Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant ( X )
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement
( X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Emergent Group, Inc.
(Name of Registrant as Specified In Its Charter)
Emergent Group, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
( X ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2)
( ) $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3)
( ) Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
________________________________________________________
2) Aggregate number of securities to which transaction
applies:
________________________________________________________
3) Per unit price or other underlying value of transaction
computer pursuant to Exchange Act Rule 0-11:*
________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________
* Set forth the amount on which the filing fee is calculated and
state how it was determined.
( X ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid: $125.00
2) Form, Schedule or Registration Statement No. 14(a)
3) Filing Party: Emergent Group, Inc
4) Date Filed: April 19, 1995
<PAGE>
EMERGENT GROUP, INC.
15 SOUTH MAIN STREET, SUITE 750
P. O. BOX 17526
GREENVILLE, SOUTH CAROLINA 29606
________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 9, 1995
________________________
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Emergent Group, Inc.
will be held at 9:00 A.M. on June 9, 1995, at the Hyatt Regency
Hotel, 220 North Main Street, Greenville, South Carolina, for the
purpose of considering and acting upon the following:
1. The election of eight Directors to serve until the next
Annual Meeting of Shareholders or until their successors
have been elected and qualified;
2. The proposal to adopt an amendment to the Company's Articles
of Incorporation to effect a one-for-three reverse split of
the Company's Common and Class A Common stock;
3. The proposal to adopt an amendment to the Company's Articles
of Incorporation to increase the authorized shares of Common
stock to 4,000,000 shares;
4. The approval of the Company's 1995 Employee and Officer
Stock Option Plan;
5. The approval of the Company's 1995 Director Stock Option
Plan;
6. The ratification of the Board's appointment of Elliott,
Davis & Company, L.L.P. as independent auditors of the
Company for 1995; and
7. The transaction of such other matters as may properly come
before the meeting or any adjournment thereof.
Only those Shareholders of record at the close of business
on April 14, 1995, will be entitled to notice of the meeting and
to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
C. Thomas Wyche, Secretary
Greenville, South Carolina
May 12, 1995
A form of proxy and the Annual Report of the Company for the
calendar year 1994 are enclosed. You are cordially invited to
attend the meeting in person but, whether or not you plan to
attend, you are urged to SIGN, DATE and RETURN the proxy in the
enclosed, postage-paid, addressed envelope. If you attend the
meeting, you may either vote by your proxy or withdraw your proxy
and vote in person.
<PAGE>
EMERGENT GROUP, INC.
15 SOUTH MAIN STREET, SUITE 750
P. O. BOX 17526
GREENVILLE, SOUTH CAROLINA 29606
________________________
PROXY STATEMENT
________________________
ANNUAL MEETING OF SHAREHOLDERS
JUNE 9, 1995
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Emergent
Group, Inc. (hereinafter called the "Company") to be voted at the
Annual Meeting of Shareholders of the Company to be held at 9:00
A.M. on Friday, June 9, 1995, at the Hyatt Regency Hotel, 220
North Main Street, Greenville, South Carolina. The approximate
date of mailing this Proxy Statement is May 12, 1995.
Shares represented by proxies in the accompanying form, if
properly signed and returned and not revoked before their voting,
will be voted at the Annual Meeting and any adjournment or
adjournments thereof in accordance with the specifications made
thereon. If a proxy is signed and returned without indicating
any voting instructions, the shares represented by that proxy
will be voted (1) For the election of the nominees for director
named in this proxy statement, (2) For the proposal to adopt an
amendment to the Company's Articles of Incorporation to effect a
one-for-three reverse split of the Company's Common and Class A
Common stock, (3) For the proposal to adopt an amendment to the
Company's Articles of Incorporation to increase the authorized
shares of Common stock to 4,000,000 shares, (4) For the approval
of the Company's 1995 Employee and Officer Stock Option Plan, (5)
For the approval of the Company's 1995 Director Stock Option
Plan, (6) For the ratification of the appointment of Elliott,
Davis & Company, L.L.P. as independent auditors for the Company
for 1995 and (7) in the discretion of the proxy holders on such
other matters as may properly come before the meeting.
Any person signing and mailing the enclosed proxy may revoke
it at any time before it is voted by giving written notice of
revocation to the Secretary of the Company prior to the proxy
being voted, by mailing to the Company a later dated proxy which
is received by the Company prior to the meeting or by attending
the meeting and giving notice of revocation to the Secretary of
the Company either prior to the meeting or in open meeting prior
to the proxy being voted (although attendance at the meeting will
not in and of itself constitute a revocation of a proxy). Any
written notice revoking a proxy should be sent to Emergent Group,
Inc., Post Office Box 17526, Greenville, South Carolina 29606,
Attention: Secretary.
