AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 19, 2003.
REGISTRATION 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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OXFORD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
GEORGIA 580831862
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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OXFORD INDUSTRIES, INC.
222 PIEDMONT AVENUE, NE
ATLANTA, GEORGIA 30308
(404) 659-2424
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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THOMAS C. CHUBB III
VICE PRESIDENT, SECRETARY & GENERAL COUNSEL
OXFORD INDUSTRIES, INC.
222 PIEDMONT AVENUE, NE
ATLANTA, GEORGIA 30308
(404) 659-2424
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
MARY BERNARD
ALEX SIMPSON
KING & SPALDING LLP
1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 556-2100
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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, as determined in
light of market conditions.
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration 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, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- --------------------------------- -------------- ---------------- ----------------- ----------------
Common Stock, par value $1.00 per 388,200 shares $64.68 $25,108,776 $2,032
share
(1) Estimated solely for the purpose of calculating the registration fee based
upon the average of the high and low trading prices of the Common Stock on
the New York Stock Exchange on November 14, 2003, in accordance with Rule
457(c).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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(SUBJECT TO COMPLETION, DATED NOVEMBER 19, 2003)
PROSPECTUS
388,200 SHARES
OXFORD INDUSTRIES, INC.
COMMON STOCK
This prospectus relates to the offering from time to time of up to
388,200 shares of common stock of Oxford Industries, Inc. by certain of our
shareholders. We will not receive any of the proceeds from the sale of the
shares being offered. We are registering these shares for resale, but the
registration of such shares does not necessarily mean that any of the shares
will be offered or sold by the selling shareholders.
The selling shareholders from time to time may offer and sell the
shares directly to purchasers or through agents, underwriters or dealers on
terms to be determined at the time of sale. If required, the names of any
agents, underwriters or dealers and any other required information will be set
forth in an accompanying prospectus supplement.
Our common stock is listed on the New York Stock Exchange under the
symbol "OXM." On November 18, 2003, the last reported sale price of our common
stock on the New York Stock Exchange was $63.85 per share. The shares of our
common stock offered pursuant to this prospectus have been listed on the New
York Stock Exchange.
References in this prospectus and any accompanying prospectus
supplement to "Oxford," our "company," "we," "us" and "our" refer to Oxford
Industries, Inc. and its consolidated subsidiaries. In June 2003, we acquired
Viewpoint International, Inc. and its consolidated subsidiaries, which we refer
to as the "Tommy Bahama Group."
INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF THESE RISKS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION 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 , 2003.
TABLE OF CONTENTS
About This Prospectus........................................ 1
Where You Can Find More Information.......................... 1
Oxford Industries, Inc. ..................................... 2
Risk Factors................................................. 3
Forward-Looking Statements................................... 16
Use of Proceeds.............................................. 17
Selling Shareholders......................................... 18
Plan of Distribution......................................... 19
Validity of Common Stock..................................... 20
Experts .................................................... 20
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC using a "shelf" registration process. Under this shelf process, the
selling shareholders may offer and sell up to 388,200 shares of common stock in
one or more transactions. You should read this prospectus and any applicable
prospectus supplement together with the additional information described under
the heading "Where You Can Find More Information."
The registration statement that contains this prospectus (including the
exhibits to the registration statement) contains additional information about
our company and the common stock offered under this prospectus. That
registration statement can be read at the SEC web site or at the SEC offices
mentioned under the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC's website at http://www.sec.gov. You may also read and
copy any document we file with the SEC at its public reference facility at 450
Fifth Street, N.W., Washington, D.C. 20459. You can also obtain copies of the
documents at prescribed rates by writing to the Public Reference Section of the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20459. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
facility. Our SEC filings are also available at the office of the New York Stock
Exchange. For further information on obtaining copies of our public filings from
the New York Stock Exchange, please call (212) 656-5060.
We "incorporate by reference" into this prospectus the information that
we file with the SEC, which means that we are disclosing important information
to you by referring you to those documents. The information incorporated by
reference is an important part of this prospectus, and information that we
subsequently file with the SEC will automatically update and supercede
information in this prospectus and in our other filings with the SEC. We
incorporate by reference the documents listed below, which we have already filed
with the SEC, and any future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the date that
the selling shareholders sell all of the common stock offered by this
prospectus:
- Our Annual Report on Form 10-K for the year ended May 30, 2003
(File No. 001-04365);
- Our Quarterly Report on Form 10-Q for the quarter ended August 30,
2003 (File No. 001-04365);
- Our Current Reports on Form 8-K filed on June 26, 2003 and July 16,
2003 (File No. 001-04365); and
- The description of our common stock contained in our Registration
Statement on Form 8-A which became effective on July 23, 1960 (File
No. 001-04365); and
You may also request a copy of these filings at no cost (other than an exhibit
to a filing unless that exhibit is specifically incorporated by reference into
the filing), by writing or calling us at the following address:
Oxford Industries, Inc.
222 Piedmont Avenue, NE
Atlanta, Georgia 30308
(404) 659-2424
Attention: Vice President, Secretary &
General Counsel
You should only rely on the information contained or incorporated by
reference in this prospectus or any applicable prospectus supplement. We have
not authorized anyone else to provide you with different information. The
selling shareholders are only offering these securities in states where the
offer is permitted. You should not assume that the information contained or
incorporated by reference in this prospectus or the applicable prospectus
supplement is accurate as of any date other than the dates on the front of such
documents.
OXFORD INDUSTRIES, INC.
We are a leading producer and marketer of branded and private label
apparel for men, women and children. We provide retailers and consumers with a
wide variety of apparel products and services to suit their individual needs.
Our brands include Tommy Bahama(R), Indigo Palms(TM), Island Soft(R), Ely and
Walker(R) and Oxford Golf(R). We also hold exclusive licenses to produce and
sell certain product categories under the Tommy Hilfiger(R), Nautica(R),
Geoffrey Beene(R), Slates(R), Dockers(R) and Oscar de la Renta(R) labels. Our
customers are found in every major channel of distribution including national
chains, specialty catalogs, mass merchants, department stores, specialty stores
and internet retailers. Our business is operated through the following groups:
the Oxford Shirt Group, Lanier Clothes, Oxford Slacks, the Oxford Womenswear
Group and the Tommy Bahama Group.
We are a Georgia corporation and our principal executive offices are
located at 222 Piedmont Avenue, NE, Atlanta, Georgia 30308. Our telephone number
is (404) 659-2424. Our website address is www.oxfordinc.com. Information on our
website does not constitute part of this prospectus.
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RISK FACTORS
You should carefully consider the following factors and other
information in this prospectus before deciding to invest in shares of our common
stock.
WE MAY EXPERIENCE VOLATILITY IN OUR STOCK PRICE.
The market price of our common stock may experience significant
volatility from time to time. Such volatility may be affected by factors such as
our quarterly operating results or changes in the economy, financial markets or
apparel and retail industries. In recent years, the U.S. stock market has
experienced extreme price and volume fluctuations, which have sometimes affected
the market price of the securities issued by a particular company which may be
unrelated to the operational performance of the company. This type of market
effect could impact our common stock price as well. In addition, we may be
subject to securities class action litigation if the market price of our stock
experiences significant volatility. Such litigation may divert our management's
attention and resources from normal operations, which may have a material
adverse effect on our business.
THE APPAREL INDUSTRY IS HEAVILY INFLUENCED BY GENERAL ECONOMIC CYCLES.
The apparel industry is cyclical and is dependent upon the overall
level of consumer spending. Purchases of apparel and related goods (in
particular, higher priced goods) tend to be highly correlated with cycles in the
disposable income of consumers. Our customers anticipate and respond to adverse
changes in economic conditions and uncertainty by reducing inventories and
canceling orders. As a result, any deterioration in general economic or
political conditions, or acts of war or terrorism that diminish consumer
spending in the United States could reduce our sales and materially adversely
affect our results of operations and financial condition. In particular, we were
significantly negatively impacted by the events of September 11, 2001.
WE OPERATE IN A HIGHLY COMPETITIVE AND FRAGMENTED INDUSTRY.
The apparel industry, at wholesale and retail, is highly competitive
and fragmented. Our competitors include numerous apparel designers,
manufacturers, importers, licensors and retailers, some of which have greater
financial and marketing resources than we have. We believe that the principal
competitive factors in the apparel industry are:
- price;
- quality;
- styling;
- marketing;
- customer service; and
- with respect to branded and designer product lines, consumer
recognition and preference.
The level of competition and the nature of competitors varies by
product segment, with low-margin, mass-market manufacturers being our main
competitors in the less expensive segment of the market, American and foreign
designers and licensors competing with us in the more upscale segment of
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the market and high-end specialty retailers, department stores and chain stores
competing with Tommy Bahama. There can be no assurance that we will continue to
compete successfully.
In addition, many other companies manufacture products that resemble
and/or compete with Tommy Bahama branded products. They may offer these products
at significantly lower price points in order to directly compete with Tommy
Bahama branded merchandise sold at higher prices. To the extent such competitors
are successful, we may not be able to maintain the premium price points that
Tommy Bahama products have traditionally commanded, which could have a material
adverse effect on us.
THE WORLDWIDE APPAREL INDUSTRY CONTINUES TO EXPERIENCE PRICE DEFLATION, WHICH
HAS AFFECTED, AND MAY CONTINUE TO AFFECT, OUR RESULTS OF OPERATIONS.
The worldwide apparel industry has experienced significant price
deflation in recent years. The deflation is attributable to increased
competition, excess worldwide manufacturing capacity, increased product sourcing
in lower cost countries, growth of the mass merchant channel of distribution and
reduced relative spending on apparel and increased value consciousness on the
part of consumers reflecting, in part, general economic conditions. Downward
pressure on prices has affected the apparel industry by:
- negatively impacting gross margins;
- requiring the introduction of lower-priced products;
- requiring the reduction of wholesale prices on existing products;
- increasing customer demands for allowances, incentives and other
forms of economic support that could adversely affect our
profitability; and
- increasing pressure to further reduce production costs and
operating expenses and to increase unit sales.
All of these impacts may continue in the future. If we are unable to
successfully respond to these developments in our industry, our profitability
and results of operations may suffer significantly.
THE APPAREL INDUSTRY IS SUBJECT TO RAPIDLY EVOLVING FASHION TRENDS AND WE AND
OTHER PARTICIPANTS IN THE INDUSTRY MUST CONTINUOUSLY OFFER INNOVATIVE AND
UPGRADED PRODUCTS.
Although many of our products carry over from season to season, the
apparel industry in general is subject to rapidly changing fashion trends and
shifting consumer demands. Accordingly, success depends on the priority that
target customers place on fashion and ability to anticipate, identify and
capitalize upon emerging as well as proven fashion trends. The failure to
anticipate, identify or react appropriately to changes in styles or trends could
lead to, among other things, excess inventories and higher markdowns, as well as
the decreased appeal of certain of our brands.
The worldwide apparel industry is also characterized by constant
product innovation due to changing consumer preferences and by the rapid
replication of new products by competitors. As a result, success depends in
large part on the ability to continuously develop, market and deliver innovative
products at a pace and intensity competitive with other brands in our segments.
In addition, we must create products that appeal to multiple consumer segments
at a range of price points. Any failure on our part to develop innovative
products and update core products could:
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- limit our ability to differentiate, segment and price our products;
- adversely affect retail and consumer acceptance of our products;
- limit sales growth; and
- leave us with a substantial amount of unsold inventory, which we
may be forced to sell through markdowns.
The increasing importance of product innovation in apparel requires us
to strengthen our internal research and commercialization capabilities, to rely
more on successful commercial relationships with third parties such as fiber,
fabric and finishing providers and to compete and negotiate effectively for new
technologies and product components. In addition, almost all of our products are
produced outside of the United States. The exposure of our business to changes
in consumer preferences is heightened by this reliance on offshore
manufacturers, as offshore outsourcing may increase lead times between
production decisions and customer delivery. Our focus on tight management of
inventory may also result, from time to time, in our not having an adequate
supply of products to meet consumer demand and cause us to lose sales. Moreover,
if we misjudge consumer preferences, our brand image may be significantly
impaired.
