SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE
SECURITIES EXCHANGE ACT OF 1934
STAGE II APPAREL CORP.
(Name of Issuer)
Common Stock par value $.01 per share
(Title of Class of Securities)
852542 10 9
(CUSIP Number)
Martin Mushkin
Pomeranz Gottlieb & Mushkin, LLC
205 Lexington Avenue - 16th Floor
New York, NY 10016
212-779-4233
(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)
May 11, 1998
(Date of Event with 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: [ ]
CUSIP No. 852542 10 9
1) Name of Reporting Person Richard Siskind
S.S. or I.R.S. Identification No. Intentionally
of Above Person Omitted
2) Check the Appropriate Box if a (a) [ ]
Member of a Group (b) [ ]
3) SEC Use Only
4) Source of Funds [OO]
5) Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization United States
Number of Shares Beneficially Owned by Reporting Person with...
7) Sole Voting Power 1,893,660
8) Shared Voting Power N/A
9) Sole Dispositive Power 1,893,660
10) Shared Dispositive Power N/A
11) Aggregate Amount Beneficially 1,893,660
Owned By Each Reporting Person
12) Check box if the Aggregate Amount [ ]
in Row(11) Excludes Certain Shares
13) Percent of Class Represented by 48.5%
14) Type of Reporting Person IN
This Schedule 13D is filed by Richard Siskind.
Item 1. Security and Issuer.
The class of equity securities to which this Schedule 13D relates is
the Common Stock, par value $.01 per share, ("shares") of Stage II Apparel
Corp. (the "Company" or "Stage II"), a New York corporation. The principal
executive office of the Company is at 350 Fifth Avenue, New York, NY 10118.
Item 2. Identity and Background.
Richard Siskind is the president, chief executive officer and sole
shareholder of R. Siskind and Company, Inc. and certain companies affiliated
with it. The principal executive office of R. Siskind & Company, Inc. is 1385
Broadway, Penthouse, New York, NY 10018.
Mr. Siskind has not during the last five years been convicted in any
criminal proceeding. Mr. Siskind has not during the last five years been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in a decree or final order enjoining future violations
of, or prohibitions or mandating activities subject to, Federal or State
securities laws or finding any violation with respect to such laws.
Mr. Siskind is a citizen of the United States of America.
Purchase of Shares. On May 11, 1998, pursuant to a stock purchase
agreement (the "Stock Purchase Agreement") dated February 26, 1998, Richard
Siskind purchased 1,893,660 shares (the "shares") of Stage II common stock,
which is approximately 48.5% of the Company's common stock in the following
amounts from the respective individuals:
Number of
Name of Seller Shares
Jack Clark............................. 1,225,000
Bonnie Plotkin......................... 1,000
Robert Plotkin......................... 498,363
Steven R. Clark........................ 170,297
Total 1,893,660
Prior to execution of the Stock Purchase Agreement, Jack Clark, Robert
Plotkin and Steven R. Clark were members of the board of directors and were
the principal shareholders (collectively, the "Sellers" or "Principal
Shareholders") of Stage II. Jack Clark was the Company's chairman of the
board and Steven R. Clark was its president. Stage II designs and
distributes men's and boy's casual apparel and activewear.
Item 3. Source and Amount of Funds or Other Consideration.
In consideration of the sale of the shares, Mr. Siskind (a) arranged for
the release of Jack Clark and Robert Plotkin from all obligations under their
guarantees of the Company's indebtedness to Milberg Factors, Inc.
("Milberg"), (b) arranged for the return by Milberg to Jack Clark of
securities and cash he provided to it as collateral security for his
guarantee, and (c) issued to the Sellers options to reacquire a total of
1,500,000 shares, as described below. The Company issued options to Mr.
Siskind which mirror the options granted to the Sellers by Mr. Siskind, thus
giving him the opportunity to replenish shares he must sell to the Sellers
if they exercise their options.
Item 4. Purpose of the Transaction.
Richard Siskind, the Sellers and the board of directors of Stage II
believe it is in the best interests of Stage II for Mr. Siskind to assume
control of the Company. All parties believe that Mr. Siskind's experience,
industry contacts and successful track record in the apparel industry will
aid the return to profitability of Stage II.
To effectuate the above objectives, the parties entered into a series
of transactions.
Principal Shareholder Options Pursuant to the Stock Purchase Agreement
Mr. Siskind issued options to each of the Principal Shareholders to reacquire
collectively from Mr. Siskind an aggregate of 1,500,000 of the shares,
exercisable in three series, each of 500,000 shares, at $.50 per share for
the first series, $1.00 per share for the second series and $1.50 per share
for the third series, vesting, respectively, on, May 11, 1999, May 11, 2000,
and May 11, 2001, and expiring on, respectively, May 10, 2003, May 10, 2004
and May 10, 2005 (the "Principal Shareholder Options").
