As filed with the Securities and Exchange Commission on April 10, 2001
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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JONES APPAREL GROUP, INC.
(Exact name of Registrant as specified in its charter)
JONES APPAREL GROUP HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
JONES APPAREL GROUP USA, INC.
(Exact name of Registrant as specified in its charter)
NINE WEST GROUP INC.
(Exact name of Registrant as specified in its charter)
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Pennsylvania 06-0935166
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Delaware 51-0390339
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Pennsylvania 23-2978516
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Delaware 13-4060243
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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250 Rittenhouse Circle
Bristol, Pennsylvania 19007
(215) 785-4000
(Address, including zip code, and telephone number,
including area code, of Registrant's
principal executive offices)
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Ira M. Dansky, Esq.
Jones Apparel Group, Inc.
1411 Broadway
New York, New York 10018
(212) 536-9526
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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With a copy to:
William V. Fogg, Esq.
Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
(212) 474-1000
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Approximate date of commencement of proposed sale to public: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box: [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), other than securities
offered only in connection with dividend or interest reinvestment plans,
please check the following box: [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ] ____________
If delivery of the prospectus is expected to be made pursuant to
Rule 434 under the Securities Act, please check the following box. [X]
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CALCULATION OF REGISTRATION FEE
Proposed Maximum
Title of Each Class of Securities Amount to be Proposed Maximum Aggregate Aggregate Offering Price Amount of
to be Registered Registered(1)(2) Price Per Unit (1)(2) (1)(3) Registration Fee(4)
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Debt Securities....................
Preferred Stock (5)................
Common Stock, par value
$.01 per share, of Jones Apparel
Group, Inc.(6).....................
Warrants (7).......................
Total.............................. $450,000,000.00 $112,500.00
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(1) There are being registered under this Registration Statement such
indeterminate number of shares of common stock and preferred stock of
the Registrants, such indeterminate number of warrants of the
Registrants, and such indeterminate principal amount of debt
securities of the Registrants, as shall have an aggregate initial
offering price not to exceed $450,000,000. If any debt securities are
issued at an original issue discount, then the securities registered
shall include such additional debt securities as may be necessary such
that the aggregate initial public offering price of all securities
issued pursuant to this Registration Statement will equal
$450,000,000. Any securities registered under this Registration
Statement may be sold separately or as units with other securities
registered under this Registration Statement. The proposed maximum
initial offering prices per unit will be determined, from time to
time, by the Registrants in connection with the issuance by the
Registrants of the securities registered under this Registration
Statement.
(2) Not specified with respect to each class of securities to be
registered pursuant to General Instruction II.D. of Form S-3 under the
Securities Act.
(3) Estimated solely for the purpose of calculating the registration fee.
Any offering of debt securities denominated in any foreign currency or
currency unit will be treated as the equivalent in U.S. dollars based
on the exchange rate applicable to the purchase of such debt
securities from the Registrant. No separate consideration will be
received for common stock, preferred stock, Warrants or debt
securities that are issued upon conversion or exchange of debt
securities or preferred stock registered hereunder.
(4) Calculated pursuant to Rule 457 of the rules and regulations under the
Securities Act.
(5) Including such indeterminate number of shares of preferred stock as
may from time to time be issued (i) at indeterminate prices or (ii)
upon conversion or exchange of debt securities registered hereunder,
to the extent any such debt securities are, by their terms,
convertible into preferred stock.
(6) Including such indeterminate number of shares of common stock as may
from time to time be issued (i) at indeterminate prices or (ii) upon
conversion or exchange of debt securities or preferred stock
registered hereunder, to the extent any of such debt securities or
shares of preferred stock are, by their terms, convertible into common
stock.
(7) Including such indeterminate number of warrants as may from time to
time to be issued at indeterminate prices, representing rights to
purchase certain of the common stock, preferred stock or debt
securities registered hereunder.
--------------------------
The Registrants hereby amend this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrants shall file a further amendment that specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
PROSPECTUS
Jones Apparel Group, Inc.
Jones Apparel Group Holdings, Inc.
Jones Apparel Group USA, Inc.
Nine West Group Inc.
In this prospectus, the terms "we," "us," and "our" refer
collectively to Jones Apparel Group, Inc. and its subsidiaries Jones
Apparel Group Holdings, Inc., Jones Apparel Group USA, Inc. and Nine West
Group Inc.
From time to time, we, as co-obligors, may sell any of the
following securities:
- DEBT SECURITIES
- WARRANTS (DEBT)
From time to time, Jones Apparel Group, Inc. may also sell any of
the following securities:
- PREFERRED STOCK
- COMMON STOCK
- WARRANTS (STOCK)
We will provide the specific terms of these securities in one or
more supplements to this prospectus. You should read this prospectus and
any prospectus supplement carefully before you invest. The aggregate of the
offering prices of securities covered by this prospectus will not exceed
$450,000,000.
Jones Apparel Group common stock is listed on the New York Stock
Exchange under the symbol "JNY." The applicable prospectus supplement will
contain information, where applicable, as to any other listing (if any) on
the New York Stock Exchange or any securities exchange of the securities
covered by the prospectus supplement.
The securities may be sold to investors, through agents
designated from time to time or to or through underwriters or dealers. See
"Plan of Distribution." If any underwriters are involved in the sale of any
securities in respect of which this prospectus is being delivered, the
names of such underwriters and any applicable commissions or discounts will
be set forth in a prospectus supplement. The net proceeds we expect to
receive from such sale also will be set forth in a prospectus supplement.
Investing in the securities involves certain risks. See "Risk
Factors" beginning on page 5.
This prospectus may not be used to offer or sell any securities
unless accompanied by a prospectus supplement.
Neither the Securities and Exchange Commission (the "SEC") nor
any state securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is April 10, 2001.
TABLE OF CONTENTS
Page
About this Prospectus.................................................3
Where You Can Find More Information...................................3
Special Note Regarding Forward-Looking Statements.....................4
The Company...........................................................5
Risk Factors..........................................................5
Use of Proceeds.......................................................8
Ratio of Earnings to Fixed Charges....................................8
Description of Debt Securities........................................8
Description of Capital Stock..........................................20
Description of Warrants...............................................21
Plan of Distribution..................................................22
Validity of Securities................................................23
Experts...............................................................23
As used in this prospectus, unless the context requires
otherwise:
o "We," "us" and "our" refer collectively to Jones Apparel
Group, Inc., Jones Apparel Group Holdings, Inc., Jones
Apparel Group USA, Inc., and Nine West Group Inc.;
o "Jones" or the "Company" means Jones Apparel Group, Inc.
and/or its predecessors and consolidated subsidiaries,
including the other issuers, as the context may require;
o "Jones Apparel Group" means Jones Apparel Group, Inc.;
o "Jones Holdings" means Jones Apparel Group Holdings, Inc.;
o "Jones USA" means Jones Apparel Group USA, Inc.; and
o "Nine West" means Nine West Group Inc.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed
with the SEC utilizing a "shelf" registration process. Under this shelf
process, we may sell any combination of the securities described in this
prospectus in one or more offerings up to an aggregate offering price of
$450,000,000.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the
terms of that offering. The prospectus supplement may also add, update or
change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional
information described immediately below under the heading "Where You Can
Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
Jones files annual, quarterly and special reports, proxy
statements and other information with the SEC. Jones' SEC filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document Jones files at
the SEC's public reference facilities in Washington, D.C., New York, New
York and Chicago, Illinois at the following addresses:
o 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549;
o Seven World Trade Center, Suite 1300, New York, New York
10048; and
o Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661.
Please call the SEC at 1-800-SEC-0330 for further information on
the public reference facilities.
Reports, proxy statements and other information concerning us can
also be inspected and copied at the offices of the New York Stock Exchange
at 20 Broad Street, New York, New York 10005.
We have elected to incorporate by reference into this prospectus
the following documents (including the documents incorporated by reference
therein) filed by Jones with the SEC:
o Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, filed with the SEC on March 26, 2001.
Any statement made in a document incorporated by reference or
deemed incorporated herein by reference is deemed to be modified or
superseded for purposes of this prospectus if a statement contained in this
prospectus or in any other subsequently filed document which also is
incorporated or deemed incorporated by reference herein modifies or
supersedes that statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this prospectus. We also incorporate by reference all documents
filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") after the date of this prospectus
and prior to the termination of this offering.
You may request a copy of these filings, in most cases without
exhibits, at no cost by writing or telephoning us at the following address:
Chief Financial Officer
Jones Apparel Group, Inc.
250 Rittenhouse Circle
Bristol, Pennsylvania 19007
(215) 785-4000
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SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference
contain certain "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 with respect to financial
condition, results of operations, business strategies, operating
efficiencies or synergies, competitive position, growth opportunities for
existing products, plans and objectives of management, markets for Jones
Apparel Group common stock and other matters. Statements in this
prospectus, including those incorporated by reference, that are not
historical facts are "forward-looking statements" for the purpose of the
safe harbor provided by Section 21E of the Exchange Act and Section 27A of
the Securities Act. Forward-looking statements, including, without
limitation, those relating to our future business prospects, revenues and
income, wherever they occur in this prospectus, are necessarily estimates
reflecting the best judgment of our senior management and involve a number
of risks and uncertainties that could cause actual results to differ
materially from those suggested by forward-looking statements. You should
consider forward-looking statements, therefore, in light of various
important factors, including those set forth in this prospectus. Important
factors that could cause actual results to differ materially from estimates
or projections contained in the forward-looking statements include, without
limitation:
o the effect of national and regional economic conditions;
o lowered levels of consumer spending resulting from a general
economic downturn;
o the performance of our products within the prevailing retail
environment;
o customer acceptance of both new designs and newly-introduced
product lines;
o financial difficulties encountered by customers;
o the effects of vigorous competition in the markets in which
we operate;
o our ability to integrate the organizations and operations of
any acquired business into our existing organization and
operations;
o the termination or non-renewal of the licenses with Polo
Ralph Lauren Corporation;
o risks relating to our extensive foreign operations and
manufacturing;
o changes in the costs of raw materials, labor and
advertising; and
o our ability to secure and protect trademarks and other
intellectual property rights.
