<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): JULY 15, 1998
STAGE II APPAREL CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 1-9502 13-3016967
(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1385 BROADWAY
NEW YORK, NEW YORK 10018
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (212) 564-5865
================================================================================
<PAGE>
ITEM 5. OTHER EVENTS
In July 1998, Stage II Apparel Corp. (the "Company") entered into a
cancellation agreement with Empire State Building Company, providing for the
cancellation of the Company's lease for sales and administrative offices in the
Empire State Building at 350 Fifth Avenue, New York, New York. The lease
covered approximately 10,800 square feet for a term through 2006 at an average
annual rent of $343,000 plus electricity, taxes and expense escalations. In the
absence of the cancellation agreement, the Company's estimated future
obligations under the lease would have aggregated approximately $4 million. The
lease cancellation was effective as of July 15, 1998, subject to payment of a
$325,000 cancellation fee in four installments through October 1, 1998.
The Company has relocated its administrative and sales offices to 1385
Broadway, New York, New York, where it will lease approximately 3,000 square
feet through 2003 at a total annual cost of approximately $80,000. This
represents an annual savings to the Company of approximately $330,000. Part of
the new space is shared with R. Siskind and Company, an apparel company owned by
Richard Siskind, the President, Chief Executive Officer and principal
shareholder of the Company. Under that arrangement, rent will be shared
proportionately on a pass through basis. Additional information about the
relocation is incorporated by reference to the Company's press release included
as an exhibit to this Report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) None
(b) None
(c) EXHIBITS.
EXHIBIT
NUMBER EXHIBIT
10.1 Cancellation Agreement dated as of July 9, between the
Company and Empire State Building Company.
20.1 Press release dated July 22, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STAGE II APPAREL CORP.
Date: July 22, 1998 By: /s/ MICHAEL HANRAHAN
---------------------------
Michael Hanrahan,
Treasurer
(Duly Authorized Officer)
<PAGE>
Exhibit 10.1
CANCELLATION AGREEMENT
----------------------
AGREEMENT made as of the 9th day of July, 1998, between EMPIRE STATE
BUILDING COMPANY, a partnership with an office at 350 Fifth Avenue, New York,
New York 10118 (hereinafter called "LANDLORD"), and STAGE II APPAREL CORP., a
corporation having an office at 350 Fifth Avenue, New York, New York,
hereinafter called "TENANT").
WITNESSETH:
-----------
WHEREAS, Landlord and Tenant are respectively the landlord and tenant
under that certain lease, dated as of January 17, 1995, covering certain
premises designated as Rooms 901-913 and 931-936, in the building known as
the Empire State Building, 350 Fifth Avenue, New York, New York, which lease
was modified by a certain Lease Modification Agreement, dated as of January
23, 1997 (which lease, as so modified, is hereinafter called the "LEASE"); and
WHEREAS, the parties hereto wish to cancel the Lease on the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The term of the Lease is hereby cancelled effective as of July 15,
1998 (the "Cancellation Date"), and shall cease and come to an end on that
day with the same force and effect as though that were the original date set
forth in the Lease for the expiration of its term, and Tenant shall deliver
vacant, broom clean possession of the demised premises to Landlord, on or
before the Cancellation Date, in accordance with the terms of the Lease.
Notwithstanding the foregoing, Tenant's obligation to pay rent and escalation
additional rent under the Lease shall end as of June 30, 1998.
2. Upon such cancellation and surrender of possession, neither party
shall have any obligation to the other under the Lease, except for the
cancellation fee hereinafter described in Article 3 of this Agreement.
3. In consideration of Landlord's agreement to cancel the Lease,
Tenant shall pay Landlord a cancellation fee in the sum of $324,998.98. Such
cancellation fee shall be payable in four (4) equal installments of
$81,249.75 each, the first of which shall be due upon the execution and
delivery of this Agreement by Tenant, and the remaining three of which shall
be due on August 1, 1998, September 1, 1998 and October 1, 1998.
4. This Agreement shall not in any way bind Landlord until such time
as it has been executed by Tenant, and has been executed by Landlord and
delivered to Tenant.
