiaries'
ability to compete with or conduct any business or line of business,
including, but not limited to, geographic limitations on PremiumWear's or
any of its subsidiaries' activities;
(xviii) plan, announce, implement or effect any reduction in force, lay-
off, early retirement program, severance program or other program or effort
concerning the termination of employment of employees of PremiumWear or its
subsidiaries other than routine employee terminations for cause;
(xix) take any action, engage in any transaction or enter into any
agreement which could reasonably be expected to cause (A) any of the
representations or warranties of PremiumWear in the Merger Agreement that
are subject to, or qualified by, a Material Adverse Effect, "material
adverse change" or other materiality qualification to be untrue as of the
Effective Time, or any such representations and warranties that are not so
qualified to be untrue in any material respect, (B) any of the tender offer
conditions to not be satisfied, or (C) a Material Adverse Effect on
PremiumWear;
(xx) take any action including, without limitation, the adoption of any
stockholder rights plan or amendments to the certificate of incorporation
or by-laws of PremiumWear (or comparable governing documents of any
subsidiary), which would, directly or indirectly, restrict or impair the
ability of Parent to vote, or otherwise to exercise the rights and receive
the benefits of a stockholder with respect to, securities of PremiumWear
that may be acquired or controlled by Parent or Purchaser;
(xxi) modify, amend or terminate any material contract to which it is a
party or waive any of its material rights or claims except in the ordinary
course of business consistent with past practice; or
(xxii) agree, in writing or otherwise, to take any of the foregoing
actions.
No Solicitation. PremiumWear has agreed that it will not, nor will it
authorize or permit any of its affiliates or any of their respective officers,
directors, employees, representatives, consultants, investment bankers,
attorneys, accountants or other agents to (i) encourage, solicit, initiate, or
facilitate the making of, or take any other action to facilitate any inquiries
or the making of any proposal that constitutes, or may reasonably be expected
to lead to, any Acquisition Proposal (as defined below); (ii) participate in
any way in discussions or negotiations with, or furnish or disclose any
nonpublic information to, any person (other than Parent or Purchaser), in
connection with any Acquisition Proposal; (iii) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Purchaser or Parent the approval
and recommendation of the Offer, the Merger or the Merger Agreement; (iv)
approve or recommend, or propose to approve or recommend, any Acquisition
Proposal; or (v) enter into any agreement, letter of intent or similar document
contemplating or otherwise relating to any Acquisition Proposal.
The term "Acquisition Proposal" means (A) any proposal or offer from any
person relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of PremiumWear or any of its subsidiaries or of
over 10% of any class of equity securities of PremiumWear or any of its
subsidiaries, (B) any tender offer or exchange offer that, if consummated,
would result in any person beneficially owning 10% or more of any class of
equity securities of PremiumWear or any of its subsidiaries, (C) any merger,
consolidation, business combination, sale of substantially all the assets,
recapitalization, liquidation, dissolution or similar transaction involving
PremiumWear or any of its subsidiaries or (D) any other transaction the
consummation of which could reasonably be expected to impede, interfere with,
prevent or materially delay the Offer or the Merger or which could reasonably
be expected to dilute materially the benefits to Parent of the transactions
contemplated by the Merger Agreement.
Notwithstanding the foregoing, the Merger Agreement does not prohibit
PremiumWear or its representatives from:
(A) participating in discussions or negotiations with, or furnishing or
disclosing nonpublic information to, a third party in response to an
unsolicited, bona fide and written Acquisition Proposal that is submitted
to PremiumWear by such third party after the date of the Merger Agreement
and prior to the
24
date any Shares are accepted for payment pursuant to the Offer (and not
withdrawn) if (1) neither PremiumWear, any of its affiliates nor any of its
representatives shall have violated any of the restrictions described in
this non-solicitation section, (2) the PremiumWear Board determines in good
faith, after having taken into account the advice of its outside legal
counsel, that such action is required in order for the PremiumWear Board to
comply with its fiduciary obligations to PremiumWear's stockholders under
applicable law, (3) PremiumWear gives Parent at least two business days
prior written notice of the identity of such third party and of
PremiumWear's intention to participate in discussions or negotiations with,
or furnish or disclose nonpublic information to, such third party, and
PremiumWear receives from such third party an executed confidentiality
agreement containing terms no less restrictive than the terms of the Non
Disclosure Agreement (as defined below) and (4) at least two business days
prior to furnishing or disclosing such information to such third party,
PremiumWear furnishes such information to Parent (to the extent not
previously delivered or made available); or
(B) approving or recommending, or entering into (and in connection
therewith, withdrawing or modifying the approval and recommendation of the
Offer, the Merger and the Merger Agreement) a definitive agreement with
respect to an unsolicited, bona fide and written Acquisition Proposal that
is submitted to the Company after the date of the Merger Agreement and
prior to the date any Shares are accepted for payment pursuant to the Offer
(and not withdrawn) if (1) neither PremiumWear, any of its affiliates nor
any of its representatives shall have violated any of the restrictions
described in this non-solicitation section, (2) PremiumWear provides Parent
with written notice at least two business days prior to any meeting of the
PremiumWear Board at which such Board will consider whether such
Acquisition Proposal constitutes a Superior Proposal, (3) the PremiumWear
Board makes the determination necessary for such Acquisition Proposal to
constitute a Superior Proposal, (4) the PremiumWear Board determines in
good faith, after having taken into account the advice of its outside legal
counsel, that such action is required in order for such Board to comply
with its fiduciary obligations to PremiumWear's stockholders under
applicable law, (5) PremiumWear does not approve or recommend or enter into
a definitive agreement with respect to such Acquisition Proposal at any
time before the day that is the fifth business day after Parent receives
written notice from PremiumWear stating that the PremiumWear Board has
determined that such Acquisition Proposal constitutes a Superior Proposal
and (6) simultaneously with the earlier of the approval or recommendation
of, or execution of a definitive agreement with respect to, any such
Superior Proposal, PremiumWear makes the payments to Parent required to be
made pursuant by the fees and expenses provision of the Merger Agreement.
The term "Superior Proposal" means a bona fide proposal made by a third
party to acquire all of the Shares pursuant to a tender offer or a merger or to
acquire all of the properties and assets of PremiumWear on terms and conditions
which a majority of the members of the PremiumWear Board determines in its good
faith, based on the written advice of an independent outside nationally
recognized financial advisor and taking into account all the terms and
conditions of such proposal (including, without limitation, any expense
reimbursement provisions, termination fees and conditions to consummation) to
be more favorable to PremiumWear and its stockholders than the transactions
contemplated by the Merger Agreement.