Words such as "estimate," "project," "plan," "intend," "expect,"
"believe" and similar expressions are intended to identify forward-looking
statements. You will find these forward-looking statements at various
places throughout this prospectus and the documents incorporated by
reference, including any amendments. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date they were made. We do not undertake any obligation to publicly update
or release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this prospectus or to reflect the
occurrence of unanticipated events.
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THE COMPANY
Jones is a leading designer and marketer of a broad range of
women's collection sportswear, suits and dresses, casual sportswear and
jeanswear for men, women and children, women's shoes and accessories, and
costume jewelry. Jones has pursued a multi-brand strategy by marketing its
products under several nationally known brands, including Jones New York,
Evan-Picone, Rena Rowan, Nine West, Easy Spirit, Enzo Angiolini, Bandolino
and Todd Oldham and the licensed brands Lauren by Ralph Lauren, Ralph by
Ralph Lauren and Polo Jeans Company. Each brand is differentiated by its
own distinctive styling and pricing strategy, and together they target a
wide range of consumers. Jones primarily contracts for the manufacture of
its products through a worldwide network of quality manufacturers. Jones
has capitalized on its nationally known brand names by entering into
various licenses for the Jones New York, Evan-Picone and Nine West brand
names with select manufacturers of women's and men's products which Jones
does not manufacture.
On July 31, 2000, Jones acquired 100% of the capital stock of
Victoria + Co Ltd. Victoria is a leading designer and marketer of branded
and private label costume jewelry sold to better department and specialty
stores. Victoria markets its products under the national brand names Napier
and Richelieu and under several licensed brands, including Tommy Hilfiger
and Givenchy, as well as private labels. In addition, Victoria markets
jewelry under Jones' Nine West label.
Our principal executive offices are located at 250 Rittenhouse
Circle, Bristol, Pennsylvania 19007. Our telephone number is (215)
785-4000.
RISK FACTORS
You should consider carefully all the information included or
incorporated by reference in this prospectus and, in particular, should
evaluate the following risks before deciding to invest in the securities.
The Apparel, Footwear and Accessories Industries are Highly Competitive
Apparel, footwear and accessories companies face competition on
many fronts, including the following:
o establishing and maintaining favorable brand recognition;
o developing products that appeal to consumers;
o pricing products appropriately;
o providing strong marketing support; and
o obtaining access to retail outlets and sufficient floor
space.
There is intense competition in the sectors of the apparel,
footwear and accessories industries in which we participate. We compete
with many other manufacturers and retailers, some of which are larger and
have greater resources than we do. Any increased competition could result
in reduced sales or prices, or both, which could have a material adverse
effect on us.
Fashion Trends are Constantly Changing
Customer tastes and fashion trends can change rapidly. We may not
be able to anticipate, gauge or respond to such changes in a timely manner.
If we misjudge the market for our products or product groups, we may be
faced with a significant amount of unsold finished goods inventory, which
would have a material adverse effect on us.
The Apparel, Footwear and Accessories Industries are Highly Cyclical
Negative economic trends over which we have no control that
depress the level of consumer spending could have a material adverse effect
on us. Purchases of apparel, footwear and related goods often decline
during recessionary periods
-5-
when disposable income is low. In such an environment, we may increase the
number of promotional sales, which would further adversely affect our
profitability.
The Concentration of Our Customers Could Adversely Affect Our Business
Our ten largest customers, principally department stores,
accounted for approximately 56% of sales in 2000. While no single customer
accounted for more than 10% of our net sales, certain of our customers are
under common ownership. Department stores owned by the following entities
accounted for the following percentages of our 2000 sales:
Federated Department Stores, Inc...................... 14%
May Department Stores Company......................... 14%
Remainder of ten largest customers.................... 28%
We believe that purchasing decisions are generally made
independently by individual department stores within a commonly controlled
group. There has been a trend, however, toward more centralized purchasing
decisions. As such decisions become more centralized, the risk to us of
such concentration increases. The loss of any of our largest customers, or
the bankruptcy or material financial difficulty of any customer or any of
the companies listed above, could have a material adverse effect on us. We
do not have long-term contracts with any of our customers, and sales to
customers generally occur on an order-by-order basis. As a result,
customers can terminate their relationships with us at any time or under
certain circumstances cancel or delay orders.
Significant Portions of Our Sales and Profits Depend on Certain of Our License
Agreements with Polo Ralph Lauren Corporation
The termination or non-renewal of our exclusive licenses to
manufacture and market clothing under the Lauren by Ralph Lauren and Polo
Jeans Company trademarks in the United States and elsewhere would have a
material adverse effect on us. Our Lauren by Ralph Lauren and Polo Jeans
Company businesses represent significant portions of our sales and profits.
We sell products bearing those trademarks, as well as the Ralph by Ralph
Lauren trademark, under exclusive licenses from affiliates of Polo Ralph
Lauren Corporation.
The Lauren by Ralph Lauren license expires on December 31, 2001.
We have exercised our right to renew that license through December 31,
2006. There is no presently existing right or obligation to renew the
Lauren by Ralph Lauren license after December 31, 2006.
The Polo Jeans Company license expires on December 31, 2005 and
may be renewed by us in five-year increments for up to 25 additional years,
if certain minimum sales levels in certain years are met. Polo Jeans
Company sales are made season-to-season, with customers having no
obligation to buy products beyond what they have already ordered for a
particular season. In addition, renewal of the Polo Jeans Company license
after 2010 requires a one-time payment by us of $25 million or, at our
option, a transfer of a 20% interest in our Polo Jeans Company business to
Polo Ralph Lauren (with no fees required for subsequent renewals). Polo
Ralph Lauren also has an option, exercisable on or before June 1, 2010, to
purchase our Polo Jeans Company business at the end of 2010 for a purchase
price, payable in cash, equal to 80% of the then fair value of the business
as a going concern, assuming the continuation of the Polo Jeans Company
license through December 31, 2030.
In addition to the provisions described above, the licenses
contain provisions common to trademark licenses which could result in
termination of a license, such as failure to meet payment or advertising
obligations.
The Extent of Our Foreign Operations and Manufacturing May Adversely Affect Our
Domestic Business
In 2000, approximately 73% of our apparel products were
manufactured outside North America, primarily in Asia, while the remainder
were manufactured in the United States and Mexico. Nearly all of Nine
West's products were manufactured outside of North America in 2000 as well.
The following may adversely affect foreign operations:
o political instability in countries where contractors and
suppliers are located;
-6-
o imposition of regulations and quotas relating to imports;
o imposition of duties, taxes and other charges on imports;
o significant fluctuation of the value of the dollar against
foreign currencies; and
o restrictions on the transfer of funds to or from foreign
countries.
As a result of our substantial foreign operations, Jones'
domestic business is subject to the following risks:
o quotas imposed by bilateral textile agreements between the
United States and certain foreign countries;
o reduced manufacturing flexibility because of geographic
distance between us and our foreign manufacturers,
increasing the risk that we may have to mark down unsold
inventory as a result of misjudging the market for a
foreign-made product; and
o violations by foreign contractors of labor and wage
standards and resulting adverse publicity.
Fluctuations in the Price, Availability and Quality of Raw Materials Could
Cause Delay and Increase Costs
Fluctuations in the price, availability and quality of the
fabrics or other raw materials used by us in our manufactured apparel and
in the price of leather used to manufacture our footwear and accessories
could have a material adverse effect on our cost of sales or our ability to
meet our customers' demands. We mainly use cotton twill, wool, denim, and
synthetic and blended fabrics. The prices for such fabrics depend largely
on the market prices for the raw materials used to produce them,
particularly cotton. The price and availability of such raw materials and,
in turn, the fabrics used in our apparel may fluctuate significantly,
depending on many factors, including crop yields and weather patterns. We
generally enter into denim purchase order contracts at specified prices for
three to six months at a time. Higher cotton prices would directly affect
our costs and could affect our earnings. During the past few years, there
have been increases in the price of leather, which generally were reflected
in the selling price of our footwear and accessories products. In the
future, we may not be able to pass all or a portion of such higher raw
materials prices on to our customers.
Our Reliance on Independent Manufacturers Could Cause Delay and Damage Customer
Relationships
We rely upon independent third parties for the manufacture of
most of our products. A manufacturer's failure to ship products to us in a
timely manner or to meet the required quality standards could cause us to
miss the delivery date requirements of our customers for those items. The
failure to make timely deliveries may drive customers to cancel orders,
refuse to accept deliveries or demand reduced prices, any of which could
have a material adverse effect on our business. We do not have long-term
written agreements with any of our third party manufacturers. As a result,
any of these manufacturers may unilaterally terminate their relationships
with us at any time.
We Depend on Key Personnel to Manage Our Business
Our success depends upon the personal efforts and abilities of
our senior executive officers, including Sidney Kimmel (Chairman), Jackwyn
Nemerov (President) and Irwin Samelman (Executive Vice President,
Marketing), as well as the senior executive officers of our operating
subsidiaries. If any of these individuals become unable or unwilling to
continue in their present positions, our business and financial results
could be materially adversely affected.
Our Stock Price Has Been Volatile and We Expect That It Will Continue to be
Volatile
Our stock price has historically been volatile, and we expect
that it will continue to be volatile. Our financial results are difficult
to predict and could fluctuate significantly.