INCREASES IN THE PRICE OF RAW MATERIALS OR THEIR REDUCED AVAILABILITY COULD
INCREASE OUR COST OF GOODS SOLD AND DECREASE OUR PROFITABILITY.
The principal fabrics used in our business are cotton, linens, wools,
silk, other natural fibers, synthetics and blends of these materials. The prices
paid for these fabrics depend on the market price for raw materials used to
produce them, primarily cotton and silk. The price and availability of cotton
has in the past fluctuated, and may in the future fluctuate significantly
depending on a variety of factors, including crop yields, weather, supply
conditions, government regulation, economic climate and other unpredictable
factors. Any raw material price increases could increase our cost of goods sold
and decrease profitability unless we are able to pass higher prices on to our
customers, which will be difficult to do as a result of price deflation in the
apparel industry. Moreover, any decrease in the availability of cotton or silk
could impair our ability to meet production requirements in a timely manner. We
have not historically hedged for these risks.
WE DEPEND ON A GROUP OF KEY CUSTOMERS FOR A SIGNIFICANT PORTION OF OUR SALES. A
SIGNIFICANT ADVERSE CHANGE IN A CUSTOMER RELATIONSHIP OR IN A CUSTOMER'S
FINANCIAL POSITION COULD MATERIALLY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS
AND FINANCIAL CONDITION.
We derive a significant amount of our respective net sales from a few
major customers. Net sales to our ten largest customers totaled approximately
73%, 72% and 80% of our net sales in fiscal 2001, fiscal 2002 and fiscal 2003,
respectively. Sales to Target, Wal-Mart and Sears accounted for 22%, 15% and
16%, respectively, of our net sales in fiscal 2003. In addition, the net sales
of several of our individual business segments (in particular, Oxford Slacks,
Oxford Womenswear and the Tommy Bahama Group) are concentrated among several
large customers. We believe that consolidation in the retail industry has
centralized purchasing decisions and given customers greater leverage over
suppliers, often resulting in lower prices, and we expect this trend to
continue. If this consolidation continues, our results of operations may be
increasingly sensitive to a deterioration in the financial condition of, or
other adverse developments with, one or more of our customers.
5
We do not have long-term contracts with any of our customers. As a
result, purchases generally occur on an order-by-order basis, and the
relationship, as well as particular orders, can generally be terminated by
either party at any time. A decision by a major customer, whether motivated by
competitive considerations, quality and style issues, financial difficulties,
economic conditions or otherwise, to decrease its purchases or to change its
manner of doing business with us, could materially adversely affect our business
and financial condition. In addition, during recent years, numerous retailers,
including some of our customers, have experienced significant changes and
difficulties, including consolidation of ownership, restructurings, bankruptcies
and liquidations. There is excess retail floorspace in the industry, which could
lead to further consolidations, restructurings, bankruptcies and liquidations.
For example, Kmart Corporation, which accounted for 2.2% of our net sales in
fiscal 2002, filed for bankruptcy protection under Chapter 11 of the U.S.
Bankruptcy Code in January 2002 and subsequently announced the closing of in
excess of 28% of its stores. As of the date of Kmart's bankruptcy filing, we had
outstanding $3.5 million of receivables from Kmart. In fiscal 2002, Oxford's
pre-petition Kmart claim was sold for $1.1 million. In addition, Spiegel, Inc.,
which owns Eddie Bauer and accounted for 2.6% of our net sales in fiscal 2003,
filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in
March 2003. Although we do not expect any write-off in connection with the
Spiegel bankruptcy, the bankruptcy could have a negative impact on our sales to
Eddie Bauer going forward.
These and other financial problems of some customers, as well as
general weakness in the retail environment, increase the risk of extending
credit to these retailers. A significant adverse change in a customer
relationship or in a customer's financial position could cause us to limit or
discontinue business with that customer, require us to assume more credit risk
relating to that customer's receivables or limit our ability to collect amounts
related to previous purchases by that customer, all of which could have a
material adverse effect on our business, financial condition and results of
operations. Many customers (in particular, purchasers of Tommy Bahama) are small
upscale independent specialty stores that may be more susceptible to general
economic conditions. In addition, in order to reduce our future exposure to
risks associated with its bankruptcy, we have decided not to sell products to
Kmart in the near future and may make similar decisions with respect to other
customers in the future.
OUR THIRD PARTY PRODUCERS AND SOURCING AGENTS MAY BE UNABLE TO MANUFACTURE AND
DELIVER PRODUCTS IN A TIMELY MANNER OR MEET OUR QUALITY STANDARDS.
In fiscal 2003, we purchased 85% of our products from third party
producers located in foreign countries. The Tommy Bahama Group's largest third
party producer accounted for approximately 26% of its purchases for fiscal 2003.
The Tommy Bahama Group's two largest suppliers accounted for 44% of the Tommy
Bahama Group's purchases in fiscal 2003. We depend upon the ability of third
party producers to secure a sufficient supply of raw materials, adequately
finance the production of goods ordered and maintain sufficient manufacturing
and shipping capacity. The use of third party producers and the resulting lack
of direct control could subject us to difficulty in obtaining timely delivery of
products of acceptable quality. In addition, a third party producer'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. The
failure to make timely deliveries may cause customers to cancel orders, refuse
to accept deliveries, impose non-compliance charges through invoice deductions
or other charge-backs, demand reduced prices or reduce future orders any of
which could harm our sales, reputation and overall profitability. In addition,
the recent trend in the apparel industry towards outsourcing has intensified
competition for quality contractors, some of which have long-standing
relationships with our competitors. To the extent we are not able to secure or
maintain relationships with third party producers that are able to fulfill our
requirements, our business would be harmed.
6
WE COULD BE MATERIALLY AND ADVERSELY AFFECTED IF OUR DISTRIBUTION OPERATIONS
WERE DISRUPTED.
We operate warehousing and distribution facilities in Georgia,
Tennessee, South Carolina and Washington. Finished garments from our
manufacturing facilities and from our contractors are inspected and stored for
distribution at these distribution facilities. We do not have other distribution
facilities to support our distribution needs. As a result, if any of these
distribution facilities were to shut down or otherwise become inoperable or
inaccessible for any reason, we could incur significantly higher costs and
longer lead times associated with the distribution of our products during the
time it takes to reopen or replace the facility. In light of our strategic
emphasis on rapid replenishment as a key competitive advantage, a distribution
disruption might have a disproportionately adverse effect on our operations and
profitability relative to our competitors.
WE ARE SUBJECT TO RISKS ASSOCIATED WITH OUR MANUFACTURING AND SOURCING
OPERATIONS IN FOREIGN COUNTRIES.
Because approximately 98% of our products are manufactured abroad, we
must begin production of our products further in advance than would be the case
if the products were manufactured domestically. Typically, we do not begin
production of products until after receipt of an order from a customer. In those
cases in which we begin production in one of our owned manufacturing facilities
or place an order with an independent manufacturer before receiving an order
from a customer, if we overestimate retailers' demand, we may be required to
hold goods in inventory which we may be unable to sell at historical margins. If
we underestimate retailers' demand, we may not be able to fill reorders on a
timely basis. However, foreign manufacturing is subject to a number of other
risks, including:
- work stoppages;
- transportation delays and interruptions;
- political instability;
- economic disruptions;
- foreign currency;
- the imposition of new or adversely adjusted tariffs, duties,
- quotas, import and export controls, and other regulations;
- changes in governmental policies and other events; and
- intellectual property infringement, including knock-offs and
counterfeiting.
If any of these events occur, contract manufacturers' ability to
produce and ship products during a given retailing season will be impaired,
which could result in loss of revenues, customer orders and customer goodwill
and could have a material adverse effect on our business, financial condition,
results of operations and prospects.
We require third party producers to meet our standards in terms of
working conditions, environmental protection and other matters before placing
business with them. As such, we may not be able to obtain the most
cost-effective production. In addition, the labor and business practices of
independent apparel manufacturers have received increased attention from the
media, non-governmental
7
organizations, consumers and governmental agencies in recent years. Any failure
by our independent manufacturers to adhere to labor or other laws or appropriate
labor or business practices, and the potential litigation, negative publicity
and political pressure relating to any of these events, could harm our business
and reputation.
We are also exposed to foreign currency risk as a result of our foreign
manufacturing and sourcing operations. Most of our contracts to have goods
assembled or produced in foreign countries are negotiated in U.S. dollars. If
the value of the U.S. dollar decreases relative to certain foreign currencies in
the future, then the prices that we negotiate for products could increase, and
it is possible that we would not be able to pass this increase on to customers.
If the value of the U.S. dollar increases between the time a price is set and
payment for a product, the price we pay may be higher than that paid for
comparable goods by any competitors that pay for goods in local currencies, and
they may be able to sell their products at more competitive prices. We do not
engage in hedging activities with respect to foreign currency risk.
OUR BUSINESS IS SUBJECT TO REGULATORY RISKS ASSOCIATED WITH IMPORTING PRODUCTS.
We import approximately 98% of our products from owned foreign
manufacturing facilities or foreign third party producers. Substantially all of
our import operations are subject to tariffs imposed on imported products and
quotas imposed by trade agreements. In addition, the countries in which our
products are manufactured or imported from may from time to time impose
additional new quotas, duties, tariffs or other restrictions on imports or
adversely modify existing restrictions. Adverse changes in these import costs
and restrictions, or any supplier's failure to comply with customs or similar
laws, could harm our business. We cannot assure you that future trade agreements
will not provide our competitors with an advantage over us or increase our
costs, either of which could have a material adverse effect on our business and
profitability.
Our operations are also subject to international trade agreements and
regulations such as the North American Free Trade Agreement and the Caribbean
Basin Initiative, and the activities and regulations of the World Trade
Organization. Generally, these trade agreements benefit our business by reducing
or eliminating the duties and/or quotas assessed on products manufactured in a
particular country. However, trade agreements can also impose requirements that
adversely affect our business, such as limiting the countries from which we can
purchase raw materials and setting quotas on products that may be imported into
the United States from a particular country. In addition, the World Trade
Organization may commence a new round of trade negotiations that liberalize
textile trade by further eliminating quotas or reducing tariffs. The elimination
of quotas on World Trade Organization member countries by 2005 and other effects
of these trade agreements could result in increased competition from developing
countries which historically have lower labor costs, including China and Taiwan,
both of which recently became members of the World Trade Organization. This
increased competition could have an adverse effect on our business and financial
condition. We also believe that the elimination of quotas in 2005 will
significantly change the competitiveness of many countries as locations for
apparel manufacturing and sourcing.
EVENTS SUCH AS WAR, ACTS OF TERRORISM AND LABOR DISPUTES MAY MAKE IT MORE
DIFFICULT FOR US TO IMPORT PRODUCTS, WHICH COULD MATERIALLY ADVERSELY AFFECT OUR
BUSINESS.
As a result of our reliance on offshore manufacturing of our products,
if goods become difficult or impossible to import into the United States due to
war or acts of terrorism, or if either is threatened, our sales and net margins
may be materially adversely affected. In the event that commercial
transportation is curtailed or substantially delayed, our business may be
materially adversely impacted, as
8
we may have difficulty shipping merchandise from foreign facilities, which
provide approximately 98% of our manufacturing requirements. In addition, any of
these events may adversely affect general economic conditions in the United
States. Further deterioration in prevailing economic conditions in the United
States could reduce demand for our products.