The Merger Agreement also provides that PremiumWear agrees to promptly
advise Parent of, and provide Parent with certain information related to, any
request for information or of any Acquisition Proposal, or any inquiry,
proposal, discussions or negotiation with respect to any Acquisition Proposal.
Directors' and Officers' Indemnification and Insurance. The Merger Agreement
provides that, for a period of six years from the Effective Time (and until the
disposition of any claims made during, and remaining outstanding at the end of,
such six-year period), Parent shall and shall cause the Surviving Corporation,
to the fullest extent permitted under the DGCL, to indemnify and hold harmless
each present and former director and officer of PremiumWear against all costs
and expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages, liabilities and settlement amounts paid in connection with any
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), whether civil, administrative or
25
investigative, arising out of or pertaining to any action or omission in their
capacity as an officer or director of PremiumWear occurring prior to the
Effective Time (including the transactions contemplated by the Merger
Agreement).
In addition, the Merger Agreement provides that Parent shall cause the
certificate of incorporation and the by-laws of the Surviving Corporation to
contain the provisions with respect to indemnification and exculpation from
liability set forth in PremiumWear's certificate of incorporation and by-laws,
which provisions shall not be amended, repealed or otherwise modified for a
period of six years from the Effective Time in any manner that would adversely
affect the rights thereunder of individuals who on or prior to the Effective
Time were directors, officers, employees or agents of PremiumWear, unless such
modification is required by law.
The Merger Agreement further provides that the Surviving Corporation shall
either (i) maintain in effect PremiumWear's current directors' and officers'
liability insurance covering those persons who are currently covered on the
date of the Merger Agreement by PremiumWear's directors' and officers'
liability insurance policy; (ii) substitute for such PremiumWear's directors'
and officers' liability policy a directors' and officers' liability policy or
policies with at least the same coverage containing terms and conditions which
are no less advantageous and which do not result in any gaps or lapses in
coverage with respect to matters occurring prior to the Effective Time; or
(iii) cause the Parent's, directors' and officers' liability insurance then in
effect to cover those persons who are covered on the date of the Merger
Agreement by PremiumWear's directors' and officers' liability insurance policy
with respect to those matters covered by PremiumWear's directors' and officers'
liability policy.
Conditions to Each Party's Obligation to Effect the Merger. The respective
obligation of each party to effect the Merger is subject to the satisfaction on
or prior to the Effective Time of each of the following conditions (any of
which may be waived by the parties in writing, in whole or in part, to the
extent permitted by applicable law): (i) to the extent required by applicable
law, the Merger Agreement and the Merger shall have been approved and adopted
by holders of a majority of Shares entitled to vote thereon in accordance with
applicable law and the certificate of incorporation and by-laws of PremiumWear;
(ii) any waiting period (and any extension thereof) under the Hart-Scott-Rodino
Antitrust Improvements Act (the "HSR Act") applicable to the Merger shall have
expired or been terminated and no action shall have been instituted by the
Antitrust Division of the Department of Justice (the "Antitrust Division") or
the Federal Trade Commission (the "FTC") challenging or seeking to enjoin the
consummation of the transactions contemplated thereby, which action shall have
not been withdrawn or terminated; (iii) no preliminary or permanent injunction,
judgment or other order shall have been issued by any federal, state or foreign
court or by any federal, state or foreign governmental or regulatory agency,
body or authority and be in effect at the Effective Time which prohibits,
restrains, restricts or enjoins the consummation of the Offer or the Merger;
provided, however, that, in the case of a decree, injunction or other order,
each of the parties shall have used reasonable best efforts to prevent the
entry of any such injunction or other order and to appeal as promptly as
possible any such decree, injunction or other order that may have been entered;
(iv) no federal, state or foreign statute, law, rule, regulation, executive
order, judgment, decree or order of any kind shall have been enacted, entered,
promulgated or enforced by any court or governmental authority which prohibits,
restrains, restricts or enjoins the consummation of the Offer or the Merger or
has the effect of making the Merger or the Offer illegal; and (v) Purchaser
shall have purchased Shares pursuant to the Offer.
Termination; Fees. The Merger Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time:
(a) by the mutual consent of PremiumWear, on the one hand, and of Parent
and Purchaser, on the other hand;
(b) by either Parent, on the one hand, or PremiumWear, on the other
hand, if (i) the Effective Time shall not have occurred within 120 days
after the date of the Merger Agreement, unless the Effective Time shall not
have occurred because of a material breach of the Merger Agreement on the
part of the party
26
seeking to terminate the Merger Agreement or (ii) any statute, law, rule or
regulation shall have been promulgated which prohibits the consummation of
the Offer or the Merger or any court of competent jurisdiction or any
governmental or regulatory agency shall have issued an order, decree
judgment or ruling or taken any other action, which permanently restricts,
restrains, enjoins or otherwise prohibits the consummation of the Offer or
the Merger and such order, decree, ruling or other action shall have become
final and non-appealable;
(c) by Parent, if:
(i) the Offer is terminated or expires in accordance with its terms
without Purchaser having purchased any Shares thereunder due to an
occurrence which would result in a failure to satisfy any one or more
of the conditions to the Offer set forth in Section 14, unless any such
failure shall have been caused by or resulted from the failure of
Parent or Purchaser to perform in any material respect any covenant or
agreement of either of them contained in the Merger Agreement or the
material breach by Parent or Purchaser of any representation or
warranty of either of them contained in the Merger Agreement;
(ii) PremiumWear or any of its affiliates or representatives
violates any of the non-solicitation requirements or restrictions in
the Merger Agreement;
(iii) the PremiumWear Board approves or recommends to PremiumWear's
stockholders any Acquisition Proposal or Superior Proposal;
(iv) PremiumWear enters into any agreement, letter of intent or
similar document contemplating or otherwise relating to any Acquisition
Proposal or Superior Proposal;
(v) the PremiumWear Board fails to reaffirm its determination that
the Offer and the Merger are fair to, and in the best interests of,
PremiumWear's stockholders or fails to reaffirm its recommendation of
acceptance of the Offer and approval and adoption of the Merger
Agreement and the Merger by the stockholders of PremiumWear, within six
business days after Parent requests in writing that such recommendation
or determination be reaffirmed;
(vi) an Acquisition Proposal is publicly announced and PremiumWear
fails to issue a press release announcing its opposition to such
Acquisition Proposal within six business days after such Acquisition
Proposal is announced;
(vii) any of the conditions to the Offer, other than solely the
Financing Condition, shall not have been satisfied by the expiration
date of the Offer and on or prior to such date (A) an Acquisition
Proposal shall have been made or publicly announced or (B) it shall
have been publicly disclosed, or the Parent or Purchaser shall have
otherwise learned, that beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) of 15% or more of the Shares has been acquired
by any person or group (as defined in Section 13(d)(3) under the
Exchange Act); or
(d) by PremiumWear, if PremiumWear shall have approved or recommended,
or executed or entered into a definitive agreement with respect to, a
Superior Proposal in compliance with the non-solicitation and fees and
expenses sections of the Merger Agreement, including making the payments to
Parent required to be made pursuant to the fees and expenses provision of
the Merger Agreement, or if Parent fails to commence the Offer (so long as
PremiumWear is not in breach of its obligations under the Merger
Agreement).
