SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
JAY JACOBS, INC.
_______________________________________________________
(Name of Issuer)
COMMON SHARES, $.01 PAR VALUE
_______________________________________________________
(Title of Class of Securities)
469816102
_______________________________________________________
(CUSIP Number)
Kim Z. Golden, Managing Director, T. Rowe Price Recovery
Fund II, LP, 100 East Pratt Street, Baltimore, Maryland 21202
(410) 345-6703
___________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 5, 1997
_______________________________________________________
(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(b)(3) or (4), check the following box .
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
*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).
CUSIP No. 469816102 13D Page 1 of 14 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
T. ROWE PRICE RECOVERY FUND II, L.P.
52-1995189
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b) x
3 SEC USE ONLY
_________________________________________
4 SOURCE OF FUNDS*
WC
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
Number of 7 SOLE VOTING POWER -0-
Shares
Beneficially 8 SHARED VOTING POWER 19,943,362 (1)
Owned By Each
Reporting 9 SOLE DISPOSITIVE POWER -0-
Person
With: 10 SHARED DISPOSITIVE POWER 19,943,362 (1)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,943,362
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
76.24%
14 TYPE OF REPORTING PERSON*
PN
(1) Representing 8,803 shares Series B Preferred stock owned and
the present right to acquire 19,943,362 common shares. Voting
and dispositive power is exercised through its sole general
partner, T. Rowe Price Recovery Fund II Associates, LLC
<PAGE>
CUSIP No. 469816102 13D Page 2 of 14 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
T. ROWE PRICE RECOVERY FUND II ASSOCIATES, LLC
52-1599407
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b) x
3 SEC USE ONLY
_________________________________________
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Maryland
Number of 7 SOLE VOTING POWER -0-
Shares
Beneficially 8 SHARED VOTING POWER 19,943,362(1)
Owned By Each
Reporting 9 SOLE DISPOSITIVE POWER -0-
Person
With: 10 SHARED DISPOSITIVE POWER 19,943,362(1)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,943,362
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
76.24%
14 TYPE OF REPORTING PERSON*
OO (Limited Liability Company)
(1) Representing 8,803 shares Series B Preferred stock owned and
the present right to acquire 19,943,362 common shares. Voting
and dispositive power is exercised solely in its capacity as sole
general partner of T. Rowe Price Recovery Fund II, L.P.
CUSIP No. 469816102 13D Page 3 of 14 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
T. ROWE PRICE ASSOCIATES, INC.
52-0556948
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b) X
3 SEC USE ONLY
_________________________________________
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
MARYLAND
Number of 7 SOLE VOTING POWER -0-
Shares
Beneficially 8 SHARED VOTING POWER 19,943,362(1)
Owned By Each
Reporting 9 SOLE DISPOSITIVE POWER -0-
Person
With: 10 SHARED DISPOSITIVE POWER 19,943,362(1)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,943,362
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
76.24%
14 TYPE OF REPORTING PERSON*
IA
(1) Voting and dispositive power is exercised solely in its
c0apacity as sole manager of T. Rowe Price Recovery Fund II, LLC
CUSIP No. 469816102 13D Page 4 of 14 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
KIM Z. GOLDEN
###-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b) X
3 SEC USE ONLY
_________________________________________
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U. S. Citizen
Number of 7 SOLE VOTING POWER -0-
Shares
Beneficially 8 SHARED VOTING POWER 19,943,362 (1)
Owned By Each
Reporting 9 SOLE DISPOSITIVE POWER -0-
Person
With: 10 SHARED DISPOSITIVE POWER 19,943,362 (1)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,943,362
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
76.24%
14 TYPE OF REPORTING PERSON*
IN
(1) As a result of his position as a managing director of T. Rowe
Price Recovery Fund II, L.P.
Item 1. Security and Issuer.
This statement relates to the shares of common stock, $.01
par value per share (the "Common Shares") of Jay Jacobs, Inc.
(the "Issuer") having its principal executive office at 1530
Fifth Avenue, Seattle, Washington 98101.
The Common Shares beneficially owned by the reporting
persons (the "Recovery II Shares") are those to be tendered on
conversion of 8,803 shares of Series B Preferred Stock, par value
$.01 per share of the Issuer (the "Series B Shares") acquired by
T. Rowe Price Recovery Fund II, L.P. ("Recovery II") pursuant to
a Preferred Stock Purchase Agreement dated as of December 5, 1997
among the Issuer, Recovery II, Cahill Warnock & Company, LLC, a
Maryland limited liability company and certain other purchasers
identified on Exhibit A thereto and filed as Exhibit 7.2 hereto
(the "Purchase Agreement"). Pursuant to a Statement of Rights
and Preferences of Series A Preferred Stock and Series B
Preferred Stock of Jay Jacobs, Inc. filed with the Secretary of
State of the State of Washington on December 3, 1997 as an
amendment to the Articles of Incorporation of the Issuer and
filed as Exhibit 7.3 hereto (the "Statement of Rights and
Preferences"), each Series B Share is immediately convertible
into Common Shares at the election of the Series B Shareholder at
a conversion ratio of approximately 22.65 Common Shares per
Series B Share converted. Accordingly, the Common Shares which
would result from such conversion are deemed beneficially held by
the reporting persons pursuant to Rule 13d-3(d)(1)(i)(A).