Shareholders of record at the close of business on April 14,
1995 (the "Record Date") are entitled to notice of and to vote at
1
<PAGE>
the meeting. As of such date, there were outstanding
9,803,438.44 shares of Class A Common stock ("Class A Common")
and 200,574.56 shares of Common stock ("Common"), each of which
is entitled to one vote. An automated system administered by the
Company's transfer agent tabulates the votes. Each is tabulated
separately. Abstentions and broker non-votes are each included
in the determination of the number of shares present for purposes
of determining whether a quorum exits. A majority of the shares
outstanding present in person or by proxy will constitute a
quorum at the meeting. Abstentions and broker non-votes have no
effect upon the votes respecting proposal six, the ratification
of the appointment of Elliott, Davis & Company, L.L.P. as
independent public accountants, but are counted as a vote against
proposals two and three to amend the Articles of Incorporation
and proposals four and five to adopt the 1995 Employee and
Officer Stock Option Plan and the 1995 Director Stock Option
Plan. Directors are elected by a plurality of votes cast by the
shares entitled to vote at the meeting. Items two and three for
Amendments to the Company's Articles of Incorporation require the
affirmative vote of two-thirds of the issued and outstanding
shares of Common stock and Class A Common stock. Items four and
five, the approval of the 1995 Employee and Officer Stock Option
Plan and the 1995 Director Stock Option Plan require the
affirmative vote of a majority of the shares present or
represented at the meeting and entitled to vote on the matter.
The cost of solicitation of proxies in the accompanying form
will be borne by the Company, including expenses in connection
with preparing and mailing this proxy statement. Such
solicitation will be made by mail and may also be made on behalf
of the Company by the Company's regular officers and employees in
person or by telephone or telegram for no additional
compensation. The Company, upon request, will also reimburse
brokers or persons holding shares in their names or in the names
of nominees for their reasonable expenses in sending proxies and
proxy material to beneficial owners.
ELECTION OF DIRECTORS
(Proxy Item 1)
NOMINEES
The Company's Bylaws provide that the Company shall have at
least three and no more than nine directors, with the exact
number to be determined by the Board of Directors. The Board of
Directors has, by resolution, fixed the number of directors at
eight. Each director will serve until the next annual meeting of
shareholders or until his successor has been elected or
appointed. Unless otherwise instructed, proxy holders will vote
the proxies received by them for the election of the nominees
named below. All of the nominees for director, except Mr.
Bauknight, are currently directors of the Company. If any
nominee becomes unavailable for any reason, it is intended that
the proxies will be voted for a substitute nominee designated by
the Board of Directors. The Board of Directors has no reason to
believe the nominees named will be unable to serve if elected.
2
<PAGE>
Any vacancy occurring on the Board of Directors for any reason
may be filled by vote of a majority of the directors then in
office until the next meeting of shareholders.
The Company's Class A Common and Common may be voted
cumulatively in the election of directors. The right to vote
cumulatively means that each shareholder entitled to vote at the
election of directors shall be entitled to as many votes as shall
equal the number of shares of Class A Common and Common held by
the shareholder as of the Record Date multiplied by the number of
directors to be elected and may cast all such votes for a single
candidate or may distribute them among two or more candidates
nominated for director. No shares may be voted in such manner
unless the shareholder intending to vote cumulatively shall
either: (1) give separate written designation to an officer of the
Company not less than 48 hours before the time for the meeting,
stating that such shareholder intends to vote his or her shares
cumulatively, which notice will be announced in the meeting
before the voting, or (2) announce his or her intention in the
meeting before the voting for directors shall commence.
Instructions with respect to cumulative voting on the proxy card
do not constitute notice of an election that a shareholder
intends to vote his or her shares cumulatively. In the event
that cumulative voting is invoked, the person presiding may, or
if requested by any shareholder shall, recess the meeting for a
period not to exceed two hours. If any shareholder of the
Company exercises his or her right to vote cumulatively in the
election of directors, all shares, including those to be voted by
proxy holders, will be voted cumulatively. If there is no
designation and cumulative voting rights are invoked, proxy
holders, in their own judgment, will cumulate votes for directors
to secure the election of as many as possible of the Board of
Directors' nominees. Directors will be elected by a plurality of
votes.