Our ability to import products in a timely and cost-effective manner
may be affected by problems at ports or issues that otherwise affect
transportation and warehousing providers, such as labor disputes. These problems
could require us to locate alternative ports or warehousing providers to avoid
disruption to our customers. These alternatives may not be available on short
notice or could result in higher transit costs, which could have an adverse
impact on our business and financial condition. As an example, in September
2002, the Pacific Maritime Association, which represents terminal operators and
ocean ship companies, locked out the union workers at a number of ports on the
western coast of the United States. Although a federal court ordered the ports
reopened and the parties ultimately entered into a new union agreement, the lock
out caused a significant disruption in the shipment of goods, including our
products, into the United States.
WE ARE SUBJECT TO INCREASED COMPETITION FROM DIRECT SOURCING BY OUR CUSTOMERS.
We sell most of our products on a landed, duty-paid basis after they
are imported into the United States. However, some of our customers, by working
directly with manufacturers, purchase goods on a direct basis in which the
customer takes ownership of the product in the country of production. As a
result of this direct sourcing, customers can reduce their cost of goods by
handling the logistics of importation of goods themselves. If customers continue
or increase the amount of goods they purchase through direct sourcing, as many
have, our net sales and net margins may be materially adversely affected.
WE HOLD IMPORTANT LICENSES, THE LOSS OF THE VALUE OF WHICH COULD MATERIALLY
ADVERSELY AFFECT OUR BUSINESS.
We have entered into license and design agreements to use well-known
trademarks and trade names to market our products. These license and design
agreements will expire at various dates through fiscal 2007. We cannot assure
you that we will be able to renew these licenses on acceptable terms upon their
expiration or that we will be able to acquire new licenses to use other popular
trademarks. Moreover, many of these licenses provide minimum thresholds for
sales, royalty payments and advertising expenditures for each calendar year and
if these thresholds are not met due to a general economic downturn or otherwise,
our licensors may contractually be permitted to terminate these agreements or
seek payment of minimum royalties even if the minimum sales are not achieved.
The loss of significant third party licenses or penalty payments could reduce
our net sales and have a material adverse effect on our results of operations
and financial condition. Certain agreements provide for indemnification from our
licensors, which may or may not be enforceable. In addition, other agreements
require us to indemnify our licensees. We cannot currently assess the scope or
effect that these obligations may have on our financial condition. In addition,
our licensors license trademarks we use to other third parties and we are unable
to control the quality or fashion sense of goods that such third parties
produce. If such third party licensees do not maintain the quality of these
trademarks or tradenames, our sales and financial condition could materially
suffer.
9
WE MAY BE UNABLE TO PROTECT OUR TRADEMARKS AND OTHER INTELLECTUAL PROPERTY AND
MAY OTHERWISE HAVE OUR BRAND NAMES AND GOODWILL HARMED BY COMPETITORS' PRODUCTS
OR THE QUALITY OF OUR LICENSEES' PRODUCTS.
We currently rely on a combination of trademark, copyright and patent
rights, as well as other contractual arrangements, including licenses, to
establish and protect our intellectual property, brand names and similar
proprietary rights. We believe that our trademarks and other proprietary
intellectual property rights are important to our continued success and our
competitive position due to their recognition by our customers. For example, the
value of the Tommy Bahama brand and other related brands is critical to our
success and our ability to maintain certain price points. We devote substantial
resources to the establishment and protection of our trademarks and other
proprietary intellectual property rights.
There can be no assurance that the actions that we have taken to
establish and protect our trademarks and other intellectual property will be
adequate to prevent the creation of knock-offs, imitations or infringement of
our marks, products, services or trademarks by third parties. For example, from
time to time, we discover products in the marketplace that are reproductions of
Tommy Bahama products or that otherwise infringe upon our trademark and
copyright rights. If we are unsuccessful in challenging or decide not to
challenge a particular third party's products on the basis of trademark
infringement or otherwise or are unaware of any such infringement, continued
sales of such product by that or any other third party could materially
adversely impact the Tommy Bahama brand or other brands and negatively impact
our sales. In addition, if any third party imitates Tommy Bahama products in a
manner that projects a lesser quality or carries a negative connotation, this
could have a material adverse effect on Tommy Bahama's goodwill in the
marketplace, whether or not it violates our intellectual property rights.
A portion of our business uses endorsements of amateur and professional
athletes and coaches to promote some of our product lines. Unfavorable news
reports about an endorser could create unfavorable publicity for us and could
result in harm to the goodwill associated with some of our trademarks. We
typically have the option to immediately terminate a particular endorsement
agreement upon the occurrence of any of these or other undesirable events.
In the future, we may have to rely on litigation and other legal action
to enforce our intellectual property rights or contractual rights. If litigation
that we initiate is unsuccessful, we may not be able to protect the value of
some of our intellectual property. In addition, we may face claims of
infringement by third parties that could interfere with our ability to sell some
of our products. In the event a claim of infringement against us is successful,
we may be required to pay royalties or license fees to continue to use
intellectual property rights that we had been using or we may be unable to
obtain necessary licenses from third parties at a reasonable cost or within a
reasonable time. Any litigation and other legal action of this type, whether
successful or unsuccessful, could result in substantial costs to us and
diversion of our resources. In addition, the laws of certain foreign countries
do not protect our trademarks and proprietary rights to the same extent as do
the laws of the United States.
WE RELY ON KEY MANAGEMENT.
Our success depends upon the talents and efforts of a small number of
key management personnel, many of whom have been with our company and our
industry for a long time, including J. Hicks Lanier, our chairman of the board
and chief executive officer and Ben B. Blount, Jr., our executive vice president
of finance, planning and administration and chief financial officer, as well as
the principal managers of the Tommy Bahama Group, S. Anthony Margolis and Lucio
Dalla Gasperina. The
10
loss of any such management personnel, due to retirement or otherwise, could
have a material adverse effect on our business.
OUR RETAIL STORES MAY EXPERIENCE FLUCTUATIONS IN COMPARABLE STORE SALES.
Our comparable store sales are affected by a variety of factors which
may cause our results to differ materially from prior periods. These factors
include:
- general economic conditions;
- fashion trends;
- changes in its merchandise assortment;
- our success in executing our business strategy;
- competition;
- retail prices;
- the timing of release of new merchandise; and
- weather conditions.
Fluctuations in our comparable store sales could have a material
adverse effect on our business and on the market price of our common stock. Any
failure to meet the expectations of investors, security analysts or credit
rating agencies in one or more future periods could reduce the market price of
our common stock and cause our credit ratings to decline.
THE SUCCESS OF OUR RETAIL STORES DEPENDS TO A LARGE EXTENT UPON THE SHOPPING
ENVIRONMENT IN WHICH THE STORES ARE LOCATED.
Many of our Tommy Bahama retail stores are located in indoor and
outdoor shopping malls and plazas, and sales are derived, in part, from the
volume of traffic in such shopping areas. An important part of our business is
finding and keeping profitable store locations within successful shopping areas
in order to generate consumer traffic. Tommy Bahama's stores face competition
from other nearby retailers, and a store's sales can be affected not only by its
location in relation to its competitors but also by its proximity to other
points of attraction, the location of a store within the mall and the amount of
advertising and promotional dollars spent on attracting consumers to the malls.
Fuel shortages and high fuel prices may also deter shoppers. Hence, our business
may suffer based on declines in the desirability of the shopping environment in
a particular mall, shopping center or plaza, which could result from factors
outside of our control. The failure to locate new stores in advantageous
locations or failure to obtain renewal of our current attractive locations may
have a material adverse effect our retail business.
OUR SALES ATTRIBUTABLE TO OUR RETAIL STORES COULD BE ADVERSELY AFFECTED BY
REDUCED TRAVEL TO RESORT LOCATIONS.
We have retail stores under the Tommy Bahama name located in resort
areas and sell apparel that is often worn in resort locations. Recently, resort
travel has declined and could remain at depressed levels for a substantial
period of time as a result of geopolitical and economic conditions. Any
continued or further decline in resort travel would adversely affect sales in
those locations, as well as from
11
customers serving consumers traveling to those locations, and our operating
results could materially suffer.
WE FACE CERTAIN RISKS RELATED TO OUR OPERATION OF RESTAURANTS UNDER THE TOMMY
BAHAMA NAME.
We own and operate six compound locations under the Tommy Bahama name
that contain a full-service, white linen Tommy Bahama Tropical Cafe, in addition
to a standard Tommy Bahama retail store selling Tommy Bahama products. As a
participant in the restaurant industry, we face risks relating to food quality,
food-borne illness, injury, restaurant facilities, health inspection scores,
employees relationships, operational concerns and other matters at one or more
of its restaurants. Regardless of whether allegations related to these matters
are valid or whether we become liable, we may be materially and adversely
affected by negative publicity related thereto. The negative impact of adverse
publicity relating to one restaurant may extend far beyond the restaurant
involved to affect some or all of the other restaurants, as well the Tommy
Bahama brand name and image as a whole, including our retail and wholesale
businesses.
The profitability and continued success of our restaurant operations
depend on, among other things, the following additional factors:
- the ability to compete in the highly competitive restaurant
business;
- the ability to maintain the necessary federal, state and local
governmental licenses, permits and approvals, including those
relating to the preparation and sale of food and alcoholic
beverages, building and zoning requirements, and
employer-employee relationships, such as minimum wage
requirements, overtime, working and safety requirements, and
citizenship requirements;
- the availability and timely delivery of high quality, fresh
ingredients, including fresh produce, dairy products and meat;
- the availability of qualified, high energy restaurant
personnel; and
- factors affecting discretionary consumer spending, including
national, regional and local economic conditions, disposable
consumer income, inflation and consumer confidence.
Adverse changes in any of these factors could reduce guest traffic and
adversely affect the profitability of our restaurant operations and thus
adversely affect our results of operations.
INTEGRATING THE TOMMY BAHAMA GROUP INTO OUR COMPANY STRUCTURE MAY STRAIN OUR
RESOURCES AND PROVE TO BE DIFFICULT.
The acquisition of the Tommy Bahama Group in June 2003 was
significantly larger than any of our previous acquisitions. The significant
expansion of our business and operations resulting from the acquisition of the
Tommy Bahama Group may strain our administrative, operational and financial
resources. The integration of the Tommy Bahama Group into our company will
require substantial time, effort, attention and dedication of management
resources and may distract our management in unpredictable ways from our
existing business. The integration process could create a number of potential
challenges and adverse consequences for us, including the possible unexpected
loss of key employees, customers or suppliers, a possible loss of sales or an
increase in operating or other costs. These types of challenges and
uncertainties could have a material adverse effect on our business,
12
financial condition and results of operations. We may not be able to manage the
combined operations and assets effectively or realize all or any of the
anticipated benefits of the acquisition of the Tommy Bahama Group.
As part of our business strategy, we intend to pursue other strategic
acquisitions of brands and related businesses and we may face similar challenges
regarding such acquisitions.
THE EXPANSION OF OUR BUSINESS TO INCLUDE RETAIL STORES AND RESTAURANTS AS A
RESULT OF THE TOMMY BAHAMA GROUP ACQUISITION PRESENTS US WITH NEW CHALLENGES.
Prior to the acquisition of the Tommy Bahama Group in June 2003, we did
not operate any retail stores or restaurants. We may not be successful in
managing retail and/or restaurant operations and these operations may divert our
management's attention away from our existing business. These challenges may
impair our integration of the Tommy Bahama Group and may materially adversely
affect the rest of our business and our results of operations.
WE MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT OUR PLANS TO EXPAND OUR TOMMY
BAHAMA BUSINESS.
We plan to expand our Tommy Bahama business, including our Tommy Bahama
retail stores and restaurants. Our ability to open and operate new retail stores
and restaurants depends on many factors, including, among others, our ability
to:
- identify and obtain suitable retail and restaurant locations,
the availability of which is outside of our control;
- negotiate favorable lease terms;
- successfully address competition, merchandising and
distribution challenges;
- and hire, train and retain a sufficient number of qualified
personnel.
