SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
February 12, 2003
Phillips-Van Heusen Corporation
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-724 13-1166910
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(Commission File Number) (IRS Employer Identification Number)
200 Madison Avenue, New York, New York 10016
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(Address of Principal Executive Offices)
Registrant's telephone number (212)-381-3500
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 12, 2003, Phillips-Van Heusen Corporation ("PVH"), a Delaware
corporation, completed the acquisition (the "CKI Acquisition") from Calvin
Klein, Barry Schwartz and certain family members and affiliated trusts
(collectively, the "Sellers") of all of the issued and outstanding stock of
Calvin Klein, Inc., a New York corporation, Calvin Klein (Europe), Inc., a
Delaware corporation, Calvin Klein (Europe II) Corp., a Delaware corporation,
Calvin Klein Europe S.r.l., a limited liability company organized under the laws
of Italy, and CK Service Corp., a Delaware corporation. Calvin Klein, Inc.,
Calvin Klein (Europe), Inc., Calvin Klein (Europe II) Corp., Calvin Klein Europe
S.r.l., and CK Service Corp. collectively are defined as the "CK Companies".
The CKI Acquisition was accomplished pursuant to the Stock Purchase Agreement
("CKI Purchase Agreement"), dated December 17, 2002, among PVH, the CK Companies
and the Sellers, which was previously filed as an exhibit, to the Form 8-K filed
by PVH on December 20, 2002 (the "Previous Form 8K"). PVH purchased from the
Sellers all of the issued and outstanding stock of the CK Companies for $400
million in cash as well as 2,535,926 shares of PVH common stock (valued at $30
million based on the 10-trading day period ending two days prior to the
closing), subject to certain closing and post-closing adjustments. In connection
with the issuance of such PVH common stock, PVH granted the Sellers certain
registration rights pursuant to the Registration Rights Agreement (the
"Registration Rights Agreement"), dated February 12, 2003, between PVH, the
Sellers, and the Apax Entities (as defined below).
The transaction also included, in consideration of certain other rights held by
Mr. Klein, a nine-year warrant in favor of Mr. Klein's designee to purchase
320,000 shares of PVH common stock at $28 per share (the "Klein Warrant"), and
contingent payments in favor of Mr. Klein based on future sales of products
bearing the Calvin Klein brand.
PVH partially funded the acquisition through the sale of $250 million of newly
issued preferred stock to affiliates of Apax Managers, Inc. and Apax Partners
Europe Managers Ltd. (collectively, the "Apax Entities") in a transaction in
which Lehman Brothers Inc. ("Lehman Brothers") acted as the broker-dealer (the
"Apax Transaction"). Additional funding was provided by an initial advance of
$100 million pursuant to a $125 million term loan agreement, which PVH entered
into with a syndicate of lenders, agented by Apax Managers, Inc. Each of the
sale of the preferred stock and the loan are described below in Item 5.
The terms of the CKI Acquisition were determined in arms'-length negotiations
between PVH and the Sellers. The foregoing descriptions of the CKI Purchase
Agreement, the Klein Warrant, and the Registration Rights Agreement are
qualified in their entirety by reference to the full text of such documents,
copies of which are filed as Exhibit 2.1 to this Form 8-K Filing which
incorporates by reference to Exhibit 10.1 of the Previous Form 8K and Exhibits
10.2 and 10.7 respectively to this Form 8-K filing.
ITEM 5. OTHER EVENTS
Preferred Stock Investment
Simultaneously with the CKI Acquisition, the Apax Entities invested $250 million
in PVH through the purchase of 10,000 shares (the "Series B Shares") of a new
series of convertible preferred stock of PVH pursuant to the Securities Purchase
Agreement (the "Preferred Stock Purchase Agreement"), dated December 16, 2002,
among PVH, Lehman Brothers and the Apax Entities, which was filed as an exhibit
to the Previous Form 8K. In the Apax Transaction, Lehman Brothers acted as the
broker-dealer and in this capacity, it purchased from PVH and sold to the Apax
Entities the Series B Shares. The Series B Shares are initially convertible into
17,857,143 shares of PVH common stock at a conversion price of $14 per share of
PVH common stock. The Series B Shares have a dividend rate of 8% per annum of
the purchase price, payable in cash, except, for any quarter in which PVH does
not pay the holders of the Series B Shares a cash dividend, upon conversion of
such shares, the holders will receive shares of PVH common stock of equal value
to the dividends which PVH did not pay. The Series B Shares were issued pursuant
to the Certificate of Designation filed by PVH filed with the Secretary of the
State of Delaware (the "Certificate of Designation") a copy of which is filed as
Exhibit 3.1 to this Form 8-K.
