-----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, UXMtbf/lfQFkLcoSjPFepdjTMWdUOX2n7B5jSovdA9fXJqIOYo2aik73RGxdAJlR YVUnLSKaeLHvae8JUmHaPQ== 0000950144-99-002679.txt : 19990317 0000950144-99-002679.hdr.sgml : 19990317 ACCESSION NUMBER: 0000950144-99-002679 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19990316 GROUP MEMBERS: COLUMBIA HILL, LLC GROUP MEMBERS: DAVID R. CLARK GROUP MEMBERS: GREGORY ALBION EDGELL GROUP MEMBERS: HERTH MANAGEMENT, INC. GROUP MEMBERS: JAMES M. TEMPLETON GROUP MEMBERS: LARRY D. HEFNER GROUP MEMBERS: RICHARDSON JAMES C JR SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FRESH FOODS INC CENTRAL INDEX KEY: 0000067494 STANDARD INDUSTRIAL CLASSIFICATION: BAKERY PRODUCTS [2050] IRS NUMBER: 560945643 STATE OF INCORPORATION: NC FISCAL YEAR END: 0306 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-32920 FILM NUMBER: 99565941 BUSINESS ADDRESS: STREET 1: 3437 EAST MAIN STREET CITY: CLAREMONT STATE: NC ZIP: 28610 BUSINESS PHONE: 7044597626 MAIL ADDRESS: STREET 1: 3437 EAST MAIN STREET CITY: CLAREMONT STATE: NC ZIP: 28610 FORMER COMPANY: FORMER CONFORMED NAME: WSMP INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: WESTERN STEER MOM N POPS INC DATE OF NAME CHANGE: 19880719 FORMER COMPANY: FORMER CONFORMED NAME: MOM N POPS HAM HOUSE INC DATE OF NAME CHANGE: 19810827 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RICHARDSON JAMES C JR CENTRAL INDEX KEY: 0000904825 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: P O BOX 399 CITY: CLAREMONT STATE: NC ZIP: 28610 BUSINESS PHONE: 7044593117 MAIL ADDRESS: STREET 1: P O BOX 399 CITY: CLAREMONT STATE: NC ZIP: 28610 FORMER COMPANY: FORMER CONFORMED NAME: RICHARDSON JAMES CLAUDE JR EDGELL GREGORY ALBION ET AL DATE OF NAME CHANGE: 19930514 SC 13D/A 1 FRESH FOODS/JAMES C RICHARDSON SC 13D/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (AMENDMENT NO. 17) FRESH FOODS, INC., formerly known as WSMP, INC. (Name of the Issuer) Common Stock (Title of Class of Securities) 929330 10 8 (CUSIP Number) Patrick Daugherty McGuire, Woods, Battle & Boothe LLP Bank of America Corporate Center, Suite 2900 100 North Tryon Street Charlotte, NC 28202 (704) 373-8975 (Name, address and Telephone Number of Persons Authorized to Receive Notice and Communications) August 12, 1998 (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: [ ] 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 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act. The total number of shares reported herein is 2,091,332 shares, which constitutes approximately 32.0% of the total number of shares outstanding. All ownership percentages set forth herein are based upon 5,914,809 shares of Common Stock issued and outstanding as of January 19, 1999. When calculating the number of shares reported herein and the number of shares outstanding, 627,000 shares issuable pursuant to currently exercisable options belonging to five of the individual Reporting Persons 2 (defined hereinafter) are accounted for by aggregating the optioned shares with the shares that are beneficially owned by the Reporting Persons and dividing the sum by the number of shares outstanding plus the number of currently exercisable options belonging to the Reporting Persons. 3 SCHEDULE 13D CUSIP No. 929330 10 8 1. Name of Reporting Person; S.S. or I.R.S. Identification No. of Above Person James Claude Richardson, Jr. ###-##-#### 2. Check the Appropriate Box if a Member of a Group (a) [ x ] (b) [ ] 3. SEC Use Only 4. Source of Funds SC, BK, PF 5. Check Box if Disclosure of Legal Proceedings is Required to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization United States of America Number of Shares Beneficially Owned By Each Reporting Person With 7. Sole Voting Power 222,657 (1) 8. Shared Voting Power 1,274,034 (2) 9. Sole Dispositive Power 222,657 (1) 10. Shared Dispositive Power 1,274,034 (2) 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,496,691 12. Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row 11 24.4% (3) 14. Type of Reporting Person IN 4 SCHEDULE 13D CUSIP No. 929330 10 8 1. Name of Reporting Person; S.S. or I.R.S. Identification No. of Above Person David R. Clark ###-##-#### 2. Check the Appropriate Box if a Member of a Group (a) [ x ] (b) [ ] 3. SEC Use Only 4. Source of Funds SC, BK, PF 5. Check Box if Disclosure of Legal Proceedings is Required to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization United States of America Number of Shares Beneficially Owned By Each Reporting Person With 7. Sole Voting Power 286,964 (4) 8. Shared Voting Power 1,274,034 (2) 9. Sole Dispositive Power 286,964 (4) 10. Shared Dispositive Power 1,274,034 (2) 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,560,998 12. Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row 11 25.2% (3) 14. Type of Reporting Person IN 5 SCHEDULE 13D CUSIP No. 929330 10 8 1. Name of Reporting Person; S.S. or I.R.S. Identification No. of Above Person James M. Templeton ###-##-#### 2. Check the Appropriate Box if a Member of a Group (a) [ x ] (b) [ ] 3. SEC Use Only 4. Source of Funds SC, BK, PF 5. Check Box if Disclosure of Legal Proceedings is Required to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization United States of America Number of Shares Beneficially Owned By Each Reporting Person With 7. Sole Voting Power 78,802 (5) 8. Shared Voting Power 1,257,235 (6) 9. Sole Dispositive Power 78,802 (5) 10. Shared Dispositive Power 1,257,235 (6) 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,336,037 12. Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row 11 22.3% (3) 14. Type of Reporting Person IN 6 SCHEDULE D CUSIP No. 929330 10 8 1. Name of Reporting Person; S.S. or I.R.S. Identification No. of Above Person Gregory Albion Edgell ###-##-#### 2. Check the Appropriate Box if a Member of a Group (a) [ x ] (b) [ ] 3. SEC Use Only 4. Source of Funds SC, BK, PF 5. Check Box if Disclosure of Legal Proceedings is Required to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization United States of America Number of Shares Beneficially Owned By Each Reporting Person With 7. Sole Voting Power 171,875 (7) 8. Shared Voting Power 1,227,235 (8) 9. Sole Dispositive Power 171,875 (7) 10. Shared Dispositive Power 1,227,235 (8) 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,399,110 12. Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row 11 23.5% (3) 14. Type of Reporting Person IN 7 SCHEDULE 13D CUSIP No. 929330 10 8 1. Name of Reporting Person; S.S. or I.R.S. Identification No. of Above Person HERTH Management, Inc. 56-1645597 2. Check the Appropriate Box if a Member of a Group (a) [ x ] (b) [ ] 3. SEC Use Only 4. Source of Funds SC, BK, PF 5. Check Box if Disclosure of Legal Proceedings is Required to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization United States of America Number of Shares Beneficially Owned By Each Reporting Person With 7. Sole Voting Power (9) 1,227,235 (10) 8. Shared Voting Power 0 9. Sole Dispositive Power (9) 1,227,235 (10) 10. Shared Dispositive Power 0 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,227,235 12. Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row 11 20.7% (3) 14. Type of Reporting Person C 8 SCHEDULE 13D CUSIP No. 929330 10 8 1. Name of Reporting Person; S.S. or I.R.S. Identification No. of Above Person Columbia Hill, LLC 56-2016827 2. Check the Appropriate Box if a Member of a Group (a) [ x ] (b) [ ] 3. SEC Use Only 4. Source of Funds SC, BK, PF 5. Check Box if Disclosure of Legal Proceedings is Required to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization United States of America Number of Shares Beneficially Owned By Each Reporting Person With 7. Sole Voting Power (11) 46,799 (12) 8. Shared Voting Power 1,227,235 (8) 9. Sole Dispositive Power (11) 46,799 (12) 10. Shared Dispositive Power 1,227,235 (8) 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,274,034 12. Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row 11 21.5% (3) 14. Type of Reporting Person C 9 SCHEDULE 13D CUSIP No. 929330 10 8 1. Name of Reporting Person; S.S. or I.R.S. Identification No. of Above Person Larry D. Hefner ###-##-#### 2. Check the Appropriate Box if a Member of a Group (a) [ x ] (b) [ ] 3. SEC Use Only 4. Source of Funds SC, BK, PF 5. Check Box if Disclosure of Legal Proceedings is Required to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization United States of America Number of Shares Beneficially Owned By Each Reporting Person With 7. Sole Voting Power 27,000 (13) 8. Shared Voting Power 1,274,034 (2) 9. Sole Dispositive Power 27,000 (13) 10. Shared Dispositive Power 1,274,034 (2) 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,301,034 12. Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares [ ] 13. Percent of Class Represented by Amount in Row 11 21.9% (3) 14. Type of Reporting Person IN 10 (1) Consists of (i) 7,657 shares owned of record and (ii) 215,000 shares subject to currently exercisable call options. (2) Consists of (i) 1,227,235 shares owned beneficially through HERTH Management, Inc. and (ii) 46,799 shares owned beneficially through Columbia Hill, LLC. (3) Calculated by taking the aggregate amount beneficially owned by the individual reporting person and dividing by the number of shares outstanding (5,914,809) plus the number of presently exercisable call options belonging to the individual reporting person. (4) Consists of (i) 1,964 shares owned of record and (ii) 285,000 shares subject to currently exercisable call options. (5) Consists of (i) 8,802 shares owned of record and (ii) 70,000 shares subject to currently exercisable call options. (6) Consists of 1,227,235 shares owned beneficially through HERTH Management, Inc. and 30,000 shares owned beneficially through Catawba Valley Real Estate, Inc. (7) Consists of (i) 131,250 shares owned of record, (ii) 625 shares owned by spouse as custodian for minor children and (iii) 40,000 shares subject to currently exercisable call options. (8) Consists of 1,227,235 shares beneficially owned through HERTH Management, Inc. (9) Power is exercised by a majority vote of the shareholders of HERTH Management, Inc. and does not include other shares beneficially owned by the shareholders of HERTH Management, Inc. (10) Consists of 1,227,235 shares owned of record. (11) Power is exercised by a majority vote of the members of Columbia Hill, LLC and does not include other shares beneficially owned by the members of Columbia Hill, LLC. (12) Consists of 46,799 shares owned of record. (13) Consists of (i) 10,000 shares owned of record and (ii) 17,000 shares subject to currently exercisable call options. 11 ITEM 1. SECURITY AND ISSUER Pursuant to Rule 13d-2(a) under the Securities Exchange Act of 1934, as amended (the "Act"), the undersigned hereby amend their Schedule 13D dated October 21, 1997, relating to the common stock, $1.00 par value per share (the "Common Stock"), of Fresh Foods, Inc., which changed its name on May 8, 1998, was formerly known as WSMP, Inc. (the "Company"), and whose principal executive offices are located at 3437 East Main Street (P.O. Box 399), Claremont, North Carolina 28610. ITEM 2. IDENTITY AND BACKGROUND (a) This statement is filed by (i) HERTH Management, Inc., a North Carolina corporation ("HERTH"), with respect to shares of Common Stock beneficially owned by it, (ii) Columbia Hill, LLC, a North Carolina limited liability company ("Columbia"), with respect to shares of Common Stock beneficially owned by Columbia and HERTH, and (iii) Messrs. David R. Clark, Gregory A. Edgell, Larry D. Hefner, James C. Richardson, Jr. and James M. Templeton with respect to the shares of Common Stock beneficially owned by such individuals, HERTH and Columbia. The foregoing persons are hereinafter sometimes referred to collectively as the "Reporting Persons." Messrs. Clark, Richardson and Hefner are the sole members of Columbia. Columbia and Messrs. Richardson, Edgell and Templeton are the sole shareholders of HERTH. (b) The business address of Columbia, HERTH and each of Messrs. Clark, Hefner, Richardson and Templeton is 3437 East Main Street, P.O. Box 399, Claremont, NC 28610. The business address of Mr. Edgell is 3200 Devine Street, Suite 103, Columbia, SC 29205. The business address of Mr. Hefner is 1004 Power Street, China Grove, NC 28023. (c) Each Reporting Person's present principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such employment is conducted, is as follows:
Present Principal Occupation or Name Principal Business Address business - ---------------------------------- ------------------------------------- --------------------------------- David R. Clark Fresh Foods, Inc. President, Chief Operating 3437 East Main Street Officer and Director of the P.O. Box 399 Company Claremont, NC 28610 Columbia Hill, LLC, a North 3437 East Main Street Private investment firm Carolina limited liability P.O. Box 399 engaging in the purchase and company Claremont, NC 28610 sale of securities
