<PAGE> 1
As filed with the Securities and Exchange Commission on April 23, 1999.
Registration Statement No. 333-71629
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
RACING CHAMPIONS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
--------------
DELAWARE 36-4088307
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
800 ROOSEVELT ROAD
BUILDING C, SUITE 320
GLEN ELLYN, ILLINOIS 60137
(630) 790-3507
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
ROBERT E. DODS
CHIEF EXECUTIVE OFFICER
RACING CHAMPIONS CORPORATION
800 ROOSEVELT ROAD
BUILDING C, SUITE 320
GLEN ELLYN, ILLINOIS 60137
TELEPHONE (630) 790-3507
FACSIMILE (630) 790-0406
(Name,Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies of communications to:
JAMES M. BEDORE, ESQ.
REINHART, BOERNER, VAN DEUREN,
NORRIS & RIESELBACH, S.C.
1000 NORTH WATER STREET, SUITE 2100
MILWAUKEE, WI 53202
TELEPHONE (414) 298-1000
FACSIMILE (414) 298-8097
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If any of the securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following
box. |_|
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================
TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE PRICE FEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, PAR
VALUE $0.01 PER SHARE 255,863 $13.88 (1) $3,551,379 (1) $ 988 (3)
SHARES (1)(2)
COMMON STOCK, PAR
VALUE $0.01 PER SHARE 273,342 $13.75 (4) $3,758,453 (4) $1,045
SHARES
============================================================================================================
</TABLE>
(1) THESE SHARES OF COMMON STOCK ARE ISSUABLE PURSUANT TO WARRANTS ASSUMED BY
THE REGISTRANT UPON THE CONSUMMATION OF ITS ACQUISITION OF RACING CHAMPIONS
SOUTH, INC. (FORMERLY NAMED WHEELS SPORTS GROUP, INC.). THE PROPOSED
MAXIMUM OFFERING PRICE FOR THE SHARES ISSUABLE PURSUANT TO SUCH WARRANTS
IS, PURSUANT TO RULE 457(G), EQUAL TO THE PRODUCT OF (I) THE EXERCISE PRICE
PER SHARE OF COMMON STOCK ISSUABLE PURSUANT THERETO AND (II) THE AGGREGATE
NUMBER OF SHARES OF COMMON STOCK ISSUABLE PURSUANT THERETO.
(2) PURSUANT TO RULE 416 PROMULGATED UNDER THE ACT, THIS REGISTRATION STATEMENT
COVERS SUCH SHARES AS MAY BE ISSUABLE PURSUANT TO THE ANTIDILUTION
PROVISIONS OF THE WARRANTS.
(3) PREVIOUSLY PAID BY THE REGISTRANT IN CONNECTION WITH THE FILING OF THE
REGISTRATION STATEMENT ON FEBRUARY 2, 1999.
(4) CALCULATED IN ACCORDANCE WITH RULE 457(c) BASED ON THE AVERAGE OF THE HIGH
AND LOW SALES PRICES OF THE COMMON STOCK AS REPORTED ON THE NASDAQ
NATIONAL MARKET ON APRIL 20, 1999, SOLELY FOR PURPOSES OF CALCULATING THE
AMOUNT OF THE REGISTRATION FEE.
--------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 3
PROSPECTUS
[LOGO]
529,205 SHARES OF COMMON STOCK
Racing Champions Corporation is offering 255,863 shares of its Common Stock to
the holders of 1,003,384 Warrants assumed by Racing Champions in connection
with its acquisition of Wheels Sports Group, Inc. The Warrants may be exercised
to purchase a total of 255,863 shares of Racing Champions Common Stock at $13.88
per share.
PER SHARE TOTAL
--------- -----
Exercise Price . . . . . $13.88 $3,551,379
Certain stockholders of Racing Champions are offering for sale up to 273,342
shares of Racing Champions common stock. Because these shares will be sold by
the selling stockholders, Racing Champions will not receive any proceeds from
the sale of these shares.
The selling stockholders have not advised Racing Champions of any specific
plans they have for the distribution of their shares covered by this
Prospectus. Racing Champions anticipates that the selling stockholders will
sell the shares from time to time primarily in transactions (which may include
block transactions) on the Nasdaq National Market at the market price then
prevailing. However, the selling stockholders may also make sales in
negotiated transactions or otherwise. The selling stockholders and the brokers
and dealers which may sell the shares on behalf of the selling stockholders may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933,
as amended, and their commissions or discounts and other compensation may be
regarded as underwriters' compensation.
We are the leading producer and marketer of die-cast racing replicas sold at
more than 20,000 North American retail outlets. We have leveraged this
leadership position and our relationship with NASCAR to market an extensive line
of NASCAR collectibles, which includes Press Pass trading cards in addition to
die-cast racing replicas, as well as NASCAR apparel and souvenirs. Building on
our proven retail strategies, and our leading-edge design and manufacturing
capabilities, we have also broadened our offering of die-cast collectibles to
include high-profile, licensed vehicle replicas on behalf of World Championship
Wrestling and Sony "Signature" performers.
Shares of Racing Champions Common Stock are traded on the Nasdaq National
Market. We urge you to obtain current market prices before purchasing shares of
Racing Champions Common Stock.
Trading Symbol on Nasdaq National Market: RACN
Last Sale Price on April 20, 1999: $14.00 per share
----------------------------
Consider carefully the risk factors beginning on page 3 of this Prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
----------------------------
___________, 1999
<PAGE> 4
PROSPECTUS SUMMARY
This summary highlights selected information from this document and
from the documents that we incorporate by reference. For a more complete
description of the offering and Racing Champions, you should read carefully this
entire document and the documents to which we have referred you. See "Where You
Can Find More Information" (page 10).