-7-
There Is No Public Market for the Debt Securities, Preferred Stock and Warrants
Before the offering of any debt securities, preferred stock or
warrants, there will have been no public market for those securities and we
do not intend to apply for the listing of any debt securities or preferred
stock that may be offered by this prospectus on any securities exchange or
for quotation of any debt securities or preferred stock on any public
market. We cannot assure you that an active public market for any debt
securities, preferred stock or warrants will develop or as to the
liquidity, if any, that may develop in such market. If an active public
market in any new class of securities does not develop, the market price
and liquidity of those securities may be adversely affected. See "Plan of
Distribution."
USE OF PROCEEDS
We will use the net proceeds from our sale of the securities for
our general corporate purposes, which may include repaying indebtedness,
making additions to our working capital, funding future acquisitions or for
any other purpose we describe in the applicable prospectus supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratios of earnings to fixed
charges for the years and periods indicated:
Year Ended December 31,
--------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges........... 4.3 4.1 12.6 18.2 14.4
We computed these ratios by dividing fixed charges into the sum
of earnings (after certain adjustments) and fixed charges. Earnings used in
computing the ratio of earnings to fixed charges consist of income before
income taxes and fixed charges excluding capitalized interest. Fixed
charges consist of interest expensed and capitalized, amortization of debt
expense and that portion of rental expense representative of interest.
Because we do not have any preferred stock outstanding, our ratio
of earnings to fixed charges and preferred stock dividends was the same as our
ratio of earnings to fixed charges.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the debt securities
sets forth certain general terms and provisions of the debt securities to
which any prospectus supplement may relate. The particular terms of the
debt securities offered by any prospectus supplement and the extent, if
any, to which these general provisions may apply to those debt securities
will be described in the prospectus supplement relating to those debt
securities. Accordingly, for a description of the terms of a particular
issue of debt securities, reference must be made to both the prospectus
supplement relating thereto and to the following description.
The debt securities will be issued by Jones Apparel Group, Jones
Holdings, Jones USA and Nine West, as co-obligors (the "issuers"). The debt
securities will be our general obligations. In the event that any series of
debt securities will be subordinated to other securities that we have
outstanding or may incur, the terms of the subordination will be set forth
in the prospectus supplement relating to the subordinated debt securities.
Debt securities will be issued under one or more indentures between us and
one or more trustees named in the prospectus supplement (collectively, the
"trustee"). A copy of the form of indenture has been filed as an exhibit to
the registration statement filed with the SEC. The following discussion of
certain provisions of the indenture is a summary only and should not be
considered a complete description of the terms and provisions of the
indenture. Accordingly, the following discussion is qualified in its
entirety by reference to the provisions of the indenture, including the
definition of certain terms used below.
-8-
General
The indenture does not limit the aggregate principal amount of
debt securities that can be issued under it. The debt securities may be
issued in one or more series as we may authorize from time to time. You
should refer to the applicable prospectus supplement for the following
terms of the debt securities of the series with respect to which that
prospectus supplement is being delivered:
(1) the title of the debt securities of the series;
(2) the price or prices of the debt securities of the
series;
(3) any limit on the aggregate principal amount of the debt
securities of the series that may be authenticated and delivered
under the indenture;
(4) the date or dates on which the principal and premium
with respect to the debt securities of the series are payable;
(5) the rate or rates (which may be fixed or variable) at
which the debt securities of the series shall bear interest (if
any) or the method of determining such rate or rates, the date or
dates from which such interest, if any, shall accrue, the
interest payment dates on which such interest, if any, shall be
payable or the method by which such dates will be determined, the
record dates for the determination of holders thereof to whom
such interest is payable (in the case of Securities in registered
form), and the basis upon which interest will be calculated if
other than that of a 360-day year of twelve 30-day months;
(6) the currency or currencies in which debt securities of
the series shall be denominated, if other than U.S. dollars, the
place or places, if any, in addition to or instead of the
corporate trust office of the trustee (in the case of Securities
in registered form) or the principal New York office of the
trustee (in the case of Securities in bearer form), where the
principal, premium and interest with respect to debt securities
of the series shall be payable or the method of such payment, if
by wire transfer, mail or other means;
(7) the price or prices at which, the period or periods
within which, and the terms and conditions upon which debt
securities of the series may be redeemed, in whole or in part at
our option or otherwise;
(8) whether debt securities of the series are to be issued
as Securities in registered form or Securities in bearer form or
both and, if Securities in bearer form are to be issued, whether
coupons will be attached to them, whether Securities in bearer
form of the series may be exchanged for Securities in registered
form of the series, and the circumstances under which and the
places at which any such exchanges, if permitted, may be made;
(9) if any debt securities of the series are to be issued as
Securities in bearer form or as one or more global securities
representing individual Securities in bearer form of the series,
whether certain provisions for the payment of additional interest
or tax redemptions shall apply; whether interest with respect to
any portion of a temporary Bearer Security of the series payable
with respect to any interest payment date prior to the exchange
of such temporary Bearer Security for definitive Securities in
bearer form of the series shall be paid to any clearing
organization with respect to the portion of such temporary Bearer
Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which
any such interest payment received by a clearing organization
will be credited to the persons entitled to interest payable on
such interest payment date; and the terms upon which a temporary
Bearer Security may be exchanged for one or more definitive
Securities in bearer form of the series;
(10) our obligation, if any, to redeem, purchase, or repay
debt securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder of such debt
securities and the price or prices at which, the period or
periods within which, and the terms and conditions upon which,
debt securities of the series shall be redeemed, purchased, or
repaid, in whole or in part, pursuant to such obligations;
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(11) the terms, if any, upon which the debt securities of
the series may be convertible into or exchanged for any issuer's
common stock, preferred stock, other debt securities or warrants
for common stock, preferred stock, indebtedness or other
securities of any kind and the terms and conditions upon which
such conversion or exchange shall be effected, including the
initial conversion or exchange price or rate, the conversion or
exchange period and any other additional provisions;
(12) if other than denominations of $1,000 or any integral
multiple thereof, the denominations in which debt securities of
the series shall be issuable;
(13) if the amount of principal, premium or interest with
respect to the debt securities of the series may be determined
with reference to an index or pursuant to a formula, the manner
in which such amounts will be determined;
(14) if the principal amount payable at the stated maturity
of debt securities of the series will not be determinable as of
any one or more dates prior to such stated maturity, the amount
that will be deemed to be such principal amount as of any such
date for any purpose, including the principal amount thereof
which will be due and payable upon any maturity other than the
stated maturity or which will be deemed to be outstanding as of
any such date (or, in any such case, the manner in which such
deemed principal amount is to be determined), and if necessary,
the manner of determining the equivalent thereof in United States
currency;
(15) any changes or additions to the provisions of the
indenture dealing with defeasance;
(16) if other than the principal amount thereof, the portion
of the principal amount of debt securities of the series that
shall be payable upon declaration of acceleration of the maturity
thereof or provable in bankruptcy;
(17) the terms, if any, of the transfer, mortgage, pledge or
assignment as security for the debt securities of the series of
any properties, assets, moneys, proceeds, securities or other
collateral, including whether certain provisions of the Trust
Indenture Act of 1939, as amended, are applicable and any
corresponding changes to provisions of the indenture as then in
effect;
(18) any addition to or change in the events of default with
respect to the debt securities of the series and any change in
the right of the trustee or the holders to declare the principal,
premium and interest, if any, with respect to such debt
securities due and payable;
(19) if the debt securities of the series shall be issued in
whole or in part in the form of a global security, the terms and
conditions, if any, upon which such global security may be
exchanged in whole or in part for other individual debt
securities in definitive registered form, the depositary (as
defined in the applicable prospectus supplement) for such global
security and the form of any legend or legends to be borne by any
such global security in addition to or in lieu of the legend
referred to in the indenture;
(20) any trustee, authenticating or paying agent, transfer
agent or registrar;
(21) the applicability of, and any addition to or change in,
the covenants and definitions then set forth in the indenture or
in the terms then set forth in the indenture relating to
permitted consolidations, mergers, or sales of assets;
(22) the terms, if any, of any guarantee of the payment of
principal, premium and interest with respect to debt securities
of the series and any corresponding changes to the provisions of
the indenture as then in effect;
(23) the subordination, if any, of the debt securities of
the series pursuant to the indenture and any changes or additions
to the provisions of the indenture relating to subordination;
(24) with regard to debt securities of the series that do
not bear interest, the dates for certain required reports to the
trustee; and
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(25) any other terms of the debt securities of the series
(which terms shall not be prohibited by the provisions of the
indenture).
The prospectus supplement will also describe any material United
States federal income tax consequences or other special considerations
applicable to the series of debt securities to which such prospectus
supplement relates, including those applicable to:
(1) Securities in bearer form;
(2) debt securities with respect to which payments of
principal, premium or interest are determined with reference to
an index or formula (including changes in prices of particular
securities, currencies or commodities);
(3) debt securities with respect to which principal or
interest is payable in a foreign or composite currency;
(4) debt securities that are issued at a discount below
their stated principal amount, bearing no interest or interest at
a rate that at the time of issuance is below market rates
("Original Issue Discount Debt Securities"); and
(5) variable rate debt securities that are exchangeable for
fixed rate debt securities.
Unless otherwise provided in the applicable prospectus
supplement, Securities in registered form may be transferred or exchanged
at the office of the trustee at which its corporate trust business is
principally administered in the United States or at the office of the
trustee or the trustee's agent in the Borough of Manhattan, the City and
State of New York, at which its corporate agency business is conducted,
subject to the limitations provided in the indenture, without the payment
of any service charge, other than any tax or governmental charge payable in
connection therewith. Securities in bearer form will be transferable only
by delivery. Provisions with respect to the exchange of Securities in
bearer form will be described in the prospectus supplement relating to
those Securities in bearer form.