12
Present Principal Occupation or Name Principal Business Address business - ---------------------------------- ------------------------------------- --------------------------------- Gregory A. Edgell Accounting Resources, Inc. Financial consulting 3200 Devine Street, Suite 103 Columbia, SC 29205 Larry D. Hefner Program Sales & Marketing, LLC Co-owner of Program Sales & 1004 Power Street Marketing, LLC, a food China Grove, NC 28023 product brokerage HERTH Management, Inc., a North 3437 East Main Street Provision of business Carolina corporation P.O. Box 399 management and consulting Claremont, NC 28610 services and private investment firm engaging in the purchase and sale of securities James C. Richardson, Jr. Fresh Foods, Inc. Chief Executive Officer and 3437 East Main Street Vice Chairman of the Board of P.O. Box 399 Directors of the Company Claremont, NC 28610 James M. Templeton Fresh Foods, Inc. Senior Vice President - Real 3437 East Main Street Estate of the Company P.O. Box 399 Claremont, NC 28610
(d) During the past five years, none of the persons referred to in paragraph (a) above has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, none of the persons referred to in paragraph (a) above has been 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 judgment, 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. (f) Messrs. Clark, Edgell, Hefner, Richardson and Templeton are United States citizens. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Item 3 is partially amended to update Amendment 15: Over the course of eleven years, the Reporting Persons have used various sources of funds for the acquisition of Common Stock including personal funds of the Reporting Persons, loans from the Reporting Persons and affiliated corporations of the Reporting Persons, and loans from banks to some or all of the Reporting Persons. Presently the Reporting Persons have outstanding approximately $12.5 million in loans to acquire or refinance the acquisition of the Common Stock and for which portions of the Common Stock are pledged as security. These loans are between some or all of the Reporting Persons, their affiliated corporations and several regional banks, including First Century Bank of Wytheville, Virginia, Carolina First Bank of Greenville, South Carolina, First Union National Bank of Hickory, North Carolina, Bank of Granite of Hickory, North Carolina and Peoples Bank of Newton, North Carolina. Maturities range from three to five years, and interest rates range from LIBOR plus 2.75% to prime plus 1.00%. 13 Item 3 is further amended to add the following: Prior to December 31, 1997, RSH Management, Inc. ("RSH") held of record 918,312 shares of Common Stock. HERTH owned 98.2% of the outstanding shares of RSH and HERTH's shareholders owned the remaining 1.8% of the outstanding shares of RSH directly. On December 31, 1997, RSH merged into HERTH through a short-form merger motivated by tax considerations. Pursuant to the merger, each outstanding share of RSH was converted into and exchanged for one share in HERTH. On August 12, 1998, Capital Factors, Inc., a South Carolina corporation ("Capital"), distributed to Mr. Edgell 125,000 shares of Common Stock at $21.00 per share in exchange for the cancellation of $2,625,000.00 of indebtedness. On August 12, 1998, Capital was owned 50% by Mr. Edgell and 50% by Mr. Richardson. ITEM 4. PURPOSE OF THE TRANSACTION The Reporting Persons acquired the shares of Common Stock for investment purposes, and the Reporting Persons intend to evaluate the performance of such securities as an investment in the ordinary course of business. The Reporting Persons pursue an investment objective that seeks capital appreciation. In pursuing this investment objective, the Reporting Persons analyze the operations, capital structure and markets of companies in which they invest, including the Company, on a continuous basis through analysis of documentation and discussions with knowledgeable industry and market observers and with representatives of such companies (often at the invitation of management). Each Reporting Person will continuously assess the Company's business financial condition, results of operations