-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K9ELCzngUNu8L+w7JZMQNmboVzwTMqgvAGGfQeswlPQHhk9FZn4S8DzHrslB4SHf sdU6KQ0OoTyCsulcVZODjA== /in/edgar/work/20000710/0000950124-00-004115/0000950124-00-004115.txt : 20000712 0000950124-00-004115.hdr.sgml : 20000712 ACCESSION NUMBER: 0000950124-00-004115 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20000710 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DAVIDS BRIDAL INC CENTRAL INDEX KEY: 0001080187 STANDARD INDUSTRIAL CLASSIFICATION: [5621 ] IRS NUMBER: 650214563 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: SEC FILE NUMBER: 005-56399 FILM NUMBER: 669999 BUSINESS ADDRESS: STREET 1: 44 WEST LANCASTER AVENUE SUITE 250 CITY: ARDMORE STATE: PA ZIP: 19003 BUSINESS PHONE: 6108962111 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MAY DEPARTMENT STORES CO CENTRAL INDEX KEY: 0000063416 STANDARD INDUSTRIAL CLASSIFICATION: [5311 ] IRS NUMBER: 431104396 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 611 OLIVE ST CITY: ST LOUIS STATE: MO ZIP: 63101 BUSINESS PHONE: 3143426300 SC TO-T 1 scto-t.txt TENDER OFFER STATEMENT 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------------ SCHEDULE TO Tender Offer Statement Under Section 14(d)(1) or Section 13(e)(1) of the Securities Exchange Act of 1934 DAVID'S BRIDAL, INC. (Name of Subject Company (Issuer)) ALPHA OMEGA ACQUISITION, INC. a wholly owned subsidiary of THE MAY DEPARTMENT STORES COMPANY (Names of Filing Persons (Offerors)) ------------------------------------ COMMON STOCK, PAR VALUE $.01 PER SHARE (Title of Class of Securities) ------------------------------------ 238576102 (CUSIP Number of Class of Securities) ------------------------------------ Richard A. Brickson, Esq. The May Department Stores Company 611 Olive Street St. Louis, Missouri 63101-1799 Telephone: (314) 342-6300 (Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons) Copy to: J. Michael Schell, Esq. Margaret L. Wolff, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Telephone: 212-735-3000 CALCULATION OF FILING FEE - --------------------------------------------------------------------------------------------- Transaction Valuation* Amount of Filing Fee $412,615,040 $82,523 - ---------------------------------------------------------------------------------------------
* For purposes of calculating amount of filing fee only. This amount assumes that the Offerors purchase of 19,469,276 shares of common stock of David's Bridal, Inc. at the offer price of $20.00 per share and pay holders of 2,322,952 David's Bridal stock options the spread (estimated at $10.00 per share) between the exercise price of those options and $20.00. The amount of the filing fee, calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50 of 1% of the transaction value. [ ] Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number or the Form or Schedule and the date of its filing. Amount Previously Paid: N/A Form or Registration No.: N/A Filing party: N/A Date Filed: N/A
[ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [X] third-party tender offer subject to Rule 14d-1. [ ] issuer tender offer subject to Rule 13e-4. [ ] going-private transaction subject to Rule 13e-3. [ ] amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: [ ] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 ITEM 1. SUMMARY TERM SHEET. The information set forth in the section of the Offer to Purchase entitled "Summary Term Sheet" is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION. (a) The name of the subject company is David's Bridal, Inc., a Florida corporation (the "Company"). The Company's principal executive offices are located at 1001 Washington Street, Conshohocken, Pennsylvania 19428. Its telephone number is (610) 896-2111. (b) This Statement relates to the Offer by Alpha Omega Acquisition, Inc. (the "Purchaser"), a Florida corporation and a wholly owned subsidiary of The May Department Stores Company, a Delaware corporation ("Parent"), to purchase all outstanding shares of common stock of the Company, par value $.01 per share (the "Shares"), at a price of $20.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2) (which are herein collectively referred to as the "Offer"). The information set forth in the introduction to the Offer to Purchase (the "Introduction") is incorporated herein by reference. (c) The information concerning the principal market in which the Shares are traded and certain high and low sales prices for the Shares in such principal market is set forth in Section 6 -- "Price Range of Shares; Dividends" in the Offer to Purchase and is incorporated herein by reference. ITEM 3. IDENTITY AND BACKGROUND OF THE FILING PERSON. (a), (b), (c) The information set forth in Section 8 -- "Certain Information Concerning Parent and the Purchaser" and Schedule I in the Offer to Purchase is incorporated herein by reference. ITEM 4. TERMS OF THE TRANSACTION. (a)(1)(i)-(viii), (xii) The information set forth under "Introduction", Section 10 -- "Background of the Offer; Past Contacts or Negotiations with the Company", Section 12 -- "Purpose of the Offer; Plans for the Company", Section 11 -- "The Merger Agreement; Other Arrangements", Section 7 -- "Certain Information Concerning the Company", Section 13 -- "Certain Effects of the Offer" and Section 9 -- "Source and Amount of Funds" in the Offer to Purchase is incorporated herein by reference. (a)(1)(ix) Not applicable (x) Not applicable (xi) Not applicable (a)(2) Not applicable ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. The information set forth in Section 10 -- "Background of the Offer; Past Contacts or Negotiations with the Company", Section 11 -- "The Merger Agreement; Other Arrangements", Section 8 -- "Certain Information Concerning Parent and the Purchaser" and Section 12 -- "Purpose of the Offer; Plans for the Company" in the Offer to Purchase is incorporated herein by reference. ITEM 6. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS. (a), (c)(1), (4-7) The information set forth in "Introduction", Section 11 -- "The Merger Agreement; Other Arrangements," Section 12 -- "Purpose of the Offer; Plans for the Company", and Section 14 -- "Dividends and Distributions" in the Offer to Purchase is incorporated herein by reference. (c)(2) None (c)(3) None i 3 ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) The information set forth in Section 9 -- "Source and Amount of Funds" in the Offer to Purchase is incorporated herein by reference. (b) Not applicable (d) Not applicable ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. The information set forth in "Introduction", Section 7 -- "Certain Information Concerning the Company", Section 8 -- "Certain Information Concerning Parent and the Purchaser" and Schedule I in the Offer to Purchase is incorporated herein by reference. ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED. The information set forth in "Introduction" and Section 18 -- "Fees and Expenses" of the Offer to Purchase is incorporated herein by reference. ITEM 10. FINANCIAL STATEMENTS. Not applicable ITEM 11. ADDITIONAL INFORMATION. The information set forth in Section 11 -- "The Merger Agreement; Other Arrangements" and Section 16 -- "Certain Legal Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein by reference. ITEM 12. EXHIBITS. (a)(1) Offer to Purchase dated July 10, 2000. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Joint Press Release issued by Parent and the Company on July 3, 2000, incorporated herein by reference to the Schedule TO filed by the parties on July 3, 2000. (a)(8) Summary Advertisement as published in The New York Times on July 10, 2000. (b) Not applicable (d)(1) Agreement and Plan of Merger, dated as of July 3, 2000, among Parent, the Purchaser and the Company. (d)(2) Form of Shareholder Agreement dated as of July 3, 2000 by and between Parent and certain shareholders of the Company. (d)(3) Employment Agreement dated as of July 3, 2000 between Parent and Robert Huth. (g) Not applicable (h) Not applicable ii 4 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. ALPHA OMEGA ACQUISITION, INC. By: /s/ RICHARD A. BRICKSON -------------------------------------- Name: Richard A. Brickson Title: Vice President and Secretary THE MAY DEPARTMENT STORES COMPANY By: /s/ RICHARD A. BRICKSON -------------------------------------- Name: Richard A. Brickson Title: Secretary Dated: July 10, 2000 iii 5 EXHIBIT INDEX
EXHIBIT NO. EXHIBIT NAME - ----------- ------------ (a)(1) Offer to Purchase dated July 10, 2000 (a)(2) Form of Letter of Transmittal (a)(3) Form of Notice of Guaranteed Delivery (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 (a)(8) Summary Advertisement as published in The New York Times on July 10, 2000 (d)(1) Agreement and Plan of Merger, dated as of July 3, 2000, among Parent, the Purchaser and the Company (d)(2) Form of Shareholder Agreement dated as of July 3, 2000 by and between Parent and certain shareholders of the Company (d)(3) Employment Agreement dated as of July 3, 2000 between Parent and Robert Huth
iv EX-99.(A)(1) 2 ex99-a1.txt OFFER TO PURCHASE 1 EXHIBIT 99(a)(1) Offer To Purchase For Cash All Outstanding Shares of Common Stock of David's Bridal, Inc. at $20.00 Net Per Share by Alpha Omega Acquisition, Inc. a wholly owned subsidiary of The May Department Stores Company ------------------------ THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 7, 2000, UNLESS THE OFFER IS EXTENDED. ------------------------ THE OFFER IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER DATED AS OF JULY 3, 2000 (DEFINED HEREIN), AMONG THE MAY DEPARTMENT STORES COMPANY, ALPHA OMEGA ACQUISITION, INC. AND DAVID'S BRIDAL, INC. (THE "COMPANY"). THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, - SHAREHOLDERS OWNING AT LEAST A MAJORITY, ON A FULLY DILUTED BASIS, OF THE THEN OUTSTANDING SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE OF THE COMPANY, TENDERING AND NOT PROPERLY WITHDRAWING THEIR SHARES PRIOR TO THE EXPIRATION OF THE OFFER, AND - THE EXPIRATION OR TERMINATION OF THE WAITING PERIOD UNDER THE HART- SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER. THE OFFER IS ALSO SUBJECT TO OTHER CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE THE INTRODUCTION AND SECTIONS 1, 15 AND 16. THE OFFER IS NOT CONDITIONED UPON PARENT (DEFINED HEREIN) OR PURCHASER (DEFINED HEREIN) OBTAINING FINANCING. ------------------------ THE BOARD OF DIRECTORS OF THE COMPANY (1) HAS DETERMINED THAT THE MERGER AGREEMENT, THE OFFER, THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND THE COMPANY'S SHAREHOLDERS, (2) HAS APPROVED AND ADOPTED THE MERGER AGREEMENT, THE OFFER, THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, AND (3) RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES (DEFINED HEREIN) PURSUANT TO THE TERMS OF THE OFFER, AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER. ------------------------ CERTAIN SHAREHOLDERS OF THE COMPANY WHO OWN APPROXIMATELY 42% OF THE OUTSTANDING SHARES HAVE AGREED, AMONG OTHER THINGS, TO TENDER 90% OF THEIR SHARES PURSUANT TO THE OFFER. ------------------------ The Dealer Manager for the Offer is: MORGAN STANLEY DEAN WITTER July 10, 2000 2 IMPORTANT Any shareholder wishing to tender Shares in the Offer must either: (i) complete and sign the Letter of Transmittal (or a facsimile thereof) in accordance with the instructions in the Letter of Transmittal and mail or deliver the Letter of Transmittal and all other required documents to The Bank of New York (the "Depositary") together with certificates representing the Shares tendered or follow the procedure for book-entry transfer set forth in Section 3 of this Offer to Purchase, or (ii) request such shareholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for the shareholder. A shareholder whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such person if that shareholder wishes to tender those Shares. Any shareholder who wishes to tender Shares and cannot deliver certificates representing those Shares and all other required documents to the Depositary or who cannot comply with the procedures for book-entry transfer on a timely basis may tender those Shares by following the procedure for guaranteed delivery set forth in Section 3. Questions and requests for assistance may be directed to D.F. King & Co., Inc. (the "Information Agent") or Morgan Stanley & Co. Incorporated (the "Dealer Manager") at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent or the Dealer Manager. Shareholders may also contact their broker, dealer, commercial bank, trust company or other nominee for copies of these documents. 3 TABLE OF CONTENTS
PAGE ------- SUMMARY TERM SHEET.......................................... 1 INTRODUCTION................................................ 6 THE TENDER OFFER............................................ 8 1. Terms of the Offer............................ 8 2. Acceptance for Payment and Payment for Shares........................................ 10 3. Procedures for Accepting the Offer and Tendering Shares.............................. 11 4. Withdrawal Rights............................. 13 5. Certain United States Federal Income Tax Consequences.................................. 14 6. Price Range of Shares; Dividends.............. 15 7. Certain Information Concerning the Company.... 15 8. Certain Information Concerning Parent and the Purchaser..................................... 16 9. Source and Amount of Funds.................... 17 10. Background of the Offer; Past Contacts or Negotiations with the Company................. 17 11. The Merger Agreement; Other Arrangements...... 18 12. Purpose of the Offer; Plans for the Company... 30 13. Certain Effects of the Offer.................. 31 14. Dividends and Distributions................... 32 15. Certain Conditions of the Offer............... 32 16. Certain Legal Matters; Regulatory Approvals... 34 17. Dissenters' Rights............................ 36 18. Fees and Expenses............................. 36 19. Miscellaneous................................. 37 SCHEDULE I.................................................. S-1
i 4 SUMMARY TERM SHEET We are offering to purchase all of the outstanding common stock of David's Bridal, Inc. for $20.00 per share in cash. This summary term sheet asks some of the questions which you, as a shareholder of David's Bridal, may have and answers them. The information in this summary term sheet is not complete. We urge you to read carefully the remainder of this Offer to Purchase and the Letter of Transmittal because they contain additional important information. WHO IS OFFERING TO BUY MY SECURITIES? Our name is Alpha Omega Acquisition, Inc. We are a Florida corporation formed for the purpose of making a tender offer for all of the common stock of David's Bridal, Inc. We have carried on no activities other than in connection with the merger agreement. The May Department Stores Company, a Delaware corporation, our parent company, owns all our stock. See the "Introduction" to this Offer to Purchase and Section 8 -- "Certain Information Concerning Parent and the Purchaser". WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER? We seek to purchase all of the outstanding common stock of David's Bridal. See the "Introduction" to this Offer to Purchase and Section 1 -- "Terms of the Offer". HOW MUCH ARE YOU OFFERING TO PAY? WHAT IS THE FORM OF PAYMENT? WILL I HAVE TO PAY ANY FEES OR COMMISSIONS? We offer to pay $20.00 per share, net to you, in cash. If you are the record owner of your shares and you tender your shares to us in the Offer, you will not have to pay brokerage fees or similar expenses. If you own your shares through a broker or other nominee and your broker tenders your shares on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply. See the "Introduction" to this Offer to Purchase. DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT? Our offer is not conditioned upon any financing arrangements. May will provide us with sufficient funds to purchase all shares validly tendered and not withdrawn in the Offer and for the merger that will follow the Offer. We anticipate that May will obtain the funds required for these transactions through commercial paper borrowings, other short-term and long-term debt financings, and its operating cash flows. See Section 9 -- "Source and Amount of Funds". IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER? We do not think our financial condition is relevant to your decision whether to tender in the Offer because - the form of payment consists solely of cash, - the Offer is not subject to any financing condition, - our offer applies to all the outstanding shares of David's Bridal, and - if we are successful with our offer, we will acquire all remaining shares for the same cash price when we are merged with and into David's Bridal. HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER? You will have at least until 12:00 midnight, New York City time, on Monday, August 7, 2000, to tender your shares in the Offer. Further, if you cannot deliver everything that is required in order to make a valid tender by that time, you may be able to use a guaranteed delivery procedure, which we describe later in this Offer to Purchase. See Section 1 -- "Terms of the Offer" and Section 3 -- "Procedures for Accepting the Offer and Tendering Shares". 1 5 CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES? We have agreed in the merger agreement that: - We may extend the Offer beyond the scheduled expiration date from time to time, with or without David's Bridal's consent, if at that date any of the conditions to our obligation to accept for payment and to pay for the shares are not satisfied or, to the extent permitted by the merger agreement, waived. In this case, any single extension will not exceed the lesser of 10 business days and the number of days we reasonably believe is necessary to cause the conditions to the Offer to be satisfied. - We may generally extend the Offer for any period required by any rule, regulation or interpretation of the Securities and Exchange Commission (the "SEC") applicable to the Offer, with or without David's Bridal's consent. - We will extend the Offer from time to time, unless David's Bridal advises us that it does not wish us to do so, until the earlier of - 30 days after the date on which any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act has expired or terminated, and - October 31, 2000, if on the then-scheduled expiration date all of the conditions to the Offer have not been satisfied or waived as permitted by the merger agreement. In this case, any single extension will not exceed the lesser of 10 business days and the number of days we reasonably believe is necessary to cause the conditions to the Offer to be satisfied. If all conditions to the Offer have been satisfied or waived, we will: - accept for payment and pay for all shares validly tendered and not withdrawn at such time (which shares you may not thereafter withdraw), and - extend the Offer to provide a "subsequent offering period" of at least three business days, during which time shareholders whose shares have not been accepted for payment may tender, but not withdraw, their shares and receive the Offer consideration. Under the federal securities laws we may not provide a subsequent offering period of more than 20 business days (for all such extensions). See Section 1 -- "Terms of the Offer" for more details on our ability to extend the Offer. HOW WILL YOU NOTIFY ME IF YOU EXTEND THE OFFER? If we extend the Offer, we will inform The Bank of New York (the depositary for the Offer) of that fact. We will also make a public announcement of the extension not later than 9:00 a.m., New York City time, on the next business day after the day on which the Offer was scheduled to expire. See Section 1 -- "Terms of the Offer". WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER? - We are not obligated to purchase any shares that are validly tendered unless the number of shares validly tendered and not withdrawn before the expiration date of the Offer represents at least a majority of the then outstanding shares on a fully diluted basis. We call this condition the "minimum condition". - We are not obligated to purchase shares that are validly tendered if, among other things, there is a material adverse change in David's Bridal or its business. - We are not obligated to purchase shares that are validly tendered if, among other things, the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act has not expired or been terminated. 2 6 A number of other conditions also apply. We can waive some of the conditions to the Offer without David's Bridal's consent; however, we cannot waive the minimum condition. See Section 15 -- "Certain Conditions of the Offer". HOW DO I TENDER MY SHARES? If you wish to accept our offer, this is what you must do: - If you are a record holder and have your stock certificates, you must complete and sign the enclosed letter of transmittal and send it and the certificates representing your shares to The Bank of New York, the depositary for the Offer, not later than the time the tender offer expires. - If your shares are held in street name, the shares can be tendered by your nominee through The Depository Trust Company. - If you are unable to deliver any required document or instrument to the depositary by the expiration of the tender offer, you may gain some extra time by having a broker, a bank or other fiduciary that is an eligible institution guarantee that the missing items will be received by the depositary within three New York Stock Exchange trading days. For the tender to be valid, however, the depositary must receive the missing items within that three trading day period. See Section 3 -- "Procedures for Accepting the Offer and Tendering Shares". UNTIL WHAT TIME MAY I WITHDRAW PREVIOUSLY TENDERED SHARES? You may withdraw shares at any time until the Offer has expired. This right to withdraw will not apply to the subsequent offering period discussed in Section 1 of this Offer to Purchase. See Section 4 -- "Withdrawal Rights". HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES? To withdraw shares, you must deliver a written notice of withdrawal, or a facsimile of one, with the required information to the depositary while you still have the right to withdraw the shares. See Section 4 -- "Withdrawal Rights". WHAT DOES THE DAVID'S BRIDAL BOARD OF DIRECTORS THINK OF THE OFFER? The David's Bridal board of directors - has determined that the merger agreement, the Offer, the merger and the other transactions contemplated by the merger agreement are fair to and in the best interests of David's Bridal and the shareholders of David's Bridal, - has approved and adopted the merger agreement, the Offer, the merger and the other transactions contemplated by the merger agreement, and - recommends that David's Bridal's shareholders accept the Offer, tender their shares pursuant to the terms of the Offer, and approve and adopt the merger agreement and the merger. See the "Introduction" to this Offer to Purchase. HAVE ANY SHAREHOLDERS AGREED TO TENDER THEIR SHARES? Yes. Shareholders who own shares representing approximately 42% of the outstanding common stock have agreed, among other things, to tender 90% of their shares in the Offer. 3 7 IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL DAVID'S BRIDAL CONTINUE AS A PUBLIC COMPANY? No. Following the purchase of shares in the Offer we expect to consummate the merger. If the merger takes place, David's Bridal no longer will be publicly owned. Even if for some reason the merger does not take place, if we purchase all of the tendered shares, there may be so few remaining shareholders and publicly held shares that - David's Bridal common stock will no longer be eligible to be traded through the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), - there may not be a public trading market for David's Bridal common stock, and - David's Bridal may cease making filings with the SEC or otherwise cease being required to comply with the SEC rules relating to publicly held companies. See Section 13 -- "Certain Effects of the Offer". WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL OF THE DAVID'S BRIDAL SHARES ARE NOT TENDERED IN THE OFFER? Yes. If we accept and pay for at least a majority of the shares of David's Bridal on a fully diluted basis, subject to shareholder approval, if required, we will be merged with and into David's Bridal. If that merger takes place, May will own all of the shares of David's Bridal and all remaining shareholders of David's Bridal (other than May and shareholders properly exercising dissenters' rights) will receive $20.00 per share in cash. See the "Introduction" to this Offer to Purchase. IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES? If the merger described above takes place, shareholders not tendering in the Offer will have no rights with respect to their shares except to receive $20.00 per share in cash, subject to any dissenters' rights granted pursuant to the merger agreement and properly exercised under Florida law. Therefore, if the merger takes place, the only difference between what you will receive tendering your shares and not tendering your shares is that you will receive $20.00 per share in cash earlier if you tender your shares. If the merger does not take place, however, the number of shareholders and the number of shares of David's Bridal that are still in the hands of the public may be so small that there no longer will be an active public trading market (or, possibly, there may not be any public trading market) for David's Bridal common stock. Also, as described above, David's Bridal may cease making filings with the SEC or otherwise may not be required to comply with the SEC rules relating to publicly held companies. See the "Introduction" to this Offer to Purchase and Section 13 -- "Certain Effects of the Offer". WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE? On June 30, 2000, the last trading day before we announced the tender offer, the last sale price of David's Bridal common stock reported on NASDAQ was $11 9/16 per share. On July 7, 2000, the last trading day before we commenced the tender offer, the closing price of David's Bridal common stock reported on NASDAQ was $19 13/16. We encourage you to obtain a recent quotation for shares of David's Bridal common stock in deciding whether to tender your shares. See Section 6 -- "Price Range of Shares; Dividends". WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF TENDERING SHARES? Your receipt of cash for shares that you tender pursuant to the tender offer or exchange pursuant to the merger will be a taxable transaction for United States federal income tax purposes and possibly for state, local and foreign income tax purposes as well. In general, a shareholder who sells shares pursuant to the tender offer or receives cash in exchange for shares pursuant to the merger will recognize gain or loss for United States federal income tax purposes equal to the difference, if any, between the amount of cash received and the shareholder's adjusted tax basis in the shares sold pursuant to the tender offer or exchanged for cash pursuant 4 8 to the merger. If the shares sold or exchanged constitute capital assets in the hands of the shareholder, such gain or loss will be capital gain or loss. In general, capital gains recognized by an individual will be subject to a maximum United States federal income tax rate of 20% if the shares were held for more than one year, and if held for one year or less they will be subject to tax at ordinary income tax rates. See Section 5 -- "Certain United States Federal Income Tax Consequences". WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER? You may call either of the following: - D.F. King & Co., Inc., the information agent for our offer, at (888) 460-7637 (toll free); or - Morgan Stanley & Co. Incorporated, the dealer manager for our offer, at (212) 761-7310. 5 9 TO THE HOLDERS OF SHARES OF COMMON STOCK OF DAVID'S BRIDAL, INC. INTRODUCTION Alpha Omega Acquisition, Inc., a Florida corporation (the "Purchaser") and a wholly owned subsidiary of The May Department Stores Company, a Delaware corporation ("Parent"), hereby offers to purchase all outstanding shares of common stock, par value $.01 per share (the "Shares"), of David's Bridal, Inc., a Florida corporation (the "Company"), at a price of $20.00 per Share, net to the seller in cash (the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer"). The Offer is being made pursuant to the Agreement and Plan of Merger dated as of July 3, 2000 (the "Merger Agreement") among Parent, the Purchaser and the Company. The Merger Agreement provides that the Purchaser will be merged with and into the Company (the "Merger"), with the Company continuing as the surviving corporation (the "Surviving Corporation"), wholly owned by Parent. Pursuant to the Merger, at the effective time of the Merger (the "Effective Time") each Share outstanding immediately prior to the Effective Time (other than Shares owned by Parent or any subsidiary of Parent as a result of the Offer or by the Company or any subsidiary of the Company, all of which will be canceled, and other than Shares that are held by shareholders, if any, who properly exercise their dissenters' rights under the Florida Business Corporation Act (the "FBCA")), will be converted into the right to receive $20.00 per Share in cash or any greater per Share price paid in the Offer in cash, without interest (the "Merger Consideration"). The Merger Agreement is more fully described in Section 11 -- "The Merger Agreement; Other Arrangements", which also contains a discussion of the treatment of stock options. Tendering shareholders who are record owners of their Shares and tender directly to the Depositary (as defined below) will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by the Purchaser pursuant to the Offer. Shareholders who hold their Shares through a broker or bank should consult such institution as to whether it charges any service fees. Parent or the Purchaser will pay all charges and expenses of Morgan Stanley & Co. Incorporated, as dealer manager ("Morgan Stanley" or the "Dealer Manager"), The Bank of New York as depositary (the "Depositary"), and D.F. King & Co., Inc., as information agent (the "Information Agent"), incurred in connection with the Offer. See Section 18 -- "Fees and Expenses". THE COMPANY'S BOARD OF DIRECTORS (THE "COMPANY BOARD") - HAS DETERMINED THAT THE MERGER AGREEMENT, THE OFFER, THE MERGER, AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY AND THE COMPANY'S SHAREHOLDERS, - HAS APPROVED AND ADOPTED THE MERGER AGREEMENT, THE OFFER, THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, AND - RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT TO THE TERMS OF THE OFFER, AND APPROVE AND ADOPT THE MERGER AGREEMENT AND THE MERGER. Credit Suisse First Boston Corporation ("Credit Suisse First Boston"), the Company's financial advisor, has delivered to the Company Board a written opinion dated July 3, 2000, to the effect that, as of such date and based on and subject to the matters stated in the opinion, the $20.00 per Share cash consideration to be received in the Offer and the Merger by holders of Shares was fair, from a financial point of view, to such holders (other than Parent and its affiliates). The full text of Credit Suisse First Boston's written opinion dated July 3, 2000, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is included as an annex to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") under the Securities Exchange Act of 1934, as amended (the 6 10 "Exchange Act"), which is being mailed to shareholders concurrently with this Offer to Purchase. Holders of Shares are urged to read the full text of that opinion carefully in its entirety. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, - SHAREHOLDERS OWNING AT LEAST A MAJORITY, ON A FULLY DILUTED BASIS, OF THE THEN OUTSTANDING SHARES TENDERING AND NOT PROPERLY WITHDRAWING THEIR SHARES PRIOR TO THE EXPIRATION OF THE OFFER (THE "MINIMUM CONDITION"), AND - THE EXPIRATION OR TERMINATION OF THE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE "HSR ACT"). THE OFFER IS ALSO SUBJECT TO THE SATISFACTION OF CERTAIN OTHER CONDITIONS. SEE SECTIONS 1 -- "TERMS OF THE OFFER", 15 -- "CERTAIN CONDITIONS OF THE OFFER" AND 16 -- "CERTAIN LEGAL MATTERS; REGULATORY APPROVALS". The Company has advised Parent that, on July 3, 2000, 19,469,276 Shares were issued and outstanding and 2,322,952 Shares were subject to stock option grants. Neither Parent, the Purchaser nor any person listed on Schedule I to this Offer to Purchase beneficially owns any Shares. Accordingly, the Purchaser believes that the Minimum Condition would be satisfied if 10,896,115 Shares were validly tendered and not withdrawn prior to the expiration of the Offer. Holders of 8,127,429 Shares have agreed, among other things, to tender 90% (7,314,686 Shares) of their Shares in the Offer pursuant to the Shareholder Agreements. See Section 11 -- "The Merger Agreement; Other Arrangements". The Merger Agreement provides that promptly following the purchase of and payment for a number of Shares that satisfies the Minimum Condition, Parent will be entitled to designate such number of directors, rounded up to the next whole number, on the Company Board that equals the product of - the total number of directors on the Company Board (giving effect to the directors designated by Parent pursuant to the Merger Agreement), and - the percentage that the number of Shares so purchased and paid for bears to the total number of Shares then outstanding. The Company has agreed, upon a request of the Purchaser, promptly to increase the size of the Company Board or exercise its reasonable best efforts to secure the resignations of such number of directors, or both, as is necessary to enable Parent's designees to be so elected or appointed to the Company Board and, subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, to cause Parent's designees to be so elected or appointed; provided, however, that until the Effective Time, neither Parent nor Purchaser will take any action that would cause the Company Board to include fewer than two members who were directors as of the date of the Merger Agreement and are not employees of the Company. See Section 11 -- "The Merger Agreement; Other Arrangements". The Merger is subject to the satisfaction or waiver of certain conditions, including, if required, the approval and adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding Shares. If the Purchaser obtains 80% or more of the outstanding Shares in the Offer, the Purchaser will effect the Merger pursuant to the short-form merger provisions of the FBCA without obtaining the approval of any other shareholder of the Company. See Section 16 -- "Certain Legal Matters; Regulatory Approvals". If the Minimum Condition is satisfied, the Purchaser would have sufficient voting power to approve the Merger without the affirmative vote of any other shareholder of the Company. The Company has agreed, if required, to cause a meeting of its shareholders to be held following consummation of the Offer for the purposes of considering and taking action upon the approval and adoption of the Merger Agreement. Parent and the Purchaser have agreed to vote the Shares purchased in the Offer in favor of the approval and adoption of the Merger Agreement. See Section 11 -- "The Merger Agreement; Other Arrangements". THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT YOU SHOULD READ CAREFULLY BEFORE YOU MAKE ANY DECISION WITH RESPECT TO THE OFFER. 7 11 THE TENDER OFFER 1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the Purchaser will accept for payment and pay for all Shares validly tendered and not properly withdrawn on or prior to the Expiration Date. The term "Expiration Date" means 12:00 midnight, New York City time, on Monday, August 7, 2000, unless the Purchaser, in accordance with the Merger Agreement, extends the period during which the Offer is open. In that event, the term "Expiration Date" means the latest time and date on which the Offer, as so extended (other than any extension with respect to the Subsequent Offering Period described below), expires. The Offer is conditioned upon the satisfaction of the Minimum Condition, the expiration or termination of any applicable waiting period under the HSR Act, and the other conditions set forth in Section 15 of this Offer to Purchase. Subject to the provisions of the Merger Agreement, the Purchaser may waive any or all of the conditions to its obligation to purchase Shares pursuant to the Offer other than the Minimum Condition. If on the initial Expiration Date or any subsequent Expiration Date any or all of the conditions to the Offer have not been satisfied or waived, subject to the provisions of the Merger Agreement, the Purchaser may elect to - terminate the Offer and return all tendered Shares to tendering shareholders, - waive all of the unsatisfied conditions (other than the Minimum Condition) and, subject to any required extension, purchase all Shares validly tendered by the Expiration Date and not properly withdrawn, or - extend the Offer and, subject to the right of shareholders to withdraw Shares until the new Expiration Date, retain the Shares that have been tendered until the expiration of the Offer as extended. The Purchaser will not make any change without the prior written consent of the Company that - decreases the Offer Price, - reduces the maximum number of Shares to be purchased in the Offer, - changes the form of consideration to be paid in the Offer, - modifies or amends any of the conditions to the Offer set forth in Section 15 of this Offer to Purchase, - imposes conditions to the Offer in addition to the conditions set forth in Section 15 of this Offer to Purchase, - waives the Minimum Condition, or makes any other changes in the terms and conditions of the Offer that are in any manner adverse to the holders of Shares or - except as provided in the Merger Agreement, extends the Offer. The Purchaser - may extend the Offer beyond the scheduled Expiration Date from time to time, with or without the Company's consent, if at that date any of the conditions to the Purchaser's obligation to accept for payment and to pay for the Shares are not satisfied or waived, in which case, any single extension will not exceed the lesser of 10 business days and the number of days the Purchaser reasonably believes is necessary to cause the conditions of the Offer to be satisfied, or - may extend the Offer for any period required by any rule, regulation or interpretation of the Securities and Exchange Commission (the "SEC") or its staff applicable to the Offer, other than Rule 14e-5 promulgated under the Exchange Act, with or without the Company's consent, and - shall extend the Offer from time to time, unless the Company advises the Purchaser that the Company does not wish it to do so, until the earlier of 8 12 - 30 days after the date on which any applicable waiting period under the HSR Act has expired or been terminated, and - October 31, 2000, if on the then-scheduled Expiration Date all of the conditions to the Offer have not been satisfied or waived as permitted by the Merger Agreement. In this case, any single extension will not exceed the lesser of 10 business days and the number of days the Purchaser reasonably believes is necessary to cause the conditions of the Offer to be satisfied. Pursuant to Rule 14d-11 under the Exchange Act, the Purchaser may, subject to certain conditions, provide a subsequent offering period following the expiration of the Offer on the Expiration Date (a "Subsequent Offering Period"). A Subsequent Offering Period is an additional period of time from three business days to 20 business days in length, beginning after the Purchaser purchases Shares tendered in the Offer, during which shareholders may tender, but not withdraw, their Shares and receive the Offer Price. The Purchaser has agreed to include a Subsequent Offering Period of not less than three business days following Purchaser's acceptance for payment of Shares in the Offer. Pursuant to Rule 14d-7 under the Exchange Act, no withdrawal rights apply to Shares tendered during a Subsequent Offering Period and no withdrawal rights apply during the Subsequent Offering Period with respect to Shares tendered in the Offer and accepted for payment. During a Subsequent Offering Period, the Purchaser will promptly purchase and pay for all Shares tendered at the same price paid in the Offer. Subject to the applicable rules and regulations of the SEC and the provisions of the Merger Agreement, the Purchaser also expressly reserves the right, in its sole discretion, at any time or from time to time, - to terminate the Offer if any of the conditions set forth in Section 15 of this Offer to Purchase have not been satisfied, and - to waive any condition to the Offer (other than the Minimum Condition) or otherwise amend the Offer in any respect, in each case by giving oral or written notice of such extension, termination, waiver or amendment to the Depositary and by making a public announcement thereof. If the Purchaser accepts for payment any Shares pursuant to the Offer, it will accept for payment all Shares validly tendered prior to the Expiration Date and not properly withdrawn, and will promptly pay for all Shares so accepted for payment. Purchaser will publicly announce any extension, delay, termination, waiver or amendment as promptly as practicable. Purchaser will announce any extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date in accordance with the public announcement requirements of Rule 14e-1(d) under the Exchange Act. Subject to applicable law (including, without limitation, Rules 14d-4(d) and 14d-6(c) under the Exchange Act which require that material changes be promptly disseminated to shareholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to the Dow Jones News Service. If the Purchaser extends the Offer or if the Purchaser is delayed in its acceptance for payment of or payment for Shares or it is unable to pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser, and these Shares may not be withdrawn except to the extent that tendering shareholders are entitled to withdrawal rights as described under Section 4 -- "Withdrawal Rights". However, the ability of the Purchaser to delay the payment for Shares that the Purchaser has accepted for payment is limited by (i) Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of shareholders promptly after the termination or withdrawal of such bidder's offer, unless such bidder elects to offer a Subsequent Offering Period and pay for Shares tendered during the Subsequent Offering Period in accordance with Rule 14d-11 under the Exchange Act and (ii) the terms of the Merger Agreement, which require that the Purchaser pay for Shares that are tendered pursuant to the Offer as soon as permitted after the Offer. 9 13 If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Purchaser will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of the Offer, other than a change in price, percentage of securities sought, or inclusion of or changes to a dealer's soliciting fee, will depend upon the facts and circumstances, including the materiality, of the changes. In the SEC's view, an offer should remain open for a minimum of five business days from the date on which the material change is first published, sent or given to shareholders and, if material changes are made with respect to information that approaches the significance of price and share levels, a minimum of 10 business days may be required to allow for adequate dissemination and investor response. Accordingly, if, prior to the Expiration Date, the Purchaser decreases the number of Shares being sought or increases the consideration offered pursuant to the Offer, and if the Offer is scheduled to expire at any time earlier than the tenth business day from the date that notice of such increase or decrease is first published, sent or given to shareholders, the Offer will be extended at least until the expiration of such tenth business day. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time of such day. The Company has provided the Purchaser with the Company's shareholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency's security position listing. 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Purchaser will accept for payment and will pay for all Shares validly tendered prior to the Expiration Date and not properly withdrawn pursuant to the Offer as soon as it is permitted to do so under applicable law. Subject to the Merger Agreement and compliance with Rule 14e-1(c) under the Exchange Act, the Purchaser expressly reserves the right to delay payment for Shares in order to comply in whole or in part with any applicable law. See Section 16 -- "Certain Legal Matters; Regulatory Approvals". In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of - the certificates evidencing such Shares (the "Share Certificates") or confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 of this Offer to Purchase, - a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined below) in lieu of the Letter of Transmittal, and - any other documents required by the Letter of Transmittal. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such Shares. Payment for Shares so accepted will be made by the deposit of the Offer Price for those Shares with the Depositary, which will act as agent for tendering shareholders for the purpose of receiving payments from the Purchaser and transmitting such payments to tendering shareholders. If, for any reason whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer is delayed, or the Purchaser is unable to accept for payment Shares tendered pursuant to the Offer, then, without prejudice to the Purchaser's rights under Section 1 of this 10 14 Offer to Purchase, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn, except to the extent that the tendering shareholders are entitled to withdrawal rights as described in Section 4 of this Offer to Purchase, and as otherwise required by Rule 14e-1(c) under the Exchange Act. Under no circumstances will interest be paid on the Offer Price, regardless of any delay in making such payment. If any tendered Shares are not accepted for payment for any reason or if Share Certificates are submitted evidencing more Shares than are tendered, Share Certificates evidencing unpurchased Shares will be returned, without expense to the tendering shareholder (or, in the case of Shares tendered by book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3, such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), as promptly as practicable following the expiration or termination of the Offer. The Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates, the right to purchase all or any portion of the Shares tendered pursuant to the Offer. Any such transaction or assignment will not relieve the Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering shareholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. 3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES. VALID TENDERS. In order for Shares to be validly tendered pursuant to the Offer, the Letter of Transmittal (or a facsimile of the Letter of Transmittal), properly completed and duly executed, together with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal) and any other documents required by the Letter of Transmittal must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and either (1) the Share Certificates representing tendered Shares must be received by the Depositary or such Shares must be tendered pursuant to the procedure for book-entry transfer described below and a Book-Entry Confirmation must be received by the Depositary, in each case prior to the Expiration Date, or (2) the guaranteed delivery procedures described below must be complied with. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, that states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that are the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against such participant. BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make a book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at the Book-Entry Transfer Facility, (1) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), together with any required signature guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or (2) the tendering shareholder must comply with the guaranteed delivery procedures described below. 11 15 DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of Transmittal (1) if the Letter of Transmittal is signed by the registered holder of the Shares tendered therewith, unless that holder has completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the Letter of Transmittal, or (2) if the Shares are tendered for the account of a firm that is participating in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (each an "Eligible Institution" and collectively "Eligible Institutions"). In all other cases, all signatures on a Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a Share Certificate is registered in the name of a person or persons other than the signer of the Letter of Transmittal, or if payment is to be made or delivered to, or a Share Certificate not accepted for payment or not tendered is to be issued in the name of a person other than the registered holder(s), then the Share Certificate must be endorsed or accompanied by appropriate duly executed stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on the Share Certificate, with the signature(s) on the Share Certificate or stock powers guaranteed by an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal. GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to the Offer and the Share Certificates evidencing such shareholder's Shares are not immediately available, or such shareholder cannot deliver the Share Certificates and all other required documents to the Depositary prior to the Expiration Date, or such shareholder cannot complete the procedure for delivery by book-entry transfer on a timely basis, such Shares may nevertheless be tendered, provided that all of the following conditions are satisfied: (1) the tender is made by or through an Eligible Institution, (2) the Depositary receives, prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, and (3) the Share Certificates (or a Book-Entry Confirmation) representing all tendered Shares, in proper form for transfer, together with the properly completed and duly executed Letter of Transmittal (or a facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message), and any other documents required by the Letter of Transmittal are received by the Depositary within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery. A "trading day" is any day on which the New York Stock Exchange is open for business. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile transmission or mailed to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. In all cases, Shares will not be deemed validly tendered unless the Depositary receives a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), or, in the case of a book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal. The method of delivery of Share Certificates, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the option and risk of the tendering shareholder. The delivery will be deemed made only when the documents are actually received by the Depositary (including in the case of a book-entry transfer, receipt of a Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. DETERMINATION OF VALIDITY. Purchaser will determine, in its sole discretion, all questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tendered Shares and its determination shall be final and binding on all parties. The Purchaser reserves the absolute right to reject any and all tenders that it determines are not in proper form or the acceptance for payment of which may, in the opinion of its counsel, be unlawful. The Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular shareholder, whether or not similar defects or 12 16 irregularities are waived in the case of other shareholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived to the satisfaction of the Purchaser. None of the Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding. OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth above, a tendering shareholder irrevocably appoints designees of the Purchaser as such shareholder's proxies, each with full power of substitution, in the manner set forth in the Letter of Transmittal, to the full extent of such shareholder's rights with respect to the Shares tendered by such shareholder and accepted for payment by the Purchaser (including with respect to any and all other Shares or other securities issued or issuable in respect of such Shares on or after the date of this Offer to Purchase). All such proxies shall be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts such Shares for payment. Upon such acceptance for payment, all prior proxies given by such shareholder with respect to such Shares (and such other Shares and securities) will be revoked without further action, and no subsequent proxies may be given nor any subsequent written consent be executed by such shareholder (and, if given or executed, will not be deemed to be effective). The designees of the Purchaser will, with respect to the Shares for which the appointment is effective, be empowered to exercise all voting and other rights of such shareholder as they in their sole discretion may deem proper at any annual, special or adjourned meeting of the Company's shareholders, action by written consent in lieu of any such meeting or otherwise. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, the Purchaser must be able to exercise full voting rights with respect to such Shares immediately upon the Purchaser's payment for such Shares. The tender of Shares pursuant to any one of the procedures described above will constitute the tendering shareholder's acceptance of the Offer, as well as the tendering shareholder's representation and warranty that such shareholder has the full power and authority to tender and assign the Shares tendered, as specified in the Letter of Transmittal. The Purchaser's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering shareholder and the Purchaser upon the terms and subject to the conditions of the Offer. BACKUP WITHHOLDING. Under the "backup withholding" provisions of United States federal income tax law, the Depositary may be required to withhold 31% of the amount of any payments pursuant to the Offer. In order to prevent backup federal income tax withholding with respect to payments of the Offer Price to certain shareholders for Shares purchased pursuant to the Offer, each such shareholder must provide the Depositary with such shareholder's correct taxpayer identification number ("TIN") and certify that such shareholder is not subject to backup withholding by completing the Substitute Form W-9 in the Letter of Transmittal. Certain shareholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. If a shareholder does not provide its correct TIN or fails to provide the certifications described above, the Internal Revenue Service may impose a penalty on the shareholder and payment of cash to the shareholder pursuant to the Offer may be subject to backup withholding. All shareholders surrendering Shares should complete and sign the Substitute Form W-9 included in the Letter of Transmittal to provide the information necessary to avoid backup withholding. Non-corporate foreign shareholders should complete and sign a Form W-8, Certificate of Foreign Status (a copy of which may be obtained from the Depositary) in order to avoid backup withholding. See Instruction 8 of the Letter of Transmittal. 4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are irrevocable, except that such Shares may be withdrawn at any time prior to the Expiration Date. No withdrawal rights will apply to Shares tendered into a Subsequent Offering Period and no withdrawal rights apply during the Subsequent Offering Period with respect to Shares tendered in the Offer and accepted for payment. See Section 1 -- "Terms of the Offer". 13 17 For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase. Any notice of withdrawal must specify the name, address and taxpayer identification number of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If Share Certificates representing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3 -- "Procedures for Accepting the Offer and Tendering Shares", any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. If the Purchaser extends the Offer, is delayed in its acceptance for payment of Shares, or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and those Shares may not be withdrawn except to the extent that tendering shareholders are entitled to withdrawal rights as described in this Section. Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered at any time prior to the Expiration Date or during any Subsequent Offering Period by following one of the procedures described in Section 3 -- "Procedures for Accepting the Offer and Tendering Shares". All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion. That determination will be final and binding. None of the Purchaser, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. 5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The following is a summary of certain United States federal income tax consequences of the Offer and the Merger to the Company's shareholders whose Shares are tendered and accepted for payment pursuant to the Offer or whose Shares are converted into the right to receive cash in the Merger. The discussion is for general information only and does not purport to consider all aspects of United States federal income taxation that might be relevant to the Company's shareholders. The discussion is based on current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing, proposed and temporary regulations promulgated under the Code and administrative and judicial interpretations of the Code, all of which are subject to change, possibly with a retroactive effect. The discussion applies only to the Company's shareholders in whose hands Shares are capital assets within the meaning of Section 1221 of the Code and who do not own directly or through attribution 50% or more of the stock of Parent. This discussion does not apply to Shares received pursuant to the exercise of employee stock options or otherwise as compensation, or to certain types of shareholders (such as insurance companies, tax-exempt organizations, financial institutions and broker-dealers) who may be subject to special rules. This discussion does not discuss the United States federal income tax consequences to any Company shareholder who, for United States federal income tax purposes, is a non-resident alien individual, a foreign corporation, a foreign partnership or a foreign estate or trust, nor does it consider the effect of any foreign, state or local tax laws. Because individual circumstances may differ, each shareholder should consult his or her own tax advisor to determine the applicability of the rules discussed below and the particular tax effects of the Offer and the Merger on a beneficial holder of Shares, including the application and effect of the alternative minimum tax, and any state, local and foreign tax laws and of changes in such laws. 14 18 The payment for Shares tendered in the Offer or the exchange of Shares for cash pursuant to the Merger will be a taxable transaction for United States federal income tax purposes and possibly for state, local and foreign income tax purposes as well. In general, a shareholder who sells Shares pursuant to the Offer or receives cash in exchange for Shares pursuant to the Merger will recognize gain or loss for United States federal income tax purposes equal to the difference, if any, between the amount of cash received and the shareholder's adjusted tax basis in the Shares sold pursuant to the Offer or exchanged for cash pursuant to the Merger. Gain or loss will be determined separately for each block of Shares (i.e., Shares acquired at the same cost in a single transaction) tendered pursuant to the Offer or exchanged for cash pursuant to the Merger. Such gain or loss will be long-term capital gain or loss provided that a shareholder's holding period for such Shares is more than one year at the time of consummation of the Offer or the Merger, as the case may be. Capital gains recognized by an individual upon a disposition of a Share that has been held for more than one year generally will be subject to a maximum United States federal income tax rate of 20% or, in the case of a Share that has been held for one year or less, will be subject to tax at ordinary income tax rates. Certain limitations apply to the use of a shareholder's capital losses. A shareholder whose Shares are purchased in the Offer or exchanged pursuant to the Merger may be subject to 31% backup withholding unless certain information is provided to the Depositary or an exemption applies. See Section 3 -- "Procedures for Accepting the Offer and Tendering Shares". 6. PRICE RANGE OF SHARES; DIVIDENDS. Since May 21, 1999, the Shares have traded on NASDAQ under the symbol "DABR". The following table sets forth, for the periods indicated, the high and low sale prices per Share. No dividends were paid to shareholders for the periods indicated. Share prices are as reported on NASDAQ based on published financial sources.
