General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D General Statement of Beneficial Ownership 58± 214K
2: EX-3 Articles of Incorporation/Organization or By-Laws 8± 31K
3: EX-4 Instrument Defining the Rights of Security Holders 8± 31K
4: EX-5 Opinion re: Legality 2± 10K
5: EX-8 Opinion re: Tax Matters 19± 78K
6: EX-9 Voting Trust Agreement 2± 9K
7: EX-10 Material Contract 2± 9K
EX-4 — Instrument Defining the Rights of Security Holders
AGREEMENT OF MERGER
OF
GS CAPITAL PARTNERS PRL HOLDING II, INC.
(a Delaware corporation)
WITH AND INTO
POLO RALPH LAUREN CORPORATION
(a Delaware corporation)
AGREEMENT OF MERGER entered into as of June 9, 1997 by
GS Capital Partners PRL Holding II, Inc., a Delaware
corporation ("Holding"), Polo Ralph Lauren Corporation, a
Delaware corporation ("PRLC"), and GS Capital Partners,
L.P., a Delaware limited partnership ("GSCP").
WHEREAS, Section 251 of the Delaware General
Corporation Law (the "DGCL") permits the merger of two
domestic corporations;
WHEREAS, the board of directors and stockholders of
Holding and PRLC deem it advisable and in their best
interest to merge Holding into PRLC pursuant to the
provisions of the laws of the State of Delaware upon the
terms and conditions set forth herein (the "Merger"); and
WHEREAS, the Subscription Agreement (as defined herein)
requires the Merger;
NOW, THEREFORE, in consideration of the premises and
agreement and covenants herein contained, pursuant to the
Subscription Agreement, the parties hereto agree as follows:
1. Definitions. Capitalized terms used but otherwise
not defined herein shall have the meaning set forth in the
Subscription Agreement, dated as of April 6, 1997, by and
among Mr. Ralph Lauren, an individual residing in the State
of New York, RL Holding, L.P., a Delaware limited
partnership, RL Family, L.P., a Delaware limited
partnership, GS Capital Partners, L.P., a Delaware limited
partnership, GS Capital Partners PRL Holding I, L.P., a
Delaware limited partnership, GS Capital Partners PRL
Holding II, L.P., a Delaware limited partnership, Stone
Street Fund 1994, L.P., a Delaware limited partnership,
Stone Street 1994 Subsidiary Corp., a Delaware corporation
and wholly owned subsidiary of Stone Street, and Bridge
Street Fund 1994, L.P., a Delaware limited partnership, and
PRLC, as amended on the date hereof (as amended, the
"Subscription Agreement"). A copy of the Subscription
Agreement is on file with the Secretary of PRLC.
2. Merger. Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective
Time Holding shall be merged with and into PRLC in
accordance with the provisions of the DGCL, and PRLC shall
be the continuing and surviving entity and shall be governed
by the laws of the State of Delaware. The Merger shall have
the effects specified in the DGCL. The closing of the
Merger (the "Closing") shall take place on the Transfer
Closing Date subject to the satisfaction or waiver of the
conditions set forth in Section 11 on or prior to such time.
The Effective Time of the Merger shall be simultaneously
with the closing of the transactions contemplated by the
Subscription Agreement.
3. Name. The name of the surviving entity shall be
Polo Ralph Lauren Corporation.
4. Effective Date of Merger. At the Closing, Holding
and PRLC will cause a Certificate of Merger to be executed
and filed with the Secretary of State of Delaware. The
Merger shall become effective upon the filing of the
Certificate of Merger filed with the Secretary of State of
Delaware (the "Effective Time").
5. Certificate of Incorporation and By-laws. The
Certificate of Incorporation and the By-laws of PRLC shall
be the Certificate of Incorporation and the By-laws of the
surviving entity.
6. Directors and Officers. The directors and
officers of PRLC at the Effective Time shall be the
directors and officers of the surviving entity.
