-----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, U1Fo13Zl5jLu+bRb7PVrjd4pBN6oWXHFQ0EswkkwQLOGrNuO87wkx3pyUW3x90E7 THjr0Lhec9mB0PQRezXFYw== 0001042910-00-000726.txt : 20000502 0001042910-00-000726.hdr.sgml : 20000502 ACCESSION NUMBER: 0001042910-00-000726 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000501 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: 10-K405/A SEC ACT: SEC FILE NUMBER: 001-07909 FILM NUMBER: 616184 BUSINESS ADDRESS: STREET 1: 5150 LINTON BLVD STREET 2: 5TH FL CITY: DELRAY BEACH STATE: FL ZIP: 33484 BUSINESS PHONE: 5614984000 MAIL ADDRESS: STREET 1: P O BOX 4000 CITY: TARBORO STATE: NC ZIP: 27886 10-K405/A 1 AMENDMENT OF THE ANNUAL REPORT OF FORM 10-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _______________ Commission file number 1-7909 EMPIRE OF CAROLINA, INC. (Exact name of registrant as specified in its charter) DELAWARE 13-2999480 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 5150 Linton Boulevard, Delray Beach, Florida 33484 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (561) 498-4000 Securities registered under Section 12(g) of the Exchange Act: Title of each class: Name of each exchange on which registered: Common Stock, par value $.10 American Stock Exchange per share (including the associated preferred Stock Purchase Rights) Securities registered under Section 12(g) of the Exchange Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference to Part III of this Form 10-K or any amendment to this Form 10-K. [X ] The aggregate market value of the voting stock held by non-affiliates of the registrant, as of March 24, 2000, was $12,539,149 (assuming solely for the purpose of this calculation that all directors and officers of the registrant are "affiliates"). The number of shares outstanding of the registrant's common stock, par value $.10 per share, as of March 24, 2000, was 20,062,639. Documents Incorporated By Reference: None. Part III information contained herein. EMPIRE OF CAROLINA, INC. FORM 10-K INDEX
PART III................................................................................................. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..................................... ITEM 11. EXECUTIVE COMPENSATION................................................................. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......................... ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................................... PART IV....... ....................................................................................... ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K........................ SIGNATURES...............................................................................................
2 PART I ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Name Age Position - ---- --- ----------------------------------------------- Timothy Moran........................... 36 Chairman of the Board, President and Chief Executive Officer Charles S. Holmes....................... 55 Director Lenore H. Schupak....................... 45 Director James J. Pinto.......................... 48 Direcor John J. Doran........................... 50 Director Frederick W. Rosenbauer, Jr............. 65 Director Mark S. Rose............................ 57 Director Thomas Wenzler.......................... 33 Vice President and General Manager Thomas MacDougall....................... 36 Chief Financial Officer, Secretary and Treasurer
Timothy Moran has served as a director, President and Chief Executive Officer of the Company since May 1998. He was President and Chief Operating Officer from February 1998 to May 1998. Since February 1993, Mr. Moran was President of Apple Sports, Inc. and Apple Golf Shoes, Inc. Charles S. Holmes has served as a director of the Company since May 1997 and as Chairman of the Board of Directors since June 1997. Since 1991, Mr. Holmes has served as principal of and is the sole stockholder of Asset Management Associates of New York, Inc. , a New York-based firm specializing in acquisitions of manufacturing businesses. Mr. Holmes is also an officer of HPA Associates, LLC. Lenore H. Schupak has served as a director of the Company since May 1997. Since 1990, Ms. Schupak has been President and principal owner of LHS Environmental Management, Inc., a New Jersey based company which provides environmental management consulting services in North America and Europe. From 1979 to 1989, she was an executive with American Standard, Inc., most recently serving as Corporate Director, Environmental Technology. James J. Pinto has served as a director of the Company since September 1997. Since 1990, Mr. Pinto has been the President of the Private Finance Group Corp. a merchant banking company, and has been an officer of HPA since October 1996. Mr. Pinto is a director of the following publicly traded companies: Anderson Group, Inc. (an electronics manufacturer), Bristol Hotels and Resorts and National Capital Management Corp. John J. Doran has served as a director of the Company since November 1997. Since September 1985, Mr. Doran has been the President of Citizens Medical Corporation, a pharmacy benefit management company. 