If the Merger Agreement is terminated, it shall become null and void and
there shall be no liability on the part of Parent, Purchaser or PremiumWear;
provided that nothing shall relieve any party from any liability or obligation
with respect to any breach of the Merger Agreement.
If the Merger Agreement is terminated by (i) Parent pursuant to clause
(c)(i) above because of the occurrence of any of the events set forth in (A)
clauses (v)(e) or (f) of Section 14 as a result of an intentional breach by
PremiumWear of any representation or warranty or covenant or agreement or (B)
clause (v)(h) of
27
Section 14, (ii) Parent pursuant to clauses (c)(ii) through (vii) above or
(iii) PremiumWear pursuant to clause (d) above, then PremiumWear shall, in the
case of clause (i) or (ii) of this paragraph, on the business day next
succeeding the date of termination and, in the case of clause (iii) of this
paragraph as provided in the Merger Agreement, (A) reimburse Parent in
immediately available funds for the out-of-pocket expenses of Parent and
Purchaser (including, without limitation, printing fees, filing fees and fees
and expenses of its legal and financial advisors and all fees and expenses
payable to any financing sources) related to the Offer, the Merger Agreement,
the transaction contemplated thereby and any related financing and (B) pay to
Parent in immediately available funds an amount equal to $813,000. The total
amount payable to Parent under the fees and expenses provision of the Merger
Agreement shall not exceed $1,220,000.
Other Arrangements.
Non-Disclosure Agreement. Effective as of February 10, 2000, PremiumWear
and Parent entered into a Mutual Non-Disclosure Agreement (the "Non-Disclosure
Agreement"), pursuant to which the parties agreed to provide, among other
things, for the confidential treatment of their discussions regarding the Offer
and the Merger and the exchange of certain confidential information. The Non-
Disclosure Agreement provides that Parent will not buy PremiumWear's common
stock without the written consent of the PremiumWear Board prior to March 1,
2002. The preceding summary of the Non-Disclosure Agreement is qualified in its
entirety by reference to the Non-Disclosure Agreement, a copy of which is
attached as an exhibit to the Schedule TO. The Non-Disclosure Agreement may be
examined, and copies obtained, as set forth in Section 9.
Consulting Agreement. In connection with the execution of the Merger
Agreement, Mr. Gleason entered into a consulting agreement with Parent and
PremiumWear (the "Consulting Agreement"). The Consulting Agreement has a term
of two years from the date of the Merger Agreement and provides, among other
things, that Mr. Gleason will assist PremiumWear in the transition following
the Merger. In consideration for his services, Mr. Gleason will receive
aggregate consulting and engagement fees of $582,500. The Consulting Agreement
also subjects Mr. Gleason to customary confidentiality, non-competition and
non-solicitation covenants and provides Mr. Gleason with indemnification
protection. The Consulting Agreement supercedes Mr. Gleason's existing change
in control severance agreement with PremiumWear, unless the Merger is not
completed, in which case the Consulting Agreement will be of no effect, and the
change in control severance agreement will be reinstated. The preceding summary
of the Consulting Agreement is qualified in its entirety by reference to the
Consulting Agreement, a copy of which is attached as an exhibit to the Current
Report on Form 8-K filed by PremiumWear with the SEC on June 9, 2000. The
Consulting Agreement may be examined, and copies obtained, as set forth in
Section 8.
12. Plans for PremiumWear after the Offer and the Merger.
Plans for PremiumWear. Pursuant to the Merger Agreement, promptly upon the
purchase of and payment for any Shares by Purchaser pursuant to the Offer,
Parent currently intends to seek maximum representation on the PremiumWear
Board, subject to the requirement in the Merger Agreement that if Shares are
purchased pursuant to the Offer, there shall be until the Effective Time at
least two members of the PremiumWear Board who were directors as of the date of
the Merger Agreement. Purchaser currently intends, as soon as practicable after
consummation of the Offer, to consummate the Merger.
Except as otherwise provided herein, Parent has no present plans or
proposals that would result in an extraordinary corporate transaction involving
PremiumWear or any of its subsidiaries, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of a material amount
of assets. However, PremiumWear's and Parent's management will continue to
routinely review proposals for the acquisition or disposition of assets or
other changes to PremiumWear's business, corporate structure, capitalization,
management or dividend policy which they consider to be in the best interests
of PremiumWear and Parent. In addition, following the Merger, PremiumWear's
management will continue to evaluate and review PremiumWear's businesses,
operations and properties and make such changes as are deemed appropriate.