COMMON STOCK ------------------ HIGH LOW ------- ------- Fiscal Year 1999: First Quarter............................................. N/A N/A Second Quarter (beginning May 21, 1999)................... $16 $11 1/2 Third Quarter............................................. $16 $ 6 1/4 Fourth Quarter............................................ $12 1/2 $ 6 5/8 Fiscal Year 2000: First Quarter............................................. $13 3/4 $ 7 3/4 Second Quarter............................................ $15 1/8 $10
On June 30, 2000, the last full day of trading before the public announcement of the execution of the Merger Agreement, the closing price of the Shares on NASDAQ was $11 9/16 per Share. On July 7, 2000, the last full day of trading before the commencement of the Offer, the closing price of the Shares on NASDAQ was 19 13/16 per Share. Shareholders are urged to obtain a current market quotation for the Shares. 7. CERTAIN INFORMATION CONCERNING THE COMPANY. GENERAL. The Company is a Florida corporation with its principal offices located at 1001 Washington Street, Conshohocken, Pennsylvania 19428. The Company's telephone number is (610) 896-2111. The Company is a leading retailer of bridal gowns and bridal-related apparel and accessories in the United States. The Company operates over 100 stores in 35 states. The Company's broad in-stock assortments enable it to offer the convenience of one-stop shopping for the entire bridal party. In addition, the Company offers a variety of special occasion dresses and accessories for events such as proms, pageants, homecomings and other formal affairs. As of the end of the 1999 fiscal year, the Company employed approximately 2,820 associates, of which approximately 1,210 were part-time associates. AVAILABLE INFORMATION. The Shares are registered under the Exchange Act. Accordingly, the Company is subject to the informational reporting requirements of the Exchange Act and, in accordance therewith, is 15 19 required to file periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the SEC's regional offices located at Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. The Company's filings are also available to the public on the SEC's Internet site (http://www.sec.gov). Copies of such materials may also be obtained by mail from the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. 8. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER. GENERAL. Parent is a Delaware corporation with its principal offices located at 611 Olive Street, St. Louis, Missouri 63101-1799. Parent's telephone number is (314) 342-6300. Parent is one of the nation's largest retailing companies, operating department stores in 36 states and the District of Columbia. Parent's department store divisions and their headquarters are Lord & Taylor in New York City; Hecht's in Washington, D.C., which also operates as Strawbridge's in Philadelphia; Foley's in Houston; Robinsons-May in Los Angeles; Kaufmann's in Pittsburgh; Filene's in Boston; Famous-Barr in St. Louis, which also operates as L.S. Ayres in Indianapolis and The Jones Store in Kansas City; and Meier & Frank in Portland, Oregon, which also operates as ZCMI in Salt Lake City, Utah. As of the end of the 1999 fiscal year, Parent employed approximately 62,000 full-time and 72,000 part-time associates in the United States and nine offices overseas. The Purchaser is a Florida corporation with its principal offices located at 611 Olive Street, St. Louis, Missouri 63101. The Purchaser's telephone number is (314) 342-6300. The Purchaser is a wholly owned subsidiary of Parent. The Purchaser has not carried on any activities other than in connection with the Merger Agreement. The name, citizenship, business address, business phone number, principal occupation or employment and five-year employment history for each of the directors and executive officers of Parent and the Purchaser and certain other information are set forth in Schedule I to this Offer to Purchase. Except as described in this Offer to Purchase, none of Parent, the Purchaser nor, to the best knowledge of Parent and the Purchaser, any of the persons listed in Schedule I to this Offer to Purchase or any associate or majority-owned subsidiary of Parent or the Purchaser or any of the persons so listed - beneficially owns or has any right to acquire, directly or indirectly, any Shares, or - has effected any transaction in the Shares during the past 60 days. Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, none of Parent, the Purchaser nor, to the best knowledge of Parent and the Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or voting of such securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss, guarantees of profits, division of profits or loss or the giving or withholding of proxies. Except as set forth in this Offer to Purchase, none of Parent, the Purchaser nor, to the best knowledge of Parent and the Purchaser, any of the persons listed on Schedule I hereto, has had any business relationship or transaction with the Company or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the SEC applicable to the Offer. Except as set forth in this Offer to Purchase, there have been no contacts, negotiations or transactions between Parent or any of its subsidiaries or, to the best knowledge of Parent, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets. None of the persons listed in Schedule I has, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). None of the persons 16 20 listed in Schedule I has, during the past five years, been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. 9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the Purchaser to purchase Shares pursuant to the Offer and the Merger is estimated to be approximately $436 million plus any transaction related fees and expenses. The Purchaser will obtain such funds from Parent. Purchaser anticipates that Parent will obtain the funds required for these transactions through commercial paper borrowings, other short-term and long-term debt financings and its operating cash flows. 10. BACKGROUND OF THE OFFER; PAST CONTACTS OR NEGOTIATIONS WITH THE COMPANY. In January, 2000, during the course of informal conversations, Parent discussed with the Company's financial advisor, among other things, the possible strategic fit of the Company's and Parent's businesses. On March 1, 2000, Eugene S. Kahn, president and chief executive officer of Parent, Jerome T. Loeb, chairman of Parent, John L. Dunham, chief financial officer of Parent, and William D. Edkins, senior vice president of Parent, met with Messrs. Robert B. Calhoun and Eugene P. Lynch, directors of the Company and officers of The Clipper Group, a shareholder of the Company, in New York, New York to discuss the Company's history and business operations. On March 8, 2000, Parent and the Company entered into a confidentiality agreement to facilitate discussions between the two companies relating to a possible business combination transaction. Thereafter, Messrs. Kahn, Loeb and Dunham met with Robert Huth president and chief executive officer of the Company, together with Parent's and the Company's respective financial advisors, in New York, New York to begin discussions of a possible business combination. Pursuant to the confidentiality agreement, the Company began to provide certain information to Parent. On April 11, 2000, Mr. Kahn met with Mr. Huth and Steven Erlbaum in Philadelphia, Pennsylvania to continue their discussions about a possible business combination transaction. From March to June 2000, there were ongoing discussions among Parent, the Company and their respective financial advisors regarding the potential financial and other terms of a possible business combination transaction. At a regularly scheduled meeting held on June 7, 2000, the Company Board considered the potential transaction with Parent and discussed strategic and structural issues related to the transaction. On June 12, 2000, representatives of Parent and the Company tentatively agreed upon a purchase price of $20.00 per Share, subject to a number of factors, including satisfactory due diligence by Parent and negotiation of a definitive acquisition agreement. On June 15, 2000, Messrs. Kahn, Loeb and Dunham met with Mr. Huth and Edward Wozniak, the chief financial officer of the Company, in Philadelphia, Pennsylvania to continue their discussions. On June 16, 2000, Thomas H. Lucas, vice president of Parent, Lonny J. Jay, senior vice president of Parent and Michael G. Culhane, vice president of Parent met in Philadelphia, Pennsylvania with Messrs. Huth and Wozniak, and with representatives of Parent's and the Company's legal and financial advisors to begin in-depth financial and business due diligence. Also on June 16, 2000, Parent's legal advisors provided the Company's legal advisors with a form of a merger agreement. Thereafter, legal advisors for Parent and the Company continued to negotiate the proposed form of merger agreement. Throughout June 2000, representatives of Parent sought, and the Company provided, additional due diligence information. After extensive discussions regarding the proposed agreements between Parent and certain shareholders of the Company in connection with the Offer and the Merger, Parent, the Company and 17 21 the shareholders agreed on the terms of the agreements and to the number of Shares that would be subject to such agreements. Throughout the second half of June, 2000, a series of informational meetings of members of the Company Board were held at which such members were kept apprised of the status of the ongoing discussions with Parent. On June 28, 2000, the Company Board met in a special meeting. At that meeting, the Company's management and legal and financial advisors described the material terms of the Merger Agreement and the shareholder agreements with certain of the Company's shareholders. Also at this meeting, Credit Suisse First Boston reviewed with the Company Board its financial analysis of the $20.00 per Share cash consideration payable in the Offer and the Merger. After full consideration and discussion, the Company Board, by unanimous vote of all directors present, preliminarily approved and adopted the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement and authorized the Company's management and legal and financial advisors to finalize the transaction substantially on the terms presented. On June 29, 2000, Mr. Kahn met with Mr. Huth in Philadelphia, Pennsylvania to discuss contractual arrangements for Mr. Huth's continued employment with the Company following the Merger. These discussions were completed by telephone on June 30, 2000. On June 30, 2000, at a special telephonic meeting, Parent's management presented to Parent's board of directors various materials concerning the Company and outlined the terms of the proposed acquisition transaction. The board of directors then authorized management to pursue the transaction substantially as presented to the board. On July 2, 2000, at a special telephonic meeting attended by the Company's management and legal and financial advisors, the Company Board again met to review the proposed transaction. At this meeting, the Company Board was updated as to the negotiations with Parent and its representatives concerning the proposed transaction. Also at this meeting, Credit Suisse First Boston rendered to the Company Board an oral opinion (which opinion was confirmed by delivery of a written opinion dated July 3, 2000, the date of the Merger Agreement) to the effect that, as of the date of such opinion and based on and subject to the matters stated in the opinion, the $20.00 per Share cash consideration to be received in the Offer and the Merger by holders of Shares was fair, from a financial point of view, to such holders (other than Parent and its affiliates). After discussion, the Company Board, by unanimous vote of all directors present, approved and adopted the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement. Thereafter, representatives of Parent and the Company and their respective legal advisors finalized the Merger Agreement. The Merger Agreement, the shareholder agreements and the employment agreement with Mr. Huth were all signed on July 3, 2000. Also on July 3, 2000, Parent and the Company issued a joint press release announcing the execution of the Merger Agreement and the proposed Offer. Parent and Purchaser filed this press release with the SEC as an exhibit to Schedule TO, and the Company filed this press release with the SEC as an exhibit to Schedule 14D-9. On July 10, 2000, in accordance with the terms of the Merger Agreement, the Purchaser commenced the Offer. 11. THE MERGER AGREEMENT; OTHER ARRANGEMENTS. THE MERGER AGREEMENT The following is a summary of the material provisions of the Merger Agreement, a copy of which is filed as an exhibit to the Tender Offer Statement on Schedule TO filed by Parent and the Purchaser pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act with the SEC in connection with the Offer (the "Schedule TO"). The summary is qualified in its entirety by reference to the Merger Agreement, which is deemed to be incorporated by reference in this Offer to Purchase. Capitalized terms used 18 22 in this Offer to Purchase and not otherwise defined have the meanings ascribed to them in the Merger Agreement. THE OFFER. The Merger Agreement provides for the making of the Offer. The obligation of the Purchaser to accept for payment and pay for Shares tendered pursuant to the Offer is subject to the satisfaction of the Minimum Condition, the expiration or termination of any applicable waiting period under the HSR Act, and certain other conditions that are described in Section 15. DIRECTORS. The Merger Agreement provides that promptly upon the purchase of and payment for a number of Shares that satisfies the Minimum Condition pursuant to the Offer, Parent shall be entitled to designate such number of directors, rounded up to the next whole number, on the Company Board that equals the product of - the total number of directors on the Company Board (giving effect to the directors designated by Parent pursuant to the Merger Agreement), and - the percentage that the number of Shares so purchased and paid for bears to the total number of Shares then outstanding. The Company has agreed, upon request of the Purchaser, promptly to increase the size of the Company Board or exercise its reasonable best efforts to secure the resignations of such number of directors, or both, as is necessary to enable Parent's designees to be so elected or appointed to the Company Board and will cause Parent's designees to be so elected or appointed; provided, however, that until the Effective Time, neither Parent nor the Purchaser will take any action that would cause the Company Board to include fewer than two members who are directors as of the date of the Merger Agreement and are not employees of the Company. Following the election of Parent's designees to the Company Board (a) any amendment or termination of the Merger Agreement by the Company, (b) any extension or waiver by the Company of the time for the performance of any of the obligations of Parent or the Purchaser under the Merger Agreement or (c) any waiver of any of the Company's rights under the Merger Agreement, will require the concurrence of a majority of the directors of the Company then in office who neither were designated by Parent nor are employees of the Company, if any. THE MERGER. The Merger Agreement provides that no later than two business days after the satisfaction or waiver of each of the conditions to the Merger set forth in the Merger Agreement, the Purchaser will be merged with and into the Company. Following the Merger, the separate existence of the Purchaser will cease, and the Company will continue as the Surviving Corporation, wholly owned by Parent. If required by the FBCA, the Company will call and hold a meeting of its shareholders following consummation of the Offer for the purpose of voting upon the approval of the Merger Agreement. At any such meeting all Shares then owned by Parent or the Purchaser or any other subsidiary of Parent will be voted in favor of approval of the Merger Agreement. Under the FBCA, Parent may cause Purchaser to merge with and into the Company without a vote of the Company's remaining shareholders if the Purchaser owns at least 80% of the outstanding Shares. Consequently, if over 80% of the outstanding Shares are tendered in the Offer, Parent intends to immediately effect the Merger. Pursuant to the Merger Agreement, each Share outstanding at the Effective Time (other than Shares owned by Parent or any of its subsidiaries or by the Company or any of its subsidiaries, all of which will be cancelled, and other than Shares that are held by shareholders, if any, who properly exercise their dissenters' rights under the FBCA) will be converted into the right to receive the Merger Consideration. Shareholders who perfect their dissenters' rights under the FBCA will be entitled to the amounts determined pursuant to judicial determination. See Section 17 -- "Dissenters' Rights". REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the Company has made customary representations and warranties to Parent and the Purchaser, including but not limited to representations relating to corporate existence and power; capitalization; corporate authorizations; subsidiaries; SEC filings; financial statements; absence of certain changes (including any material adverse effect on the business, results of operations, or financial condition of the Company); employee benefit plans; ERISA; government 19 23 authorizations; litigation; compliance with laws; employee matters; labor matters; environmental matters; taxes; intellectual property; accuracy of certain disclosures to be made in connection with preparation of the Offer documents; the opinion of the Company's financial advisor; business of the Company; third party agreements; properties owned or leased by the Company; brokers; insurance; accounts receivable; and inventory. Certain representations and warranties in the Merger Agreement made by the Company and Parent are qualified as to "materiality" or "Material Adverse Effect". For purposes of the Merger Agreement and this Offer to Purchase, the term "Material Adverse Effect" generally means an event, change, effect or violation of a representation or warranty that is materially adverse to the financial condition, business, or results of operations of any person (or, if used with respect thereto, of any group of persons taken as a whole). The term "Material Adverse Effect" does not include any adverse effect resulting from changes in general economic conditions or conditions generally affecting the industries in which Parent and the Company operate. Pursuant to the Merger Agreement, Parent and the Purchaser have made customary representations and warranties to the Company, including representations relating to their corporate existence and power; good standing; corporate authority; corporate authorizations; the accuracy of certain disclosures to be made in connection with preparation of the Offer documents; their ability to finance the Offer and the Merger; and litigation. COVENANTS. The Merger Agreement contains various covenants of the parties thereto. A description of certain of these covenants follows. The Merger Agreement provides that, prior to the Effective Time or earlier termination of the Merger Agreement, and except as may be agreed in writing by Parent (which consent Parent will not unreasonably withhold), or as expressly permitted by or disclosed in the Merger Agreement, the Company: - will, and will cause each of its subsidiaries to, (a) conduct its operations according to its ordinary course of business; (b) use commercially reasonable efforts to preserve intact its business organization and to maintain its existing relations with customers, suppliers, employees, creditors and business partners; and (c) use its reasonable efforts keep available the services of its current key executives. - will not, and will not permit any of its subsidiaries to, transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any material assets other than in the ordinary and usual course of business; - will not, and will not permit any of its subsidiaries to, except as required by law or as provided in the Merger Agreement: (a) grant any increase in the compensation payable or to become payable to any key executive, key employee or director; or (b) enter into any, or amend any existing, employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee; provided, however, that the Company may, in the ordinary course of business, consistent with past practice, enter into termination agreements or arrangements with employees other than any key executive, if the aggregate value of such agreements and arrangements does not exceed $250,000 and with respect to any individual employee does not have a value not in excess of $25,000, or hire any employee or obligate itself to hire any employee having a title or the responsibility of vice president or above; - will not, and will not permit any of its subsidiaries to, modify, amend or terminate any material Company agreements or waive, release or assign any material rights or claims with respect to such agreements, except in the ordinary course of business and consistent with past practice; - will not permit any material insurance policy naming it or any of its subsidiaries as a beneficiary or a loss payable payee to be canceled or terminated, unless equivalent replacement policies, without lapse of coverage, shall be put in place; - will not settle, compromise, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, (a) to the extent reflected or reserved against in, or contemplated by, the financial statements, including the notes thereto, contained in the Company's SEC filings, (b) incurred in the 20 24 ordinary course of business and consistent with past practice or (c) which are legally required to be paid, discharged or satisfied; - will take all reasonable steps in defense of any claim asserted against the Company in any proceedings before any governmental entity; - will not make, or commit to make, any capital expenditures in excess of $100,000 for each such individual expenditure or $300,000 in the aggregate unless it is expressly disclosed in the Company's capital expenditure plan or is paid out of or is planned to be paid out of any unallocated capital item expressly disclosed in that plan; - except in the ordinary course of the Company's business consistent with past practice, will not, and will not permit any of its subsidiaries to, (a) amend, modify, supplement or terminate any agreement listed on the Disclosure Schedule to the Merger Agreement (the "Disclosure Schedule") with respect to real property or enter into any new agreement or arrangement with respect to any real property except as expressly listed in the Disclosure Schedule, and (b) enter into or execute subordination non-disturbance agreements, estoppel certificates or similar instruments required to be executed pursuant to the terms of the real property leases listed in the Disclosure Schedule except for those which have the content prescribed in the lease and which conform to that lease in all material respects; - will not, and will not permit any of its Subsidiaries to, except as required by law or as otherwise expressly provided elsewhere in the Merger Agreement, adopt any new or amend or otherwise change any benefit agreement with any individual employee; and - will not, and will not permit any of its subsidiaries to, except in the ordinary course of business (i) make any loans, advances or capital contributions to, or investments in, any other person; (ii) except as described in the Disclosure Schedule, incur, assume, or prepay any indebtedness for borrowed money or enter into any capital leases or other arrangements with similar economic effects or issue any debt securities; or (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person. The Merger Agreement also provides that, prior to the Effective Time or earlier termination of the Merger Agreement, and except as may be agreed in writing by Parent, or as expressly permitted by or disclosed in the Merger Agreement, the Company: - will not, directly or indirectly, split, combine, reclassify, purchase or redeem any shares of its capital stock or purchase or redeem any rights, warrants or options to acquire any such shares; - will not, and will not permit any of its subsidiaries to: (a) amend its articles of incorporation or bylaws; (b) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (c) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of the capital stock of any class of the Company or of any of its subsidiaries, other than issuances pursuant to the exercise of Company stock options and Company benefit plan obligations; or (d) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; - will not, and will not permit any of its subsidiaries to, except as required by law or as provided in the Merger Agreement: (a) adopt any new or (b) amend or otherwise increase or accelerate the payment or vesting of the amounts payable or to become payable under any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement, program, fund, policy, practice or arrangement which applies to more than one employee; - will not, and will not permit any of its subsidiaries to, except in the ordinary course of business or except as described in the Disclosure Schedule, enter into any material commitment or transaction (including any borrowing, capital expenditure or purchase, sale or lease of assets); 21 25 - will not adopt or authorize a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than with respect to the Merger); - will not change any method of accounting or any accounting principle or practice, except for changes required by a concurrent change in generally accepted accounting principles or by SEC requirements or staff interpretations; - as to all intellectual property relating to the name "David's Bridal", "David's Bridal Warehouse", "David's Bridal Wearhouse" and other related uses of those names and/or marks, will (a) use diligent efforts to maintain or otherwise preserve its rights in such intellectual property owned by the Company and its subsidiaries and not permit any of such intellectual property to lapse, expire or go abandoned by any action or inaction on its part; (b) diligently and responsively prosecute all applications or registrations with respect to such intellectual property before whichever governmental entity the same may be pending; and (c) not allow any rights with respect to such intellectual property to become abandoned for failure to timely file new applications for registrations corresponding to the subject matter thereof; - will not voluntarily make or agree to make any material change in any tax accounting method, waive or consent to the extension of any statute of limitations with respect to income or other material taxes, or consent to any material assessment of taxes, or settle any judicial proceeding affecting any material amount of taxes; - except as otherwise expressly permitted in the Merger Agreement, will not, and will not permit any of its subsidiaries to (a) issue, sell or otherwise distribute or dispose of any Shares to, (b) become indebted in respect of borrowed money or make any commitment with respect to borrowed money from, (c) sell (other than sales of retail merchandise), distribute, mortgage, license, lease or otherwise dispose of any of its assets to, or (d) enter into any other such agreement, arrangement, commitment or transaction involving the Company's assets or finances with any officer, director or legal or beneficial owner of more than 5% of the Shares and their affiliates, except for continuing payments under the leases shown on the Disclosure Schedule as "123-Natick" and payments owed to Fillberg Limited; and - will notify Parent of (a) any emergency or other substantial change in the normal course of its or any of its subsidiaries' respective businesses or in the operation of its or its subsidiaries' respective properties and (b) any complaints of or hearings (or written communications indicating that the same are threatened) of which the Company has knowledge before any governmental entity if such emergency, change, complaint, investigation or hearing would have a Material Adverse Effect on the Company. ACCESS; CONFIDENTIALITY. The Merger Agreement provides that throughout the period prior to the earlier of the Effective Time and any termination of the Merger Agreement, the Company will - afford to Parent's representatives reasonable access, upon reasonable prior notice, to all of the Company's and its subsidiaries' senior management, books, records, files, and documents and the Company shall furnish to Parent access to (i) a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of the federal securities laws and (ii) such other information concerning the Company's business, properties and personnel as Parent may reasonably request; and - use its reasonable best efforts to provide Parent and its representatives with access to the representatives, commercial bankers, actuaries, trustees, outside employee benefit plan administrators and consultants of the Company and to use its reasonable best efforts to cause such representatives, commercial bankers, actuaries, trustees, outside employee benefit plan administrators and consultants to provide Parent and Parent's representatives with such information regarding the Company as may be reasonably requested. 22 26 The Merger Agreement further provides that until the Effective Time, Parent and the Purchaser will, with respect to information furnished to Parent by or on behalf of the Company, and the Company will, with respect to the information furnished to the Company by or on behalf of Parent or the Purchaser, have the same confidentiality obligations as set forth in the Confidentiality Agreement dated March 8, 2000, between Parent and the Company. FURTHER ACTION; REASONABLE BEST EFFORTS. The Merger Agreement provides that throughout the period prior to the earlier of the Effective Time and any termination of the Merger Agreement: (1) Upon the terms and subject to the conditions provided in the Merger Agreement, each of Parent, the Purchaser and the Company agrees to use its reasonable best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary under applicable laws and regulations to consummate and make effective the transactions contemplated by the Merger Agreement, including, without limitation, to (a) comply promptly with all legal requirements which may be imposed on it with respect to the Merger Agreement and the transactions contemplated by the Merger Agreement, (b) satisfy the conditions precedent to the obligations of such party, (c) except for those items listed on the Disclosure Schedule, obtain each consent, authorization, order or approval of, and exemption by, any governmental entity or other public or private third party required to be obtained or made by Parent, the Purchaser, the Company or any of their subsidiaries in connection with the Merger or the taking of any action contemplated by the Merger Agreement, (d) effect all necessary registrations and filings, and (e) take any action reasonably necessary to vigorously defend, lift, mitigate and/or rescind the effect of any litigation or administrative proceeding adversely affecting the Merger or the Merger Agreement, including promptly appealing any adverse court or administrative decision; (2) Subject to appropriate confidentiality protections, each of Parent, the Purchaser and the Company agrees to furnish to the other parties such necessary information and reasonable assistance as the other parties may reasonably request in connection with the provisions in (1) above and to provide those other parties with copies of all filings made by such party with any governmental entity and, upon request, any other information supplied by such party to a governmental entity in connection with the Merger Agreement and the transactions contemplated by the Merger Agreement, except for documents and other information provided in response to Item (4)(c) of the Notification and Report Form required under the HSR Act; (3) Parent and the Company agree to take or cause to be taken the following actions: (a) consult and cooperate with and provide assistance to each other in the preparation and filing of certain documents with the SEC; (b) provide promptly to governmental entities with regulatory jurisdiction over enforcement of any applicable antitrust laws (defined in the Merger Agreement as " Government Antitrust Entity") information and documents requested by any Government Antitrust Entity or necessary, proper or advisable to permit consummation of the Offer, the Merger and the transactions contemplated by the Merger Agreement; (c) file any Notification and Report Form and related material required under the HSR Act as soon as practicable, but no later than 10 business days after July 3, 2000, and thereafter use its reasonable efforts to certify as soon as practicable its substantial compliance with any requests for additional information or documentary material that may be made under the HSR Act; (d) take promptly, in the event that any permanent or preliminary injunction or other order is entered or becomes reasonably foreseeable to be entered in any antitrust proceeding that would make consummation of the Offer or the Merger in accordance with the terms of the Merger Agreement unlawful or that would prevent or materially delay consummation of the Offer or the Merger or the other transactions contemplated by the Merger Agreement, any and all steps (including the appeal thereof or the posting of a bond) necessary to vacate, modify or suspend such injunction or order so as to permit such consummation on a schedule as close as possible to that contemplated by the Merger Agreement (each of the Company and Parent agrees to provide to the other copies of all correspondence between it (or its advisors) and any Government Antitrust Entity relating to the Offer or the Merger or any of the matters described in the Merger Agreement) and (e) avoid the entry of, or have vacated or terminated, any decree, order, or judgment that would restrain, prevent, or delay the consummation of the Offer or the Merger, including defending through litigation on the merits any claim asserted in any court by any person. 23 27 EMPLOYEE STOCK AND OTHER EMPLOYEE BENEFITS. Current Obligations. The Merger Agreement provides that the Company will, and after the Effective Time the Parent or the Surviving Corporation will, honor all obligations under all existing employee benefit plans and employment agreements. Stock Options. The Merger Agreement provides that the Company will use its reasonable best efforts to cause each outstanding option to purchase Shares (including any related alternative rights) granted under any equity plan or arrangement of the Company or its subsidiaries (collectively, the "Company Option Plans") (including those granted to current or former employees and directors of the Company or any of its subsidiaries) (the "Employee Stock Options") to become exercisable, and each restricted Share granted under the Company Option Plans, to vest in full and become fully transferable and free of restrictions, either prior to the purchase of the Shares pursuant to the Offer or immediately prior to the Effective Time, as permitted pursuant to the terms and conditions of the applicable Company Option Plan. The Company will offer to each holder of an Employee Stock Option that is outstanding immediately prior to the first purchase of Shares pursuant to the Offer (the "Purchase Date") (whether or not then presently exercisable or vested) to, and shall use its reasonable best efforts to cause such holders to, cancel such Employee Stock Option in exchange for an amount in cash equal to the product obtained by multiplying (x) the difference between the Offer Price and the per share exercise price of such Employee Stock Option, by (y) the number of shares of Company Common Stock covered by such Employee Stock Option. All payments in respect of such Employee Stock Options will be funded by Parent and made on the Purchase Date, subject to the collection or withholding of all applicable withholding taxes required by law to be collected or withheld by the Company. Except with respect to any stock options or stock-related programs, for the period of one year following the Effective Time, Parent will, or will cause the Surviving Corporation to, provide, on an uninterrupted basis, employee benefits to the employees of the Surviving Corporation which are, in the aggregate, no less favorable than those in effect on the date of the Merger Agreement. NOTIFICATION OF CERTAIN MATTERS. The Merger Agreement provides that the Company will give prompt notice to Parent and Parent will give prompt notice to the Company, of (1) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would cause any representation or warranty contained in the Merger Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time, (2) any material failure of the Company, Parent or the Purchaser to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under the Merger Agreement, and (3) the commencement or the threat of any action, suit, claim, investigation or proceeding which relates to the Merger Agreement or the transactions contemplated by the Merger Agreement; provided, however, that the delivery of any such notice will not limit or otherwise affect the remedies, if any, available under the Merger Agreement to the party receiving such notice. NO SOLICITATION. The Merger Agreement provides that neither the Company nor any of its subsidiaries nor any of the officers and directors of any of them will, and the Company will direct and use its reasonable best efforts to cause its and its subsidiaries' employees, agents and representatives, including any investment banker, attorney or accountant retained by it or any of its subsidiaries not to, directly or indirectly through another person, (1) initiate, solicit, encourage or otherwise knowingly facilitate any inquiry, proposal or offer from any person that constitutes an Acquisition Proposal or (2) participate in any discussions or negotiations regarding an Acquisition Proposal; provided, however, that the Company Board may, or may authorize the Company, its subsidiaries and their respective officers, directors, employees, agents and representatives to, in response to an Acquisition Proposal that the Company Board concludes in good faith is an Incipient Superior Proposal, (x) furnish information with respect to the Company and its subsidiaries to any person making such Acquisition Proposal pursuant to a customary confidentiality agreement and (y) participate in discussions or negotiations regarding such Acquisition Proposal, provided that, prior to taking any such action, the Company provides reasonable advance notice to Parent that it is taking such action. The term "Acquisition Proposal" is defined in the Merger Agreement to mean any direct or indirect inquiry, proposal or offer (or any improvement, restatement, amendment, renewal or reiteration thereof) relating to the acquisition or purchase of a business or shares of any class of equity securities of the Company 24 28 or any of its subsidiaries, any tender offer or exchange offer that, if consummated, would result in any person beneficially owning any class of equity securities of the Company or any of its subsidiaries, or any merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction (a "Business Combination Transaction") involving the Company or any of its subsidiaries, or any purchase or sale of a substantial portion of the assets (including stock of subsidiaries owned directly or indirectly by the Company) or business of the Company or any of its subsidiaries (an "Asset Transaction"), other than the transactions contemplated by the Merger Agreement or certain other transactions permitted by the Merger Agreement. The term "Incipient Superior Proposal" is defined in the Merger Agreement to mean an unsolicited bona fide written Acquisition Proposal that the Company Board concludes in good faith (after consultation with the Company's financial advisor) would, if consummated, provide greater aggregate value to the Company's shareholders from a financial point of view than the transactions contemplated by the Merger Agreement, provided that for purposes of this definition the term "Acquisition Proposal" shall have the meaning set forth above, except that (x) references to "shares of any class of equity securities of the Company" shall be deemed to be references to "100% of the outstanding Shares" and (y) an "Acquisition Proposal" shall be deemed to refer only to a Business Combination Transaction involving the Company or, with respect to an Asset Transaction, such transaction must involve the assets of the Company and its subsidiaries, taken as a whole, and not any subsidiary of the Company alone. The term "Superior Proposal" is defined in the Merger Agreement to mean an Incipient Superior Proposal for which any required financing is committed or which, in the good faith judgment of the Company Board, is capable of being financed by the person making the Acquisition Proposal. The Merger Agreement provides that neither the Company Board nor any committee thereof shall (i) withdraw, modify or change, or propose publicly to withdraw, modify or change, in a manner adverse to Parent, the recommendation by the Company Board or such committee of the Offer, the Merger or the Merger Agreement unless the Company Board shall have determined in good faith, after consultation with its financial advisor, that the Offer, the Merger or the Merger Agreement is no longer in the best interests of the Company's shareholders and that such withdrawal, modification or change is, therefore, required in order to satisfy its fiduciary duties to the Company's shareholders under applicable law, (ii) approve or recommend, or propose publicly to approve or recommend, any Acquisition Proposal, or (iii) cause the Company to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement (each, an "Acquisition Agreement") related to any Acquisition Proposal. Notwithstanding the foregoing, the Company may, in response to a Superior Proposal, (1) withdraw, modify or change or propose publicly to withdraw, modify or change in a manner adverse to Parent its recommendation of the Offer, the Merger or the Merger Agreement, (2) approve or recommend, or propose publicly to approve or recommend, any Acquisition Proposal or (3) so long as the Company is not in breach of its obligations described in this "No Solicitation" section, terminate the Merger Agreement, but only after the third business day following Parent's receipt of written notice advising Parent that the Company Board is prepared to accept an Acquisition Proposal and attaching the most current version of any such Acquisition Proposal or any draft of an Acquisition Agreement. The Merger Agreement also provides that the Company agrees to promptly (but in any event within one business day) notify Parent orally and in writing of any Acquisition Proposal or any inquiry regarding the making of any Acquisition Proposal. DIRECTORS' AND OFFICERS' INSURANCE AND INDEMNIFICATION. The Merger Agreement provides that: (a) from and after the Effective Time, Parent will, or will cause the Surviving Corporation to, indemnify and hold harmless each present and former director and officer of the Company and its subsidiaries, against any costs or expenses (including attorneys' fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, by reason of the fact that such individual is or was a director, officer, employee or agent of the Company or any of its subsidiaries, arising out of or pertaining to matters existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the purchase of Shares in the Offer, to the fullest extent permitted under applicable law, and Parent shall, or shall cause the Surviving 25 29 Corporation to, also advance fees and expenses (including attorneys' fees) as incurred to the fullest extent permitted under applicable law; (b) the articles of incorporation of the Company shall, from and after the Effective Time, and the articles of incorporation of the Surviving Corporation shall, from and after the Effective Time, contain provisions no less favorable with respect to indemnification than are set forth as of the date of the Merger Agreement in the articles of incorporation of the Company, which provisions shall not be amended, repealed or otherwise modified for a period of six (6) years from the Effective Time in any manner that would adversely affect the rights of individuals who at the Effective Time were directors, officers or employees of the Company; provided that this provision shall not limit Parent's ability to merge the Company into Parent or any of its affiliates or otherwise eliminate the Company's corporate existence if the surviving person assumes responsibility for such indemnification; (c) for six (6) years from the Effective Time, Parent shall maintain, or cause the Surviving Corporation to maintain, in effect the Company's and its subsidiaries' current directors' and officers' liability insurance policy covering those persons who are currently covered by such policy; provided, however, that in no event shall Parent or the Surviving Corporation be required to expend in any one year an amount in excess of the annual premiums paid on the date of the Merger Agreement by the Company and its subsidiaries for such insurance, and, provided, further, that if the annual premiums of such insurance coverage exceeds such amount, Parent or the Surviving Corporation shall be obligated to obtain policies with the greatest coverage available for a cost not exceeding 150% of such amount; and provided, further, that Parent or the Surviving Corporation may meet its obligations under this provision by covering the above persons under Parent's or the Surviving Corporation's insurance policy on the terms described above that expressly provide coverage for any acts which are covered by the existing policies of the Company and its subsidiaries; (d) nothing in the Merger Agreement is intended to, shall be construed to, or shall release, waive or impair any rights to directors' and officers' insurance claims under any policy that is or has been in existence with respect to the Company or any of its subsidiaries or any of their respective officers, directors or employees, it being understood and agreed that the indemnification provided for in these provisions is not prior to or in substitution for any such claims under such policies; (e) each present and former director and officer of the Company and its subsidiaries is a third party beneficiary to these provisions and may directly enforce the obligations of these provisions of Parent, the Company and the Surviving Corporation; and (f) the Surviving Corporation will pay all expenses, including reasonable fees and expenses of counsel, that an indemnified party may incur in enforcing the indemnity and other obligations provided for. PARENT UNDERTAKING. The Merger Agreement provides that Parent shall be responsible for and shall cause the Purchaser to perform all of its obligations under the Merger Agreement in a timely manner. TAKEOVER STATUTE. The Merger Agreement provides that if any "fair price," "moratorium," "control share acquisition" or other form of anti-takeover statute or regulation becomes applicable to the transactions contemplated by the Merger Agreement, each of Parent, the Purchaser and the Company, and the members of their respective boards of directors, shall grant such approvals and take such actions as are reasonably necessary so that the transactions contemplated by the Merger Agreement may be consummated as promptly as practicable on the terms contemplated by the Merger Agreement and otherwise act to eliminate or minimize the effects of such statute or regulation on the transactions contemplated by the Merger Agreement. DISCLOSURE SCHEDULE SUPPLEMENTS. The Merger Agreement further provides that from time to time during the period prior to the Effective Time, the Company will promptly advise Parent of any and all matters arising which, if existing or occurring at or prior to the date of the Merger Agreement, would have been required to be set forth or described in the Disclosure Schedule or which is necessary to make correct any information in a schedule or in any representation and warranty of the Company in the Merger Agreement which has been rendered inaccurate thereby in any material respect; provided, however, that such Disclosure Schedule shall not be deemed amended thereby for any purpose. 