All funds which we pay to a paying agent for the payment of
principal, premium or interest with respect to any debt securities that
remain unclaimed at the end of two years after that principal, premium or
interest shall have become due and payable will be repaid to us, and the
holders of those debt securities or any related coupons will thereafter
look only to us for payment thereof.
Global Securities
The debt securities of a series may be issued in whole or in part
in the form of one or more global securities. A global security is a debt
security that represents, and is denominated in an amount equal to the
aggregate principal amount of, all outstanding debt securities of a series,
or any portion thereof, in either case having the same terms, including the
same original issue date, date or dates on which principal and interest are
due, and interest rate or method of determining interest. A global security
will be deposited with, or on behalf of, a depositary, which will be
identified in the prospectus supplement relating to such debt securities.
Global securities may be issued in either registered or bearer form and in
either temporary or definitive form. Unless and until it is exchanged in
whole or in part for the individual debt securities represented thereby, a
global security may not be transferred except as a whole by the depositary
to a nominee of the depositary, by a nominee of the depositary to the
depositary or another nominee of the depositary, or by the depositary or
any nominee of the depositary to a successor depositary or any nominee of
such successor.
The specific terms of the depositary arrangement with respect to
a series of debt securities will be described in the prospectus supplement
relating to such debt securities. We anticipate that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a global security, the depositary for such
global security will credit, on its book entry registration and transfer
system, the respective principal amounts of the individual debt securities
represented by such global security to the accounts of persons that have
accounts with the depositary ("participants"). Such accounts shall be
designated by the dealers or underwriters with respect to such debt
securities or, if such debt securities are offered and sold
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directly by us or through one or more agents, by us or such agents.
Ownership of beneficial interests in a global security will be limited to
participants or persons that hold beneficial interests through
participants. Ownership of beneficial interests in such global security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the depositary (with respect to interests of
participants) or records maintained by participants (with respect to
interests of persons other than participants). The laws of some states
require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limitations and laws may impair
the ability to transfer beneficial interests in a global security.
So long as the depositary for a global security, or its nominee,
is the registered owner or holder of such global security, such depositary
or nominee, as the case may be, will be considered the sole owner or holder
of the individual debt securities represented by such global security for
all purposes under the indenture. Except as provided below, owners of
beneficial interests in a global security will not be entitled to have any
of the individual debt securities represented by such global security
registered in their names, will not receive or be entitled to receive
physical delivery of any of such debt securities in definitive form, and
will not be considered the owners or holders thereof under the indenture.
Subject to the restrictions applicable to Securities in bearer
form described in an applicable prospectus supplement (see "Limitations on
Issuance of Securities in Bearer Form" below), payments of principal,
premium, and interest with respect to individual debt securities
represented by a global security will be made to the depositary or its
nominee, as the case may be, as the registered owner or holder of such
global security. Neither we, the trustee, any paying agent or registrar for
such debt securities or any agent of ours or the trustee's will have any
responsibility or liability for:
(1) any aspect of the records relating to or payments made
by the depositary, its nominee or any participants on account of
beneficial interests in the global security or for maintaining,
supervising or reviewing any records relating to such beneficial
interests;
(2) the payment to the owners of beneficial interests in the
global security of amounts paid to the depositary or its nominee;
or
(3) any other matter relating to the actions and practices
of the depositary, its nominee or its participants.
Neither we, the trustee, any paying agent or registrar for such debt
securities or any agent of ours or the trustee will be liable for any delay
by the depositary, its nominee or any of its participants in identifying
the owners of beneficial interests in the global security, and we and the
trustee may conclusively rely on, and will be protected in relying on,
instructions from the depositary or its nominee for all purposes.
We expect that the depositary for a series of debt securities or
its nominee, upon receipt of any payment of principal, premium or interest
with respect to a definitive global security representing any of such debt
securities, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of such global security, as shown on the records of the
depositary or its nominee. We also expect that payments by participants to
owners of beneficial interests in such global security held through such
participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers and registered in "street name." Such payments will be the
responsibility of such participants. Receipt by owners of beneficial
interests in a temporary global security of payments of principal, premium
or interest with respect thereto will be subject to the restrictions
described in an applicable prospectus supplement (see "Limitation on
Issuance of Securities in Bearer Form" below).
If the depositary for a series of debt securities is at any time
unwilling, unable or ineligible to continue as depositary, we shall appoint
a successor depositary. If a successor depositary is not appointed by us
within 90 days, we will issue individual debt securities of such series in
exchange for the global security representing such series of debt
securities. In addition, we may at any time and in our sole discretion,
subject to any limitations described in the prospectus supplement relating
to such debt securities, determine to no longer have debt securities of a
series represented by a global security and, in such event, will issue
individual debt securities of such series in exchange for the global
security representing such series of debt securities. Furthermore, if we so
specify with respect to the debt securities of a series, an owner of a
beneficial interest in a global security representing debt securities of
such series may, on terms acceptable to us,
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the trustee, and the depositary for such global security, receive
individual debt securities of such series in exchange for such beneficial
interests, subject to any limitations described in the prospectus
supplement relating to such debt securities. In any such instance, an owner
of a beneficial interest in a global security will be entitled to physical
delivery of individual debt securities of the series represented by such
global security equal in principal amount to such beneficial interest and
to have such debt securities registered in its name (if the debt securities
are issuable as Securities in registered form). Individual debt securities
of such series so issued will be issued:
(1) as Securities in registered form in denominations,
unless otherwise specified by us, of $1,000 and integral
multiples thereof if the debt securities are issuable as
Securities in registered form;
(2) as Securities in bearer form in the denomination or
denominations specified by us if the debt securities are issuable
as Securities in bearer form; or
(3) as either Securities in registered form or Securities in
bearer form as described above if the debt securities are
issuable in either form.
Limitations on Issuance of Securities in Bearer Form
The debt securities of a series may be issued as Securities in
registered form (which will be registered as to principal and interest in
the register maintained by the registrar for such debt securities) or
Securities in bearer form (which will be transferable only by delivery). If
such debt securities are issuable as Securities in bearer form, the
applicable prospectus supplement will describe certain special limitations
and considerations that will apply to such debt securities.
Certain Covenants
The indenture contains covenants including, among others, the
following:
Restrictions on Liens. Except as provided below under "--Exempted Debt," we
will not, and will not permit any "significant subsidiary" (as such term is
defined in Regulation S-X promulgated by the SEC) to, create or suffer to
exist any mortgage, lien, pledge, charge, security interest or encumbrance
(a "lien" or "liens") to secure any of our or a significant subsidiary's
indebtedness on any property the net book value of which exceeds 1% of our
consolidated net tangible assets (the "Principal Properties"), unless all
of the debt securities outstanding at the time of such lien are secured by
the same lien, equally and ratably with any and all other indebtedness
secured by such lien.
The restrictions in the preceding sentence do not apply to:
o liens on property of a person existing at the time of its
merger or consolidation with or into any of us or our
significant subsidiaries or at the time of sale, lease or
other disposition of its properties to any of us or our
significant subsidiaries;
o liens on property of a person existing at the time it
becomes a significant subsidiary or existing on property
prior to our or a significant subsidiary's acquisition of
the property;
o liens securing indebtedness (A) between a significant
subsidiary and any of us, or (B) between significant
subsidiaries or (C) between us;
o liens on any property created, assumed or otherwise brought
into existence in contemplation of the sale or other
disposition of the underlying property, so long as (A) the
relevant person disposes of such property within 180 days
after the creation of those liens and (B) any indebtedness
secured by those liens is without recourse to any of us or
any significant subsidiary;
o liens in favor of the United States of America or any of its
states, or any of their departments, agencies or
instrumentalities or political subdivisions, or in favor of
any country, or any of its political subdivisions, to secure
partial, progress, advance or other payments, or performance
of any other similar
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obligations, including, without limitation, liens to secure
pollution control bonds or industrial revenue or other similar
types of bonds;
o liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure obligations not
more than 60 days past due or are being contested in good
faith and by appropriate proceedings;
o liens incurred in the ordinary course of business to secure
performance of obligations with respect to statutory or
regulatory requirements, performance or return-of-money
bonds, surety bonds or other obligations of a like nature,
in each case which are not incurred in connection with the
borrowing of money, the obtaining of advances or credit or
the payment of the deferred purchase price of property and
which do not in the aggregate impair in any material respect
the use of property in the operation of our business taken
as a whole;
o liens incurred to secure appeal bonds and judgment and
attachment liens, in each case in connection with litigation
or legal proceedings which are being contested in good faith
by appropriate proceedings so long as reserves have been
established to the extent required by generally accepted
accounting principles as in effect at such time;
o pledges or deposits under workmen's compensation laws,
unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts
(other than for the payment of indebtedness) or leases to
which any of us or any significant subsidiary is a party, or
deposits to secure public or statutory obligations of any of
us or of any significant subsidiary or deposits for the
payment of rent, in each case incurred in the ordinary
course of business;
o utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character;
o liens granted to any bank or other institution on the
payments to be made to such institution by any of us or any
subsidiary pursuant to any interest rate swap or similar
agreement or foreign currency hedge, exchange or similar
agreement designed to provide protection against
fluctuations in interest rates and currency exchange rates,
respectively, provided that such agreements are entered into
in, or are incidental to, the ordinary course of business;
o liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set off
or similar rights and remedies, in each case as to any
deposit account or any other fund maintained with a creditor
depository institution, provided that (1) the deposit
account is not a dedicated cash collateral account and is
not subject to restrictions against access by the applicable
issuer or a significant subsidiary in excess of those set
forth by regulations promulgated by the Federal Reserve
Board, and (2) the deposit account is not intended by the
applicable issuer or a significant subsidiary to provide
collateral to the depository institution;
o liens arising from the Uniform Commercial Code financing
statements regarding leases;
o the giving, simultaneously with or within 180 days after the
latest of the date of the indenture, or the acquisition,
construction, improvement, development or expansion of such
property, of a purchase money lien on property acquired,
constructed, improved, developed or expanded after the date
of the indenture, or the acquisition, construction,
improvement, development or expansion after the date of the
indenture, of property subject to any lien which is limited
to such property;
o the giving of a lien on real property which is the sole
security for indebtedness incurred within two years after
the latest of the date of the indenture, or the acquisition,
construction, improvement, development or expansion of the
property, so long as the holder of such indebtedness is
entitled to enforce its payment only by resorting to such
security;
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o liens arising by the terms of letters of credit entered into
in the ordinary course of business to secure reimbursement
obligations thereunder;
o liens existing on the date of the indenture;
o liens for taxes, assessments and other governmental charges
or levies not yet due or as to which the period of grace, if
any, has not expired or which are being contested in good
faith and by appropriate proceedings if adequate reserves
are maintained to the extent required by generally accepted
accounting principles as in effect at such time; and
o extension, renewal, replacement or refunding of any lien
existing on the date of the indenture or referred to in
certain of the bullet points above, so long as the principal
amount of indebtedness so secured and not otherwise
authorized by the relevant bullet points shall not exceed
the principal amount of indebtedness, plus any premium or
fee payable in connection with any such extension, renewal,
replacement or refunding, so secured at the time of such
extension, renewal, replacement or refunding.