28
Stockholder Approval. Under the DGCL, the approval of the PremiumWear Board
and the affirmative vote of the holders of a majority of the outstanding Shares
are required to adopt and approve the Merger Agreement and the transactions
contemplated thereby. PremiumWear has represented in the Merger Agreement that
the execution and delivery of the Merger Agreement by PremiumWear and the
consummation by PremiumWear of the transactions contemplated by the Merger
Agreement have been duly authorized by all necessary corporate action on the
part of PremiumWear, subject to the approval of the Merger by PremiumWear's
stockholders in accordance with the DGCL. In addition, PremiumWear has
represented that the affirmative vote of the holders of a majority of the
outstanding Shares is the only vote of the holders of any class or series of
PremiumWear's capital stock which is necessary to approve the Merger Agreement
and the transactions contemplated thereby, including the Merger. Therefore,
unless the Merger is consummated pursuant to the short-form merger provisions
under the DGCL described below (in which case no further corporate action by
the stockholders of PremiumWear will be required to complete the Merger), the
only remaining required corporate action of PremiumWear will be the approval of
the Merger Agreement and the transactions contemplated thereby by the
affirmative vote of the holders of a majority of the Shares. The Merger
Agreement provides that Parent will vote, or cause to be voted, all of the
Shares then owned by Parent, Purchaser or any of Parent's other subsidiaries
and affiliates in favor of the approval of the Merger and the adoption of the
Merger Agreement. In the event that Parent, Purchaser and Parent's other
subsidiaries and affiliates acquire in the aggregate at least a majority of the
Shares entitled to vote on the approval of the Merger and the Merger Agreement
(which would be the case if the Minimum Condition is satisfied and Purchaser
were to accept for payment Shares tendered in the Offer), they would have the
ability to effect the Merger by written consent or at a stockholder meeting
without the affirmative votes of any other stockholders.
Short-Form Merger. Section 253 of the DGCL provides that, if a corporation
owns at least 90% of the outstanding shares of each class of another
corporation, the corporation holding such stock may merge itself into such
corporation without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a "short-form merger"). In the
event that Parent, Purchaser and any other subsidiaries of Parent acquire in
the aggregate at least 90% of the outstanding Shares, pursuant to the Offer or
otherwise, then, at the election of Parent, a short-form merger could be
effected without any approval of the stockholders of PremiumWear, subject to
compliance with the provisions of Section 253 of the DGCL. Even if Parent and
Purchaser do not own 90% of the outstanding Shares following consummation of
the Offer, Parent and Purchaser could seek to purchase additional Shares in the
open market or otherwise in order to reach the 90% threshold and employ a
short-form merger. The per Share consideration paid for any Shares so acquired
may be greater or less than that paid in the Offer. Parent and Purchaser
presently intend to effect a short-form merger if permitted to do so under the
DGCL.
Appraisal Rights. Holders of the Shares do not have appraisal rights in
connection with the Offer. However, if the Merger is consummated, holders of
the Shares at the Effective Time will have certain rights pursuant to the
provisions of Section 262 of the DGCL, including the right to dissent and
demand appraisal of, and to receive payment in cash of the fair value of, their
Shares. Under Section 262 of the DGCL, dissenting stockholders of PremiumWear
who comply with the applicable statutory procedures will be entitled to receive
a judicial determination of the fair value of their Shares (exclusive of any
element of value arising from the accomplishment or expectation of the Merger)
and to receive payment of such fair value in cash, together with a fair rate of
interest thereon, if any. Any such judicial determination of the fair value of
the Shares could be based upon factors other than, or in addition to, the price
per Share to be paid in the Merger or the market value of the Shares. The value
so determined could be more or less than the price per Share to be paid in the
Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS UNDER THE
DGCL DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE
FOLLOWED BY STOCKHOLDERS DESIRING TO EXERCISE ANY APPRAISAL RIGHTS AVAILABLE
UNDER THE DGCL. THE PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE
STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL.
29
13. Dividends and Distributions.
On January 27, 1997, the PremiumWear Board declared a special cash
distribution of $5.39 per share, or approximately $12,500,000, to stockholders
of record on February 19, 1997, which was paid on March 5, 1997. The funds
utilized were proceeds from the 1996 sales of trademarks and collection of
accounts receivable and liquidation of inventories related to the former retail
and golf businesses. PremiumWear has not paid other cash dividends to date and
intends to retain any future earnings for use in the business. Except as set
forth below and except for the impact of normal financial covenants in loan
agreements and the provisions of the DGCL, there are no restrictions on
PremiumWear's ability to pay dividends.
The Merger Agreement provides that prior to the Effective Date, neither
PremiumWear nor any PremiumWear subsidiary shall: (i) issue or sell, or
authorize the issuance or sale of, any shares of its capital stock or any other
securities, or issue or sell, or authorize the issuance or sale of, any
securities convertible into, or options, warrants or rights to purchase or
subscribe to, or enter into any arrangement or contract with respect to the
issuance or sale of, any shares of its capital stock or any other securities,
or make any other changes in its capital structure, except for the issuance and
sale of Shares upon the exercise of PremiumWear stock options outstanding on
the date of the Merger Agreement; (ii) sell or pledge or agree to sell or
pledge any stock or other equity interest owned by it in any other person; or
(iii) declare, pay or set aside any dividend or other distribution or payment
with respect to, or split, combine, redeem or reclassify, or purchase or
otherwise acquire, any shares of its capital stock or its other securities.
14. Conditions of the Offer.
The Offer is subject to the condition that there shall have been validly
tendered and not withdrawn prior to the expiration of the Offer, a majority of
the issued and outstanding Shares, on a fully diluted basis, as of the date of
expiration.