RACING CHAMPIONS CORPORATION
800 Roosevelt Road
Building C, Suite 320
Glen Ellyn, IL 60137
(630) 790-3507
We are the leading producer and marketer of die-cast racing replicas sold at
more than 20,000 North American retail outlets. We have leveraged this
leadership position and our relationship with NASCAR to market an extensive line
of NASCAR collectibles, which includes Press Pass trading cards in addition to
die-cast racing replicas, as well as NASCAR apparel and souvenirs. Building on
our proven retail strategies, and our leading-edge design and manufacturing
capabilities, we have also broadened our offering of die-cast collectibles to
include high-profile, licensed vehicle replicas on behalf of World Championship
Wrestling and Sony "Signature" performers.
Since our inception in 1989, Racing Champions has capitalized on the growing
popularity of motor sports by offering an expanding line of high quality,
affordable racing replicas targeted toward racing fans and adult collectors.
Beginning in 1996, Racing Champions successfully expanded into classic and
custom vehicle collectibles by introducing the Racing Champions Mint(TM) line of
high quality die cast replicas of classic and late-model vehicles. Racing
Champions continued this expansion in 1997 by introducing additional lines of
classic and custom vehicle replicas and two new lines of collectible pewter
figures. In 1998, we introduced a new line of die-cast vehicle replicas sold
exclusively at hobby and collector shops and a new line of collectible pewter
figures.
In June 1998, we completed the acquisition of Wheels Sports Group, Inc., which
was subsequently renamed Racing Champions South, Inc. Racing Champions South
markets and distributes souvenirs, apparel and collectible sports trading cards,
primarily for the NASCAR market.
THE OFFERING
The Warrants. Racing Champions is offering up to 255,863 shares of its Common
Stock to the holders of the Warrants. The Warrants were originally issued by
Racing Champions South in April 1997 in connection with its initial public
offering. Racing Champions assumed the Warrants in June 1998 upon the completion
of Racing Champions' acquisition of Racing Champions South. Two Warrants may be
exercised to purchase 0.51 shares of Racing Champions Common Stock at an
exercise price of $13.88 per share. The Warrants expire on April 16, 2002.
Racing Champions may redeem the Warrants if the average closing bid price of
Racing Champions Common Stock exceeds $17.35 over a 20 trading day period
preceding the notice of redemption. The redemption price is $0.05 per Warrant.
See "Plan of Distribution" on page 8 for a more complete description of the
Warrants.
The Selling Stockholders. The selling stockholders are offering for sale up to
273,342 shares of Racing Champions common stock. Because these shares will be
sold by the selling stockholders, Racing Champions will not receive any
proceeds from the sale of these shares. For more information on the selling
stockholders, please refer to "Selling Stockholders" on page 8 and "Plan of
Distribution" on page 8.
FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
We have made forward-looking statements in this document, and in documents that
we incorporate by reference, that are subject to risks and uncertainties.
Forward-looking statements include the information concerning possible or
assumed future results of operations of Racing Champions. When we use words such
as "believes," "expects," "anticipates" or similar expressions, we are making
forward-looking statements.
You should note that many factors, some of which are discussed elsewhere in this
document and in the documents that we incorporate by reference, could affect the
future financial results of Racing Champions and could cause those results to
differ materially from those expressed in our forward-looking statements
contained or incorporated by reference in this document. These factors include
those discussed under the caption "Risk Factors" starting on page 3.
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<PAGE> 5
RISK FACTORS
Before purchasing our stock, you should carefully consider the
following risk factors and the other information contained in this Prospectus.
CONSUMER ACCEPTANCE OF PRODUCTS
Rapidly changing consumer preferences may affect the markets for Racing
Champions' products. Racing Champions' historical growth has been based in part
on the growing interest in racing and motor sports and the evolution of the
preferences of racing enthusiasts and collectors toward Racing Champions'
products. A decline in the popularity of racing and motor sports or a change in
consumer preferences could have a material adverse effect on Racing Champions.
Racing Champions' future growth will depend in large part upon its ability to
continue to conceive, design, source and market new products and upon continuing
market acceptance of its existing and future products. Any significant delays in
the introduction of, or the failure to introduce, new products or additions to
its existing product lines or the failure of Racing Champions' existing or
future products to maintain or receive market acceptance could have a material
adverse effect on the business, results of operations or financial condition of
Racing Champions.
COMPETITION
Racing Champions operates in highly competitive markets. Racing
Champions competes with several larger domestic and foreign companies, such as
Mattel, Inc., Hasbro, Inc. and Action Performance Companies, Inc., and with
other producers of racing and non-racing vehicle replicas. Racing Champions also
competes with domestic and foreign producers of scaled die cast toy vehicles.
Racing Champions' collectible sports trading cards compete with full line
collectible sports trading card companies, primarily Upper Deck, and with
several smaller companies with more limited product lines. Many of Racing
Champions' competitors have greater financial, technical, marketing and other
resources than Racing Champions. There can be no assurance that Racing Champions
will be able to continue to compete successfully in the future.