The names of the nominees for director, together with
certain information about them, are as follows:
DIRECTOR
NAME AND AGE SINCE PRINCIPAL OCCUPATION
CLARENCE B. BAUKNIGHT (58) -- Chairman of the Board,
Builderway, Inc. (1)
ROBERT S. DAVIS (48) 1990 Vice President,
Treasurer and Chief
Financial Officer of
the Company (2)
KEITH B. GIDDENS (40) 1992 Vice President of
Operations of the
Company; Chief Executive
Officer, Carolina
Investors, Inc. (3)
TECUMSEH HOOPER, JR. (47) 1991 President, Modern
Office Machines, Inc. (4)
3
<PAGE>
JACOB H. MARTIN (76) 1991 Retired Chairman,
Standard Car Truck Co.;
Of counsel to the law
firm of Martin, Craig,
Chester & Sonnenschein (5)
BUCK MICKEL (69) 1991 Chairman of the Board and
Chief Executive Officer,
RSI Holdings, Inc. (6)
PORTER B. ROSE (53) 1991 President, Liberty
Investment Group, Inc.,;
Chairman, Liberty
Properties Group, Inc.;
Chairman, Liberty Capital
Advisors, Inc. (7)
JOHN M. STERLING, JR. (57) 1991 Chairman of the Board,
President and Chief
Executive Officer of the
Company; President of
Palmetto Seed Capital
Corp. (8)
(1) Mr. Bauknight has been Chairman of the Board of Builderway,
Inc. since 1976. Builderway, Inc. is engaged in the
business of distribution and retail sale of building
supplies and appliances. Mr. Bauknight has also served
since 1978 as Chairman of the Board of Enterprise Computer
Systems, Inc. which is engaged in the development of
computer software for the building supply industry. Mr.
Bauknight also serves on the Board of Directors of Builder
Marts of America, Inc.
(2) Mr. Davis has served as Vice President and Chief Financial
Officer of the Company since January 1991, as Treasurer
since 1992, as Vice President of Finance of the Company from
November 1989 through June 1990, as President and Treasurer
of the Company from June through December 1990, and as
Corporate Controller of the Company from 1986 through
November 1989.
(3) Mr. Giddens has served as Vice President of Operations of
the Company since February 1995, and as Chief Executive
Officer of Carolina Investors, Inc., an indirect subsidiary
of the Company, since May 1991, the acquisition date of the
assets of Carolina Investors, Inc. by the Company. Mr.
Giddens was a partner in the public accounting firm of Ernst
& Young from October 1988 through April 1991 and a Senior
Manager at such firm from October 1984 through September
1988.
(4) Mr. Hooper served as Treasurer of the Company from January
1991 through 1992. Mr. Hooper has served as President of
Modern Office Machines, Inc. ("MOM"), which is engaged in
the sale of office equipment and supplies, since 1982. Mr.
Hooper's responsibilities as President of MOM include
4
<PAGE>
strategic planning, hiring and directing all corporate
officers and general management of MOM's branch operations.
Since October 1994, Mr. Hooper has also been the Southeast
Regional Director for Alco Office Products, MOM's parent
company.
(5) Mr. Martin was Chairman of Standard Car Truck Company from
January 1989 until May 1, 1995, when he retired from this
position. Standard Car Truck Company is engaged in the
business of designing, manufacturing and selling railroad
equipment. Mr. Martin also served as Chairman of the Board
of Enterprise Finance Company and as Chairman of the Board
of Freight Car Building and Supply Company until May 1,
1995, when he retired from these positions. Prior to 1989,
Mr. Martin was a partner of the law firm of Martin, Craig,
Chester & Sonnenschein in Chicago, Illinois from 1953
through 1980. Mr. Martin is presently of-counsel to that
firm.
(6) Mr. Mickel has served since 1989 as Chairman of the Board
and Chief Executive Officer of RSI Holdings, Inc., which was
engaged in the distribution of turf care products. Mr.
Mickel has served in various executive positions, including
Vice Chairman of the Board of Fluor Corporation, from which
position he resigned in 1987, Chairman of the Board of
Daniel International Corporation, from which position he
resigned in 1987, and Chairman of the Board and Chief
Executive Officer of RSI Corporation, which engaged in the
distribution of outdoor power, turf care equipment and patio
and entry doors and windows and in the office supply
business, from 1978 to 1989. Mr. Mickel also serves on the
Board of Directors of Fluor Corporation, Monsanto Company,
NationsBank Corporation, Liberty Corporation, Duke Power
Company, Delta Woodside Industries, Inc. and Insignia
Financial Group, Inc.
(7) Mr. Rose has been President of Liberty Investment Group,
Inc. ("Liberty Group") since April 1992, and Chairman of
Liberty Capital Advisors, Inc. ("Liberty Capital") and
Chairman of Liberty Properties Group, Inc. ("Liberty
Properties") since January 1987. Prior to that time, Mr.
Rose served as President of Liberty Capital from January
1987 to April 1992 and as Executive Vice President of
investments for Liberty Life Insurance Company from 1983
through 1987. Liberty Group, Liberty Capital and Liberty
Properties are subsidiaries of Liberty Corporation. Liberty
Group manages investment portfolios for Liberty Corporation,
its subsidiaries and other clients. Assets managed by this
corporation total approximately $2 billion.
