EXHIBIT 20.1
NEWS RELEASE
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FOR IMMEDIATE RELEASE
March 2, 1998
STAGE II APPAREL SIGNS AGREEMENTS FOR
SHAREHOLDER AND MANAGEMENT REALIGNMENT
New York, New York -- STAGE II APPAREL CORP. (AMEX: SA) announced
agreements for sale of a controlling interest by three of its principal
shareholders to Xxxxxxx Xxxxxxx, who will join the Company as CEO upon
completion of the sale and related transactions. The agreements replace a
purchase agreement announced in December 1997 for the Company's acquisition of
Shorebreak Group, Inc. from Xx. Xxxxxxx.
The transactions contemplated by the modified arrangements include (i) the
sale to Xx. Xxxxxxx of 1,900,000 million shares of the Company's common stock
("SA Common") held by Xxxx Xxxxx, Xxxxxx Xxxxxxx and Xxxxxx X. Xxxxx, officers
and directors of the Company, in consideration for their release from guarantees
of the Company's indebtedness to its factor and their receipt of options to
reacquire a total of 1,500,000 shares of SA Common from Xx. Xxxxxxx at exercise
prices ranging from $.50 to $1.50 per share (the "Principal Shareholder
Options"), (ii) the Company's issuance to Xx. Xxxxxxx of options to purchase up
to 1,500,000 shares of SA Common on the same terms as the Principal Shareholder
Options, exercisable only to the extent the Principal Shareholder Options are
exercised, (iii) the arrangement of a new credit facility for the Company by Xx.
Xxxxxxx, (iv) the reconstitution of the Company's board of directors with
designees of Xx. Xxxxxxx and (v) the addition of a new management team headed by
Xx. Xxxxxxx. Xx. Xxxxxxx will also receive options to purchase up to 900,000
shares of SA Common at an exercise price of $.75 per share.
Xxxx Xxxxx, Chairman of Stage II, said "We explored a number of
alternatives to address the company's growth potential, capital availability and
management needs. We have great confidence in Xxxxxxx Xxxxxxx'x talented
management team and believe this is the best available transaction for the
Company and its shareholders."
Xx. Xxxxxxx 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. The Company's board believes Xx. Xxxxxxx'x experience,
industry contacts and successful track record will enable the Company to
complete the turnaround started by its current management. Xx. Xxxxxxx commented
that "I am committed to this goal and believe my major equity position and
management role in Stage II will provide excellent opportunities for growth."
Completion of the transactions is subject to various closing conditions.
Prior to closing, the Company expects to provide its shareholders with an
information statement relating to the board reconstitution.
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 Xxxxxxx Xxxxxxxx
Contact: Chief Financial Officer
(000) 000-0000
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