-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vxr/aPH2INuGY944uLUlODzz/dA8/YwjEfNvSMtpYfUIZerpe4DMyd7W7X+DJCrQ 4vIO6f+9/D3PyHGm61TnRQ== 0000950168-97-001182.txt : 19970509 0000950168-97-001182.hdr.sgml : 19970509 ACCESSION NUMBER: 0000950168-97-001182 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970508 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970508 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMPIRE OF CAROLINA INC CENTRAL INDEX KEY: 0000312840 STANDARD INDUSTRIAL CLASSIFICATION: GAMES, TOYS & CHILDREN'S VEHICLES (NO DOLLS & BICYCLES) [3944] IRS NUMBER: 132999480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07909 FILM NUMBER: 97598279 BUSINESS ADDRESS: STREET 1: 5150 LINTEN BLVD CITY: DEL RAY BEACH STATE: FL ZIP: 33484 BUSINESS PHONE: 4074984000 MAIL ADDRESS: STREET 1: P O BOX 4000 CITY: TARBORO STATE: NC ZIP: 27886 8-K 1 EMPIRE OF CAROLINA, INC. FORM 8-K 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 May 8, 1997 Date of Report (Date of earliest event reported) Empire of Carolina, Inc. (Exact name of registrant as specified in its charter) Delaware 1-7909 13-2999480 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 5150 Linton Boulevard, 5th Floor, Delray Beach, Florida 33484 (Address of principal executive offices) (Zip Code) (561) 498-4000 (Registrant's telephone number) ITEM 5. OTHER EVENTS. On May 8, 1997, the Registrant issued the press release attached hereto as Exhibit 99, which press release is hereby incorporated by reference herein, announcing the execution of a definitive securities purchase agreement with private investors to invest up to $16 million for newly issued convertible preferred stock, the funding by such private investors of a short-term $5 million bridge loan, the adoption of an amendment to the Registrant's Stockholder Rights Agreement to facilitate such investment and certain related matters. The American Stock Exchange has advised the Company that the proposed transaction does not require stockholder approval under applicable Exchange rules. The First Amendment to the Registrant's Stockholder Rights Agreement is attached hereto as Exhibit 4.6, and is hereby incorporated by reference herein. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit Number Description 4.6 First Amendment dated as of May 5, 1997, to Rights Agreement, dated as of September 11, 1996, between Empire of Carolina, Inc. and American Stock Transfer & Trust Company as Rights Agent. 99 Press Release, dated May 8, 1997.
-2- 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 hereunto duly authorized. EMPIRE OF CAROLINA, INC. By /s/ Lawrence Geller Name: Lawrence Geller Title: Vice President and General Counsel Date: May 8, 1997 -3- EXHIBIT INDEX
Exhibit Number Description 4.6 First Amendment dated as of May 5, 1997, to Rights Agreement, dated as of September 11, 1996, between Empire of Carolina, Inc. and American Stock Transfer & Trust Company as Rights Agent. 99 Press Release, dated May 8, 1997.