7. Conversion. At the Effective Time, as a result of
the Merger and without any action on the part of the holder
of any capital stock of Holding, each of the shares of
common stock of Holding issued and outstanding immediately
prior to the Effective Time shall by virtue of the Merger be
converted into the right to receive (with respect to each
share of common stock of Holding, the "Merger
Consideration") (i) the number of shares of Class C Common
Stock of PRLC such that the outstanding shares of common
stock of Holding will convert, in the aggregate, into
2,682,262 shares of Class C Common Stock and (ii) a
promissory note (a "Note") in the amount of $1,319,740.12,
which principal amount is included as a part of the
promissory note issued by PRLC to GSCP in the amount of
$11,580,544.93 on the date hereof. The Note shall be non-
interest bearing and shall be payable on the same date as
are any dividends declared by PRLC on or prior to the
Transfer Closing Date but which are payable on a date after
the Transfer Closing Date. PRLC shall issue the Merger
Consideration with respect to a share of common stock of
Holding to the record holder thereof simultaneously with the
surrender of the certificate representing such share of
common stock of Holding.
8. Effects of the Merger. At the Effective Time,
Holding shall be deemed merged into PRLC as provided by the
DGCL and this Agreement. All rights, privileges, and powers
of Holding, and all property, real, personal and mixed, and
all debts due to Holding, as well as all other things and
causes of action belonging to Holding, shall be vested in
PRLC, and shall thereafter be the property of PRLC as they
were of Holding. The parties intend that the Merger will be
treated as a transaction that qualifies under Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as
amended (the "Code"), and as part of a transaction described
in Section 351 of the Code and agree to so report the
transaction for all income tax purposes to the extent
permitted by applicable law.
9. Representations, Warranties and Covenants.
9.1. Each party represents and warrants to the
other party that, on the date hereof and as of the Effective
Time, that:
(a) it is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of Delaware;
(b) it has requisite corporate power and
authority to enter into this Agreement and to consummate the
Merger;
(c) compliance by it with all provisions of
this Agreement will not conflict with or result in a breach
or violation of any understanding or agreement to which it
is bound or subject and will not result in any violation of
its Certificate of Incorporation or By-laws or any statute,
order, rule or regulation of any court or governmental
agency or body having jurisdiction over it or any of its
properties and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the consummation
by it of the transactions contemplated in this Agreement;
(d) this Agreement has been duly authorized,
executed and delivered by it and (assuming the due
authorization, execution and delivery hereof, by the other
party) constitutes its valid and binding obligation,
enforceable in accordance with its terms, subject as to
enforcement, to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting
creditors' rights generally and to general principles of
equity (regardless of whether enforcement is sought at a
proceeding at law or equity); and
(e) it is not subject to or obligated under
any contract, license, franchise or permit, or, subject to
any order or decree, which would be breached, violated, or
exceeded by the execution and performance of this Agreement
by it.
9.2. Holding represents and warrants to PRLC on
the date hereof and as of the Effective Time, that:
(a) except as contemplated by this
Agreement, (i) it has not, prior to the Transfer Closing
Date, engaged in any business other than (A) holding
partnership interests in GS Capital Partners PRL Holding II,
L.P., a Delaware limited partnership ("Holding II LP") which
partnership has been liquidated, (B) from and after the
liquidation of Holding II LP, holding partnership interests
in Enterprises, Polo and Womenswear and (C) holding
indebtedness of Enterprises and (ii) it has no assets other
than such partnership interests.
(b) it has no liabilities or obligations of
any kind (whether accrued, absolute, contingent,
unliquidated or otherwise, whether due or to become due),
except for (i) indebtedness held by GSCP which will either
be contributed to the capital of Holding or repaid prior to
the Effective Time and (ii) liabilities for current taxes
not yet due.