DEPENDENCE ON LICENSING ARRANGEMENTS
Racing Champions markets virtually all of its products under licenses
from other parties. For example, Racing Champions markets its racing replicas
and other NASCAR souvenirs and merchandise pursuant to licensing arrangements
with race team owners, drivers, sponsors, agents, vehicle manufacturers and
major racing series sanctioning bodies. Racing Champions markets its collectible
figures pursuant to licensing arrangements with popular sports figures, creators
of certain comic book characters and owners of major entertainment properties.
These licensing arrangements are generally limited in scope and duration and
generally authorize the sale of specific licensed products on a nonexclusive
basis for a limited period of time. Any termination, cancellation or inability
to renew certain of Racing Champions' existing licensing arrangements, or the
inability to develop and enter into new licensing arrangements, could have a
material adverse effect on the business, results of operations or financial
condition of Racing Champions.
Increased competition among manufacturers for licenses could require
Racing Champions to pay licensors higher royalties and higher minimum guaranteed
payments in the future in order to obtain or retain attractive properties for
development of existing and new
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<PAGE> 6
product lines. This increased competition could have an adverse effect on the
profitability of these licenses. In addition, exclusive or other licensing
arrangements granted to competitors or other parties could limit Racing
Champions' future ability to produce replicas of certain characters, athletes,
vehicles, drivers and sponsors, including replicas of vehicles or entities
currently being produced. For example, competitors currently have licenses with
Dale Earnhardt, Jeff Gordon and other popular drivers which restrict Racing
Champions' ability to produce replicas of these drivers' racing vehicles.
RELIANCE ON KEY SUPPLIERS
Racing Champions depends upon independently owned factories located in
China to manufacture its racing replicas and certain other products. Any
difficulties encountered by the independent manufacturers which result in
product defects, production delays, cost overruns or the inability to fulfill
orders on a timely basis could have a material adverse effect on the business,
results of operations or financial condition of Racing Champions. Any
significant accident, labor dispute or other disruption at one or more of these
factories also could adversely affect Racing Champions' business, results of
operations or financial condition.
RISKS OF FOREIGN MANUFACTURING
Racing Champions' reliance on foreign manufacturing subjects it to
numerous risks, including the following: fluctuations in currency exchange
rates; economic and political instability; restrictive actions by foreign
governments; the laws and policies of the United States affecting the
importation of goods (including duties, quotas and taxes); and trade and foreign
tax laws.
Substantially all of Racing Champions' products are subject to United
States duties and regulations pertaining to the importation of goods. Currently,
Racing Champion imports the majority of its products duty free. The United
States may, from time to time, impose new duties, tariffs, quotas or other
charges or restrictions, or adjust presently prevailing quotas, duties or tariff
levies, which could adversely affect Racing Champions' business, financial
condition or results of operations or its ability to continue to import products
at current or increased levels. From time to time, Racing Champions may also be
involved in disputes with the United States Customs Service regarding the amount
of duty to be paid, the value of merchandise to be reported or other customs
regulations with respect to certain of Racing Champions' imports, which may
result in the payment of additional duties and/or penalties. Racing Champions
cannot predict what regulatory changes may occur or the type or amount of any
financial impact on Racing Champions which those changes may have in the future.
TRADING STATUS OF CHINA
Racing Champions' racing replicas and certain other products are
manufactured in China. Currently, China has "Most Favored Nation" status and
generally is not subject to discriminatory United States duties. The United
States most recently renewed China's "Most Favored Nation" status in June of
1998. China's trading status is reviewed on an annual basis and each renewal may
involve a review by the United States government of various commercial and legal
practices widespread in China, including the handling of intellectual
properties. Accordingly, the duty treatment of goods imported from China is
subject to political uncertainties. To the extent China ceases to have "Most
Favored Nation" status or its exports become subject to political retaliation,
the cost of importing products from China could increase significantly. Racing
Champions could also be subject to the imposition of retaliatory tariffs or
other import restrictions such as
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quotas as a result of a trade dispute between China and the United States. These
increased tariffs or other restrictions could be imposed whether or not the
trade dispute itself involves products of the type imported by Racing Champions.
Such increased tariffs or other trade restrictions could also have a material
adverse effect on the business, results of operations or financial condition of
Racing Champions.
RISKS RELATING TO HONG KONG
Racing Champions conducts operations in Hong Kong through its Hong Kong
subsidiary. On July 1, 1997, sovereignty over Hong Kong was transferred from the
United Kingdom to China, and Hong Kong became a Special Administrative Region of
China. At the present time, Racing Champions is unable to predict the effect, if
any, that such change will have on Racing Champions' business, financial
condition or results of operations.
FOREIGN CURRENCY RISK
Racing Champions' sales are denominated in U.S. dollars. Racing
Champions' purchases of finished goods from the Chinese manufacturers are
denominated in Hong Kong dollars. Expenses for these manufacturers are often
denominated in Chinese Renminbi. Racing Champions is subject to a variety of
risks associated with changes among the relative values of the U.S. dollar, the
Hong Kong dollar and Renminbi. Any material increase in the value of the Hong
Kong dollar or Renminbi relative to the U.S. dollar would increase Racing
Champions' expenses and therefore could have a material adverse effect on Racing
Champions. Since 1983, the Hong Kong government has maintained a policy of
linking the U.S. dollar and the Hong Kong dollar. There can be no assurance that
this link will be continued, although Racing Champions is not aware of any
intention of the Hong Kong government or China to abandon the link. There has
been significant volatility in the exchange rates of Renminbi to U.S. dollars in
recent years. Over the last five years, the Renminbi has experienced significant
devaluation against most major currencies. Racing Champions does not hedge
foreign currency risk.