26 30 CONDITIONS TO THE MERGER. The Merger Agreement provides that the obligations of Parent, the Purchaser and the Company to consummate the Merger are subject to the satisfaction on or prior to the Effective Time of each of the following conditions: - the Merger Agreement shall have been approved and adopted by the Company's shareholders if required by applicable law; - no governmental entity shall have issued, given notice of its intent to issue or commenced any proceeding for the purpose of issuing any order, and there shall not be any statute, rule, decree or regulation restraining, prohibiting or making illegal the acquisition of the Shares by the Purchaser or Parent or the consummation of the Merger; - Parent or the Purchaser or any affiliate of either of them shall have purchased Shares pursuant to the Offer, except that this condition shall not be a condition to Parent's and the Purchaser's obligation to effect the Merger if Parent or the Purchaser shall have failed to purchase Shares pursuant to the Offer in breach of their obligations under the Merger Agreement; and - any applicable waiting period under the HSR Act shall have expired or been terminated. TERMINATION. The Merger Agreement may be terminated at any time prior to the Effective Time: (1) by the mutual consent of the Company, Parent and the Purchaser; (2) By either the Company or Parent if: (i) the Offer shall have expired without any Shares being purchased pursuant to the Offer, or the Offer has not been consummated on or before October 31, 2000, provided that the terminating party is not the cause of the failure to purchase Shares pursuant to the Offer; (ii) a statute, rule, regulation or executive order shall have been enacted prohibiting the consummation of the Offer or the Merger substantially on the terms contemplated by the Merger Agreement; (iii) the shareholders of the Company fail to approve and adopt the Merger Agreement at a special meeting, if a meeting is required (including any postponement or adjournment thereof); or (iv) any governmental entity shall have issued or threatened to issue a statute, order, decree or regulation or taken any other action, in each case permanently restraining, enjoining or prohibiting the consummation of the transactions contemplated by the Merger Agreement and such statute, order, decree, regulation or other action shall have become final and non-appealable; if the party seeking to terminate the Merger Agreement shall have used its reasonable best efforts to remove such order, decree, ruling or injunction and shall not be in breach of certain obligations; (3) by Parent if due to an occurrence or circumstance, other than as a result of a breach by Parent or the Purchaser of its obligations under the Merger Agreement or under the Offer resulting in a failure to satisfy any condition to the Offer, the Purchaser shall have (a) failed to commence the Offer within 30 days following the date of the Merger Agreement, or (b) terminated the Offer without having accepted any Shares for payment under the Offer; (4) by the Company, upon approval by the Company Board, if the Purchaser shall have terminated the Offer without having accepted any Shares for payment under the Offer, other than as a result of a breach by the Company of its obligations under the Merger Agreement that would result in a failure to satisfy any of the conditions to the Offer; or (5) by the Company, in accordance with the Merger Agreement, in response to a Superior Proposal, provided that such termination shall not be effective unless and until the Company shall have paid to Parent the fee described below. If the Merger Agreement is terminated there shall be no other liability (other than with respect to termination fees and confidentiality, and in certain instances, Company stock options) on the part of Parent, the Purchaser or the Company or their respective officers or directors except liability arising out of a willful 27 31 breach of the Merger Agreement. If the Merger Agreement is terminated prior to the expiration of the Offer, Parent and the Purchaser will promptly terminate the Offer without the purchase of Shares under the Offer. FEES AND EXPENSES. The Merger Agreement provides that, except as otherwise specified below, all costs and expenses incurred in connection with the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement shall be paid by the party incurring such expenses, whether or not the Offer or the Merger is consummated. If the Merger Agreement shall have been terminated pursuant to paragraph (5) under "-- Termination" above as a result of the failure of any condition set forth in paragraph (e) of Section 15 below, or pursuant to paragraph (5) under "Termination" above, the Company will immediately pay Parent or the Purchaser (as designated by Parent) a fee equal to $13,000,000 (the "Termination Fee"), payable by wire transfer of immediately available funds, the receipt of which by Parent or the Purchaser shall be a condition to the effectiveness of such termination. Parent shall be solely responsible for any and all filing fees that are payable in connection with or on account of any filing by Parent or any other party concerning the transactions contemplated by the Merger Agreement under or pursuant to the HSR Act. AMENDMENT; WAIVER. The Merger Agreement provides that: - the Merger Agreement may be amended by written agreement of the parties at any time before or after the Company's shareholders have approved matters presented in connection with the Merger; provided, however, that after such approval, no amendment will be made to the Merger Agreement without further approval by such shareholders that would alter or change the type of consideration into which each Share shall be converted upon consummation of the Merger or materially adversely affect the rights of the shareholders of the Company, and - at any time prior to the Effective Time, the parties to the Merger Agreement may by written agreement (a) extend the time for the performance of any of the obligations or other acts of the parties, (b) waive any inaccuracies in the representations and warranties of one or more parties contained in the Merger Agreement or in any document, certificate or writing delivered pursuant to the Merger Agreement or (c) waive compliance with any of the agreements or conditions of the parties contained in the Merger Agreement. SHAREHOLDER AGREEMENT As an inducement to Parent to enter into the Merger Agreement with the Company, Clipper/Merchant Partners, L.P., Clipper Equity Partners I, L.P., Clipper/Merban, L.P., Clipper Capital Associates, L.P., Clipper/European Re, L.P., Gary Erlbaum, Erlbaum Family L.P., Trust of S. H. Erlbaum, Adam Erlbaum Trust, Michael Erlbaum, MCE Family Limited Partnership, Steven Erlbaum, Robert Huth, Steven Sidewater, Grantor Retained Annuity Trust of Steven J. Sidewater, SPWJ Associates, L.P., Wendy Sidewater Trust, Peter Sidewater Trust and Nancy Sidewater Trust (collectively, the "Shareholders), who in the aggregate own approximately 42% of the outstanding Shares, have each entered into a shareholder agreement (the "Shareholder Agreement") with Parent. The following summary of certain provisions of the Shareholder Agreement is qualified in its entirety by reference to the complete text of the Shareholder Agreement, a copy of the form of which is filed as an exhibit to the Schedule TO and is incorporated by reference in this Offer to Purchase. You may examine or obtain a copy of the form of Shareholder Agreement by following the procedures described in Section 7 -- "Certain Information Concerning the Company." Each Shareholder has agreed to tender 90% of his/its Shares (the "Agreement Shares") into the Offer. In addition, each Shareholder has agreed not to transfer, sell, offer, pledge or otherwise dispose of or encumber any of the Agreement Shares until the effective date of the Merger or the date the Shareholder Agreement is terminated. 28 32 Each Shareholder has also agreed to irrevocably appoint Parent or any designee of Parent the lawful agent, attorney, and proxy of the Shareholder, to (a) vote the Agreement Shares in favor of the Merger, (b) vote the Agreement Shares against any action or agreement that would result in a breach in any material aspect of any covenant, representation, or warranty or any other obligation or agreement of the Company under the Merger Agreement; and (c) vote the Agreement Shares against any action or agreement that would impede, interfere with, delay, postpone, or attempt to discourage the Merger, including, but not limited to: (i) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company, (ii) a sale or transfer of a material amount of the assets of the Company or a reorganization, recapitalization, or liquidation of the Company, (iii) any change in the management or board of directors of the Company, except as otherwise agreed to in writing by Parent, (iv) any change in the present capitalization or dividend policy of the Company; or (v) any other change in the Company's corporate structure. In the event that Parent or its designee is unable to exercise the power and authority granted in the proxy described above for any reason, each Shareholder has agreed to vote all of the Agreement Shares (i) in favor of the Merger Agreement, as amended from time to time, and the Merger or any transactions contemplated by the Merger Agreement at any meetings of the Company's shareholders held to consider the Merger Agreement, (ii) against any other proposal for any recapitalization, merger, sale of assets, or other business combination between the Company and any person or entity other than Parent or which would result in any of the conditions to Parent's obligations under the Merger Agreement not being fulfilled, and (iii) as otherwise necessary or appropriate to enable Parent to consummate the transactions contemplated by the Merger Agreement. Each Shareholder also irrevocably granted to Parent an option to purchase his/its Agreement Shares at the same purchase price per share provided for in the Merger Agreement. Parent can exercise this option, in whole and not in part, at any time (i) after the later of the date the Offer is commenced and the termination or expiration of the waiting period under the HSR Act, but (ii) before October 31, 2000. Each Shareholder has made certain representations and warranties in the Shareholder Agreement, including with respect to (i) ownership of his/its Shares and his/its Agreement Shares, (ii) the authority to enter into and perform his/its obligations under such Shareholder Agreement and the absence of required consents and statutory or contractual conflicts or violations, and (iii) the absence of liens or any other encumbrances on or in respect of his/its Shares and his/its Agreement Shares. The Shareholder Agreement, and all rights and obligations under the Shareholder Agreement, terminates upon the earlier of (a) the successful consummation of the Merger, (b) the written agreement of all of the parties to terminate, or (c) the termination of the Merger Agreement. EMPLOYMENT AGREEMENT In connection with the transactions contemplated by the Merger Agreement, Parent entered into an employment agreement (the "Employment Agreement") with Robert Huth, effective as of the closing date of the Merger. A copy of the Employment Agreement is filed as an exhibit to the Schedule TO and is incorporated herein by reference, and the following summary is qualified in its entirety by reference to such agreement. The Employment Agreement provides that Parent will employ Mr. Huth as the president and chief executive officer of David's Bridal, Inc. for a term that commences on the closing date of the Merger and ends on April 30, 2004. The Employment Agreement provides that, after the closing date of the Merger, Mr. Huth will - receive a base salary of $600,000 per year, subject to annual review, - become eligible for a bonus for fiscal 2000 on the basis of the Company's current bonus plan and will be eligible for annual and long-term bonuses in future years under Parent's bonus plan for executives in positions comparable to his, and 29 33 - be granted shares of Parent's restricted common stock and options to purchase Parent's common stock. The Employment Agreement also provides that Mr. Huth will not compete with Parent during the term of the Employment Agreement and for a period of two years following termination of his employment with Parent. 12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY. Purpose of the Offer. The purpose of the Offer is for Parent to acquire control of, and the entire equity interest in, the Company. The purpose of the Merger is for Parent to acquire all outstanding Shares not tendered and purchased pursuant to the Offer. If the Offer is successful, the Purchaser intends to consummate the Merger as promptly as practicable. The Company Board has approved the Merger and the Merger Agreement. Depending upon the number of Shares purchased by the Purchaser pursuant to the Offer, the Company Board may be required to submit the Merger Agreement to the Company's shareholders for approval at a shareholder's meeting convened for that purpose in accordance with the FBCA. If shareholder approval is required, the Merger Agreement must be approved by a majority of all votes entitled to be cast at such meeting. If the Minimum Condition is satisfied, the Purchaser will have sufficient voting power to approve the Merger Agreement without the affirmative vote of any other shareholder. If the Purchaser acquires at least 80% of the then outstanding Shares pursuant to the Offer, the Purchaser will be able to adopt the Merger Agreement without a shareholder meeting and without the approval of the Company's shareholders. See Section 16 -- "Certain Legal Matters; Regulatory Approvals". The Merger Agreement provides that the Purchaser will be merged into the Company and that the articles of incorporation and bylaws of the Company will be the articles of incorporation and bylaws of the Surviving Corporation following the Merger. Under the FBCA, holders of Shares do not have dissenters' rights as a result of the Offer. In connection with the Merger, however, shareholders of the Company may have the right to dissent and demand appraisal of their Shares pursuant to the Merger Agreement and/or under the FBCA. Dissenting shareholders who comply with the applicable statutory procedures under the FBCA will be entitled to receive a judicial determination of the fair value of their Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) and to receive payment of such fair value in cash. Any such judicial determination of the fair value of the Shares could be based upon considerations other than or in addition to the price per Share paid in the Merger and the market value of the Shares. Shareholders should recognize that the value so determined could be higher or lower than the price per Share paid pursuant to the Offer or the consideration per Share to be paid in the Merger. Moreover, the Purchaser may argue in an appraisal proceeding that, for purposes of such a proceeding, the fair value of the Shares is less than the price paid in the Offer or the Merger. Plans for the Company. Pursuant to the terms of the Merger Agreement, promptly upon the purchase of and payment for any Shares pursuant to the Offer, Parent currently intends to seek maximum representation on the Company Board, subject to the requirement in the Merger Agreement that if Shares are purchased pursuant to the Offer, until the Effective Time neither Parent nor the Purchaser will take any action that would cause the Company Board to include fewer than two members who were directors as of the date of the Merger Agreement and who are not employees of the Company. The Purchaser currently intends, as soon as practicable after consummation of the Offer, to consummate the Merger. Except as otherwise provided herein, it is expected that, initially following the Merger, the business and operations of the Company will, except as set forth in this Offer to Purchase, be continued substantially as they are currently being conducted. Parent will continue to evaluate the business and operations of the Company during the pendency of the Offer and, after the consummation of the Offer and the Merger, will take such actions as it deems appropriate under the circumstances then existing. Parent intends to seek additional information about the Company during this period. Thereafter, Parent intends to review such information as 30 34 part of a comprehensive review of the Company's business, operations, capitalization and management with a view to optimizing development of the Company's potential in conjunction with Parent's business. Except as described above or elsewhere in this Offer to Purchase, the Purchaser and Parent have no present plans or proposals that would relate to or result in (i) any extraordinary corporate transaction involving the Company or any of its subsidiaries (such as a merger, reorganization, liquidation, relocation of any operations or sale or other transfer of a material amount of assets), (ii) any sale or transfer of a material amount of assets of the Company or any of its subsidiaries, (iii) any change in the Company Board or management of the Company, (iv) any material change in the Company's capitalization or dividend policy, (v) any other material change in the Company's corporate structure or business, (vi) a class of securities of the Company being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association or (vii) a class of equity securities of the Company being eligible for termination of registration pursuant to Section 12(g) of the Exchange Act. 13. CERTAIN EFFECTS OF THE OFFER. MARKET FOR THE SHARES. The purchase of Shares pursuant to the Offer will reduce the number of holders of Shares and the number of Shares that might otherwise trade publicly. This could adversely affect the liquidity and market value of the remaining Shares held by the public. The Purchaser cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for, or marketability of, the Shares or whether it would cause future market prices to be greater or less than the Offer Price. STOCK QUOTATION. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the standards for continued listing on NASDAQ, which among other things require that an issuer have either - at least 750,000 publicly held shares, held by at least 400 shareholders of round lots, with an aggregate market value of at least $5,000,000, net tangible assets of at least $4,000,000, a minimum bid price of at least $1 per Share, and at least two registered and active market makers providing quotations for the shares, or - at least 1,100,000 publicly held shares, held by at least 400 shareholders of round lots, with an aggregate market value of at least $15,000,000, a minimum bid price of at least $5 per share and either (x) a market capitalization of at least $50,000,000 or (y) total assets and total revenue of at least $50,000,000 each for the most recently completed fiscal year or two of the last three most recently completed fiscal years and at least four registered and active market markers providing quotations for the Shares. If neither of the foregoing standards is met, the Shares would no longer be listed on NASDAQ. Shares held directly or indirectly by directors, officers or beneficial owners of more than 10% of the Shares are not considered as being publicly held for this purpose. If NASDAQ were to delist the Shares, it is possible that the Shares would continue to trade on another securities exchange or otherwise in the over-the-counter market and that price or other quotations would be reported by such exchange or through other sources. The extent of the public market for such Shares and the availability of such quotations would depend, however, upon such factors as the number of shareholders and/ or the aggregate market value of such securities remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act as described below and other factors. MARGIN REGULATIONS. The Shares are currently "margin securities" under the Regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares. Depending upon factors similar to those described above regarding the market for the Shares and stock quotations, it is possible that, following the Offer, the Shares would no longer constitute "margin securities" for the purposes of the margin 31 35 regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers. EXCHANGE ACT REGISTRATION. The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application of the Company to the SEC if the Shares are not held by 300 or more holders of record. Termination of registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to its shareholders and to the SEC and would make certain provisions of the Exchange Act no longer applicable to the Company, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with shareholders' meetings and the related requirement of furnishing an annual report to shareholders and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions. Furthermore, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired or eliminated. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be "margin securities" or be eligible for trading on NASDAQ. Parent and the Purchaser currently intend to seek to cause the Company to terminate the registration of the Shares under the Exchange Act as soon after consummation of the Offer as the requirements for termination of registration are met. 14. DIVIDENDS AND DISTRIBUTIONS. As discussed in Section 11 of this Offer to Purchase, the Merger Agreement provides that from the date of the Merger Agreement to the Effective Time, the Company will not and will not permit any of its subsidiaries to declare, set aside or pay any dividends or other distribution payable in cash, stock or property with respect to its capital stock (other than issuances pursuant to Employee Stock Options and Company benefit plans obligations which are outstanding on the date of the Merger Agreement). 15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer, the Merger Agreement provides that the Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act (relating to the Purchaser's obligation to pay for or return Shares promptly after termination or withdrawal of the Offer), pay for, and may postpone the acceptance for payment of and payment for Shares tendered, and, except as set forth in the Merger Agreement, terminate the Offer as to any Shares not then paid for if (1) the Minimum Condition shall not have been satisfied at the Expiration Date, (2) any applicable waiting period under the HSR Act shall not have expired or been terminated, or (3) immediately prior to the expiration of the Offer, any of the following conditions shall exist: (a) there shall have been entered, enforced or issued by any court, arbitral tribunal, administrative agency or commission, or other governmental or other regulatory authority, agency or official (a "Governmental Entity"), any judgment, order, injunction or decree (i) which makes illegal, restrains or prohibits or makes materially more costly the making of the Offer, the acceptance for payment of, or payment for, any Shares by Parent, the Purchaser or any other affiliate of Parent, or the consummation of the Merger transaction; (ii) which prohibits or limits materially the ownership or operation by the Company, Parent or any of their affiliates of all or any material portion of the business or assets of the Company, Parent or any of their affiliates, or compels the Company, Parent or any of their affiliates to dispose of or hold separate all or any portion of the business or assets of the Company, Parent or any of their affiliates; (iii) which imposes or confirms limitations on the ability of Parent, the Purchaser or any other affiliate of Parent to exercise full rights of ownership of any Shares, including, without limitation, the right to vote any Shares acquired by the Purchaser pursuant to the Offer or otherwise on all matters properly presented to the Company's shareholders, including, without limitation, the approval and adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement; (iv) which requires divestiture by Parent, the Purchaser or any other affiliate of Parent of any Shares; or (v) which otherwise would have a Material Adverse Effect on the Company to the extent that it relates to or arises out of the transactions contemplated by the Merger 32 36 Agreement or Parent, except in the case of clauses (i) through (v), where such events are consistent with or result from Parent's, the Purchaser's and the Company's obligations described under "The Merger Agreement -- Further Action; Reasonable Best Efforts" in Section 11; (b) there shall have been any statute, rule, regulation, legislation or interpretation enacted, enforced, promulgated, amended or issued by any Governmental Entity or deemed by any Governmental Entity applicable to (i) Parent, the Company or any subsidiary or affiliate of Parent or the Company or (ii) any transaction contemplated by the Merger Agreement, other than the HSR Act, which is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above, except where such events are consistent with or result from Parent's, the Purchaser's and the Company's obligations described under "The Merger Agreement -- Further Action; Reasonable Best Efforts" in Section 11; (c) there shall have occurred any changes, conditions, events or developments that would have, or be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company and its subsidiaries taken as a whole; (d) there shall have occurred (i) any general suspension of, or limitation on prices for, trading in securities on the NYSE or NASDAQ other than a shortening of trading hours or any coordinated trading halt triggered solely as a result of a specified increase or decrease in a market index, (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) any limitation (whether or not mandatory) on the extension of credit by banks or other lending institutions in the United States, (iv) the commencement of a war, material armed hostilities or any other material international or national calamity involving the United States or (v) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; (e)(i) it shall have been publicly disclosed or the Purchaser shall have otherwise learned that any individual, corporation, partnership, association, trust or any other entity or organization, other than Parent or any of its affiliates, shall have acquired or entered into a definitive agreement or agreement in principle to acquire beneficial ownership (determined for the purposes of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of the then outstanding Shares, or shall have been granted any option, right or warrant, conditional or otherwise, to acquire beneficial ownership of 50% or more of the then outstanding Shares, or (ii) the Company Board or any committee thereof shall have (A) withdrawn, modified or changed, in a manner adverse to Parent or the Purchaser, the recommendation by such Company Board or such committee of the Offer, the Merger or the Merger Agreement, (B) approved or recommended, or proposed publicly to approve or recommend an Acquisition Proposal, (C) caused the Company to enter into any Acquisition Agreement relating to any Acquisition Proposal, or (D) resolved to do any of the foregoing; (f) the representations and warranties of the Company set forth in the Merger Agreement shall not be true and correct, individually or in the aggregate with other representations and warranties of the Company in the Merger Agreement, without regard to any qualification or limitation contained in or related to any such representation or warranty relating to Material Adverse Effect, in a manner having a Material Adverse Effect on Company and its subsidiaries, taken as a whole, in each case, as if such representations or warranties were made as of such time on or after the date of the Merger Agreement (except to the extent that such representations and warranties speak as of a specific date or as of the date of the Merger Agreement, in which case such representations and warranties shall not be so true and correct in a manner having a Material Adverse Effect on the Company and its subsidiaries, taken as a whole, as of such specific date or as of the date of the Merger Agreement, respectively); (g) the Company shall have failed to perform in any material respect any material obligation or to comply in any material respect with any material agreement or covenant of the Company to be performed or complied with by it under the Merger Agreement; (h) the Merger Agreement shall have been terminated in accordance with its terms; or (i) the Purchaser and the Company shall have agreed that the Purchaser shall terminate the Offer or postpone the acceptance for payment of or payment for Shares under the Offer; which, in the reasonable good 33 37 faith judgment of Parent in any such case, and regardless of the circumstances (including any action or inaction by Parent or any of its affiliates) giving rise to any such condition, makes it inadvisable to proceed with such acceptance for payment or payment. The foregoing conditions are for the benefit of the Purchaser and Parent and may be asserted by the Purchaser or Parent regardless of the circumstances giving rise to any such condition or may be waived by the Purchaser or Parent in whole or in part at any time and from time to time in their sole and absolute discretion. The failure by Parent or the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and other circumstances shall not be deemed a waiver with respect to any other facts and circumstances; and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. 16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. GENERAL. The Purchaser is not aware of any pending legal proceeding relating to the Offer. Except as described in this Section 16, based on its examination of publicly available information filed by the Company with the SEC and other publicly available information concerning the Company, the Purchaser is not aware of any governmental license or regulatory permit that appears to be material to the Company's business that might be adversely affected by the Purchaser's acquisition of Shares pursuant to the Offer, or of any approval or other action by any governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Shares by the Purchaser or Parent pursuant to the Offer. Should any such approval or other action be required, the Purchaser currently contemplates that, except as described below under "State Takeover Statutes", such approval or other action will be sought. While the Purchaser does not currently intend to delay acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that if such approvals were not obtained or such other actions were not taken, adverse consequences might not result to the Company's business, or certain parts of the Company's business might not have to be disposed of, any of which could cause the Purchaser to elect to terminate the Offer without the purchase of Shares thereunder under certain conditions. See Section 15 -- "Certain Conditions of the Offer". STATE TAKEOVER STATUTES. A number of states have adopted laws that purport, to varying degrees, to apply to attempts to acquire corporations that are incorporated in, or that have substantial assets, shareholders, principal executive offices or principal places of business or whose business operations otherwise have substantial economic effects in, such states. The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted such laws. In Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana could, as a matter of corporate law, constitutionally disqualify a potential acquirer from voting shares of a target corporation without the prior approval of the remaining shareholders where, among other things, the corporation is incorporated in, and has a substantial number of shareholders in, the state. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal District Court in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as they apply to corporations incorporated outside Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a Federal District Court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. Affiliated Transaction Statute. Because the Company is incorporated under the laws of the State of Florida, it is subject to Section 607.0901 (the "Affiliated Transactions Statute") of the FBCA. The Affiliated Transactions Statute generally prohibits a Florida corporation from engaging in an "affiliated transaction" with an "interested shareholder," unless the affiliated transaction is approved by a majority of the disinterested directors or by the affirmative vote of the holders of two-thirds of the voting shares other than the shares 34 38 beneficially owned by the interested shareholder, the corporation has not had more than 300 shareholders of record at any time for three years prior to the public announcement relating to the affiliated transaction, or the corporation complies with certain statutory fair price provisions. Subject to certain exceptions, under the FBCA an "interested shareholder" is a person who beneficially owns more than 10% of the corporation's outstanding voting shares. In general terms, an "affiliated transaction" includes: (i) any merger or consolidation with an interested shareholder; (ii) the transfer to any interested shareholder of corporate assets with a fair market value equal to 5% or more of the corporation's consolidated assets or outstanding shares or representing 5% or more of the corporation's earning power or net income; (iii) the issuance to any interested shareholder of shares with a fair market value equal to 5% or more of the aggregate fair market value of all outstanding shares of the corporation; (iv) any reclassification of securities or corporate reorganization that will have the effect of increasing by more than 5% the percentage of the corporation's outstanding voting shares beneficially owned by any interested shareholder; (v) the liquidation or dissolution of the corporation if proposed by any interested shareholder; and (vi) any receipt by the interested shareholder of the benefit of any loans, advances, guaranties, pledges or other financial assistance or any tax credits or other tax advantages provided by or through the corporation. Because a majority of the disinterested directors of the Company Board has approved the Merger Agreement and the Shareholder Agreements and the transactions contemplated by those agreements, the provisions of the Affiliated Transactions Statute are not applicable to the Offer and the Merger and other such transactions. Control Share Acquisition Statute. The Company also may be subject to Section 607.0902 of the FBCA (the "Control Share Acquisition Statute"). The Control Share Acquisition Statute provides that shares of publicly held Florida corporations that are acquired in a "control share acquisition" generally will have no voting rights unless such rights are conferred on those shares by the vote of the holders of a majority of all the outstanding shares other than interested shares. A control share acquisition is defined, with certain exceptions, as the acquisition of the ownership of voting shares which would cause the acquirer to have voting power within the following ranges or to move upward from one range into another: (i) 20%, but less than 33 1/3%; (ii) 33 1/3%, but less than 50%; or (iii) 50% or more of such votes. The Control Share Acquisition Statute does not apply to an acquisition of shares of a publicly held Florida corporation (i) pursuant to a merger or share exchange effected in compliance with the FBCA if the publicly held Florida corporation is a party to the merger or share exchange agreement, or (ii) if such acquisition has been approved by the board of directors of that corporation before the acquisition. Because the Control Share Acquisition Statute specifically exempts a merger effected in compliance with the FBCA if the publicly held Florida corporation is a party to the merger agreement and the acquisition has been approved by the board of directors of the target corporation before the acquisition, the provisions of the Control Share Acquisition Statute are not applicable to the Offer or the Merger. At the July 2, 2000 meeting of the Company Board, the Company Board, by unanimous vote of all directors present, approved the acquisition of the Agreement Shares pursuant to the Shareholder Agreements. If any government official or third party should seek to apply any state takeover law to the Offer or the Merger or other business combination between the Purchaser or any of its affiliates and the Company, the Purchaser will take such action as then appears desirable, which action may include challenging the applicability or validity of such statute in appropriate court proceedings. In the event that it is asserted that one or more state takeover statutes is applicable to the Offer or the Merger and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities or holders of Shares, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer or the Merger. In such case, the Purchaser may not be obligated to accept for payment or pay for any tendered Shares. See Section 15 -- "Certain Conditions of the Offer". 35 39 SHORT-FORM MERGER. Section 607.1104 of the FBCA provides that, if the parent corporation owns at least 80% of the outstanding shares of each class of the subsidiary corporation, the merger into the subsidiary corporation of the parent corporation may be effected by a plan of merger adopted by the board of directors of the parent corporation and the appropriate filings with the Florida Department of State, without the approval of the shareholders of the subsidiary corporation (a "short-form merger"). Under the FBCA, if the Purchaser acquires at least 80% of the outstanding Shares, the Purchaser will be able to effect the Merger without a vote of the other shareholders of the Company. In such event, the Company has agreed in the Merger Agreement to take, at the request of Purchaser, all necessary and appropriate action to cause the Merger to become effective after such acquisition without a meeting of the Company's shareholders. UNITED STATES ANTITRUST COMPLIANCE. Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (the "FTC"), certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the FTC and certain waiting period requirements have been satisfied. The purchase of Shares pursuant to the Offer is subject to such requirements. Pursuant to the requirements of the HSR Act, the Purchaser filed a Notification and Report Form with respect to the Offer and Merger with the Antitrust Division and the FTC on or about July 10, 2000. As a result, the waiting period applicable to the purchase of Shares pursuant to the Offer is scheduled to expire at 11:59 p.m., New York City time, 15 days after such filing. However, prior to such time, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material relevant to the Offer from the Purchaser. If such a request is made, the waiting period will be extended until 11:59 p.m., New York City time, on the tenth day after substantial compliance by the Purchaser with such request. Thereafter, such waiting period can be extended only by court order. The Antitrust Division and the FTC both scrutinize the legality under the antitrust laws of transactions such as the acquisition of Shares by the Purchaser pursuant to the Offer. At any time before or after the consummation of any such transactions, the Antitrust Division or the FTC could take such action under the antitrust laws of the United States as it deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or seeking divestiture of the Shares so acquired or divestiture of substantial assets of Parent or the Company. Private parties (including individual States) may also bring legal actions under the antitrust laws of the United States. The Purchaser does not believe that the consummation of the Offer will result in a violation of any applicable antitrust laws. However, there can be no assurance that a challenge to the Offer on antitrust grounds will not be made, or if such a challenge is made, what the result will be. See Section 15, including conditions with respect to litigation and certain governmental actions and Section 11 for certain termination rights. 17. DISSENTERS' RIGHTS. If the Merger is consummated, shareholders of the Company may have the right to dissent and demand appraisal of their Shares pursuant to the Merger Agreement and/or under the FBCA. Under the FBCA, dissenting shareholders who comply with the applicable statutory procedures will be entitled to receive a judicial determination of the fair value of their Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) and to receive payment of such fair value in cash, together with a fair rate of interest, if any. Any such judicial determination of the fair value of the Shares could be based upon considerations other than or in addition to the Offer Price, the consideration per Share to be paid in the Merger and the market value of the Shares, including asset values and the investment value of the Shares. Shareholders should recognize that the value so determined could be higher or lower than the price per Share paid pursuant to the Offer or the consideration per Share to be paid in the Merger. 18. FEES AND EXPENSES. Morgan Stanley is acting as the Dealer Manager in connection with the Offer and has provided certain financial advisory services to the Parent in connection with the acquisition of the Company. Morgan Stanley will receive reasonable and customary compensation for its services. In addition, Parent will reimburse 36 40 Morgan Stanley for certain expenses it incurs in providing its services. Parent has agreed to indemnify Morgan Stanley and certain related persons against certain liabilities and expenses in connection with its engagement, including certain liabilities under the federal securities laws. Parent and the Purchaser have retained D.F. King & Co., Inc. to be the Information Agent and The Bank of New York to be the Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telecopy, telegraph and personal interview and may request banks, brokers, dealers and other nominees to forward materials relating to the Offer to beneficial owners of Shares. The Information Agent and the Depositary each will receive reasonable and customary compensation for their respective services in connection with the Offer, will be reimbursed for reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under federal securities laws. Neither Parent nor the Purchaser will pay any fees or commissions to any broker or dealer or to any other person (other than to the Dealer Manager) in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by the Purchaser for customary mailing and handling expenses incurred by them in forwarding offering materials to their customers. 19. MISCELLANEOUS. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. However, the Purchaser may, in its discretion, take such action as it may deem necessary to enable it to make the Offer in any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. Parent and the Purchaser have filed with the SEC a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, together with exhibits furnishing certain additional information with respect to the Offer, and may file amendments thereto. In addition, the Company has filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9, together with exhibits, pursuant to Rule 14d-9 under the Exchange Act, setting forth the recommendation of the Company Board with respect to the Offer and the reasons for such recommendation and furnishing certain additional related information. A copy of such documents, and any amendments thereto, may be examined at, and copies may be obtained from, the SEC (but not the regional offices of the SEC) in the manner set forth under Section 7 above. ALPHA OMEGA ACQUISITION, INC. July 10, 2000 37 41 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER 1. DIRECTORS AND EXECUTIVE OFFICERS OF MAY The following table sets forth the name, age as of the date of this Offer to Purchase, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each director and executive officer of May. Unless otherwise indicated, the current business address of each person is 611 Olive Street, St., Louis, Missouri 63101. Unless otherwise indicated, each person is a citizen of the United States of America and each occupation set forth opposite an individual's name refers to employment with May.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME, AGE AND BUSINESS ADDRESS DURING THE PAST FIVE YEARS - ------------------------------ -------------------------------------------------------------- John L. Dunham, 53 Director since 1997. Vice chairman and chief financial officer since November, 1999. He joined May in 1976, serving in a number of senior positions at operating divisions. He became chairman of May Merchandising Company in 1993. He became executive vice president and chief financial officer in May 1996. Marsha J. Evans, 52 Director since 1998. National executive director of Girl Girl Scouts of the U.S.A. Scouts of the U.S.A. since 1998. She served with the United 420 Fifth Avenue States Navy for 29 years, where she was commissioned Ensign in New York, New York 10018 1968, attaining the designation of Rear Admiral before retiring in 1998. Prior to retirement, she served as superintendent of the Naval Post Graduate School in Monterey, California, and as director of the George C. Marshall European Center for Security Studies. Eugene S. Kahn, 50 Director since 1996. President and chief executive officer since May, 1998. He joined May in 1990 as president and chief executive officer of its G. Fox division. He became president and chief executive officer of the Filene's division in 1992. He became vice chairman of May in March 1996 and was appointed executive vice chairman in June 1997. Helene L. Kaplan, 67 Director since 1985. Of counsel to the law firm of Skadden, Skadden, Arps, Slate, Meagher & Flom Arps, Slate, Meagher & Flom LLP since 1990. She is a director LLP of Bell Atlantic Corporation, Chase Manhattan Corporation, Four Times Square ExxonMobil Corporation, and Metropolitan Life Insurance New York, New York 10036 Company. Mrs. Kaplan also serves as a trustee or director of many nonprofit cultural, educational and scientific organizations. James M. Kilts, 52 Director since 1998. President and chief executive officer of Nabisco, Inc. Nabisco, Inc. Prior to assuming his present position in 1998, 7 Campus Drive he held several positions with Philip Morris Companies, Inc., Parsippany, New Jersey 07054 including president of Kraft Foods U.S.A. from 1989 to 1994 and executive vice president from 1994 to 1997. Mr. Kilts serves on the boards of Nabisco, Inc., Knox College, the Grocery Manufacturers of America, and Whirlpool Corporation.