Item 2. Identity and Background.
(a) This statement is being filed by (i) Recovery II, a
Delaware limited partnership, (ii) T. Rowe Price Recovery Fund II
Associates, L.L.C., a Maryland limited liability company and the
sole general partner of Recovery II (the "General Partner"),
(iii) T. Rowe Price Associates, Inc., a Maryland corporation and
the sole manager of the General Partner (the "Manager") and
(iv) Kim Golden, the Vice President of the Manager with principal
responsibility over investment in the Issuer by Recovery II.
(b) The address of the principal business and the
principal office of Recovery II, the General Partner and the
Manager and the business address of Kim Golden is: 100 East Pratt
Street, Baltimore, Maryland 21202.
(c) The principal business of Recovery II is to engage in
venture capital investments in securities of distressed
companies. The principal business of the General Partner is to
act as the sole general partner of Recovery II. The principal
business of the Manager is to act as manager of certain venture
capital funds affiliated with T. Rowe Price, Inc., a Maryland
corporation. The principal occupation of Kim Golden is Vice
President of the Manager.
(d) During the five years prior to the date hereof, none
of the reporting persons have been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors
or civil infractions).
(e) During the five years prior to the date hereof, none
of the reporting persons have been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction
ending in 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 violation with
respect to such laws.
(f) Recovery II is a limited partnership organized under
the laws of Delaware. The General Partner is a limited
liability company organized under the laws of Maryland. The
Manager is a corporation organized under the laws of Maryland.
Kim Golden is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
The reporting persons paid, or caused to be paid, a purchase
price of $880,300 ($100 per share) to the Issuer for the Recovery
II Shares. The funds necessary to pay the purchase price were
paid from the working capital of Recovery II.
Item 4. Purpose of Transaction.
Each of the reporting persons acquired, or caused to be
acquired, the Recovery II Shares for investment purposes and each
of the reporting persons intend to hold, or cause to be held, all
of the Recovery II Shares for investment purposes. Depending on
market conditions, their continuing evaluation of the business
and prospects of the Issuer and other factors each of the
reporting persons may dispose of or acquire, or may cause the
disposition or acquisition of, additional Common Shares of the
Issuer in the open market. In addition, based upon the same
considerations, each of the reporting persons may dispose of or
acquire, or may cause the disposition or acquisition of,
additional shares of preferred stock of the Issuer which are
convertible into Common Shares of the Issuer (including, without
limitation, Series B Shares of the Issuer) through private
placements of securities by the Issuer which are exempt from
registration under the Securities Act of 1993, as amended (the
"Securities Act").
Pursuant to the terms of the Voting Agreement dated as of
December 5, 1997 among each of the Series B Shareholders, Rex
Loren Steffey ("Steffey") and William L. Lawrence, Jr.
("Lawrence") and filed as Exhibit 7.4 hereto (the "Voting
Agreement"), the parties thereto, including Recovery II, have
agreed to fix the size of the Board of Directors at seven (7) and
to elect certain persons as directors thereto. Except as set
forth in the Voting Agreement, the Purchase Agreement and in the
preceding paragraph, none of the reporting persons have any
present plans which relate to or would result in any of the
actions described in Item 4(a)-(j) of the instructions to
Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a)(i)Recovery II is the beneficial owner of 8,803 Series B
Shares which are immediately convertible into 19,943,362 Common
Shares, representing 76.24% of the Common Shares of the Issuer.
Recovery II is the record owner of such shares but shares
beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) with the General Partner, the Manager and Kim
Golden pursuant to the relationships described in Item 2 above.