(8) Mr. Sterling was a director and Secretary of the Company
from 1974 through February 1990, when he resigned from these
positions. Mr. Sterling was elected President and Chairman
of the Board of the Company in January 1991. Mr. Sterling
has served as President of Palmetto Seed Capital Corporation
since November 1993. Palmetto Seed Capital Corporation is
the general partner of Palmetto Seed Capital, L.P. ("PSC").
5
<PAGE>
PSC invests primarily in early stage South Carolina
companies. Mr. Sterling was Chairman of the Board of Modern
Office Machines, Inc. from 1981 through August 1992. Mr.
Sterling's responsibilities as Chairman of the Board of
Modern Office Machines, Inc. included financial planning
and oversight and development of strategies for the future.
Mr. Sterling has served as General Partner and Manager of
Reedy River Ventures ("RRV"), which Mr. Sterling also
founded, since 1981. RRV is a Small Business Investment
Company licensed by the Small Business Administration to
invest in small businesses. Mr. Sterling also serves on the
Board of Directors of Datastream Systems, Inc.
MEETINGS AND COMMITTEES
During fiscal 1994, the Company's Board of Directors met
four times. Each director attended more than 75% of the total
number of meetings of the Board of Directors and all committees
on which he served.
The Board of Directors has an Executive Committee, the
function of which is to make decisions between meetings of the
Board of Directors pursuant to authority delegated by the Board
of Directors. The current members of the Executive Committee are
John M. Sterling, Jr., Porter B. Rose and Buck Mickel. The
Executive Committee met two times during 1994.
The Board of Directors also has an Audit Committee, which is
responsible for reviewing and making recommendations regarding
the Company's engagement of independent auditors, the annual
audit of the Company's financial statements and the Company's
internal accounting practices and policies. The current members
of the Audit Committee are Tecumseh Hooper, Jr., F. E. Haag and
Porter B. Rose. The Audit Committee met one time during 1994.
Mr. Haag, who has served as a director of the Company since 1970,
will retire from the Board following the Annual Meeting.
The Board of Directors also has a Compensation Committee,
the function of which is to make recommendations to the Board of
Directors as to the salaries and bonuses of the officers of the
Company. The current members of the Compensation Committee are
F. E. Haag, Buck Mickel and Jacob H. Martin. The Compensation
Committee met one time during 1994.
The Board of Directors does not have a Nominating Committee.
DIRECTORS' FEES
The Company pays monthly directors' fees of $1,000 to each
of the directors of the Company except for Messrs. Sterling,
Davis and Giddens, who receive no directors' fees.
6
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information regarding
the current executive officers of the Company:
NAME AND AGE POSITION
John M. Sterling, Jr. (57) Chairman of the Board, President
and Chief Executive Officer (1)
Robert S. Davis (48) Vice President, Treasurer and Chief
Financial Officer (1)
Keith B. Giddens (40) Vice President of Operations of the
Company and Chief Executive
Officer, Carolina Investors, Inc. (1)
C. Thomas Wyche (69) Secretary (2)
______________________
(1) See information under "Election of Directors; Nominees."
(2) Mr. C. Thomas Wyche is a senior member of the law firm of
Wyche, Burgess, Freeman & Parham, P.A. Mr. Wyche has been a
member of this law firm since 1951. Mr. Wyche has served as
Secretary of the Company since January 1991.
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid by
the Company or its subsidiaries during fiscal years 1994, 1993
and 1992 to each of the executive officers of the Company whose
cash and cash-equivalent compensation exceeded $100,000 for
services rendered in all capacities (collectively, the "Named
Executive Officers").
7
<PAGE>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
LONG-TERM
COMPENSA-
TION
(1) AWARDS
OTHER ALL
ANNUAL SECURITIES OTHER
NAME AND COMPEN- UNDERLYING COMPEN-
PRINCIPAL SALARY BONUS SATION OPTIONS SATION
POSITION YEAR ($) ($) ($) (#) (2) ($) (3)
<S> <C> <C> <C> <C> <C> <C>
John M. Sterling, Jr. 1994 178,437 70,000 - - 3,234
Chairman of the Board, 1993 170,303 50,000 - 50,000 3,148
President and CEO of 1992 162,098 20,000 - - 3,055
the Company
Keith B. Giddens (4) 1994 165,900 65,000 - 30,000 2,572
Vice President of 1993 157,698 45,000 - 50,000 1,470
Operations of the 1992 150,210 10,000 - - -
Company and CEO,
Carolina Investors, Inc.