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its sole discretion (subject to the provisions of the Merger
Agreement), Purchaser shall not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
under the Exchange Act (relating to Purchaser's obligation to pay for or return
tendered Shares promptly after termination or withdrawal of the Offer), pay
for, and may delay the acceptance for payment of or, subject to the restriction
referred to above, the payment for, any tendered Shares, and may terminate or
amend the Offer as to any Shares not then paid for, if (i) the Minimum
Condition shall not have been satisfied, (ii) any applicable waiting period
(and any extension thereof) under the HSR Act shall not have expired or been
terminated, (iii) any permit, consent or approval of any federal, state, local
or foreign governmental or regulatory body, agency or authority or third party
necessary to the consummation of the Offer or the Merger, shall not have been
obtained, (iv) any condition to Parent's borrowing under the Credit Agreement
an amount equal to the aggregate of (A) the Offer Price multiplied by the
number of Shares and (B) the aggregate Stock Option Consideration (as defined
below) shall not have been satisfied or (v) at any time on or after the date of
the Merger Agreement and at or before the time of payment for any such Shares
(whether or not any Shares have theretofore been accepted for payment or paid
for pursuant to the Offer) any of the following shall occur or shall occur:
(a) there shall be threatened, instituted or pending any action or
proceeding by any government or governmental authority or agency, domestic
or foreign, or by any other person, domestic or foreign, before any court
of competent jurisdiction or governmental authority or agency, domestic or
foreign, (1) challenging or seeking to, or which could reasonably be
expected to make, illegal, impede, delay or otherwise directly or
indirectly restrain, prohibit or make materially more costly the Offer or
the Merger or seeking to obtain material damages, (2) seeking to impose
material limitations on the ability of Purchaser, or render Purchaser
unable, to accept for payment, pay for or purchase some or all of the
Shares tendered pursuant to the Offer or the Merger, (3) seeking to
prohibit or materially limit the ownership or operation by Parent or
Purchaser of all or any material portion of the business or assets of
PremiumWear and its
30
subsidiaries taken as a whole or to compel Parent or Purchaser to dispose
of or hold separately all or any material portion of the business or assets
of Parent and its subsidiaries taken as a whole or PremiumWear and its
subsidiaries taken as a whole, or seeking to impose any material limitation
on the ability of Parent, Purchaser, PremiumWear or any of PremiumWear's
subsidiaries to conduct its business or own such assets, (4) seeking to
impose limitations on the ability of Parent or Purchaser effectively to
exercise full rights of ownership of the Shares, including, without
limitation, the right to vote any Shares acquired or owned by Purchaser or
Parent on all matters properly presented to PremiumWear's stockholders, (5)
seeking to require divestiture by Parent or Purchaser of any Shares, (6)
seeking any material diminution in the benefits expected to be derived by
Parent or Purchaser as a result of the transactions contemplated by the
Offer or the Merger, (7) otherwise directly or indirectly relating to the
Offer or the Merger and which has had, or could reasonably be expected to
have, a Material Adverse Effect on PremiumWear or Parent or the value of
the Shares or (8) otherwise having, or which could reasonably be expected
to have, a Material Adverse Effect on PremiumWear;
(b) there shall be any action taken, or any statute, law, rule,
regulation, legislation, interpretation, judgment, order or injunction
proposed, enacted, enforced, promulgated, amended or issued and applicable
to or deemed applicable to (1) Parent, Purchaser, PremiumWear or any
subsidiary thereof or (2) the Offer or the Merger, by any legislative body,
court, government or governmental, administrative or regulatory authority
or agency, domestic or foreign, other than the routine application of the
waiting period provisions of the HSR Act to the Offer or to the Merger,
which would, directly or indirectly, result in any of the consequences
referred to in clauses (1) through (8) of paragraph (v)(a) above;
(c) any event, change, effect, fact or circumstance shall have occurred,
or Parent shall have become aware of any event, change, effect, fact,
circumstance or occurrence that has had, or could reasonably be expected to
have, a Material Adverse Effect on PremiumWear;
(d) there shall have occurred (1) any general suspension of trading in,
or limitation on prices for, securities on any U.S. securities exchange or
in any U.S. over-the-counter market, (2) any decline in any of the Dow
Jones Industrial Average, the Standard & Poor's Index of 500 Industrial
Companies, the New York Stock Exchange Composite Index or the Nasdaq
Composite Index in excess of 30% measured from the close of business on the
trading day next preceding the date of the Merger Agreement, (3) any
material adverse change in the general political, market, economic or
financial conditions in the United States or abroad that has had, or could
reasonably be expected to have, a Material Adverse Effect on PremiumWear,
(4) any material change in United States or any other currency exchange
rates or a suspension of, or limitation on, the markets therefor, (5) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or any other jurisdiction in which
any bank or other financial institution in any manner involved with the
financing of the Offer or the Merger is incorporated, (6) any material
limitation (whether or not mandatory) by any federal, state or foreign
governmental authority or agency on, the extension of credit by banks or
other lending institutions, (7) a commencement or escalation of a war or
armed hostilities or other national or international calamity directly or
indirectly involving the United States or (8) in the case of any of the
foregoing existing at the time of the commencement of the Offer, any
acceleration or worsening thereof;
(e) any of the representations or warranties made by PremiumWear in the
Merger Agreement that are qualified as to materiality shall be untrue or
incorrect in any respect or any such representations and warranties that
are not so qualified shall be untrue or incorrect in any material respect,
in each case as of the date of the Merger Agreement and the scheduled
expiration date of the Offer, except for (1) changes specifically permitted
by the Merger Agreement and (2) those representations and warranties which
address matters only as of a particular date, which representations and
warranties shall remain true and correct as of such date;
(f) PremiumWear shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of PremiumWear to be performed or complied with by it under the
Merger Agreement;
31
(g) the PremiumWear Board or any committee thereof shall have (1)
withdrawn, or shall have modified or amended in a manner adverse to Parent
or Purchaser, the approval, adoption or recommendation, as the case may be,
of the Offer, the Merger or the Merger Agreement, (2) approved or
recommended, or announced a neutral position with respect to, any
Acquisition Proposal other than the Offer and the Merger or (3) upon
request by Parent, failed to reaffirm its approval and recommendation of
the Offer, the Merger or the Merger Agreement within six business days of
such request;
(h) it shall have been publicly disclosed, or Purchaser shall have
otherwise learned, that beneficial ownership (determined for the purposes
of this paragraph (h) as set forth in Rule 13d-3 under the Exchange Act) of
15% or more of the Shares has been acquired by any person (including
PremiumWear or any of its Subsidiaries or Affiliates) or group (as defined
in Section 13(d)(3) under the Exchange Act); or
(i) the Merger Agreement shall have been terminated in accordance with
its terms;
which, in the sole judgment of Purchaser, in any such case and regardless of
the circumstances giving rise to any such condition, makes it inadvisable to
proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser, or may be waived by Parent or
Purchaser, in whole or in part at any time and from time to time in their
respective sole discretion. The failure by Parent or Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time. Any determination by Parent or
Purchaser with respect to whether or not the foregoing conditions to the Offer
described in this Section 14 have been satisfied shall be final and binding
upon all parties.
The term "Stock Option Consideration" means, with respect to each
PremiumWear Option outstanding immediately prior to the Effective Time (whether
or not then exercisable), an amount in cash equal to the excess of (i) the
product of (A) the excess, if any, of (x) the Offer Price over (y) the per
share exercise price of such PremiumWear Option multiplied by (B) the number of
Shares subject to such PremiumWear Option over (ii) any federal or state income
tax or employment tax withholding required under the Code.