<PAGE>
5. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives, successors and
permitted assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
WITNESS (Landlord): Landlord:
EMPIRE STATE BUILDING COMPANY
By: HELMSLEY-SPEAR, INC., AS AGENT
/s/ Illegible By: /s/ John B. Trainor, Jr.
- ----------------------------- -----------------------------------
Name: John B. Trainor, Jr.
Title: Senior Vice President
WITNESS (Tenant) STAGE II APPAREL CORP.
/s/ Leonard Plavin By: /s/ Richard Siskind
- ----------------------------- -----------------------------------
Leonard Plavin Name: Richard Siskind
Controller Title: Chief Executive Officer
GUARANTY
--------
The undersigned Guarantor guarantees to Landlord, Landlord's successors
and assigns, the full performance and observance of all the agreements to be
performed and observed by Tenant in the aforedescribed Cancellation
Agreement, including the payment of the cancellation fee thereunder, without
requiring any notice to Guarantor of nonpayment, or nonperformance, or proof,
or notice of demand, to hold the undersigned responsible under this Guaranty,
all of which the undersigned hereby expressly waives and expressly agrees
that the legality of this Guaranty and the agreements of the Guarantor under
this Guaranty shall not be ended, or changed by reason of the claims to
Landlord against Tenant of any of the rights or remedies given to Landlord as
agreed in the aforedescribed Cancellation Agreement. The Guarantor further
agrees that this Guaranty shall remain and continue in full force and effect
as to any change or extension of said Cancellation Agreement. As a further
inducement to Landlord to make said Cancellation Agreement, Landlord and
Guarantor agree that in any action or proceeding brought by either Landlord
or the Guarantor against the other on any matters concerning said
Cancellation Agreement or of this Guaranty that Landlord and the undersigned
shall and do waive trial by jury.
Dated: /s/ Richard Siskind
--------------------------------------
Guarantor
Guarantor's Residence: 870 Lake Drive
Boca Raton, FL 33432
On this 10 day of July, 1998, before me personally came Richard Siskind to me
know and know to be to be the individual described in, and who executed the
foregoing Guaranty and acknowledged to me that he executed the same.
/s/ Ilene Ayana Scott
[SEAL OF THE NOTARY] ----------------------------------
Notary
<PAGE>
EXHIBIT 20.1
NEWS RELEASE
- -------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
July 22, 1998
STAGE II APPAREL CUTS OVERHEAD
WITH NEW OFFICE SPACE
New York, New York--STAGE II APPAREL CORP. (AMEX: SA) announced
arrangements for saving approximately $2.9 million in overhead during the
next eight years through a relocation to new offices at 1385 Broadway in
Manhattan's fashion district. The Company relocated from the Empire State
Building, where its future lease obligations through 2006 would have
aggregated around $4 million for space far exceeding the needs of its downsized
operations. To achieve these savings, the Company obtained a cancellation of
its prior office lease for a fee of $325,000.
Richard Siskind, who joined the Company as CEO in May 1998 in connection
with his acquisition of a controlling interest in Stage II, commented that
"Our success in relieving Stage II of a burdensome lease on favorable terms
is the first major step in our plans for the Company's turnaround. Although
savings from the transaction will not fully offset anticipated losses for the
balance of the year, the long term benefits will be significant, helping to
bring overhead in line with the Company's sales.
Mr. Siskind is the principal shareholder and CEO of several companies
engaged in various segments of the apparel industry, in which he has over 30
years' experience. He added that "I am committed to achieving a turnaround for
the Company and will now focus on potential new licenses and other
opportunities for growth."
The Company is engaged in the design and distribution of an extensive
range of men's and boy's casual apparel and activewear. The Company markets
its apparel to mass merchandisers, department stores, sporting goods chains
and specialty stores under nationally recognized brand names as well as
proprietary and private labels, including Dunlop, Timber Run, Main Event and
Pro Tour.
-END-
Company Michael Hanrahan
Contact: Chief Financial Officer
(212) 840-0880
