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SECURITIES AND EXCHANGE COMMISSION
FORM SC 13D
Schedule filed to report acquisition of beneficial ownership of 5% or more of a class of equity
securities
Filing Date: 1998-12-17
SEC Accession No. 0001047469-98-044352
(HTML Version on secdatabase.com)
SUBJECT COMPANY
ST JOHN KNITS INC
CIK:896100| IRS No.: 952245070 | State of Incorp.:CA | Fiscal Year End: 1103
Type: SC 13D | Act: 34 | File No.: 005-43547 | Film No.: 98771477
SIC: 2253 Knit outerwear mills
Mailing Address
17422 DERIAN AVE
IRVINE CA 92614
Business Address
17422 DERIAN AVE IVE
IRVINE CA 92614
7142233301
Mailing Address
17422 DERIAN AVENUE
IRVINE CA 92614
Business Address
17422 DERIAN AVENUE
IRVINE CA 92614
7148631171
FILED BY
GRAY ROBERT E
CIK:938704
Type: SC 13D
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
ST. JOHN KNITS, INC.
-------------------------------------------------------------------------------(NAME OF ISSUER)
COMMON STOCK
-------------------------------------------------------------------------------(TITLE OF CLASS OF SECURITIES)
790289 10 2
-------------------------------------------------------------------------------(CUSIP NUMBER)
ROBERT E. GRAY
17422 DERIAN AVENUE
IRVINE, CALIFORNIA 92614
(714) 863-1171
JAMES P. KELLEY
VESTAR CAPITAL PARTNERS III, L.P.
1225 17TH STREET, SUIT 1660
DENVER, COLORADO 80202
(303) 292-6300
WITH COPIES TO
PAUL A. ROWE
HEWITT & MCGUIRE, LLP
19900 MACARTHUR BOULEVARD, SUITE 1050
IRVINE, CALIFORNIA 92612
(949) 798-0500
ROBERT L. FRIEDMAN
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 455-2000
-------------------------------------------------------------------------------(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS)
DECEMBER 8, 1998
-------------------------------------------------------------------------------(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
IF THE FILING PERSON HAS PREVIOUSLY FILED A STATEMENT ON SCHEDULE 13G TO REPORT
THE ACQUISITION WHICH IS THE SUBJECT OF THIS SCHEDULE 13D, AND IS FILING THIS
SCHEDULE BECAUSE OF RULE 13D-1(e), 13D-(f) OR 13D-1(g), CHECK THE FOLLOWING
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BOX /X/.
NOTE: SEE RULE 13D-7(b) FOR OTHER PARTIES TO WHOM COPIES ARE TO BE SENT.
SCHEDULES FILED IN PAPER FORMAT SHALL INCLUDE A SIGNED ORIGINAL AND FIVE COPIES
OF THE SCHEDULE, INCLUDING ALL EXHIBITS.
*THE REMAINDER OF THIS COVER PAGE SHALL BE FILLED OUT FOR A REPORTING PERSON'S
INITIAL FILING ON THIS FORM WITH RESPECT TO THE SUBJECT CLASS OF SECURITIES, AND
FOR ANY SUBSEQUENT AMENDMENT CONTAINING INFORMATION WHICH WOULD ALTER
DISCLOSURES PROVIDED IN A PRIOR COVER PAGE.
THE INFORMATION REQUIRED ON THE REMAINDER OF THIS COVER PAGE SHALL NOT BE DEEMED
TO BE "FILED" FOR THE PURPOSE OF SECTION 18 OF THE SECURITIES EXCHANGE ACT OF
1934 ("Act") OR OTHERWISE SUBJECT TO THE LIABILITIES OF THAT SECTION OF THE ACT
BUT SHALL BE SUBJECT TO ALL OTHER PROVISIONS OF THE ACT (HOWEVER, SEE THE
NOTES).
Exhibit Index appears on Page A-1.
SCHEDULE 13D
----------------------------------CUSIP NO. 790289 10 2
-----------------------------------
-----------------------------PAGE 2 OF 23
------------------------------
-------------------------------------------------------------------------------1
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ROBERT E. GRAY
-------------------------------------------------------------------------------2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
-------------------------------------------------------------------------------3
SECURITIES USE ONLY
-------------------------------------------------------------------------------4
SOURCE OF FUNDS
PF
-------------------------------------------------------------------------------5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
-------------------------------------------------------------------------------6
CITIZENSHIP OR PLACE OF ORGANIZATION
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UNITED STATES OF AMERICA
-------------------------------------------------------------------------------7
SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
420,000(1)
-----------------------------------------------------------8
SHARED VOTING POWER
658,079(2)
-----------------------------------------------------------9
SOLE DISPOSITIVE POWER
420,000(1)
-----------------------------------------------------------10
SHARED DISPOSITIVE POWER
658,079(2)
-------------------------------------------------------------------------------11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,078,079
-------------------------------------------------------------------------------12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
-------------------------------------------------------------------------------13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.34%
-------------------------------------------------------------------------------14
TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------------------(1)
REPRESENTS 420,000 SHARES OF COMMON STOCK UNDERLYING EXERCISABLE EMPLOYEE
STOCK OPTIONS ISSUED TO ROBERT GRAY BY THE COMPANY.