We seek to foster an element of scarcity at the consumer level when
selling Tommy Bahama products in a given geographical market, and believe that
the careful and deliberate selection of our retail stores within particular
geographical areas has been a key element of our successful retail business.
Therefore, we may not achieve our retail and restaurant expansion goals for
Tommy Bahama. Even if we succeed in expanding the number of Tommy Bahama retail
stores and restaurants, we cannot assure you that the newly opened stores and
restaurants will achieve sales or profitability levels comparable to those of
our existing Tommy Bahama stores and restaurants in the time periods estimated
by us, or at all. If these retail stores and restaurants fail to achieve or are
unable to sustain acceptable sales and profitability levels, we may incur
significant costs associated with operating or closing those stores and
restaurants.
OUR SUCCESS WILL DEPEND ON THE VALUE OF THE TOMMY BAHAMA BRAND, AND IF THE VALUE
OF THE TOMMY BAHAMA BRAND WERE TO DIMINISH, OUR REVENUES AND RESULTS OF
OPERATIONS WOULD BE ADVERSELY AFFECTED.
Maintaining and developing the Tommy Bahama brand will be critical to
our success. If for any reason Tommy Bahama's image or reputation were to be
tarnished, or if consumers no longer perceived Tommy Bahama products to be of
high quality and value, worthy of a premium price as compared to the
competition, our results of operations would materially suffer.
13
In addition, we license our Tommy Bahama brand and other related brands
to a number of strategic partners to produce a variety of other products,
including certain types of shoes, neckwear, handbags, furniture and women's
swimwear. While we require that these licensees maintain the quality of the
Tommy Bahama brand through specific contractual provisions, we cannot be certain
that such licensees, or their manufacturers and distributors, will honor their
contractual obligations or that they will not take other actions that will
significantly diminish the value of the Tommy Bahama brand name.
WE MAY NOT HAVE UNCOVERED ALL RISKS ASSOCIATED WITH THE TOMMY BAHAMA GROUP
ACQUISITION OR ANY FUTURE ACQUISITIONS.
We may become responsible for unexpected liabilities that we failed to
discover in the course of performing due diligence in connection with the Tommy
Bahama Group acquisition and any future acquisitions. We have required the
selling shareholders of the Tommy Bahama Group to indemnify us against
undisclosed liabilities. However, we cannot assure you that the indemnification
will be enforceable, collectible or sufficient in amount, scope or duration to
fully offset the possible liabilities associated with the business or property
acquired. Any of these liabilities, individually or in the aggregate, could have
a material adverse effect on our business, financial condition and results of
operations.
In addition, under the terms of our acquisition of the Tommy Bahama
Group, we will be required to make up to $75 million in performance-based
contingent payments to the selling shareholders of the Tommy Bahama Group over
the four years following the Tommy Bahama Group Acquisition. The contingent
payments will be comprised of an annual basic contingent payment and a
cumulative additional contingent payment. Although we will only be required to
make these payments if the acquired Tommy Bahama Group business is successful,
the contingent payments are payable based on that business achieving earnings
targets. These earnings may not be cash-based and we therefore may have
difficulty making cash payments. In addition, if the acquired Tommy Bahama Group
business is successful but the rest of our business is not successful, we may
have difficulty making the contingent payments. Certain of the selling
shareholders are key members of management of the Tommy Bahama Group business.
It is possible that their interests with respect to the contingent payments will
differ from the acquired interests of Oxford.
RISKS RELATING TO OUR INDEBTEDNESS AND THE NOTES
OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH AND
PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THE NOTES.
We have a significant amount of indebtedness. As of August 29, 2003, we
had $209 million indebtedness outstanding and stockholders' equity of $210
million.
Our substantial amount of indebtedness could have important
consequences for us. For example, it could:
- make it more difficult for us to satisfy our obligations with
respect to our outstanding indebtedness;
- limit our ability to borrow additional funds, or to sell
assets to raise funds, if needed, for working capital, capital
expenditures, acquisitions or other purposes;
- increase our vulnerability to adverse economic and industry
conditions;
14
- require us to dedicate a substantial portion of our cash flow
from operations to payments on our debt, thereby reducing
funds available for operations, future business opportunities
or other purposes, such as funding our working capital and
capital expenditures;
- limit our flexibility in planning for, or reacting to, changes
in the business and industry in which we operate;
- place us at a competitive disadvantage compared to our
competitors that have less indebtedness.
OUR ANTI-TAKEOVER PROVISIONS MAY LIMIT SHAREHOLDER VALUE.
Certain provisions of our articles of incorporation and bylaws and
Georgia law may delay, defer or prevent a takeover attempt that a shareholder
might consider in its best interest. A shareholder may not receive as much in
exchange for his or her shares as they could without these provisions. The
following is a description of the provisions that may reduce the market prices
for our shares of common stock.
Our articles of incorporation and bylaws separate our board of
directors into three classes of directors, with each class as nearly equal in
number as the total number of directors permits. Each class serves for
three-year terms, and each class' term expires in different successive years. In
addition, our articles of incorporation authorize the board of directors to
issue preferred stock in one or more classes or series and to determine the
price, rights, preferences, privileges and restrictions, including voting
rights, of those shares without any action on the part of the shareholders. The
rights of the holders of our common stock will be subject to, and may be
adversely affected by, the rights of the holders of any preferred stock that may
be issued in the future. The issuance of preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire a majority of our outstanding voting stock.
15
FORWARD-LOOKING STATEMENTS
This prospectus, including the documents incorporated by reference
herein, contains forward-looking statements within the meaning of the federal
securities laws. Statements that are not historical facts, including statements
about our beliefs and expectations, are forward-looking statements.
Forward-looking statements include statements preceded by, followed by or that
include the words "may," "could," "would," "should," "believe," "expect,"
"anticipate," "plan," "estimate," "target," "project," "intend," or similar
expressions. These statements include, among others, statements regarding our
expected business outlook, anticipated financial and operating results, our
business strategy and means to implement the strategy, our objectives, the
amount and timing of future capital expenditures, the likelihood of our success
in developing and introducing new products and expanding our business, the
timing of the introduction of new and modified products or services, financing
plans, working capital needs and sources of liquidity.
Forward-looking statements reflect our current expectations and are not
guarantees of performance. These statements are based on our management's
beliefs and assumptions, which in turn are based on currently available
information. Important assumptions relating to these forward looking statements
include, among others, assumptions regarding demand for our products, expected
pricing levels, raw material costs, the timing and cost of planned capital
expenditures, expected outcomes of pending litigation, competitive conditions,
general economic conditions and expected synergies in connection with
acquisitions and joint ventures, including the acquisition of the Tommy Bahama
Group. These assumptions could prove inaccurate. Forward-looking statements also
involve risks and uncertainties, which could cause actual results to differ
materially from those contained in any forward-looking statement. Many of these
risks are beyond our ability to control and predict. Many of these risks are
beyond our ability to control or predict. Such risks include, but are not
limited to, all of the risks discussed under "Risk Factors" and the following:
- general economic cycles;
- competitive conditions in our industry;
- price deflation in the worldwide apparel industry;
- our ability to identify and respond to rapidly changing
fashion trends and to offer innovative and upgraded products;
- the price and availability of raw materials;
- our dependence on and relationships with key customers;
- the ability of our third party producers to deliver quality
products in a timely manner;
- potential disruptions in the operation of our distribution
facilities;
- economic and political conditions in the foreign countries in
which we operate or source our products;
- regulatory risks associated with importing products;
- the impact of labor disputes and wars or acts of terrorism on
our business;
16
- increased competition from direct sourcing;
- our ability to maintain our licenses;
- our ability to protect our intellectual property and prevent
our trademarks and service marks and goodwill from being
harmed by competitors' products;
- our reliance on key management;
- inability to retain premium pricing on Tommy Bahama products
due to competitive or other factors;
- fluctuations in the Tommy Bahama Group's comparable store
sales;
- the impact of reduced travel to resort locations on the Tommy
Bahama Group's sales;
- risks related to the Tommy Bahama Group's operation of
restaurants under the Tommy Bahama name;
- the integration of the Tommy Bahama Group into our company;
- the expansion of our business through the Tommy Bahama Group
acquisition into new businesses;
- our ability to successfully implement our growth plans for the
Tommy Bahama Group;
- our ability to open new Tommy Bahama stores following the
acquisition of the Tommy Bahama Group; and
- unforeseen liabilities associated with the acquisition of the
Tommy Bahama Group and other businesses.
We believe these forward-looking statements are reasonable; however,
you should not place undue reliance on any forward-looking statements, which are
based on current expectations. Furthermore, forward-looking statements speak
only as of the date they are made, and we undertake no obligation to update
publicly any of them in light of new information or future events.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares of
common stock offered by the selling shareholders under this prospectus, but we
have agreed to bear certain expenses associated with registering such shares
under federal and state securities laws. We are registering the shares for sale
to provide the selling shareholders with freely tradeable securities, but the
registration of such shares does not necessarily mean that any of the shares
will be offered or sold by the selling shareholders.
17
SELLING SHAREHOLDERS
We have agreed to register with the SEC shares of our common stock
beneficially owned by certain of our selling shareholders. The following table
sets forth as of October 31, 2003:
- the names of the selling shareholders;
- the nature of any position, office or other material
relationship the selling shareholders have had within the past
three years with us or any of our predecessors or affiliates;
- the number of shares of common stock beneficially owned by the
selling shareholders;
- the maximum number of shares of common stock that may be
offered or sold by the selling shareholders under this
prospectus; and
- the amount of common stock to be owned by the selling
shareholders upon the completion of the offering if all shares
offered are sold.
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OFFERING(1) OWNED AFTER OFFERING(1)
-------------------------- ------------------------
PERCENT OF SHARES BEING PERCENT OF
NAMES OF SELLING SHAREHOLDERS(2) NUMBER CLASS OFFERED NUMBER CLASS
- -------------------------------- ------ ----- ------- ------ --------
SKM-TB, LLC(3)................. 137,379 * 137,379 - 0%
Whole Duty Investment Ltd...... 130,863 * 130,863 - 0%
S. Anthony Margolis(4)......... 54,296 * 54,296 - 0%
Margolis Family Stock Trust u/a/d/
May 1, 2001, for benefit of Jodi
Kooperman(5)................... 1,329 * 1,329 - 0%
Margolis Family Stock Trust u/a/d/
May 1, 2001, for benefit of David
Margolis(5).................... 1,329 * 1,329 - 0%
Margolis Family Stock Trust u/a/d/
May 1, 2001, for benefit of Lucas
Margolis(5).................... 1,330 * 1,330 - 0%
Margolis Family Stock Trust u/a/d/
May 1, 2001, for benefit of Katelyn
Margolis(5).................... 1,329 * 1,329 - 0%
Margolis Family Stock Trust u/a/d/
May 1, 2001, for benefit of Brandon
Margolis(5).................... 1,329 * 1,329 - 0%
William S. Sterns, III(5)...... 6,646 * 6,646 - 0%
Bonita Beach Blues Inc......... 17,962 * 17,962 - 0%
Lucio Dalla Gasperina(6)....... 41,054 * 41,054 - 0%
- ----------------------
(1) The amounts and percentages of common stock beneficially owned have
been calculated in accordance with applicable SEC regulations. Each
beneficial owner listed in the table has both voting and investment
power over the applicable shares, unless otherwise indicted. Shares
underlying stock options that are exercisable within 60 days are deemed
to be outstanding for the purpose of computing the outstanding shares
owned by the selling shareholders.
(2) Each of the selling shareholders listed in the table was a stockholder
of the Tommy Bahama Group prior to its acquisition by us.