Restrictions on Sale and Leaseback Transactions. Except as provided below
under "--Exempted Debt," we will not, and will not permit any significant
subsidiary to, enter into any arrangement with any person providing for the
leasing from that person of any Principal Property previously or
contemporaneously sold or transferred to it by any of us or our significant
subsidiaries with the intention of taking back a lease of such Principal
Property (a "sale and leaseback transaction"), unless our board of
directors determines that the net proceeds of the sale or transfer are to
be at least equal to the fair market value of the relevant Principal
Property or asset at the time of the sale and transfer and either one of
the following occurs:
o within 180 days after it has been received, an amount equal
to the net proceeds of such sale or transfer is applied to
the retirement or prepayment of our or a significant
subsidiary's indebtedness that is senior to or equal in
right of payment with the debt securities of all series
under the indenture or to the purchase, construction or
development of property or assets to be used in the ordinary
course of business, or
o the lessee would, on the effective date of the relevant sale
or transfer, be entitled, pursuant to the indenture, to
issue, assume or guarantee indebtedness secured by a lien
upon the relevant Principal Property at least equal in
amount to the then present value (discounted at the actual
rate of interest of the sale and leaseback transaction) of
its obligation for the net rental payments in respect of
such sale and leaseback transaction without equally and
ratably securing the debt securities of all series under the
indenture.
The restrictions in the preceding paragraph will not apply to any sale and
leaseback transaction:
o between (A) any of us and a significant subsidiary or (B)
between significant subsidiaries or (C) between us, so long
as the lessor is one of us or a wholly owned significant
subsidiary;
o which has a lease of less than three years in length;
o entered into within 180 days after the later of the
purchase, construction or development of the relevant
Principal Property or asset or the commencement of operation
of the relevant Principal Property; or
o involving Jones' distribution warehouse at South Hill,
Virginia.
Exempted Debt. Notwithstanding the restrictions in the indenture on (1)
liens and (2) sale and leaseback transactions, any of us or any significant
subsidiary may, in addition to amounts permitted under those restrictions,
create indebtedness secured by liens, or enter into sale and leaseback
transactions, so long as, at the time of those transactions and after
giving effect to them, the aggregate outstanding amount of all such
indebtedness secured by liens plus the then present value (discounted at
the actual rate of interest of the sale and leaseback transaction) of the
obligations for the net rental payments resulting from the sale and
leaseback transactions does not exceed 20% of our and our subsidiaries'
consolidated stockholders' equity.
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Corporate Existence. Unless our board of directors determines that it is no
longer desirable in the conduct of our business and the business of our
significant subsidiaries considered as a whole, each of us will do or cause
to be done all things necessary to preserve and keep in full force and
effect our corporate existence, material rights (charter and statutory) and
material franchises.
No Special Protection in the Event of a Highly Leveraged Transaction. The
terms of the debt securities of any series will not afford the holders
special protection in the event of a highly leveraged transaction.
Events of Default
Each of the following constitutes an event of default under the
indenture with respect to any series of debt securities:
o default in payment of the principal or premium, if any, on
the debt securities of that series, when such amount becomes
due and payable at maturity, upon acceleration, redemption
or otherwise;
o our failure to pay interest on the debt securities of that
series within 30 days of the due date;
o our failure to comply with the obligations described under
"--Mergers and Sales of Assets" below;
o our failure to comply with any of our obligations under the
covenants described under "--Certain Covenants" above upon
receipt by us of notice of such default by the trustee or by
holders of not less than 25% in aggregate principal amount
of the debt securities of that series then outstanding and
our failure to cure (or obtain a waiver of) such default
within 30 days after receipt by us of such notice;
o our failure to comply with any of our other agreements in
the debt securities of that series or the indenture upon
receipt by us of notice of such default by the trustee or by
holders of not less than 25% in aggregate principal amount
of the debt securities of that series then outstanding and
our failure to cure (or obtain a waiver of) such default
within 60 days after receipt by us of such notice;
o a default under any indebtedness (including any other series
of debt securities) by any of us or by any significant
subsidiary as a result of which an amount in excess of $25.0
million becomes due and payable prior to the date on which
it would otherwise have become due and payable upon receipt
by us of notice of such default by the trustee or by holders
of not less than 25% in aggregate principal amount of the
debt securities of that series then outstanding, without
such indebtedness having been discharged or such
acceleration having been rescinded or annulled within 30
days after such notice;
o any judgment or decree for the payment of money (not covered
by insurance) in excess of $25.0 million against any of us
or any significant subsidiary if (A) an enforcement
proceeding thereon is commenced by any creditor or (B) it is
not discharged, waived or stayed and remains outstanding for
a period of 60 days;
o the co-obligation of any of us shall cease to be in full
force and effect (except as contemplated by the terms
thereof); and
o certain events of bankruptcy, insolvency or reorganization
affecting us.
A prospectus supplement may omit, modify or add to the foregoing
events of default.
If any event of default (other than an event of default relating
to certain events of bankruptcy, insolvency or reorganization) occurs and
is continuing under the indenture with respect to a particular series of
debt securities, either the trustee or the holders of not less than 25% in
aggregate principal amount of the debt securities of that series then
outstanding by written notice to us (and to the trustee if such notice is
given by the holders), may declare the principal amount of (or in the case
of Original Issue Discount Debt Securities, the portion thereby specified
in the terms thereof), premium, if any, and accrued interest on the debt
securities of that series to be immediately due and payable. In the case of
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certain events of bankruptcy, insolvency or reorganization, the principal
amount of, premium, if any, and accrued interest on the debt securities of
that series shall automatically become and be immediately due and payable
without any declaration or other act on the part of the trustee or any
holders.
The holders of a majority in aggregate principal amount of the
debt securities of any series then outstanding by notice to the trustee
under the indenture may on behalf of the holders of all of such series of
debt securities waive any existing default or event of default and its
consequences under the applicable indenture except a continuing default or
event of default in the payment of interest on, or the principal of the
debt securities of such series.
Subject to the provisions of the indenture relating to the duties
of the trustee in case an event of default shall occur and be continuing,
the trustee is under no obligation to exercise any of its rights or powers
under the indenture at the request or direction of any of the holders of
any series of debt securities, unless such holders have offered to the
trustee indemnity or security satisfactory to it against any loss,
liability or expense. Subject to such provisions for the indemnification of
the trustee, the holders of at least a majority in aggregate principal
amount of the outstanding debt securities of a series have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to the trustee or exercising any trust or power conferred
on the trustee with respect to such series of debt securities. The trustee,
however, may refuse to follow any direction that conflicts with law or the
indenture or that the trustee determines is unduly prejudicial to the
rights of any other holder of such series of debt securities or that would
involve the trustee in personal liability. Prior to taking any action under
the indenture, the trustee is entitled to indemnification satisfactory to
it in its sole discretion against all losses and expenses caused by taking
or not taking such action.
No holder of debt securities of a series has any right to
institute any proceeding with respect to the indenture, or for the
appointment of a receiver or a trustee, or for any other remedy thereunder,
unless:
o such holder has previously given to the trustee written
notice of a continuing event of default with respect to such
series of debt securities;
o the holders of at least 25% in aggregate principal amount of
the outstanding debt securities of that series have made
written request, and such holder or holders have offered
reasonable security or indemnity against any loss, liability
or expense, to the trustee to institute such proceeding as
trustee; and
o the trustee has failed to institute such proceeding, and has
not received from the holders of a majority in aggregate
principal amount of the outstanding debt securities of that
series a direction inconsistent with such request, within 60
days after such notice, request and offer.
However, such limitations do not apply to a suit instituted by a holder of
a debt security of such series for the enforcement of payment of the
principal, premium, if any, or interest on such debt security on or after
the applicable due date specified in such debt security.
The indenture provides that if a default with respect to a series
of debt securities occurs and is continuing and is known to the trustee,
the trustee must mail to each holder of such debt securities notice of the
default within 90 days after it occurs. Except in the case of a default in
the principal or premium, if any, upon acceleration, redemption or
otherwise with respect to any debt security of a series when such amount
becomes due and payable, the trustee may withhold notice if and so long as
a committee of its trust officers in good faith determines that withholding
notice is in the interests of the holders.