15. Legal Matters; Regulatory Approvals.
General. Except as described below, Parent and Purchaser are not aware of
any license or regulatory permit that appears to be material to the business of
PremiumWear and its subsidiaries, taken as a whole, that might be adversely
affected by Purchaser's acquisition of Shares pursuant to the Offer. Likewise,
Parent is not aware of any approval or other action by any governmental,
administrative or regulatory agency, or authority or public body, domestic or
foreign, that would be required for the acquisition or ownership of Shares by
Purchaser pursuant to the Offer. Should any approval or other action be
required, it is presently contemplated that the approval or action would be
sought except as described below in this Section under "State Takeover
Statutes." While, except as otherwise expressly described in this Offer,
Purchaser does not currently intend to delay acceptance for payment of Shares
tendered pursuant to the Offer pending the outcome of any such matter, there
can be no assurance that any such approval or other action, if needed, would be
obtained without substantial conditions or that adverse consequences might not
result to PremiumWear's business or that certain parts of PremiumWear's
business might not have to be disposed of if the approvals were not obtained or
such other actions were not taken or to obtain any such approval or other
action, any of which could cause Purchaser to decline to accept for payment, or
pay for, any Shares tendered. Purchaser's obligation under the Offer to accept
for payment and pay for Shares is subject to the conditions to the Offer,
including conditions relating to legal matters discussed in this Section 15.
Antitrust. The Offer is subject to the HSR Act and the rules promulgated
thereunder, which provide that certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division and the FTC and certain waiting period requirements have been
satisfied.
32
Pursuant to the requirements of the HSR Act, Parent expects to file a
Notification and Report form with respect to the Offer and Merger with the
Antitrust Division and the FTC on or about June 9, 2000. As a result, the
waiting period applicable to the purchase of Shares pursuant to the Offer is
scheduled to expire at 11:59 p.m., New York City time, 15 days after such
filing. However, prior to such time, the Antitrust Division or the FTC may
extend the waiting period by requesting additional information or documentary
material relevant to the Offer from Parent. If such a request is made, the
waiting period will be extended until 11:59 p.m., New York City time, on the
tenth day after substantial compliance by Parent with such request. Thereafter,
such waiting period can be extended only by court order.
The Antitrust Division and the FTC frequently scrutinize the legality under
the Antitrust Laws (as defined below) of transactions such as Purchaser's
acquisition of Shares pursuant to the Offer and the Merger. At any time before
or after Purchaser's acquisition of Shares, the Antitrust Division or the FTC
could take such action under the Antitrust Laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the acquisition
of Shares pursuant to the Offer or otherwise seeking divestiture of Shares
acquired by Purchaser or divestiture of substantial assets of Parent,
PremiumWear or their respective affiliates. Private parties and state attorneys
general may also bring legal action under the Antitrust Laws under certain
circumstances.
Based upon an examination of information provided by PremiumWear relating to
the businesses in which Parent and PremiumWear are engaged, Parent and
Purchaser believe that the acquisition of Shares by Purchaser pursuant to the
Offer or Merger will not violate the Antitrust Laws. Nevertheless, there can be
no assurance that a challenge to the Offer or other acquisition of Shares by
Purchaser on antitrust grounds will not be made or, if such a challenge is
made, what the result would be.
As used in this Offer to Purchase, "Antitrust Laws" shall mean and include
the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, and all other Federal and state
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict
or regulate actions having the purpose or effect of monopolization or restraint
of trade.
State Takeover Statutes. PremiumWear is incorporated under the laws of the
State of Delaware. In general, Section 203 of the DGCL prevents an "interested
stockholder" (generally, a person who owns or has the right to acquire 15% or
more of a corporation's outstanding voting stock, or an affiliate or associate
of that person) from engaging in a "business combination" (defined to include
mergers and other transactions) with a Delaware corporation for a period of
three years following the date such person became an interested stockholder
unless, among other things, before that date the board of directors of the
corporation approved either the business combination or the transaction in
which the interested director became an interested stockholder. PremiumWear has
taken action to render Section 203 inapplicable to the Offer and the Merger.
A number of states have adopted "takeover" statutes that purport to apply to
attempts to acquire corporations that are incorporated in those states, or
whose business operations have substantial economic effects in such states, or
which have substantial assets, security holders, employees, principal executive
offices, or places of business in such states. In Edgar v. MITE Corporation,
the Supreme Court of the United States invalidated on constitutional grounds
the Illinois Business Takeover Act, which, as a matter of state securities law,
made takeovers of corporations meeting certain requirements more difficult.
However, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that
a state may, as a matter of corporate law and, in particular, those laws
concerning corporate governance, constitutionally disqualify a potential
acquirer from voting on the affairs of a target corporation without prior
approval of the remaining stockholders, provided that the corporation has a
substantial number of stockholders in the state and is incorporated there.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal District Court
in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as
they apply to corporations incorporated outside Oklahoma in that they would
subject such corporations to inconsistent regulations. Similarly, in Tyson
Foods, Inc. v. McReynolds, a Federal District Court in Tennessee ruled that
four Tennessee takeover statutes were unconstitutional as applied to
corporations incorporated outside Tennessee. This decision was affirmed by the
United States Court of Appeals for the Sixth Circuit.
33
PremiumWear, directly or through its subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover statutes. Purchaser does not know whether any of these statutes will,
by their terms, apply to the Offer, and has not complied with any such
statutes. To the extent that the provisions of these statutes purport to apply
to the Offer, Purchaser believes there are reasonable bases for contesting such
statutes. If any person should seek to apply any state takeover statute,
Purchaser would take such action as then appears desirable, which action may
include challenging the validity or applicability of any such statute in
appropriate court proceedings. If 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, Purchaser might be required to file information with, or receive
approvals from, the relevant state authorities, and Purchaser might be unable
to purchase or pay for Shares tendered pursuant to the Offer, or be delayed in
continuing or consummating the Offer. In such case, Purchaser may not be
obligated to accept for payment, or pay for, Shares tendered pursuant to the
Offer.
16. Fees and Expenses.
Purchaser has retained The Altman Group, Inc. to act as the Information
Agent in connection with the Offer. The Information Agent may contact holders
of Shares by mail, telephone, fax and personal interviews and may request
brokers, dealers and other nominee stockholders to forward materials to the
beneficial owners of Shares. The Information Agent will receive reasonable and
customary compensation for its services, will be reimbursed for certain
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities and expenses in connection therewith, including certain liabilities
under the federal securities laws.