(3) Two directors of the ultimate parent of SKM-TB, LLC were directors of
the Tommy Bahama Group prior to its acquisition by us. In addition, an
affiliate of the ultimate parent of SKM-TB, LLC provided financial
advisory services to the Tommy Bahama Group prior to its acquisition by
us.
(4) Mr. Margolis is currently Group Vice President of our company and is
President and Chief Executive Officer of the Tommy Bahama Group. Prior
to our acquisition of the Tommy Bahama Group, Mr. Margolis served as
its President and Chief Executive Officer.
(5) William S. Sterns, III, is the sole trustee of each of the indicated
trusts and may be deemed to be the beneficial owner of the shares held
by each such trust. Mr. Sterns is not selling any shares in this
offering. All shares indicated as being sold by Mr. Sterns are shares
attributed to him, but being sold by the trusts.
(6) Mr. Dalla Gasperina is currently Executive Vice President of the Tommy
Bahama Group. Prior to our acquisition of the Tommy Bahama Group, Mr.
Dalla Gasperina served as its Executive Vice President.
18
PLAN OF DISTRIBUTION
The sale of common stock by the selling shareholders and any of their
pledgees, assignees and successors-in-interest pursuant to this prospectus may
be effected from time to time in one or more transactions on the New York Stock
Exchange or otherwise at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
The selling shareholders may from time to time offer and sell the
shares directly to purchasers or through agents, underwriters or dealers. Such
sales may be in the form of:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its own account;
- exchange distributions in accordance with the rules of the New
York Stock Exchange or any other applicable exchange;
- privately negotiated transactions;
- short sales;
- agreements between broker-dealers and the selling shareholders
to sell a specified number of shares at a stipulated price per
share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
Agents or underwriters acting on behalf of the selling shareholders may
receive compensation from the selling shareholders or from purchasers of the
common stock for whom they act as agent in the form of discounts, concessions or
commissions. Underwriters may sell the common stock to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Agents, underwriters and dealers that participate
in the distribution of common stock may be deemed to be underwriters for
purposes of the Securities Act of 1933, as amended, which we refer to as the
Securities Act, and any discounts, concessions or commissions received by them
from the selling shareholders and any profit on the resale of common stock by
them may be deemed to be underwriting discounts and commissions under the
Securities Act. To our knowledge, the selling shareholders have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the shares, nor is there any underwriter or
coordinating broker acting in connection with the proposed sale of shares by the
selling shareholders.
The selling shareholders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
such transactions, broker-dealers or other financial institutions may engage in
short sales of the shares in the course of hedging the positions they assume
with selling shareholders. The selling shareholders may also sell shares short
and deliver the shares to close out such short positions. The selling
shareholders may also enter into option or other transactions with
broker-dealers, which require the delivery to the broker-dealer of the shares.
The broker-dealer may then resell or otherwise transfer such shares pursuant to
this prospectus. The selling shareholders may
19
also pledge or loan the shares to a broker-dealer. The broker-dealer may sell
the shares so loaned, or upon a default, the broker-dealer may sell the pledged
shares pursuant to this prospectus.
The selling shareholders may from time to time pledge or grant a
security interest in some or all of the shares of our common stock owned by them
and, if they default in the performance of their secured obligations, the
pledges or secured parties may offer and sell the shares of common stock from
time to time under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision on the Securities Act
amending the list of selling shareholders to include the pledgee, transferee or
other successors-in-interest as selling shareholders under this prospectus.
At the time a particular offer of shares is made, a prospectus
supplement, if required, will be distributed that will set forth the names of
any agents, underwriters or dealers and any compensation from the selling
shareholders and any other required information.
In order to comply with the securities laws of certain states, if
applicable, the shares may be sold only through registered or licensed brokers
or dealers. In addition, in certain states, the shares may not be sold unless
they have been registered or qualified for sale in such state or an exemption
from such registration or qualification requirement is available and is complied
with.
We have advised the selling shareholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling shareholders and their affiliates.
In addition, we will make copies of this prospectus available to the selling
shareholders and we have informed them of the need for delivery of copies of
this prospectus to purchasers at or prior to the time of any sale of the shares
offered hereby. The selling shareholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities Act.
We will pay all expenses incident to the offering and sale of the
shares to the public other than any commissions and discounts of underwriters,
dealers or agents and any transfer taxes. We estimate that we will spend
approximately $100,000 for expenses in connection with the offering of shares by
the selling shareholders.
Agents, underwriters or dealers may engage in transactions with or
perform services for us in the ordinary course of business.
VALIDITY OF COMMON STOCK
The validity of the common stock offered hereby will be passed upon for
us by Thomas C. Chubb III, our Vice President, Secretary & General Counsel. As
of November 18, 2003, Mr. Chubb beneficially owned 1,000 shares of our common
stock and had options to purchase 16,735 shares.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements as of May 30, 2003 and May 31, 2002, and for the years then
ended, included in our Annual Report on Form 10-K for the year ended May 30,
2003, as set forth in their report, which is incorporated by reference in this
prospectus and elsewhere in the registration statement. Our financial statements
are incorporated by reference in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing.
The consolidated financial statements of Oxford Industries, Inc. and
Subsidiaries for the year ended June 1, 2001, incorporated by reference in this
registration statement, were audited by Arthur Andersen LLP, independent public
accountants, as stated in their reports. On May 22, 2002, we engaged
20
Ernst & Young LLP to replace Arthur Andersen LLP as our independent auditors.
Relief in connection with claims which may be available to you against auditing
firms may not be available as a practical matter against Arthur Andersen LLP. In
reliance on the temporary relief provided by the SEC under Rule 437a of the
Securities Act, we are filing this registration statement without the written
consent of Arthur Andersen LLP as required by Section Seven of the Securities
Act. Accordingly, you will not be able to sue Arthur Andersen LLP pursuant to
Section 11(a)(4) of the Securities Act and therefore your right of recovery
under that section may be limited as a result of the lack of consent.
The consolidated financial statements of Viewpoint International, Inc.
as of March 31, 2002 and 2001 and for each of the three fiscal years ended March
31, 2002, incorporated by reference in this registration statement, have been
audited by Mahoney Cohen & Company, CPA, P.C. independent accountants, as stated
in their report.
21
================================================================================
388,200 Shares
OXFORD INDUSTRIES, INC.
Common Stock
------------------
PROSPECTUS
------------------
, 2003
================================================================================
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC registration fee................................................... $ 2,032
Legal fees and expenses................................................ 75,000
Accounting fees and expenses........................................... 10,000
Printing expenses...................................................... 10,000
Miscellaneous.......................................................... 2,968
---------
Total........................................................ $ 100,000
---------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The registrant is incorporated under the laws of the State of Georgia.
The articles of incorporation and bylaws of the registrant provide that the
registrant shall indemnify its directors and officers to the fullest extent
permitted by the Georgia Business Corporation Code.
Subsection (a) of Section 14-2-851 of the Georgia Business Corporation
Code provides that a corporation may indemnify or obligate itself to indemnify
an individual made a party to a proceeding because he or she is or was a
director against liability incurred in the proceeding if: (1) such individual
conducted himself or herself in good faith; and (2) such individual reasonably
believed: (A) in the case of conduct in his or her official capacity, that such
conduct was in the best interests of the corporation; (B) in all other cases,
that such conduct was at least not opposed to the best interests of the
corporation; and (C) in the case of any criminal proceeding, that the individual
had no reasonable cause to believe such conduct was unlawful. Subsection (d) of
Section 14-2-851 of the Georgia Business Corporation Code provides that a
corporation may not indemnify a director: (1) in connection with a proceeding by
or in the right of the corporation, except for reasonable expenses incurred in
connection with the proceeding if it is determined that the director has met the
relevant standard of conduct; or (2) or in connection with any proceeding with
respect to conduct for which he or she was adjudged liable on the basis that
personal benefit was improperly received by him or her, whether or not involving
action in his or her official capacity. Notwithstanding the foregoing, pursuant
to Section 14-2-854, a court shall order a corporation to indemnify or give an
advance for expenses to a director if such court determines the director is
entitled to indemnification under Section 14-2-854 or if it determines that in
view of all relevant circumstances, it is fair and reasonable, even if the
director has not met the standard of conduct set forth in subsections (a) and
(b) of Section 14-2-851 of the Georgia Business Corporation Code or was adjudged
liable in a proceeding referred to in subsection (d) of Section 14-2-851 of the
Georgia Business Corporation Code.
Section 14-2-852 of the Georgia Business Corporation Code provides that
a corporation shall indemnify a director who was wholly successful, on the
merits or otherwise, in the defense of any proceeding to which the director was
a party because he or she was a director of the corporation against reasonable
expenses incurred by the director in connection with the proceeding.
Subsection (c) of Section 14-2-857 of the Georgia Business Corporation
Code provides that an officer of the corporation who is not a director is
entitled to mandatory indemnification under Section 14-2-852 and may apply to a
court under Section 14-2-854 for indemnification or advances for expenses, in
each case to the same extent to which a director may be entitled to
indemnification or advances for expenses under those provisions. In addition,
subsection (d) of Section 14-2-857 provides that a
corporation may also indemnify and advance expenses to an employee or agent who
is not a director to the extent, consistent with public policy, that may be
provided by its articles of incorporation, bylaws, action of its board of
directors or contract.
As permitted by the Georgia Business Corporation Code, Article XII of
the registrant's' Articles of Incorporation provides that a director shall not
be personally liable to the registrant or its shareholders for monetary damages
for breach of duty of care or other duty as a director, except that such
provision shall not eliminate or limit the liability of a director (a) for any
appropriation, in violation of his or her duties, of any business opportunity of
the registrant, (b) for any acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) for the types of
liability set forth in Section 14-2-154 of the Georgia Business Corporation Code
or (d) for any transaction from which the director derived an improper personal
benefit. The Articles of Incorporation of the registrant further provide that if
the Georgia Business Corporation Code is amended to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the registrant shall be eliminated or limited to the
fullest extent permitted by the Georgia Business Corporation Code, as so
amended. Article XII of the registrant's articles of incorporation also provides
that neither the amendment or repeal of such Article XII nor the adoption of any
provision of the registrant's articles of incorporation inconsistent with such
Article XII shall eliminate or adversely affect any right of protection of a
director of the registrant existing immediately prior to such amendment, repeal
or adoption.
Under Article VI of the registrant's bylaws, the registrant is required
to indemnify each person who is now, has been, or who will hereafter become a
director or officer of the registrant, whether or not then in office. The
registrant is required to indemnify any such director or officer against all
costs and expenses reasonably incurred by or imposed upon him or her in
connection with or resulting from any demand, action, suit or proceedings or
threat thereof, to which he or she may be a party as a result or by reason of
his being or having been a director or officer of the registrant or of any other
corporation which he serves as director or officer at the request of the
registrant, except in relation to matters as to which a recovery shall be had
against him or penalty imposed upon him by reason of his having been finally
adjudged in such action, suit or proceedings to have been derelict in the
performance of his duties as such director or officer. The foregoing right to
indemnity includes reimbursement of the amounts and expenses paid in settling
any such demand, suit or proceedings or threat thereof when settling the same
appears to the board of directors of executive committee of the registrant to be
in the best interests of the registrant, and is not exclusive of other rights to
which such director or officer may be entitled as a matter of law.
The registrant's directors and executive officers are insured against
damages from actions and claims incurred in the course of performing duties, and
the registrant is insured against expenses incurred in defending lawsuits
arising from certain alleged acts against directors and executive officers.
ITEM 16. EXHIBITS
Exhibit Description
- ------- --------------------------------------------------------------------
2.1 Stock Purchase Agreement, dated as of April 26, 2003, among
Viewpoint International, Inc., the Stockholders of Viewpoint
International, Inc. and the registrant. Incorporated by reference to
the registrant's Form 8-K filed on June 26, 2003.