Robert S. Davis (5) 1994 88,137 33,000 - 30,000 2,168
Vice President, 1993 83,793 25,000 - 50,000 2,285
Treasurer and Chief 1992 76,157 15,000 - - 1,914
Financial Officer of
the Company
__________________________
(1) The Company provides to certain officers the use of automobiles for
business purposes. Such automobiles may have been used for personal
reasons on occasion; however, the Company has made reasonable
inquiry and has concluded that the aggregate amounts of such, or
other personal benefits which cannot be specifically ascertained,
do not, in any event, exceed the lesser of $50,000 or 10% of the
salary and bonus reported herein to any person and has
further concluded that the information set forth in the table is
not rendered materially misleading by virtue of the omission of
the value of such personal benefits.
(2) No long-term compensation was awarded to such officers during
fiscal year 1992.
(3) Amounts shown under "All other compensation" consist of
contributions during fiscal 1994, 1993 and 1992 to the Company's
401(k) plan in the amount shown to match pre-tax elective
deferral contributions (included under salary) made by the
executive officers to the plan.
8
</TABLE>
(4) Mr. Giddens was elected as Vice President of Operations of
the Company as of February 17, 1995. Mr. Giddens was
employed by the Company as Chief Executive Officer of
Carolina Investors, Inc. effective May 1, 1991, the
acquisition date of Carolina Investors, Inc. by the Company.
(5) Mr. Davis was elected as Vice President and Chief Financial
Officer of the Company effective January 1, 1991 and as
Treasurer effective May 19, 1992. Mr. Davis has been
employed by the Company in various positions since April
1986.
The following table sets forth certain information concerning
grants of options to the Named Executive Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(#)(1) FISCAL YEAR ($/SHARE) DATE
JOHN M. STERLING, -0- -0-
JR.
ROBERT S. DAVIS 30,000 50% $0.725 2-17-00
KEITH B. GIDDENS 30,000 50% $0.725 2-17-00
(1) The options granted are exercisable, on a cumulative basis,
at the rate of twenty percent per year during each year
since the grant of the option.
9
<PAGE>
The following table sets forth information with respect to
the Named Executive Officers concerning the exercise of options
during the last fiscal year and unexercised options held as of
the end of the fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
VALUE
OF
UNEXERCISED
NUMBER OF IN-THE-
SECURITIES MONEY
UNDERLYING OPTIONS AT
UNEXERCISED 1994
OPTIONS AT FISCAL
1994 FISCAL YEAR-END
SHARES YEAR-END (#) ($) (1)
ACQUIRED VALUE
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
JOHN M. STERLING, -0- -0- 20,000/30,000 $4,300/$6,450
JR.
ROBERT S. DAVIS -0- -0- 26,000/54,000 $5,590/$11,610
KEITH B. GIDDENS -0- -0- 26,000/54,000 $5,590/$11,610
(1) The value shown represents the excess of the fair market
value at December 31, 1994 over the exercise price of the
shares covered by all unexercised options held by the
executive officer at 1994 year-end.
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of the Record Date, except as
otherwise noted, certain information regarding ownership of the
Company's Class A Common stock and Common stock by (i) each person or
group who is known by the Company to own beneficially more than 5% of the
Company's Class A Common stock or Common stock, (ii) each of the
Company's directors, and (iii) all directors and executive officers of
the Company as a group.
<TABLE>
<CAPTION>
Name and Address Amount and Nature Of Percent of Outstanding
Of Beneficial Owner Beneficial Ownership Shares (12)
Class A Class A
Common Common Common Common
<S> <C> <C> <C> <C>
John Hancock Mutual Life 945,692.454(1) 19,299.846(1) 9.27% 9.24%
Insurance Company
P. O. Box 111
Boston, MA 02118
John M. Sterling, Jr. 1,305,299.897(2) 26,641.19(2) 12.79% 12.76%
P. O. Box 17526
Greenville, SC 29606
C. Thomas Wyche 855,973.18(3) 23,937.82(3) 8.39% 11.47%
P. O. Box 728
Greenville, SC 29602-0728
Buck Mickel 378,811.06(4) 7,729.94(4) 3.71% 3.70%
P. O. Box 19019
Greenville, SC 29602-9019
Tecumseh Hooper, Jr. 251,223.00 5,127.00 2.46% 2.46%
P. O. Box 5615
Greenville, SC 29606
F. E. Haag 160,134.94 3,268.06 1.57% 1.57%
210 Pine Forest Drive
Greenville, SC 29601
</TABLE>
11
<PAGE>
Name and Address Amount and Nature Of Percent of Outstanding
Of Beneficial Owner Beneficial Ownership Shares (11)
Class A Class A
Common Common Common Common
Robert S. Davis 69,580.98 (5) 1,420.02 (5) (11) (11)
P. O. Box 17526
Greenville, SC 29606
Jacob H. Martin 482,160.00 (6) 9,840.00 (6) 4.72% 4.71%
865 Busse Highway
Park Ridge, IL 60068
Porter B. Rose 24,900.00 (7) 100 (7) (11) (11)
P. O. Box 789
Greenville, SC 29602
Keith B. Giddens 190,284.58 (8) 3,882.42 (8) 1.86% 1.86%
P. O. Box 998
Pickens, SC 29671
Clarence B. Bauknight 187,730.76 (9) 3,831.24 (9) 1.84% 1.84%
P. O. Box 2183
Greenville, SC 29602
All Executive Officers and
Directors as a Group
(10 persons) (10) 3,718,367.637 81,946.45 36.44% 39.25%
__________________________
(1) Includes the right to acquire 271,523.70 shares of Class A Common
and 5,541.30 shares of Common at $1.75 per share pursuant to currently
exercisable stock purchase warrants.