(2)
INCLUDES 603,439 SHARES WHICH ARE OWNED BY THE GRAY FAMILY TRUST, OF WHICH
ROBERT GRAY AND MARIE GRAY SERVE AS CO-TRUSTEES. IN ADDITION, INCLUDES
54,640 SHARES WHICH ARE OWNED BY THE KELLY ANN GRAY TRUST, OF WHICH ROBERT
GRAY AND MARIE GRAY SERVE AS CO-TRUSTEES.
SCHEDULE 13D
----------------------------------CUSIP NO. 790289 10 2
-----------------------------------
-----------------------------PAGE 3 OF 23
------------------------------
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1
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MARIE GRAY
-------------------------------------------------------------------------------2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
-------------------------------------------------------------------------------3
SECURITIES USE ONLY
-------------------------------------------------------------------------------4
SOURCE OF FUNDS
PF
-------------------------------------------------------------------------------5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
-------------------------------------------------------------------------------6
CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
-------------------------------------------------------------------------------7
SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
80,000(3)
-----------------------------------------------------------8
SHARED VOTING POWER
658,079(2)
-----------------------------------------------------------9
SOLE DISPOSITIVE POWER
80,000(3)
-----------------------------------------------------------10
SHARED DISPOSITIVE POWER
658,079(2)
-------------------------------------------------------------------------------11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
738,079
-------------------------------------------------------------------------------12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
-------------------------------------------------------------------------------13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.43%
-------------------------------------------------------------------------------14
TYPE OF REPORTING PERSON
IN
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(2)
INCLUDES 603,439 SHARES WHICH ARE OWNED BY THE GRAY FAMILY TRUST, OF WHICH
ROBERT GRAY AND MARIE GRAY SERVE AS CO-TRUSTEES. IN ADDITION, INCLUDES
54,640 SHARES WHICH ARE OWNED BY THE KELLY ANN GRAY TRUST, OF WHICH ROBERT
GRAY AND MARIE GRAY SERVE AS CO-TRUSTEES.
(3)
REPRESENTS 80,000 SHARES OF COMMON STOCK UNDERLYING EXERCISABLE EMPLOYEE
STOCK OPTIONS ISSUED TO MARIE GRAY BY THE COMPANY.
SCHEDULE 13D
----------------------------------CUSIP NO. 790289 10 2
-----------------------------------
-----------------------------PAGE 4 OF 23
------------------------------
-------------------------------------------------------------------------------1
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KELLY A. GRAY
-------------------------------------------------------------------------------2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
-------------------------------------------------------------------------------3
SECURITIES USE ONLY
-------------------------------------------------------------------------------4
SOURCE OF FUNDS
AF
-------------------------------------------------------------------------------5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
-------------------------------------------------------------------------------6
CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
-------------------------------------------------------------------------------7
SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
607,904(4)
-----------------------------------------------------------8
SHARED VOTING POWER
0
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EACH
REPORTING
PERSON
WITH
-----------------------------------------------------------9
SOLE DISPOSITIVE POWER
607,904(4)
-----------------------------------------------------------10
SHARED DISPOSITIVE POWER
0
-------------------------------------------------------------------------------11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
607,904
-------------------------------------------------------------------------------12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
-------------------------------------------------------------------------------13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.65%
-------------------------------------------------------------------------------14
TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------------------(4)
INCLUDES 60,000 SHARES OF COMMON STOCK UNDERLYING EXERCISABLE EMPLOYEE
STOCK OPTIONS ISSUED TO KELLY GRAY BY THE COMPANY.
SCHEDULE 13D
----------------------------------CUSIP NO. 790289 10 2
-----------------------------------
-----------------------------PAGE 5 OF 23
------------------------------
-------------------------------------------------------------------------------1
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GRAY FAMILY TRUST
-------------------------------------------------------------------------------2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
-------------------------------------------------------------------------------3
SECURITIES USE ONLY
-------------------------------------------------------------------------------4
SOURCE OF FUNDS
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AF
-------------------------------------------------------------------------------5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
-------------------------------------------------------------------------------6
CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
-------------------------------------------------------------------------------7
SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
603,439
-----------------------------------------------------------8
SHARED VOTING POWER
0
-----------------------------------------------------------9
SOLE DISPOSITIVE POWER
603,439
-----------------------------------------------------------10
SHARED DISPOSITIVE POWER
0
-------------------------------------------------------------------------------11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
603,439
-------------------------------------------------------------------------------12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
-------------------------------------------------------------------------------13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.64%
-------------------------------------------------------------------------------14
TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
SCHEDULE 13D
----------------------------------CUSIP NO. 790289 10 2
-----------------------------------
-----------------------------PAGE 6 OF 23
------------------------------
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1
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KELLY ANN GRAY TRUST
-------------------------------------------------------------------------------2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
-------------------------------------------------------------------------------3
SECURITIES USE ONLY
-------------------------------------------------------------------------------4
SOURCE OF FUNDS
AF
-------------------------------------------------------------------------------5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
-------------------------------------------------------------------------------6
CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
-------------------------------------------------------------------------------7
SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
54,640
-----------------------------------------------------------8
SHARED VOTING POWER
0
-----------------------------------------------------------9
SOLE DISPOSITIVE POWER
54,640
-----------------------------------------------------------10
SHARED DISPOSITIVE POWER
0
-------------------------------------------------------------------------------11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
54,640
-------------------------------------------------------------------------------12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
-------------------------------------------------------------------------------13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.33%
-------------------------------------------------------------------------------14
TYPE OF REPORTING PERSON
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OO
--------------------------------------------------------------------------------
SCHEDULE 13D
----------------------------------CUSIP NO. 790289 10 2
-----------------------------------
-----------------------------PAGE 7 OF 23
------------------------------
-------------------------------------------------------------------------------1
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
VESTAR CAPITAL PARTNERS III, L.P.