Purchaser has retained EquiServe Trust Company, N.A. to serve as the
Depositary. The Depositary has not been retained to make solicitations or
recommendation in its role as Depositary. The Depositary will receive
reasonable and customary compensation for its services, will be reimbursed for
certain reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith, including certain
liabilities under federal securities laws.
Neither Parent nor Purchaser will pay any fees or commissions to any broker
or dealer or to any other person (other than to the Information Agent and the
Depositary) in connection with the solicitation of tenders of Shares pursuant
to the Offer. Brokers, dealers, commercial banks and trust companies will, upon
request, be reimbursed by Parent for customary mailing and handling expenses
incurred by them in forwarding interest to their customer.
17. Miscellaneous.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky, or other laws of such jurisdiction. Purchaser may, in its discretion,
however, take such action as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to holders of Shares in any such
jurisdiction. In any jurisdiction where the securities, blue sky, or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Purchaser by one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of Parent or Purchaser that is not contained in this
Offer or in the Letter of Transmittal and, if given or made, that information
or representation must not be relied upon as having been authorized.
34
Parent and Purchaser have filed with the SEC the Schedule TO and PremiumWear
has filed with the SEC the Schedule 14D-9, together with exhibits in each case,
pursuant to Regulation M-A and Rule 14d-9, respectively, under the Exchange
Act, furnishing certain additional information with respect to the Offer. Such
Schedules and any amendments thereto, including exhibits, are available for
inspection and copies can be obtained in the same manner set forth in Section 8
(except that such material will not be available at the regional offices of the
SEC).
NEW ENGLAND BUSINESS SERVICE, INC
PENGUIN SUB, INC.
June 9, 2000
35
SCHEDULE I
INFORMATION CONCERNING
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT AND PURCHASER
Directors, Executive Officers and Managers of Purchaser and Parent. The
following tables set forth the names and present principal occupations or
employment, and material occupations, positions, offices or employment for the
past five years, of the directors and executive officers of Purchaser and
Parent. Unless otherwise indicated, each person is a citizen of the United
States with a principal business address of 500 Main Street, Groton,
Massachusetts 01471.
DIRECTORS OF PARENT:
- --------------------
Present Principal Occupation or Employment; Material
Name Positions Held During Past Five Years
- ---- -------------------------------------
Neil S. Fox, age 60 Mr. Fox has been a director of Parent since April
1999. Mr. Fox has been a self-employed consultant in
the field of database and direct response marketing
since February 2000. Prior to that, he was chairman
and chief executive officer of Lowe Fox Pavlika, a
marketing consulting firm affiliated with the
Interpublic Group of Companies, from 1998 to February
2000. Prior to that he was chairman of Fox Pavlika &
Partners for more than five years.
Robert L. Gable, age Mr. Gable has been a director of Parent since 1996.
68 Mr. Gable was chairman of Unitrode Corporation, a
supplier of electronic components and sub-systems,
from 1990 until his retirement in 1998, and was chief
executive officer of Unitrode from 1990 to 1997. Mr.
Gable is a director of Evercel, Inc. and Ibis
Technology Corporation. Mr. Gable's present business
address is 7 Continental Boulevard, Merrimack, NH
03054.
Benjamin H. Lacy, age Mr. Lacy has been a director of Parent since 1970.
73 Mr. Lacy's principal occupation since May 1995 has
been as president of the Clipper Ship Foundation,
Inc., a grant-making charitable foundation. Prior to
that he was of counsel to the law firm of Hill &
Barlow, a professional corporation, which served as
general counsel to Parent from 1973 to 1998. Mr.
Lacy's present business address is Clipper Ship
Foundation, Inc., 77 Summer Street, Boston, MA 02110.
Thomas J. May, age 53 Mr. May has been a director of Parent since 1999. Mr.
May has been chairman and chief executive officer of
NSTAR, an energy utility holding company formed in
connection with the combination of BEC Energy and
Commonwealth Energy Systems, and its principal
operating subsidiaries since 1999. Prior to that he
was chairman and chief executive officer of BEC
Energy, an energy utility holding company, and its
principal operating subsidiaries from 1998 to 1999.
He has been chairman and chief executive officer of
Boston Edison Company, a regulated holding company,
since 1994, and was president of Boston Edison from
1994 to 1999. Mr. May is a trustee of NSTAR and a
director of Fleet Boston Financial Corporation,
Liberty Financial Companies, Inc. and RCN
Corporation. Mr. May's present business address is
NSTAR, 800 Boylston Street, Boston, MA 02199.
Schedule I-1
Present Principal Occupation or Employment; Material
Name Positions Held During Past Five Years
- ---- -------------------------------------
Herbert W. Moller, age Mr. Moller has been a director of Parent since 1996.
59 Mr. Moller retired from The Gillette Company, a
diversified consumer products company, in 1998,
having been with Gillette for 32 years. From 1992
until his retirement in 1998, Mr. Moller was vice
president, finance and strategic planning, Gillette
North Atlantic Group.
Robert J. Murray, age Mr. Murray has been a director of Parent since 1991.
58 Mr. Murray has been chairman of the board, president
and chief executive officer of Parent since 1995. Mr.
Murray retired from The Gillette Company, a
diversified consumer products company, in 1995,
having been with Gillette for more than 34 years.
From 1991 until his retirement in 1995, Mr. Murray
was executive vice president, North Atlantic Group of
Gillette. Mr. Murray is a director of Fleet National
Bank, LoJack Corporation, Hannaford Bros. Co. and
Allmerica Financial Corporation.
Richard H. Rhoads, age Mr. Rhoads joined Parent in 1965 and has been a
70 director since 1970. From 1975 to 1991, he was chief
executive officer of Parent, and from 1988 to his
retirement in 1995, he was chairman of the board of
Parent.
Brian E. Stern, age 51 Mr. Stern has been a director of Parent since 1995.
Mr. Stern has been senior vice president of Xerox
Corporation, a provider of document processing
products and services, and president of Xerox
Technology Enterprises since 1999. From 1994 to 1999,
he was senior vice president and president of the
Office Document Products Group of Xerox. Mr. Stern is
a director of HON Industries, Inc. and Esselte AB.
Mr. Stern's present business address is Xerox
Corporation, 800 Long Ridge Road, Stamford, CT 06904.
