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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)/1/
YES CLOTHING CO.
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(Name of Issuer)
COMMON STOCK, NO PAR VALUE
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(Title of Class of Securities)
985832 10 4
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(CUSIP Number)
GARY J. COHEN, ESQ.
SIDLEY & AUSTIN
555 WEST FIFTH STREET
LOS ANGELES, CALIFORNIA 90013-1010
(213) 896-6013
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
JULY 12, 1995
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(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 [_].
Check the following box if a fee is being paid with the statement [_]. (A
fee is not required only if the reporting person; (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
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.
(Continued on following pages)
(Page 1 of 8 Pages)
__________________________
/1/ 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 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).
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CUSIP NO. 985832 10 4 13D PAGE 2 OF 8 PAGES
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NAME OF REPORTING PERSONS
1 S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
GEORGES MARCIANO
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
PF
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS
5 REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[_]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
UNITED STATES
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SOLE VOTING POWER
7
NUMBER 10,214,693
OF -----------------------------------------------------------
SHARED VOTING POWER
SHARES 8
-0-
BENEFICIALLY
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OWNED BY SOLE DISPOSITIVE POWER
9
REPORTING 10,214,693
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0-
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
10,214,693
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
12
[_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
13
92.6%
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TYPE OF REPORTING PERSON*
14
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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The Schedule 13D filed with the Securities and Exchange Commission (the
"SEC") on behalf of Georges Marciano on December 9, 1994 (the "Schedule 13D") as
amended by Amendment No. 1 filed with the SEC on February 6, 1995, each of which
was previously filed on paper, are hereby further amended and restated in their
entirety, as follows:
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this Statement on Schedule 13D
relates is the common stock, no par value ("Common Stock"), of Yes Clothing Co.,
a California corporation (the "Issuer"), with its principal executive offices
located at 1380 West Washington Boulevard, Los Angeles, California 90007.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed by Georges Marciano (the "Reporting
Person") individually and in his capacity as the trustee of the following five
trusts (the "Trusts"):
The Georges Marciano Trust, dated February 20, 1986, as amended,
a revocable "living" trust created under the laws of the State of
California.
The Georges Marciano Gift Trust II F/B/O Matthew David Marciano, dated
December 31, 1991, an irrevocable trust created under the laws of the
State of California. The principal beneficiary of this trust is the
Reporting Person's son, Matthew David Marciano.
The Georges Marciano Gift Trust II F/B/O Scott Marciano, dated December
31, 1991, an irrevocable trust created under the laws of the State of
California. The principal beneficiary of this trust is the Reporting
Person's son, Scott Marciano.
The Georges Marciano Gift Trust II F/B/O Kevin Marciano, dated
December 31, 1991, an irrevocable trust created under the laws of
the State of California. The principal beneficiary of this trust
is the Reporting Person's son, Kevin Marciano.
The Georges Marciano Gift Trust II F/B/O Chloe Marciano, dated
December 31, 1991, an irrevocable trust created under the laws of
the State of California. The principal beneficiary of this trust
is the Reporting Person's daughter, Chloe Marciano.
The Trusts collectively own 3,030,000 shares of Common Stock of the
Issuer (the "Trust Shares"). As the sole trustee of the Trusts, the Reporting
Person has sole power to vote, or to direct the voting of, the Trust Shares and
investment power that includes the power to dispose of, or direct the
disposition of, the Trust Shares. Accordingly, the
Page 3 of 8 Pages
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Reporting Person is the beneficial owner of the Trust Shares for purposes
of this Statement/1/. Additionally, since the Reporting Person has the
power to revoke The Georges Marciano Trust, and obtain direct ownership of
the Trust Shares owned by it, he is executing this Statement individually
as to those shares.
In addition, the Reporting Person, individually, is the direct
beneficial owner of 7,184,693 shares of Common Stock. Of this amount, 2,000,000
shares of Common Stock are represented by an option to purchase such shares,
which option vests monthly over a four year period at the rate of 41,667 shares
per month for the first 47 months and 41,651 shares for the 48th month
commencing as of July 17, 1995 and ending June 1, 2000, and 2,000,000 shares are
represented by a Warrant Agreement dated as of June 17, 1995. See Exhibits 10.27
and 10.28, Executive Stock Option Agreement (the "Option Agreement" or "Option")
and Warrant Agreement (the "Warrant Agreement" or "Warrant"), between the Issuer
and the Reporting Person dated as of June 17, 1995, to the Issuer's Annual
Report on Form 10-K for the Year Ended March 31, 1995, which exhibits are
incorporated herein by reference. (The Executive Stock Option Agreement and
Warrant Agreement are subject to approval by shareholder vote at the Issuer's
next annual meeting scheduled for September 20, 1995.)