and prospects, general economic conditions, the securities market in general and those for the Company's securities in particular, other developments and other investment opportunities. Depending on such assessments, one or more of the Reporting Persons may acquire additional shares of Common Stock or may determine to sell or otherwise dispose of all or some if its holdings of shares of Common Stock. Such actions will depend upon a variety of factors, including, without limitation, current and anticipated future trading prices for such Common Stock, the financial condition, results of operations and prospects of the Company, alternate investment opportunities, and general economic, financial market and industry conditions. The Reporting Persons have no plans or proposals that relate to, or could result in, any of the matters referred to in paragraphs (a) through (j), inclusive, of Item 4 of Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) As of the close of business on March 1, 1999, the Reporting Persons, as a group, beneficially owned, as that term is defined in Rule 13d-3 under the Act, 2,091,332 shares of Common Stock, constituting 32.0% of the outstanding shares. The total number of shares of Common Stock outstanding was 5,914,809 (not including 627,000 shares issuable pursuant to currently exercisable options belonging to five of the individual 14 Reporting Persons which are used in the calculation of the percentage of beneficial ownership) as of January 19, 1999, as reflected in the Company's quarterly report on Form 10-Q filed with the Securities and Exchange Commission for the fiscal quarter ended December 5, 1998. As of the close of business on March 1, 1999, the Reporting Persons beneficially owned, as that term is defined in Rule 13d-3 under the Act, the following shares of Common Stock:
Number of Shares Percentage of Name of Reporting Person Held Outstanding Shares (1) ------------------------ ---- ---------------------- James C. Richardson, Jr. 1,496,691 24.4% David R. Clark 1,560,998 25.2 James M. Templeton 1,336,037 22.3 Gregory A. Edgell 1,399,110 23.5 HERTH Management, Inc. 1,227,235 20.7 Columbia Hill, LLC 1,274,034 21.5 Larry D. Hefner 1,301,034 21.9
(1) Calculated by taking the aggregate amount beneficially owned by the Reporting Person and dividing by the sum of the number of shares outstanding (5,914,809) plus the number of presently exercisable call options belonging to the Reporting Person. Of the shares beneficially owned by the Reporting Persons, the following shares of Common Stock are held pursuant to currently exercisable options under the Company's 1997 Special Stock Option Plan, 1997 Incentive Stock Option Plan and 1987 Special Stock Option Plan:
Currently Options Not Name of Reporting Person Exercisable Options Currently Exercisable ------------------------ ------------------- --------------------- David R. Clark 285,000 30,000 James C. Richardson, Jr. 215,000 -- James M. Templeton 70,000 20,000 Gregory A. Edgell 40,000 -- Larry D. Hefner 17,000 23,000
15 (b) The ownership of each non-individual Reporting Person is as follows:
Percent Reporting Person Ownership Shares of Stock ---------------- --------- --------------- HERTH 1,227,235 Columbia 45% 552,256 Richardson 22 269,992 Edgell 22 269,992 Templeton 11 134,996 --- --------- 100% 1,227,235 COLUMBIA 46,799 Clark 45% 21,060 Richardson 40 18,720 Hefner 15 7,020 --- --------- 100% 46,799
The direct and indirect Common Stock ownership of each Reporting Person, and the power to vote and dispose of the Common Stock, is as follows:
- -------------------- --------------- ---------------------- ---------------------- ----------------- Shares Held Shares Held Shares Held Indirectly through Indirectly through Total Shares Name Directly (1) HERTH (4) Columbia (5) - -------------------- --------------- ---------------------- ---------------------- ----------------- HERTH 1,227,235 -- -- 1,227,235 - -------------------- --------------- ---------------------- ---------------------- ----------------- Columbia 46,799 552,256 -- 599,055 - -------------------- --------------- ---------------------- ---------------------- ----------------- Richardson 7,657 269,992 239,622 215,000 (2) 732,271 - -------------------- --------------- ---------------------- ---------------------- ----------------- Clark 