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PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME, AGE AND BUSINESS ADDRESS DURING THE PAST FIVE YEARS - ------------------------------ -------------------------------------------------------------- Jerome T. Loeb, 59 Director since 1984. Chairman of the board since May, 1998. He joined May in 1964 and held various positions at Famous-Barr, Hecht's, and the corporate office until 1981 when he was appointed executive vice president and chief financial officer of May. He was named vice chairman in 1986 and president in 1993. Russell E. Palmer, 65 Director since 1984. Chairman and chief executive officer of The Palmer Group The Palmer Group, a corporate investment firm. He is the 3600 Market Street, Suite 530 retired managing director and chief executive officer of Philadelphia, Pennsylvania 19104 Touche Ross International and the retired Dean of The Wharton School and Reliance Professor of Management and Private Enterprise at the University of Pennsylvania. He is also a director of Freddie Mac, GTE Corporation, Honeywell International, and Safeguard Scientifics, Inc. William D. Perez, 52 Director since 1998. President and chief executive officer of S.C. Johnson & Son, Inc. S.C. Johnson and Son, Inc. He joined S.C. Johnson and Son in 1525 Howe Street, Mail Station #78 1970 and served as president and chief operating officer of Racine, Wisconsin 53403 its worldwide consumer products division from 1993 to 1997, when he assumed his present position. He is also a director of S.C. Johnson and Son, Inc., Hallmark Cards, Kellogg Company, and the Grocery Manufacturers of America. Michael R. Quinlan, 55 Director since 1993. Chairman of the executive committee of McDonald's Corporation McDonald's Corporation. He joined McDonald's in 1963 and Kroc Drive served as chief executive officer from 1987 to 1998 and as Oak Brook, Illinois 60523 chairman from 1990 to 1999. He is also a director of Dun & Bradstreet Corporation and Catalyst, a nonprofit organization, and a member of the board of trustees of Ronald McDonald Children's Charities and Loyola University of Chicago. William P. Stiritz, 66 Director since 1983. Chairman of the board, chief executive Agribrands International, Inc. officer and president of Agribrands International, Inc. He 9811 South Forty Drive served as chief executive officer of Ralston Purina Company St. Louis, Missouri 63124 until 1997, and continues to serve as chairman of its board of directors. He is also a director of American Freightways, Angelica Corporation, Ball Corporation, Ralcorp Holdings, Inc., Reinsurance Group of America, Inc., and Vail Resorts, Inc. Robert D. Storey, 64 Director since 1989. Partner in the law firm of Thompson, Hine Thompson, Hine & Flory LLP & Flory LLP, in Cleveland, Ohio since 1993. He is also a 3900 Key Center director of GTE Corporation and The Procter & Gamble Company, 127 Public Square and a trustee of the Kresge Foundation, the George Gund Cleveland, OH 44114-1216 Foundation, Case Western Reserve University, and Spelman College. Anthony J. Torcasio, 54 Director since 1996. Vice chairman since May, 1997. He joined May in 1969. He held a serving in a number of senior positions at operating divisions. He served as president of May Merchandising Company from 1993 to 1998 and as chief executive officer of May Merchandising Company from 1993 to February 2000.
S-2 43
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME, AGE AND BUSINESS ADDRESS DURING THE PAST FIVE YEARS - ------------------------------ -------------------------------------------------------------- Edward E. Whitacre, Jr., 58 Director since 1989. Chairman of the board and chief executive SBC Communications Inc. officer of SBC Communications, Inc. since January 1990. He is 175 East Houston, Suite 1300 a director of Anheuser-Busch Companies, Inc., Burlington San Antonio, Texas 78205 Northern Santa Fe Corporation, and Emerson Electric Co. R. Dean Wolfe, 56 Director since 1997. Executive vice president of acquisitions and real estate since 1996. He joined May in 1972 and served as executive vice president of real estate from 1986 to 1996. Richard W. Bennet, III, 47 Vice Chairman since February, 2000. He served as president and chief executive officer of Famous-Barr from 1995 to 1997 and as president and chief executive officer of Kaufmann's from 1997 through January, 2000. Richard A. Brickson, 52 Secretary and senior counsel since 1988. Alan E. Charlson, 51 Senior Vice President and chief counsel since 1998. He served as senior counsel from 1988 to 1998. Michael G. Culhane, 38 Vice president since 1998. He served in a financial position for May from 1997 to 1998. He was associated with the accounting firm of Arthur Andersen LLP from 1984 to 1997. Martin M. Doerr, 45 Senior vice president since September, 1999. He served as vice president from 1992 through August, 1999. William D. Edkins, 47 Senior vice president since 1990. Thomas D. Fingleton, 53 Executive vice president of finance and operations since May, 2000. He joined May in 1978, serving in a number of senior positions at operating divisions. He served as chairman of Hecht's from 1991 through May 14, 2000. Judith K. Hofer, 60 President and chief executive officer of May Merchandising Company since February, 2000. She served as president and chief executive officer of Meier & Frank from 1988 to 1996, as president and chief executive officer of Filene's from 1996 to 1999 and as chief executive officer of Filene's from 1999 through January, 2000. Lonny J. Jay, 58 Senior vice president since 1986. Jan R. Kniffen, 51 Senior vice president since 1991. William P. McNamara, 49 Vice Chairman since February, 2000. He served as senior vice president and general merchandise manager for May Merchandising Company from 1995 to 1997, as president and chief executive officer of Famous-Barr from 1997 to 1998 and as president of May Merchandising Company form 1998 through January, 2000.
S-3 44 2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The following table sets forth the name, age as of the date of this Offer to Purchase, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each director and executive officer of the Purchaser. Unless otherwise indicated, the current business address of each person is 611 Olive Street, St., Louis, Missouri 63101. Unless otherwise indicated, each person is a citizen of the United States of America and each occupation set forth opposite an individual's name refers to employment with May.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS NAME, AGE AND BUSINESS ADDRESS DURING THE PAST FIVE YEARS - ------------------------------ -------------------------------------------------------------- Richard A. Brickson, 52 See Part 1 of this Schedule I. Alan E. Charlson, 51 See Part 1 of this Schedule I. Martin M. Doerr, 45 See Part 1 of this Schedule I. Jan R. Kniffen, 51 See Part 1 of this Schedule I.
S-4 45 Manually signed facsimile copies of the Letter of Transmittal, properly completed and duly executed, will be accepted. Letters of Transmittal and certificates for Shares and any other required documents should be sent or delivered by each shareholder of the Company or his or her broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of its addresses set forth below: THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK BY MAIL: BY HAND/OVERNIGHT COURIER: BY FACSIMILE TRANSMISSION Tender & Exchange Department Tender & Exchange Department (FOR ELIGIBLE INSTITUTIONS P.O. Box 11248 101 Barclay Street ONLY): Church Street Station Receive and Deliver Window (212) 815-6213 New York, New York 10286-1248 New York, New York, 10286 TO CONFIRM FAX ONLY: (212) 815-6156
Any questions or requests for assistance may be directed to the Information Agent at its address and telephone numbers set forth below. Requests for additional copies of this Offer to Purchase, the Letter of Transmittal, and the Notice of Guaranteed Delivery may be directed to the Information Agent or the Depositary. Shareholders may also contact their brokers, dealers, commercial banks, trust companies or other nominees for assistance concerning the Offer. THE INFORMATION AGENT FOR THE OFFER IS: D. F. KING & CO., INC. 77 Water Street New York, New York 10005-4495 Banks and Brokers Call Collect: (212) 269-5550 All Others Call Toll Free: (888) 460-7637 THE DEALER MANAGER FOR THE OFFER IS: MORGAN STANLEY DEAN WITTER Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 (212) 761-7310 EX-99.(A)(2) 3 ex99-a2.txt LETTER OF TRANSMITTAL 1 EXHIBIT 99(a)(2) Letter of Transmittal to Tender Shares of Common Stock of David's Bridal, Inc. Pursuant to the Offer to Purchase dated July 10, 2000 by Alpha Omega Acquisition, Inc., a wholly owned subsidiary of The May Department Stores Company THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 7, 2000, UNLESS THE OFFER IS EXTENDED. THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT COURIER: (FOR ELIGIBLE INSTITUTIONS Tender & Exchange Department ONLY): Tender & Exchange Department P.O. Box 11248 (212) 815-6213 101 Barclay Street Church Street Station TO CONFIRM FAX ONLY: Receive and Deliver Window New York, New York 10286 (212) 815-6156 New York, New York 10286
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE COPY NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
- ------------------------------------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED - ------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY) - ------------------------------------------------------------------------------------------------------------- TOTAL NUMBER OF SHARES SHARE EVIDENCED BY NUMBER CERTIFICATE SHARE OF SHARES NUMBER(S)* CERTIFICATE(S)* TENDERED** ------------------------------------------- ------------------------------------------- ------------------------------------------- ------------------------------------------- ------------------------------------------- TOTAL SHARES - ------------------------------------------------------------------------------------------------------------- * Need not be completed by shareholders delivering Shares by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to the Depositary are being tendered hereby. See Instruction 4. - -------------------------------------------------------------------------------------------------------------
2 This Letter of Transmittal is to be completed by shareholders of David's Bridal, Inc. either if certificates evidencing Shares (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if tenders of Shares are to be made by book-entry transfer to an account maintained by the Depositary at the Book-Entry Transfer Facility (as defined in and pursuant to the procedures set forth in Section 3 of the Offer to Purchase). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Holders of Shares whose certificates evidencing Shares ("Share Certificates") are not immediately available or who cannot deliver their Share Certificates and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase) or who cannot complete the procedure for delivery by book-entry transfer on a timely basis and who wish to tender their Shares must do so pursuant to the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. See Instruction 2. [ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: --------------------------------------------------------- Account Number: ------------------------------------------------------------------- Transaction Code Number: ------------------------------------------------------------ [ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): ------------------------------------------------------- Window Ticket No. (if any): ----------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: ------------------------------------------ Name of Institution that Guaranteed Delivery: ---------------------------------------------- If delivery is by book-entry transfer, give the following information: Account Number: ------------------------------------------------------------------- Transaction Code Number: ------------------------------------------------------------ 3 NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to Alpha Omega Acquisition, Inc., a Florida corporation ("Purchaser") and a wholly owned subsidiary of The May Department Stores Company, a Delaware corporation, the above-described shares of common stock, par value $0.01 per share ("Shares"), of David's Bridal, Inc., a Florida corporation (the "Company"), pursuant to Purchaser's offer to purchase all Shares at $20.00 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 10, 2000 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, together with the Offer to Purchase and any amendments or supplements hereto or thereto, collectively constitute the "Offer"). The undersigned understands that Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates the right to purchase all or any portion of Shares tendered pursuant to the Offer. Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of any such extension or amendment), and subject to, and effective upon, acceptance for payment of Shares tendered herewith, in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to or upon the order of Purchaser all right, title and interest in and to all Shares that are being tendered hereby and all dividends, distributions (including, without limitation, distributions of additional Shares) and rights declared, paid or distributed in respect of such Shares on or after the date hereof (collectively, "Distributions") and irrevocably appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and all Distributions), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver Share Certificates evidencing such Shares (and all Distributions), or transfer ownership of such Shares (and all Distributions) on the account books maintained by the Book-Entry Transfer Facility, together, in either case, with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser, (ii) present such Shares (and all Distributions) for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and all Distributions), all in accordance with the terms of the Offer. By executing this Letter of Transmittal, the undersigned hereby irrevocably appoints the designees of The May Department Stores Company and each of them, as the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to vote in such manner as each such attorney-in-fact and proxy or his or her substitute shall, in his sole discretion, deem proper and otherwise act (by written consent or otherwise) with respect to all Shares tendered hereby which have been accepted for payment by Purchaser prior to the time of such vote or other action and all Shares and other securities issued in Distributions in respect of such Shares, which the undersigned is entitled to vote at any meeting of shareholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting) or consent in lieu of any such meeting or otherwise. This proxy and power of attorney is coupled with an interest in Shares tendered hereby, is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by Purchaser in accordance with other terms of the Offer. Such acceptance for payment shall revoke all other proxies and powers of attorney granted by the undersigned at any time with respect to such Shares (and all Shares and other securities issued in Distributions in respect of such Shares), and no subsequent proxies, powers of attorney, consents or revocations may be given by the undersigned with respect thereto (and if given will not be deemed effective). The undersigned understands that, in order for Shares or Distributions to be deemed validly tendered, immediately upon Purchaser's acceptance of such Shares for payment, Purchaser must be able to exercise full voting and other rights with respect to such Shares (and any and all Distributions), including, without limitation, voting at any meeting of the Company's shareholders then scheduled. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer Shares tendered hereby and all Distributions, that when such Shares are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restriction, charges and encumbrances, and that none of such Shares and Distributions will be subject to any adverse claim. The undersigned, upon request, shall execute and deliver all additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of Purchaser all Distributions in respect of Shares tendered hereby, accompanied by appropriate documentation 4 of transfer, and pending such remittance and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of Shares tendered hereby, or deduct from such purchase price, the amount or value of such Distribution as determined by Purchaser in its sole discretion. No authority herein conferred or agreed to be conferred shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned. All obligations of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, successors, successors in interest and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that the valid tender of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the Instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer. Purchaser's acceptance of such Shares for payment will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms or conditions of any such extension or amendment). Unless otherwise indicated below in the box entitled "Special Payment Instructions", please issue the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not tendered or not accepted for payment in the name(s) of the registered holder(s) appearing above under "Description of Shares Tendered". Similarly, unless otherwise indicated below in the box entitled "Special Delivery Instructions", please mail the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not tendered or not accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Shares Tendered". In the event that the boxes below entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price of all Shares purchased and return all Share Certificates evidencing Shares not tendered or not accepted for payment in the name(s) of, and deliver such check and return such Share Certificates (and any accompanying documents, as appropriate) to, the person(s) so indicated. Unless otherwise indicated below in the box entitled "Special Payment Instructions", please credit any Shares tendered hereby and delivered by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name of the registered holder(s) thereof if Purchaser does not accept for payment any Shares tendered hereby. 5 ------------------------------------------------------------ SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check for the purchase price of Shares and Share Certificates evidencing Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned, or if Shares tendered by book-entry transfer which are not purchased are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than that designated on the front cover. Issue Check and Share Certificate(s) to: Name: ---------------------------------------------------- (PLEASE PRINT) Address: -------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------ (ZIP CODE) ------------------------------------------------------------ (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) (SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE) Credit unpurchased Shares tendered by book-entry transfer to the Book-Entry Transfer Facility account set forth below: Account Number: - --------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------ SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if the check for the purchase price of Shares purchased and Share Certificates evidencing Shares not tendered or not purchased are to be mailed to someone other than the undersigned, or the undersigned at an address other than that shown under "Description of Shares Tendered". Mail Check and Share Certificate(s) to: Name: ------------------------------------------------------- (PLEASE PRINT) Address: --------------------------------------------------------------- --------------------------------------------------------------- --------------------------------------------------------------- (ZIP CODE) --------------------------------------------------------------- (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER) (SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE) ------------------------------------------------------------ 6 IMPORTANT SHAREHOLDERS: SIGN HERE (PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW) X - -------------------------------------------------------------------------------- X - -------------------------------------------------------------------------------- SIGNATURE(S) OF HOLDER(S) Dated: - ------------------------,2000 (Must be signed by registered holder(s) exactly as name(s) appear(s) on Share Certificates or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.) Name(s): - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Daytime Area Code and Telephone No.: - ---------------------------------------------------------------------------- Taxpayer Identification or Social Security No.: - --------------------------------------------------------------------- (SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5) FOR USE BY FINANCIAL INSTITUTIONS ONLY. FINANCIAL INSTITUTIONS: PLACE MEDALLION GUARANTEE IN SPACE BELOW 7 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal must be guaranteed by a firm which is a member of the Securities Transfer Agents Medallion Signature Program, or by any other "eligible guarantor institution", as such term is defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as amended (each of the foregoing being an "Eligible Institution") UNLESS (i) this Letter of Transmittal is signed by the registered holder(s) of Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered hereby and such holder(s) has (have) not completed the box entitled "Special Payment Instructions" or "Special Delivery Instructions" on the reverse hereof or (ii) such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter of Transmittal is to be used either if Share Certificates are to be forwarded herewith or, unless an Agent's Message (as defined in Section 3 of the Offer to Purchase) is utilized, if tenders are to be made by book-entry transfer pursuant to the procedure set forth in Section 3 of the Offer to Purchase. Share Certificates evidencing all physically tendered Shares, or a timely confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, as well as a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) and any other documents required by this Letter of Transmittal, with any required signature guarantees, or an Agent's Message in the case of a book-entry transfer, must be received by the Depositary at one of its addresses set forth below prior to the Expiration Date (as defined in Section 1 of the Offer to Purchase). If Share Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal (or facsimile thereof) must accompany each such delivery. Shareholders whose Share Certificates are not immediately available, who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis may tender their Shares pursuant to the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by Purchaser, must be received by the Depositary prior to the Expiration Date; and (iii) the Share Certificates evidencing all physically delivered Shares in proper form for transfer by delivery, or a confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, in each case together with a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or in the case of a book-entry transfer, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange ("NYSE") trading days after the date of execution of such Notice of Guaranteed Delivery, all as described in Section 3 of the Offer to Purchase. A NYSE trading day is any day on which the NYSE is open for business. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. By execution of this Letter of Transmittal (or a manually signed facsimile hereof), all tendering shareholders waive any right to receive any notice of the acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided under "Description of Shares Tendered" is inadequate, the Share Certificate numbers, the number of Shares evidenced by such Share Certificates and the number of Shares tendered should be listed on a separate signed schedule and attached to this Letter of Transmittal. 8 4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all Shares evidenced by any Share Certificate delivered to the Depositary herewith are to be tendered hereby, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered". In such cases, new Share Certificate(s) evidencing the remainder of Shares that were evidenced by the Share Certificates delivered to the Depositary herewith will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the box entitled "Special Payment Instructions" and/or "Special Delivery Instructions" on the reverse hereof, as soon as practicable after the Expiration Date or the termination of the Offer. All Shares evidenced by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificates evidencing such Shares without alteration, enlargement or any other change whatsoever. If any Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any Shares tendered hereby are registered in different names, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such Shares. If this Letter of Transmittal is signed by the registered holder(s) of Shares tendered hereby, no endorsements of Share Certificates or separate stock powers are required, unless payment is to be made to, or Share Certificates evidencing Shares not tendered or not accepted for payment are to be issued in the name of, a person other than the registered holder(s). If this Letter of Transmittal is signed by a person other than the registered holder(s) of Shares tendered hereby, the Share Certificate(s) evidencing Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such Share Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any Share Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to Purchaser of such person's authority so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6, Purchaser will pay all stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price of any Shares purchased is to be made to, or Share Certificate(s) evidencing Shares not tendered or not accepted for payment are to be issued in the name of, any person other than the registered holder(s), or if tendered certificates are registered in the name of any person other than the person(s) signing the Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s), or such other person, or otherwise) payable on account of the transfer to such other person will be deducted from the purchase price of such Shares purchased, unless evidence satisfactory to Purchaser of the payment of such taxes, or exemption therefrom, is submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES EVIDENCING SHARES TENDERED HEREBY. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase price of any Shares tendered hereby is to be issued in the name of, and/or Share Certificate(s) evidencing Shares not tendered or not accepted for payment are to be issued in the name of and/or returned to, a person other than the person(s) signing this Letter of Transmittal or if such check or any such Share Certificate is to be sent to a person other than the signor of this Letter of Transmittal or to the person(s) signing this Letter of Transmittal but at an address other than that shown in the box entitled "Description of Shares Tendered" on the reverse hereof, the appropriate boxes herein must be completed. 9 8. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses or telephone numbers set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be obtained from the Information Agent. 9. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN") on the Substitute Form W-9 which is provided under "Important Tax Information" below, and to certify, under penalty of perjury, that such number is correct and that such shareholder is not subject to backup withholding of federal income tax. If a tendering shareholder has been notified by the Internal Revenue Service that such shareholder is subject to backup withholding, such shareholder must cross out item (2) of the Certification box of the Substitute Form W-9, unless such shareholder has since been notified by the Internal Revenue Service that such shareholder is no longer subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the tendering shareholder to 31% federal income tax withholding on the payment of the purchase price of all Shares purchased from such shareholder. If the tendering shareholder has not been issued a TIN and has applied for one or intends to apply for one in the near future, such shareholder should write "Applied For" in the space provided for the TIN in Part I of the Substitute Form W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% on all payments of the purchase price to such shareholder until a TIN is provided to the Depositary. 10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Share Certificate(s) has been lost, destroyed or stolen, the shareholder should promptly notify the Company's transfer agent, The Bank of New York, for assistance. The address is 101 Barclay Street, New York, New York, 10286. The phone number is (800) 507-9357. The shareholder will then be instructed as to the steps that must be taken in order to replace the Share Certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen Share Certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR MANUALLY SIGNED FACSIMILE HEREOF), PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES (OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE) AND SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). 10 IMPORTANT TAX INFORMATION Under U.S. federal income tax law, a shareholder whose tendered Shares are accepted for payment is generally required to provide the Depositary (as payer) with such shareholder's correct TIN on Substitute Form W-9 provided herewith. If such shareholder is an individual, the TIN generally is such shareholder's social security number. If the Depositary is not provided with the correct TIN, the shareholder may be subject to a $50 penalty imposed by the Internal Revenue Service and payments that are made to such shareholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding of 31%. In addition, if a shareholder makes a false statement that results in no imposition of backup withholding, and there was no reasonable basis for making such statement, a $500 penalty may also be imposed by the Internal Revenue Service. Certain shareholders (including, among others, corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such individual must submit a statement (Internal Revenue Service Form W-8), signed under penalties of perjury, attesting to such individual's exempt status. Forms of such statements can be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional instructions. A shareholder should consult his or her tax advisor as to such shareholder's qualification for exemption from backup withholding and the procedure for obtaining such exemption. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the shareholder. Backup withholding is not an additional tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained provided that the required information is furnished to the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments that are made to a shareholder with respect to Shares purchased pursuant to the Offer, the shareholder is required to notify the Depositary of such shareholder's correct TIN by completing the form below certifying that (a) the TIN provided on Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b)(i) such shareholder has not been notified by the Internal Revenue Service that he is subject to backup withholding as a result of a failure to report all interest or dividends or (ii) the Internal Revenue Service has notified such shareholder that such shareholder is no longer subject to backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The shareholder is required to give the Depositary the TIN (e.g., social security number or employer identification number) of the record holder of Shares tendered hereby. If Shares are in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. If the tendering shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, the shareholder should write "Applied For" in the space provided for the TIN in Part I, and sign and dated the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% of all payments of the purchase price to such shareholder until a TIN is provided to the Depositary. 11 PAYER'S NAME: THE BANK OF NEW YORK - -------------------------------------------------------------------------------- SUBSTITUTE PART I -- Taxpayer Identification Number -- For ------------------------------- FORM W-9 all accounts, enter your taxpayer Social security number DEPARTMENT OF THE identification number in the box at right. (For OR TREASURY most individuals, this is your social security INTERNAL REVENUE SERVICE number. If you do not have a number, see ------------------------------- "Obtaining a Number" in the enclosed Employer identification number PAYER'S REQUEST FOR TAXPAYER Guidelines.) Certify by signing and dating (If awaiting TIN write "Applied For") IDENTIFICATION NUMBER (TIN) below. Note: If the account is in more than one name, see the chart in the enclosed Guidelines to determine which number to give the payer. ---------------------------------------------------------------------------------------- PART II -- For Payees Exempt from Backup Withholding, see the enclosed Guidelines and complete as instructed therein. - -------------------------------------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to back-up withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines.) - ------------------------------------------------------------------------------------------------------------------------- Signature Date , 2000 -------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS. NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING A TAXPAYER IDENTIFICATION NUMBER. - -------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration office or (2) I intend to mail or deliver an application in the near future. I understand that If I do not provide a taxpayer identification number by the time of payment, 31% of all reportable cash payments made to me thereafter will be withheld until I provide a taxpayer identification number. ----------------------------------------- ---------------------------------- Signature: Date: - -------------------------------------------------------------------------------- 12 Questions or requests for assistance or for additional copies of the Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be directed to the Information Agent or the Dealer Manager at their respective telephone numbers and locations listed below, and will be furnished promptly at the Purchaser's expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. THE INFORMATION AGENT FOR THE OFFER IS: D. F. KING & CO., INC. 77 Water Street New York, NY 10005-4495 Banks and Brokers Call Collect: (212) 269-5550 ALL OTHERS CALL TOLL FREE: (888) 460-7637 THE DEALER MANAGER FOR THE OFFER IS: MORGAN STANLEY DEAN WITTER Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 (212) 761-7310 EX-99.(A)(3) 4 ex99-a3.txt NOTICE OF GUARANTEED DELIVERY 1 EXHIBIT 99(a)(3) Notice of Guaranteed Delivery for Tender of Shares of Common Stock of David's Bridal, Inc. (Not to be Used for Signature Guarantees) This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) (i) if certificates ("Share Certificates") evidencing shares of Common Stock, par value $0.01 per share (the "Shares"), of David's Bridal, Inc., a Florida corporation (the "Company"), are not immediately available, (ii) if Share Certificates and all other required documents cannot be delivered to The Bank of New York, as Depositary (the "Depositary"), prior to the Expiration Date (as defined in "Section 1. Terms of the Offer" of the Offer to Purchase) or (iii) if the procedure for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by telegram, telex or facsimile transmission to the Depositary. See "Section 3. Procedures for Accepting the Offer and Tendering Shares" of the Offer to Purchase. THE DEPOSITARY FOR THE OFFER IS: THE BANK OF NEW YORK BY MAIL: BY FACSIMILE BY HAND/OVERNIGHT COURIER: (FOR ELIGIBLE INSTITUTIONS Tender & Exchange Department ONLY): Tender & Exchange Department P.O. Box 11248 (212) 815-6213 101 Barclay Street Church Street Station TO CONFIRM FAX ONLY: Receive and Deliver Window New York, New York 10286 (212) 815-6156 New York, New York 10286
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. 2 LADIES AND GENTLEMEN: The undersigned hereby tenders to Alpha Omega Acquisition, Inc., a Florida corporation and a wholly owned subsidiary of The May Department Stores Company, a Delaware corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase dated July 10, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with any amendment or supplements thereto, collectively constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedure described in "Section 3. Procedures for Accepting the Offering and Tendering Shares" of the Offer to Purchase. Number of Shares: -------------------------------- Certificate Nos. (If Available): ------------------------------------ ------------------------------------ ------------------------------------ Check box if Shares will be delivered by book-entry transfer: [ ] The Depository Trust Company Account No ------------------------- Date: , 2000 ------------------------- Name(s) of Holders: ------------------------------------ ------------------------------------ ------------------------------------ (PLEASE TYPE OR PRINT) ------------------------------------ ------------------------------------ ADDRESS ------------------------------------ ZIP CODE ------------------------------------ AREA CODE AND TELEPHONE NO. ------------------------------------ ------------------------------------ ------------------------------------ SIGNATURE(S) OF HOLDER(S) 2 3 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc. or which is a commercial bank or trust company having an office or correspondent in the United States, guarantees to deliver to the Depositary, Share Certificates evidencing the Shares tendered hereby, in proper form for transfer, or confirmation of book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company, with delivery of a Letter of Transmittal (or facsimile thereof) properly completed and duly executed, and any other required documents (or an Agent's Message, as defined in Section 3 of the Offer to Purchase, in the case of a book-entry transfer), all within three New York Stock Exchange trading days (as defined in the Offer to Purchase) of the date hereof. - --------------------------------------------------- --------------------------------------------------- NAME OF FIRM TITLE - --------------------------------------------------- --------------------------------------------------- AUTHORIZED SIGNATURE ADDRESS ZIP CODE Name: ------------------------------------------- --------------------------------------------------- PLEASE TYPE OR PRINT AREA CODE AND TELEPHONE NO.
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. Dated: , 2000 3 EX-99.(A)(4) 5 ex99-a4.txt LETTER TO BROKERS 1 EXHIBIT 99(a)(4) Offer to Purchase for Cash All Outstanding Shares of Common Stock of David's Bridal, Inc. at $20.00 Net Per Share by Alpha Omega Acquisition, Inc., a wholly owned subsidiary of The May Department Stores Company THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 7, 2000, UNLESS THE OFFER IS EXTENDED. July 10, 2000 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: Alpha Omega Acquisition, Inc., a Florida corporation ("Purchaser") and a wholly owned subsidiary of The May Department Stores Company, a Delaware corporation ("Parent"), has offered to purchase all outstanding shares of Common Stock, par value $0.01 per share (the "Shares"), of David's Bridal, Inc., a Florida corporation (the "Company"), at a price of $20.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in Purchaser's Offer to Purchase dated July 10, 2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) SHAREHOLDERS OWNING AT LEAST A MAJORITY, ON A FULLY DILUTED BASIS, OF THE THEN OUTSTANDING SHARES, TENDERING AND NOT PROPERLY WITHDRAWING THEIR SHARES PRIOR TO THE EXPIRATION OF THE OFFER, AND (2) THE EXPIRATION OR TERMINATION OF THE WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER. THE OFFER IS ALSO SUBJECT TO OTHER CONDITIONS SET FORTH IN THE OFFER TO PURCHASE. SEE THE INTRODUCTION AND SECTIONS 1, 15 AND 16 OF THE OFFER TO PURCHASE. THE OFFER IS NOT CONDITIONED UPON PARENT OR PURCHASER OBTAINING FINANCING. Enclosed for your information and use are copies of the following documents: 1. Offer to Purchase, dated July 10, 2000; 2. Letter of Transmittal to be used by holders of Shares in accepting the Offer and tendering Shares; 3. Notice of Guaranteed Delivery to be used to accept the Offer if the Shares and all other required documents are not immediately available or cannot be delivered to The Bank of New York (the "Depositary") by the Expiration Date (as defined in the Offer to Purchase) or if the procedure for book-entry transfer cannot be completed by the Expiration Date; 4. A letter to shareholders of the Company from Robert Huth, President and Chief Executive Officer of the Company, together with a Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission by the Company; 2 5. A letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer; 6. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9; and 7. Return envelope addressed to the Depositary. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 7, 2000, UNLESS THE OFFER IS EXTENDED. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates evidencing such Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at one of the Book-Entry Transfer Facilities (as defined in the Offer to Purchase)), a Letter of Transmittal (or facsimile thereof) properly completed and duly executed, or an Agent's Message, in the case of a book-entry transfer, and any other required documents. If holders of Shares wish to tender, but cannot deliver such holder's certificates or cannot comply with the procedure for book-entry transfer prior to the expiration of the Offer, a tender of Shares may be effected by following the guaranteed delivery procedure described in "Section 3. Procedures for Accepting the Offer and Tendering Shares" of the Offer to Purchase. Purchaser will not pay any fees or commissions to any broker, dealer or other person (other than the Dealer Manager as described in the Offer to Purchase) in connection with the solicitation of tenders of Shares pursuant to the Offer. However, Purchaser will reimburse you for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. Purchaser will pay or cause to be paid any stock transfer taxes payable with respect to the transfer of Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. If you have any inquiries about the Offer you should address these to D.F. King & Co., Inc. (the "Information Agent") at its address and telephone number set forth on the back cover page of the Offer to Purchase. You may obtain additional copies of the enclosed material from the Information Agent at the address and telephone number set forth on the back cover page of the Offer to Purchase. Very truly yours, MORGAN STANLEY & CO. Incorporated NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF PARENT, PURCHASER, THE COMPANY, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 2 EX-99.(A)(5) 6 ex99-a5.txt LETTER TO CLIENTS 1 EXHIBIT 99(a)(5) Offer to Purchase for Cash All Shares of Common Stock of David's Bridal, Inc. at $20.00 Net Per Share by Alpha Omega Acquisition, Inc., a wholly owned subsidiary of The May Department Stores Company THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 7, 2000, UNLESS THE OFFER IS EXTENDED. To Our Clients: Enclosed for your consideration are an Offer to Purchase dated July 10, 2000 (the "Offer to Purchase"), and a related Letter of Transmittal in connection with the offer by Alpha Omega Acquisition, Inc., a Florida corporation ("Purchaser") and a wholly owned subsidiary of The May Department Stores Company, a Delaware corporation ("Parent"), to purchase all outstanding shares of Common Stock, par value $0.01 per share (the "Shares"), of David's Bridal, Inc., a Florida corporation (the "Company"), at a price of $20.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. We request instructions as to whether you wish to have us tender on your behalf any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer. Your attention is invited to the following: 1. The tender price is $20.00 per Share, net to the seller in cash. 2. The Offer is being made for any and all outstanding Shares. 3. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of July 3, 2000 (the "Merger Agreement"), among Parent, Purchaser and the Company. The Merger Agreement provides, among other things, that Purchaser will be merged with and into the Company (the "Merger") following the satisfaction or waiver of each of the conditions to the Merger set forth in the Merger Agreement. 4. The Board of Directors of the Company (i) has determined that the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and the shareholders of the Company, (ii) has approved and adopted the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement, and (iii) recommends that the Company's shareholders accept the Offer, tender their Shares pursuant to the terms of the Offer and approve and adopt the Merger Agreement and the Merger. 2 5. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Monday, August 7, 2000, unless the Offer is extended. 6. The Offer is conditioned upon, among other things, (i) shareholders owning at least a majority, on a fully diluted basis, of the then outstanding Shares, tendering and not properly withdrawing their Shares prior to the expiration of the Offer and (ii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations thereunder. The Offer is also subject to other conditions set forth in the Offer to Purchase. See the Introduction and Sections 1, 15 and 16 of the Offer to Purchase. The Offer is not conditioned upon Parent or Purchaser obtaining financing. 7. Tendering shareholders will not be obligated to pay, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the sale and transfer of any Shares by Purchaser pursuant to the Offer. Payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) the certificates evidencing such Shares or confirmation of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company, pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (ii) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), with any required signature guarantee or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal, and (iii) any other documents required by the Letter of Transmittal. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form contained in this letter. An envelope to return your instructions to us is enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. The Offer is made solely by the Offer to Purchase and the related Letter of Transmittal and is being made to all holders of Shares. Purchaser is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good faith effort to comply with such state statute. If, after such good faith effort, Purchaser cannot comply with such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction. 2 3 INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK DAVID'S BRIDAL, INC. BY ALPHA OMEGA ACQUISITION, INC., A WHOLLY OWNED SUBSIDIARY OF THE MAY DEPARTMENT STORES COMPANY The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated July 10, 2000, and the related Letter of Transmittal (which together constitute the "Offer") in connection with the offer by Alpha Omega Acquisition, Inc., a Florida corporation and a wholly owned subsidiary of The May Department Stores Company, a Delaware corporation, to purchase any and all outstanding shares of Common Stock, par value $0.01 per share (the "Shares"), of David's Bridal, Inc., a Florida corporation. This will instruct you to tender the number of Shares indicated below (or, if no number is indicated below, all Shares) that are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. Number of Shares to be Tendered*: ----------------------------------------------- SHARES Date: --------------------------------------------------------------------------- SIGN HERE - -------------------------------------------------------------------------------- SIGNATURE(S) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PLEASE TYPE OR PRINT NAME(S) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PLEASE TYPE OR PRINT ADDRESS - -------------------------------------------------------------------------------- AREA CODE AND TELEPHONE NUMBER - -------------------------------------------------------------------------------- TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER - --------------- * Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. 3 EX-99.(A)(6) 7 ex99-a6.txt GUIDELINES FOR CERTIFICATION OF TAXPAYER ID 1 EXHIBIT 99(a)(6) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer.