The business address of the Reporting Person and each of the Trusts is
9756 Wilshire Boulevard, Beverly Hills, California 90212.
The Reporting Person is a private investor and garment designer and
manufacturer. The Reporting Person owns and operates GO USA Streetwear, Inc., a
fashion company, located at 9756 Wilshire Boulevard, Beverly Hills, California
90212.
During the last five years, the Reporting Person has not been (a)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (b) 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 judgement, 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.
The Reporting Person is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On January 31, 1995, pursuant to the Stock Purchase Agreement, dated as
of December 23, 1994 (the "Stock Purchase Agreement"), by and between the
Reporting Person and George Randall and Moshe Tsabag (collectively, the
"Sellers"), as amended by that certain Amendment to the Stock Purchase
Agreement, dated as of January 30, 1995 (the "Amendment"), the Trusts acquired
the Trust Shares from the Sellers for an aggregate purchase price of $6,060,000
in cash and notes. All funds used to purchase the Trust Shares
___________________________
/1/ The Reporting Person is not a beneficiary of any of the Trusts, other than
The Georges Marciano Trust.
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were obtained from trust funds of the respective Trusts, including margin loans
against other marketable securities held by such Trusts. The Georges Marciano
Trust acquired 2,430,000 of the Trust Shares. The aggregate amount of funds
required by The Georges Marciano Trust to acquire such shares was $4,860,000,
consisting of $3,300,000 in cash and the remainder in the form of two non-
negotiable promissory notes of the Reporting Person (the "Notes"). Subject to
any offsets permitted as described in the Agreement, the principal amount of the
Notes will be payable in two equal annual installments on January 31, 1996 and
January 31, 1997. The Notes bear interest, payable annually in arrears, at a
rate of eight percent (8%) per annum. Each of the four other Trusts acquired
150,000 of the Trust Shares. The aggregate amount of funds required by each such
Trust to acquire the shares purchased by it was $300,000.
Each of the Stock Purchase Agreement and the Amendment were filed
as exhibits to the Reporting Person's Amendment No. 1 to Schedule 13D filed
on February 6, 1995 and are not being refiled herewith.
On July 12, 1995, pursuant to an understanding between the Issuer and
the Reporting Person, and pursuant to the Option Agreement and the Warrant
Agreement, the Reporting Person acquired 3,184,693 shares of Common Stock. The
Option and Warrant, each to purchase up to 2,000,000 additional shares of Common
Stock, were granted on June 17, 1995. The Option vests monthly over a four year
period and the Warrant is exercisable immediately for a two year period from
June 17, 1995. Both the Option and the Warrant are subject to shareholder
approval. The aggregate amount of funds required by the Reporting Person to
acquire such shares was $3,980,866, consisting of $3,300,000 in cash and the
remainder in the form of cancellation of a $680,866 outstanding debt and
advances from the Issuer to the Reporting Person.
ITEM 4. PURPOSE OF TRANSACTION.
The George Marciano Trust acquired its portion of the Trust Shares for
the purpose of obtaining a controlling equity interest in the Issuer. Each of
the four other Trusts acquired its portion of the Trust Shares for investment
purposes.
It was the initial intention of the Reporting Person that the Issuer
continue to conduct its business in substantially the same manner as had been
conducted. This intention has changed. The Reporting Person and the Issuer
initially entered into an agreement pursuant to which the Issuer began to
manufacture, on a cost plus basis, a new line of clothing designed by Georges
Marciano and bearing trademarks owned or controlled by Georges Marciano,
including Misfits(R) and GMSurf(TM). The Reporting Person then licensed the
foregoing trademarks to the Issuer and terminated the cost plus agreement as of
April 1, 1995. Royalties are to accrue commencing as of January 31, 1996
pursuant to a License Agreement attached as Exhibit 10.18 to Issuer's Annual
Report on Form 10-K for the Year Ended March 31, 1995 and incorporated herein by
this reference.
Three members of the Issuer's Board of Directors, including George
Randall, resigned as Directors of the Issuer effective January 31, 1995 upon the
closing of the Stock
Page 5 of 8 Pages
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Purchase Agreement. The Reporting Person then recommended Irving Kroll and
Daniel V. Goodstein, the Registrant's then Chief Financial Officer, to fill the
remaining vacancies on the board. In addition, the Sellers each confirmed the
termination of their respective employment agreements with the Issuer and
released any claim for further remuneration thereunder. (George Randall had
served as the Chairman of the Board of Directors of the Issuer and Moshe Tsabag
had served as President.) It was anticipated that Mr. Tsabag would continue to
be employed at will by the Issuer, although he would no longer be an officer.