2.2 Earnout Agreement, dated as of June 13, 2003, among the Stockholders
of Viewpoint International, Inc. and the registrant. Incorporated by
reference to the registrant's Form 8-K filed on June 26, 2003.
II-2
3.1 Articles of Incorporation of the registrant. Incorporated by
reference to Exhibit 3(a) to the registrant's Form 10-Q for the
fiscal quarter ended August 29, 1997.
3.2 Bylaws of the registrant. Incorporated by reference to Exhibit 3(b)
to the registrant's Form 10-K for the fiscal year ended May 28,
1999.
4.1 Registration Rights Agreement dated as of June 13, 2003 among the
registrant and the Sellers listed on Schedule 1 thereto.
*5.1 Opinion of Thomas C. Chubb III.
*23.1 Consent of Thomas C. Chubb III (included as part of Exhibit 5.1).
*23.2 Consent of Ernst & Young LLP, independent auditors.
*23.3 Consent of Mahoney Cohen & Company, CPA, P.C.
24.1 Power of Attorney (included in signature pages).
- ----------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are made,
a post-effective amendment to this Registration Statement:
(1) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(2) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in the 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 a 20 percent change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" Table in the
effective Registration Statement;
(3) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that paragraphs (1) and (2) 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 registrant pursuant to Section 13 of
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
II-3
(b) 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.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby further 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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant 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 Atlanta, State of Georgia, on November 18, 2003.
Oxford Industries, Inc.
By: /s/ J. Hicks Lanier
-------------------------------------------
Name: J. Hicks Lanier
Title: Chairman of the Board, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Tiffany W. Easton, Mary Margaret Heaton
and Thomas C. Chubb III, or any one of them, his or her true and lawful
attorney-in-fact and agent, with full power of 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 (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agents or any of them, their,
or his or her, substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and Power of Attorney have been signed by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ J. Hicks Lanier Chairman of the Board, President November 18, 2003
- --------------------------- and Chief Executive Officer
J. Hicks Lanier (Principal Executive Officer)
/s/ Ben B. Blount, Jr. Director, Executive Vice President, November 18, 2003
- --------------------------- Chief Financial Officer (Principal
Ben B. Blount, Jr. Financial Officer)
II-5
SIGNATURE TITLE DATE
--------- ----- ----
/s/ K. Scott Grassmyer Controller (Principal Accounting November 18, 2003
- --------------------------- Officer)
K. Scott Grassmyer
/s/ Cecil D. Conlee Director November 18, 2003
- ---------------------------
Cecil D. Conlee
/s/ Thomas Gallagher Director November 18, 2003
- ---------------------------
Thomas Gallagher
/s/ J. Reese Lanier, Sr. Director November 18, 2003
- ---------------------------
J. Reese Lanier, Sr.
/s/ Knowlton J. O'Reilly Director November 18, 2003
- ---------------------------
Knowlton J. O'Reilly
/s/ Clarence B. Rogers, Jr. Director November 18, 2003
- ---------------------------
Clarence B. Rogers, Jr.
/s/ Robert E. Shaw Director November 18, 2003
- ---------------------------
Robert E. Shaw
/s/ Clarence H. Smith Director November 18, 2003
- ---------------------------
Clarence H. Smith
/s/ E. Jenner Wood Director November 18, 2003
- ---------------------------
E. Jenner Wood
/s/ Helen B. Weeks Director November 18, 2003
- ---------------------------
Helen B. Weeks
II-6
EXHIBIT INDEX
Exhibit Description
- ------- -----------------------------------------------------------------------
2.1 Stock Purchase Agreement, dated as of April 26, 2003, among Viewpoint
International, Inc., the Stockholders of Viewpoint International, Inc.
and the registrant. Incorporated by reference to the registrant's Form
8-K filed on June 26, 2003.
2.2 Earnout Agreement, dated as of June 13, 2003, among the Stockholders of
Viewpoint International, Inc. and the registrant. Incorporated by
reference to the registrant's Form 8-K filed on June 26, 2003.
3.1 Articles of Incorporation of the registrant. Incorporated by reference
to Exhibit 3(a) to the registrant's Form 10-Q for the fiscal quarter
ended August 29, 1997.
3.2 Bylaws of the registrant. Incorporated by reference to Exhibit 3(b) to
the registrant's Form 10-K for the fiscal year ended May 28, 1999.
4.1 Registration Rights Agreement dated as of June 13, 2003 among the
registrant and the Sellers listed on Schedule 1 thereto.
**5.1 Opinion of Thomas C. Chubb III.
**23.1 Consent of Thomas C. Chubb III (included as part of Exhibit 5.1).
**23.2 Consent of Ernst & Young LLP, independent auditors.
**23.3 Consent of Mahoney Cohen & Company, CPA, P.C.
24.1 Power of Attorney (included in signature pages).
- -----------
* Filed herewith.
** To be filed by amendment.
II-7
EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of the
13th day of June, 2003, among each stockholder and/or warrant holder of
VIEWPOINT INTERNATIONAL, INC., a Delaware corporation (the "Company") listed on
Schedule 1 hereto (each, a "Seller" and collectively, the "Sellers"); S. Anthony
Margolis, an individual resident of Connecticut, and David J. Oddi, an
individual resident of Connecticut, as the Sellers' Representatives (the
"Sellers' Representatives"); and OXFORD INDUSTRIES, INC., a Georgia corporation
(the "Buyer").
WHEREAS, the Buyer, the Company, and the Sellers entered into a Stock
Purchase Agreement (the "Purchase Agreement"), dated as of April 26, 2003,
pursuant to which the Sellers agreed to sell, and the Buyer agreed to purchase,
all of the outstanding stock and equity interests of the Company on the terms
and conditions set forth in the Purchase Agreement;
WHEREAS, pursuant to Section 8.12 and Section 9.5 of the Purchase
Agreement, the Buyer, the Company, and the Sellers agreed to enter into an
Earnout Agreement (the "Earnout Agreement"), dated as of the date hereof, as a
condition to consummation of the transactions contemplated by the Purchase
Agreement;
WHEREAS, pursuant to Section 8.21 and Section 9.8 of the Purchase
Agreement, the parties agreed to enter into this Agreement as a condition to
consummation of the transactions contemplated by the Purchase Agreement;
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
(a) "Business Day" shall mean any day on which banking
institutions in New York, New York and the Stock Exchange are
customarily open for the purpose of transacting business.
(b) "Buyer Notice" shall have the meaning set forth in
Section 4(b) hereof.
(c) "Buyer Refusal Period" shall have the meaning set
forth in Section 4(b) hereof.
(d) "Common Stock" shall mean the common stock, par value
$1.00 per share, of the Buyer.
(e) "Company" shall have the meaning set forth in the
preamble.
(f) "Covered Person" shall have the meaning set forth in
Section 3(a) hereof.
(g) "Delay Notice" shall have the meaning set forth in
Section 2(b)(i) hereof.
(h) "Earnout Agreement" shall have the meaning set forth
in the recitals.
(i) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended from time to time.
(j) "Material Development Condition" shall have the
meaning set forth in Section 2(b)(i) hereof.
(k) "Offer" shall have the meaning set forth in Section
4(a) hereof.
(l) "Offered Shares" shall have the meaning set forth in
Section 4(a) hereof.
(m) "Person" shall mean any individual,
partnership, limited liability company, corporation, association,
trust, joint venture, unincorporated organization, labor union or other
entity.
(n) "Purchase Agreement" shall have the meaning set forth
in the recitals.
(o) "Registration Notice" shall mean a written notice
from the Sellers' Representatives requesting the Buyer to file a Shelf
Registration Statement or, to the extent a Shelf Registration Statement
has been filed and become effective, to make such Shelf Registration
Statement available for resales thereunder.
(p) "Registrable Securities" shall mean any Shares held
by the Sellers, excluding (i) Shares that have been sold pursuant to
any Shelf Registration Statement or any other effective registration
statement, (ii) Shares sold or otherwise transferred pursuant to Rule
144 under the Securities Act, (iii) Shares held by any Seller if all of
such Shares are eligible for sale pursuant to Rule 144 under the
Securities Act in one transaction in accordance with the volume
limitations contained in Rule 144(e) under the Securities Act and (iv)
Shares eligible for sale under Rule 144(k) under the Securities Act.
(q) "Resale Window" shall have the meaning set forth in
Section 2(a) hereof.
(r) "Right of Refusal Oxford Trading Price" shall mean
the average of the high and low per share sales prices of a share of
Common Stock during the regular trading session on the applicable Stock
Exchange on the trading day immediately preceding the date that any
Seller makes an applicable Offer.
(s) "Right of Refusal Sale Date" shall have the meaning
set forth in Section 4(c) hereof.
(t) "SEC" shall mean the Securities and Exchange
Commission.
- 2 -
(u) "Securities Act" shall mean the Securities Act of
1933, as amended from time to time.
(v) "Sellers" shall have the meaning set forth in the
preamble.
(w) "Sellers' Representatives" shall have the meaning set
forth in the preamble.
(x) "Shares" shall mean any shares of Common Stock issued
to the Sellers pursuant to the Purchase Agreement and, if applicable,
the Earnout Agreement.
(y) "Shelf Registration Statement" shall mean any
registration statement filed by the Buyer pursuant to Section 2 of this
Agreement, including the prospectus contained therein, any amendments,
and all exhibits thereto and supplements to such registration
statement, including post-effective amendments, and all material
incorporated by reference (or deemed to be incorporated by reference)
in such registration statement; provided that such registration
statement shall only be used for resales of the Registrable Securities
in brokered transactions at the market.
(z) "Stock Exchange" shall mean (i) the New York Stock
Exchange or (ii) if shares of Common Stock are not listed on the New
York Stock Exchange, another national securities exchange or automated
quotation system on which shares of Common Stock are listed or quoted.
(aa) "Subsidiary" shall mean any Person of which any
specified Person shall own directly or indirectly through a Subsidiary,
a nominee arrangement or otherwise at least a majority of the
outstanding capital stock (or other shares of beneficial interest)
entitled to vote generally or otherwise have the power to elect a
majority of the board of directors or similar governing body or the
legal power to direct the business or policies of such Person.
2. Shelf Registration Under the Securities Act.
(a) Filing of a Shelf Registration Statement. The Buyer
shall file with the SEC as promptly as practicable after the receipt of
a Registration Notice (and with respect to a Registration Notice
relating to Registrable Securities issued pursuant to the Earnout
Agreement at the election of the Sellers within thirty (30) days),
subject to the Buyer's receipt of all information from the Sellers that
is necessary to comply with applicable state and federal securities
laws, and use commercially reasonable efforts to cause to become
effective as promptly as possible thereafter, a Shelf Registration
Statement. The Buyer agrees to use its commercially reasonable efforts
to (i) cooperate with the Sellers in the disposition of the Registrable
Securities pursuant to this Agreement and (ii) subject to Section 2(b)
hereof, to keep the Shelf Registration Statement continuously effective
so long as the Sellers hold such Registrable Securities.