- ------------------------------------------------------------ GIVE THE SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: NUMBER OF-- - ------------------------------------------------------------ 1. An individual's account The individual 2. Two or more individuals (joint The actual owner of account) the account or, if combined funds, the first individual on the account(1) 3. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 4. a. The usual revocable savings The grantor trust account (grantor is also trustee(1) trustee) b. So-called trust account that is The actual owner(1) not a legal or valid trust under State law - ------------------------------------------------------------
- ------------------------------------------------------------ GIVE THE EMPLOYER IDENTIFICATION FOR THIS TYPE OF ACCOUNT: NUMBER OF-- - ------------------------------------------------------------ 5. Sole proprietorship account The owner(3) 6. A valid trust, estate, or pension Legal entity (Do trust not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(4) 7. Corporate account The corporation 8. Partnership account held in the The partnership name of the business 9. Association, club, or other tax- The organization exempt organization 10. A broker or registered nominee The broker or nominee 11. Account with the Department of The public entity Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments - ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Show the name of the owner. The name of the business or the "doing business as" name may also be entered. Either the social security number or the employer identification number may be used. (4) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. 2 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 OBTAINING A NUMBER If you don't have a taxpayer identification number ("TIN") or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on all dividend and interest payments and on broker transactions include the following: - A corporation. - A financial institution. - An organization exempt from tax under section 501(a), or an individual retirement plan, or a custodial account under section 403(b)(7). - The United States or any agency or instrumentality thereof. - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - An international organization or any agency, or instrumentality thereof. - An international organization or any agency, or instrumentality thereof. - A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. - A real estate investment trust. - A common trust fund operated by a bank under section 584(a). - An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). - An entity registered at all times under the Investment Company Act of 1940. - A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - Payments to nonresident aliens subject to withholding under section 1441. - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - Payments of patronage dividends where the amount received is not paid in money. - Payments made by certain foreign organizations. - Payments made to a nominee. - Payments of interest not generally subject to backup withholding include the following: - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - Payments of tax-exempt interest (including exempt-interest dividends under section 852). - Payments described in section 6049(b)(5) to nonresident aliens. - Payments on tax-free covenant bonds under section 1451. - Payments made by certain foreign organizations. - Payments made to a nominee. Exempt payees described above should file the substitute Form W-9 to avoid possible erroneous backup withholding. Complete the substitute Form W-9 as follows: ENTER YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ACROSS THE FACE OF THE FORM, SIGN, DATE, AND RETURN THE FORM TO THE PAYER. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the sections 6041, 6041A(a), 6042, 6044, 6045, 6050A and 6050N and the regulations thereunder. PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend, interest or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes and to help verify the accuracy of tax returns. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail to furnish your correct taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. (4) MISUSE OF TAXPAYER IDENTIFICATION NUMBERS--If the payer discloses or uses taxpayer identification numbers in violation of Federal law, the payer may be subject to civil and criminal penalties. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.(A)(8) 8 ex99-a8.txt SUMMARY ADVERTISEMENT 1 EXHIBIT 99 (a)(8) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made only by the Offer to Purchase, dated July 10, 2000, and the related Letter of Transmittal, and any amendments or supplements thereto, and is being made to all holders of Shares. The Offer, however, is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares residing in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However, the Purchaser (as defined below) may, in its discretion, take such action as it may deem necessary to make the Offer in any jurisdiction and extend the Offer to holders of Shares in such jurisdiction. In those jurisdictions where securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by Morgan Stanley & Co. Incorporated ("Morgan Stanley" or the "Dealer Manager") or one or more registered brokers or dealers licensed under the laws of such jurisdiction. Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock of David's Bridal, Inc. at $20.00 Net Per Share by Alpha Omega Acquisition, Inc. a wholly owned subsidiary of The May Department Stores Company Alpha Omega Acquisition, Inc., a Florida corporation (the "Purchaser") and a wholly owned subsidiary of The May Department Stores Company, a Delaware corporation ("Parent"), is offering to purchase all of the outstanding shares of common stock, par value $0.01 per share (the "Shares"), of David's Bridal, Inc., a Florida corporation (the "Company"), at a purchase price of $20.00 per Share (the "Offer Price"), net to the seller in cash, on the terms and subject to the conditions set forth in the Offer to Purchase, dated July 10, 2000 (the "Offer to Purchase"), and in the related letter of transmittal (the "Letter of Transmittal") (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). Tendering shareholders who have Shares registered in their names and who tender directly to The Bank of New York (the "Depositary") will not be charged brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. Shareholders who hold their Shares through a broker or bank should consult such institution as to whether it charges any service fees. Parent or the Purchaser will pay all charges and expenses of Page 1 2 the Dealer Manager, the Depositary and D.F. King & Co., Inc., which is acting as the information agent (the "Information Agent"), incurred in connection with the Offer. Following the consummation of the Offer, the Purchaser intends to effect the Merger described below. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, AUGUST 7, 2000, UNLESS THE OFFER IS EXTENDED. The Offer is conditioned upon, among other things, shareholders owning at least a majority, on a fully diluted basis, of the then outstanding Shares tendering and not withdrawing their Shares (the "Minimum Condition"), and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations thereunder. The Offer is also subject to certain other conditions set forth in the Offer to Purchase. See the Introduction and Sections 1, 15 and 16 of the Offer to Purchase. The Offer is not conditioned upon Parent or Purchaser obtaining financing. Certain shareholders of the Company who own approximately 42% of the outstanding Shares have agreed, among other things, to tender 90% of their Shares pursuant to the Offer. The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of July 3, 2000 (the "Merger Agreement"), among Parent, the Purchaser and the Company. The purpose of the Offer is for Parent, through the Purchaser, to acquire a majority voting interest in the Company as the first step in acquiring the entire equity interest in the Company. The Merger Agreement provides that, among other things, the Purchaser will make the Offer and that as promptly as practicable after the purchase of Shares pursuant to the Offer and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement and in accordance with relevant provisions of the Business Corporation Act of the State of Florida (the "FBCA"), the Purchaser will be merged with and into the Company, with the Company continuing as the surviving corporation (the "Merger"). At the effective time of the Merger (the "Effective Time"), each Share issued and outstanding immediately prior to the Effective Time (other than Shares owned by Parent or any subsidiary of Parent as a result of the Offer or by the Company or any subsidiary of the Company, all of which will be canceled, and other than Shares that are held by shareholders, if any, who properly exercise their dissenters' rights under the FBCA) will be converted into the right to receive $20.00 in cash, or any greater per Share Page 2 3 price that is paid in the Offer, without interest. The Merger Agreement is more fully described in Section 11 of the Offer to Purchase. The Board of Directors of the Company (i) has determined that the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and the Company's shareholders, (ii) has approved and adopted the Merger Agreement, the Offer, the Merger and the other transactions contemplated by the Merger Agreement, and (iii) recommends that the Company's shareholders accept the Offer, tender their Shares pursuant to the terms of the Offer and approve and adopt the Merger Agreement and the Merger. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance of such Shares for payment pursuant to the Offer. Payment for Shares so accepted will be made by deposit of the Offer Price for those Shares with the Depositary, which will act as agent for tendering shareholders for the purpose of receiving payment from the Purchaser and transmitting such payment to validly tendering shareholders. If, for any reason whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer is delayed, or the Purchaser is unable to accept for payment Shares tendered pursuant to the Offer, then, without prejudice to the Purchaser's rights under Section 1 of the Offer to Purchase, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn, except to the extent that the tendering shareholders are entitled to withdrawal rights as described in Section 4 of the Offer to Purchase, and as otherwise required by Rule 14e-1(c) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Merger is subject to the satisfaction or waiver of certain conditions, including, if required, the approval and adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding Shares. If Purchaser obtains 80% or more of the outstanding Shares in the Offer, Purchaser will effect the Merger pursuant to the short-form merger provisions of the FBCA without obtaining the approval of any other shareholder of the Company. If the Minimum Condition is satisfied, the Purchaser would have sufficient voting power to approve the Merger without the affirmative vote of any other shareholder Page 3 4 of the Company. The Company has agreed, if required, to cause a meeting of its shareholders to be held following consummation of the Offer for the purposes of considering and taking action upon the approval and adoption of the Merger Agreement. Parent and the Purchaser have agreed to vote the Shares purchased in the Offer in favor of the approval and adoption of the Merger Agreement. Under no circumstances will interest be paid on the Offer Price, regardless of any delay in making such payment. No interest will be paid on the consideration to be paid in the Merger to shareholders who fail to tender their Shares pursuant to the Offer, regardless of any delay in effecting the Merger or making such payment. Payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after the timely receipt by the Depositary of (i) the certificates evidencing such Shares (the "Share Certificates") or confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (ii) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal, and (iii) any other documents required by the Letter of Transmittal. The term "Expiration Date" means 12:00 midnight New York City time, on Monday, August 7, 2000, unless and until the Purchaser, in accordance with the Merger Agreement, extends the period during which the Offer is open. In that event, the term "Expiration Date" means the latest time and date on which the Offer, as so extended (other than any extension with respect to the Subsequent Offering Period), expires. Subject to the terms of the Merger Agreement and the applicable rules and regulations of the Securities and Exchange Commission (the "SEC"), the Purchaser - may, under certain circumstances, extend the Offer beyond the scheduled Expiration Date from time to time, with or without the Company's consent, if at that date any of the conditions to the Purchaser's obligation to accept for payment and to pay for the Shares are not satisfied or, to the extent permitted in the Merger Agreement, waived, in which case any single extension will not exceed the lesser of ten business days and the number of days that the Purchaser reasonably believes is necessary Page 4 5 to cause the conditions of the Offer to be satisfied; - - may extend the Offer for any period required by any rule, regulation or interpretation of the SEC or its staff applicable to the Offer, other than Rule 14e-5 of the General Rules and Regulations under the Exchange Act, with or without the Company's consent; and - - will extend the Offer from time to time, unless the Company advises the Purchaser that the Company does not wish it to do so, until the earlier of - - 30 days after the date on which any applicable waiting period under the HSR Act has expired or been terminated, and - - October 31, 2000, if on the then-scheduled Expiration Date all of the conditions to the Offer have not been satisfied or waived as permitted by the Merger Agreement. In this case, any single extension will not exceed the lesser of ten business days and the number of days that the Purchaser reasonably believes is necessary to cause the conditions of the Offer to be satisfied. Pursuant to Rule 14d-11 under the Exchange Act, the Purchaser shall, subject to certain conditions, provide a subsequent offering period following the expiration of the Offer on the Expiration Date (a "Subsequent Offering Period"). A Subsequent Offering Period is an additional period of time from three business days to 20 business days in length, beginning after the Purchaser purchases Shares tendered in the Offer, during which shareholders may tender, but not withdraw, their Shares and receive the Offer Price. Any extension, delay, waiver, amendment or termination of the period during which the Offer is open will be followed, as promptly as practicable, by public announcement thereof. The announcement in the case of an extension will be issued not later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the rights of a tendering shareholder to withdraw such shareholder's Shares (except during any Subsequent Offering Period). Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable. No withdrawal rights will apply to Shares tendered into a Subsequent Offering Period and no withdrawal rights will apply during the Subsequent Offering Period with respect to Shares tendered in the Offer and accepted for payment. For a withdrawal of Shares to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth Page 5 6 on the back cover of the Offer to Purchase. Any notice of withdrawal must specify the name, address and taxpayer identification number of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such shares, if different from that of the person who tendered the Shares. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered for the account of an Eligible Institution (as defined in the Offer to Purchase), the signature on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, and its determination will be final and binding on all parties. The information required to be disclosed by Paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference. The Company has provided to the Purchaser its list of shareholders and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase, the related Letter of Transmittal and other related materials are being mailed to record holders of Shares and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. The Offer to Purchase and the related Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Offer. The receipt of cash for Shares pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes; see Section 5 of the Offer to Purchase for additional information. Questions and requests for assistance and copies of the Offer to Purchase, the Page 6 7 Letter of Transmittal and all other tender offer materials may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth below and will be furnished promptly at the Purchaser's expense. The Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Dealer Manager) for soliciting tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: D. F. King & Co., Inc. 77 Water Street New York, New York 10005 Banks and Brokers Call Collect: (212) 269-5550 All Others Call Toll Free: (888) 460-7637 The Dealer Manager for the Offer is: Morgan Stanley Dean Witter Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 (212) 761-7310 July 10, 2000 Page 7 EX-99.(D)(1) 9 ex99-d1.txt AGREEMENT AND PLAN OF MERGER 1 EXHIBIT 99(d)(1) AGREEMENT AND PLAN OF MERGER BY AND AMONG THE MAY DEPARTMENT STORES COMPANY ALPHA OMEGA ACQUISITION, INC. AND DAVID'S BRIDAL, INC. JULY 3, 2000 2 TABLE OF CONTENTS
PAGE ---- ARTICLE I THE OFFER Section 1.1 The Offer................................................... 1 Section 1.2 Company Actions............................................. 3 Section 1.3 Directors of the Company.................................... 3 ARTICLE II THE MERGER Section 2.1 The Merger.................................................. 4 Section 2.2 Closing..................................................... 4 Section 2.3 Effective Time.............................................. 4 Section 2.4 Articles of Incorporation; Bylaws........................... 4 Section 2.5 Directors and Officers of the Surviving Corporation......... 5 ARTICLE III CONVERSION OF SHARES Section 3.1 Conversion of Shares........................................ 5 Section 3.2 Exchange of Certificates.................................... 5 Section 3.3 Dissenters' Rights.......................................... 6 Section 3.4 Shareholders' Meeting....................................... 7 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY Section 4.1 Organization................................................ 8 Section 4.2 Capitalization.............................................. 9 Section 4.3 Authorization; Validity of Agreement........................ 9 Section 4.4 No Violations; Consents and Approvals....................... 10 Section 4.5 SEC Reports and Financial Statements........................ 10 Section 4.6 Absence of Certain Changes.................................. 11 Section 4.7 [Reserved].................................................. 11 Section 4.8 [Reserved].................................................. 11 Section 4.9 Employee Benefit Plans; ERISA............................... 11 Section 4.10 Litigation; Compliance with Law............................. 12 Section 4.11 Intellectual Property....................................... 13 Section 4.12 Company Agreements.......................................... 13 Section 4.13 Taxes....................................................... 13 Section 4.14 Environmental Matters....................................... 14 Section 4.15 No Default.................................................. 15 Section 4.16 Opinion of Financial Advisor................................ 15 Section 4.17 Brokers..................................................... 15 Section 4.18 Personal Property........................................... 16 Section 4.19 Board Recommendations....................................... 16 Section 4.20 Labor Matters............................................... 16 Section 4.21 Personal Property Leases.................................... 16 Section 4.22 Insurance................................................... 16 Section 4.23 Accounts Receivable; Inventory.............................. 16 Section 4.24 Real Estate Matters......................................... 16 Section 4.25 Schedule 14D-9; Offer Documents; and Proxy Statement........ 17
i 3
PAGE ---- ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION Section 5.1 Organization................................................ 18 Section 5.2 Authorization; Validity of Agreement........................ 18 Section 5.3 Consents and Approvals; No Violations....................... 18 Section 5.4 Schedule TO, Offer Documents, Registration Statement and Proxy Statement............................................. 18 Section 5.5 Financing................................................... 19 Section 5.6 Litigation; Compliance with Law............................. 19 ARTICLE VI COVENANTS Section 6.1 Interim Operations of the Company........................... 19 Section 6.2 No Solicitations............................................ 22 Section 6.3 Access to Information....................................... 23 Section 6.4 Further Action; Reasonable Best Efforts..................... 24 Section 6.5 Employee Benefits........................................... 25 Section 6.6 Notification of Certain Matters............................. 25 Section 6.7 Directors' and Officers' Insurance and Indemnification...... 26 Section 6.8 Parent Undertaking.......................................... 26 Section 6.9 Takeover Statute............................................ 26 Section 6.10 Disclosure Schedule Supplements............................. 27 ARTICLE VII CONDITIONS TO THE MERGER Section 7.1 Conditions to Each Party's Obligation To Effect the Merger...................................................... 27 ARTICLE VIII TERMINATION Section 8.1 Termination................................................. 27 Section 8.2 Effect of Termination....................................... 28 ARTICLE IX MISCELLANEOUS Section 9.1 Fees and Expenses........................................... 28 Section 9.2 Amendment; Waiver........................................... 29 Section 9.3 Survival.................................................... 29 Section 9.4 Notices..................................................... 29 Section 9.5 Interpretation.............................................. 30 Section 9.6 Section Headings; Section References........................ 30 Section 9.7 Counterparts................................................ 30 Section 9.8 Entire Agreement............................................ 30 Section 9.9 Severability................................................ 30 Section 9.10 Governing Law; Waiver of Jury Trial; Enforcement............ 30 Section 9.11 Assignment; Binding Effect.................................. 30 Section 9.12 Enforcement of Agreement.................................... 31 Section 9.13 Continuation of Attorney-Client Privilege................... 31 Section 9.14 Finders or Brokers.......................................... 31 Section 9.15 Publicity................................................... 31
ii 4 TABLE OF DEFINED TERMS
TERM PAGE - ---- ---- 1934 Act.................................................... 7 1934 Act Rules.............................................. 7 Acquisition................................................. 1 Acquisition Agreement....................................... 23 Acquisition Proposal........................................ 22 Affiliates.................................................. 30 Agreement................................................... 1 Annex A..................................................... 1 Articles of Merger.......................................... 4 Asset Transaction........................................... 22 Associates.................................................. 30 Audit....................................................... 13 beneficial ownership........................................ 30 Business Combination Transaction............................ 22 Certificate................................................. 5 Certificates................................................ 5 Closing..................................................... 4 Closing Date................................................ 4 Code........................................................ 6 Company..................................................... 1 Company Agreements.......................................... 10 Company Common Stock........................................ 1 Company Representatives..................................... 22 Company SEC Documents....................................... 10 Company Subsidiaries........................................ 8 Company Subsidiary.......................................... 8 Confidentiality Agreement................................... 24 Disclosure Schedule......................................... 1 Dissenting Shareholder...................................... 6 Dissenting Shares........................................... 6 Drop Dead Date.............................................. 27 Effective Time.............................................. 4 Environmental Claim......................................... 15 Environmental Law........................................... 15 ERISA....................................................... 11 ERISA Affiliate............................................. 11 ERISA Plans................................................. 11 Exchange Act................................................ 7 FBCA........................................................ 1 Florida Department of State................................. 4 GAAP........................................................ 10 Government Antitrust Entity................................. 24 Governmental Entity......................................... 10 Hazardous Substance......................................... 15 Home Office................................................. 17 HSR Act..................................................... 10 Incipient Superior Proposal................................. 22 Indemnified Parties......................................... 26 Intellectual Property....................................... 13 Key Executive............................................... 19
iii 5
TERM PAGE - ---- ---- Key Executives.............................................. 19 knowledge of the Company.................................... 11 Lease....................................................... 17 Leased Properties........................................... 16 Leased Property............................................. 16 Leases...................................................... 17 Liens....................................................... 10 made available.............................................. 30 Main Warehouse.............................................. 17 Material Adverse Effect..................................... 8 Material Company Agreements................................. 13 Merger...................................................... 4 Merger Communications....................................... 31 Merger Consideration........................................ 5 Minimum Condition........................................... 2 Non-Key Employees........................................... 20 Offer....................................................... 1 Offer Documents............................................. 2 Offer Price................................................. 1 Owned Property.............................................. 16 Parent...................................................... 1 Parties..................................................... 1 Party....................................................... 1 Paying Agent................................................ 5 Person...................................................... 8 Plans....................................................... 11 Policies.................................................... 26 Preliminary Statement....................................... 7 Proxy Statement............................................. 7 Real Properties............................................. 16 Real Property............................................... 16 Release..................................................... 15 Schedule 14d-9.............................................. 3 Schedule TO................................................. 2 SEC......................................................... 2 Securities Act.............................................. 10 Shareholders................................................ 1 Shareowner Agreement........................................ 1 Shareowner Agreements....................................... 1 Shares...................................................... 1 Special Meeting............................................. 7 Subsidiary.................................................. 8 Superior Proposal........................................... 23 Surviving Corporation....................................... 4 Tax Return.................................................. 14 Taxes....................................................... 14 Termination Fee............................................. 28 Voting Debt................................................. 9
iv 6 AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 3, 2000, by and among THE MAY DEPARTMENT STORES COMPANY, a Delaware corporation ("Parent"), ALPHA OMEGA ACQUISITION, INC., a Florida corporation and a wholly-owned subsidiary of Parent ("Acquisition"), and DAVID'S BRIDAL, INC., a Florida corporation (the "Company"). Parent, Acquisition and the Company are later in this Agreement sometimes referred to individually as a "Party" or collectively as the "Parties." RECITALS This Agreement is entered into with reference to the following facts, objectives, and definitions: A. The Boards of Directors of Parent, Acquisition and the Company have each approved, and, if required by law, have determined to recommend to their respective shareholders, the acquisition of the Company by Parent upon the terms and subject to the conditions set forth in this Agreement. B. It is contemplated that the acquisition be accomplished by Acquisition's commencing a cash tender offer (as it may be amended from time to time as permitted by this Agreement, the "Offer") to purchase all of the issued and outstanding shares of common stock, par value $.01 per share, of the Company (the "Company Common Stock"; the shares of Company Common Stock are referred to herein as "Shares"; record owners of the Shares are referred to herein as "Shareholders"), for $20.00 per Share (such amount or any greater amount per Share paid pursuant to the Offer being hereinafter referred to as the "Offer Price"), subject to applicable withholding Taxes, net to the seller of the Shares in cash, upon the terms and subject to the conditions set forth in this Agreement. C. In furtherance of such acquisition, the Boards of Directors of Parent, Acquisition and the Company have each approved this Agreement and the merger of Acquisition with and into the Company in accordance with the terms of this Agreement and the Florida Business Corporation Act (the "FBCA"). The Board of Directors of the Company has resolved to recommend that holders of Shares tender their Shares pursuant to the Offer and, if required by law, approve and adopt this Agreement and the Merger. D. Following the approvals in paragraph C above and concurrently with the execution and delivery of this Agreement, and as a condition and inducement to the willingness of Parent and Acquisition to enter into this Agreement, Parent has entered into separate Shareholder Agreements each dated as of the date hereof with each Person (as defined in Section 4.1(a)) expressly disclosed in Section D of the Disclosure Schedule attached hereto and incorporated herein (the "Disclosure Schedule") (collectively, the "Shareholder Agreements" and, individually, a "Shareholder Agreement"). Pursuant to the Shareholder Agreements, certain shareholders have granted an option in favor of Parent or its designee to purchase 90% of the Shares held by each, respectively, and has granted Parent an irrevocable proxy to vote 90% of the Shares held by each, respectively, in favor of the Merger (as hereafter defined). AGREEMENT NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, the Parties agree as follows: ARTICLE I THE OFFER Section 1.1 The Offer. (a) Provided that this Agreement shall not have been terminated and none of the events set forth in Section (a) through (i) of Annex A attached hereto and made a part hereof ("Annex A") shall have occurred or be existing (and shall not have been waived by Acquisition), Acquisition shall commence (within the 1 7 meaning of Rule 14d-2 of the Exchange Act as defined in Section 3.4(a)) the Offer as promptly as reasonably practicable after the date hereof, but in no event later than five business days after the public announcement of the execution of this Agreement. The obligation of Acquisition to accept for payment and pay for Shares tendered pursuant to the Offer shall be subject only to the satisfaction of the condition that there be validly tendered and not withdrawn prior to the expiration of the Offer that number of Shares which represents at least a majority of the then outstanding Shares on a fully diluted basis (the "Minimum Condition") and to the satisfaction or waiver by Acquisition of the other conditions set forth in Annex A. The Company agrees that no Shares held by the Company or any of its Subsidiaries will be tendered to Acquisition pursuant to the Offer. Acquisition expressly reserves the right to waive any of such conditions (other than the Minimum Condition), to increase the price per Share payable in the Offer and to make any other changes in the terms of the Offer; provided, however, that no change may be made without the prior written consent of the Company which decreases the price per Share payable in the Offer, reduces the maximum number of Shares to be purchased in the Offer, changes the form of consideration to be paid in the Offer, modifies or amends any of the conditions set forth in Annex A, imposes conditions to the Offer in addition to the conditions set forth in Annex A, waives the Minimum Condition or makes other changes in the terms and conditions of the Offer that are in any manner adverse to the holders of Shares or, except as provided below, extends the Offer. Subject to the terms of the Offer and this Agreement and the satisfaction or earlier waiver of all the conditions of the Offer set forth in Annex A as of any expiration date of the Offer, Acquisition will accept for payment and pay for all Shares validly tendered and not withdrawn pursuant to the Offer as soon as it is permitted to do so under applicable law. Notwithstanding the foregoing, Acquisition may, without the consent of the Company, (i) extend the Offer beyond the scheduled expiration date, which shall be 20 business days following the date of commencement of the Offer, if, at the scheduled expiration of the Offer, any of the conditions to Acquisition's obligation to accept for payment and to pay for the Shares shall not be satisfied or, to the extent permitted by this Agreement, waived or (ii) extend the Offer for any period required by any rule, regulation or interpretation of the Securities and Exchange Commission (the "SEC") or the staff thereof applicable to the Offer, other than Rule 14e-5 promulgated under the Exchange Act. Unless the Company advises Acquisition that it does not wish Acquisition to extend the Offer, Acquisition shall extend the Offer from time to time until the earlier of (A) the date that is 30 days after the date on which any applicable waiting period under the HSR Act (as defined in Section 4.4) shall have expired or been terminated and (B) the Outside Date (as defined in Section 8.1), in the event that, at the then-scheduled expiration date, all of the conditions of the Offer set forth in Annex A have not been satisfied or waived as permitted by this Agreement. Any extension of the Offer pursuant to the preceding sentence or pursuant to clause (i) of the second preceding sentence of this Section 1.1 shall not exceed the lesser of ten business days or such fewer number of days that Acquisition reasonably believes are necessary to cause the conditions of the Offer set forth in Annex A to be satisfied. Acquisition shall provide a "subsequent offering period" (as contemplated by Rule 14d-11 under the Exchange Act) of not less than three business days following its acceptance for payment of Shares in the Offer. On or prior to the dates that Acquisition becomes obligated to accept for payment and pay for Shares pursuant to the Offer, Parent shall provide or cause to be provided to Acquisition the funds necessary to pay for all Shares that Acquisition becomes so obligated to accept for payment and pay for pursuant to the Offer. The Offer Price shall, subject to any required withholding of Taxes, be net to the seller in cash, upon the terms and subject to the conditions of the Offer. (b) On the date of the commencement of the Offer, Acquisition shall file with the SEC a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, the "Schedule TO") with respect to the Offer. The Schedule TO shall contain or incorporate by reference an offer to purchase and forms of the related letter of transmittal and all other ancillary Offer documents (collectively, together with all amendments and supplements thereto, the "Offer Documents"). Parent and Acquisition shall cause the Offer Documents to be disseminated to the holders of the Shares as and to the extent required by applicable federal securities laws. Parent and Acquisition, on the one hand, and the Company, on the other hand, will promptly correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect, and Acquisition will cause the Offer Documents as so corrected to be filed with the SEC and to be disseminated to holders of the Shares, in each case as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given a reasonable 2 8 opportunity to review and comment upon the Schedule TO before it is filed with the SEC. In addition, Parent and Acquisition agree to provide the Company and its counsel with any comments, whether written or oral, that Parent or Acquisition or either of their counsel may receive from time to time from the SEC or its staff with respect to the Schedule TO promptly after the receipt of such comments and to consult with the Company and its counsel prior to responding to any such comments. Section 1.2 Company Actions. (a) The Company hereby approves of and consents to the Offer and represents and warrants that the Company's Board of Directors, at a meeting duly called and held, has (i) determined that the terms of the Offer and the Merger are fair to and in the best interests of the Shareholders, (ii) approved and adopted this Agreement and approved and adopted the transactions contemplated hereby, including the Offer and the Merger and (iii) subject to Section 6.2, resolved to recommend that the Shareholders accept the Offer, tender their Shares to Acquisition thereunder and, if required by law, approve and adopt this Agreement and the Merger. The Company hereby consents to the inclusion in the Offer Documents of the recommendation of the Company's Board of Directors described in this Section 1.2(a), subject to Section 6.2. (b) As promptly as practicable after the commencement of the Offer, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (together with all amendments and supplements thereto, the "Schedule 14D-9") which, subject to Section 6.2, shall contain the recommendation referred to in clause (iii) of Section 1.2(a) hereof. The Company further agrees to take all steps necessary to cause the Schedule 14D-9 to be disseminated to holders of the Shares as and to the extent required by applicable federal securities laws. The Company, on the one hand, and each of Parent and Acquisition, on the other hand, will promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent that it shall have become false or misleading in any material respect, and the Company will cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated to holders of the Shares, in each case as and to the extent required by applicable federal securities laws. Parent and its counsel shall be given a reasonable opportunity to review and comment upon the Schedule 14D-9 before it is filed with the SEC. In addition, the Company agrees to provide Parent, Acquisition and their counsel with any comments, whether written or oral, that the Company or its counsel may receive from time to time from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments and to consult with Parent, Acquisition and their counsel prior to responding to any such comments. (c) The Company shall promptly furnish Acquisition with mailing labels containing the names and addresses of all record holders of Shares and with security position listings of Shares held in stock depositories, each as of a recent date, together with all other available listings and computer files containing names, addresses and security position listings of record holders and non-objecting beneficial owners of Shares. The Company shall furnish Acquisition with such additional information, including updated listings and computer files of Shareholders, mailing labels and security position listings, and such other assistance as Parent, Acquisition or their agents may reasonably require in communicating the Offer to the record and beneficial holders of Shares. Subject to the requirements of applicable law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Offer or the Merger, Parent and Acquisition shall hold in confidence the information contained in such labels, listings and files, shall use such information solely in connection with the Offer and the Merger, and, if this Agreement is terminated or if the Offer is otherwise terminated, shall promptly deliver or cause to be delivered to the Company all copies of such information, labels, listings and files then in their possession or in the possession of their agents or representatives. Section 1.3 Directors of the Company. (a) Promptly upon the purchase of and payment for a number of Shares that satisfies the Minimum Condition by Acquisition or any of its affiliates pursuant to the Offer, Parent shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors of the Company as is equal to the product obtained by multiplying the total number of directors on such Board (giving effect to the directors designated by Parent pursuant to this sentence) by the percentage that the number of Shares so purchased and paid for bears to the total number of Shares then outstanding. In furtherance thereof, the 3 9 Company shall, upon request of Acquisition, promptly increase the size of its Board of Directors or exercise its reasonable best efforts to secure the resignations of such number of directors, or both, as is necessary to enable Parent's designees to be so elected or appointed to the Company's Board and, subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, shall cause Parent's designees to be so elected or appointed. At such time, the Company shall, if requested by Parent, also cause directors designated by Parent and Acquisition to constitute at least the same percentage (rounded up to the next whole number) as is on the Company's Board of Directors of each committee of the Company's Board of Directors. Notwithstanding the foregoing, if Shares are purchased pursuant to the Offer, until the Effective Time, Parent and Acquisition shall take no action which would cause the Company's Board of Directors to include fewer than two members who are directors on the date hereof and are not employees of the Company. (b) The Company shall promptly take all actions required pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its obligations under Section 1.3(a), including mailing to Shareholders together with the Schedule 14D-9 the information required by such Section 14(f) and Rule 14f-1 as is necessary to enable Parent's designees to be elected to the Company's Board of Directors. Parent and Acquisition will supply the Company and be solely responsible for any information with respect to them and their nominees, officers, directors and affiliates required by such Section 14(f) and Rule 14f-1. (c) Following the election or appointment of Parent's designees to the Company's Board of Directors pursuant to this Section 1.3, prior to the Effective Time (i) any amendment or termination of this Agreement by the Company, (ii) any extension or waiver by the Company of the time for the performance of any of the obligations or other acts of Parent or Acquisition under this Agreement, or (iii) any waiver of any of the Company's rights hereunder shall, in any such case, require the concurrence of a majority of the directors of the Company then in office who neither were designated by Parent nor are employees of the Company, if any. ARTICLE II THE MERGER Section 2.1 The Merger. Upon the terms and subject to the conditions of this Agreement and in accordance with the FBCA, at the Effective Time (as defined in Section 2.3), Acquisition shall be merged (the "Merger") with and into the Company and the separate corporate existence of Acquisition shall cease. After the Merger, the Company shall continue as the surviving corporation (sometimes later in this Agreement referred to as the "Surviving Corporation"). The Merger shall have the effects set forth in the FBCA. Section 2.2 Closing. The closing of the Merger (the "Closing") will take place at 10:00 a.m., New York time, on a date to be specified by the Parties, which shall be no later than the second business day after satisfaction or waiver of all of the conditions set forth in Article VII, (the "Closing Date"), at the offices of Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, Pennsylvania 19103, unless another date or place is agreed to in writing by the Parties. Section 2.3 Effective Time. On or as promptly as practicable following the Closing, the Company will cause appropriate Articles of Merger (the "Articles of Merger") to be filed with the Department of State of the State of Florida (the "Florida Department of State") in such form and executed as provided in the FBCA. The Merger shall become effective at such time as the Articles of Merger have been duly filed with the Florida Department of State or such later time as is agreed upon by the Parties and specified in the Articles of Merger in accordance with the FBCA, and such time is referred to in this Agreement as the "Effective Time." Section 2.4 Articles of Incorporation; Bylaws. The Articles of Incorporation of the Company in effect immediately prior to the Effective Time, shall be the Articles of Incorporation of the Surviving Corporation until thereafter amended in accordance with applicable law. The Bylaws of the Company in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Corporation until thereafter amended as provided by law, the Articles of Incorporation or such Bylaws. 4 10 Section 2.5 Directors and Officers of the Surviving Corporation. (a) The directors of Acquisition immediately prior to the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation until their successors shall have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the FBCA, and the Surviving Corporation's Articles of Incorporation and Bylaws. (b) The officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly appointed and qualified, or until their earlier death, resignation or removal. ARTICLE III CONVERSION OF SHARES Section 3.1 Conversion of Shares. As of the Effective Time, by virtue of the Merger and without any action on the part of the Parties or the holders of any Shares of the Company: (a) Each issued and outstanding Share (other than Shares to be canceled in accordance with Section 3.1(c) and Dissenting Shares (as defined in Section 3.3)) automatically shall be converted into the right to receive the Offer Price in cash (the "Merger Consideration"), payable, without interest, to the holder of such Share, upon surrender, in the manner provided in Section 3.2, of the certificate that formerly evidenced such Share. All such Shares, when so converted, shall no longer be outstanding and automatically shall be canceled and retired and shall cease to exist, and each holder of a certificate representing any such Shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration therefor upon the surrender of such certificate in accordance with Section 3.2. Any payment made pursuant to this Section 3.1(a) shall be made net of applicable withholding taxes in accordance with Section 3.2(f) to the extent that such withholding is required by law. (b) Each issued and outstanding share of common stock, par value $1.00 per share, of Acquisition shall be converted into and become one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation. (c) All Shares that are owned at the Effective Time by the Company, Parent, Acquisition or any other direct or indirect wholly-owned Subsidiary (as defined in Section 4.1) of the Company, Parent or Acquisition shall be canceled and retired and no Merger Consideration shall be delivered in exchange therefor. Section 3.2 Exchange of Certificates. (a) Prior to the Effective Time, Parent shall designate an agent reasonably satisfactory to the Company to act as agent for the holders of the Shares (other than the Shares held by Parent, Acquisition, the Company or any of their Subsidiaries, and Dissenting Shares) in connection with the Merger (the "Paying Agent") to receive in trust, the aggregate Merger Consideration to which holders of Shares shall become entitled pursuant to Section 3.1(a). At the Effective Time, Parent shall deposit the Merger Consideration with the Paying Agent. The Merger Consideration shall be invested by the Paying Agent as directed by Parent or the Surviving Corporation. If for any reason (including losses) the funds held by the Paying Agent are inadequate to pay the amounts to which the Shareholders shall be entitled under Section 3.1(a), Parent and the Surviving Corporation shall be liable for the payment thereof. (b) As promptly as practicable after the Effective Time, Parent and the Surviving Corporation shall cause to be mailed to each record holder, as of the Effective Time, of an outstanding certificate or certificates which immediately prior to the Effective Time represented Shares (the "Certificates" or individually, a "Certificate"), whose Shares were converted pursuant to Section 3.1(a) into the right to receive the Merger Consideration, a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to a Certificate shall pass, only upon proper delivery of the Certificate to the Paying Agent and shall be in such form and have such other provisions as Parent may reasonably specify) and instructions for effecting the surrender of a Certificate in exchange for the Merger Consideration for the Shares. Upon surrender of a Certificate for cancellation to the Paying Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal duly executed and completed in accordance with the instructions thereto, and any other required documents, the holder of such Certificate shall receive promptly in 5 11 exchange therefor the Merger Consideration for each Share formerly evidenced thereby, and such Certificate shall forthwith be canceled. No interest will be paid or accrued on the cash payable upon the surrender of a Certificate. If payment of the Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition of payment that the Certificate so surrendered be properly endorsed or otherwise be in proper form for transfer and that the Person requesting such payment shall (i) have paid any transfer and other Taxes required by reason of the payment to a Person other than the registered holder of the Certificate surrendered or (ii) have established to the satisfaction of the Surviving Corporation that such Taxes have been paid or that payment of Taxes is not applicable. Until surrendered as contemplated by this Section 3.2, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration for each Share in cash as contemplated by Section 3.1. (c) At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no transfers on the stock transfer books of the Company of the Shares which were outstanding immediately prior to the Effective Time. From and after the Effective Time, the holders of Certificates evidencing ownership of the Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such Shares, except as otherwise provided for herein or by applicable law. If, after the Effective Time, Certificates are presented to the Paying Agent or the Surviving Corporation, they shall be canceled and exchanged for the Merger Consideration in accordance with the procedures set forth in this Article III. (d) At any time following the first anniversary of the Effective Time, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds (including any interest received with respect thereto) which had been made available to the Paying Agent, and holders shall be entitled to look to the Surviving Corporation (subject to abandoned property, escheat or other similar laws) only as general creditors thereof with respect to the Merger Consideration payable upon due surrender of their Certificates without any interest thereon. Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying Agent shall be liable to any holder of a Certificate for Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. (e) In the event that any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof as determined in accordance with this Article III, provided, that the Person to whom the Merger Consideration is paid shall, as a condition precedent to the payment thereof, give the Surviving Corporation a bond in such sum as it may direct or otherwise indemnify the Surviving Corporation in a manner satisfactory to it against any claim that may be made against the Surviving Corporation with respect to the Shares represented by the Certificate claimed to have been lost, stolen or destroyed. (f) Parent, Acquisition and the Surviving Corporation shall be entitled to deduct and withhold, or cause the Paying Agent to deduct and withhold, from the Offer Price or the Merger Consideration payable to a holder of Shares pursuant to the Offer or the Merger any or all such amounts as are required to be deducted and withheld under the Internal Revenue Code of 1986, as amended (the "Code"), and/or any applicable provision of state, local or foreign tax law. To the extent that amounts are so deducted and withheld by Parent, Acquisition or the Surviving Corporation, such deducted and withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares in respect of which such deduction and withholding was made by Parent, Acquisition or the Surviving Corporation. Section 3.3 Dissenters' Rights. Notwithstanding anything in this Agreement to the contrary, Shares ("Dissenting Shares") that are outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Merger or consented thereto in writing and who has delivered a written demand for payment of such shares in accordance with Sections 607.1301-607.1302 and 607.1320 of the FBCA ("Dissenting Shareholder"), shall not be converted into the right to receive the Merger Consideration unless and until such holder fails to perfect or effectively withdraws or otherwise loses its right to payment as a dissenting shareholder under the FBCA. If any Dissenting Shareholder shall have failed to perfect or shall have effectively withdrawn or otherwise lost its right to payment as a Dissenting Shareholder, such Dissenting 6 12 Shares shall thereupon be converted into and become exchangeable for the rights to receive, as of the Effective Time, the Merger Consideration pursuant to Section 3.1 for each Share without interest or dividends thereon. The Company shall give Parent (i) prompt notice of any demands received by the Company for payment of Shares, written demands for appraisal of any Shares, attempted withdrawals of such demands and any other instruments served pursuant to the FBCA and received by the Company relating to shareholders' rights of appraisal, and (ii) the opportunity to direct all negotiations and proceedings with respect to demands for appraisal under the FBCA. Neither the Company nor the Surviving Corporation shall, except with the prior written consent of Parent, voluntarily make any payment with respect to, or settle or offer to settle, any such demands. Section 3.4 Shareholders' Meeting. (a) Following the purchase of the Shares pursuant to the Offer, if required by applicable law in order to consummate the Merger, (i) the Company, acting through its Board of Directors, shall, in accordance with applicable law, duly call, give notice of, convene and hold a special meeting (the "Special Meeting") of its Shareholders and submit this Agreement to a vote of the Company's Shareholders; (ii) the Company shall prepare a preliminary proxy statement (the "Preliminary Statement") relating to the Merger and this Agreement which shall comply as to form with all applicable laws and which shall include all information concerning the Company, Parent and Acquisition required to be set forth therein pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the applicable rules and regulations thereunder (the "1934 Act Rules", the 1934 Act Rules together with the 1934 Act, the "Exchange Act"); (iii) the Company shall, subject to review of the Preliminary Statement by the SEC and notification (either orally or in writing) to the Company that the SEC has no further comments relating to such Preliminary Statement, distribute to the Shareholders a letter to Shareholders, notice of meeting, proxy statement and form of proxy in connection with the Merger (collectively, including any amendments or supplements thereto, the "Proxy Statement"); (iv) the Company shall file a definitive form of the Proxy Statement, which shall reflect compliance with or resolution of the comments and requests in accordance with the Exchange Act from the SEC as the Company and Parent shall deem appropriate; (v) the Company shall distribute the definitive Proxy Statement to the Shareholders in accordance with applicable law; and (vi) the Company shall take all such other reasonable action necessary or appropriate to obtain the lawful approval of this Agreement by the Shareholders. (b) The Company and Parent shall each pay one-half ( 1/2) of the expenses related to the printing, preparation, filing and mailing of the Proxy Statement. Parent shall pay the Preliminary Statement fee to the SEC. (c) Parent and Acquisition shall furnish to the Company all information concerning Parent, Acquisition and their Affiliates (as defined in Section 9.5) required by the Exchange Act or as otherwise required by the SEC to be set forth in the Proxy Statement. (d) Each of the Company and Parent shall consult and confer with the other and the other's counsel regarding the Preliminary Statement and the Proxy Statement and each shall have the opportunity to comment on the Preliminary Statement and the Proxy Statement and any amendments and supplements thereto before the Preliminary Statement and the Proxy Statement, and any amendments or supplements thereto, are filed with the SEC or mailed to the Shareholders. Each of the Company and Parent will provide to the other copies of all correspondence between it (or its advisors) and the SEC relating to the Preliminary Statement and the Proxy Statement. 7 13 (e) Parent will vote, or cause to be voted, all Shares acquired by Parent, Acquisition or any other Subsidiary of Parent in favor of the Merger and the approval of this Agreement. (f) Notwithstanding the provisions of Sections 3.4 (a) and (b), in the event that Parent, Acquisition and any other Subsidiaries of Parent shall acquire in the aggregate at least 80% of the outstanding shares of each class of capital stock of the Company pursuant to the Offer or otherwise, the parties hereto shall, subject to Article VII hereof, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after such acquisition, without a meeting of Shareholders of the Company, in accordance with Section 607.0704 of the FBCA. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to Parent and Acquisition that, except as expressly set forth in the Disclosure Schedule or expressly disclosed in the Company SEC Documents (as later defined): Section 4.1 Organization. (a) The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Florida, has all requisite corporate power and corporate authority and all necessary governmental approvals to own, lease and operate its properties and other assets and to conduct its business as it is now being conducted, and is qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except where the failure to be so organized, existing and in good standing or to have such power, authority or governmental approvals, or to be so qualified would not have a Material Adverse Effect (as defined below) on the Company and the Company Subsidiaries, taken as a whole, or would not materially impair or delay the consummation of the transactions contemplated by this Agreement. Included in the SEC Documents are a complete and correct copy of each of the Company's Articles of Incorporation, as amended, and its Bylaws, as currently in effect. For purposes of this Agreement, (i) any reference to any event, change, effect or violation of a representation or warranty hereunder having a "Material Adverse Effect" on or with respect to any Person (or group of Persons taken as a whole) means an event, change, effect or violation of a representation or warranty hereunder that is materially adverse to the financial condition, business, or results of operations of such Person (or, if used with respect thereto, of such group of Persons taken as a whole), provided that a Material Adverse Effect shall not include any adverse effect resulting from changes in general economic conditions or conditions generally affecting the industries in which Parent and the Company operate; (ii) "Subsidiary" shall mean with respect to any Person, any corporation or other entity of which 50% or more of the securities or other interests having by their terms ordinary voting power to elect a majority of the Board of Directors or others performing similar functions with respect to such entity is directly or indirectly owned by such Person; and (iii) "Person" shall mean an individual, partnership, joint venture, limited liability company, trust, corporation, unincorporated entity or Governmental Entity (as defined in Section 4.4). All subsidiaries of the Company are listed in Section 4.1(b) of the Disclosure Schedule. (b) Each of the Company's Subsidiaries (individually, a "Company Subsidiary," and, collectively, "Company Subsidiaries") is listed in Section 4.1(b) of the Disclosure Schedule, and is a corporation or other business entity duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization. Each of the Company Subsidiaries (i) has the corporate or other organizational power and authority required for it to own its properties and assets and to carry on its business as it is now being conducted, (ii) is duly qualified to do business as a foreign corporation or other foreign business entity and is in good standing in each jurisdiction in which the ownership of its properties or the conduct of its business requires such qualification, except for jurisdictions in which the failure to be so qualified or in good standing would not have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole and (iii) is 100% owned by the Company, provided however, that Fillberg Limited is 50% owned by the Company and 50% owned by Addwood Limited, and Wingreat Limited is 50% owned by the Company and 50% owned by Elemax, a Hong Kong corporation. All the outstanding shares of capital stock of, or other 8 14 ownership interests in, the Company Subsidiaries are duly authorized, validly issued, fully paid and non-assessable and, with respect to such shares or ownership interests that are owned by the Company or the Company Subsidiaries, are free and clear of all Liens (as defined in Section 4.4). Other than the Subsidiaries listed in Section 4.1(b) of the Disclosure Schedule, there are no Persons in which the Company owns, of record or beneficially, any direct or indirect equity or similar interest, or any right (contingent or otherwise) to acquire the same. Section 4.2 Capitalization. (a) The authorized capital stock of the Company consists of 100,000,000 shares of Company Common Stock, par value $.01 per share. As of the date of this Agreement, (i) 19,469,276 Shares are issued and outstanding and (ii) Company Options to acquire 2,322,952 Shares are outstanding under the option plans listed in the Disclosure Schedule. All the outstanding shares of the Company's capital stock are duly authorized, validly issued, fully paid and non-assessable, and all Shares, when issued in accordance with the terms of such option plans, will be duly authorized, validly issued, fully paid and non-assessable. There are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such rights) ("Voting Debt") of the Company issued and outstanding. Except as set forth above, (i) there are no shares of the capital stock of the Company authorized, issued or outstanding and (ii) there are no existing options, warrants, calls, pre-emptive rights, subscriptions or other rights, convertible securities, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company obligating the Company (i) to issue, transfer or sell or cause to be issued, transferred or sold any shares of its capital stock or Voting Debt of, or other equity interest in, the Company or securities convertible into or exchangeable for such shares or equity interests, or obligations of the Company or (ii) to grant, extend or enter into any such option, warrant, call, subscription or other right, convertible security, agreement, arrangement or commitment. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any Shares of the capital stock of the Company or any Affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any other Person and following the Merger, the Company will not have any obligation to issue, transfer or sell any shares of its capital stock. (b) There are no voting trusts or other agreements or understandings to which the Company is a party with respect to the voting of the capital stock of the Company. The Company is not required to redeem, repurchase or otherwise acquire shares of the capital stock of the Company as a result of the transactions contemplated by this Agreement. (c) At the Effective Time, the number of shares of Company Common Stock outstanding (assuming all Company Options outstanding on the date hereof are exercised) shall not exceed 21,792,228. Section 4.3 Authorization; Validity of Agreement. (a) The Company has the requisite corporate power and corporate authority to execute and deliver this Agreement and, subject to approval of its Shareholders as contemplated by Section 3.4, to consummate the transactions contemplated by this Agreement. The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by the Board of Directors of the Company and, except for obtaining the Shareholder approval, if required by law, and making filings contemplated by Section 3.4 of this Agreement, no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement by Parent and Acquisition, this Agreement is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, reorganization, fraudulent conveyance, insolvency, moratorium or similar laws affecting the rights and remedies of creditors generally and by equitable principles of general application (regardless of whether such enforceability is considered in a proceeding at law or in equity). 9 15 (b) The Board of Directors of the Company has duly and validly approved and taken all corporate action required to be taken by it for the consummation by the Company of the transactions contemplated by this Agreement. The affirmative vote of the holders of a majority of all of the Shares entitled to vote is the only vote of the holders of the capital stock of the Company necessary to approve this Agreement and the Merger. Section 4.4 No Violations; Consents and Approvals. Except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the Exchange Act, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the FBCA, if required by law, for the approval of this Agreement and the Merger by the Shareholders and the filing of the Articles of Merger required by the FBCA, neither the execution and delivery of this Agreement by the Company nor the consummation by the Company of the transactions contemplated by this Agreement will (i) conflict with or violate any provision of the Articles of Incorporation or ByLaws of the Company, (ii) require any filing with, or any permit, authorization, consent or approval of, any court, arbitral tribunal, administrative agency or commission or other governmental or other regulatory authority, agency or official (a "Governmental Entity"), (iii) assuming the accuracy of the representations and warranties of, and performance of the covenants by Parent and Acquisition as set forth in this Agreement, result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) or require any consent under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, guarantee, other evidence of indebtedness, lease, license, contract, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which the Company or any of the Company Subsidiaries or any of its or their assets may be bound (except for any Lease, as defined in Section 4.24) (collectively, the "Company Agreements") or result in the imposition or creation of any lien, charge, security interest, option, claim or encumbrance of any nature whatsoever (collectively, "Liens") on the assets of the Company or any of the Company Subsidiaries or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any of the Company Subsidiaries or any of its or their properties or assets; except in the case of clauses (ii), (iii) or (iv), (A) where the failure to obtain any such permit, authorization, consent or approval or to make any such filing would not have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole, or (B) any such violation, breach or default which would not have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole, or would not prevent or materially delay the consummation of the transactions contemplated hereby. Section 4.5 SEC Reports and Financial Statements. (a) The Company has filed with the SEC, and has made available to Parent, true and complete copies of all forms and documents required to be filed by it since January 1, 2000, under the Exchange Act or the Securities Act of 1933, as amended (the "Securities Act") (as such documents have been amended since the time of their filing, collectively, the "Company SEC Documents"). As of their respective dates (or, if amended, as of the date of the last such amendment), the Company SEC Documents, including any financial statements or schedules included therein (i) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (ii) complied as to form in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, and the applicable rules and regulations of the SEC thereunder. (b) The consolidated financial statements included in the Company SEC Documents (i) have been prepared from, and are in accordance with, the books and records of the Company, (ii) have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis during the periods involved (except as otherwise noted therein and except that the quarterly financial statements are subject to normal recurring year end adjustment and do not contain all footnote disclosures required by GAAP), and (iii) fairly present in all material respects the financial position and the results of operations and cash flows of the Company and the Company Subsidiaries as at the dates thereof or for the periods presented therein. None of the Company's Subsidiaries is required to file any forms, reports or other documents with the SEC. 10 16 Section 4.6 Absence of Certain Changes. Since January 1, 2000, the Company and the Company Subsidiaries have conducted their businesses and operations only in the ordinary course and consistent with past practice, and there have not occurred (i) any events or changes (including the incurrence of any liabilities or obligations of any nature, whether or not accrued, contingent or otherwise) having or which would have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole; (ii) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to the equity interests of the Company; or (iii) any change by the Company in accounting principles or methods, except insofar as was or may be required by a change in GAAP. Since January 1, 2000, the Company has not taken any of the actions prohibited by Section 6.1. For purposes of this Agreement, "knowledge of the Company" shall mean the actual knowledge of the individuals specified in Section 4.6 of the Disclosure Schedule. Section 4.7 [Reserved] Section 4.8 [Reserved] Section 4.9 Employee Benefit Plans; ERISA. (a) Section 4.9(a) of the Disclosure Schedule contains a true and complete list of each bonus, incentive compensation, stock option, severance or termination pay, hospitalization or other medical, life or other insurance, supplemental unemployment benefits, profit-sharing, program, agreement, fund, policy, practice or arrangement, including all employee benefit plans within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), sponsored, maintained or contributed to by the Company (or for which the Company makes payroll deductions) or by any trade or business, whether or not incorporated (an "ERISA Affiliate"), that together with the Company would be deemed a "single employer" within the meaning of section 4001 of ERISA, for the benefit of any employee or former employee of the Company and their dependents, or any ERISA Affiliate (collectively, the "Plans"). Section 4.9(a) of the Disclosure Schedule identifies each of the Plans that is an "employee benefit plan," as defined in section 3(3) of ERISA (collectively, the "ERISA Plans"). Neither the Company nor any Company Subsidiary has, or has had, any deferred compensation, stock purchase, pension or retirement plan (other than a 401(k) plan) or any "defined benefit plan" as defined in Section 3(35) of ERISA. (b) With respect to each Plan, the Company has heretofore delivered or made available to Parent true and complete copies of each of the following documents: (i) the Plan document, including all amendments thereto; (ii) the annual report for the most recent three plan years, if required under ERISA; (iii) the most recent Summary Plan Description (as defined in ERISA) required under ERISA with respect thereto, including all summaries of material modifications; (iv) if the Plan is funded through a trust or any third party funding vehicle, the trust or other funding agreement and the latest financial statements thereof; and (v) the most recent determination letter received from the Internal Revenue Service with respect to each Plan intended to qualify under section 401(a) of the Code or copies of any pending determination letter requests. (c) No Lien imposed under the Code or ERISA exists or is to the knowledge of the Company likely to be imposed on account of any ERISA Plan. The form of each ERISA Plan intended to be "qualified" within the meaning of section 401(a) of the Code has been determined by the Internal Revenue Service to be so qualified (or timely application has been made therefor); no event has occurred since the date of such determination that would adversely affect such qualification for which the cost of correction would have a Material Adverse Effect on the Company; and each trust maintained thereunder has been determined by the Internal Revenue Service to be exempt from taxation under section 501(a) of the Code. Except as expressly disclosed in Section 4.10(b) of the Disclosure Schedule, each Plan has been operated and administered in 11 17 accordance with its terms, except for such non-compliance that would not have a Material Adverse Effect on the Company. (d) There are no pending, scheduled or, to the knowledge of the Company, anticipated audits or investigations with respect to the Plans by any governmental agency or authority. (e) Neither the Company, nor, to the knowledge of the Company, any ERISA Affiliate, any of the ERISA Plans, any trust created thereunder, any trustee or administrator or any other person or entity acting as a fiduciary thereof has engaged in a transaction or has taken or failed to take any action in connection with which the Company, any ERISA Affiliate, any of the ERISA Plans, any such trust, any trustee or administrator thereof, or any party dealing with the ERISA Plans or any such trust could be subject to either a civil penalty assessed pursuant to section 409 or 502(i) of ERISA or a tax imposed pursuant to section 4975, 4976 or 4980B of the Code which would have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole. (f) No Plan provides benefits, including death, medical, dental or life insurance benefits (whether or not insured), with respect to current or former employees after retirement or other termination of employment, other than (i) coverage mandated by applicable law, (ii) disability, death or retirement benefits under any "employee pension plan," as that term is defined in section 3(2) of ERISA, (iii) deferred compensation benefits or severance benefits accrued as liabilities on the books of the Company or an ERISA Affiliate, (iv) severance pay, disability benefits and benefit claims under ERISA Plans incurred on or prior to a termination of employment but not reported or paid until after such termination, or (v) benefits, the full cost of which is borne by the current or former employee (or his or her beneficiary). (g) Neither the Company nor any Company Subsidiary has employment agreements or severance agreements with any officer, director or other employee as of the date of this Agreement. There are no such agreements whose terms have expired but pursuant to which the Company has any continuing liability to any officer, director or employees or any former officer, director or employee of the Company. Section 4.10 Litigation; Compliance with Law. (a) There is no suit, claim, action, proceeding or investigation pending or, to the knowledge of the Company, threatened, against or affecting the Company or any Company Subsidiary or any of its or their properties which, if determined adversely to the Company or such Company Subsidiary, would have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole, or would prevent or materially delay the Offer or prevent or materially delay the Company from consummating the Merger or the other transactions contemplated by this Agreement. (b) The Company and each Company Subsidiary is in compliance in all material respects with all laws, statutes, regulations, rules, ordinances, judgments, decrees, orders, writs and injunctions, of any court or Governmental Entity relating to any of the property owned or leased by it, or applicable to its business, including employment and employment practices, labor relations, occupational safety and health, interstate commerce and antitrust laws, except for such non-compliance that would not have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole. Neither the Company nor any Company Subsidiary nor any of its or their properties is subject to any judgment, decree, order, writ or injunction having, or which would have, a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole, or which would prevent or materially delay the consummation of the transactions contemplated by this Agreement. (c) The Company and each Company Subsidiary holds all licenses, permits, variances and approvals of Governmental Entities necessary for the lawful conduct of its businesses as currently conducted except where the failure to hold such licenses, permits, variances or approvals would not have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole. (d) This Section 4.10 does not apply to any ERISA, tax, environmental or real property matter specifically covered by Sections 4.9, 4.13, 4.14 or 4.24. 12 18 Section 4.11 Intellectual Property. Section 4.11 of the Disclosure Schedule is a complete list of all registered trademarks, trade names and service marks and trademarks, trade names and service marks for which registration has been applied (collectively, the "Intellectual Property") owned or filed by or licensed to the Company or to any Company Subsidiary, and with respect to registered trademarks and service marks, contains a list of all jurisdictions in which such trademarks and service marks are registered or applied for and all registration and application numbers. There are no unregistered trademarks, trade names or service marks used by the Company or any Subsidiary which are material to the business of the Company and the Company Subsidiaries, taken as a whole. The Intellectual Property that is owned by the Company or any Company Subsidiary is not subject to any Liens and, to the knowledge of the Company, there are no infringements or other violations or conflicts with the rights of others with respect to the (i) use of or other conduct by the Company or any Company Subsidiary within the scope of, (ii) ownership of, (iii) validity of, or (iv) enforceability of, any Intellectual Property owned by the Company or any Company Subsidiary that has or would have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole. Section 4.12 Company Agreements. Each of the Company Agreements that, in the judgment of the individuals specified in the Disclosure Schedule whose actual knowledge constitutes knowledge of the Company, is material to the business and operations of the Company as currently conducted is listed in the SEC Documents or in Section 4.12 of the Disclosure Schedule (collectively, the "Material Company Agreements"), and is a valid, binding and enforceable obligation of the Company, and there are no defaults thereunder on the part of the Company or, to the knowledge of the Company, on the part of any other party thereto. Except as expressly disclosed in Section 4.12-1 of the Disclosure Schedule, neither the Company nor any Company Subsidiary is a party to any license agreement or sales agency or distributorship agreement that limits in any material manner the ability of the Company or any Company Subsidiary to compete in or conduct any significant line of business or compete with any Person or in any geographic area or during any period of time, which is material in the judgment of the individuals specified in the Disclosure Schedule whose actual knowledge constitutes knowledge of the Company. Except as expressly disclosed in Section 4.12-2 of the Disclosure Schedule, neither the Company nor any Company Subsidiary is bound by any agreement or contract for consulting, advisory, professional or other similar services which is material in the judgment of the individuals specified in the Disclosure Schedule whose actual knowledge constitutes knowledge of the Company. Section 4.13 Taxes. (a) The Company has (i) filed (or there have been filed on its behalf) with the appropriate Governmental Entity all Tax Returns (as later defined) required to be filed by it and each of the Company Subsidiaries and such Tax Returns are true, correct and complete in all material respects, (ii) maintained in all material respects all required records with respect to all Tax Returns, (iii) withheld or paid, as appropriate, in full (or there has been paid on its behalf) all Taxes (as later defined) that are due and payable for all taxable periods and portions thereof and (iv) made provision, in accordance with GAAP, for all future material Tax liabilities (including reserves for deferred Taxes established in accordance with GAAP and for all material contingent Tax liabilities) for all taxable periods and portions thereof. (b) No material federal, state, local or foreign audit or other administrative proceeding ("Audit") or court proceedings are presently pending with regard to any Taxes or Tax Returns of the Company or any Company Subsidiary, and the Company has not received written or, to the knowledge of the Company, oral notice of either the commencement of any such Audit or of the intention on the part of any Governmental Entity to commence any such Audit, and the Company has not received written notice that it or any Company Subsidiary has not filed a (i) Tax Return or (ii) paid material Taxes required to be filed or paid by it. (c) No Governmental Entity has asserted in writing against the Company or any Company Subsidiary any material deficiency for any Taxes which have not been satisfied in full or adequately reserved for in accordance with GAAP on the financial statements included in the Company SEC Documents. (d) There are no Liens for Taxes upon any property or assets of the Company or any Company Subsidiary (except for current Taxes that are not yet due and payable). 13 19 (e) [Reserved] (f) The Company has not waived any statute of limitation with respect to Taxes (which waiver is currently in effect) or agreed to any extension of time with respect to a Tax assessment or deficiency (which has not yet been paid) or extended the time to file any income or other material Tax Return (which Tax Return has not subsequently been filed). (g) Neither the Company nor any Company Subsidiary is a party to any income tax allocation, tax indemnity or tax sharing agreement or arrangement, and neither the Company nor any Company Subsidiary has ever joined in the filing of a consolidated, combined, unitary or other group Tax Return with any corporation other than the affiliated group of which the Company is the common parent. The Company and Company Subsidiaries have no liability for Taxes of any other corporation, person or entity other than members of the affiliated group of which the Company is the common parent under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law) by contract, or otherwise that would have a Material Adverse Effect on the Company. (h) The Company and the Company Subsidiaries have complied in all material respects with all applicable laws, rules and regulations relating to the payment and withholding of Taxes and has, within the time and manner prescribed by law, withheld and paid over to the proper Governmental Entity all amounts required to be withheld and paid over under all applicable laws. (i) The Company has never been a member of an affiliated group other than the group for which it is currently the common parent. (j) For purposes of this Agreement: "Taxes" shall mean any and all federal, state, local, foreign and other taxes, charges, fees, levies and other assessments, including all net income, gross income, gross receipts, excise, stamp, real and personal property, ad valorem, withholding, workers' compensation, estimated, social security, unemployment, occupation, sales, use, service, service use, license, net worth, payroll, franchise, severance, transfer, recording and other taxes, assessments and charges imposed by any Governmental Entity and any interest, penalties, and additions to tax attributable thereto; and "Tax Return" shall mean any return, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including any information return, including any information return or report with respect to backup withholding and other payments to third parties, claim for refund, amended return or declaration of estimated Tax. Section 4.14 Environmental Matters. (a) The Company and all Company Subsidiaries are in compliance with all applicable Environmental Laws (as later defined) which compliance includes (i) the possession of permits, licenses, registrations, variances, exemptions and other governmental authorizations and financial assurances required under applicable Environmental Laws for the Company and the Company Subsidiaries to operate their businesses as currently conducted, and (ii) compliance with the terms and conditions thereof, except in all cases above where such non-compliance would not have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole. (b) To the knowledge of the Company, (i) there are no Environmental Claims (as later defined) pending or threatened in writing against the Company or any current or former Company Subsidiary; (ii) neither the Company nor any current or former Company Subsidiary has received any written request for information under any Environmental Law (as later defined) from any Governmental Entity with respect to any actual or alleged environmental contamination which has not been remediated or otherwise resolved; (iii) neither the Company nor any current or former Company Subsidiary is conducting or has conducted any environmental remediation or investigation under any Environmental Law; and (iv) neither the Company nor any current or former Company Subsidiary is subject to the order of any Governmental Entity under any Environmental Law or relating to the remediation of any Hazardous Substance (as later defined) contamination. 14 20 (c) To the knowledge of the Company, there have been no Releases (as later defined) of any Hazardous Substance at any of the property currently or formerly owned or leased by the Company or any current or former Company Subsidiary, or of any Hazardous Substance which was generated, stored, disposed of or transported by the Company or any current or former Company Subsidiary, which could form the basis of any Environmental Claim against the Company or any current or former Company Subsidiary or against any person or entity whose liability for any Releases the Company or any current or former Company Subsidiary has or may have retained or assumed either contractually or by operation of law, except, in all such cases above, where such Releases would not have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole. (d) As used in this Agreement: (i) the term "Environmental Claim" means any claim, action, investigation or written notice to the Company or to any Company Subsidiary by any person or entity alleging potential liability or responsibility of the Company or any Company Subsidiary (including, without limitation, potential liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, personal injuries, or penalties) arising out of, based on, or resulting from (a) the presence or Release of any Hazardous Substance at any location, whether or not currently or formerly owned or leased by the Company or any Company Subsidiary or (b) circumstances forming the basis of any violation or alleged violation of any applicable Environmental Law; (ii) the term "Environmental Law" means all federal, state, local and foreign laws, rules, regulations, ordinances, decrees, orders and other binding legal requirements, as in effect as of the date of this Agreement, relating to pollution or protection of the environment or human health in any manner applicable to the Company or to any Company Subsidiary, including laws and regulations relating to Releases or threatened Releases of Hazardous Substances, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances; (iii) the term "Hazardous Substance" means any materials, chemicals, pollutants, contaminants, hazardous wastes, toxic substances or radioactive materials regulated under any Environmental Law, and oil and petroleum products; and (iv) the term "Release" means any release, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration into the indoor or outdoor environment (including ambient air, surface water, groundwater and surface or subsurface strata). Section 4.15 No Default. The business of the Company (including that of the Company Subsidiaries) is not being conducted in default or violation of any term, condition or provision of (a) its applicable Articles of Incorporation or Bylaws, or (b) any federal, state, local or foreign law, statute, regulation, rule, ordinance, judgment, decree, writ, injunction, franchise, permit or license or other governmental authorization or approval applicable to the Company or any Company Subsidiary, which, in either case, would materially impair the ability of the Company to consummate the Merger or the other transactions contemplated by this Agreement. Section 4.16 Opinion of Financial Advisor. The Board of Directors of the Company has received an opinion from Credit Suisse First Boston Corporation to the effect that, as of the date of this Agreement, the cash consideration to be received in the Offer and Merger is fair to the Shareholders (other than Parent and its Affiliates) from a financial point of view, and a true and correct copy of such opinion will be delivered to Parent. Section 4.17 Brokers. Except for the fees payable by the Company to Credit Suisse First Boston Corporation (a true and complete copy of whose engagement letter has been provided to Parent), no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. 15 21 Section 4.18 Personal Property. The Company and each Company Subsidiary has (i) good and valid title to, or in the case of leased property, has valid leasehold interests in, all personal, whether tangible or intangible, properties and assets, and (ii) all rights, licenses and other contractual rights, in the case of each of clause (i) and (ii) above, as necessary to conduct the business of the Company and each Company Subsidiary as currently conducted, except to the extent the failure of this representation and warranty to be true would not have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole. Section 4.19 Board Recommendations. The Board of Directors of the Company, at a meeting duly called and held prior to the date hereof, has by a majority vote of those directors present (i) determined that this Agreement and the transactions contemplated by this Agreement are fair to and in the best interests of the Shareholders of the Company and has approved the same, and (ii) resolved to recommend that the holders of the shares of Company Common Stock approve this Agreement and the transactions contemplated in this Agreement, subject to Section 6.2. Section 4.20 Labor Matters. Neither the Company nor any Company Subsidiary is a party to or bound by any collective bargaining agreement or other labor union contract applicable to persons employed by the Company or any Company Subsidiary nor, to the knowledge of the Company, as of the date of this Agreement, are there any activities or proceedings of any labor union to organize any such employees. As of the date of this Agreement, (i) there are no current union representation questions involving employees of the Company or any Company Subsidiary which have, had or would have a Material Adverse Effect on the Company, (ii) there are no unfair labor practice charges or complaints pending against the Company or any Company Subsidiary before the National Labor Relations Board and (iii) there is no labor strike, lockout, organized slowdown or organized work stoppage in effect or, to the knowledge of the Company, threatened against the Company or any Company Subsidiary. Section 4.21 Personal Property Leases. The Disclosure Schedule describes, to the knowledge of the Company, all material personal property leases of the Company and the Subsidiaries. Section 4.22 Insurance. Each insurance policy to which the Company is a party is in full force and effect and is listed on Section 4.22 of the Disclosure Schedule. The Company has not received any written notice from the insurer disclaiming coverage or reserving rights with respect to any material claim or any such policy in general. Section 4.23 Accounts Receivable; Inventory. (a) All accounts receivable of the Company arising after the date of the Company Balance Sheet through the date of this Agreement arose in the ordinary course of business. (b) All items of inventories disclosed in the Company SEC Documents were acquired by the Company in the ordinary course of business and, as of the date of this Agreement, have been replenished by the Company in all material aspects in the ordinary course of business consistent with past practices. Section 4.24 Real Estate Matters. (a) The Company (or the Company Subsidiaries as specified in Section 4.24(a)(i) or Section 4.24 (a)(ii) of the Disclosure Schedule, as the case may be) (i) has good, valid and insurable title (subject to all matters disclosed in the title policies referenced in Section 4.24(f) below) to the fee interest in the real property listed in Section 4.24(a)(i) of the Disclosure Schedule (the "Owned Property"), and (ii) to the knowledge of the Company, has good and valid title to all of the leasehold estates in all real properties listed in Section 4.24(a)(ii) of the Disclosure Schedule (collectively, the "Leased Properties" or individually, a "Leased Property"; the Owned Property and Leased Properties being sometimes collectively referred to in this Agreement as the "Real Properties" or individually as a "Real Property"), in each case, to the knowledge of the Company as to the Leased Properties, free and clear of all Liens. Neither the Company nor any Company Subsidiary owns, leases, licenses, uses, occupies or otherwise holds any interest in any real estate other than the Real Properties. No Person listed in Section D of the Disclosure Schedule owns, leases, licenses, uses, occupies or otherwise holds any interest in any of the Real Properties. 16 22 (b) Except to the extent that the inaccuracy of any of the following (or the circumstances giving rise to such inaccuracy) are not reasonably likely to have a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole: (i) to the knowledge of the Company, each of the agreements by which the Company or a Company Subsidiary has obtained a leasehold interest in a Leased Property (individually, a "Lease" and collectively, the "Leases") is in full force and effect in accordance with its respective terms and the Company or the respective Company Subsidiary shown as the tenant on Section 4.24(a)(ii) is the holder of the lessee's or tenant's interest thereunder; to the knowledge of the Company, there exists no default under any Lease and no circumstance exists (except for the Merger) which, with the giving of notice, the passage of time or both, is reasonably likely to result in such a default; (ii) there are no leases, subleases, licenses, concessions or any other contracts or agreements granting to any person or entity other than the Company or the applicable Company Subsidiary any right to the possession, use, occupancy or enjoyment of any Real Property or any portion thereof; (iii) to the knowledge of the Company, the current operation and use of the Real Properties does not violate any statute, law, regulation, rule, ordinance, permit, requirement, order or decree now in effect; the use being made of each Real Property at present is in conformity with the certificate of occupancy, if any, issued for such Real Property; and (iv) there are no existing, or to the knowledge of the Company, threatened, condemnation or eminent domain proceedings (or proceedings in lieu thereof) affecting the Real Properties or any portion thereof. (c) Neither the Company nor any Company Subsidiary is obligated under or bound by any option, right of first refusal, purchase contract, or other contractual right or obligation to acquire, use or operate any real property nor to sell or dispose of any Real Property or any portions thereof or interests therein. (d) Neither the Company nor any Company Subsidiary has transferred, sold, terminated or otherwise disposed of any real property interests for which the Company has any continuing liability with respect to such real property. This Section 4.24(d) does not apply to any environmental matters. (e) Any error, misstatement, omission or inaccuracy with respect to the representations set forth in this Section 4.24, viewed as if it were individually made without reference to Material Adverse Effect, and, with respect to Sections 4.24(a)(ii), 4.24(b)(i) and 4.24(b)(iii), viewed as if made without qualification as to the knowledge of the Company, which either individually or collectively would result in a material ongoing impairment in the use of, operation of, or material adverse financial arrangements with respect to (i) the Main Warehouse described in Section 4.24(a)(ii) of the Disclosure Schedule ("Main Warehouse"), (ii) the Home Office ("Home Office") described in Section 4.24(a)(i) of the Disclosure Schedule or (iii), when combined with any Leases that are terminated by the landlords thereunder pursuant to provisions in such Leases permitting the landlords to do so based upon the Merger, any 10 or more of the other properties listed in Section 4.24(a)(i) or 4.24(a)(ii) of the Disclosure Schedule shall constitute a breach of representations and warranties of the Company in a manner having a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole, under Paragraph (f) of Annex A. Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole, for all purposes of this Agreement. In addition, the determination of Material Adverse Effect under Section (f) of Annex A shall be made without the "knowledge of the Company" qualification in Sections 4.24(a)(ii), 4.24(b)(i) and 4.24(b)(iii). (f) The Company has provided to Parent prior to the execution of this Agreement historical title commitments and title policies obtained by the Company or any Company Subsidiary for the Real Properties listed in Section 4.24(a)(i) of the Disclosure Schedule. (g) Neither the Company nor any Company Subsidiary is in the process of committing to purchase, lease any, license, use, occupy or otherwise hold any interest in any real property. Section 4.25 Schedule 14D-9; Offer Documents; and Proxy Statement. Neither the Schedule 14D-9 nor any information supplied by the Company for inclusion in the Offer Documents will, at the respective times the Schedule 14D-9, the Offer Documents or any amendments or supplements thereto are filed with the SEC or are first published, sent or given to Shareholders, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading. The Schedule 14D-9, will, when filed by the Company with the SEC, comply as to form in all material respects 17 23 with the applicable provisions of the Exchange Act and the rules and regulations thereunder. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to information supplied by or on behalf of Parent or Acquisition which is contained in any of the foregoing documents, or which Parent or Acquisition failed to supply. ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION Parent and Acquisition, jointly and severally, represent and warrant to the Company as follows: Section 5.1 Organization. Parent is a corporation duly organized, validly existing and in good standing under the laws of Delaware, and Acquisition is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida. Each of Parent and Acquisition has all requisite corporate power and corporate authority and necessary governmental approvals to own, lease and operate its respective properties and to carry on its respective business as now being conducted except where the failure to have such power or authority would not have a Material Adverse Effect on Parent or Acquisition, or materially impair or materially delay the consummation of the transactions contemplated by this Agreement. Section 5.2 Authorization; Validity of Agreement. Each of Parent and Acquisition has the requisite corporate power and corporate authority to execute and deliver this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery by Parent and Acquisition of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized by the respective Boards of Directors of Parent and Acquisition and no other corporate proceedings on the part of Parent or Acquisition are necessary to authorize the execution and delivery of this Agreement by Parent and Acquisition and the consummation by Parent and Acquisition of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by Parent and Acquisition. Assuming due authorization, execution and delivery of this Agreement by the Company, this Agreement is a valid and binding obligation of Parent and Acquisition, enforceable against each of them in accordance with its terms, except as such enforceability may be limited by bankruptcy, reorganization, fraudulent conveyance, insolvency, moratorium or similar laws affecting the rights and remedies of creditors generally and by equitable principles of general application (regardless of whether such enforceability is considered in a proceeding at law or in equity). Section 5.3 Consents and Approvals; No Violations. Except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, the Exchange Act and the HSR Act and the filing and recordation of the Articles of Merger as required by the FBCA, no filing with, and no permit, authorization, consent or approval of, any Governmental Entity is necessary for the consummation by Parent or Acquisition of the transactions contemplated by this Agreement. Neither the execution and delivery of this Agreement by Parent or Acquisition nor the consummation by Parent or Acquisition of the transactions contemplated by this Agreement nor compliance by Parent or Acquisition with any of the provisions of this Agreement will (i) conflict with or violate any provision of the Articles of Incorporation or Certificate of Incorporation, as the case may be, or Bylaws, of Parent or Acquisition or (ii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Parent or Acquisition or any of their respective properties or assets, except in the case of clause (ii) where such violations would not have a Material Adverse Effect on Parent and Acquisition, taken as a whole. Section 5.4 Schedule TO, Offer Documents, Registration Statement and Proxy Statement. (a) None of the information supplied by Parent or Acquisition for inclusion in the Preliminary Statement or the Proxy Statement will, at the date mailed to Shareholders and at the time of the Special Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated in the Preliminary Statement and the Proxy Statement or necessary in order to make the statements in the Preliminary Statement and the Proxy Statement, in light of the circumstances under which they are made, not misleading. 