9.3. In furtherance of the representations and
warranties made by the parties in the Subscription
Agreement, GSCP represents and warrants to PRLC on the date
hereof and as of the Effective Time, that:
(a) it or its representatives has had an
opportunity to ask questions of and receive answers from
officers of PRLC, or a person or persons acting on its
behalf, concerning the terms and conditions of this
investment;
(b) it is an "accredited investor" as such
term is defined in Regulation 501 promulgated under the
Securities Exchange Act of 1934, as amended, and has such
knowledge and experience in financial and business matters
to evaluate the risks of investment in PRLC;
(c) the shares of common stock of PRLC
issuable to it in the Merger are being purchased by it for
its own sole benefit and account for investment and not with
a view to, or for resale in connection with, a public
offering or distribution thereof other than in the Offering;
and
(d) it has no present plan or intention to
sell, exchange or otherwise dispose of any shares of common
stock of PRLC received in the Merger except as contemplated
by the registration statement of PRLC on file with the
Securities and Exchange Commission on the date hereof.
9.4. GSCP will not, within two years of the
Effective Time, sell, exchange or otherwise dispose of a
number of shares of common stock of PRLC received in the
Merger that would reduce its ownership of common stock of
PRLC that it received in the Merger to a number of shares
having a value, as of the date of the Merger, of less than
50 percent of the value of all of the formerly outstanding
capital stock of Holding as of the date of the Merger. The
parties acknowledge that this restriction may be satisfied
by GSCP concurrently with the restriction on GSCP and
certain other parties contained in Section 4.1(b) of the
Stockholders Agreement dated the date hereof among GSCP and
certain other parties. Notwithstanding the foregoing, in no
event shall the provisions of this Section 9.4 prohibit the
sale, exchange or other disposition in connection with any
business combination transaction or other acquisition of
PRLC as a result of which no party to the Subscription
Agreement or any of its affiliates holds any outstanding
shares of common stock of PRLC.
10. Indemnification.
10.1. Indemnification. GSCP shall indemnify, save
and hold harmless (a) PRLC from and against any and all losses,
damages, liabilities, claims, judgments, settlement, fines, costs
and expenses, including attorneys' fees and disbursements
(collectively, "Losses") arising out of or in connection with any
breach of the representation made by Holding in Sections 9.1 and
9.2, (b) PRLC from and against any Losses caused by the Merger
and (c) PRLC from any liabilities whatsoever of Holding incurred
on or prior to the Effective Time, including, without limitation,
liabilities for taxes incurred on or prior to the Effective Time
of Holding or of any other person with respect to which Holding is
or may be liable, including, without limitation, interest,
additions to tax, penalties and legal and accounting expenses in
connection therewith, and any related out-of-pocket costs and
expenses, and any liabilities that result in whole or in part from
the failure of the Merger to qualify under Section 368(a)(1)(A) of
the Code. Any payment by GSCP to PRLC pursuant to this Section
10.1 shall be made on a basis (a "Grossed-Up Basis") such that any
payment received or deemed to have been received by PRLC (the
"Original Payment") shall be supplemented by a further
simultaneous payment to PRLC so that the sum of the two payments
shall be equal to the Original Payment, after taking into account
all taxes that would result from the receipt or accrual of such
two payments.
10.2. Procedure. (a) If a claim is to be made by
PRLC against GSCP, PRLC shall give prompt written notice (a "Claim
Notice") to GSCP after PRLC becomes aware of any fact, condition
or event which may give rise to Losses for which indemnification
may be sought under this Section 10. The failure of PRLC to
give timely notice hereunder shall not affect rights to
indemnification hereunder, except to the extent that GSCP is
actually prejudiced by the failure to give such notice.