M. Anne Szostak, age Ms. Szostak has been a director of Parent since 1998.
49 Ms. Szostak has been executive vice president and
corporate director of human resources of Fleet Boston
Financial Corporation (formerly known as Fleet
Financial Group, Inc.), a diversified financial
services company, since 1998. From 1994 to 1998, Ms.
Szostak was senior vice president and corporate
director of human resources of Fleet. Ms. Szostak is
a director of Providence Energy Corporation. Ms.
Szostak's present business address is Fleet Boston
Financial Corporation, 1 Federal Street, Boston, MA
02110.
EXECUTIVE OFFICERS OF PARENT:
- ----------------------------
Present Principal Occupation or Employment; Material
Name Positions Held During Past Five Years
- ---- -------------------------------------
George P. Allman, age Mr. Allman joined Parent in 1996, and he has been
58 senior vice president and president of diversified
operations since October 1998. Prior to that, he
served as vice president, diversified operations from
1996 to 1998, and as vice president, retail sales and
operations during 1996. Prior to joining Parent, he
was a private investor during 1995, and founded and
served as President of GPA Associates, Inc., a
diversified promotional products supplier, from 1984
to 1995.
Schedule I-2
Present Principal Occupation or Employment; Material
Name Positions Held During Past Five Years
- ---- -------------------------------------
Edward M. Bolesky, age Mr. Bolesky joined Parent in 1981, and he has been
54 senior vice president and president of NEBS direct
marketing since October 1998. Prior to that, he
served as vice president, direct marketing/telesales
and service from 1996 to 1998, as vice president,
business solutions and operations from 1995 to 1996,
as vice president, manufacturing and information
systems during 1995, as vice president, operations
from 1994 to 1995, and prior to that in numerous
capacities in operations and administration.
John F. Fairbanks, age Mr. Fairbanks joined Parent in 1994, and he has been
38 senior vice president and president of Chiswick since
October 1998. Prior to that, he served as vice
president and chief financial officer from 1996 to
1998, and as vice president and corporate controller
during 1996. He also served as treasurer from 1994 to
1996 and during 1998, and as secretary from 1994 to
1996. Mr. Fairbanks's present business address is
Chiswick, Inc., 33 Union Avenue, Sudbury, MA 01776.
Joel S. Hughes, age 55 Mr. Hughes joined Parent in February 1999, and he has
been senior vice president, corporate channel
marketing since that date. Prior to joining Parent,
he served as vice president of marketing, sales and
service of Harvard Business School Publishing from
1992 to 1999.
Daniel M. Junius, age Mr. Junius joined Parent in October 1998, and he has
47 been senior vice president and chief financial
officer and treasurer since that date. Prior to
joining Parent, he served as vice president -finance
and chief financial officer of Nashua Corporation, a
supplier of specialty imaging products and services,
from 1995 to 1998, and as Treasurer of Nashua
Corporation from 1985 to 1998.
Richard T. Riley, age Mr. Riley has been senior vice president and
44 president of Rapidforms since October 1998. Mr. Riley
joined Parent in 1997 in connection with Parent's
acquisition of Rapidforms, Inc., where he has been
President since 1992. During 1998 he held the
additional office of Vice President of Parent. Mr.
Riley's present business address is Rapidforms, Inc.,
301 Grove Road, Thorofare, NJ 08086.
Steven G. Schlerf, age Mr. Schlerf joined Parent in 1979, and he has been
47 senior vice president, manufacturing and technical
operations since October 1998. Prior to that, he
served as vice president, manufacturing and technical
operations from 1996 to 1998, as vice president,
image manufacturing and product development from 1995
to 1996, and prior to that in a variety of capacities
in manufacturing and operations.
Robert D. Warren, age Mr. Warren joined Parent in 1996, and he has been
49 senior vice president, business management and
development since October 1998. Prior to that, he
served as vice president, business management and
development from 1996 to 1998, and as vice president,
business management and business solutions during
1996. Prior to joining Parent, he served as vice
president, marketing for Gillette Stationery
Products, North America of The Gillette Company from
1992 to 1996.
Schedule I-3
Present Principal Occupation or Employment; Material
Name Positions Held During Past Five Years
- ---- -------------------------------------
Directors and Executive Officers of Purchaser:
Robert J. Murray Mr. Murray is president and a director of Purchaser.
See Mr. Murray's biographical information above.
Daniel M. Junius Mr. Junius is treasurer and a director of Purchaser.
See Mr. Junius's biographical information above.
Craig Barrows, age 45 Mr. Barrows is secretary of Purchaser. Mr. Barrows
joined Parent in 1998, and he has been vice
president, general counsel and secretary since 1999.
Prior to that, he served as general counsel and
secretary from 1998 to 1999. Prior to joining Parent,
he was general counsel and secretary of Media 100
Inc., a supplier of high performance desktop digital
video products, from 1996 to 1998. Prior to that he
was general counsel and secretary of M/A-COM, Inc. a
supplier of microwave semiconductors, components and
sub-systems, from 1994 to 1996.
Schedule I-4
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each
stockholder of PremiumWear or his or her broker, dealer, commercial bank, trust
company or other nominee to the Depositary, at one of the addresses set forth
below:
The Depositary for the Offer is:
EquiServe Trust Company, N.A.
c/o EquiServe
150 Royall Street
Canton, Massachusetts 02021
(781) 575-2330
By First Class Mail: By Overnight Courier, By Hand:
Certified or Express
Mail Delivery:
Securities Transfer &
BankBoston, N.A. BankBoston, N.A. Reporting Services, Inc.
Attn: Corporate Actions Attn: Corporate Actions c/o Boston EquiServe LP
P.O. Box 8029 150 Royall Street 100 William Street,
Boston, MA 02266-8029 Canton, MA 02021 Galleria
New York, NY 10038
Guarantee of Delivery Facsimile For Confirmation by Telephone:
Transmission for Eligible (800) 736-3001
Institutions:
(781) 575-2233/2232
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
the Guidelines for Certification of Taxpayer Identification on Substitute Form
W-9 may be directed to the Information Agent at the address and telephone
number 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:
The Altman Group, Inc.
60 East 42nd Street, Suite 1241
New York, New York 10165
Call Collect: (212) 681-9600
Banks, Brokers & Stockholders Call Toll-Free:
(800) 206-0007