-------------------------------------------------------------------------------2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
-------------------------------------------------------------------------------3
SECURITIES USE ONLY
-------------------------------------------------------------------------------4
SOURCE OF FUNDS
NOT APPLICABLE. SEE ITEM 3.
-------------------------------------------------------------------------------5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
-------------------------------------------------------------------------------6
CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
-------------------------------------------------------------------------------7
SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
0
-----------------------------------------------------------8
SHARED VOTING POWER
0
-----------------------------------------------------------9
SOLE DISPOSITIVE POWER
0
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10
SHARED DISPOSITIVE POWER
0
-------------------------------------------------------------------------------11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,078,079*
-------------------------------------------------------------------------------12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
-------------------------------------------------------------------------------13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.34%
-------------------------------------------------------------------------------14
TYPE OF REPORTING PERSON
PN
-------------------------------------------------------------------------------*
VESTAR CAPITAL PARTNERS III, L.P. MAY BE DEEMED TO HAVE ACQUIRED BENEFICIAL
OWNERSHIP OF THE COMMON STOCK BENEFICIALLY OWNED BY ROBERT GRAY SOLELY BY
VIRTUE OF THE EXECUTION OF THE LETTER DESCRIBED IN ITEM 4, PURSUANT TO
WHICH THEY OFFERED TO PURCHASE 98% OF THE OUTSTANDING COMMON STOCK OF THE
COMPANY. VESTAR CAPITAL PARTNERS III, L.P. DISCLAIMS ANY SUCH BENEFICIAL
OWNERSHIP. CAPITALIZED TERMS HAVE THE MEANINGS ASSIGNED THERETO HEREIN.
SCHEDULE 13D
----------------------------------CUSIP NO. 790289 10 2
-----------------------------------
-----------------------------PAGE 8 OF 23
------------------------------
-------------------------------------------------------------------------------1
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
VESTAR ASSOCIATES III, L.P.
-------------------------------------------------------------------------------2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
-------------------------------------------------------------------------------3
SECURITIES USE ONLY
-------------------------------------------------------------------------------4
SOURCE OF FUNDS
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NOT APPLICABLE. SEE ITEM 3.
-------------------------------------------------------------------------------5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
-------------------------------------------------------------------------------6
CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
-------------------------------------------------------------------------------7
SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
0
-----------------------------------------------------------8
SHARED VOTING POWER
0
-----------------------------------------------------------9
SOLE DISPOSITIVE POWER
0
-----------------------------------------------------------10
SHARED DISPOSITIVE POWER
0
-------------------------------------------------------------------------------11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,078,079*
-------------------------------------------------------------------------------12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
-------------------------------------------------------------------------------13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.34%
-------------------------------------------------------------------------------14
TYPE OF REPORTING PERSON
PN
-------------------------------------------------------------------------------*
VESTAR ASSOCIATES III, L.P. MAY BE DEEMED TO HAVE ACQUIRED BENEFICIAL
OWNERSHIP OF THE COMMON STOCK BENEFICIALLY OWNED BY ROBERT GRAY SOLELY BY
VIRTUE OF THE EXECUTION OF THE LETTER DESCRIBED IN ITEM 4, PURSUANT TO
WHICH THEY OFFERED TO PURCHASE 98% OF THE OUTSTANDING COMMON STOCK OF THE
COMPANY. VESTAR ASSOCIATES III, L.P. DISCLAIMS ANY SUCH BENEFICIAL
OWNERSHIP. CAPITALIZED TERMS HAVE THE MEANINGS ASSIGNED THERETO HEREIN.
SCHEDULE 13D
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----------------------------------CUSIP NO. 790289 10 2
-----------------------------------
-----------------------------PAGE 9 OF 23
------------------------------
-------------------------------------------------------------------------------1
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
VESTAR ASSOCIATES CORPORATION III
-------------------------------------------------------------------------------2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
-------------------------------------------------------------------------------3
SECURITIES USE ONLY
-------------------------------------------------------------------------------4
SOURCE OF FUNDS
NOT APPLICABLE. SEE ITEM 3.