(ii) Each of the General Partner, the Manager and Kim Golden
are the beneficial owner of 8,803 Series B Shares which are
immediately convertible into 19,943,362 Common Shares,
representing 76.24% of the Common Shares of the Issuer. Recovery
II is the record owner of such shares but shares beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act)
with the General Partner, the Manager and Kim Golden pursuant to
the relationships described in Item 2 above. The General
Partner, the Manager and Kim Golden hereby each disclaim
beneficial ownership of such shares
(iii)The percentages set forth in Item 5(a)(i) and (a)(ii)
are calculated based upon a total of 26,157,199 Common Shares
outstanding, consisting of: (i) 6,213,837 Common Shares
represented to Recovery II as outstanding as of the date of the
Purchase Agreement pursuant to certain representations and
warranties contained therein and (ii) 19,943,362 Common Shares
issuable upon conversion of the Series B Shares beneficially
owned by the reporting persons pursuant to the conversion rights
set forth in the Statement of Rights and Preferences.
(iv) Each of the reporting persons may be deemed to be the
beneficial holder of 39,175,446 Common Shares (the "Voting
Agreement Shares") representing an additional 59.96% of Common
Shares by reason of shared voting power acquired through the
provisions of the Voting Agreement. The Voting Agreement Shares
consist of: (i) 36,694,608 Common Shares issuable upon conversion
of the Series B Shares held by the other Series B Shareholders
party to the Voting Agreement and (ii) 2,480,838 Common Shares
issuable upon exercise of options held by Steffey and Lawrence,
which shares are subject to the Voting Agreement. If the Voting
Agreement Shares were counted as beneficially owned by
Recovery II, each of the reporting persons would own an aggregate
of 59,118,808 Common Shares representing 90.49% of the Common
Shares of the Issuer. Each of the reporting persons hereby
disclaims beneficial ownership of the Voting Agreement Shares.
(v) The percentages set forth in Item 5(a)(iv) are
calculated based on a total of 65,332,645 Common Shares
outstanding, consisting of: (i) 6,213,837 Common Shares
represented by Recovery II as outstanding as of the date of the
Purchase Agreement pursuant to certain representations and
warranties contained therein; (ii) 56,637,970 Common Shares
issuable upon conversion of all of the Series B Shares pursuant
to the conversion ratio set forth in the Statement of Rights and
Preferences; and (iii) 2,480,838 Common Shares issuable upon
exercise of options held by Steffey and Lawrence as set forth in
the Issuer s Current Report on Form 8-K filed December 15, 1997.
(b) Regarding the number of Common Shares as to which each of
the reporting persons has
(i) sole power to vote or dispose or to direct the
voting or disposition:
0 shares.
(ii) shared power to dispose or to direct the
disposition:
19,943,362 shares.
(iii) shared power to vote or to direct the voting:
19,943,362 shares.*
*excludes the Voting Agreement Shares (as defined
in Item 5(a)) which may be deemed to be
beneficially owned by the reporting persons based
upon shared voting power pursuant to the terms of
the Voting Agreement. See Item 6(b) and Exhibit
7.4 hereto for further details regarding such
provisions.
(c) Except as set forth above, none of the reporting
persons has effected any transaction in the Common
Shares during the last 60 days.
(d) No other person is known to have the right to receive
or the power to direct the receipt of dividends from,
or any proceeds from the sale of, Common Shares
beneficially owned by any of the reporting persons.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Undertakings or Relationships
with Respect to Securities of the Issuer.
(a) Pursuant to the terms of the Management Information
Rights Letter Agreement dated as of December 5, 1997 between
Recovery II and the Issuer and filed as Exhibit 7.6 hereto (the
"Management Rights Agreement"), the Issuer has agreed to extend
certain information and inspection rights to Recovery II,
including rights to delivery of financial statements, rights to
consult with and give advice to the Issuer s management and
rights to sit as a non-voting observer at meetings of the Board
of Directors if a representative of Recovery II is at any time
not a director of the Issuer. The Management Rights Agreement
also provides for the election of Kim Golden as one of the
directors to be designated by the Series B Shareholders pursuant
to the Voting Agreement. The terms of the Management Rights
Agreement remain in effect as long as Recovery II owns any of the
Recovery II Shares (whether or not converted into Common Shares)
or any of the shares of Series A Preferred Stock acquired by
Recovery II pursuant to the Purchase Agreement.
(b) Pursuant to the terms of the Voting Agreement, Recovery
II has agreed with the other Series B Shareholders, Lawrence and
Steffey to expand the size of the board of directors of the
Issuer and to elect certain directors, as more fully set forth in
Items 1 and 5 above.
(c) Pursuant to the terms of the Purchase Agreement, the
Issuer has agreed to prepare within 180 days a registration
statement for a public offering to be made on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act
registering the resale from time to time of the Common Shares
issued upon conversion of the Series B Shares acquired by the
purchasers of Series B Shares pursuant to the Purchase Agreement.