In connection with the Apax Transaction, the Supplemental Rights Agreement and
Fifth Amendment to the Rights Agreement (the "Supplemental Rights Agreement"),
dated February 12, 2003 amending the Rights Agreement (the "Rights Agreement"),
dated as of June 10, 1986, as amended, was entered into between PVH and The Bank
of New York (successor to The Chase Manhattan Bank, N.A.), as rights agent. The
Supplemental Rights Agreement extended the protections offered by the Rights
Agreement to the holders of the Series B Shares and rendered the Rights
Agreement inapplicable to the Apax Transaction and the transactions contemplated
by the Preferred Stock Purchase Agreement.
In connection with the issuance of the Series B Shares, PVH granted the Apax
Entities certain registration and other investor rights pursuant to the
Registration Rights Agreement and the Investors' Rights Agreement (the
"Investors' Rights Agreement"), dated February 12, 2003, among PVH and the Apax
Entities.
The foregoing descriptions of the Preferred Stock Purchase Agreement, the
Certificate of Designation, and the Supplemental Rights Agreement, the
Registration Rights Agreement, and the Investors' Rights Agreement are qualified
in their entirety by reference to the full text of such documents, copies of
which are filed as Exhibit 10.1 to this Form 8-K Filing which incorporates by
reference to Exhibit 10.2 of the Previous Form 8K and Exhibits 3.1, 4.1, 10.7,
and 10.8 respectively to this Form 8-K filing.
Loan
In connection with the CKI Acquisition, a syndicate of lenders agented by Apax
Managers, Inc. provided a loan to PVH pursuant to the Term Loan Agreement (the
"Term Loan Agreement"), dated December 16, 2002, between PVH, the Apax Entities
and Apax Managers, Inc., as agent
for the Apax Entities. The Term Loan Agreement provided for a two-year loan in
which an initial advance of $100 million was made on February 12, 2003, and a
subsequent advance up to $25 million can be requested by PVH prior to June 30,
2003. The loans bear an interest rate of 10% per annum for the first year and
15% per annum for the second year. If PVH determines to extend the loan to the
second year, it is required to pay the lenders a $4 million renewal fee. The
loans are secured by a lien on all of the equity interests in the CK Companies,
except for Calvin Klein Europe S.r.l. in which the loan is secured by 65% of the
equity.
The foregoing description of the Term Loan Agreement is qualified in its
entirety by reference to the full text of such document, a copy of which is
filed as Exhibits 10.3 to this Form 8-K filing.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of the Businesses Acquired.
The financial statements required by this item will be filed
within 60 days of February 27, 2003, the date on which the
initial report on Form 8-K reporting the completion of the
acquisition of the CK Companies is required to be filed.
(b) Pro Forma Financial Information.
The pro forma financial information required by this item will
be filed within 60 days of February 27, 2003, the date on
which the initial report on Form 8-K reporting the completion
of the acquisition of the CK Companies is required to be
filed.
(c) Exhibits:
EXHIBIT DESCRIPTION
2.1 Stock Purchase Agreement, dated December 17, 2002, among
Phillips-Van Heusen Corporation, Calvin Klein, Inc., Calvin
Klein (Europe), Inc., Calvin Klein (Europe II) Corp., Calvin
Klein Europe S.r.l., CK Service Corp., Calvin Klein, Barry
Schwartz, Trust for the Benefit of the Issue of Calvin
Klein, Trust for the Benefit of the Issue of Barry Schwartz,
Stephanie Schwartz-Ferdman and Jonathan Schwartz
(incorporated by reference to Exhibit 10.1 to the Form 8-K
of Phillips-Van Heusen Corporation, filed on December 20,
2002, Commission File No. 1-724). The registrant agrees to
furnish supplementally a copy of any omitted schedules to
the Commission upon request.