-------------------------------------------------------------------------------5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
/ /
-------------------------------------------------------------------------------6
CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
-------------------------------------------------------------------------------7
SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
0
-----------------------------------------------------------8
SHARED VOTING POWER
0
-----------------------------------------------------------9
SOLE DISPOSITIVE POWER
0
-----------------------------------------------------------10
SHARED DISPOSITIVE POWER
0
-------------------------------------------------------------------------------11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,078,079*
-------------------------------------------------------------------------------12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
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-------------------------------------------------------------------------------13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.34%
-------------------------------------------------------------------------------14
TYPE OF REPORTING PERSON
PN
-------------------------------------------------------------------------------*
VESTAR ASSOCIATES CORPORATION III MAY BE DEEMED TO HAVE ACQUIRED BENEFICIAL
OWNERSHIP OF THE COMMON STOCK BENEFICIALLY OWNED BY ROBERT GRAY SOLELY BY
VIRTUE OF THE EXECUTION OF THE LETTER DESCRIBED IN ITEM 4, PURSUANT TO
WHICH THEY OFFERED TO PURCHASE 98% OF THE OUTSTANDING COMMON STOCK OF THE
COMPANY. VESTAR ASSOCIATES CORPORATION III DISCLAIMS ANY SUCH BENEFICIAL
OWNERSHIP. CAPITALIZED TERMS HAVE THE MEANINGS ASSIGNED THERETO HEREIN.
Page 10 of 23
STATEMENT PURSUANT TO RULE 13D-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
ITEM 1.
SECURITY AND ISSUER.
This Statement on Schedule 13D relates to the Common Stock, no par value
("Common Stock"), of St. John Knits, Inc., a California corporation (the
"Company"). The principal executive offices of the Company are located at 17422
Derian Avenue, Irvine, California 92614.
ITEM 2.
IDENTITY AND BACKGROUND.
This Schedule 13D is being filed jointly by Robert E. Gray, Marie Gray, Kelly A.
Gray, the Gray Family Trust, the Kelly Ann Gray Trust (collectively, the "Gray
Stockholders"), and Vestar Capital Partners III, L.P. ("Vestar"), Vestar
Associates III, L.P. ("Vestar Associates III"), and Vestar Associates
Corporation III (Vestar Associates Corporation III, together with Vestar and
Vestar Associates III, the "Vestar Reporting Persons" and, together with the
Gray Stockholders, the "Reporting Persons").
Robert Gray is Chairman of the Board and Chief Executive Officer of the Company.
Marie Gray is Vice-Chairman of the Board, Chief Designer and Secretary of the
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Company and the wife of Robert Gray. Kelly Gray is President of the Company and
the daughter of Robert and Marie Gray. Their principal business address is
17422 Derian Avenue, Irvine, California 92614. Each is a citizen of the United
States of America.
Robert Gray and Marie Gray are co-trustees of the Gray Family Trust (the "Family
Trust"), a revocable living trust governed by the laws of the State of
California. The business address of the Family Trust is 17422 Derian Avenue,
Irvine, California 92614. Robert Gray and Marie Gray are also co-trustees of the
Kelly Ann Gray Trust (the "Kelly Trust"), a trust governed by the laws of the
State of California. The business address of the Kelly Trust is 17422 Derian
Avenue, Irvine, California 92614.
The principal business and office address of the Vestar Reporting Persons is 245
Park Avenue, 41st Floor, New York, New York 10167. Vestar, Vestar Associates
III and Vestar Associates
Page 11 of 23
Corporation III are principally engaged in the business of investing in
securities. Vestar Associates III is the sole general partner of Vestar and
Vestar Associates Corporation III is the sole general partner of Vestar
Associates III. The executive officers of Vestar Associates Corporation III are
as follows: Daniel S. O'Connell is the President and Chief Executive Officer;
Prakash A. Melwani is the Vice President and Secretary; James P. Kelley, Norman
W. Alpert, Arthur J. Nagle, Robert L. Rosner and Sander M. Levy are Vice
Presidents; Nicholas A. Dovidio is the Chief Financial Officer; and Brian P.
Schwartz is the Controller. Mr. O'Connell is the sole member of the Board of
Directors of Vestar Associates Corporation. The principal business address for
Messrs. O'Connell, Alpert, Nagle, Melwani, Rosner, Levy, Dovidio and Schwartz is
245 Park Avenue, 41st Floor, New York, New York 10167.
The principal business
address for Mr. Kelley is 1225 17th Street, Suite 1660, Denver, Colorado 80202.
Messrs. O'Connell, Kelley, Alpert, Nagle, Rosner, Levy, Dovidio and Schwartz are
citizens of the United States of America. Mr. Melwani is a British National
Overseas Citizen. The present principal occupation or employment of each of
Messrs. O'Connell, Kelley, Alpert, Nagle, Melwani, Rosner, Levy, Dovidio and
Schwartz is serving in his position with Vestar Associates Corporation III.