-4- EX-4 2 EXHIBIT 4.6 EXHIBIT 4.6 FIRST AMENDMENT TO RIGHTS AGREEMENT THIS FIRST AMENDMENT to the Rights Agreement (the "Rights Agreement") dated as of September 11, 1996, between Empire of Carolina, Inc. and American Stock Transfer & Trust Company as Rights Agent ("American Stock Transfer") is dated as of the 5th day of May 1997. WHEREAS, the Company, HPA Associates, L.L.C., a Delaware limited liability company ("HPA"), and EMP Associates L.L.C., a Delaware limited liability company (collectively with HPA, the "Investors") propose to enter into that certain Securities Purchase Agreement dated as of May 5, 1997 between the Company and the Investors (the "Securities Purchase Agreement"), and following the consummation of the transactions contemplated thereby the Investors will be significant stockholders of the Company; and WHEREAS, the Board of Directors of the Company believes that it is in the best interests of the Company and its stockholders that the Rights Agreement be amended as set forth herein; and WHEREAS, Section 27 of the Rights Agreement authorizes the Board of Directors of the Company and the Rights Agent to adopt the proposed amendment without the approval of the Company's stockholders; NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties agree to amend the Rights Agreement as follows: 1. Section 1(a) of the Rights Agreement is hereby amended by deleting the words "and (iii)" from the second sentence thereof and substituting the following therefor: (iii) no Person who or which was an Exempt Person prior to the adoption of the First Amendment dated as of May 5, 1997 (the "Amendment") to the Rights Agreement shall be deemed to be an "Acquiring Person" for purposes of this Agreement; provided, however, that if any such Person ceases to be an Exempt Person following the adoption of the Amendment, after 5:00 p.m., New York time, on May 7, 1997, (A) acquires beneficial ownership of any additional Common Shares and (B) beneficially owns after such acquisition 15% or more of the aggregate number of Common Shares of the Company then outstanding, then such Person shall be deemed to be an "Acquiring Person," and (iv) 2. Section 1(k) of the Rights Agreement is hereby amended by deleting Section 1(k) thereof in its entirety and substituting the following therefor: (k) "Exempt Person" means (i) the Company; (ii) any Subsidiary of the Company; (iii) any employee benefit plan of the Company or any Subsidiary of the Company, or any entity holding Common Shares of the Company for or -5- pursuant to the terms of any such plan or related trust; (iv) Steven E. Geller ("Geller"), WPG Corporate Development Associates IV, L.P., a Delaware limited partnership, WPG Corporate Development Associates IV (Overseas), L.P., a Cayman Islands limited partnership, Westpool Investment Trust plc, Glenbrook Partners, L.P. and any Affiliate of any of the foregoing Persons; (v) Geller and any descendant of Geller, or any spouse, widow or widower of Geller or of any such descendant (Geller and any such descendants, spouses, widows and widowers collectively defined as the "Family Members"); (vi) any trust of which Geller is a trustee; (vii) any estate of a Family Member, or any trust established by or for the benefit directly or indirectly of one or more Family Members provided that one or more Family Members or charitable organizations which qualify as exempt organizations under Section 501(c) of the Internal Revenue Code of 1986, as amended ("Charitable Organizations") collectively are the beneficiaries of at least 50% of the actuarially-determined beneficial interest in such estate or trust; (viii) any Charitable Organization which is established by one or more Family Members (a "Family Charitable Organization"); (ix) any corporation of which a majority of the voting power or a majority of the equity interest is held, directly or indirectly, by or for the benefit of one or more Family Members, estates or trusts described in clause (vii) above, or Family Charitable Organizations; (x) any partnership, limited liability company or other entity or arrangement of which a majority of the voting interest or a majority of the economic interest is held, directly or indirectly, by or for the benefit of one or more Family Members, estates or trusts described in clause (vii) above, or Family Charitable Organizations; (xi) HPA Associates, L.L.C., a Delaware limited liability company ("HPA"), and EMP Associates, L.L.C., a Delaware limited liability company (collectively with HPA, the "Investors"), and their respective Affiliates, from and after the execution of that certain Securities Purchase Agreement between the Company and the Investors to be dated as of May 5, 1997 (the "Securities Purchase Agreement"); provided that (A) if the Investors or their respective Affiliates acquires beneficial ownership of any Common Shares other than in a transaction with the Company or with the written consent of the Company from and after the execution of the Securities Purchase Agreement and prior to the consummation of the investment by the Investors contemplated by the Securities Purchase Agreement, then the Investors and their Affiliates shall not be deemed to be "Exempt Persons" at any time after such acquisition of beneficial ownership, or (B) if the investment by the Investors contemplated by the Securities Purchase Agreement is not consummated, then the Investors and their respective Affiliates shall not be deemed to be "Exempt Persons" at any time after the Securities Purchase Agreement terminates in accordance with its terms, and (xii) any trustee, executor, direct or indirect managing or general partner or other Person who has or shares voting and/or investment power over Common Shares beneficially owned by any of the foregoing Persons solely in their capacities as such. -6- 3. Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the Rights Agreement. 