(2) Includes 1 Common share owned by Mr. Sterling directly. Also
includes 1,171,837.389 Class A Common and 23,916.465 Common shares
owned by a partnership whose partners are Mr. Sterling, his spouse and
his three adult children. Also includes the right to acquire 29,400
Class A and 600 Common shares at $.725 per share pursuant to currently
exercisable stock options. Includes 104,062.508 shares of Class A
Common and 2,123.725 shares of Common owned by a trust of which Mr.
Sterling is the sole trustee, as to which shares Mr. Sterling disclaims
beneficial ownership. Excludes 737,885.52 Class A Common and 15,058.48
Common shares held by The Prosperity Company ("Prosperity"), a
partnership in which Sterling Capital, Ltd., a corporation in which
Mr. Sterling is an officer and director, is a 3% partner and is
designated as managing partner, as to which shares Mr. Sterling
disclaims beneficial ownership.
12
<PAGE>
(3) Includes 118,087.66 Class A Common and 8,879.34 Common
shares owned by Mr. Wyche directly, and 737,885.52 Class A
Common and 15,058.48 Common shares owned by Prosperity, of
which Mr. Wyche's spouse and three adult children are
partners, as to which shares Mr. Wyche disclaims beneficial
ownership. Also excludes 104,062.508 Class A Common and
2,123.725 Common shares owned by a trust of which Mr. Wyche
is grantor, as to which shares Mr. Wyche disclaims
beneficial ownership.
(4) Includes 31,360 Class A Common and 640 Common shares owned
by Mr. Mickel directly. Also includes 347,451.06 Class A
Common and 7,089.94 Common shares owned by Mr. Mickel's
spouse, as to which shares he disclaims beneficial
ownership.
(5) Includes the right to acquire 41,160 Class A and 840 Common
shares at $.725 and 3,920 Class A Common and 80 Common
shares at $.88 per share pursuant to currently exercisable
stock options.
(6) Includes 401,800 Class A Common and 8,200 Common shares
owned by Enterprise Finance Company and 80,360 Class A
Common and 1,640 Common shares owned by Freight Car Building
and Supply Company. Mr. Martin was a director and officer
of each of these corporations as of the Record Date. He
disclaims beneficial ownership of the shares held by these
corporations.
(7) Includes 24,900 Class A Common and 100 Common shares owned
by Mr. Rose directly. Excludes 140,966.96 Class A Common
and 3,285.04 Common shares owned by Liberty Life Insurance
Company, a common subsidiary of the parent company of
Liberty Group, Liberty Capital and Liberty Properties. Mr.
Rose is president of Liberty Group and Chairman of Liberty
Capital and Liberty Properties.
(8) Includes 106,356.40 Class A Common and 2,169.60 Common
shares owned by Mr. Giddens directly. Also includes
22,188.18 Class A Common and 452.82 Common shares owned by
Mr. Giddens' spouse, as to which shares he disclaims
beneficial ownership. Also includes 5,880 Class A Common
and 120 Common shares owned by a trust administered by Mr.
Giddens' spouse for his three children. Also includes the
right to acquire 41,160 Class A Common and 840 Common shares
at $.725 and 14,700 Class A Common and 300 Common shares at
$.88 per share pursuant to currently exercisable stock
options.
(9) Includes 187,730.76 Class A Common and 3,831.24 Common
shares owned by a partnership whose partners are Mr.
Bauknight, his spouse and his two adult children.
(10) Excludes the shares described as excluded in notes (2), (3)
and (7) above.
(11) Less than 1%.