The option agreement between Richard Siskind and Jack Clark, places a
condition on Jack Clark's exercise of his share of the first series of
options. In the event that (a) at least 80% of the merchandise covered by
the Company's purchase orders as of February 25, 1998 aggregating
approximately $3.3 million is not shipped by June 30, 1998, and (b) 80% of
the Company's orders for direct letters of credit purchases by third parties
as of February 25, 1998 aggregating approximately $3.0 million, is not
shipped by December 31, 1998, then the number of options he may exercise as
part of the first series, vesting on May 11, 1999, shall be reduced from
365,000 to 200,000.
Management Agreement Richard Siskind entered into a Management
Agreement (the "Management Agreement") with Stage II providing for the
Company's employment of Mr. Siskind as its president and chief executive
officer. The agreement is for a term of three years at a base salary of
$200,000 per annum, plus fringe benefits.
New Credit Facility As a condition precedent to the effectiveness of
the Management Agreement, Mr. Siskind agreed that he would arrange for
financing of the Company's accounts receivables and for letters of credit as
reasonably necessary to carry on the business of the Company within such
business plans as he proposes for the Company (the "New Credit Facility")
with the New Credit Facility to commence at the Closing. The condition
precedent was satisfied.
Siskind Option Agreements The Management Agreement also provides for
the Company's issuance to Mr. Siskind of options to purchase up to 900,000
shares of the Company's common stock, in three series, each of 300,000
shares, at an exercise price of $.75 per share for each series. The options
vest, respectively, on May 11, 1999, May 11, 2000 and May 11, 2001 and expire
respectively on May 10, 2003, May 10, 2004, and May 10, 2005 ("1998
Nonqualified Stock Option Plan A".)
Mirror Options The Stock Purchase Agreement provides for the issuance
to Mr. Siskind of an option pursuant to the 1998 Nonqualified Stock Option
Plan B to purchase up to 1,500,000 shares of Stage II's common stock on the
same terms as the Principal Shareholder Options, but only to the extent that
the Principal Shareholder Options are exercised by the Principal
Shareholders.
Employment Agreement Jack Clark entered into a new employment agreement
with the Company providing for (i) the termination of his existing employment
agreement and Buy-Sell Agreement with the Company, and (ii) the continuation
of Mr. Clark's employment by the Company as Consulting Executive for a term
of one year, subject to extension for an additional year at the election of
the parties, at an annual salary of $100,000, plus certain fringe benefits.
The Stock Purchase Agreement also provides for reconstitution of Stage
II's board of directors. The directors of Stage II resigned from the board
and were replaced by the designees of Mr. Siskind, effective in each case
upon the expiration of the ten-day period after the Company filed with the
Securities and Exchange Commission ("SEC") and mailed to its shareholders an
Information Statement on Schedule 14f in accordance with the requirements of
Rule 14f-1 under the Securities Exchange Act of 1934, as amended. That
requirement was completed on March 19, 1998. The Stock Purchase Agreement
provides that the board will continue to have at least two independent
directors and an audit committee comprised of a majority of independent
directors in accordance with the requirements in the American Stock Exchange
Company Guide.
Item 5. Interest in Securities of the Issuer.
(a) The aggregate number and percentage of the class of securities of
Stage II being reported here beneficially owned by Richard Siskind is
1,893,660 shares which is 48.5% of the outstanding shares of the Company.
(b) Richard Siskind has sole power to vote the 1,893,660 shares of the
Company.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
The 1,893,660 shares of Stage II common stock acquired by Richard
Siskind were purchased in conjunction with the issuance of the above
discussed option plans, management and employment agreements.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 - Stock Purchase Agreement entered into by and among Richard
Siskind, Stage II, Jack Clark, Robert Plotkin and Steven R. Clark,
incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the
Company on March 2, 1998.
Exhibit 2 - Management Agreement entered into between Stage II and
Richard Siskind, with accompanying 1998 Nonqualified Stock Option Plans A and
B, incorporated by reference to Exhibit 10.2 to the Form 8-K filed by the
Company on March 2, 1998.
Exhibit 3 - Factoring Agreement dated May 11, 1998 between the Company
and the CIT Group/Commercial Services, Inc., incorporate by reference to
Exhibit 10.1 to the Form 10-Q filed by the Company on May 15, 1998.
Exhibit 4 - Inventory Security Agreement dated May 11, 1998 between the
Company and the CIT Group/Commercial Services, Inc., incorporate by reference
to Exhibit 10.2 to the Form 10-Q filed by the Company on May 15, 1998.
Exhibit 5 - Letter of Credit Agreement dated May 11, 1998 between the
Company and the CIT Group/Commercial Services, Inc., incorporate by reference
to Exhibit 10.3 to the Form 10-Q filed by the Company on May 15, 1998.
Exhibit 6 - Option Agreement A dated May 11, 1998 between the Company
and Richard Siskind, incorporate by reference to Exhibit 10.4 to the Form
10-Q filed by the Company on May 15, 1998.
Exhibit 7 - Option Agreement B dated May 11, 1998 between the Company
and Richard Siskind, incorporate by reference to Exhibit 10.5 to the Form
10-Q filed by the Company on May 15, 1998.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: May 18, 1998
/s/ Richard Siskind
RICHARD SISKIND