DEPENDENCE ON SIGNIFICANT CUSTOMERS; CONCENTRATION OF ACCOUNTS RECEIVABLE
Racing Champions' success is, in part, dependent upon the continuing
willingness of leading retailers to purchase and provide shelf space for Racing
Champions' products. Racing Champions does not have long-term contracts with its
customers. An adverse change in Racing Champions' relationship with or the
financial viability of one or more of its customers could have a material
adverse effect on Racing Champions. In addition, certain of these retailers
generally purchase large quantities of Racing Champions' products on credit,
which may cause a concentration of accounts receivable among some of Racing
Champions' largest customers. Any inability or unwillingness to pay these
accounts receivable when due by one or more of Racing Champions' largest
customers could adversely affect Racing Champions' financial condition. Although
Racing Champions maintains credit insurance to reduce the risk associated with
the accounts receivable from 22 of its major customers, the amount of this
insurance generally does not cover the total amount of the accounts receivable
from any particular customer.
RELIANCE ON KEY PERSONNEL
Racing Champions relies heavily on its senior managers, including its
founders, Robert E. Dods, Boyd L. Meyer and Peter K.K. Chung. Although Racing
Champions has entered into an employment agreement with each of the founders
that extends through April 30, 2001, there can be no assurance that Racing
Champions will be able to retain them or its other
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key employees in the future. The loss of the services of any of the founders
could have a material adverse effect on Racing Champions. Racing Champions
maintains a $2,000,000 key man life insurance policy on each of the founders.
SEASONAL PRODUCT DEVELOPMENT AND SALES
Racing Champions generally must adjust the styles of its racing
replicas and its other NASCAR racing products each year to accurately reflect
the various vehicles competing in NASCAR. Generally in the fourth quarter,
Racing Champions commences this process of product development for the coming
year by obtaining information about new race cars. From that point until the
release date of the particular racing product during the racing season, Racing
Champions, along with its Hong Kong subsidiary and the manufacturers, must
complete the production process, including the design of prototypes for the new
products, the production of new tooling, if any, and the manufacture of the
products, and deliver the products to retailers. Any inability by Racing
Champions to deliver the new racing products to retailers by the start of the
racing season could have a material adverse effect on Racing Champions. Racing
Champions' sales are also seasonal, with approximately 60% of Racing Champions'
net sales on average over the two fiscal years ended December 31, 1998,
occurring during the second and third quarters.
PRODUCT LIABILITY AND OTHER CLAIMS
Racing Champions faces product liability risks relating to the use of
Racing Champions' products. Although Racing Champions has not experienced any
material product liability costs or claims, Racing Champions carries a policy of
product liability insurance against such contingencies. Racing Champions may
also be subject to other legal claims, such as unfair competition or trademark
infringement. Any legal claims, if brought, could materially adversely affect
the business or financial condition of Racing Champions.
CONTROL BY PRINCIPAL STOCKHOLDERS
The executive officers and directors of Racing Champions collectively
beneficially own approximately 45.2% of the outstanding shares of Racing
Champions Common Stock (including 3,032,680 shares of Racing Champions Common
Stock as to which certain directors of Racing Champions have shared voting and
investment power). This share ownership would permit these stockholders, if they
chose to act together, to control the election of Racing Champions' directors
and other actions requiring stockholder approval.
POSSIBLE VOLATILITY OF STOCK PRICE
The stock market has in the past experienced price and volume
fluctuations that have at times been unrelated to corporate operating
performance. Such market volatility may adversely affect the market price of
shares of Racing Champions Common Stock. Other factors, such as fluctuations in
quarterly operating results, changes in trade policy between China and the
United States and evolving business prospects of Racing Champions' customers and
competitors, also could cause the market price of shares of Racing Champions
Common Stock to fluctuate substantially.
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DIVIDEND POLICY
Racing Champions currently anticipates that all of its earnings will be
retained for development and expansion of Racing Champions' business and does
not anticipate paying any cash dividends on shares of Racing Champions Common
Stock in the foreseeable future.
GOVERNMENT REGULATION
Racing Champions is subject to numerous federal and state health,
safety, tax and other regulations. No assurance can by given that current
government regulations or future regulatory changes will not adversely affect
Racing Champions. In addition, certain of Racing Champions' tax positions could
be subject to examination and challenge by the Internal Revenue Service.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of Racing Champions Common Stock in the
public market could adversely affect the market price of Racing Champions Common
Stock. As of March 26, 1999, 16,085,997 shares of Racing Champions Common
Stock were outstanding. All of these shares are freely tradable in the market,
except for shares held by "affiliates" of Racing Champions which are subject to
the resale limitations (excluding the holding period requirement) of Rule 144
under the Securities Act and shares of Racing Champions Common Stock received by
certain persons deemed to be affiliates of Racing Champions South prior to its
acquisition by Racing Champions which are subject to the restrictions imposed by
Rules 144 and 145 under the Securities Act.
CERTAIN ANTI-TAKEOVER PROVISIONS
Certain provisions of Racing Champions' Certificate of Incorporation
and By-Laws and of the Delaware General Corporation Law could discourage
potential acquisition proposals and delay or prevent a change in control of
Racing Champions. These provisions could diminish the opportunities for a
stockholder to participate in potential premiums associated with tender offers
or other acquisitions of Racing Champions or Racing Champions Common Stock.
These provisions include certain advance notice procedures for nominations of
candidates for election as directors and for stockholder proposals to be
considered at stockholders' meetings. In addition, the Delaware anti-takeover
statute could delay or prevent consummation of an acquisition transaction
between Racing Champions and certain significant stockholders if the Racing
Champions Board does not approve such acquisition transaction in advance.