(b) With respect to any claim under Section
10.1 relating to matters other than tax liabilities, GSCP
shall be entitled if it so elects at its own cost, risk and
expense, (i) to take control of the defense and
investigation of such lawsuit or action, (ii) to employ and
engage attorneys of its own choice and (iii) to compromise
or settle such claim, which compromise or settlement can be
made only with the written consent of PRLC which may not be
unreasonably withheld or delayed. If GSCP fails to assume
the defense of such claim within 30 calendar days after
receipt of the Claim Notice, PRLC will (upon delivering
notice to such effect to GSCP) have the right to undertake,
at GSCP's cost and expense, the defense of such claim on
behalf of and for the account and risk of GSCP. In the
event that PRLC assumes the defense of the claim, PRLC will
keep GSCP reasonably informed of the progress of any such
defense.
(c) With respect to any claim under Section
10.1 relating to tax liabilities, PRLC shall consult in good
faith with GSCP, and GSCP shall have the right to reasonably
participate, in the defense of any such claim against PRLC,
provided, however, that GSCP shall have no right to
participate in any proceeding involving a consolidated
federal income tax return of PRLC.
(d) PRLC shall cooperate in all reasonable
respects with GSCP and such attorneys in the investigation,
trial and defense of such lawsuit or action and any appeal
arising therefrom. GSCP shall be responsible for all
out-of-pocket costs and expenses for such cooperation.
(e) PRLC shall not compromise or settle any
claim relating to a Loss covered by this Section 10 without
the prior written consent of GSCP which may not be
unreasonably withheld or delayed.
10.3. Survival. PRLC's rights to indemnification
shall survive until the later of ten years and the
expiration of the applicable statute of limitations
including extensions thereof.
10.4 Tax Returns. GSCP shall prepare all tax returns
with respect to Holding for periods ending on or prior to
the Effective Time and PRLC shall file any such returns.
All parties will cooperate with each other with respect to
the preparation and filing of any such tax returns and GSCP
shall afford PRLC reasonable review of any such returns
prior to their filing and will accept reasonable comments of
PRLC with respect thereto. GSCP shall bear all
out-of-pocket costs and expenses in connection with the
preparation and filing of such tax returns and shall
reimburse PRLC for any costs incurred in connection
therewith, including reasonably allocable internal costs.
11. Conditions; Termination. The respective
obligation of each party to effect the Merger is subject to
the simultaneous occurrence of the Transfer Closing Date and
the simultaneous consummation of the transactions
contemplated by the Subscription Agreement. The Board of
Directors of either constituent corporation may terminate
this Agreement by filing a certificate of termination with
the Secretary of State of the State of Delaware prior to the
effective time of the merger as set forth in the Certificate
of Merger. Each party may terminate this Agreement by
providing written notice to that effect to the other party
if the Closing shall not occur on or prior to June 15, 1997.
12. Counterparts. This Agreement may be signed in one
or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
13. Notices. Any notice or request to be given under
this Agreement by one party to another shall be in writing
and shall be delivered personally or by certified mail,
postage prepaid to such addresses as any party may designate
in writing to the other.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF
EXCEPT THAT WITH RESPECT TO MATTERS CONTAINED HEREIN COVERED
BY THE DELAWARE GENERAL CORPORATION LAW (THE "DGCL") THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY THE DGCL.
15. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto and supersedes
all prior agreements and understandings, oral and written,
between the parties hereto, with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the date first above written.
GS CAPITAL PARTNERS PRL
HOLDING II, INC.,
a Delaware corporation
By: /s/ C.H. Skodinski
---------------------------
Name: C.H. Skodinski
Title: Secretary
POLO RALPH LAUREN CORPORATION,
a Delaware corporation
By /s/ Victor Cohen
---------------------------
Name: Victor Cohen
Title: Senior Vice
President, General
Counsel and
Secretary
GS CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: GS Advisors, L.P., its
general partner
By: GS Advisors, Inc., its
general partner
By: /s/ C.H. Skodinski
---------------------------
Name: C.H. Skodinski
Title: Vice President
Dates Referenced Herein and Documents Incorporated by Reference
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