Notwithstanding anything herein to the contrary, the effectiveness of a
Registration Notice shall be subject to the following: (i) no
Registration Notice may be delivered prior to the date that is ninety
(90) days after the date hereof, (ii) any Registration Notice relating
to Registrable Securities issued pursuant to the Earnout Agreement at
the election
- 3 -
of the Sellers may be delivered on or after the date the Sellers'
Representatives submit the Sellers Stock Percentage or Accelerated
Stock Percentage (each as defined in the Earnout Agreement), as
applicable, to the Buyer, and (iii) Registration Notices may only
request, (A) in the case of a request to file a Shelf Registration
Statement, that such Shelf Registration Statement be filed on any date
beginning no earlier than the first day of a Resale Window (as defined
below) and ending no later than the last day of a Resale Window and (B)
in the case of a request to use an existing Shelf Registration
Statement, that such Shelf Registration Statement be made available for
resales thereunder beginning no earlier than the first day of a Resale
Window and ending no later than the last day of a Resale Window. Each
Registration Notice shall specify the Registrable Securities covered
thereby, the holder thereof, and the requested action with respect to
any Shelf Registration Statement (including, if applicable, the time
period during which use of such Shelf Registration Statement is being
requested). Notwithstanding anything herein to the contrary, (i) the
Buyer shall have no obligation to have any Shelf Registration Statement
declared effective until 180 days after the date hereof and (ii) at any
time that a Seller is an employee, officer, director or consultant of
the Buyer or the Company, such Seller must comply with any internal
trading policies or similar policies of the Buyer in effect from time
to time with respect to any Offer (as defined herein) or sale or
proposed sale of Shares. It is understood by the parties that the
Sellers' Representatives may deliver more than one Registration Notice
pursuant to this Agreement.
With respect to any fiscal quarter, a "Resale Window" (y)
shall begin on the date that is one full Business Day after the earlier
of the date (A) the Buyer files a Quarterly Report on Form 10Q or
Annual Report on Form 10K in respect of its most recently completed
fiscal quarter or fiscal year, as the case may be, and (B) the Buyer
issues a press release reporting its results of operations relating to
the Buyer's most recently completed fiscal quarter or fiscal year, as
the case may be, and (z) end on the last day of such fiscal quarter.
For any period that any Seller holds any Registrable Securities, a
Shelf Registration Statement is effective and a Delay Notice (as
defined below) is not in effect, the Buyer agrees to use reasonable
commercial efforts to issue a press release relating to the Buyer's
most recently completed fiscal quarter or fiscal year, as the case may
be, as promptly as practicable after the Buyer's independent public
accountants have completed the applicable SAS 71 review related to such
period (which, in the case such period is any fiscal year, such period
shall be the fourth fiscal quarter). The Buyer agrees to use its
commercially reasonable efforts to cause its independent public
accountants to complete an applicable SAS 71 review as promptly as
practicable following the end of such applicable fiscal quarter.
(b) Delay Notices.
(i) If the Buyer determines in its reasonable
judgment that the filing or effectiveness of, or sales
pursuant to, any Shelf Registration Statement would require
the Buyer to disclose any pending or anticipated acquisition
or corporate reorganization, financing or other transaction or
development involving the Buyer or any of its Subsidiaries and
such public disclosure would be materially disadvantageous (a
"Material Development Condition") to the Buyer, the Buyer may,
at its option, notwithstanding any other provision of this
Agreement, upon
- 4 -
the delivery or transmission of a written notice from the
Buyer (a "Delay Notice") to such effect to the holders of
Registrable Securities covered by such Shelf Registration
Statement (A) to delay the filing or the effectiveness of, or
suspend sales pursuant to, such Shelf Registration Statement
until the earlier of ninety (90) days after the date of the
Delay Notice or the date that the Material Development
Condition ceases to exist or (B) to the extent required by
applicable law, cause such Shelf Registration Statement to be
withdrawn. In the event a Shelf Registration Statement is
filed and subsequently suspended or withdrawn by reason of any
Material Development Condition as provided herein, the Buyer
shall either update the existing Shelf Registration Statement
as required by applicable law or cause a new Shelf
Registration Statement to be filed with the SEC not later than
the earlier of ninety (90) days after the date of the Delay
Notice or the date on which such Material Development
Condition ceases to exist and, if applicable, to use its
commercially reasonable efforts to cause such new Shelf
Registration Statement to become effective as soon as
practicable after such Material Development Condition ceases
to exist. The Buyer may only deliver one Delay Notice during
any three hundred sixty-five (365) day period.
(ii) Each Seller agrees that, upon receipt from
the Buyer of a Delay Notice, such Seller will immediately
discontinue sales of Registrable Securities pursuant to any
Shelf Registration Statement until (A) the Sellers are advised
in writing by the Buyer that the use of the prospectus
relating to the applicable Shelf Registration Statement may be
resumed and, if applicable, the Sellers receive copies of any
required supplement or amendment to such prospectus or (B) the
Sellers are advised in writing by the Buyer that a new Shelf
Registration Statement has become effective under the
Securities Act and the Sellers receive copies of any required
prospectus.
(iii) Subject to Sections 2(a) and 2(b)(i), the
Buyer will immediately notify the Sellers of the happening of
any event, as a result of which the prospectus included or to
be included in a Shelf Registration Statement includes an
untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
then existing, not misleading. The Sellers will immediately
discontinue sales of Registrable Securities pursuant to such
Shelf Registration Statement. Subject to Sections 2(a) and
2(b)(i), the Buyer will, as promptly as practicable, revise
such prospectus as may be necessary so that such prospectus
shall not include such an untrue statement of a material fact
or omit to state such a material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances then existing, not misleading. The
Buyer will, as promptly as practicable, deliver copies of such
revised prospectus to the Sellers. Subject to Sections 2(a)
and 2(b)(i), following receipt of the revised prospectus, the
Sellers will be free to resume disposition of such Registrable
Securities provided that such dispositions are within the time
periods specified in a previously delivered Registration
Notice.
- 5 -
(c) Expenses. All expenses incurred by the Buyer in
complying with this Section 2, including all registration and filing
fees, shall be paid by the Buyer; provided, however, that all selling
commissions, brokerage fees and expenses and transfer taxes in
connection with sales of Shares covered by a Shelf Registration
Statement shall be paid by the respective Sellers.
(d) Registration Procedures. If and whenever the Buyer is
required by the provisions of this Agreement to effect the registration
of any of the Registrable Securities under the Securities Act, the
Buyer will take the actions described below in this Section 2(d).
(i) Copies of Prospectus. The Buyer shall
promptly furnish to each Seller of Registrable Securities
pursuant to a Shelf Registration Statement such number of
copies (as reasonably requested by the Sellers'
Representatives) of such Shelf Registration Statement, each
amendment and supplement thereto, the prospectus included in
such Shelf Registration Statement and any other prospectus
filed under Rule 424 promulgated under the Securities Act
relating to such Seller's Registrable Securities.
(ii) Listing. The Buyer shall cause all
Registrable Securities covered by any Shelf Registration
Statement to be listed on the Stock Exchange.
(iii) General Compliance with Federal Securities
Laws. The Buyer shall comply with the Securities Act, the
Exchange Act and any other applicable rules and regulations of
the SEC.
(iv) Eligibility to Use Form S-3. During the
period when any Registrable Securities are outstanding the
Buyer agrees to use its commercially reasonable efforts to
maintain its eligibility to use Form S-3 (or any successor
form allowing for the incorporation of information therein by
reference) to register Shares for re-sale under the Securities
Act.
(v) Seller Information. Upon receipt of a
Registration Notice, the Buyer shall promptly notify the
Sellers' Representatives of all information the Buyer requires
from the Sellers in order to effect the registration requested
in such Registration Notice in compliance with applicable
federal and state securities laws.
3. Indemnification.
(a) Indemnification by Buyer. Upon any registration of
any of the Registrable Securities under the Securities Act pursuant to
this Agreement, to the extent permitted by law, the Buyer will
indemnify and hold harmless each Seller, its partners, directors and
officers and each other Person, if any, who controls such Seller within
the meaning of the Securities Act or the Exchange Act (each such Person
being a "Covered Person") against any losses, claims, damages or
liabilities, joint or several, to which such Covered Person may become
subject under the Securities Act, the Exchange Act, state securities
laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect
- 6 -
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any Shelf
Registration Statement under which any Registrable Securities were
registered under the Securities Act, any preliminary or final
prospectus contained in any Shelf Registration Statement, or any
amendment or supplement to any Shelf Registration Statement or (ii) the
omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and the Buyer will reimburse such Covered Person for any
legal or any other expenses reasonably incurred by such Covered Person
in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Buyer will not
be liable to any Covered Person in any such case (x) to the extent that
any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Shelf Registration
Statement or prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the
Buyer, in writing, by or on behalf of such Covered Person specifically
for use in the preparation thereof or (y) in the case of a sale
directly by a Seller, such untrue statement or omission was contained
in any prospectus and corrected in an amendment or supplement thereto
provided to such Seller and thereafter such Seller failed to deliver a
copy of the amended or supplemented prospectus at or prior to the
confirmation of the sale of any Registrable Securities to the person
asserting any such loss, claim, damage or liability.
(b) Indemnification by Sellers. Upon any registration of
any of the Registrable Securities under the Securities Act pursuant to
this Agreement, then to the extent permitted by law, each Seller will
indemnify and hold harmless the Buyer, each of its directors and
officers and each Person (other than such Seller), if any, who controls
the Buyer within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities to which the Buyer,
such directors and officers, or controlling person may become subject
under the Securities Act, Exchange Act, state securities laws or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any
untrue statement of a material fact contained in any Shelf Registration
Statement under which any Registrable Securities were registered under
the Securities Act, any preliminary or final prospectus contained in
any Shelf Registration Statement, or any amendment or supplement to any
Shelf Registration Statement or (ii) the omission to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in
reliance upon and in conformity with information furnished in writing
to the Buyer by or on behalf of such Seller, specifically for use in
connection with the preparation of such Shelf Registration Statement,
prospectus, amendment or supplement; provided, however, that the
obligations of such Seller under this Section 3 will be limited to an
amount equal to the net proceeds to such Seller (after deducting all
brokerage commissions and all other expenses paid by such Seller in
connection with any Shelf Registration Statement) from the disposition
of Registrable Securities pursuant to all Shelf Registration
Statements.
(c) Notice of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a claim of the type referred to in the foregoing
provisions of this Section 3, such indemnified party will, if a
- 7 -
claim in respect thereof is to be made against any indemnifying party,
give written notice to each such indemnifying party of the commencement
of such action; provided, however, that the failure of any indemnified
party to give such notice will not relieve such indemnifying party of
its obligations under this Section 3, except to the extent that such
indemnifying party is materially prejudiced by such failure. In case
any such action is brought against an indemnified party, each
indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly
notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and (subject to the following
proviso) after notice from an indemnifying party to such indemnified
party of its election so to assume the defense thereof, such
indemnifying party will not be liable to such indemnified party for any
legal or other expenses subsequently incurred by such indemnified
party; provided, however, that the indemnifying party will pay the
reasonable fees and expenses of counsel for the indemnified party if
representation of such indemnified party by counsel retained by the
indemnifying party would be, in the opinion of counsel to the
indemnifying party, inappropriate due to actual or potential conflict
of interests between the indemnified party and the indemnifying party;
provided, further, that in no event will the indemnifying party be
required to pay the fees and expenses of more than one law firm as
counsel for all indemnified parties pursuant to this sentence. If,
within 30 days after receipt of the notice, such indemnifying party has
not elected to assume the defense of the action, such indemnifying
party will be responsible for any legal or other expenses reasonably
incurred by such indemnified party in connection with the defense of
the action, suit, investigation, inquiry or proceeding. An indemnifying
party may, in the defense of any such claim or litigation, consent to
the entry of a judgment or enter into a settlement without the consent
of the indemnified party only if such judgment or settlement contains a
general release of the indemnified party in respect of such claims or
litigation and involves only a payment of monetary damages.