The indenture requires Jones to furnish to the trustee, within
120 days after the end of each fiscal year, a statement by certain of its
officers as to whether or not we, to their knowledge, are in default in the
performance or observance of any of the terms, provisions and conditions of
the indenture and, if so, specifying all such known defaults.
Modification and Waiver
Modifications and amendments of the indenture may be made by us
and the trustee with the consent of the holders of at least a majority in
aggregate principal amount of the outstanding debt securities of any series
affected by such modification or amendment.
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No such modification or amendment may, without the consent of
each holder affected thereby,
o make any change to the percentage of principal amount of
debt securities of any series the holders of which must
consent to an amendment;
o reduce the principal amount of, premium, if any, or interest
on, or extend the stated maturity or interest payment
periods, of any debt security;
o make any debt security payable in money or securities other
than that stated in such debt security;
o make any change that adversely affects such holder's right
to require us to purchase a debt security;
o impair the right to institute suit for the enforcement of
any payment with respect to the debt securities;
o in the case of any subordinated debt security or coupons
appertaining thereto, make any change in the provisions of
the indenture relating to subordination that adversely
affects the rights of any holder under such provisions;
o except as provided under "--Satisfaction and Discharge of the
Indenture: Defeasance", release any security or guarantee
that may have been granted with respect to the debt
securities; or
o waive a default in payment of principal of, premium, if any,
or interest on the debt securities of a series or modify any
provisions of the indenture relating to modification or
amendment thereof.
Without the consent of any holder, we and the trustee may amend
the indenture for one or more of the following purposes:
o to evidence the succession of another person to us pursuant
to the provisions of the indenture relating to
consolidations, mergers and sales of assets and the
assumption by such successor of our covenants, agreements
and obligations in the indenture and in the debt securities;
o to surrender any right or power conferred upon us by the
indenture, to add to our covenants such further covenants,
restrictions, conditions or provisions for the protection of
the holders of all or any series of debt securities as our
boards of directors shall consider to be for the protection
of the holders of such debt securities, and to make the
occurrence, or the occurrence and continuance, of a default
in respect of any of such additional covenants,
restrictions, conditions or provisions a default or an event
of default under the indenture (provided, however, that with
respect to any such additional covenant, restriction,
condition or provision, such supplemental indenture may
provide for a period of grace after default, which may be
shorter or longer than that allowed in the case of other
defaults, may provide for an immediate enforcement upon such
default, may limit the remedies available to the trustee
upon such default or may limit the right of holders of a
majority in aggregate principal amount of any series of debt
securities to waive such default);
o to cure any ambiguity or correct or supplement any provision
contained in the indenture, in any supplemental indenture or
in any debt securities that may be defective or inconsistent
with any other provision contained therein, to convey,
transfer, assign, mortgage or pledge any property to or with
the trustee, or to make such other provisions in regard to
matters or questions arising under the indenture as shall
not adversely affect the interests of any holders of debt
securities of any series;
o to modify or amend the indenture in such a manner as to
permit the qualification of the indenture or any
supplemental indenture under the Trust Indenture Act as then
in effect;
o to add to or change any of the provisions of the indenture
to provide that Securities in bearer form may be
registerable as to principal, to change or eliminate any
restrictions on the payment of principal or premium with
respect to Securities in registered form or of principal,
premium or interest with respect to
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Securities in bearer form; or to permit Securities in
registered form to be exchanged for Securities in bearer
form, so as to not adversely affect the interests of the
holders of debt securities or any coupons of any series in
any material respect or permit or facilitate the issuance of
debt securities of any series in uncertificated form;
o in the case of subordinated debt securities, to make any
change in the provisions of the indenture relating to
subordination that would limit or terminate the benefits
available to any holder of senior indebtedness under such
provisions (but only if each such holder of senior
indebtedness consents to such change);
o to add guarantees with respect to the debt securities or to
secure the debt securities;
o to make any change that does not adversely affect the rights
of any holder;
o to add to, change, or eliminate any of the provisions of the
indenture with respect to one or more series of debt
securities, so long as any such addition, change or
elimination not otherwise permitted under the indenture
shall (1) neither apply to any debt security of any series
created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor
modify the rights of the holders of any such debt security
with respect to such provision or (2) become effective only
when there is no such debt security outstanding;
o to evidence and provide for the acceptance of appointment by
a successor or separate trustee with respect to the debt
securities of one or more series and to add to or change any
of the provisions of the indenture as shall be necessary to
provide for or facilitate the administration of the
indenture by more than one trustee; or
o to establish the form or terms of debt securities and
coupons of any series, as described under "--General" above.
Mergers and Sales of Assets
The indenture provides that none of the issuers may consolidate
with or merge into any other person or convey, transfer or lease all or
substantially all of its properties and assets to another person, unless
among other items: (i) the resulting, surviving or transferee person (if
other than the relevant issuer) is organized and existing under the laws of
the United States, any state thereof or the District of Columbia and such
person expressly assumes, by supplemental indenture, all obligations of the
relevant issuer under all of the debt securities and the indenture; (ii)
the relevant issuer or such successor person shall not immediately
thereafter be in default under the indenture; (iii) the relevant issuer
shall have provided the trustee with an opinion of counsel and officer's
certificate confirming compliance with the indenture and (iv) all of the
debt securities shall be secured ratably by any liens to which a Principal
Property of the relevant issuer becomes subject as a result of the
transaction that would otherwise not be permitted by the indenture. Upon
the assumption of the obligations of the relevant issuer by such a person
in such circumstances, subject to certain exceptions, the relevant issuer
shall be discharged from all obligations under all debt securities and the
indenture (except in the case of a lease).
Satisfaction and Discharge of the Indenture; Defeasance
The indenture shall generally cease to be of any further effect
with respect to a series of debt securities if (a) we have delivered to the
trustee for cancellation all debt securities of such series (with certain
limited exceptions) or (b) all debt securities and coupons of such series
not theretofore delivered to the trustee for cancellation shall have become
due and payable, or are by their terms to become due and payable within one
year or are to be called for redemption within one
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year, and we shall have deposited with the trustee as trust funds the
entire amount sufficient to pay at maturity or upon redemption all such
debt securities and coupons (and if, in either case, we shall also pay or
cause to be paid all other sums payable under the indenture by us).
In addition, we shall have a "legal defeasance option" (pursuant
to which we may terminate, with respect to the debt securities of a
particular series, all of our obligations under such debt securities and
the indenture with respect to such debt securities) and a "covenant
defeasance option" (pursuant to which we may terminate, with respect to the
debt securities of a particular series, our obligations with respect to
such debt securities under certain specified covenants contained in the
indenture). If we exercise our legal defeasance option with respect to a
series of debt securities, payment of such debt securities may not be
accelerated because of an event of default. If we exercise our covenant
defeasance option with respect to a series of debt securities, payment of
such debt securities may not be accelerated because of an event of default
related to the specified covenants.
The applicable prospectus supplement will describe the procedures
we must follow in order to exercise our defeasance options.
Regarding the Trustee
The indenture provides that, except during the continuance of an
event of default, the trustee will perform only such duties as are
specifically set forth in the indenture. During the existence of an event
of default, the trustee will exercise such rights and powers vested in it
under the indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise under the circumstances in the
conduct of such person's own affairs.
The indenture and provisions of the Trust Indenture Act that are
incorporated by reference therein contain limitations on the rights of the
trustee, should it become one of our creditors, to obtain payment of claims
in certain cases or to realize on certain property received by it in
respect of any such claim as security or otherwise. The trustee is
permitted to engage in other transactions with us or any of our affiliates;
provided, however, that if it acquires any conflicting interest (as defined
in the indenture or in the Trust Indenture Act), it must eliminate such
conflict or resign.
The initial trustee under the indenture has additional financial
arrangements with us, including as trustee under Nine West's Supplemental
Executive Retirement Plan, as trustee for the Nine West Pension Plan, as a
lender under our 364-Day Revolving Credit Facility and our Five-Year
Revolving Credit Facility, as trustee for our 7.50% Senior Notes Due 2004,
our 7.875% Senior Notes Due 2006, our 8-3/8% Series B Senior Notes Due 2005
and Nine West's 9% Series B Senior Subordinated Notes Due 2007 and as
transfer agent and registrar for Jones Apparel Group common stock.
DESCRIPTION OF CAPITAL STOCK
Jones Apparel Group's authorized capital stock consists of (1)
200,000,000 shares of common stock, $.01 par value per share, and (2)
1,000,000 shares of preferred stock, $.01 par value per share. On April 7,
2001, Jones Apparel Group had 119,849,155 shares of common stock issued and
outstanding and no shares of preferred stock outstanding. Jones Apparel
Group common stock is listed on the New York Stock Exchange under the
trading symbol "JNY."
Each share of Jones Apparel Group common stock is entitled to one
vote on all matters submitted to a vote of shareholders. Jones Apparel
Group shareholders are entitled to receive dividends when and as declared
by the Jones Apparel Group board of directors out of legally available
funds. Dividends may be paid on the Jones Apparel Group common stock only
if all dividends on any outstanding preferred stock of Jones Apparel Group
shareholders have been paid or reserved. To date, Jones Apparel Group has
not paid any cash dividends on shares of its common stock and does not
anticipate paying any cash dividends in the foreseeable future.
The issued and outstanding shares of Jones Apparel Group common
stock are fully paid and nonassessable. Jones Apparel Group shareholders
have no preemptive or conversion rights and are not subject to further
calls or assessments by Jones Apparel Group. In the event of the voluntary
or involuntary dissolution, liquidation or winding up of Jones Apparel
Group, Jones Apparel Group shareholders are entitled to receive, pro rata,
after satisfaction in full of the prior rights of creditors and holders of
preferred stock, if any, all of Jones Apparel Group's remaining assets
available for distribution.