RECENT DEVELOPMENTS
On April 13, 1999, Racing Champions completed its acquisition (the
"Ertl Acquisition") of The Ertl Company, Inc. ("Ertl") and certain of Ertl's
foreign affiliates. Ertl manufactures, markets and distributes agricultural,
imprint die-cast collectibles and hobby model kits. The Ertl Acquisition was
consummated through the purchase by certain of Racing Champions' subsidiaries
of the stock of Ertl and the stock of Ertl's affiliates in the United Kingdom,
Mexico, Hong Kong and Italy and the purchase of certain assets and assumption
of certain liabilities of Ertl's affiliate in Canada. The purchase price for
the Ertl Acquisition was $104.5 million in cash, which is subject to
post-closing adjustment based upon the net worth of the acquired business
immediately prior to closing. In connection with the Ertl Acquisition, Racing
Champions and certain of its subsidiaries entered into a Credit Agreement with
First Union National Bank, as lender and agent, and certain other lenders named
therein (the "Credit Agreement"). The Credit Agreement provides Racing
Champions with a revolving credit facility of up to $60,000,000 and a term loan
of $115,000,000. On April 13, 1999, the Company borrowed approximately $139.3
million pursuant to the Credit Agreement, of which approximately $104.5 million
was used to fund the Ertl Acquisition.
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USE OF PROCEEDS
If the Warrants are exercised in full, Racing Champions will receive
aggregate proceeds in the amount of approximately $3,551,779, before deducting
estimated expenses of approximately $19,033. Racing Champions anticipates that
it will use any proceeds from the exercise of the Warrants for general corporate
purposes. Racing Champions will not receive any proceeds from the sale of the
shares of Racing Champions Common Stock offered by the selling stockholders.
SELLING STOCKHOLDERS
The selling stockholders are offering 273,342 shares of Racing
Champions common stock for sale pursuant to this Prospectus. Additional
information with respect to the selling stockholders follows.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK SHARES OFFERED SHARES TO BE OWNED
OWNED PRIOR TO OFFERING FOR SALE HEREBY AFTER THE OFFERING*
----------------------- --------------- -------------------
NUMBER PERCENT
------ -------
<S> <C> <C> <C> <C>
Indosuez CM II, Inc. 259,773(1) 259,773(1) - -
Nicholas J. Moceri 2,048(2) 2,048(2) - -
Scott B. Olson 11,521(2) 11,521(2) - -
</TABLE>
*Assumes sale of all shares offered hereby.
(1) Represents shares of Racing Champions Common Stock which will be received
by the selling stockholder upon exercise of outstanding warrants issued to
the selling stockholder on December 31, 1997 by Racing Champions South and
assumed by Racing Champions on June 12, 1998 in connection with the
acquisition of Racing Champions South. The warrants are exercisable at
$6.86 per share. The warrants were issued to the selling stockholder by
Racing Champions South in connection with the establishment of a credit
facility consisting of a term loan of $7.7 million and up to $10 million
in revolving loans. All obligations under this facility were paid in June
1998.
(2) Represents shares of Racing Champions Common Stock which will be received
by the selling stockholders upon exercise of outstanding warrants issued to
the selling stockholders on April 16, 1997 by Racing Champions South and
assumed by Racing Champions on June 12, 1998 in connection with the
acquisition of Racing Champions South. Certain of the warrants are
exercisable to purchase shares of Racing Champions Common Stock at $16.77
per share and certain of the warrants are exercisable to purchase Warrants
at $0.145 per Warrant (with the Warrants exercisable to purchase shares of
Racing Champions Common Stock at $13.88 per share). The warrants were
issued to the lead underwriter in Racing Champions South's initial public
offering and subsequently transferred to the selling stockholders.
PLAN OF DISTRIBUTION
The Selling Stockholders. The selling stockholders may, without
limitation and from time to time, sell all or a portion of their shares of
Racing Champions Common Stock being registered hereunder (the "Shares") on any
stock exchange, market or trading facility on which the Shares are traded, at
market prices prevailing at the time of sale, fixed prices or at negotiated
prices. The Shares may, without limitation, be sold by the selling stockholders
by one or more of the following methods:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer engaged by any of the selling
stockholders will attempt to sell the Shares as agent for such selling
stockholder but may position and resell a portion of the block as
principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its account;
- privately negotiated transactions;
- in accordance with Rule 144 promulgated under the Securities Act of
1933, as amended, rather than pursuant to this prospectus;
- a combination of any such methods of sale; or
- any other method permitted pursuant to applicable law.
From time to time the selling stockholders may pledge their Shares
pursuant to the margin provisions of the selling stockholder's customer
agreements with its brokers. Upon a default by such a selling stockholder, the
broker may, from time to time, offer and sell the pledged Shares.
In effecting sales, brokers-dealers engaged by the selling
stockholders may arrange for other broker-dealers to participate in such sales.
Brokers-dealers may receive commissions or discounts from the selling
stockholders (or, if any such broker-dealer acts as agent for the purchase of
such Shares, from such purchaser) in amounts to be negotiated which are not
expected to exceed those customary in the types of transactions involved.
Broker-dealers may agree with the selling stockholders to sell a specified
number of Shares at a stipulated price per share, and, to the extent such
broker-dealer is unable to do so acting as agent for the selling stockholders,
to purchase as principal any unsold Shares at the price required to fulfill the
broker-dealer commitment to the selling stockholders.