3 Frederick W. Rosenbauer, Jr. has served as a director of the Company since February 1998. In December 1998, Mr. Rosenbauer retired from the United States Trust Company of New York, where he served as a Vice President since 1988. Mark S. Rose has served as a director of the Company since June 1999. Mr. Rose has twelve years experience in the sporting goods industry. He served as chairman of the board and chief executive officer of Apple Sports, Inc. from 1986 until May 1998 when Apple Sports Inc. was purchased by the Company. Since 1991, he has been chairman of the board and chief executive officer of Clare Rose of Nassau, Inc., an Anheuser Busch wholesale beverage distributor for Long Island, New York. Thomas Wenzler has served as Vice President and General Manager of the Company since September 1999. Since May 1997, Mr. Wenzler was Vice President and General Manager of Apple/Dorson Sports Inc. Mr. Wenzler joined the Company in May of 1991 as Regional Sales Manager. He was later promoted to General Manager of Apple/Dorson Sports Inc. in May of 1993. Mr. Wenzler holds a Bachelor of Science degree in Business Administration from Towson State University. Thomas MacDougall has served as Chief Financial Officer, Secretary and Treasurer of the Company since September 1999. Mr. MacDougall joined Apple/Dorson Sports, Inc. in June of 1995 as controller. Prior to employment with Apple Sports, Inc. Mr. MacDougall was the Financial Analyst for Collection Clothing Corporation. Before Collection Clothing Corporation, Mr. MacDougall served as controller of Stage II Apparel. Mr. MacDougall holds a Bachelor of Business Administration degree in Accounting from Siena College. ITEM 11. EXECUTIVE COMPENSATION. The following summary compensation table (the "Compensation Table") summarizes compensation information with respect to the Chief Executive Officer of the Company and each of the Company's most highly compensated executive officers who earned on an annualized basis more than $100,000 for services rendered during the year ended December 31, 1999 (collectively, the "Named Executive Officers"). 4 Summary Compensation Table
Securities All Other Fiscal Other Annual Underlying Compensation Name and Principal Positins(s) Year Salary($) Bonus($) Compensation Options(#) ($) - ------------------------------ ------ ---------- -------- ------------ ---------- ------------- Charles S. Holmes 1999 0 0 0 0 0 (Chairman of the Board) 1998 80,328 0 0 112,500 0 through 06/08/1999 1997 65,000 0 0 0 0 Timothy Moran 1999 200,000 200,000 0 0 0 (Chief Executive Officer and 1998 123,007 100,000 0 200,000 0 President)(Chairman of the 1997 0 0 0 250,000 0 Board- 06/08/1999 to present Thomas Wenzler 1999 127,892 12,423 0 50,000 0 Vice President 1998 -- -- 0 -- 0 1997 -- -- 0 -- 0 Thomas MacDougall 1999 73,462 1.404 0 10,000 0 (Chief Financial Officer and 1998 -- -- 0 -- 0 Secretary since 8/99) 1997 -- -- 0 -- 0
- ------------------------------ The following table sets forth certain information with respect to stock options granted to each of the Named Executive Officers during 1999: Option Grants in Last Fiscal Year
Individual Grants ------------------------------------------- Percent of Total Shares Options Underlying Granted to Exercise or Grant Date Options Employees Base Price Expiration Present Granted in 1999(%) ($/Share) Date Value ($)(1) ------------ ----------- ------------- ------------- -------------- Timothy Moran 0 0.0 $ -- -- $ -- Thomas Wenzler 50,000 30.8 $ 1.00 2/26/04 $ -- Thomas MacDougall 10,000 6.2 $ 1.00 2/26/04 $ --
- -------------------- (1) The amounts shown as present values were estimated using the Black-Scholes option-pricing model using the weighted-average assumptions of dividend yield of 0.0%, expected volatility of 114.98%, risk free interest rate of 5.05% and expected life of 3 years. 5 The following table sets forth certain information with respect to stock options granted to each of the Named Executive Officers that were outstanding at December 31, 1999: Aggregated Option Exercises in Last Fiscal Year and Year-End Option Values
Shares Value of Unexercised In-the- Acquire Number of Unexercised Options Money Options (1) Upon Value ------------------------------- ------------------------------- Name Exercise (#) Realized Exercisable Unexercisable Exercisable Unexercisable - ---------------- ------------ -------- ----------- ------------- ----------- ------------- Timothy Moran 0 0 233,334 216,666 0 0 Thomas Wenzler 0 0 0 50,000 0 0 Thomas MacDougall 0 0 0 10,000 0 0
- -------------------- (1) Based on the $.0.219 per share closing price of the Company's common stock on the American Stock Exchange on December 31, 1999. Employment Contracts and Termination of Employment Arrangements On July 15, 1994, Steven Geller entered into an employment agreement pursuant to which he became Chairman and Chief Executive Officer of EII, the Company's principal subsidiary. Subsequently, the obligations of EII under such agreement were assigned to the Company, and Mr. Geller became Chairman of the Board and Chief Executive Officer of the Company. The agreement provided for a base salary of $300,000 per annum, which was increased by the Compensation Committee to $325,000 per annum effective January 1, 1995. The initial term of the agreement expired on July 15, 1998, provided that such term was automatically extended for successive one-year periods on July 15 of each year (the "Extension Date") commencing July 15, 1996, unless either the Company or Mr. Geller gives 60 days' prior written notice to the other party that it or he elects not to extend the term of the agreement. In May 1998, Mr. Geller agreed to terminate his employment contract in consideration of the Compensation Committee's agreement to enter into a consulting agreement with him. The agreement provided for a minimum one-year term, a base salary of $100,000 per year and payment of certain expenses. In addition, the Committee agreed to extend the period during which Mr. Geller's stock options vest or may be exercised until June 1, 2003. The Company did not renew Mr. Geller's consulting agreement beyond May 31, 1999. Compliance with Section 16 of the Securities Exchange Act of 1934 Pursuant to Section 16 of the Exchange Act, the Company's directors and executive officers and beneficial owners of more than 10% of the common stock are required to file certain reports, within specified time periods, indicating their holdings of and transactions in the common stock. Based solely on a review of such reports provided to the Company and written representations from such persons regarding the necessity to file such reports, the Company has determined that the Company's directors and executive officers and beneficial owners of more than 10% of the common stock timely filed all required Section 16 reports during 1999. 