Subsequently, Messrs. Goodstein and Tsabag resigned as employees and Directors,
and the Reporting Person suggested that Issuer promote employee Jeffrey Busse to
the position of Chief Financial Officer and appoint him as a Director, and
appoint Guy Anthome as Director and President. Subsequently, Jeffrey Kapor
resigned as a Director.
Because of the Issuer's continuing financial problems, in March and
June, the Reporting Person was required to provide letters of credit to cover
overdrafts from Issuer's accounts receivable factor. Finally, in mid-June, 1995,
the Reporting Person offered to provide additional capital to Issuer and to
become Chairman of the Board and Chief Executive Officer in exchange for
3,184,693 shares of Common Stock, the Warrant and the Option. The sale of shares
was contingent on a fairness and valuation opinion which was received on July
10, 1995. A copy of the opinion is included as Exhibit 99.1 to Issuer's Annual
Report on Form 10-K for the Year Ended March 31, 1995 and is incorporated herein
by this reference. The Warrant and Option are subject to approval by a vote of
the Issuer's shareholders, scheduled for September 20, 1995. As a result of the
Transactions occurring on June 17, 1995 and closing on July 12, 1995, the
Reporting Person is now Chairman of the Board and Chief Executive Officer of
Issuer for a salary of One Dollar ($1.00) per year pursuant to the Employment
Agreement attached as Exhibit 10.26 to Issuer's Annual Report on Form 10-K for
the Year Ended March 31, 1995 and incorporated herein by this reference.
The Reporting Person has no other plans or proposals which relate to,
or may result in, any of the matters listed in Items 4(a)-(j) of Schedule 13D
(although the Reporting Person reserves the right to do so).
ITEM 5. INTEREST IN THE SECURITIES OF ISSUER.
The Reporting Person and the Trusts in the aggregate hold 10,214,693
shares of Common Stock of the Issuer, representing approximately 92.6% of the
issued and outstanding shares of Common Stock of the Issuer, assuming full
exercise of the Warrant and the Option. The Trusts in the aggregate hold
3,030,000 shares of Common Stock of the Issuer, representing approximately 27.5%
of the issued and outstanding shares of Common Stock of the Issuer. The Georges
Marciano Trust holds 2,430,000 of such Trust Shares, representing approximately
22.0% of the outstanding shares of Common Stock of the Issuer. Each of the four
other Trusts holds 150,000 of such Trust Shares, representing approximately 1.4%
of the outstanding shares of Common Stock of the Issuer. The Reporting Person,
individually, holds 7,184,693 shares of Common Stock of the Issuer, representing
approximately 65.1% of the outstanding shares of Common Stock assuming full
exercise of the Warrant and the Option. (The foregoing percentages are
calculated as if the Warrant and the Option have been fully exercised.) The
Reporting Person, as trustee, has
Page 6 of 8 Pages
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sole voting and dispositive power with respect to all of the Trust Shares.
In addition, the Reporting Person has the power to revoke The Georges
Marciano Trust and obtain direct ownership of the Trust Shares owned by it.
Except as described herein, the Reporting Person has not acquired
or disposed of any shares of Common Stock of the Issuer during the past
sixty days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The Reporting Person and Issuer have entered into the Option
Agreement and Warrant Agreement described herein.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
10.18 License Agreement between Issuer and Marble Sportswear, Inc.
(incorporated by reference to Exhibit 10.18 of Issuer's Annual
Report on Form 10-K for the Year Ended March 31, 1995)
10.26 Employment Agreement between Issuer and the Reporting Person
(incorporated by reference to Exhibit 10.26 of Issuer's Annual
Report on Form 10-K for the Year Ended March 31, 1995)
10.27 Executive Stock Option Agreement between Issuer and the
Reporting Person (incorporated by reference to Exhibit 10.27
of Issuer's Annual Report on Form 10-K for the Year Ended
March 31, 1995)
10.28 Warrant Agreement between Issuer and the Reporting Person
(incorporated by reference to Exhibit 10.28 of Issuer's Annual
Report on Form 10-K for the Year Ended March 31, 1995)
99.1 Fairness and Valuation Option issued by Houlihan Lokey Howard &
Zukin, Inc. (incorporated by reference to Exhibit 99.1 of
Issuer's Annual Report on Form 10-K for the Year Ended March 31,
1995)
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment No. 2 is true,
complete and correct.
/s/ GEORGES MARCIANO
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Georges Marciano, individually and as
Trustee of the Trusts referred to
herein
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