1,964 -- 269,575 285,000 (2) 556,539 - -------------------- --------------- ---------------------- ---------------------- ----------------- Templeton 8,802 134,996 -- 70,000 (2) 243,798 (6) - -------------------- --------------- ---------------------- ---------------------- ----------------- Hefner 10,000 -- 89,858 17,000 (2) 116,858 - -------------------- --------------- ---------------------- ---------------------- ----------------- Edgell 131,250 269,992 -- 625 (3) 40,000 (2) 441,867 - -------------------- --------------- ---------------------- ---------------------- ----------------- Total 2,061,332 1,227,236 599,055 - -------------------- --------------- ---------------------- ---------------------- -----------------
(1) Each Reporting Person has the sole power to vote and dispose of the shares, unless otherwise indicated. (2) Represents shares that the Reporting Person has the option to acquire pursuant to currently exercisable stock options granted pursuant to the Company's 1997 Special Stock Option Plan, 1997 Incentive Stock Option Plan and 1987 Special Stock Option Plan. 16 (3) Shares held by spouse as custodian for minor children. (4) Voting or disposition of HERTH's shares may be done only by the consent of the holders of a majority of its outstanding shares. Beneficial ownership of other than a pro-rata interest in the shares has been disclaimed by each of the shareholders of HERTH. (5) Voting or disposition of Columbia's shares may be done only by the consent of the holders of a majority of its membership interest. Beneficial ownership of other than a pro-rata interest in the shares has been disclaimed by each of the members of Columbia. (6) Mr. Templeton and his family may be deemed the beneficial owners of 30,000 shares through their two-thirds ownership of Catawba Valley Real Eastate, Inc., which owns 30,000 shares of the Company. (c) On August 12, 1998, Capital transferred 125,000 shares of Common Stock at $21.00 per share to Mr. Edgell in exchange for the cancellation of debt owed to Mr. Edgell by Capital. At that time, Capital was owned 50% by Mr. Richardson and 50% by Mr. Edgell. Within the 60 days prior to the August 12, 1998 event, pursuant to which this statement has been filed, HERTH purchased 500 shares at $14 per share on August 7, 1998 and Columbia purchased 4,000 shares at $14 1/8 per share on July 30, 1998 in broker's transactions conducted through Pauli & Company of St. Louis, Missouri. Subsequent to Capital's August 12 transaction, HERTH purchased 4,000 shares at $13 5/8 on August 13, 1998 and an additional 3,500 shares at $13 5/8 on August 17, 1998 in broker's transactions conducted through Pauli & Company. On December 9, 1998 Mr. Templeton purchased 1,000 shares at $6 per share in a broker's transaction. On December 11, 1998, Catawba Valley Real Estate, Inc., two-thirds owned by Mr. Templeton and his immediate family, purchased 20,000 shares at $5.796 per share and an additional 10,000 shares at $5 1/8 on January 19, 1999 through broker's transactions with Peoples Bank in Newton, North Carolina acting as agent. On February 18, 1999, Mr. Edgell purchased 5,000 shares at $5 per share in a broker's transaction. (d) No person, other than the Reporting Persons, is known to have the right to receive or the power to direct the receipt of dividends or proceeds from the sale of the shares of Common Stock held by the Reporting Persons. (e) On December 31, 1997, RSH merged into HERTH and ceased to exist. Pursuant to Rule 13d-4 of the Exchange Act Rules, the Reporting Persons expressly declare that the filing of this statement shall not be construed as an admission that the Reporting Persons are, for the purposes of Section 13(d) of the Act, the beneficial owner of any securities covered by this statement. 17 ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Item 6 is partially amended to add the following: RSH and HERTH entered into a plan of merger whereby RSH merged into HERTH on December 31, 1997. Capital transferred 125,000 shares of Common Stock at $21.00 per share to Mr. Edgell in exchange for cancellation of debt owed by Capital to Mr. Edgell. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 99-1. Articles of Merger of RSH Management, Inc. into HERTH Management, Inc. dated December 31, 1997. Exhibit 99-2. Consent of Directors of HERTH Management, Inc. to Action Without Meeting dated as of December 31, 1997. 18 SIGNATURE After reasonable inquiry and to the best of the undersigned's knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. /s/ JAMES C. RICHARDSON, JR. March 15, 1999 - -------------------------------------- James C. Richardson, Jr. /s/ DAVID R. CLARK March 15, 1999 - -------------------------------------- David R. Clark /s/ GREGORY A. EDGELL March 15, 1999 - -------------------------------------- Gregory A. Edgell /s/ JAMES M. TEMPLETON March 15, 1999 - -------------------------------------- James M. Templeton /s/ LARRY D. HEFNER March 15, 1999 - -------------------------------------- Larry D. Hefner COLUMBIA HILL, LLC By: /s/ DAVID R. CLARK March 15, 1999 ---------------------------------- David R. Clark, Member HERTH MANAGEMENT, INC. By: /s/ JAMES M. TEMPLETON March 15, 1999 ---------------------------------- James M. Templeton, Vice President EX-99.1 2 ARTICLES OF MERGER 1 ARTICLES OF MERGER OF RSH MANAGEMENT, INC. INTO HERTH MANAGEMENT, INC. HERTH MANAGEMENT, INC., a corporation organized under the laws of North Carolina (the "Surviving Corporation"), hereby submits these Articles of Merger for the purpose of merging its subsidiary corporation, RSH Management, Inc., a corporation organized under the laws of North Carolina (the "Merging Corporation") into the surviving corporation: I. The following Plan of Merger was duly approved by the board of directors of the Surviving Corporation in the manner prescribed by law: * * * * * * * * * * * * * * * PLAN OF MERGER A. Corporations Participating in Merger. RSH Management, Inc. (the "Merging Corporation") will merge into HERTH Management, Inc., which will be the surviving corporation (the "Surviving Corporation"). B. Name of Surviving Corporation. After the merger, the Surviving Corporation will have the name "HERTH Management, Inc." 2 C. Merger. The merger of the Merging Corporation into the Surviving Corporation will be effected pursuant to the terms and conditions of this Plan. Upon the merger becoming effective, the corporate existence of the Merging Corporation will cease, and the corporate existence of the Surviving Corporation will continue. The time when the merger becomes effective is hereinafter referred to as the "Effective Time." D. Conversion and Exchange of Shares. At the Effective Time, the outstanding shares of the corporations participating in the merger will be converted and exchanged as follows: 1. Surviving Corporation. The outstanding shares of the Surviving Corporation will not be converted, exchanged, or altered in any manner as a result of the merger and will remain outstanding as shares of the Surviving Corporation. 2. Merging Corporation. Each outstanding share of the Merging Corporation will be converted into and exchanged for one share of the Surviving Corporation. 3. Fractional Shares. No fractional shares will be issued. Any shareholder of the Merging Corporation who would otherwise be entitled to receive five-tenths (.5) or more of a share will instead receive an additional whole share; and any shareholder who would otherwise be entitled to less than five-tenths (.5) of a share will not receive any consideration for such fractional interest. 4. Surrender of Share Certificates. Each holder of a certificate representing shares to be converted or exchanged in the merger will surrender such certificate and after the Effective Time will be entitled to receive in exchange therefor a certificate or certificates representing the number of shares to which he is entitled under 2 3 this Plan. Until so surrendered, each outstanding certificate that prior to the Effective Time represented shares of the Merging Corporation will be deemed for all purposes to evidence ownership of the consideration to be issued for such shares under this Plan. E. Amendments to Articles of Incorporation. The Articles of Incorporation of the Surviving Corporation will not be amended. F. Abandonment. After approval of this Plan by the directors of the Surviving Corporation, and at any time prior to the merger becoming effective, the board of directors of the Surviving Corporation may, in their discretion, abandon