6 Compensation Committee Interlocks and Insider Participation During 1999, the Compensation Committee of the Company's Board of Directors was composed of independent, outside directors, Mr. James Pinto and Ms. Lenore Schupak. As noted above, the Company's compensation program for its executives is administered by the Board of Directors with the advice and counsel of the Compensation Committee. As a result, Mr. Moran provides input to the deliberations by the Committee and the Board concerning executive compensation. Mr. Moran did not vote as a member of the Board in the Board action which affected his compensation. Neither of the compensation committee members is or has been an officer or employee of the Company or any of its subsidiaries. In addition, neither Mr. Pinto nor Ms. Schupak has, or has had, any relationship with the Company which is required to be disclosed under "Certain Relationships and Related Transactions." No Company executive officer currently serves on the compensation committee or any similar committee of another public company. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The Company's policy is that all transactions between the Company and its executive officers, directors and principal shareholders occurring outside the ordinary course of the Company's business be on terms no less favorable than could be obtained from unaffiliated third parties or are subject to the approval of the Company's disinterested directors. In connection with the Series A preferred stock transactions described in Note 8 to the Financial Statements, the following members of the Company's Board of Directors made investments in the Company during 1997, which balances may subsequently have changed through December 31, 1999: Shares of Warrants to Series A Acquire Preferred Stock Common Stock ----------------- ---------------- Charles S. Holmes 125,000 2,753,752 James J. Pinto 100,000 2,678,752 Lenore H. Schupak 22,500 22,500 John Doran 10,000 10,000 7 Timothy Moran, the Company's President and Chief Operating Officer, who was a significant shareholder of the Apple Companies, and Mark S. Rose, the majority shareholder of the Apple Companies, participated in the Series A preferred stock transactions, acquiring 50,000 shares of Series A preferred stock and warrants to acquire 50,000 shares of common stock, each. Mark S. Rose is the father-in-law of Timothy Moran. Weiss, Peck & Greer, L.L.C. ("WPG"), on behalf of investment funds for which they were managers, in June 1997 exchanged $14,900,000 of debentures for 1,490 newly-issued Series C preferred stock of the Company. See Note 8 to the Financial Statements. WPG released, among other things, their claims to accrued and unpaid interest, fees and expenses. Two principals of WPG were members of the Company's Board of Directors from 1994 through November 1997. Steven Geller, former Chief Executive Officer and director of the Company, has the right to vote 734,039 shares of common stock of the Company owned by Barry Halperin. Mr. Geller's right to vote such shares terminates upon Mr. Halperin's disposal thereof. Mr. Geller has certain rights of first refusal relative to Mr. Halperin's disposal of the remaining shares. Mr. Geller had a one year consulting agreement with the Company which expired in May 1999. Mark S. Rose, a director of the Company and father-in-law of Timothy Moran, is an 80% owner of Vets Park Associates, which is the landlord of office and warehouse space in Ronkonkoma, New York, rented to Apple Sports, Inc. and Dorson Sports, Inc. Apple Sports and Dorson Sports are subsidiaries of the Company. During fiscal 1999, the Company paid rent to Vets Park Associates in the amount of $313,997. 8 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Empire of Carolina, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: May 1, 2000 EMPIRE OF CAROLINA, INC. (Registrant) By: /s/ Timothy Moran --------------------------------- Timothy Moran, Chairman of the Board, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ----- /s/Timothy Moran Chairman of the Board, May 1, 2000 - ------------------------------------------ President and Chief Executive Timothy Moran Officer (Principal Executive Officer) /s/ Thomas MacDougall Chief Financial Officer, May 1, 2000 - ------------------------------------------ Secretary and Treasurer Thomas MacDougall (Principal Accounting and Financial Officer) /s/ John J. Doran Director May 1, 2000 - ------------------------------------------ John J. Doran /s/ Charles S. Holmes Director May 1, 2000 - ------------------------------------------ Charles S. Holmes /s/ James J. Pinto Director May 1, 2000 - ------------------------------------------ James J. Pinto /s/ Frederick W. Rosenbauer, Jr. Director May 1, 2000 - ------------------------------------------ Frederick W. Rosenbauer, Jr. /s/ Lenore Schupak Director May 1, 2000 - ------------------------------------------ Lenore Schupak /s/ Mark S. Rose Director May 1, 2000 - ------------------------------------------ Mark S. Rose
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