18 24 (b) The Schedule TO, the Offer Documents and any information supplied by Parent or Acquisition for inclusion in the Schedule 14D-9 will not, at the respective times the Schedule TO, the Offer Documents, the Schedule 14D-9 or any amendments or supplements thereto are filed with the SEC or are first published, sent or given to Shareholders, as the case may be, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Schedule TO will, when filed by Parent with the SEC, comply as to form in all material aspects with the applicable provisions of the Exchange Act and the rules and regulations thereunder. Not withstanding the foregoing, Parent makes no representation or warranty with respect to information supplied by or on behalf of the Company, which is contained in any of the foregoing documents, or which the Company failed to supply. Section 5.5 Financing. Parent and Acquisition will have sufficient cash available to pay for the Shares that Acquisition becomes obligated to accept for payment and pay for pursuant to the Offer and to pay the aggregate Merger Consideration pursuant to the Merger. Section 5.6 Litigation; Compliance with Law. There is no suit, claim, action, proceeding or investigation pending or, to the knowledge of Parent, threatened against Parent or any Subsidiary of Parent which if determined adversely to Parent or such Subsidiary would prevent or materially delay the Offer or prevent or materially delay the Company from consummating the Merger or the other transactions contemplated by this Agreement. ARTICLE VI COVENANTS Section 6.1 Interim Operations of the Company. (1) The Company covenants and agrees that, except as (i) expressly provided to the contrary in this Agreement, (ii) expressly disclosed in Section 6.1 of the Disclosure Schedule or (iii) approved in writing by Parent (which consent Parent agrees it shall not unreasonably withhold; requests for which consent may be made, at the option of the Company, pursuant to the provisions of Section 9.4 or by telephonic request to William D. Edkins, telephone number 314-342-6757, or to such other person and telephone number as Mr. Edkins may designate from time to time, from and after the date of this Agreement and prior to the Effective Time or the date, if any, on which this Agreement is earlier terminated: (a) the business of the Company and of each Company Subsidiary shall be conducted only in the ordinary course consistent with the requirements of law and past practice and, to the extent consistent therewith, the Company shall use its commercially reasonable efforts to preserve its and each Company Subsidiary's business organization intact and maintain its and their existing relations with customers, suppliers, employees, creditors and business partners, and the Company shall use its reasonable efforts to cause the key executive employees of the Company and the Company Subsidiaries (such individuals being later collectively referred to as the "Key Executives" or individually as a "Key Executive" (which Key Executives have been identified previously in writing by Parent and the Company)) to continue to perform their duties as currently performed for the Company and the Company Subsidiaries; (b) the Company shall not, and shall not permit any Company Subsidiary to, transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any material assets other than in the ordinary and usual course of business; (c) the Company shall not, and shall not permit any Company Subsidiary to, except as required by law or as otherwise expressly provided elsewhere in this Agreement: (i) grant any increase in the compensation payable or to become payable to any of the Key Executives, key employees or directors, (ii) enter into any, or amend any existing, employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company; provided, however, that the Company may, in the ordinary course of business, consistent with 19 25 past practice, enter into termination agreements or arrangements with employees other than any Key Executive (collectively, the "Non-Key Employees"), if the aggregate value of such agreements and arrangements does not exceed $250,000 and with respect to any individual Non-Key Employee does not have a value not in excess of $25,000, or (iii) hire any employee or obligate itself to hire any employee having a title or the responsibility of vice president or above. (d) the Company shall not, and shall not permit any Company Subsidiary to, modify, amend or terminate any of the Material Company Agreements or waive, release or assign any material rights or claims with respect to such Material Company Agreements, except in the ordinary course of business and consistent with past practice; (e) the Company shall not permit any material insurance policy naming it or any Company Subsidiary as a beneficiary or a loss payable payee to be canceled or terminated without notice to and consent of Parent, unless equivalent replacement policies, without lapse of coverage, shall be put in place; (f) the Company shall not settle, compromise, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, (x) to the extent reflected or reserved against in, or contemplated by, the Company Balance Sheet (or the notes thereto), (y) incurred in the ordinary course of business and consistent with past practice or (z) which are legally required to be paid, discharged or satisfied (provided that if such claims, liabilities or obligations referred to in this clause (z) are legally required to be paid and are also not otherwise payable in accordance with clauses (x) or (y) above, the Company will notify Parent in writing if such claims, liabilities or obligations exceed, individually or in the aggregate, $200,000 in value, reasonably in advance of their payment), provided that notwithstanding anything to the contrary set forth in this Section 6.1(1)(f), the Company shall not settle or compromise any claim or litigation brought by any Shareholder of the Company making such claim or bringing such litigation as such a Shareholder, either individually or on behalf of any class; (g) the Company shall take all reasonable steps in defense of any claim asserted against the Company in any proceedings before any Governmental Entity; (h) the Company shall not make, or commit to make, any capital expenditures in excess of $100,000 for each such individual expenditure or $300,000 in the aggregate unless it is expressly disclosed in the Company's capital expenditure plan shown on Section 6.1(1)(h) of the Disclosure Schedule ("Company's Capital Expenditure Plan") or is paid out of or is planned to be paid out of any unallocated capital item expressly disclosed in the Company's Capital Expenditure Plan; and (i) (A) except in the ordinary course of the Company's business consistent with past practice, the Company shall not, and shall not permit any Company Subsidiary to, amend, modify, supplement or terminate any agreement listed in Sections 4.24(a)(i) and 4.24(a)(ii) of the Disclosure Schedule with respect to any Real Property or enter into any new agreement or arrangement with respect to real property except as expressly listed in Section 6.1(1)(i)(A) of the Disclosure Schedule; and (B) neither the Company nor any Company Subsidiary may enter into or execute subordination non-disturbance agreements, estoppel certificates or similar instruments required to be executed pursuant to the terms of the agreements listed in Section 4.24(a)(ii) with respect to the Leases, provided, however, that the Company and the Company Subsidiaries may enter into and execute such subordination non-disturbance agreements, estoppel certificates and similar instruments if the applicable Lease prescribes the content thereof and such instrument conforms thereto in all material respects. (j) the Company shall not, and shall not permit any Company Subsidiary to, except as required by law or as otherwise expressly provided elsewhere in this Agreement, adopt any new or amend or otherwise change any benefit agreement with any individual employee. (k) the Company shall not, and shall not permit any Company Subsidiary to, except in the ordinary course of business (i) make any loans, advances or capital contributions to, or investments in, any other Person; (ii) except as described in Section 6.1(2)(d) of the Disclosure Schedule, incur, assume, or prepay any indebtedness for borrowed money or enter into any capital leases or other arrangements with similar 20 26 economic effects or issue any debt securities; or (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person. (2) The Company covenants and agrees that, except as (i) expressly provided to the contrary in this Agreement, (ii) expressly disclosed in Section 6.1 of the Disclosure Schedule or (iii) approved in writing by Parent (requests for which approvals may be made, at the option of the Company, pursuant to the provisions of Section 9.4 or by telephonic request to William D. Edkins, telephone number 314-342-6757 or to such other person and telephone number as Mr. Edkins may designate from time to time), from and after the date of this Agreement and prior to the Effective Time or the date, if any, on which this Agreement is earlier terminated: (a) the Company shall not, directly or indirectly, split, combine, reclassify, purchase or redeem any shares of its capital stock or purchase or redeem any rights, warrants or options to acquire any such shares; (b) the Company shall not, and shall not permit any Company Subsidiary to: (i) amend its Articles of Incorporation or Bylaws; (ii) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of the capital stock of any class of the Company or of any Company Subsidiary, other than issuances pursuant to the exercise of Company Options and Company benefit plan obligations disclosed in Section 4.9(a) or Section 4.2 of the Disclosure Schedule, in each case which are outstanding on the date hereof; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; (c) the Company shall not, and shall not permit any Company Subsidiary to, except as required by law or as otherwise expressly provided in Section 6.1(1)(j) or elsewhere in this Agreement: (i) adopt any new, or (ii) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing, bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan agreement, program, fund, policy, practice or arrangement which applies to more than one employee; (d) the Company shall not, and shall not permit any Company Subsidiary to, except in the ordinary course of business or except as described in Section 6.1(2)(d) of the Disclosure Schedule, enter into any material commitment or transaction (including any borrowing, capital expenditure or purchase, sale or lease of assets); (e) the Company shall not adopt or authorize a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than with respect to the Merger); (f) the Company shall not change any method of accounting or any accounting principle or practice, except for changes required by a concurrent change in GAAP or by SEC requirements or staff interpretations; (g) as to all Intellectual Property relating to the name "David's Bridal," "David's Bridal Warehouse", "David's Bridal Wearhouse" and other related uses of such names and/or marks, the Company shall (i) use diligent efforts to maintain or otherwise preserve its rights in all such Intellectual Property owned by the Company and the Company Subsidiaries and use diligent efforts not to permit any of such Intellectual Property to lapse, expire or go abandoned by any action or inaction on its part; (ii) diligently and responsively prosecute all applications or registrations with respect to such Intellectual Property before whichever Governmental Entity the same may be pending; and (iii) not allow any rights with respect to such Intellectual Property to go abandoned for failure to timely file new applications for registrations corresponding to the subject matter thereof; (h) the Company shall not voluntarily make or agree to make any material change in any Tax accounting method, waive or consent to the extension of any statute of limitations with respect to income or 21 27 other material Taxes, or consent to any material assessment of Taxes, or settle any judicial proceeding affecting any material amount of Taxes; (i) except as otherwise expressly permitted in this Agreement, the Company shall not, and shall not permit any Company Subsidiary to (i) issue, sell or otherwise distribute or dispose of any shares of Company Common Stock to, (ii) become indebted in respect of borrowed money or make any commitment with respect to borrowed money from, (iii) sell (other than sales of retail merchandise), distribute, mortgage, license, lease or otherwise dispose of any of its assets to, or (iv) enter into any other such agreement, arrangement, commitment or transaction involving the Company's assets or finances with any officer, director or legal or beneficial owner of more than 5% of the Company Common Stock and their affiliates, except for continuing payments under the Lease shown on Section 4.24(a)(ii) of the Disclosure Schedule as "123-Natick" and payments owed to Fillberg Limited; and (j) the Company shall notify Parent of any emergency or other substantial change in the normal course of its or its Subsidiaries' respective businesses or in the operation of its or its Subsidiaries' respective properties and of any complaints of or hearings (or written communications indicating that the same are threatened) of which the Company has knowledge before any Governmental Entity if such emergency, change, complaint, investigation or hearing would have a Material Adverse Effect on the Company. Section 6.2 No Solicitations. (a) Neither the Company nor any of the Company Subsidiaries nor any of the officers and directors of any of them shall, and the Company shall direct and use its reasonable best efforts to cause its and the Company Subsidiaries' employees, agents and representatives, including any investment banker, attorney or accountant retained by it or any of the Company Subsidiaries (the Company, the Company Subsidiaries and their respective officers, directors, employees, agents and representatives being the "Company Representatives") not to, directly or indirectly through another Person, (i) initiate, solicit, encourage or otherwise knowingly facilitate any inquiries (by way of furnishing information or otherwise) or the making of any inquiry, proposal or offer from any Person which constitutes an Acquisition Proposal (or would reasonably be expected to lead to an Acquisition Proposal) or (ii) participate in any discussions or negotiations regarding an Acquisition Proposal; provided, however, that the Company's Board of Directors may, or may authorize the Company Representatives to, in response to an Acquisition Proposal that the Board of Directors of the Company concludes in good faith is an Incipient Superior Proposal, (x) furnish information with respect to the Company and its Subsidiaries to any Person making such Acquisition Proposal pursuant to a customary confidentiality agreement and (y) participate in discussions or negotiations regarding such Acquisition Proposal, provided that, prior to taking any such action, the Company provides reasonable advance notice to Parent that it is taking such action. For purposes of this Agreement: (i) "Acquisition Proposal " means any direct or indirect inquiry, proposal or offer (or any improvement, restatement, amendment, renewal or reiteration thereof) relating to the acquisition or purchase of a business or shares of any class of equity securities of the Company or any of its Subsidiaries, any tender offer or exchange offer that, if consummated, would result in any Person beneficially owning any class of equity securities of the Company or any of its Subsidiaries, or any merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction (a "Business Combination Transaction") involving the Company or any of its Subsidiaries, or any purchase or sale of a substantial portion of the assets (including stock of Subsidiaries owned directly or indirectly by the Company) or business of the Company or any of its Subsidiaries (an "Asset Transaction"), other than the transactions contemplated by this Agreement or as permitted by Section 6.1 of this Agreement. (ii) "Incipient Superior Proposal" shall mean an unsolicited bona fide written Acquisition Proposal that the Board of Directors of the Company concludes in good faith (after consultation with the Company's financial advisor) would, if consummated, provide greater aggregate value to the Shareholders from a financial point of view than the transactions contemplated by this Agreement; provided that for 22 28 purposes of the definition of Incipient Superior Proposal, the term "Acquisition Proposal" shall have the meaning set forth above, except that (x) references to "shares of any class of equity securities of the Company" shall be deemed to be references to "100% of the outstanding Shares" and (y) an "Acquisition Proposal" shall be deemed to refer only to a Business Combination Transaction involving the Company or, with respect to an Asset Transaction, such transaction must involve the assets of the Company and its Subsidiaries, taken as a whole, and not any Subsidiary of the Company alone. (iii) "Superior Proposal" shall mean an Incipient Superior Proposal for which any required financing is committed or which, in the good faith judgment of the Board of Directors in the Company (after consultation with its financial advisor), is capable of being financed by the Person making the Acquisition Proposal. (b) Except as expressly permitted by this Section 6.2, neither the Company's Board of Directors nor any committee thereof shall (i) withdraw, modify or change, or propose publicly to withdraw, modify or change, in a manner adverse to Parent, the recommendation by such Board of Directors or such committee of the Offer, the Merger or this Agreement unless the Board of Directors of the Company shall have determined in good faith, after consultation with its financial advisor, that the Offer, the Merger or this Agreement is no longer in the best interests of the Company's Shareholders and that such withdrawal, modification or change is, therefore, required in order to satisfy its fiduciary duties to the Shareholders under applicable law, (ii) approve or recommend, or propose publicly to approve or recommend, any Acquisition Proposal, or (iii) cause the Company to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement (each, an "Acquisition Agreement") related to any Acquisition Proposal. Notwithstanding the foregoing, the Company may, in response to a Superior Proposal, (x) take any of the actions described in clauses (i) or (ii) above or (y) subject to this Section 6.2 (b), terminate this Agreement (and concurrently with or after such termination, if it so chooses, cause the Company to enter into any Acquisition Agreement with respect to any Acquisition Proposal) but only after the third business day following Parent's receipt of written notice advising Parent that the Company's Board of Directors is prepared to accept an Acquisition Proposal, and attaching the most current version of any such Acquisition Proposal or any draft of an Acquisition Agreement, provided the Company is not in breach of any of its obligations under this Section 6.2. (c) In addition to the obligations of the Company set forth in Sections 6.2 (a) and (b) the Company shall promptly (but in any event within one business day) notify Parent orally and in writing of any Acquisition Proposal or any inquiry regarding the making of any Acquisition Proposal, indicating, in connection with such notice, the name of such Person making such Acquisition Proposal or inquiry and the substance of any such Acquisition Proposal or inquiry. The Company thereafter shall keep Parent reasonably informed of the status and terms (including amendments or proposed amendments) of any such Acquisition Proposals or inquiries and the status of any discussions or negotiations relating thereto. (d) Nothing contained in this Section 6.2 shall prohibit the Company or its Board of Directors from at any time taking and disclosing to its Shareholders a position contemplated by Rule 14e-2 promulgated under the Exchange Act or from making any disclosure to the Company's Shareholders required by applicable law. Section 6.3 Access to Information. (a) From the date of this Agreement until the earlier of Effective Time and the date, if any, on which this Agreement is earlier terminated, the Company shall afford to Parent and the Parent's representatives reasonable access upon reasonable prior notice to all of its and the Company Subsidiaries' senior management, books, records, files and documents and, during such period, the Company shall provide to Parent access to (i) a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of the federal securities laws and (ii) such other information including, copies of books, records, files, documents and Company Agreements, concerning the Company's business, properties and personnel as Parent may reasonably request; provided, that Parent and Parent's representatives will conduct all such inspections in a reasonable manner and so as to not unreasonably interfere with the conduct of the business or affairs of the Company. The Company shall in addition use its reasonable best efforts to provide Parent and Parent's representatives with access to the representatives, commercial bankers, actuaries, trustees, outside Plan administrators and consultants of the Company and to use its 23 29 reasonable best efforts to cause such representatives, commercial bankers, actuaries, trustees, outside Plan administrators and consultants to provide Parent and Parent's representatives with such information regarding the Company as may be reasonably requested. Parent and Parent's representatives shall use reasonable best efforts to conduct any activities pursuant to this Section 6.3(a) in a manner that does not interfere in any material respect with the management and conduct of the Company's operations. The obligations of the Company under this Section 6.3(a) are subject to any and all limitations imposed by law. (b) Until the Effective Time, Parent and Acquisition will, with respect to the information furnished to Parent by or on behalf of the Company, and the Company will, with respect to the information furnished to the Company by or on behalf of Parent or Acquisition, have the same confidentiality obligations as set forth in the Confidentiality Agreement dated March 8, 2000, between Parent and the Company ("Confidentiality Agreement"). Section 6.4 Further Action; Reasonable Best Efforts. From the date of this Agreement until the earlier of the Effective Time and the date, if any, on which this Agreement is earlier terminated: (a) Upon the terms and subject to the conditions provided in this Agreement, each of the Parties shall use its reasonable best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including to (i) comply promptly with all legal requirements which may be imposed on it with respect to this Agreement and the transactions contemplated by this Agreement (which actions shall include, without limitation, furnishing all information required by applicable law in connection with approvals of or filings with any Governmental Entity), (ii) satisfy the conditions precedent to the obligations of such Party, (iii) except for those items listed on Schedule 6.4(a) of the Disclosure Schedule, obtain each consent, authorization, order or approval of, and exemption by, any Governmental Entity or other public or private third party required to be obtained or made by Parent, Acquisition, the Company or any of their Subsidiaries in connection with the Merger or the taking of any action contemplated by this Agreement, (iv) effect all necessary registrations and filings and (v) take any action reasonably necessary to vigorously defend, lift, mitigate and/or rescind the effect of any litigation or administrative proceeding adversely affecting the Merger or this Agreement, including promptly appealing any adverse court or administrative decision. (b) Subject to appropriate confidentiality protections, each of the Parties will furnish to the other Parties such necessary information and reasonable assistance as such other Parties may reasonably request in connection with the foregoing and will provide the other Parties with copies of all filings made by such Party with any Governmental Entity and, upon request, any other information supplied by such Party to a Governmental Entity in connection with this Agreement and the transactions contemplated by this Agreement, except for documents and other information provided in response to Item 4(c) of the Notification and Report Form required under the HSR Act. Upon the terms and subject to the conditions provided in this Agreement, in case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and/or directors of the Parties shall use their reasonable best efforts to take or cause to be taken all such necessary action. (c) Without limiting the generality of the undertakings in this Section 6.4, Parent and the Company shall take or cause to be taken the following actions: (i) consult and cooperate with and provide assistance to each other in the preparation and filing with the SEC of the Offer Documents, the Schedule 14D-9, the Preliminary Statement and the Proxy Statement and all necessary amendments or supplements thereto; (ii) provide promptly to Governmental Entities with regulatory jurisdiction over enforcement of any applicable antitrust laws (a "Government Antitrust Entity") information and documents requested by any Government Antitrust Entity or necessary, proper or advisable to permit consummation of the Offer, the Merger and the transactions contemplated by this Agreement; (iii) without in any way limiting the provisions of Sections 6.4(c)(i) and 6.4(c)(ii), file any Notification and Report Form and related material required under the HSR Act as soon as practicable and in any event not later than ten (10) business days after the date hereof, and thereafter use its reasonable efforts to certify as soon as practicable its substantial compliance with any requests for additional information or documentary material that may be made under the HSR Act; 24 30 (iv) take promptly, in the event that any permanent or preliminary injunction or other order is entered or becomes reasonably foreseeable to be entered in any antitrust proceeding that would make consummation of the Offer or the Merger in accordance with the terms of this Agreement unlawful or that would prevent or materially delay consummation of the Offer or the Merger or the other transactions contemplated by this Agreement, any and all steps (including the appeal thereof or the posting of a bond) necessary to vacate, modify or suspend such injunction or order so as to permit such consummation on a schedule as close as possible to that contemplated by this Agreement (each of the Company and Parent will provide to the other copies of all correspondence between it (or its advisors) and any Government Antitrust Entity relating to the Offer or the Merger or any of the matters described in this Section 6.4(c)); and (v) avoid the entry of, or have vacated or terminated, any decree, order, or judgment that would restrain, prevent, or materially delay the consummation of the Offer or the Merger, including defending through litigation on the merits any claim asserted in any court by any Person. Section 6.5 Employee Benefits. (a) Honor Current Obligations. The Company shall, and after the Effective Time Parent or the Surviving Corporation shall, honor all obligations under all existing Plans and under the Company's employment agreements. (b) Stock Options. The Company shall use its reasonable best efforts to cause each outstanding option to purchase shares of Company Common Stock (including any related alternative rights) granted under any equity compensation plan or arrangement of the Company or its Subsidiaries (collectively, the "Company Option Plans") (including those granted to current or former employees and directors of the Company or any of its Subsidiaries) (the "Employee Stock Options") to become exercisable, and each share of restricted Company Common Stock granted under the Company Option Plans, to vest in full and become fully transferable and free of restrictions, either prior to the purchase of the shares pursuant to the Offer or immediately prior to the Effective Time, as permitted pursuant to the terms and conditions of the applicable Company Option Plan. The Company shall offer to each holder of an Employee Stock Option that is outstanding immediately prior to the first purchase of Shares pursuant to the Offer (the "Purchase Date") (whether or not then presently exercisable or vested) to, and shall use its reasonable best efforts to cause such holders to, cancel such Employee Stock Option in exchange for an amount in cash equal to the product obtained by multiplying (x) the difference between the Offer Price and the per share exercise price of such Employee Stock Option, and (y) the number of shares of Company Common Stock covered by such Employee Stock Option. All payments in respect of such Employee Stock Options shall be funded by Parent and made on the Purchase Date, subject to the collection or withholding of all applicable withholding Taxes required by law to be collected or withheld by the Company. (c) Except with respect to any stock options or stock-related programs, for the period of one year following the Effective Time, Parent will, or will cause the Surviving Corporation to, provide, on an uninterrupted basis, employee benefits to the employees of the Surviving Corporation which are, in the aggregate, no less favorable than those in effect on the date hereof. Section 6.6 Notification of Certain Matters. The Company shall give prompt notice to Parent and Parent shall give prompt notice to the Company, of (i) the occurrence or nonoccurrence of any event the occurrence or nonoccurrence of which would cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect at or prior to the Effective Time, (ii) any material failure of the Company, Parent or Acquisition, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it under this Agreement and (iii) the commencement or the threat of any action, suit, claim, investigation or proceeding which relates to this Agreement or the transactions contemplated by this Agreement; provided, however, that the delivery of any notice pursuant to this Section 6.6 shall not limit or otherwise affect the remedies, if any, available under this Agreement to the party receiving such notice. 25 31 Section 6.7 Directors' and Officers' Insurance and Indemnification. (a) From and after the Effective Time, Parent will, or will cause the Surviving Corporation to, indemnify and hold harmless each present and former director and officer of the Company and its Subsidiaries (the "Indemnified Parties"), against any costs or expenses (including attorneys' fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, by reason of the fact that such individual is or was a director, officer, employee or agent of the Company or any of its Subsidiaries, arising out of or pertaining to matters existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the purchase of Shares in the Offer, to the fullest extent permitted under applicable law, and Parent shall, or shall cause the Surviving Corporation to, also advance fees and expenses (including attorneys' fees) as incurred to the fullest extent permitted under applicable law. (b) The Articles of Incorporation of the Company shall, from and after the Effective Time, and the Articles of Incorporation of the Surviving Corporation shall, from and after the Effective Time, contain provisions no less favorable with respect to indemnification than are set forth as of the date of this Agreement in the Articles of Incorporation of the Company, which provisions shall not be amended, repealed or otherwise modified for a period of six (6) years from the Effective Time in any manner that would adversely affect the rights thereunder of individuals who at the Effective Time were directors, officers or employees of the Company; provided that nothing contained herein shall limit Parent's ability to merge the Company into Parent or any of its Affiliates or otherwise eliminate the Company's corporate existence if the surviving Person assumes responsibility for such indemnification. (c) For six (6) years from the Effective Time, Parent shall maintain, or cause the Surviving Corporation to maintain, in effect the Company's and its Subsidiaries' current directors' and officers' liability insurance policy (the "Policies") covering those persons who are currently covered by the Policies; provided, however, that in no event shall Parent or the Surviving Corporation be required to expend in any one year an amount in excess of the annual premiums currently paid by the Company and its Subsidiaries for such insurance, and, provided, further, that if the annual premiums of such insurance coverage exceeds such amount, Parent or the Surviving Corporation shall be obligated to obtain policies with the greatest coverage available for a cost not exceeding 150% of such amount; and provided, further, that Parent or the Surviving Corporation may meet its obligations under this paragraph by covering the above persons under Parent or the Surviving Corporation's insurance policy on the terms described above that expressly provide coverage for any acts which are covered by the existing policies of the Company and its Subsidiaries. (d) Nothing in this Agreement is intended to, shall be construed to, or shall release, waive or impair any rights to directors' and officers' insurance claims under any policy that is or has been in existence with respect to the Company or any of its Subsidiaries or any of their respective officers, directors or employees, it being understood and agreed that the indemnification provided for in this Section 6.7 is not prior to or in substitution for any such claims under such policies. (e) Each Indemnified Party is a third party beneficiary of this Section 6.7 and is entitled, without limitation, to directly enforce the obligations in this Section 6.7 of Parent, the Company and the Surviving Corporation. (f) The Surviving Corporation shall pay all expenses, including reasonable fees and expenses of counsel, that an Indemnified Party may incur in enforcing the indemnity and other obligations provided for in this Section 6.7. Section 6.8 Parent Undertaking. Parent shall be responsible for and shall cause Acquisition to perform all of its obligations under this Agreement in a timely manner. Section 6.9 Takeover Statute. If any "fair price," "moratorium," "control share acquisition" or other form of anti-takeover statute or regulation shall become applicable to the transactions contemplated hereby, each of Parent, Acquisition and the Company, and the members of their respective Boards of Directors, shall grant such approvals and take such actions as are reasonably necessary so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of such statute or regulation on the transactions contemplated hereby. 26 32 Section 6.10 Disclosure Schedule Supplements. From time to time after the date of this Agreement and prior to the Effective Time, the Company will promptly advise Parent of any and all matters hereafter arising which, if existing or occurring at or prior to the date of this Agreement, would have been required to be set forth or described in the Disclosure Schedule or which is necessary to make correct any information in a schedule or in any representation and warranty of the Company which has been rendered inaccurate thereby in any material respect; provided, however, that the Disclosure Schedule shall not be deemed amended thereby for any purpose. ARTICLE VII CONDITIONS TO THE MERGER Section 7.1 Conditions to Each Party's Obligation To Effect the Merger. The respective obligation of each Party to consummate the Merger shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions: (a) This Agreement shall have been approved and adopted by the Shareholders if required by applicable law; (b) No Governmental Entity shall have issued, given notice of its intent to issue or commenced any proceeding for the purpose of issuing any order, and there shall not be any statute, rule, decree or regulation restraining, prohibiting or making illegal the acquisition of the Shares by Acquisition or Parent or the consummation of the Merger; (c) Parent or Acquisition or any Affiliate of either of them shall have purchased Shares pursuant to the Offer, except that this condition shall not be a condition to Parent's and Acquisition's obligation to effect the Merger if Parent or Acquisition shall have failed to purchase Shares pursuant to the Offer in breach of their obligations under this Agreement; and (d) Any waiting period applicable to the consummation of the Merger under the HSR Act shall have expired or been terminated. ARTICLE VIII TERMINATION Section 8.1 Termination. This Agreement may be terminated and the transactions contemplated herein may be abandoned at any time prior to the Effective Time, whether before or after Shareholder approval thereof: (a) By the mutual consent of Parent, Acquisition and the Company. (b) By either the Company or Parent if: (i) (1) the Offer shall have expired without any Shares being purchased pursuant thereto, or (2) the Offer has not been consummated on or before October 31, 2000 (the "Outside Date"); provided, however, that the right to terminate this Agreement pursuant to this Section 8.1(b)(i) shall not be available to any Party whose failure to fulfill any obligation under this Agreement or the Offer has been the cause of, or resulted in, the failure of the Shares to have been purchased pursuant to the Offer; (ii) a statute, rule, regulation or executive order shall have been enacted, entered or promulgated prohibiting the consummation of the Offer or the Merger substantially on the terms contemplated hereby; (iii) the Shareholders of the Company fail to approve and adopt this Agreement at the Special Meeting, if such meeting is required (including any postponement or adjournment thereof); or (iv) any Governmental Entity shall have issued or threatened to issue a statute, order, decree or regulation or taken any other action, in each case permanently restraining, enjoining or prohibiting the consummation of the transactions contemplated by this Agreement and such statute, order, decree, 27 33 regulation or other action shall have become final and non-appealable; provided, that the Party seeking to terminate this Agreement pursuant to this Section 8.1(b)(iv) shall have used its reasonable best efforts to remove such order, decree, ruling or injunction and shall not be in violation of Section 6.4; (c) by Parent if due to an occurrence or circumstance, other than as a result of a breach by Parent or Acquisition of its obligations hereunder or under the Offer resulting in a failure to satisfy any condition set forth in Annex A, Acquisition shall have (i) failed to commence the Offer within 30 days following the date of this Agreement, or (ii) terminated the Offer without having accepted any Shares for payment thereunder; (d) by the Company, upon approval of its Board of Directors, if Acquisition shall have terminated the Offer without having accepted any Shares for payment thereunder, other than as a result of a breach by the Company of its obligations hereunder that would result in a failure to satisfy any of the conditions set forth in Annex A; (e) by the Company, in accordance with Section 6.2(b); provided, that such termination shall not be effective unless and until the Company shall have paid to Parent the fee described in Section 9.1(b) hereof and shall have complied with the provisions of Sections 6.2(b) and (c). Section 8.2 Effect of Termination. In the event of termination of this Agreement pursuant to Section 8.1, written notice thereof shall forthwith be given to the other Party or Parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall terminate and be of no further force and effect (except for the provisions of Sections 6.3, 9.1(a), 9.1(b), 9.10, 9.13 and 8.2 in the case of termination of this Agreement at any time, and Section 6.5(b) in the case of a termination following the purchase of Shares pursuant to the Offer), and there shall be no other liability on the part of Parent, Acquisition or the Company or their respective officers or directors except liability arising out of a willful breach of this Agreement. In the event of termination of this Agreement prior to the expiration of the Offer, Parent and Acquisition will promptly terminate the Offer upon such termination of this Agreement without the purchase of Shares thereunder. No termination of this Agreement shall affect the continued effect of the Confidentiality Agreement. ARTICLE IX MISCELLANEOUS Section 9.1 Fees and Expenses. (a) Except as otherwise provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the consummation of the transactions contemplated in this Agreement shall be paid by the Party incurring such expenses. (b) If this Agreement shall have been terminated pursuant to Section 8.1(e) as a result of the failure of any condition of the Offer set forth in Paragraph (e) of Annex A hereto or Section 8.1(e), the Company shall immediately pay Parent or Acquisition (as designated by Parent) a fee equal to $13,000,000 million (the "Termination Fee"), payable by wire transfer of immediately available funds, the receipt of which by Parent or Acquisition in the case of such termination, shall be a condition to the effectiveness of such termination. (c) The Parties acknowledge that the agreements contained in this Section 9.1 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the Parties would not enter into this Agreement; accordingly, if a Party fails to pay an amount due pursuant to this Section 9.1, and, in order to obtain such payment, another Party commences a suit which results in a judgment against the owing Party for any fee set forth in this Section 9.1, the owing Party shall pay to the Party to which such amount is due its costs and expenses (including attorneys' fees and expenses) in connection with such suit, together with interest on the amount of the fee at the prime rate of Citibank N.A. in effect on the date such payment was required to be made. (d) Parent shall be solely responsible for any and all filing fees that are payable in connection with or on account of any filing by Parent or any other Party concerning the transactions contemplated by this Agreement under or pursuant to the HSR Act. 28 34 Section 9.2 Amendment; Waiver. (a) This Agreement may be amended by the Parties, by action taken or authorized by their respective Boards of Directors, at any time before or after approval by the Shareholders of the matters presented in connection with the Merger, but after any such approval no amendment shall be made without the approval of the Shareholders if such amendment changes the Merger Consideration or alters or changes any of the other terms or conditions of this Agreement in a manner that materially adversely affects the rights of the Shareholders. This Agreement may not be amended except by an instrument in writing signed on behalf of all of the Parties. (b) At any time prior to the Effective Time, the Parties may (i) extend the time for the performance of any of the obligations or other acts of the Parties, (ii) waive any inaccuracies in the representations and warranties of one or more Parties contained in this Agreement or in any document, certificate or writing delivered pursuant to this Agreement or (iii) waive compliance with any of the agreements or conditions of the Parties contained in this Agreement. Any agreement on the part of any Party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party. Section 9.3 Survival. The respective representations and warranties of Parent, Acquisition and the Company contained herein or in any certificates or other documents delivered prior to or as of the Effective Time shall not survive beyond the Effective Time. The covenants and agreements of the Parties (including the Surviving Corporation after the Merger) shall survive the Effective Time without limitation (except for such covenants and agreements which, by their terms, contemplate a shorter survival period). Section 9.4 Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed given upon (a) transmitter's confirmation of a receipt of a facsimile transmission provided that a confirmed delivery by a standard overnight carrier or a hand delivery is made within two business days of the date such facsimile is sent or (b) confirmed delivery by a standard overnight carrier or when delivered by hand, addressed at the following addresses (or at such other address for a Party as shall be specified by like notice): (a) if to the Company, to: David's Bridal, Inc. 1001 Washington Street Conshohocken, Pennsylvania 19428 Telephone: 610-896-2111 Facsimile: 610-896-6588 Attention: Robert D. Huth with a copy to: Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, Pennsylvania 19103 Telephone: 215-963-5000 Facsimile: 215-963-5299 Attention: Stephen M. Goodman 29 35 and (b) if to Parent or Acquisition, to: The May Department Stores Company 611 Olive Street St. Louis, Missouri 63101 Telephone: 314-342-6142 Facsimile: 314-342-4422 Attention: John L. Dunham with a copy to: The May Department Stores Company 611 Olive Street St. Louis, Missouri 63101 Telephone: 314-342-6467 Facsimile: 314-342-3040 Attention: Alan E. Charlson Section 9.5 Interpretation. When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words "include", "includes" or "including" are used in this Agreement they shall be deemed to be followed by the words "without limitation". The phrase "made available" when used in this Agreement shall mean that the information referred to has been made available if requested by the Party to which such information is to be made available. The words "Affiliate" and "Associate" when used in this Agreement shall have the respective meanings ascribed to them in Rule 12b-2 under the Exchange Act. The phrase "beneficial ownership" and words of similar import when used in this Agreement shall have the meaning ascribed to it in Rule 13d-3 under the Exchange Act. Section 9.6 Section Headings; Section References. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All references herein to a particular "Section" shall mean a reference to that Section in this Agreement unless otherwise provided. Section 9.7 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall be considered one and the same agreement. Section 9.8 Entire Agreement. This Agreement, together with the Disclosure Schedule, Annex A and the Confidentiality Agreement, (i) constitutes the entire agreement between the Parties on the subject matter of this Agreement, and supersedes all prior agreements and understandings (written and oral), among the Parties with respect to the subject matter of this Agreement and (ii) except as provided in Section 6.7, is not intended to confer upon any Person other than the Parties any rights or remedies under this Agreement. Section 9.9 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void, unenforceable or against its regulatory policy, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Section 9.10 Governing Law; Waiver of Jury Trial; Enforcement. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware without giving effect to the principles of conflicts of law thereof. Each Party (a) consents to submit itself to the nonexclusive personal jurisdiction of any federal court located in the State of Delaware or any Delaware state court in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement, and (b) agrees that it will not attempt to deny such personal jurisdiction by motion or other request for leave from any such court. Section 9.11 Assignment; Binding Effect. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned or delegated by any of the Parties (whether by operation of 30 36 law or otherwise) without the prior written consent of the other Parties, except that Acquisition may, in its sole discretion, assign any or all of its rights, interests and obligations under this Agreement to Parent or any majority-owned Affiliate of Parent. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. Any assignment not permitted under this Section 9.11 shall be null and void. Section 9.12 Enforcement of Agreement. The Parties agree that money damages or other remedy at law would not be sufficient or adequate remedy for any breach or violation of, or a default under, this Agreement by them and that in addition to all other remedies available to them, each of them shall be entitled to the fullest extent permitted by law to an injunction restraining such breach, violation or default or threatened breach, violation or default and to any other equitable relief, including specific performance, without bond or other security being required. Section 9.13 Continuation of Attorney-Client Privilege. The Company has been represented by counsel in connection with the Merger and representatives of the Company, including certain of the Key Executives, have had and through the Closing will have communications with such counsel concerning or related to the Merger, the reasons for the Merger, alternatives available to the Company to resolve its financial situation, existing or possible financing arrangements, and other similar or related matters that are entitled to be treated as confidential attorney-client communications under the Delaware Lawyers' Rules of Professional Conduct and Delaware law (collectively, the "Merger Communications"). Subsequent to the consummation of the transactions contemplated by this Agreement, the confidential nature of the Merger Communications shall be preserved and, therefore, the Merger Communications shall be treated as confidential by Parent and shall not be directly or indirectly disclosed to or used by Parent or any representative of Parent or the Company, notwithstanding that the Company is owned by Parent. Section 9.14 Finders or Brokers. Except for Morgan Stanley & Co. Incorporated with respect to Parent and Credit Suisse First Boston Corporation with respect to the Company, a copy of whose engagement agreement has been provided by the Company to Parent, neither Parent nor the Company nor any of their respective Subsidiaries has employed any investment banker, broker, finder or intermediary in connection with the transactions contemplated hereby who would be entitled to any fee or any commission in connection with or upon consummation of the Offer or the Merger. Section 9.15 Publicity. The initial press release with respect to the Offer and the Merger shall be a joint press release. Thereafter, subject to their respective legal obligations (including requirements of stock exchanges and other similar regulatory bodies), the Company, Parent and Acquisition shall consult with each other before issuing any such press release or otherwise making public statements with respect to the Offer or Merger. 