The selling stockholders and any broker-dealers or agents that
participate with the selling stockholders in sales of the Shares may be deemed
to be "underwriters" within the meaning of the Securities Act in connection with
such sales. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
Racing Champions is required to pay all fees and expenses incident to
the registration of the Shares, other than the fees and disbursements of counsel
to the selling stockholders and underwriting discounts or commissions, if any.
Additionally, Racing Champions has agreed to indemnify the selling stockholders
from certain liabilities in connection with the offering, including liabilities
under the federal securities laws.
THE WARRANTS. Racing Champions will issue 255,863 of the shares of
Racing Champions Common Stock offered hereby upon exercise of the Warrants. We
have summarized below certain terms of the Warrants relevant to exercise.
The following description of certain terms of the Warrants does not
purport to be complete and is qualified in its entirety by reference to the
terms of the Warrants and the terms of a Warrant Agreement between the Company
and BankBoston, N.A. (the "Warrant Agent"). A copy of the form of the Warrants
and the Warrant Agreement have been filed with the Securities and Exchange
Commission. See "Where You Can Find More Information" at page 10.
EXERCISE PRICE AND TERMS. Two Warrants entitle the holder to purchase
0.51 shares of Racing Champions Common Stock at an exercise price of $13.88 per
share. The Warrants may not be exercised after 5:00 p.m., Central Time, on April
16, 2002. Racing Champions has authorized and reserved for issuance the shares
of Racing Champions Common Stock issuable on exercise of the Warrants. The
Warrants are exercisable to purchase a total of 255,863 shares of Racing
Champions Common Stock.
ADJUSTMENTS. The Warrant exercise price and the number of shares of
Racing Champions Common Stock purchasable upon exercise of the Warrants are
subject to adjustment in the event of, among other events, a stock dividend on,
or a subdivision, recapitalization or reorganization of, the Racing Champions
Common Stock, or the merger or consolidation of Racing Champions with or into
another corporation or business entity.
REDEMPTION PROVISIONS. Racing Champions, in its discretion, may redeem
outstanding Warrants, in whole but not in part, upon not less than 30 days'
notice, at a price of $.05 per Warrant, provided that the closing bid price of
the Racing Champions Common Stock equals or exceeds $17.35 for 20 consecutive
trading days. The redemption notice must be provided not more than five business
days after conclusion of the 20 consecutive trading days in which the closing
bid price of the Common Stock equals or exceeds $17.35 per share. In the event
Racing Champions exercises its right to redeem the Warrants, the Warrants will
be exercisable until the close of business on the date fixed for redemption in
such notice. If any Warrant called for redemption is not exercised by such time,
it will cease to be exercisable and the holder thereof will be entitled only to
the redemption price.
Racing Champions must have on file a current registration statement
with the Securities and Exchange Commission pertaining to the Racing Champions
Common Stock underlying the Warrants in order for a holder to exercise the
Warrants or in order for the Warrants to be redeemed by the Company. The shares
underlying the Warrants must also be registered or qualified for sale under the
securities laws of the state in which the Warrant holder resides. Racing
Champions intends to use its best efforts to keep the Registration Statement
incorporating this Prospectus current, but there can be no assurance that such
Registration Statement (or any other registration statement filed by Racing
Champions covering shares underlying the Warrants)
8
<PAGE> 11
can be kept current. In the event the Registration Statement covering the
underlying Racing Champions Common Stock is not kept current, or if the Racing
Champions Common Stock underlying the Warrants is not registered or qualified
for sale in the state in which a Warrant holder resides, the Warrants may be
deprived of any value.
EXERCISE. The Warrants may be exercised upon surrender of the
certificate representing such Warrants on or prior to the expiration date (or
earlier redemption date) of such Warrants at the offices of the Warrant Agent
with the form of "election to Purchase" on the reverse side of the Warrant
certificate completed and executed as indicated, accompanied by payment of the
full exercise price by check payable to the order of Racing Champions for the
number of Warrants being exercised. Shares of Racing Champions Common Stock
issued upon exercise of Warrants for which payment has been received in
accordance with the terms of the Warrants will be fully paid and nonassessable.
Racing Champions is not required to issue any fractional shares of Racing
Champions Common Stock upon the exercise of Warrants or upon the occurrence of
adjustments pursuant to anti-dilution provisions. Racing Champions will pay to
holders of fractional interests an amount equal to the cash value of such
fractional interests based upon the then-current market price of a share of
Racing Champions Common Stock.
WARRANT HOLDER NOT A STOCKHOLDER. The Warrants do not confer upon the
Warrant holder any voting or other rights of a stockholder of Racing Champions.
Upon notice to the Warrant holders, the Company has the right to reduce the
exercise price or extend the expiration date of the Warrants. Although this
right is intended to benefit Warrant holders, to the extent Racing Champions
exercises this right when the Warrants would otherwise be exercisable at a price
higher than the prevailing market price of the Racing Champions Common Stock,
the likelihood of exercise, and resultant increase in the number of shares
outstanding, may impede or make more costly a change in control of Racing
Champions.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
the Company by Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.,
Milwaukee, Wisconsin.
EXPERTS
The financial statements and schedule of Racing Champions at December
31, 1997 and 1998 and the years ended December 31, 1996, 1997 and 1998
incorporated into this Prospectus and Registration Statement by reference to
Racing Champions' Annual Report on Form 10-K have been audited by Arthur
Andersen LLP, independent public accountants, as set forth in their reports
thereon appearing therein, and are incorporated herein in reliance upon such
reports given upon the authority of such firm as experts in giving said reports.