(d) Pursuant to the terms of the Registration Rights
Agreement dated as of December 5, 1997 among the Issuer and the
investors listed on Schedule A thereto and filed as Exhibit 7.5
hereto (the "Registration Rights Agreement"), the Issuer has
agreed to grant demand registration rights to the purchasers of
Series B Shares for the Common Shares issuable on conversion
thereof and to permit the Series B Shareholders to participate in
public offerings of the Company s Common Shares initiated by the
Company.
Item 7. Material to be Filed as Exhibits.
Exhibit 7.1 Agreement relating to the joint filing of
this Schedule 13D, dated as of December 15, 1997, between T. Rowe
Price Recovery Fund II, L.P., T. Rowe Price Recovery Fund II
Associates, L.L.C., T. Rowe Price Associates, Inc. and Kim
Golden.
Exhibit 7.2 Preferred Stock Purchase Agreement dated as
of December 5, 1997 among Jay Jacobs, Inc., T. Rowe Price
Recovery Fund II, L.P., Cahill Warnock & Company and the other
purchasers identified on Exhibit A thereto (filed as Exhibit 2.1
to the Issuer s Current Report on Form 8-K filed December 15,
1997 and incorporated herein by reference).
Exhibit 7.3 Amendment to Articles of Incorporation of Jay
Jacobs, Inc., as filed with the Secretary of State of the State
of Washington on December 3, 1997 (filed as Exhibit 3.1 to the
Issuer s Current Report on Form 8-K filed December 15, 1997 and
incorporated herein by reference).
Exhibit 7.4 Voting Agreement, dated as of December 5,
1997, among T. Rowe Price Recovery Fund II, L.P., Cahill Warnock
Strategic Partners Fund, L.P., Strategic Associates, L.P.,
Michael D. Sullivan, Rex Loren Steffey and William L. Lawrence,
Jr. (filed as Exhibit 4.2 to the Issuer s Current Report on
Form 8-K filed December 15, 1997 and incorporated herein by
reference).
Exhibit 7.5 Registration Rights Agreement, dated as of
December 5, 1997, among Jay Jacobs, Inc., T. Rowe Price Recovery
Fund II, L.P. and the other parties listed as Investors on
Schedule A thereto (filed as Exhibit 4.4 to the Issuer s Current
Report on Form 8-K filed December 15, 1997 and incorporated
herein by reference).
Exhibit 7.6 Management Information Rights Letter
Agreement, dated as of December 15, 1997, between T, Rowe Price
Recovery Fund II, L.P. and Jay Jacobs, Inc. (filed as Exhibit 4.3
to the Issuer s Current Report on Form 8-K filed December 15,
1997 and incorporated herein by reference).<PAGE>
SIGNATURE
After reasonable inquiry and to the best of their knowledge
and belief, the undersigned certify that the information set forth
in this statement is true, complete and correct.
Date: December 15, 1997
T. ROWE PRICE RECOVERY FUND II, L.P.
By: T. Rowe Price Recovery Fund II Associates, L.L.C.,
Its General Partner
By: T. Rowe Price Associates, Inc.,
Its Manager
By:____________________________________________
Kim Z. Golden
Managing Director
T. ROWE PRICE RECOVERY FUND II ASSOCIATES, L.L.C.
By: T. Rowe Price Associates, Inc.,
Its Manager
By: _________________________________
Kim Z. Golden
Vice President
T. ROWE PRICE ASSOCIATES, INC.
By: __________________________________
Lucy B. Robins
Vice President
Kim Z. Golden
Individually
<PAGE>
EXHIBIT 7.1
AGREEMENT
This agreement, dated as of December 15, 1997, is by and among
T. Rowe Price, Recovery Fund II, L.P., a Delaware limited
partnership, T. Rowe Price Recovery Fund II Associates, L.L.C., a
Maryland limited liability company, T. Rowe Price Associates, Inc.,
a Maryland corporation and Kim Z. Golden, an individual.
Pursuant to Rule 13(d)(1) promulgated under the Securities
Exchange Act of 1934, as amended, the parties hereby agree to file
a single statement on Schedule 13D on behalf of each of the
parties, and hereby further agree to file this Agreement as an
exhibit to such statement, as required by such rule.
Executed and delivered as of the date first above written.
T. ROWE PRICE RECOVERY FUND II, L.P.
By: T. Rowe Price Recovery Fund II Associates, L.L.C.,
Its General Partner
By: T. Rowe Price Associates, Inc.,
Its Manager
By: ______________________
Kim Z. Golden
Managing Director
T. ROWE PRICE RECOVERY FUND II ASSOCIATES, L.L.C.
By: T. Rowe Price Associates, Inc.,
Its Manager
By: _______________________
Kim Z. Golden
Vice President
T. ROWE PRICE ASSOCIATES, INC.
By: _______________________
Lucy B. Robins
Vice President
Kim Z. Golden
Individually