the merger. * * * * * * * * * * * * * * * * II. Shareholder approval of the Plan of Merger was not required because the Surviving Corporation was the owner of at least ninety percent (90%) of the outstanding shares of each class of the Merging Corporation and the Plan of Merger does not provide for any changes in the Articles of Incorporation of the Surviving Corporation that require shareholder action. This the 31st day of December, 1997 HERTH MANAGEMENT, INC. By: \s\ JAMES C. RICHARDSON, JR. ---------------------------------------- President James C. Richardson, Jr. 3 EX-99.2 3 CONSENT OF DIRECTORS 1 CONSENT OF DIRECTORS OF HERTH MANAGEMENT, INC. TO ACTION WITHOUT MEETING December 31, 1997 The undersigned, being all of the directors of HERTH Management, Inc., do hereby adopt the following resolution by signing our written consent thereto: Adoption of Plan of Merger RESOLVED, That the Plan of Merger attached hereto be and is hereby adopted as the Plan of Merger of this Corporation, and the Secretary is directed to cause the same to be inserted in the Minute Book; and FURTHER RESOLVED, that the officers of this Corporation are authorized to take all necessary actions and execute all necessary documents in order to consummate this Merger. This action is effective this 31st day of December, 1997. \s\ JAMES C. RICHARDSON, JR. (SEAL) ----------------------------- James C. Richardson, Jr. Director \s\ GREGORY A. EDGELL (SEAL) ----------------------------- Gregory A. Edgell Director \s\ JAMES M. TEMPLETON (SEAL) ----------------------------- James M. Templeton Director 2 PLAN OF MERGER A. Corporations Participating in Merger. RSH Management, Inc. (the "Merging Corporation") will merge into HERTH Management, Inc., which will be the surviving corporation (the "Surviving Corporation"). B. Name of Surviving Corporation. After the merger, the Surviving Corporation will have the name "HERTH Management, Inc." C. Merger. The merger of the Merging Corporation into the Surviving Corporation will be effected pursuant to the terms and conditions of this Plan. Upon the merger becoming effective, the corporate existence of the Merging Corporation will cease, and the corporate existence of the Surviving Corporation will continue. The time when the merger becomes effective is hereinafter referred to as the "Effective Time." D. Conversion and Exchange of Shares. At the Effective Time, the outstanding shares of the corporations participating in the merger will be converted and exchanged as follows: 1. Surviving Corporation. The outstanding shares of the Surviving Corporation will not be converted, exchanged, or altered in any manner as a result of the merger and will remain outstanding as shares of the Surviving Corporation. 2. Merging Corporation. Each outstanding share of the Merging Corporation will be converted into and exchanged for one share of the Surviving Corporation. 3 3. Fractional Shares. No fractional shares will be issued. Any shareholder of the Merging Corporation who would otherwise be entitled to receive five-tenths (.5) or more of a share will instead receive an additional whole share; and any shareholder who would otherwise be entitled to less than five-tenths (.5) of a share will not receive any consideration for such fractional interest. 4. Surrender of Share Certificates. Each holder of a certificate representing shares to be converted or exchanged in the merger will surrender such certificate and after the Effective Time will be entitled to receive in exchange therefor a certificate or certificates representing the number of shares to which he is entitled under this Plan. Until so surrendered, each outstanding certificate that prior to the Effective Time represented shares of the Merging Corporation will be deemed for all purposes to evidence ownership of the consideration to be issued for such shares under this Plan. E. Amendments to Articles of Incorporation. The Articles of Incorporation of the Surviving Corporation will not be amended. F. Abandonment. After approval of this Plan by the directors of the Surviving Corporation, and at any time prior to the merger becoming effective, the board of directors of the Surviving Corporation may, in their discretion, abandon the merger. -----END PRIVACY-ENHANCED MESSAGE-----