The Jones Apparel Group board of directors is authorized to
provide for the issuance from time to time of Jones Apparel Group preferred
stock in series and, as to each series, to fix the designation, the
dividend rate, whether dividends are cumulative, the preferences which
dividends will have with respect to any other class or series of capital
stock, the voting rights, the voluntary and involuntary liquidation prices,
the conversion or exchange privileges, the redemption prices
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and the other terms of redemption, and the terms of any purchase or sinking
funds applicable to the series. The terms of any series of preferred stock
will be described in a prospectus supplement. Cumulative dividends,
dividend preferences and conversion, exchange and redemption provisions, to
the extent that some or all of these features may be present when shares of
Jones Apparel Group preferred stock are issued, could have an adverse
effect on the availability of earnings for distribution to the holders of
Jones Apparel Group common stock or for other corporate purposes.
The transfer agent and registrar for Jones Apparel Group common
stock is The Bank of New York.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities,
preferred stock or common stock. Warrants may be issued independently or
together with debt securities, preferred stock or common stock offered by
any prospectus supplement and may be attached to or separate from any such
offered securities. Each series of warrants will be issued under a separate
warrant agreement to be entered into between us and a bank or trust
company, as warrant agent. The warrant agent will act solely as our agent
in connection with the warrants and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial
owners of warrants. The following summary of certain provisions of the
warrants does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the provisions of the warrant agreement
that will be filed with the SEC in connection with the offering of such
warrants.
Debt Warrants
The prospectus supplement relating to a particular issue of debt
warrants will describe the terms of such debt warrants, including the
following: (a) the title of such debt warrants; (b) the offering price for
such debt warrants, if any; (c) the aggregate number of such debt warrants;
(d) the designation and terms of the debt securities purchasable upon
exercise of such debt warrants; (e) if applicable, the designation and
terms of the debt securities with which such debt warrants are issued and
the number of such debt warrants issued with each such debt security; (f)
if applicable, the date from and after which such debt warrants and any
debt securities issued therewith will be separately transferable; (g) the
principal amount of debt securities purchasable upon exercise of a debt
warrant and the price at which such principal amount of debt securities may
be purchased upon exercise (which price may be payable in cash, securities,
or other property); (h) the date on which the right to exercise such debt
warrants shall commence and the date on which such right shall expire; (i)
if applicable, the minimum or maximum amount of such debt warrants that may
be exercised at any one time; (j) whether the debt warrants represented by
the debt warrant certificates or debt securities that may be issued upon
exercise of the debt warrants will be issued in registered or bearer form;
(k) information with respect to book-entry procedures, if any; (1) the
currency or currency units in which the offering price, if any, and the
exercise price are payable; (m) if applicable, a discussion of material
United States federal income tax considerations; (n) the antidilution
provisions of such debt warrants, if any; (o) the redemption or call
provisions, if any, applicable to such debt warrants; and (p) any
additional terms of such debt warrants, including terms, procedures, and
limitations relating to the exchange and exercise of such debt warrants.
Stock Warrants
The prospectus supplement relating to any particular issue of
preferred stock warrants or common stock warrants will describe the terms
of such warrants, including the following: (a) the title of such warrants;
(b) the offering price for such warrants, if any; (c) the aggregate number
of such warrants; (d) the designation and terms of the common stock or
preferred stock purchasable upon exercise of such warrants; (e) if
applicable, the designation and terms of the offered securities with which
such warrants are issued and the number of such warrants issued with each
such offered security; (f) if applicable, the date from and after which
such warrants and any offered securities issued therewith will be
separately transferable; (g) the number of shares of common stock or
preferred stock purchasable upon exercise of a warrant and the price at
which such shares may be purchased upon exercise; (h) the date on which the
right to exercise such warrants shall commence and the date on which such
right shall expire; (i) if applicable, the minimum or maximum amount of
such warrants that may be exercised at any one time; (j) the currency or
currency units in which the offering price, if any, and the exercise price
are payable; (k) if applicable, a discussion of material United States
federal income tax considerations; (l) the antidilution provisions of such
warrants, if any; (m) the redemption or call provisions, if any, applicable
to such
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warrants; and (n) any additional terms of such warrants, including terms,
procedures and limitations relating to the exchange and exercise of such
warrants.
PLAN OF DISTRIBUTION
The distribution of the securities may be effected from time to
time in one or more transactions at a fixed price or prices (which may be
changed from time to time), at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. Each prospectus supplement will describe the method of distribution
of the securities offered therein.
We may sell securities directly, through agents designated from
time to time, through underwriting syndicates led by one or more managing
underwriters or through one or more underwriters acting alone. Each
prospectus supplement will describe the terms of the securities to which
such prospectus supplement relates, the name or names of any underwriters
or agents with whom we have entered into arrangements with respect to the
sale of such securities, the public offering or purchase price of such
securities and the net proceeds we will receive from such sale. In
addition, each prospectus supplement will describe any underwriting
discounts and other items constituting underwriters' compensation, any
discounts and commissions allowed or paid to dealers, if any, any
commissions allowed or paid to agents, and the securities exchange or
exchanges, if any, on which such securities will be listed. Dealer trading
may take place in certain of the securities, including securities not
listed on any securities exchange.
If so indicated in the applicable prospectus supplement, we will
authorize underwriters or agents to solicit offers by certain institutions
to purchase securities from us pursuant to delayed delivery contracts
providing for payment and delivery at a future date. Institutions with
which such contracts may be made include, among others:
o commercial and savings banks;
o insurance companies;
o pension funds;
o investment companies; and
o educational and charitable institutions.
In all cases, such institutions must be approved by us. Unless otherwise
set forth in the applicable prospectus supplement, the obligations of any
purchaser under any such contract will not be subject to any conditions
except that (i) the purchase of the securities will not at the time of
delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject and (ii) if the securities are also being sold to
underwriters acting as principals for their own account, the underwriters
will have purchased such securities not sold for delayed delivery. The
underwriters and such other persons will not have any responsibility in
respect of the validity or performance of such contracts.
Any underwriter or agent participating in the distribution of the
securities may be deemed to be an underwriter, as that term is defined in
the Securities Act, of the securities so offered and sold and any discounts
or commissions received by them, and any profit realized by them on the
same or resale of the securities may be deemed to be underwriting discounts
and commissions under the Securities Act.
Certain of any such underwriters and agents, including their
associates, may be customers of, engage in transactions with and perform
services for us and our subsidiaries in the ordinary course of business.
One or more of our affiliates may from time to time act as an agent or
underwriter in connection with the sale of the securities to the extent
permitted by applicable law. The participation of any such affiliate in the
offer and sale of the securities will comply with Rule 2720 of the Conduct
Rules of the National Association of Securities Dealers, Inc. regarding the
offer and sale of securities of an affiliate.
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Except as indicated in the applicable prospectus supplement, the
securities are not expected to be listed on a securities exchange, except
for the common stock of Jones Apparel Group, which is listed on The New
York Stock Exchange, and any underwriters or dealers will not be obligated
to make a market in securities. We cannot predict the activity or liquidity
of any trading in the securities.
VALIDITY OF SECURITIES
The validity of the securities offered by this prospectus will be
passed upon by Ira M. Dansky, Esq., our General Counsel. With respect to
certain matters concerning Pennsylvania law, he will rely on Schnader,
Harrison, Segal & Lewis LLP, Philadelphia, Pennsylvania. As of April 9,
2001, Mr. Dansky owned no shares of Jones Apparel Group common stock but
had options to purchase 205,585 shares of Jones Apparel Group common stock.
EXPERTS
The consolidated financial statements of Jones incorporated by
reference in this prospectus by reference to the Annual Report on Form 10-K
for the year ended December 31, 2000 have been audited by BDO Seidman, LLP,
independent certified public accountants, to the extent and for the periods
set forth in their reports incorporated herein by reference, and are
incorporated herein in reliance upon such reports given upon the authority
of said firm as experts in accounting and auditing.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection
with the sale and distribution of the securities being registered, other
than the underwriting discounts and commissions. All amounts shown are
estimates except for the SEC registration fee.
Securities and Exchange Commission registration fee..............$112,500.00
Printing and engraving expenses.................................. 7,500.00
Accounting fees and expenses..................................... 20,000.00
Legal fees and expenses.......................................... 150,000.00
Fees of trustee.................................................. 5,000.00
Miscellaneous expenses........................................... 10,000.00
-----------
Total:......................................................$305,000.00
===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Pennsylvania Business Corporation Law of 1988
(the "Pennsylvania Business Corporation Law"), Section 8.1 of the By-laws
of Jones Apparel Group, Inc. and Section 7.1 of the By-laws of Jones
Apparel Group USA, Inc. provide that a director shall not be personally
liable for monetary damages for any action taken or failed to be taken,
other than as expressly provided in the Pennsylvania Business Corporation
Law. Furthermore, such By-laws provide that the applicable corporation
shall indemnify each officer and director to the full extent permitted by
the Pennsylvania Business Corporation Law, and shall pay and advance
expenses for any matters covered by such indemnification.
Section 1741 of the Pennsylvania Business Corporation Law
provides that a corporation shall have the power to indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the corporation), by reason of the fact that he or she is or
was a representative of the corporation, or is or was serving at the
request of the corporation as a representative of another domestic or
foreign corporation for profit or not-for-profit, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or her in connection with the action or
proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal proceeding, had no reasonable
cause to believe his or her conduct was unlawful. The termination of any
action or proceeding by judgment, order, settlement or conviction or upon a
plea of nolo contendere or its equivalent shall not of itself create a
presumption that the person did not act in good faith and in a manner that
he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal proceeding,
had reasonable cause to believe that his or her conduct was unlawful.