During the last five years, none of the Reporting Persons and, to the best
knowledge of the Reporting Persons, none of the other persons named in this
Item 2: (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) was a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, Federal
or state securities laws or finding any violations of such laws.
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Information with respect to each of the Reporting Persons is given solely by
such Reporting Person and no Reporting Person has responsibility for the
accuracy or completeness of information supplied by another Reporting Person.
ITEM 3.
SOURCE AND AMOUNT OF FUNDS.
The Family Trust beneficially owns 603,439 shares of Common Stock. The Kelly
Trust beneficially owns 54,640 shares of Common Stock. Kelly Gray beneficially
owns 607,904 shares of Common Stock, of which 60,000 shares are issuable upon
the exercise of outstanding employee stock options. All of the owned shares
described in the three preceding sentences were owned by the Gray Stockholders
as of or prior to the Company's initial public offering in March 1993. All
funds used to purchase these shares came from the personal funds of the Gray
family. In addition to the shares beneficially owned by the Family Trust and
the Kelly Trust, Robert Gray beneficially owns 420,000 shares of Common Stock
issuable upon the exercise of outstanding employee stock options and Marie Gray
beneficially owns 80,000 shares of Common Stock issuable upon the exercise of
outstanding employee stock options.
Page 12 of 23
Except for the filing on Schedule 13D on March 16, 1993 in connection with the
purchase of shares of Common Stock by the Family Trust, until the date hereof,
the Gray Stockholders have filed their beneficial ownership positions in the
Common Stock on Schedule 13G under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). In accordance with Rule 13d-1(e) of the Exchange
Act, the Gray Stockholders are now filing this Schedule 13D not on account of
additional purchases of Common Stock but on account of the execution and
delivery of a letter by Robert Gray and Vestar (collectively, the "Purchasers")
to the Company, dated as of December 8, 1998, (as modified on December 16, 1998,
the "Letter"), pursuant to which the Purchasers made a non-binding offer to
acquire control of the Company through the purchase of 98% of the outstanding
Common Stock. For further discussion of the Letter, see Item 4 below. A copy
of the Letter is attached hereto as Exhibit 2.
Beneficial ownership by the Vestar Reporting Persons of the shares of Common
Stock which are the subject of this Schedule 13D may be deemed to have been
acquired through the execution by Vestar of the Letter.
Each of the Vestar
Reporting Persons disclaims any such beneficial ownership. None of the Vestar
Reporting Persons has made any payments in connection with the execution of the
Letter.
ITEM 4.
PURPOSE OF TRANSACTION.
The Gray Stockholders purchased the shares of Common Stock which are the subject
of this Schedule 13D for the purpose of investment.
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Pursuant to the Letter, the Purchasers indicated a preliminary interest in
purchasing 98% of the outstanding Common Stock at a price of $28 per share in
cash, for an aggregate purchase price of approximately $490 million (the
"Transaction"). It is presently contemplated that following the consumation
of the Transaction, the 2% of the outstanding Common Stock retained by the
current public stockholders of the Company will represent approximately 7%
of the common equity of the Company on a pro forma basis.
According to the Letter, consummation of the Transaction would be subject to,
among other things: (a) the negotiation and execution of a definitive
acquisition agreement and related documents; (b) the receipt of necessary
consents and approvals from third parties and the expiration or termination of
any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended; (c) the receipt by the Purchasers, on terms satisfactory to
them, of all financing necessary to complete the Transaction; and (d)
satisfactory completion of due diligence.
The Purchasers have retained Chase Manhattan Bank to lead in arranging
necessary debt financing for the Transaction. In addition, Vestar has
indicated in the Letter that it is prepared to commit the necessary equity
funds to complete the Transaction.
The Transaction, if consummated, would involve one or more of the following, the
specific plans concerning which have not yet been established: (a) the
acquisition by the Purchasers of additional securities of the Company; (b) an
extraordinary corporate transaction involving the Company; (c) a change in the
present board of directors or management of the Company; (d) a change in the
present capitalization or dividend policy of the Company; (e) changes in the
Page 13 of 23
Company's charter or bylaws; (f) causing a class of securities of the Company to
be delisted from a national securities exchange; and (g) causing a class of
equity securities of the Company to become eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act.
Except as described above and elsewhere herein, neither the Reporting Persons
nor, to the best of their knowledge, any of the individuals referred to in Item
2, has any present plan or proposal which relates to, or could result in the
occurrence of, any of the events referred to in subparagraphs (a) through (j) of
Item 4 of Schedule 13D (although they reserve the right to develop such plans).
ITEM 5.
INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b). As of the date of this Schedule 13D, Robert Gray was the
beneficial owner of 1,078,079 shares of Common Stock, representing approximately
6.34% of the outstanding shares of Common Stock. Robert Gray has the sole power
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to vote or direct vote and to dispose or direct the disposition of 420,000 of
such shares, all of which underlie exercisable employee stock options issued to
Robert Gray by the Company. In addition, Robert Gray shares with Marie Gray the
power to vote or direct the vote and the power to dispose or direct the
disposition of 603,439 shares of Common Stock beneficially owned by the Family
Trust and 54,640 shares of Common Stock beneficially owned by the Kelly Trust,
representing approximately 3.64% and 0.33% of the outstanding shares of Common
Stock, respectively. Each of the Family Trust and the Kelly Trust has the sole
power to vote or direct the vote or to dispose or direct the disposition of the
shares of Common Stock referred to as being beneficially owned by it in the
preceding sentence.
As of the date of this Schedule 13D, Marie Gray was the beneficial owner of
738,079 shares of Common Stock, representing approximately 4.43% of the
outstanding shares of Common Stock. Marie Gray has the sole power to vote or
direct the vote and to dispose or direct the disposition of 80,000 shares of
Common Stock, all of which underlie exercisable employee stock options issued to
Marie Gray by the Company.
As of the date of this Schedule 13D, Kelly Gray was the beneficial owner of
607,904 shares of Common Stock, representing approximately 3.65% of the
outstanding shares of Common Stock. Kelly Gray has the sole power to vote or
direct the vote and to dispose or direct the disposition of all such shares,
which number includes 60,000 shares underlying exercisable employee stock
options issued to Kelly Gray by the Company.
By virtue of having executed the Letter, Vestar may be deemed to have acted in
concert with Robert Gray in agreeing to offer to acquire 98% of the outstanding
Common Stock of the Company, including the Common Stock referred to above as
being beneficially owned by Robert Gray. Consequently, the Purchasers may be
deemed to constitute a "group" for purposes of Section 13(d) of the Exchange Act
and Vestar may be deemed to beneficially own the shares of Common Stock
beneficially owned by Robert Gray. Vestar is controlled by its sole general
Page 14 of 23
partner, Vestar Associates III, and Vestar Associates III is controlled by its
sole general partner, Vestar Associates Corporation III. As a result, Vestar
Associates III and Vestar Associates Corporation III may be deemed to
beneficially own the shares of Common Stock beneficially owned by Robert Gray.
Each of the Vestar Reporting Persons disclaims any beneficial ownership of the
shares of Common Stock beneficially owned by Robert Gray.
As executive officers and directors of Vestar Associates Corporation III,
Messrs. O'Connell, Kelley, Alpert, Nagle, Melwani, Rosner, Levy, Dovidio and
Schwartz may be deemed to beneficially own any shares of Common Stock
beneficially owned by Vestar. They also disclaim any such beneficial ownership.
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(c) To the best knowledge of each of the Reporting Persons, none of the
Reporting Persons and no other person described in Item 2 hereof has engaged in
any transaction during the past 60 days in any shares of Common Stock.
(d) To the best knowledge of each of the Reporting Persons, no person, other
than the Reporting Persons, has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the shares of
Common Stock beneficially owned by the Reporting Persons.
(e)
Not applicable.
ITEM 6.
CONTRACTS, ARRANGEMENT OR UNDERSTANDINGS WITH RESPECT TO SECURITIES OF
THE ISSUER.
Robert Gray and Marie Gray, for the benefit of the Family Trust, and Kelly Gray
are each parties to "zero-cost collar" arrangements with respect to certain
shares of Common Stock beneficially owned by each of them.
On April 8, 1998, Robert Gray and Marie Gray FBO Gray Family Trust ("RMGT")
entered into a letter agreement with Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") pursuant to which RMGT (a) bought from Merrill
Lynch a European-style put relating to 20,700 shares of Common Stock at a price
of $43.13 per share, subject to adjustment and (b) sold to Merrill Lynch a
European-style call relating to 20,700 shares of Common Stock at a price of
$60.86 per share, subject to adjustment. RMGT paid $3.70 per share for the put
and Merrill Lynch paid $3.70 per share for the call. The put and the call are
not exercisable until, and are scheduled to expire, on or about April 10, 2000,
and if one of the two is in the money at the close of trading on that date,
that option shall be deemed to be automatically exercised. RMGT has the right
to determine whether settlement of the put or call, as applicable, will be in
cash or in shares of Common Stock. In connection with the foregoing
transaction (the "April 8, 1998 Collar"), RMGT granted Merrill Lynch a first
priority lien, charge and security interest in the shares of Common Stock held
by Merrill Lynch as security for its obligations under the zero-cost collar.
Page 15 of 23
Also on April 8, 1998, Kelly Gray entered into a letter agreement with Merrill
Lynch pursuant to which Kelly Gray (a) bought from Merrill Lynch a put and (b)
sold to Merrill Lynch a call, in each case relating to 20,700 shares of Common
Stock on terms identical to the April 8, 1998 Collar, including with respect to
the security interest.