4. Except as expressly amended hereby, the Rights Agreement remains in full force and effect. 5. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware, and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and performed entirely within such State. 6. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the day and year first above written. EMPIRE OF CAROLINA, INC. Attest: By /s/ Lawrence Geller By /s/ Steven Geller Name: Lawrence Geller Name: Steven Geller Title: General Counsel and Secretary Title: Chairman and Chief Executive Officer AMERICAN STOCK TRANSFER & TRUST COMPANY Attest: By [SIGNATURE] By /s/ Herbert J. Lemmer ------------ ---------------------- Name: Name: Herbert J. Lemmer Title: Title: Vice President -7- EX-99 3 EXHIBIT 99 EXHIBIT 99 FOR IMMEDIATE RELEASE EMPIRE OF CAROLINA COMMENTS ON PROPOSED INVESTMENT Delray Beach, FL, May 8, 1997 -- Empire of Carolina, Inc. (AMEX: EMP) announced today that it has signed a definitive securities purchase agreement with private investors to invest up to $16 million for newly issued convertible preferred stock of Empire. The Company also reported that the investors, HPA Associates, LLC and EMP Associates LLC, have funded a $5 million bridge loan to provide the Company with additional liquidity during the period prior to the closing of the preferred stock investment. The bridge loan is repayable upon the closing of the preferred stock investment in accordance with the securities purchase agreement. The principals of HPA Associates, LLC, Charles S. Holmes and James J. Pinto, have substantial experience with investments in publicly traded companies. Mr. Holmes, along with other HPA employees, will provide the Company with financial and operational support to help continue the turnaround of the Company's manufacturing facility in Tarboro, North Carolina. Steven Geller, Chairman and Chief Executive Officer, commented, "We are excited to announce the signing of the agreement and the funding of the bridge loan. We remain committed to the turn-around of our manufacturing facility and improvements in our financial performance." The securities purchase agreement provides that the investors will purchase $11 million of newly issued convertible preferred stock on or before June 5, 1997, and that the Company may elect to sell an additional $5 million of the preferred stock to the investors within 180 days. The preferred stock, which bears no dividend, will be convertible into common stock at $1.25 per share and will vote on all matters on an as if converted basis. Upon funding of the bridge loan, the investors received 5 million warrants to purchase common stock at $1.375 per share, which warrants are forfeitable under certain circumstances if the $11 million preferred stock investment is not completed. If the Company elects to issue the additional $5 million of the preferred stock described above, the investors will be issued an additional 2.5 million warrants upon closing. Also pursuant to the securities purchase agreement, Charles Holmes and Lenore Shupeck will assume two of five seats on the Company's Board of Directors. Upon completion of the investment, the investors will own securities convertible into or exercisable for a substantial majority of the Company's outstanding stock. The Company also announced that it has adopted an amendment to its Stockholder Rights Agreement in order to facilitate the proposed investment. The preferred stock transaction is subject to certain closing conditions which are specified in the securities purchase agreement. The Company can give no assurance that the preferred stock transaction will be consummated, and, in the event that it is not consummated, there can -8- be no assurance that cash generated from operations will be sufficient to fund the Company's continued operations. This press release contains various forward-looking statements and information that are based on management's beliefs as well as assumptions made by and information currently available to management. Such statements are subject to various risks and uncertainties which could cause actual results to vary materially from those stated. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect actual results may vary materially from those anticipated, estimated, expected or projected. Such risks and uncertainties include the Company's ability to close the proposed transaction, the Company's ability to manage inventory production and costs, to meet potential increases or decreases in demand, potential adverse customer impact due to delivery delays including effects on existing and future orders, competitive practices in the toy and decorative holiday products industries, changing consumer preferences and risks associated with consumer acceptance of new product introductions, potential increases in raw material prices, potential delays or production problems associated with foreign sourcing of production and the impact of pricing policies including providing discounts and allowances. Certain of these as well as other risks and uncertainties are described in more detail in the Company's Registration Statement on Form S-1 filed under the Securities Act of 1933, Registration No. 333-4440, and the Company's Annual Report on Form 10-K for the year ended December 31, 1996. The Company undertakes no obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments. Empire of Carolina, Inc. designs, develops, manufactures and markets a broad range of basic plastic children's toys. It's Holiday Products Division produces and markets decorative seasonal items including Christmas, Halloween and Easter illuminated products. The Company's full line of basic toys includes the Big Wheel(R) line of ride-on toys, Grand Champions(R) collectible horses, Buddy L(R) cars and trucks, and Power Driver(R) ride-ons. -9- -----END PRIVACY-ENHANCED MESSAGE-----