3.1* Certificate of Designations, Preferences, and Rights of Series
B Convertible Preferred Stock of Phillips-Van Heusen
Corporation.
4.1* Supplemental Rights Agreement and Fifth Amendment to the
Rights Agreement dated February 12, 2003, between
Phillips-Van Heusen Corporation and The Bank of New York
(successor to The Chase Manhattan Bank, N.A.), as rights
agent.
4.2* Second Supplemental Indenture, dated as of February 12, 2002
to Indenture, dated as of November 1, 1993, between
Phillips-Van Heusen Corporation and the Bank Of New York, As
Trustee.
10.1 Securities Purchase Agreement, dated December 16, 2002,
among Phillips-Van Heusen Corporation, Lehman Brothers Inc.
and the Investors named therein (incorporated by reference
to Exhibit 10.2 to the Form 8-K of Phillips-Van Heusen
Corporation, filed on December 20, 2002, Commission File No.
1-724).
10.2* Warrant, issued on February 12, 2003, by Phillips-Van Heusen
Corporation to the Calvin Klein 2001 Revocable Trust.
10.3* Term Loan Agreement, dated as of December 16, 2002, by and
between Phillips-Van Heusen Corporation, each of the lenders
listed therein, and Apax Managers, Inc., as administrative
agent for the lenders.
10.4* First Amendment to the Term Loan Agreement, dated as of
February 12, 2003, by and between Phillips-Van Heusen
Corporation, each of the lenders listed therein, and Apax
Managers, Inc., as administrative agent for the lenders.
10.5* First Amendment and Waiver Agreement, dated as of December
13, 2002 to the Revolving Credit Agreement, dated as of
October 17, 2002, among Phillips-Van Heusen Corporation, The
IZOD Corporation, PVH Wholesale Corp., PVH Retail Corp.,
izod.com.inc., G.H. Bass Franchises Inc., CD Group Inc., and
the lender parties thereto, JPMorgan Chase Bank, as
Administrative Agent and Collateral Agent, Lead Arranger and
Sole Bookrunner, Fleet Retail Finance Inc., as Co-Arranger
and Co-Syndication Agent, Sun Trust Bank, as Co-Syndication
Agent, The CIT Group/Commercial Services, Inc., as
Co-Documentation Agent, and Bank of America, N.A., as
Co-Documentation Agent.
10.6* Consent dated as of February 12, 2003 among Phillips-Van
Heusen Corporation, The IZOD Corporation, PVH Wholesale
Corp., PVH Retail Corp., izod.com.inc., G.H. Bass Franchises
Inc., CD Group Inc., and the lender parties thereto,
JPMorgan Chase Bank, as Administrative Agent and Collateral
Agent, Lead Arranger and Sole Bookrunner, Fleet Retail
Finance Inc., as Co-Arranger and Co-Syndication Agent, Sun
Trust Bank, as Co-Syndication Agent, The CIT
Group/Commercial Services, Inc., as Co-Documentation Agent,
and Bank of America, N.A., as Co-Documentation Agent.
10.7* Registration Rights Agreement, dated as of February 12,
2003, by and among Phillips-Van Heusen Corporation, the
Calvin Klein 2001 Revocable Trust, Barry Schwartz, Trust for
the Benefit of the Issue of Calvin Klein, Trust for the
Benefit of the Issue of Barry Schwartz, Stephanie
Schwartz-Ferdman and Jonathan Schwartz, and the Investors
listed therein.
10.8* Investors' Rights Agreement, dated as of February 12, 2003,
by and among Phillips-Van Heusen Corporation and the
Investors listed therein.
99.1* Press Release, dated February 12, 2003.
99.2* Press Release, dated February 14, 2003.
* Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Phillips-Van Heusen Corporation
By: /s/ Mark D. Fischer
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Mark D. Fischer, Vice President
Date: February 26, 2003