On July 5, 1996, each of RMGT and Kelly Gray entered into a letter agreement
with Merrill Lynch providing for a "zero-cost collar" on the same terms as the
April 8, 1998 Collar with the following differences: (a) the RMGT letter
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agreement related to 50,000 shares of Common Stock and the Kelly Gray letter
agreement related to 60,000 shares of Common Stock, (b) in each case the put
price is $46.16 and the call price is $59.08, subject to adjustment, (c) in
each case the put and call are scheduled to expire on or about July 6, 1999,
and (d) in each case the price per share for each of the put and the call was
$4.67.
Except for the zero-cost collars described above and for the Letter, which is a
preliminary indication of interest in consummating a transaction and not a
binding commitment with respect to a transaction, none of the Reporting Persons
nor, to the best knowledge of the Reporting Persons, any of the persons
identified in Item 2, has any contracts, arrangements, understandings or
relationships (legal or otherwise) with any person with respect to any
securities of the Company, including but not limited to, transfer or voting of
any of the securities of the Company, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or loss, or the giving or withholding of proxies, or a pledge or contingency the
occurrence of which would give another person voting power over the securities
of the Company.
ITEM 7.
MATERIAL TO BE FILED AS EXHIBITS.
1.
Joint Filing Agreement
2.
Letter from Robert E. Gray and Vestar Capital Partners III, L.P. to
the Board of Directors of St. John Knits, Inc., dated as of December
8, 1998, as modified on December 16, 1998.
Page 16 of 23
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
/s/ Robert E. Gray
---------------------------------------ROBERT E. GRAY
/s/ Marie Gray
---------------------------------------MARIE GRAY
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/s/ Kelly A. Gray
---------------------------------------KELLY A. GRAY
GRAY FAMILY TRUST
By: /s/ Robert E. Gray
------------------------------------Name: ROBERT E. GRAY
By:
/s/ Marie Gray
------------------------------------Name: MARIE GRAY
KELLY ANN GRAY TRUST
By:
/s/ Robert E. Gray
------------------------------------Name: ROBERT E. GRAY
By:
/s/ Marie Gray
------------------------------------Name: MARIE GRAY
Page 17 of 23
VESTAR CAPITAL PARTNERS III, L.P.
By: Vestar Associates III, L.P.
Its: General Partner
By: Vestar Associates Corporation III
Its: General Partner
By: /s/ James P. Kelley
------------------------------------Name: James P. Kelley
Title: Vice President
VESTAR ASSOCIATES III, L.P.
By:
Vestar Associates Corporation III
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Its: General Partner
By: /s/ James P. Kelley
------------------------------------Name: James P. Kelley
Title: Vice President
VESTAR ASSOCIATES CORPORATION III
By: /s/ James P. Kelley
------------------------------------Name: James P. Kelley
Title: Vice President
December 16, 1998
EXHIBIT INDEX
1.
Joint Filing Agreement
2.
Letter from Robert E. Gray and Vestar Capital Partners III, L.P. to
the Board of Directors of St. John Knits, Inc., dated as of December
8, 1998, as modified on December 16, 1998.
A-1
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Page 18 of 23
EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) of the Securities Exchange Act of 1934, as
amended, each of the undersigned hereby agrees to the joint filing of a
Statement on Schedule 13D relating to the Common Stock, no par value, of St.
John Knits, Inc., a California corporation, and that any amendments thereto
filed by any of us will be filed on behalf of each of us. This Joint Filing
Agreement may be included as an exhibit to such joint filing. This Joint Filing
Agreement may be executed in any number of counterparts all of which together
shall constitute one and the same instrument.
/s/ Robert E. Gray
---------------------------------------ROBERT E. GRAY
/s/ Marie Gray
---------------------------------------MARIE GRAY
/s/ Kelly A. Gray
---------------------------------------KELLY A. GRAY
GRAY FAMILY TRUST
By: /s/ Robert E. Gray
------------------------------------Name: Robert E. Gray
By:/s/ Marie Gray
------------------------------------Name: Marie Gray
KELLY ANN GRAY TRUST
By: /s/ Robert E. Gray
------------------------------------Name: Robert E. Gray
By: /s/ Marie Gray
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Name: Marie Gray
Page 19 of 23
VESTAR CAPITAL PARTNERS III, L.P.
By: Vestar Associates III, L.P.
Its: General Partner
By: Vestar Associates Corporation III
Its: General Partner
By: /s/ James P. Kelley
------------------------------------Name: James P. Kelley
Title: Vice President
VESTAR ASSOCIATES III, L.P.
By: Vestar Associates Corporation III
Its: General Partner
By: /s/ James P. Kelley
------------------------------------Name: James P. Kelley
Title: Vice President
VESTAR ASSOCIATES CORPORATION III
By: /s/ James P. Kelley
------------------------------------Name: James P. Kelley
Title: Vice President
Dated:
December 17, 1998
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Page 20 of 23
EXHIBIT 2
December 8, 1998
Board of Directors
St. John Knits, Inc.
17422 Derian Avenue
Irvine, California 92614
Ladies and Gentlemen:
Robert E. Gray, together with Vestar Capital Partners, Inc. ("Vestar"
and, together with Robert Gray, the "Purchasers") are pleased to submit the
following proposal to purchase 98% of the outstanding common stock of St. John
Knits, Inc. (the "Company"). The Purchasers are prepared to move quickly toward
the execution of a definitive acquisition agreement and are confident that the
proposed transaction (the "Transaction") can be completed expeditiously.