31 37 IN WITNESS WHEREOF, Parent, Acquisition and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above. THE MAY DEPARTMENT STORES COMPANY, a Delaware corporation By: /s/ RICHARD A. BRICKSON -------------------------------------- Name: Richard A. Brickson Title: Secretary ALPHA OMEGA ACQUISITION, INC., a Florida corporation By: /s/ RICHARD A. BRICKSON -------------------------------------- Name: Richard A. Brickson Title: Vice President & Secretary DAVID'S BRIDAL, INC., a Florida corporation By: /s/ ROBERT D. HUTH -------------------------------------- Name: Robert D. Huth Title: President & CEO 32 38 ANNEX A CONDITIONS TO THE OFFER The capitalized terms used in this Annex A have the meanings set forth in the attached Agreement, except that the term "the Agreement" shall be deemed to refer to the attached Agreement. Notwithstanding any other provision of the Offer, Acquisition shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act (relating to Acquisition's obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for, and may postpone the acceptance for payment of and payment for Shares tendered, and, except as set forth in this Agreement, terminate the Offer as to any Shares not then paid for if (i) the Minimum Condition shall not have been satisfied at the scheduled expiration date of the Offer, (ii) any applicable waiting period under the HSR Act shall not have expired or been terminated, or (iii) immediately prior to the expiration of the Offer, any of the following conditions shall exist: (a) there shall have been entered, enforced or issued by any Governmental Entity, any judgment, order, injunction or decree (i) which makes illegal, restrains or prohibits or makes materially more costly the making of the Offer, the acceptance for payment of, or payment for, any Shares by Parent, Acquisition or any other Affiliate of Parent, or the consummation of the Merger transaction; (ii) which prohibits or limits materially the ownership or operation by the Company, Parent or any of their Affiliates of all or any material portion of the business or assets of the Company, Parent or any of their Affiliates, or compels the Company, Parent or any of their Affiliates to dispose of or hold separate all or any portion of the business or assets of the Company, Parent or any of their Affiliates; (iii) which imposes or confirms limitations on the ability of Parent, Acquisition or any other Affiliate of Parent to exercise full rights of ownership of any Shares, including, without limitation, the right to vote any Shares acquired by Acquisition pursuant to the Offer or otherwise on all matters properly presented to the Shareholders, including, without limitation, the approval and adoption of this Agreement and the transactions contemplated by this Agreement; (iv) which requires divestiture by Parent, Acquisition or any other Affiliate of Parent of any Shares; or (v) which otherwise would have a Material Adverse Effect on the Company to the extent that it relates to or arises out of the transactions contemplated by this Agreement or Parent; except in the case of clauses (i) through (v), where such events are consistent with or result from Parent's, Acquisition's and the Company's obligations under Section 6.4 of the Agreement; (b) there shall have been any statute, rule, regulation, legislation or interpretation enacted, enforced, promulgated, amended or issued by any Governmental Entity or deemed by any Governmental Entity applicable to (i) Parent, the Company or any Subsidiary or Affiliate of Parent or the Company or (ii) any transaction contemplated by this Agreement, other than the HSR Act, which is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above, except where such events are consistent with or result from Parent's, Acquisition's and the Company's obligations under Section 6.4 of the Agreement; (c) there shall have occurred any changes, conditions, events or developments that would have, or be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole; (d) there shall have occurred (i) any general suspension of, or limitation on prices for, trading in securities on the New York Stock Exchange or the National Association of Securities Dealers Automated Quotation other than a shortening of trading hours or any coordinated trading halt triggered solely as a result of a specified increase or decrease in a market index, (ii) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) any limitation (whether or not mandatory) on the extension of credit by banks or other lending institutions in the United States, (iv) the commencement of a war, material armed hostilities or any other material international or national calamity involving the United States or (v) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; 33 39 (e) (i) it shall have been publicly disclosed or Parent shall have otherwise learned that any Person, other than Parent or any of its Affiliates, shall have acquired or entered into a definitive agreement or agreement in principle to acquire beneficial ownership (determined for the purposes of this paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act) of the then outstanding Shares, or shall have been granted any option, right or warrant, conditional or otherwise, to acquire beneficial ownership of 50% or more of the then outstanding Shares, or (ii) the Board of Directors of the Company or any committee thereof shall have (A) withdrawn, modified or changed, in a manner adverse to Parent or Acquisition, the recommendation by such Board of Directors or such committee of the Offer, the Merger or this Agreement, (B) approved or recommended, or proposed publicly to approve or recommend, an Acquisition Proposal, (C) caused the Company to enter into any Acquisition Agreement relating to any Acquisition Proposal, or (D) resolved to do any of the foregoing; (f) the representations and warranties of the Company set forth in the Agreement shall not be true and correct, individually or in the aggregate with other representations and warranties of the Company set forth in the Agreement, without regard to any qualification or limitation contained in or related to any such representation or warranty relating to Material Adverse Effect, in a manner having a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole, in each case, as if such representations and warranties were made as of such time on or after the date of the Agreement (except to the extent that such representations and warranties speak as of a specific date or as of the date hereof, in which case such representations and warranties shall not be so true and correct in a manner having a Material Adverse Effect on the Company and the Company Subsidiaries, taken as a whole, as of such specific date or as of the date hereof, respectively); (g) the Company shall have failed to perform in any material respect any material obligation or to comply in any material respect with any material agreement or covenant of the Company to be performed or complied with by it under the Agreement; (h) the Agreement shall have been terminated in accordance with its terms; or (i) Acquisition and the Company shall have agreed that Acquisition shall terminate the Offer or postpone the acceptance for payment of or payment for Shares thereunder; which, in the reasonable good faith judgment of the Parent in any such case, and regardless of the circumstances (including any action or inaction by Parent or any of its Affiliates) giving rise to any such condition, makes it inadvisable to proceed with such acceptance for payment or payment. The foregoing conditions are for the benefit of Acquisition and Parent and may be asserted by Acquisition or Parent regardless of the circumstances giving rise to any such condition or may be waived by Acquisition or Parent in whole or in part at any time and from time to time in their sole and absolute discretion. The failure by Parent or Acquisition at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and other circumstances shall not be deemed a waiver with respect to any other facts and circumstances; and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. 34 EX-99.(D)(2) 10 ex99-d2.txt SHAREHOLDER AGREEMENT 1 EXHIBIT 99 (d)(2) SHAREHOLDER AGREEMENT THIS SHAREHOLDER AGREEMENT (this "Agreement") is made and entered into as of the 3rd day of July, 2000, by and between THE MAY DEPARTMENT STORES COMPANY, a Delaware corporation ("May"), and ________________("Shareholder"), a holder of shares of DAVID'S BRIDAL, INC., a Florida corporation ("Company"). May and Shareholder are later in this Agreement sometimes referred to individually as a "Party" or collectively as the "Parties." RECITALS This Agreement is entered into with reference to the following facts, objectives, and definitions: A. Contemporaneously with the execution and delivery of this Agreement, May, Company, and Alpha Omega Acquisition, Inc., a Florida Corporation and a wholly-owned subsidiary of May ("Acquisition"), are entering into an Agreement and Plan of Merger, dated as of the date of this Agreement (the "Merger Agreement"), pursuant to which it is contemplated that Company will merge (the "Merger") with Acquisition, upon the terms and conditions set forth in the Merger Agreement; and B. It is contemplated that the acquisition be accomplished by Acquisition's commencing a tender offer (the "Offer") to purchase all of the issued and outstanding shares of the $.01 par value common stock of Company (the "Common Stock"); and C. The Board of Directors of Company has previously approved the Merger Agreement and this Agreement; and D. Shareholder owns certain of the issued and outstanding shares, and may acquire additional shares after the date of this Agreement, of the Common Stock, and desires to facilitate the consummation of the Merger, and for such purpose Shareholder has agreed, except as provided herein, (i) to vote 90% of these shares, (ii) to grant May or its designee an irrevocable proxy to exercise the voting power of Shareholder with respect to 90% of these shares, and (iii) to grant May or its designee an irrevocable option to purchase 90% of these shares, all as provided in this Agreement. NOW, THEREFORE, in consideration of the covenants and conditions contained in this Agreement, the Parties represent, warrant, and agree as follows: 2 AGREEMENT 1. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER. Shareholder represents and warrants that (i) Shareholder is the holder, free and clear of all liens and encumbrances, of _________________________________ shares of the Common Stock, 90% (________ shares) of which are subject to this Agreement and are referred to in this Agreement as the "Shares"; (ii) subject to compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder (the "HSR Act"), Shareholder has full power and authority to make, enter into, and carry out the terms of this Agreement; and (iii) the execution, delivery, and performance of this Agreement by Shareholder will not violate any other agreement to which Shareholder is a party, including, without limitation, any voting agreement, shareholder agreement, or voting trust. 2. GRANT OF IRREVOCABLE PROXY. Shareholder hereby irrevocably appoints May or any designee of May the lawful agent, attorney, and proxy of Shareholder, during the term of this Agreement, to (a) vote the Shares in favor of the Merger, (b) vote the Shares against any action or agreement that would result in a breach in any material aspect of any covenant, representation, or warranty or any other obligation or agreement of Company under the Merger Agreement; and (c) vote the Shares against any action or agreement that would impede, interfere with, delay, postpone, or attempt to discourage the Merger, including, but not limited to: (i) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving Company, (ii) a sale or transfer of a material amount of the assets of Company or a reorganization, recapitalization, or liquidation of Company, (iii) any change in the management or board of directors of Company, except as otherwise agreed to in writing by May, (iv) any change in the present capitalization or dividend policy of Company; or (v) any other change in Company's corporate structure. Shareholder intends this proxy to be irrevocable and coupled with an interest and will take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revokes any proxy previously granted by him with respect to the Shares. Shareholder shall not hereafter, unless and until this Agreement terminates, purport to vote (or execute a consent with respect to) any of the Shares (other than through this irrevocable proxy) or grant any other proxy or power of attorney with respect to any of the Shares, deposit any of the Shares into a voting trust or enter into any agreement (other than this Agreement), arrangement, or understanding with any person, directly or indirectly, to vote, grant any proxy, or give instructions with respect to the voting of any of the Shares. Shareholder shall retain at all times the right to vote the Shares in Shareholder's sole discretion on all matters other than those set forth in this Paragraph 2 that are presented for a vote to the Shareholders of Company generally. 3. AGREEMENT TO VOTE THE SHARES. In the event that May or its designee is unable to exercise the power and authority granted in Paragraph 2 for any reason, at May's written request Shareholder shall vote all of the Shares (i) in favor of the Merger Agreement, as amended from time to time, and the Merger or any transactions contemplated by the Merger Agreement at any stockholders meetings of Company held to consider the Merger Agreement, (ii) against any other proposal for any recapitalization, merger, sale of assets, or other business combination between Company and any person or entity other than May or which would result in any of the conditions to May's obligations under the Merger Agreement not being fulfilled, and (iii) as otherwise necessary or appropriate to enable May to consummate the transactions contemplated by the Merger Agreement. 2 3 4. MANNER OF VOTING. The Shares may be voted pursuant to this Agreement in person, by proxy, by written consent, or in any other manner permitted by applicable law. 5. NO OTHER VOTING AGREEMENTS OR VOTING TRUSTS. Shareholder represents, warrants, and covenants that (i) Shareholder is not a party to any voting agreement (other than this Agreement), voting trust, or other agreement for voting control or other like agreement involving any of the Shares and (ii) during the term of this Agreement, Shareholder will not become a party to any such agreement or trust. 6. NO PROXY SOLICITATIONS. Shareholder will not, nor will Shareholder permit any entity under his control to, directly or indirectly (i) solicit proxies or become a "participant" in a "solicitation" (as such terms are defined in Regulation 14A under the 1934 Act) in opposition to or competition with the consummation of the Merger, (ii) solicit, encourage, initiate, or otherwise facilitate any inquiries or the making of any proposal or offer with respect to any, merger, consolidation, tender offer, exchange offer, sale of a material portion of the assets and business of Company (whether in one or more transactions), sale of shares of the capital stock or debt securities of Company, restructuring, recapitalization, or similar transaction involving Company or any division or operating principal business unit of Company (whether in one or more transactions) (an "Acquisition Proposal") or engage in any negotiation concerning, or provide any confidential information or data to, or have any discussions with any person relating to, an Acquisition Proposal, (iii) become a member of a "group" (as such term is used in Section 13(d) of the 1934 Act) with respect to any voting securities of Company for the purpose of opposing or competing with the consummation of the Merger, or (iv) take any action that would prevent, burden, or materially delay the consummation of the transactions contemplated by this Agreement or by the Merger Agreement. Shareholder shall immediately cease and cause to be terminated any activities, discussions, or negotiations with respect to any of the foregoing. Notwithstanding any of the foregoing, if Shareholder is a director of the Company, Shareholder may, without limitation, exercise his fiduciary duties as a director of the Company, including engaging in the activities described in clauses (x) and (y) of Section 6.2(a), and in Section 6.2(b), of the Merger Agreement in Shareholder's capacity as a director of the Company, but only to the extent expressly permitted by Sections 6.2(a) and 6.2(b) of the Merger Agreement. 7. TRANSFER AND ENCUMBRANCE. Shareholder shall tender the Shares pursuant to the Offer. Shareholder shall not otherwise transfer, sell, offer, pledge, or otherwise dispose of or encumber any of the Shares during the period commencing on date of this Agreement and ending on the earlier of (i) the effective date of the Merger or (ii) the date this Agreement is terminated. 8. ADDITIONAL PURCHASES. During the period commencing on the date of this Agreement and ending on the earlier of (i) the effective date of the Merger or (ii) the date this Agreement is terminated, Shareholder shall not, except pursuant to a stock option granted to Shareholder by the Company, (a) purchase, exercise options to acquire, or otherwise acquire beneficial ownership of any shares of the Common Stock ("New Shares"), or (b) voluntarily acquire the right to vote or share in the voting of any shares of the Common Stock other than the Shares. If Shareholder acquires or otherwise acquires the beneficial ownership of any New Shares, 90% of those New Shares shall be subject to the terms of this Agreement and for all purposes shall be and constitute a portion of the Shares. 3 4 9. ADJUSTMENTS TO PREVENT DILUTION. In the event of a stock dividend or distribution, or any change in the Common Stock by reason of any stock dividend, split-up, recapitalization, combination, or the exchange of shares, the term "Shares" shall be deemed to refer to and include the Shares as well as all such stock dividends and distributions and any shares into which or for which any or all of the Shares may be changed or exchanged. 10. OPTION TO PURCHASE SHARES. a. GRANT OF OPTION. Subject to Shareholder's obligation to tender the Shares in accordance with Section 7 hereof, Shareholder hereby irrevocably grants to May or its designee an option (the "Option") to purchase in cash all of the Shares at the purchase price per share as set forth in the Merger Agreement (the "Exercise Price") (subject to adjustment pursuant to Paragraph 9 above) for each of the Shares purchased. b. EXERCISE OF OPTION. i. The Option may be exercised by May or its designee, in whole and not in part, at any time, or from time to time, from the later of (A) the date the Offer is commenced, and (B) the expiration or early termination of the applicable waiting period under the HSR Act, and thereafter as long as the Merger Agreement remains in existence, but in no event later than October 31, 2000. ii. To exercise the Option, May or its designee shall send a written notice to Shareholder of its exercise of the Option (the "Option Notice"), specifying the place, time, and date of the closing of such purchase (the "Closing"), which date shall not be less than two business days nor more than five business days from the date of the Option Notice. iii. At the Closing, (A) Shareholder shall deliver to May or its designee all of the Shares by delivery of a certificate or certificates evidencing the Shares duly endorsed or with executed blank stock power attached, in either event with signature guaranteed such that ownership of the Shares may be registered for transfer on the books of Company, and (B) in exchange therefor, May will pay Shareholder by wire transfer of immediately available funds (to such account at such bank as Shareholder shall direct) the Exercise Price multiplied by the number of the Shares. 11. NO THIRD-PARTY BENEFICIARY RIGHTS. No provision of this Agreement is intended to nor shall it be interpreted to provide or create any third-party beneficiary rights or any other rights of any kind in any person or entity who is not a Party and all provisions of this Agreement are personal to and solely between the Parties. 4 5 12. FURTHER ASSURANCES. Each Party shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, or documents as any other Party shall reasonably request from time to time in order to carry out the intent and purposes of this Agreement. No Party shall voluntarily undertake any course of action inconsistent with satisfaction of the requirements applicable to such Party as set forth in this Agreement, and each Party shall promptly do all acts and take all measures as may be appropriate or necessary to enable such Party to perform, as early as practicable, the obligations required to be performed by such Party under this Agreement. 13. INJUNCTIVE RELIEF. The Parties acknowledge that it is impossible to measure in money the damages that will accrue to one or more of them by reason of the failure of either of them to abide by the provisions of this Agreement, that every such provision is material, and that in the event of any such failure, the other Party will not have an adequate remedy at law or damages. Therefore, if any Party shall institute any action or proceeding to enforce the provisions of this Agreement, in addition to any other relief, the court in such action or proceeding may grant injunctive relief against any Party found to be in breach or violation of this Agreement, as well as or in addition to any remedies at law or damages, and such Party waives the claim or defense in any such action or proceeding that the Party bringing such action has an adequate remedy at law, and such Party shall not argue or assert in any such action or proceeding the claim or defense that such remedy at law exists. No Party shall seek and each Party shall waive any requirement for, the securing or posting of a bond in connection with the other Party seeking or obtaining such equitable relief. 14. COURT MODIFICATION. Should any portion of this Agreement be declared by a court of competent jurisdiction to be unreasonable, unenforceable, or void for any reason or reasons, the involved court shall modify the applicable provision(s) of this Agreement so as to be reasonable or as is otherwise necessary to make this Agreement enforceable and valid and to protect the interests of the Parties intended to be protected by this Agreement to the maximum extent possible. 15. FACSIMILE TRANSMISSION AND COUNTERPARTS. This Agreement may be executed by facsimile transmission and in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same Agreement. 16. NOTICES. All notices, requests, demands, and other communications under this Agreement ("Notices") shall be in writing and shall be delivered (i) personally, (ii) by first class mail, certified, return receipt requested, postage prepaid, (iii) by overnight courier, with one acknowledged receipt, or (iv) by facsimile transmission followed by delivery by first class mail or by overnight courier, in the manner provided for in this Paragraph 16 and properly addressed as follows: 5 6 If to May to: The May Department Stores Company 611 Olive Street St. Louis, Missouri 63101 Telephone: (314) 342-6563 Facsimile: (314) 342-3040 Attention: William D. Edkins with a copy to: The May Department Stores Company 611 Olive Street, Suite 1750 St. Louis, MO 63101 Telephone: (314) 342-6467 Facsimile: (314) 342-3066 Attention: Alan E. Charlson If to Shareholder: or to such other address or addresses as a Party to this Agreement may indicate to the other Party in the manner provided for in this Paragraph 16. Notices given by mail and notices given by overnight courier shall be deemed effective and complete upon delivery; notices by facsimile transmission shall be deemed effective upon receipt, unless receipt thereof shall be disputed in which case receipt shall be deemed effective as of the effective date of the follow-up notice called for by this Paragraph 16 with respect to such facsimile transmitted notice; and notices delivered personally shall be deemed effective and complete at the time of the delivery of the notice and the obtaining of a signed receipt for the notice, unless a Party shall refuse to provide a signed receipt, in which case the notice shall be effective upon the completion of personal delivery of the notice in such a way as to insure the ability to evidence such personal delivery. 17. OTHER AGREEMENTS. (a) This Agreement supersedes all prior agreements or understandings of the Parties on the subject matter of this Agreement. There are no representations, warranties, or agreements, whether express or implied, or oral or written, with respect to the subject matter of this Agreement, except as set forth in this Agreement. This Agreement (i) shall not be modified by any oral agreement, either express or implied, and all amendments or modifications of this Agreement shall be in writing and be signed by all of the Parties, and (ii) shall be binding on and shall inure to the benefit of the Parties and their respective heirs, legal representatives, successors, and permitted assigns, if any. 6 7 (b) None of the rights, duties, or obligations under this Agreement of any Party may be assigned, delegated, or transferred expressly, by operation of law, merger, or otherwise, without the prior written consent of the other Party. (c) The paragraph headings in this Agreement are for the purpose of convenience only and shall not limit or otherwise affect any of the terms of this Agreement. (d) Should any Party be in default under or breach of any of the covenants or agreements contained in this Agreement, or in the event a dispute shall arise as to the meaning of any term of this Agreement, the defaulting or nonprevailing Party shall pay all costs and expenses, including reasonable attorneys' fees, of the other Party that may arise or accrue from enforcing this Agreement, securing an interpretation of any provision of this Agreement, or in pursuing any remedy provided by law whether such remedy is pursued or interpretation is sought by the filing of a lawsuit, an appeal, or otherwise. (e) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, which internal laws exclude any provision or interpretation of such laws that would call for, or permit, the application of the laws of any other state or jurisdiction, and any dispute arising therefrom and the remedies available shall be determined solely in accordance with such internal laws. This Agreement and any Proxy granted pursuant to this Agreement shall terminate upon the first to occur of the following events: i. the successful consummation of the Merger; ii. the written agreement of all of the Parties to terminate this Agreement; or iii. the termination of the Merger Agreement. Where the context requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all other genders. Recitals A through D, inclusive, are by this reference incorporated into and made a part of this Agreement. 7 8 IN WITNESS WHEREOF, each of the Parties has executed this Agreement on or as of the date of this Agreement. THE MAY DEPARTMENT STORES COMPANY, a Delaware Corporation By: ---------------------------------------- Its: --------------------------------------- [SHAREHOLDER] By: ---------------------------------------- EX-99.(D)(3) 11 ex99-d3.txt EMPLOYMENT AGREEMENT 1 EXHIBIT 99 (D)(3) EMPLOYMENT AGREEMENT This Agreement is entered into as of the 3rd day of July, 2000, between THE MAY DEPARTMENT STORES COMPANY ("May") and Robert Huth (generally referred to as "you"). 1. EMPLOYMENT. (a) From the closing date of the merger (the "Merger Date") of David's Bridal, Inc. ("David's Bridal") and Alpha Omega Acquisition, Inc., a wholly owned subsidiary of May, with David's Bridal becoming the surviving corporation and a wholly owned subsidiary of May, until April 30, 2004 (the "Contract Term"), May will employ you and you will provide personal services to May as President and Chief Executive Officer of David's Bridal. You represent that you are not subject to any other employment agreement or other obligation that would prevent you from performing or would interfere with your ability to perform your obligations under this Agreement. This Agreement replaces your existing employment agreement (the "David's Bridal Employment Agreement") with David's Bridal, Inc. effective as of the Merger Date. (b) May will pay you basic compensation for your services at the annual rate of $600,000, payable semi-monthly. The annual rate will be subject to review by May each year and may be increased but not decreased. You will be eligible to participate in a May bonus plan (the "Incentive Plan"), and will be entitled to the awards, if any, that may be payable under the terms of the Incentive Plan; provided, however, that (i) for fiscal 2000, your bonus will be the bonus you would have been entitled to under your David's Bridal Employment Agreement, reflecting your base salary for all of fiscal 2000; (ii) for fiscal 2001, notwithstanding any eligibility phase-in provisions of the Incentive Plan, - you will be eligible for an annual award of up to 45% and a long-term award of up to 30%; - your annual award will be based on your annual compensation and David's Bridal's performance during 2001; - your long-term award will be based on your average annual compensation and David's Bridal's performance during 2000 and 2001; and - the long-term award will not be subject to a share price adjustment; and (iii) for fiscal 2002, - you will be eligible for an annual award of up to 45% and a long-term award of up to 45%; - your annual award will be based on your annual compensation and David's Bridal's performance during 2002; - your long-term award will be based on your average annual compensation and David's Bridal performance during 2000, 2001 and 2002; and - the long-term award will be subject to a share price adjustment. You may elect to have all or any part of your compensation paid under the terms of any applicable deferred compensation plan. (c) May will reimburse you for all reasonable normal expenses you incur in accordance with May's employee expense reimbursement policies. (d) If you continue as a May employee after the Contract Term expires, this Agreement will continue in full force, except that your employment will then become terminable "at will" by either you or May. (e) May will provide or cause David's Bridal to provide to you such fringe benefits as are accorded to other executive officers of David's Bridal, except that you will be provided the auto allowance, tax preparation fees and employee discount provided to other similarly situated executives of May, and you will be entitled to 4 weeks of vacation. (f) May will grant to you during fiscal 2000, 15,000 shares of restricted stock , which restricted stock will have certain performance based restrictions. The restrictions will be released with respect such shares as follows: up to 3,000 shares on the first anniversary of the date of the grant and up to 3,000 shares on April 30 in each of 2002, 2003, 2004 and 2005, in all cases to the extent the performance restrictions set forth in the Restricted Stock Agreement relating to those shares are satisfied. (g) May will grant to you during fiscal 2000 an initial stock option grant of 62,500 options under the terms and provisions of May's 1994 Stock Incentive Plan (the Stock Plan"). The stock option grant will extend for a term of ten years and will become exercisable as to 25% of the shares on each of the first through fourth anniversaries of the date of grant. Commencing with fiscal 2001, May will make annual stock option grants to you under the Stock Plan at an annual grant level comparable to the level accorded to similarly situated executives of May (currently the grant level is 35,000 options for company presidents). 1 2 2. YOUR DUTIES. For the remaining period of the Contract Term and for any period you may continue to work for May after the Contract Term expires, (a) you will (i) faithfully and diligently perform your duties in accordance with May's directions and serve May to the best of your ability; (ii) devote your undivided time and attention to May's business, subject to reasonable vacations in accordance with May's vacation policy, to such extent as may be reasonably necessary for you to perform your personal services properly; provided, however, that the foregoing shall not be construed as preventing Executive from making personal passive investments, participating in charitable or non-profit pursuits or participating on the board of directors of Stage Stores, Inc., or boards of directors of other companies approved by May, as long as such activities will not conflict or interfere with Executive's duties and responsibilities hereunder; and (iii) maintain your residence in Philadelphia, Pennsylvania or within reasonable access to the business activities of David's Bridal in that city; and (b) you will not (i) engage in any activity that conflicts with or adversely affects your performance of your duties under this Agreement; (ii) accept any other employment, whether as an executive, as a consultant or in any other capacity, whether or not you are compensated therefor, or (iii) violate any of the policies described in May's then applicable Policy of Business Conduct. 3. DISABILITY. You will be "Totally Disabled" if you are unable to substantially fulfill the normal duties of your position under this Agreement. If you remain Totally Disabled for more than 180 days during any 360 day period, May may terminate its obligations under this Agreement by giving you written notice. If May does so, your employment will terminate on the last day of the month in which notice is given. If you have previously elected to participate in May's Long Term Disability Plan, then the terms of that plan will apply. 4. TERMINATION OF EMPLOYMENT. (a) If your employment terminates because of your death or Total Disability or your voluntary termination of employment or if it is terminated by May for Cause, (i) you will not be entitled to receive basic compensation and employee benefits following your termination or any other payment or benefit except as expressly provided herein or in any applicable employee benefit plan or arrangement; and (ii) you (or your legal representative(s)) will be entitled to receive any incentive compensation payable under the terms of the Incentive Plan. (b) If your employment terminates because of your voluntary termination of employment, or if it is terminated by May for Cause, then your obligations under this Agreement, including those contained in Paragraphs 5 through 13, remain in full force and effect, and May will be entitled to all legal and equitable rights and remedies under this Agreement. (c) If your employment is terminated by May without Cause, then (i) your obligations under this Agreement, including those contained in Paragraphs 5 through 13, remain in full force and effect, and May will be entitled to all legal and equitable rights and remedies under this Agreement; and (ii) you will be entitled to your basic compensation and the other benefits provided for in Paragraph 1(f) for the remaining period of the Contract Term, subject to the provisions of Paragraph 4(c)(v); and (iii) you will be entitled to any incentive compensation payable under the terms of the Incentive Plan; and (iv) you will use your best efforts to obtain other employment consistent with the terms of Paragraph 5. If you accept other employment, you will promptly notify May of the compensation receivable or which you expect to receive from that employment that is attributable to the remaining period of the Contract Term. All basic compensation otherwise payable under Paragraph 4(c) for any remaining period of the Contract Term will be reduced by the amount of any compensation receivable or which you expect to receive from your subsequent employment; and (vi) notwithstanding the foregoing, the minimum amount payable to you upon your termination shall be your basic compensation for the period during which your post-termination obligations under Paragraph 5 are in force. (d) "Cause" in this Agreement means (i) an intentional act of fraud, embezzlement, theft or any other material violation of law that occurs during or in the course of your employment with May; (ii) intentional damage to May's assets; (iii) intentional disclosure of May's confidential information contrary to May's policies; (iv) breach of your obligations under this Agreement; (v) intentional engagement in any competitive activity which would constitute a breach of your duty of loyalty or of your obligations under this Agreement; (vi) intentional breach of any of May's policies; (vii) the willful and continued failure to substantially perform your duties for May (other than as a result of incapacity due to physical or mental illness); or (viii) willful conduct by you that is demonstrably and materially injurious to May, monetarily or otherwise. For purposes of this Paragraph 4(d), an act, or a failure to act, shall not be deemed "willful" or "intentional" unless it is done, or omitted to be done, by you in bad faith or without a reasonable belief that your action or omission was in the best interest 2 3 of May. Failure to meet performance standards or objectives, by itself, does not constitute "Cause". "Cause" also includes any of the above grounds for dismissal regardless of whether May learns of it before or after terminating your employment. (e) In addition to any other remedies, May can offset any amount due to you as wages, compensation, bonus, deferred compensation or otherwise by any unpaid amount which you owe to May. 5. AVOIDING CONFLICT OF INTEREST. (a) At all times while you are employed by May and for two years after your employment terminates, you will not directly or indirectly: (i) own, manage, operate, finance, join, control, advise, consult, render services to, have an interest or future interest in or participate in the ownership, management, operation, financing or control of, or be employed by or connected in any manner with any Competing Business; (ii) solicit for employment, hire or offer employment to, or otherwise aid or assist (by disclosing information about employees or otherwise) any other person or entity other than May or a May subsidiary in soliciting for employment, hiring or offering employment to, any employee of May or a May subsidiary; or (iii) take any action which is intended to harm May or its reputation, or that May reasonably concludes could harm May or its reputation or lead to unwanted or unfavorable publicity for May. Ownership of an investment of less than the greater of $25,000 or 1% of any class of equity or debt security of a Competing Business will not be deemed ownership or participation in ownership for purposes of Paragraph 5(a). (b) "Competing Business" includes, but is not limited to, (i) any (x) retail department store, specialty store or other retail business that sells goods or merchandise of the types sold in May's (or its subsidiaries' or divisions') stores at retail to consumers or (y) any group of such stores or businesses or any other business that (A) competes (for customers, suppliers, employees or any other resource) with May or a May subsidiary, division or store; (B) is located in the United States or another country where May or a May subsidiary or division operates a store or stores; and (C) had annual gross sales volume or revenues (including sales in leased departments) in the prior fiscal year of more than $25 million or is reasonably expected to have gross sales volume or revenues in either of the current fiscal year or the next following fiscal year of more than $25 million; or (ii) any business that provides buying office services to any store or group of stores or businesses referred to in Paragraph 5(b)(i); (iii) any business in the United States or another country where May or a May subsidiary or division operates a store or stores in which your duties and functions would be substantially similar to your duties and functions under this Agreement and that is in material competition with May or a May subsidiary or division; or (iv) any business in the United States or any foreign markets in which David's Bridal does business (i) in the retail sale and marketing of bridal gowns and bridal related apparel for the female members of the bridal party, or (ii) any of the same or similar type of products which David's Bridal was designing, developing, manufacturing, distributing or selling at the date of your termination of employment by May or at any time within two years prior thereto (together, "Prohibited Products"), except that you may (unless otherwise prohibited in subparagraphs 5(b)(i) through (iii) above) become employed as an employee or officer of a retailer where Prohibited Products is not a material percentage of sales, so long as supervising the sale of Prohibited Products is not a material portion of your duties. (c) You agree that the restrictions set forth above are reasonable, appropriate and enforceable because: (i) May is one of the leading retail companies in the United States, with department stores throughout the United States; and David's Bridal is one of the leading retailers of bridal gowns and bridal -related apparel and accessories in the United States, with stores throughout the United States. (ii) as an integral part of its business, May has expended a great deal of time, money and effort to develop and maintain confidential, proprietary and trade secret information to compete against similar businesses; this information, if misused or disclosed, could be very harmful to May's business and its competitive position in the marketplace; (iii) your position with May provides you with access to May's confidential and proprietary trade secret information, strategies and other confidential business information that would be of considerable value to a Competing Business; 3 4 (iv) May compensates its executives and other associates to, among other things, develop and maintain valuable goodwill and relationships on May's behalf and to develop and maintain business information for May's exclusive ownership and use; (v) long-term customer and supplier relationships are difficult to develop and maintain and require a significant investment of time, effort and expense; (vi) May is entitled to appropriate safeguards (x) to ensure that you do not use any confidential information given to you during your employment by May or take any other action that could result in a loss of May's goodwill developed on May's behalf and at its expense, and (y) to prevent you and/or any Competing Business from having an unfair competitive advantage over May; (vii) the amount of compensation and benefits you receive from May is based in considerable part on your express agreement to refrain from competing with May and to maintain the confidentiality of May's proprietary information in accordance with the terms of this Agreement; (viii) the limited time period during which you have agreed not to compete with May after leaving May's employment, the limited scope of the restriction and the limited prohibition on your activities are reasonable to ensure that May's confidential current and long-term business methods, strategies and plans are not made available to its competitors; and (ix) on balance, in light of your training and background, the restrictions will not pose an undue hardship on you. (d) If you engage in any activity which would violate your obligations under this Agreement (including this Paragraph 5) and which involves another person or employer or a Competing Business, you will disclose your obligations under this Agreement to that other person, employer or Competing Business. (e) Any time during which you violate any of these restrictions will not be counted in determining the time during which the restrictions apply. For example, if you were to join a Competing Business in violation of the restrictions in Paragraph 5(a) and work for that business for a month before a court enjoined this violation, then the time period of the restriction would begin when the injunction was issued and the month during which you violated the restriction would not be included in the time that the restriction is to apply. 6. PRESERVATION OF CONFIDENTIAL INFORMATION. (a) You will not, at any time, directly or indirectly, use or disclose any of May's Confidential Information except as authorized and within the scope of your employment with May. (b) At May's request and/or on termination of your employment with May, you will return to May all documents, records, notebooks, computer diskettes and tapes and anything else containing May's Confidential Information, including all copies thereof, as well as any other May property, in your possession, custody or control. You will also delete from your own computer or other electronic storage medium any of May's proprietary or confidential information. Not later than 20 days after your employment is terminated, you will certify in writing to May that you have complied with these obligations. (c) During your employment with May and thereafter, you will (i) notify and provide May immediately with the details of any unauthorized possession, use or knowledge of any of May's Confidential Information, (ii) assist in preventing any reoccurrence of this possession, use or knowledge, and (iii) cooperate with May in any litigation or other action to protect or retrieve May's Confidential Information. (d) "Confidential Information" means any non-public information pertaining to May's business. Confidential Information includes information disclosed by May to you, and information developed or learned by you during the course of or as a result of your employment with May, which you also agree is May's property. You further agree that any item of intellectual or artistic property generated or prepared by you, by yourself or with others, in connection with your employment by May is May's sole property and shall remain so unless May otherwise specifically agrees in writing. Confidential Information includes, without limitation, information and documents concerning May's processes; suppliers (including May's terms, conditions and other business arrangements with suppliers); supplier and customer lists; advertising and marketing plans and strategies; profit margins; seasonal plans, goals, objectives and projections; compilations, analyses and projections regarding May's divisions, stores, product segments, product lines, suppliers, sales and expenses; files; trade secrets and patent applications (prior to their being public); salary, staffing and employment information (including information about performance of other executives); and "know-how," techniques or any technical information not of a published nature relating, for example, to how May conducts its business. (e) You agree that you will not disclose to May or use, or induce May to use, any proprietary information, trade secret or confidential business information of any other person or entity, including any previous employer of yours. You also 4 5 represent that you have returned all property, proprietary information, trade secret and confidential business information belonging to any prior employer. 7. AUTOMATIC AMENDMENT BY COURT ORDER AND INTERIM ENFORCEMENT. (a) If a court determines that, but for the provisions of this Paragraph 7, any part of this Agreement is illegal, void as against public policy or otherwise unenforceable, then the relevant part will automatically be amended to the extent necessary to make it sufficiently narrow in scope, time and geographic area to be legally enforceable. All other terms will remain in full force and effect. (b) If you raise any question as to the enforceability of any part or terms of this Agreement, including, without limitation, Paragraphs 5 and 6, you specifically agree that you will comply fully with this Agreement unless and until an appropriate court designated in Paragraph 13 has entered a final judgment to the contrary. (c) You agree that the restrictions in Paragraphs 5 and 6 will apply regardless of the manner in which your employment with May is terminated, whether voluntarily, for Cause, without Cause or otherwise. 8. EQUITABLE AND LEGAL REMEDIES. (a) May and you shall each be entitled to pursue all legal and equitable rights and remedies to secure performance of their respective obligations and duties under this Agreement, unless otherwise expressly provided herein, and enforcement of one or more of these rights and remedies will not preclude May or you from pursuing any other rights and remedies. (b) You acknowledge and agree that the individualized services and capabilities that you will provide to May under this Agreement are of a personal, special, unique, unusual, extraordinary and intellectual character. (c) You acknowledge and agree that the restrictions in this Agreement are reasonable to protect May's rights under this Agreement and to safeguard May's Confidential Information. You expressly consent to injunctive and other equitable relief. Without limiting the foregoing, if you breach or threaten to breach your obligations under Paragraphs 5 or 6, you consent to entry of a temporary, preliminary and/or permanent injunction enjoining you from breaching those obligations. (d) If any legal proceeding is instituted, neither you nor May will be entitled to seek or obtain punitive or exemplary damages of any kind from the other or, in your case, from May's subsidiaries or divisions, or from the officers, directors or employees of May, its subsidiaries or divisions, or to seek or obtain damages or compensation for emotional distress. Nothing herein shall preclude an award of compensatory and punitive damages against any other third party. (e) If you terminate your employment voluntarily or if your employment is terminated by May for Cause, you will be liable for all attorneys' fees and costs incurred by May in seeking to enforce its rights under this Agreement. 9. ENTIRE UNDERSTANDING. The entire understanding and agreement between you and May has been incorporated into this Agreement, and this Agreement supersedes any other agreements and understandings between you and May with respect to your employment by May. There are no other promises, representations, understandings or inducements other than those specifically set forth in this Agreement. This Agreement may not be altered, amended or added to except in a single writing signed by both you and May. 10. ARM'S LENGTH. This Agreement was entered into at arm's length, without duress or coercion, and is to be interpreted as an agreement between two parties of equal bargaining strength. Both you and May agree that this Agreement is clear and unambiguous as to its terms, and that no parol or other evidence will be used or admitted to alter or explain the terms of this Agreement, but that it will be interpreted based on the language within its four corners in accordance with the purposes for which it is entered into. 11. SUCCESSORS AND ASSIGNS. This Agreement will inure to the benefit of, and will be binding upon, May, its successors and assigns and you and your heirs, successors and assigns; provided, however, that, because this is an agreement for the personal services, you cannot assign any of your obligations under this Agreement to anyone else. May may assign its obligations under this Agreement to a May subsidiary; any assignment, however, will not relieve May of any of its obligations hereunder except to the extent that they are actually discharged by the subsidiary. Whenever this Agreement refers to May, that reference includes any of May's subsidiaries or divisions, including David's Bridal, in existence at any time during which this Agreement governs the conduct of you and May. 12. SIGNING THIS AGREEMENT. This Agreement may be executed in counterparts, in which case each of the two counterparts will be deemed to be an original and the final counterpart will be deemed to have been executed in St. Louis, Missouri. 13. MISSOURI LAW GOVERNS. This Agreement has been executed by May at May's corporate headquarters and principal executive offices in St. Louis, Missouri. May and you agree that your relationship with May is centered in St. Louis, Missouri and that the weight of your contacts with and obligations to May is also in St. Louis, Missouri. Any questions or 5 6 other matter arising under this Agreement, whether of validity, interpretation, performance or otherwise, will therefore be governed by and construed in accordance with the laws of the State of Missouri applicable to agreements made and to be performed in Missouri without regard to Missouri's choice of law rules. All actions and proceedings arising out of or relating directly or indirectly to this Agreement will be filed and litigated exclusively in any state court or federal court located in the City or County of St. Louis, Missouri. May and you expressly consent to the jurisdiction of these courts, agree that venue is proper is these courts and consent to service of process made upon the Secretary of State of the State of Missouri or at your last known address in May's records. BY SIGNING THIS AGREEMENT, YOU HEREBY CERTIFY THAT YOU (A) HAVE RECEIVED A COPY OF THIS AGREEMENT TO REVIEW AND STUDY BEFORE SIGNING IT; (B) HAVE READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAVE HAD SUFFICIENT OPPORTUNITY BEFORE SIGNING IT TO ASK ANY QUESTIONS ABOUT IT AND HAVE RECEIVED SATISFACTORY ANSWERS TO ALL YOUR QUESTIONS; (D) HAVE HAD AN OPPORTUNITY TO DISCUSS IT WITH YOUR OWN LEGAL COUNSEL AND TO BE ADVISED AS TO ITS TERMS AND YOUR OBLIGATIONS AND RIGHTS UNDER IT, AND (E) UNDERSTAND YOUR RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT. IN WITNESS WHEREOF, this Agreement has been executed by you and then by May in St. Louis, Missouri on the dates shown below, but effective as of the date and year first above written. Date: -------------------------- --------------------------------- Executive THE MAY DEPARTMENT STORES COMPANY Date: BY: -------------------------- ----------------------------- 6 -----END PRIVACY-ENHANCED MESSAGE-----