Section 1742 of the Pennsylvania Business Corporation Law
provides that a corporation shall have the power to indemnify any person
who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that
he or she is or was a representative of the corporation or is or was
serving at the request of the corporation as a representative of another
domestic or foreign corporation for profit or not-for-profit, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in
connection with the defense or settlement of the action if he or she acted
in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interest of the corporation. Indemnification shall
not be made under Section 1742 in respect of any claim, issue or matter as
to which the person has been adjudged to be liable to the corporation
unless and only to the extent that the court of common pleas of the
judicial district embracing the county in which the registered office of
the corporation is located or the court in which the action was brought
determines upon application, that, despite the adjudication of liability
but in view of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for the expenses that the court of common
pleas or other court deems proper.
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Section 1743 of the Pennsylvania Business Corporation Law
provides that to the extent that a representative of a corporation has been
successful on the merits or otherwise in defense of any action or
proceeding referred to in Sections 1741 or 1742 or in defense of any claim,
issue or matter therein, he or she shall be indemnified against expenses
(including attorney fees) actually and reasonably incurred by him or her in
connection therewith.
The Certificate of Incorporation of Jones Apparel Group Holdings,
Inc., a Delaware corporation ("Jones Holdings") and the Certificate of
Incorporation of Nine West Group Inc., a Delaware corporation ("Nine
West"), provide that no director of Jones Holdings or Nine West shall be
personally liable to Jones Holdings, Nine West or their stockholders for
monetary damages for breach of a fiduciary duty other than as expressly
provided in the General Corporation Law of Delaware (the "DGCL"). Section
102(b)(7) of the DGCL eliminates liability except (1) for any breach of the
director's duty of loyalty to Jones Holdings, Nine West or their
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, (3) under Section 174
of the DGCL or (4) for any transaction from which the director derives an
improper personal benefit. Furthermore, the Certificate of Incorporation
and By-laws of Jones Holdings and Nine West each provide that Jones
Holdings and Nine West shall indemnify their officers, directors, employees
and agents to the full extent permitted by the DGCL, and shall pay and
advance expenses for any matters covered by such indemnification. In
addition, Jones Apparel Group, Inc. has entered into executive employment
agreements with Sidney Kimmel, Jackwyn Nemerov, Irwin Samelman and Wesley
R. Card pursuant to which Jones Apparel Group, Inc. has agreed to indemnify
such officers and directors to the maximum extent permitted by applicable
law against any liability incurred by such officers and directors in their
capacities as such.
Subsection (a) of Section 145 of the DGCL empowers a corporation
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the corporation) by reason of the fact that he
or she is or was a director, employee or agent of the corporation or is or
was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or their enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding
if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe that his or her conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of
the fact that such person acted in any of the capacities set forth above,
against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection with the defense or settlement of such
action or suit if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification may be made in respect of
any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought
shall determine that despite the adjudication of liability such person is
fairly and reasonably entitled to indemnity for such expenses which the
court shall deem proper.
Section 145 of the DGCL further provides that (1) to the extent a
director, officer, employee or agent of a corporation has been successful
in the defense of any action, suit or proceeding referred to in subsections
(a) and (b) or in the defense of any claim, issue or matter therein, he or
she shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith; (2)
indemnification or advancement of expenses provided for by Section 145
shall not be deemed exclusive of any other rights to which the indemnified
party may be entitled; and (3) the corporation shall have the power to
purchase and maintain insurance on behalf of a director, officer, employee
or agent of the corporation against any liability asserted against him or
her or incurred by him or her in any such capacity or arising out of his or
her status as such whether or not the corporation would have the power to
indemnify him or her against such liabilities under Section 145.
II-2
ITEM 16. EXHIBITS
Exhibit No. Description
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4.1 Form of Underwriting Agreement
4.2 Form of Indenture
5.1 Opinion of Ira M. Dansky, Esq.
5.2 Opinion of Schnader Harrison Segal & Lewis LLP
12.1 Statement regarding Computation of Ratio of Earnings to
Fixed Charges
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Ira M. Dansky, Esq. (included in opinion filed as
Exhibit 5.1)
23.3 Consent of Schnader Harrison Segal & Lewis LLP (included in
opinion filed as Exhibit 5.2)
24.1 Power of Attorney (included in signature page)
25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of The Bank of New York, as trustee
under the indenture
ITEM 17. UNDERTAKINGS.
(a) Each undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment
to this registration statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in this registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in this registration statement;
and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
this registration statement or any material change to
such information in this registration statement;
provided, however, that the undertaking set forth in paragraphs
(i) and (ii) above do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the registrants pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
II-3
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) Each undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrants pursuant to the foregoing
provisions or otherwise, the registrants have been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrants of expenses incurred or paid by a director, officer or
controlling person of the registrants in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
them is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(d) Each undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(e) Each undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the
trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act (the "Act") in accordance with the rules and regulations
prescribed by the Commission under Section 305(b)(2) of the Act.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
registrants certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York on
April 9, 2001.
JONES APPAREL GROUP, INC.
By /s/ Wesley R. Card
--------------------------------
Wesley R. Card
Chief Financial Officer
JONES APPAREL GROUP HOLDINGS, INC.
By /s/ Ira M. Dansky
--------------------------------
Ira M. Dansky
President
JONES APPAREL GROUP USA, INC.
By /s/ Wesley R. Card
--------------------------------
Wesley R. Card
Chief Financial Officer
NINE WEST GROUP INC.
By /s/ Wesley R. Card
--------------------------------
Wesley R. Card
Chief Financial Officer
II-5
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Ira M. Dansky, Wesley R. Card and Patrick M. Farrell and each of
them, his or her true and lawful attorney-in-fact and agent, with full
power and substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any and all
amendments to this registration statement, any registration statement filed
pursuant to Rule 462(b) under the Securities Act, and to file the same,
with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact,
agent, or his substitute may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
JONES APPAREL GROUP, INC.
/s/ Sidney Kimmel Chairman and Director April 9, 2001
- ---------------------- (Principal Executive Officer)
Sidney Kimmel
/s/ Jackwyn Nemerov President and Director April 9, 2001
- ----------------------
Jackwyn Nemerov
/s/ Wesley R. Card Chief Financial Officer April 9, 2001
- ---------------------- (Principal Financial Officer)
Wesley R. Card
/s/ Patrick M. Farrell Senior Vice President and Corporate Controller April 9, 2001
- ---------------------- (Principal Accounting Officer)
Patrick M. Farrell
/s/ Irwin Samelman Executive Vice President, April 9, 2001
- ---------------------- Marketing and Director
Irwin Samelman
/s/ Geraldine Stutz Director April 9, 2001
- ----------------------
Geraldine Stutz
/s/ Howard Gittis Director April 9, 2001
- ----------------------
Howard Gittis
/s/ Eric A. Rothfeld Director April 9, 2001
- ----------------------
Eric A. Rothfeld
/s/ Anthony F. Scarpa Director April 9, 2001
- ----------------------
Anthony F. Scarpa
JONES APPAREL GROUP HOLDINGS, INC.
/s/ Ira M. Dansky President and Director April 9, 2001
- ---------------------- (Principal Executive Officer)
Ira M. Dansky
/s/ Joseph T. Donnalley Vice President/Finance and Director April 9, 2001
- ---------------------- (Principal Financial Officer and Principal
Joseph T. Donnalley Accounting Officer)
/s/ Patricia F. Genzel Director April 9, 2001
- ----------------------
Patricia F. Genzel
II-6
JONES APPAREL GROUP USA, INC.
/s/ Sidney Kimmel Chairman and Director April 9, 2001
- ---------------------- (Principal Executive Officer)
Sidney Kimmel
/s/ Jackwyn Nemerov President and Director April 9, 2001
- ----------------------
Jackwyn Nemerov
/s/ Wesley R. Card Chief Financial Officer April 9, 2001
- ---------------------- (Principal Financial Officer)
Wesley R. Card
/s/ Patrick M. Farrell Senior Vice President and Corporate Controller April 9, 2001
- ---------------------- (Principal Accounting Officer)
Patrick M. Farrell
/s/ Irwin Samelman Executive Vice President, Marketing April 9, 2001
- ---------------------- and Director
Irwin Samelman
NINE WEST GROUP INC.
/s/ Jackwyn Nemerov Chairman and Director April 9, 2001
- ---------------------- (Principal Executive Officer)
Jackwyn Nemerov
/s/ Wesley R. Card Chief Financial Officer and Director April 9, 2001
- ---------------------- (Principal Financial Officer)
Wesley R. Card
/s/ Patrick M. Farrell Senior Vice President April 9, 2001
- ---------------------- (Principal Accounting Officer)
Patrick M. Farrell
/s/ Sidney Kimmel Director April 9, 2001
- ----------------------
Sidney Kimmel
/s/ Irwin Samelman Director April 9, 2001
- ----------------------
Irwin Samelman
II-7
EXHIBIT INDEX
Exhibit No. Description
- ----------- ------------
4.1 Form of Underwriting Agreement
4.2 Form of Indenture
5.1 Opinion of Ira M. Dansky, Esq.
5.2 Opinion of Schnader Harrison Segal & Lewis LLP
12.1 Statement regarding computation of Ratio of Earnings to
Fixed Charges
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Ira M. Dansky, Esq. (included in opinion filed as
Exhibit 5.1)
23.3 Consent of Schnader Harrison Segal & Lewis LLP (included in
opinion filed as Exhibit 5.2)
24.1 Power of Attorney (included in signature page)
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of The Bank of New York, as trustee under
the indenture
E-1