1.
PURCHASE PRICE. The Purchasers propose to acquire 98% of the
outstanding common stock of the Company at a price of $28 per share in cash, for
an aggregate purchase price of approximately $490 million. Approximately 5% of
the outstanding common stock will remain in the hands of the remaining current
public stockholders following the consummation of the Transaction.
2.
CONDITIONS. Consummation of the Transaction will be subject to:
(a) the negotiation and execution of a definitive acquisition agreement (the
"Definitive Agreement") and related documents; (b) the receipt of any necessary
consents and approvals from third parties and the expiration or termination of
any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended; (c) the receipt by the Purchasers, on terms satisfactory to
them, of all financing necessary to complete the Transaction; (d) satisfactory
completion by Vestar and the Purchasers' financing sources prior to the
execution of the Definitive Agreement of confirmatory due diligence
investigations of the Company; and (e) the reincorporation of the Company as a
Delaware corporation. Given the amount of diligence Vestar has completed to
date and its knowledge of the Company's business, together with Robert Gray's
intimate familiarity with the Company, we expect to complete our confirmatory
due diligence and to be in a position to execute a Definitive Agreement within
the next two weeks.
3.
FINANCING. Although consummation of the Transaction will be
subject to the receipt of financing, the Purchasers are confident that they can
obtain within the next two weeks definitive commitments with respect to the
senior debt financing and a "highly confident" letter with respect to any
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subordinated debt financing necessary to consummate the Transaction.
In that
regard, the Purchasers have retained Chase Manhattan Bank to lead in arranging
the
Page 21 of 23
necessary debt financing. Chase's expertise in financing transactions of this
nature buttresses the Purchasers' confidence that the necessary financing
arrangements will be completed expeditiously and on favorable terms. In
addition, Vestar Capital Partners III, L.P., Vestar's $800 million private
equity fund, is prepared to commit the necessary equity funds to complete the
transaction.
4.
NO BINDING COMMITMENT. Because the Board cannot accept our
proposal without a more thorough evaluation of the proposed Transaction, this
letter constitutes only a preliminary indication of our interest in consummating
a Transaction on the terms described above, and does not constitute a binding
commitment with respect to a Transaction. A binding commitment with respect to
a Transaction will result only from the execution of a Definitive Agreement, and
will be subject to the conditions set forth therein.
5.
PROCESS. We believe that the Transaction will provide superior
value to the Company's shareholders. We recognize of course that the Board will
require some time to evaluate the proposed Transaction before it can make its
own determination whether to endorse it. Given Robert Gray's and the Gray
family's involvement in the proposed Transaction, we appreciate that the Board
may want to establish a special committee to review the proposed Transaction,
and that such a committee may choose to engage counsel and investment bankers to
assist it in such review. While we appreciate and respect the Board's need to
conduct an appropriate process in evaluating our proposal, we must reserve the
right to terminate our proposal if a Definitive Agreement has not been executed
by the Company and the Purchasers by December 31, 1998.
Yours truly,
/s/ Robert Gray
-----------------------------Robert Gray
VESTAR CAPITAL PARTNERS, INC.
By: /s/ James P. Kelley
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Name: James P. Kelley
Title: Managing Director
Page 22 of 23
December 16, 1998
Board of Directors
St. John Knits, Inc.
17422 Derian Avenue
Irvine, California 92614
Ladies and Gentlemen:
Reference is made to the letter dated December 8, 1998, from Robert
Gray and Vestar Capital Partners, Inc. to you in connection with their proposal
to purchase 98% of the outstanding common stock of St. John Knits, Inc. (the
"Company"). Capitalized terms used and not defined herein shall have the
meanings set forth in such letter.
Vestar Capital Partners III, L.P., the private equity fund referred to
in the letter, will provide the equity financing for the Transaction and,
accordingly, is making the proposal with Robert Gray to purchase 98% of the
outstanding common stock of the Company. Vestar Capital Partners, Inc. should
therefore be disregarded as a signatory of the letter and a party thereto for
all purposes and Vestar Capital Partners III, L.P. should be substituted in its
stead, with all references in the letter to "Vestar" being deemed to refer to
Vestar Capital Partners III, L.P. and all references to the "Purchasers" being
deemed to refer to Robert Gray and Vestar Capital Partners III, L.P.
Yours truly,
/s/ Robert Gray
---------------------------------------Robert Gray
VESTAR CAPITAL PARTNERS III, L.P.
By: Vestar Associates III, L.P.,
its General Partner
By: Vestar Associates Corporation III,
its General Partner
By: /s/ James P. Kelley
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------------------------------------Name: James P. Kelley
Title: Vice President
Page 23 of 23
VESTAR CAPITAL PARTNERS, INC.
By: /s/ James P. Kelley
------------------------------------Name: James P. Kelley
Title: Managing Director
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