9
<PAGE> 12
WHERE YOU CAN FIND MORE INFORMATION
Racing Champions files annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). You may read and copy any such reports, statements or other
information at the Commission's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the Commission at
1-800-SEC-0330 for further information on the public reference rooms. Racing
Champions' Commission filings are also available to the public from commercial
document retrieval services and at the world wide web site maintained by the
Commission at "http://www.sec.gov."
Racing Champions has filed a Registration Statement on Form S-3 (the
"Registration Statement") to register with the Commission the Common Stock
pursuant to this prospectus. This Prospectus is a part of the Registration
Statement. As allowed by Commission rules, this Prospectus does not contain all
the information you can find in the Registration Statement or the exhibits to
the Registration Statement, which are incorporated herein by reference.
The Commission allows us to "incorporate by reference" information into
this Prospectus, which means that we can disclose important information to you
by referring you to another document filed separately with the Commission. The
information that we incorporate by
10
<PAGE> 13
reference is deemed to be part of this Prospectus, except for any information
superseded by information in this Prospectus. This Prospectus incorporates by
reference the documents set forth below that Racing Champions has previously
filed with the Commission. These documents contain important information about
Racing Champions and its finances.
<TABLE>
<CAPTION>
RACING CHAMPIONS COMMISSION FILINGS PERIOD
----------------------------------- ------
<S> <C> <C>
Annual Report on Form 10-K Year ended December 31, 1998
Description of the Common
Stock set forth in Racing Champions'
Registration Statement pursuant to Section 12 of
the Exchange Act
</TABLE>
Racing Champions also is incorporating by reference all additional
documents that it will file with the Commission between the date of this
Prospectus and the termination of the offering.
Documents which Racing Champions incorporates by reference are
available from Racing Champions without charge, excluding all exhibits unless
Racing Champions has specifically incorporated by reference an exhibit in this
Prospectus. Warrant holders may obtain documents incorporated by reference in
this Prospectus by requesting them in writing or by telephone from Racing
Champions at the following address:
Racing Champions Corporation
800 Roosevelt Road
Building C, Suite 320
Glen Ellyn, IL 60137
Attention: Corporate Secretary
(630) 790-3507
11
<PAGE> 14
===============================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED BY THE
COMPANY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MAY NOT BE RELIED UPON.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF RACING CHAMPIONS SINCE ANY OF THE DATES AS OF WHICH INFORMATION IS
FURNISHED OR SINCE THE DATE OF THIS PROSPECTUS.
TABLE OF CONTENTS
Page
Summary.......................................2
Risk Factors..................................3
Recent Developments...........................7
Use of Proceeds...............................8
Selling Stockholders..........................8
Plan of Distribution..........................8
Legal Matters.................................9
Experts.......................................9
Where You Can Find More
Information.................................10
==============================================================================
[LOGO]
529,205 SHARES OF COMMON STOCK
--------------------------------
PROSPECTUS
-------------------------------
_______, 1999
===============================================================================
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the offering are as follows:
<TABLE>
<CAPTION>
Item Amount
---- ------
<S> <C>
Registration fee.................................................. $ 2,033
Printing and engraving expenses................................... 1,000
Legal fees and expenses........................................... 10,000
Accounting fees and expenses...................................... 5,000
Miscellaneous expenses............................................ 1,000
-------
Total............................................... $19,033
=======
</TABLE>
- ----------
All of the above expenses will be paid by the Company.
Item 15. Indemnification of Directors and Officers.
Set forth below is a description of certain provisions of the Amended
and Restated Certificate of Incorporation (the "Certificate of Incorporation")
of Racing Champions Corporation (the "Company"), the Amended and Restated
By-Laws of the Company (the "By-Laws") and the Delaware General Corporation Law
("DGCL"). This description is qualified in its entirety by reference to the
Certificate of Incorporation, the By-Laws and the DGCL.
The Certificate of Incorporation provides that, to the full extent
provided by law, a director will not be personally liable to the Company or its
stockholders for or with respect to any acts or omissions in the performance of
his or her duties as a director. The DGCL provides that a corporation may limit
or eliminate a director's personal liability for monetary damages to the
corporation or its stockholders, except for liability (i) for any breach of the
director's duty of loyalty to such corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for paying a dividend or approving a stock
repurchase in violation of section 174 of the DGCL or (iv) with respect to any
transaction from which the director derived an improper personal benefit.
Under the DGCL, directors and officers as well as other employees and
individuals may be indemnified against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation as a
derivative action) if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interest of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe their conduct was unlawful. With respect to actions by or in the right
of the corporation as a derivative action, section 145 of the DGCL provides that
a corporation may indemnify directors, officers and other persons as described
above, except if such person has been adjudged to be liable to the corporation,
unless the court in which such action or suit was brought determines in view of
all of the circumstances of the case that such person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
Article V of the By-Laws provides for the mandatory indemnification of
directors, officers, employees or agents of the Company to the full extent
permitted by the DGCL. The By-Laws also contain a nonexclusivity clause which
provides in substance that the indemnification rights under the
II-1
<PAGE> 16
Amended and Restated By-Laws shall not be deemed exclusive of any other rights
to which those seeking indemnification may be entitled under any agreement with
the Company, any By-Law or otherwise.