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(12) Pursuant to Rule 13d-3 under the Securities Exchange Act of
1934, shares are deemed "beneficially owned" if the named
person or group has the right to acquire ownership of such
shares within 60 days. The percentage for each person or
group is computed on the assumption that shares subject to
acquisition upon the exercise of warrants and options by
such person or group are outstanding, but that no other such
shares similarly subject to acquisition by other persons are
outstanding.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Based solely upon a review of Forms 3, 4, and 5 and
amendments thereto furnished to the Company during and with
respect to its most recent fiscal year, and written
representations that no Form 5 was required, the Company believes
that all of its executive officers, directors and persons who may
have been deemed to be greater than 10% stockholders during the
year have made all filings required to be made under Section
16(a) of the Securities Exchange Act of 1934, as amended, except
as follows: John Hancock Mutual Life Insurance Company made a
late filing of a Form 5 to correct the number of securities held
at year-end due to the expiration of certain stock purchase
warrants during 1994 pursuant to the Stock Purchase Warrant
Agreement dated December 31, 1985.
CERTAIN TRANSACTIONS
The law firm of Wyche, Burgess, Freeman & Parham, P.A.,
whose members include Mr. Wyche, the Secretary of the Company,
serves as general counsel to the Company. In the opinion of the
Board of Directors, the fees charged by this law firm for
services rendered were on terms as favorable to the Company as
those that could have been obtained from independent third
parties.
The Company purchased the remaining 20% of the outstanding
capital stock of Young Generations, Inc. ("YGI") in February 1995
pursuant to the provisions of an employment agreement with the
deceased President of YGI. The purchase price for the stock was
$245,000 which was paid in cash.
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PROPOSAL TO AMEND THE COMPANY'S ARTICLES OF INCORPORATION
TO EFFECT A ONE-FOR-THREE REVERSE STOCK SPLIT
(Proxy Item 2)
General
The Company's Board of Directors has approved a resolution
recommending that the Company's shareholders adopt an amendment
to the Company's Articles of Incorporation pursuant to which the
Company would effect a one-for-three reverse stock split of the
Company's outstanding Class A Common stock and Common stock (the
"Reverse Split Amendment"). The Board of Directors has approved
the Reverse Split Amendment due to its belief that the Company is
not of the size to accommodate the current number of shares
outstanding.
The Articles of Incorporation presently authorize 20,000,000
shares of Class A Common stock and 400,000 shares of Common
stock. The Reverse Split Amendment would reduce the number of
authorized Class A Common shares to 6,666,667 shares and would
reduce the number of authorized Common shares to 133,333 shares.
The Reverse Split Amendment
Subsequent to the adoption of the Reverse Split Amendment,
each three shares of Class A Common stock and Common stock
outstanding will become one share of stock of its class. The
Reverse Split Amendment would amend Article 6 of the Amended and
Restated Articles of Incorporation as follows:
6. The Corporation is authorized to issue shares of stock as follows:
AUTHORIZED
CLASS OF NUMBER OF
SHARES EACH CLASS PAR VALUE
Common 133,333 $.05
Class A Common 6,666,667 $.05
A. No change
B. No change
C. Each share of Class A Common stock and Common stock
outstanding at the time of adoption of this amendment
will be void. Each shareholder of Class A Common stock
and Common stock at that time will be entitled to
receive a certificate for the whole number of shares of
Class A Common stock and Common stock representing
respectively one-third of the number of shares of Class
A Common stock and Common stock held by such
shareholder at the time of the adoption of this
Amendment. The Company will not issue fractional
shares. Cash will be paid in lieu of any fractional
shares at a price per share equal to the closing bid
price of the shares as quoted on the National Daily
Quotation Service on the first day after the adoption
of the Reverse Split Amendment.
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<PAGE>
The Reverse Split Amendment provides that each outstanding
certificate representing Class A Common stock and Common stock at
the time of adoption of the Reverse Split Amendment will be void.
Following the adoption of the Reverse Split Amendment, the
Company will mail to each holder of Class A Common and Common
stock a certificate for the whole number of shares representing
respectively one-third of the number of shares of Class A Common
stock and Common stock held by such shareholder following
adoption of the Reverse Split Amendment. In lieu of issuing
fractional shares of Class A Common stock and Common stock, the
Company will pay cash for fractional shares at a price per share
equal to the closing bid price of the shares as quoted on the
National Daily Quotation Service on the first day after the
adoption of the Reverse Split Amendment. The Company's stock is
traded on the over-the-counter Bulletin Board and is, therefore,
not included in the National Association of Securities Dealers,
Inc. Automated Quotation System. Bid and ask quotations are
obtained from the National Daily Quotation Service.
As a result of the redemption of fractional shares, the
percentage interest of each shareholder may be somewhat altered
by the adoption of the Reverse Split Amendment.
In the event of the failure of the Company's shareholders to
approve the adoption of the Reverse Split Amendment, fractional
shares outstanding will remain outstanding.