(d) Contribution. If the indemnification provided for in
Sections 3(a) or 3(b) hereof is unavailable to a party that would have
been an indemnified party under any such Section in respect of any
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to therein, then each party that would have
been an indemnifying party thereunder will, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative fault of such
indemnifying party on the one hand and such indemnified party on the
other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof). The relative fault will be determined by reference
to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such indemnifying
party or such indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties agree that it would not be just
and equitable if contribution pursuant to this Section 3(d) were
determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to
in the preceding sentence. The amount paid or payable by a contributing
party as a result
- 8 -
of the losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to in this Section 3(d) will
include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
4. Buyer's Right of First Refusal.
(a) If at any time a Seller desires to sell all or any
Shares pursuant to a Shelf Registration Statement or otherwise, such
Seller shall submit a written offer (the "Offer") to sell such Shares
(the "Offered Shares") to the Buyer at the Right of Refusal Oxford
Trading Price. The Offer shall disclose the number of Shares proposed
to be sold and the total number of Shares owned by such Seller. The
Offer shall further state that the Buyer may acquire, in accordance
with this Section 4(a), each Offered Share for the Right of Refusal
Oxford Trading Price. Sellers shall only be permitted to make an Offer
in respect of Shares proposed to be sold pursuant to a Shelf
Registration Statement during a Resale Window.
(b) If the Buyer desires to purchase any of the Offered
Shares, the Buyer must, within one Business Day (the "Buyer Refusal
Period") following receipt of the Offer, give written notice ("Buyer
Notice") to such Seller of its election to purchase all or a portion of
the Offered Shares. Failure by the Buyer to exercise its right of first
refusal within the Buyer Refusal Period shall be deemed a waiver of
such right with respect to that particular Offer only.
(c) Sales of the Offered Shares to be sold to the Buyer
pursuant to this Section 4 shall be made at the offices of the Buyer on
the third Business Day following the date the Offer was made (the
"Right of Refusal Sale Date"). Such sales shall be effected by such
Seller delivering to the Buyer a certificate or certificates evidencing
the Offered Shares to be purchased by the Buyer, duly endorsed for
transfer to the Buyer, against payment to such Seller by the Buyer of
the Right of Refusal Oxford Trading Price multiplied by the number of
Offered Shares to be purchased by the Buyer. The number of Offered
Shares to be purchased by the Buyer and the Right of Refusal Oxford
Trading Price shall be adjusted as necessary to reflect any forward or
reverse stock split, stock dividend, recapitalization or other similar
change with respect to shares of Common Stock that occurs after the
Right of Refusal Oxford Trading Price is determined and prior to the
applicable Right of Refusal Sale Date.
(d) If the Buyer does not purchase all of the Offered
Shares, the Offered Shares not so purchased may be sold by such Seller
at any time within ninety (90) days after the date the Offer was made.
Any Offered Shares not sold within such 90-day period shall once again
be subject to the requirements of a prior offer to the Buyer pursuant
to this Section 4.
(e) In the event the Buyer has delivered a Buyer Notice
in accordance with this Section 4 and subsequently breaches its
obligation to purchase the Offered Shares
- 9 -
described in such Buyer Notice, this Section 4 shall cease to be in
effect and the Sellers shall not be required to further comply with the
provisions of this Section 4.
5. Information Requirements. The Buyer covenants that, if at any
time any Seller holds Registrable Securities and the Buyer is not subject to the
reporting requirements of the Exchange Act, it will make and keep public
information available, as those terms are understood and defined in Rule 144
under the Securities Act and cooperate with such Seller and take such further
reasonable action as such Seller may reasonably request in writing, all to the
extent required from time to time to enable such Seller to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act and customarily
taken in connection with sales pursuant to such exemptions.
6. Miscellaneous.
(a) Sellers' Representatives. The appointment and removal
of the Sellers' Representatives, as well as the authority of the
Company and the Buyer to rely on the consent and approval of the
Sellers' Representatives, shall be governed by Section 7.7 of the
Purchase Agreement. Any action taken by the Sellers' Representatives
with respect to this Agreement shall bind and otherwise affect any
rights and obligations of each Seller hereunder.
(b) Entire Agreement; Waivers. This Agreement constitutes
the entire agreement among the parties hereto pertaining to the subject
matter hereof and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written,
of the parties with respect to such subject matter. No waiver of any
provision of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), shall
constitute a continuing waiver unless otherwise expressly provided nor
shall be effective unless in writing and executed (i) in the case of a
waiver by the Buyer, by the Buyer, and (ii) in the case of a waiver by
the Sellers, by the Sellers' Representatives.
(c) Amendment or Modification. The parties hereto may
amend or modify this Agreement only by a written instrument executed by
the Buyer and the Sellers' Representatives, and any such amendment or
modification shall be enforceable against the Buyer and all the
Sellers.
(d) Severability. In the event that any provision hereof
would, under applicable law, be invalid or unenforceable in any
respect, such provision shall (to the extent permitted under applicable
law) be construed by modifying or limiting it so as to be valid and
enforceable to the maximum extent compatible with, and possible under,
applicable law. The provisions hereof are severable, and in the event
any provision hereof should be held invalid or unenforceable in any
respect, it shall not invalidate, render unenforceable or otherwise
affect any other provision hereof.
(e) Successors and Assigns. All of the terms and
provisions of this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective permitted
transferees and assigns (each of which transferees and assigns
- 10 -
shall be deemed to be a party hereto for all purposes hereof);
provided, however, that (i) no transfer or assignment by any party
hereto shall be permitted without the prior written consent of the
other parties hereto and any such attempted transfer or assignment
without consent shall be null and void, provided, however, that Buyer
may assign this Agreement to any purchaser of all or substantially all
capital stock or assets of the Company and (ii) no transfer or
assignment by any party hereto shall relieve such party of any of its
obligations hereunder.
(f) Notices. Any notices or other communications required
or permitted hereunder shall be deemed to have been properly given and
delivered if in writing by such party or its legal representative and
delivered personally or sent by nationally recognized overnight courier
service guaranteeing overnight delivery, or registered or certified
mail, postage prepaid, addressed as follows:
If to any Seller or the Sellers'
Representatives: c/o Viewpoint International, Inc.
1071 Avenue of the Americas
New York, NY 10081
Attn: S. Anthony Margolis
and c/o Saunders Karp & Megrue LLC
262 Harbor Drive
Stamford, CT 06902
Attn: David J. Oddi
With a copy to: Alston & Bird LLP
90 Park Avenue
New York, New York 10016
Attn: William S. Sterns, III, Esq.
and Ropes & Gray
One International Place
Boston, MA 02110
Attn: Daniel S. Evans, Esq.
If to the Buyer: Oxford Industries, Inc.
222 Piedmont Avenue, N.E.
Atlanta, Georgia 30308-3391
Attn: Thomas C. Chubb, III, Esq.
With a copy to: King & Spalding LLP
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1763
Attn: Russell B. Richards, Esq.
Unless otherwise specified herein, such notices or other communications
shall be deemed given (a) on the date delivered, if delivered personally, (b)
one Business Day after being sent by a nationally recognized overnight courier
guaranteeing overnight delivery, and (c) five (5)
- 11 -
Business Days after being sent, if sent by registered or certified mail. Each of
the parties hereto shall be entitled to specify a different address by
delivering notice as aforesaid to each of the other parties hereto.
(g) Headings. Section and subsection headings are not to
be considered part of this Agreement, are included solely for
convenience, are not intended to be full or accurate descriptions of
the content thereof and shall not affect the construction hereof.
(h) Third-Party Beneficiaries. Except as otherwise set
forth herein, nothing in this Agreement is intended or shall be
construed to entitle any Person, other than the parties hereto, their
respective transferees and assigns permitted hereby, to any claim,
cause of action, remedy or right of any kind.
(i) Counterparts. This Agreement and any claims related
to the subject matter hereof may be executed in any number of
counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one and the same instrument.
(j) Governing Law. This Agreement and any claims related
to the subject matter hereof shall be governed by and construed in
accordance with the domestic substantive laws of the State of New York,
without giving effect to any choice or conflict of law provision or
rule that would cause the application of the laws of any other
jurisdiction.
(k) Consent to Jurisdiction. Each party to this
Agreement, by its execution hereof, (i) hereby irrevocably submits, and
agrees to cause each of its Subsidiaries to submit, to the exclusive
jurisdiction of the state courts of the State of New York located in
New York County or the United States District Court for the Southern
District of New York for the purpose of any action, claim, cause of
action or suit (in contract, tort or otherwise), inquiry proceeding or
investigation arising out of or based upon this Agreement or relating
to the subject matter hereof, (ii) hereby waives, and agrees to cause
each of its Subsidiaries to waive, to the extent not prohibited by
applicable law, and agrees not to assert, and agrees not to allow any
of its Subsidiaries to assert, by way of motion, as a defense or
otherwise, in any such action, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that any
such proceeding brought in one of the above-named courts is improper,
or that this Agreement or the subject matter hereof may not be enforced
in or by such court and (iii) hereby agrees not to commence or to
permit any of its Subsidiaries to commence any action, claim, cause of
action or suit (in contract, tort or otherwise), inquiry, proceeding or
investigation arising out of or based upon this Agreement or relating
to the subject matter hereof other than before one of the above-named
courts nor to make any motion or take any other action seeking or
intending to cause the transfer or removal of any such action, claim,
cause of action or suit (in contract, tort or otherwise), inquiry,
proceeding or investigation to any court other than one of the
above-named court whether on the grounds of inconvenient forum or
otherwise. Each party hereby consents to service of process in any such
proceeding in any manner permitted by New York law, and agrees that
service of process by registered
- 12 -
or certified mail, return receipt requested, at its address specified
pursuant to Section 6(f) is reasonably calculated to give actual
notice.
(l) WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PARTIES HERETO
HEREBY WAIVES, AND AGREES TO CAUSE EACH OF ITS SUBSIDIARIES TO WAIVE,
AND COVENANTS THAT NEITHER IT NOR ANY OF ITS SUBSIDIARIES WILL ASSERT
(WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY
JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, ACTION, CLAIM, CAUSE OF
ACTION, SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR
INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING. THE BUYER ACKNOWLEDGES THAT
IT HAS BEEN INFORMED BY THE SELLERS THAT THIS SECTION 6(L) CONSTITUTES
A MATERIAL INDUCEMENT UPON WHICH THE SELLERS ARE RELYING AND WILL RELY
IN ENTERING INTO THIS AGREEMENT AND ANY OTHER AGREEMENTS RELATING
HERETO OR CONTEMPLATED HEREBY. ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION 6(L) WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT
TO TRIAL BY JURY.
[SIGNATURE PAGES FOLLOW]
- 13 -
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Agreement to be executed, as of the date first above
written by their respective officers thereunto duly authorized.
THE SELLERS: SKM-TB, LLC
By: SKM EQUITY FUND III, L.P.
By: SKM PARTNERS, L.L.C.
By: /s/ David J. Oddi
----------------------------------
Name: David J. Oddi
A duly authorized signatory
WHOLE DUTY INVESTMENT, LTD.
By: /s/ CT Yeung
-------------------------------------
Name: CT Yeung
A duly authorized signatory
/s/ S. Anthony Margolis
-----------------------------------------
S. Anthony Margolis
MARGOLIS FAMILY STOCK TRUST u/a/d
MAY 1, 2001
By: /s/ William S. Sterns, III
-------------------------------------
Name: William S. Sterns, III
Title: Trustee
/s/ Lucio Dalla Gasperina
-----------------------------------------
Lucio Dalla Gasperina
BONITA BEACH BLUES, INC.
By: /s/ Robert Emfield
-------------------------------------
Name: Robert Emfield
Title: President
SELLERS' REPRESENTATIVES: /s/ David J. Oddi
-----------------------------------------
David J. Oddi
/s/ S. Anthony Margolis
-----------------------------------------
S. Anthony Margolis
THE BUYER: OXFORD INDUSTRIES, INC.
By: /s/ J. Hicks Lanier
-------------------------------------
Name: J. Hicks Lanier
Title: Chairman, President & Chief
Executive Officer
SCHEDULE 1
SELLERS
1. SKM-TB, LLC
2. Whole Duty Investments, LTD.
3. S. Anthony Margolis
4. Margolis Family Stock Trust u/a/d May 1, 2001
5. Lucio Dalla Gasperina
6. Bonita Beach Blues, Inc.