The DGCL permits and Article V of the By-Laws authorizes the Company to
purchase and maintain insurance on behalf of any director, officer, employee or
agent of the Company against any liability asserted against or incurred by them
in such capacity or arising out of their status as such whether or not the
Company would have the power to indemnify such director, officer, employee or
agent against such liability under the applicable provisions of the DGCL, the
Certificate of Incorporation or the By-Laws.
The general effect of the foregoing provisions is to reduce the
circumstances in which an officer or director may be required to bear the
economic burdens of the foregoing liabilities and expenses.
Item 16. Exhibits. The following exhibits are filed as part of this
Registration Statement.
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the Company. (1)
3.2 First Amendment to Amended and Restated Certificate of Incorporation of the Company.
(1)
3.2 Amended and Restated By-Laws. (2)
5 Opinion of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c. (included in its opinion filed as
Exhibit 5 hereto)
24 Power of Attorney. (3)
</TABLE>
- ----------------------
(1) Filed on March 29, 1999 as an exhibit to the Company's Annual
Report on Form 10-K for the year ended December 31, 1998 (File No.
0-22635) and incorporated herein by reference.
(2) Filed on August 13, 1998 as an exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1998 (File No.
0-22635) and incorporated herein by reference.
(3) Previously filed.
II-2
<PAGE> 17
Item 17. Undertakings.
The undersigned registrant undertakes as follows:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this registration
statement to:
(i) Include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) Reflect in the prospectus any facts or
events arising after the effective date of the registration statement for the
most recent post-effective amendment thereof which, individually or together,
represent a fundamental change in the information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) Include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do
not apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated in the registration statement.
(2) That, for determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses incurred or paid by a
director,
II-3
<PAGE> 18
officer of controlling person of the small business issuer in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
small business issuer will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 19
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and authorized this Pre-Effective
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, in the City of Glen Ellyn, State of Illinois on the 23rd day of
April, 1999.
RACING CHAMPIONS CORPORATION
BY /s/ Robert E. Dods
------------------------------------------
Robert E. Dods, Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Pre-
Effective Amendment No. 1 to Registration Statement has been signed by the
following persons on behalf of the Registrant in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Robert E. Dods Chief Executive Officer and Director April 23, 1999
- --------------------------------- (Principal Executive Officer)
Robert E. Dods
* President and Director April 23, 1999
- ---------------------------------
Boyd L. Meyer
* Director April 23, 1999
- ---------------------------------
Peter K.K. Chung
* Director April 23, 1999
- ---------------------------------
Samuel B. Guren
* Director April 23, 1999
- -----------------------------------
Avy H. Stein
* Director April 23, 1999
- ----------------------------------
Daniel M. Gill
* Director April 23, 1999
- -----------------------------------
John S. Bakalar
* Director April 23, 1999
- ----------------------------------
John J. Vosicky
</TABLE>
II-5
<PAGE> 20
<TABLE>
<CAPTION>
<S> <C> <C>
* Director April 23, 1999
- ----------------------------------
Victor H. Shaffer
/s/ Curtis W. Stoelting Executive Vice President and April 23, 1999
- ----------------------------------- Secretary (Principal Accounting
Curtis W. Stoelting Officer and Principal Financial
Officer)
/s/ Curtis W. Stoelting April 23, 1999
- -----------------------------------
Curtis W. Stoelting
*Attorney-in-Fact
</TABLE>
II-6
<PAGE> 1
EXHIBIT 5
April 23, 1999
Racing Champions Corporation
800 Roosevelt Road
Building C, Suite 320
Glen Ellyn, IL 60137
Gentlemen: Re: Registration Statement on Form S-3
We have acted as counsel for Racing Champions Corporation, a Delaware
corporation (the "Company"), in connection with the Company's offering to
certain holders Common Stock Purchase Warrants (the "Public Warrants") of up to
255,863 shares of its $.01 par value common stock (the "Common Stock") and up
to 273,342 shares of Common Stock to be sold by certain selling stockholders
upon the exercise of outstanding warrants (the "Selling Stockholder Warrants"
and, collectively with the Public Warrants, the "Warrants"). The Public
Warrants are subject to the terms of the Warrant Agreement, dated as of August
5, 1998, between the Company and BankBoston, N.A., as warrant agent (the
"Warrant Agreement").
In such capacity we have examined, among other documents, the Amended
and Restated Certificate of Incorporation of the Company, as amended, and the
Registration Statement on Form S-3 to be filed by the Company with the
Securities and Exchange Commission on or shortly after the date of this letter
covering the offering of the Company's common stock pursuant to the Public
Warrants and by the selling stockholders. Based on the foregoing and such
additional investigation as we have deemed necessary, it is our opinion that the
shares of Common Stock to be offered by the Company upon exercise of the Public
Warrants and by the Selling Stockholders upon exercise of the Selling
Stockholder Warrants have been legally and validly authorized under the Amended
and Restated Certificate of Incorporation of the Company, as amended, and the
laws of the State of Delaware. When issued in accordance with the description
set forth in the Registration Statement and the terms of the Warrants, and the
Warrant Agreement, the shares of Common Stock will be legally issued, fully-paid
and nonassessable.
We consent to the filing of a copy of this opinion as an exhibit to the
Registration Statement on Form S-3.
REINHART, BOERNER, VAN DEUREN,
NORRIS & RIESELBACH, s.c.
BY /s/ James M. Bedore
James M. Bedore
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
February 15, 1999 included in Racing Champions Corporation Annual Report on Form
10-K for the year ended December 31, 1998 and to all references to our Firm
included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
April 23, 1999