Vote Required
The affirmative vote of the holders of two-thirds of the
outstanding shares of Class A Common stock and Common stock as of
the Record Date is required for approval and adoption of the
Reverse Split Amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
APPROVAL OF THE REVERSE SPLIT AMENDMENT.
DISSENTERS RIGHTS UNDER SOUTH CAROLINA LAW
Chapter 13 of Title 33 of the South Carolina Code ("Chapter
13"), attached hereto as Appendix I, provides that if an
amendment to the Articles of Incorporation of a company reduces
the number of shares to a fraction which is to be cashed out,
each such shareholder of the stock of the company has the right
to dissent to such amendment, to have the "fair value" of his or
her fractional shares determined by the Court of Common Pleas
located in Greenville County, South Carolina, and to receive
payment of the "fair value" of such fractional shares. The
procedures set forth in Chapter 13 must be substantially complied
with. Failure to follow any of such procedures may result in a
termination or waiver of appraisal rights under Chapter 13.
Under Chapter 13, a shareholder of the Company electing to
exercise dissenters' rights must both:
(i) Give to the Company, before the taking of the vote at
the Meeting on the Reverse Split Amendment, a written notice of
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<PAGE>
the shareholder's intent to demand payment for such shareholder's
shares of Class A Common and Common stock of the Company if the
transaction with respect to which the shareholder wishes to
exercise dissenters' rights (the Reverse Split Amendment) is
consummated. This written notice is in addition to and separate
from any proxy or vote against the proposal relating to the
Reverse Split Amendment. Neither a vote against the proposal
relating to the Reverse Split Amendment nor a proxy directing
such vote shall satisfy the requirement that a written notice of
intent to demand payment be given to the Company before the vote
on the proposals relating to the transaction with respect to
which a shareholder wishes to exercise dissenters' rights. Such
written notice of intent to demand payment should be given either
in person to the Corporate Secretary of the Company at the
Meeting before the vote on the Reverse Split Amendment, or in
person or by mail (certified mail, return receipt requested, is
the recommended form of transmittal) to the Corporate Secretary,
at Emergent Group, Inc., 15 South Main Street, Suite 750,
Wachovia Bank Building, P. O. Box 17526, Greenville, South
Carolina 29606, prior to the Meeting. A notice of intent to
demand payment shall be deemed "given" at the earliest of the
following: when received or five days after its deposit in the
United States mail, as evidenced by the postmark, if mailed
postage paid and correctly addressed; or on the date shown on the
return receipt, if sent by registered or certified mail, return
receipt requested, and the receipt is signed by or on behalf of
the addressee; AND
(ii) Not vote in favor of the Reverse Split Amendment. A
failure to vote against the Reverse Split Amendment will not
constitute a waiver of dissenters' rights. Chapter 13 provides
that a vote cast in favor of an action with respect to which a
shareholder wishes to exercise dissenters' rights by the holder
of a proxy solicited by the Company will not disqualify a
shareholder from demanding payment for his or her shares under
Chapter 13.
A shareholder who fails to satisfy the requirements
described in clauses (i) and (ii) above shall not be entitled to
payment for his or her shares of the Company's Class A Common
stock or Common stock under Chapter 13.
A beneficial shareholder of the Company's Class A Common
stock or Common stock may assert dissenters' rights as to shares
beneficially owned by him or her only if he or she dissents with
respect to all shares of which he or she is the beneficial
shareholder or over which he or she has power to direct the vote.
With respect to shares held in nominee name, the beneficial owner
of such shares may assert dissenters' rights directly by giving
to the Company the required notice of intent to demand payment or
indirectly by causing the nominee to give to the Company the
required notice of intent to demand payment. A beneficial
shareholder who directly asserts dissenters' rights to shares
held on his or her behalf must notify the Company in writing of
the name and address of the record holder of the shares, if known
to him. If a record shareholder asserts dissenters' rights as to
shares beneficially owned by another, such nominee must notify
the Company in writing of the name and address of the beneficial
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<PAGE>
owner and should notify the Company of the number of shares held
of record by such nominee as to which the assertion of
dissenters' rights applies. A record shareholder may assert
dissenters' rights as to fewer than all the shares registered in
his or her name only if he or she dissents with respect to all
shares beneficially owned by any one person.
No later than 10 days after the consummation of the
transaction with respect to which a shareholder has asserted
dissenters' rights, the Company is required to, and will, send a
notice to each shareholder of the Company who has satisfied the
foregoing conditions. The notice shall (i) state where the
payment demand must be sent and where certificates for shares
must be deposited; (ii) supply a form for demanding payment that
includes the date of the first announcement of the terms of the
transaction with respect to which the shareholder has asserted
dissenters' rights, and that requires that the person asserting
dissenters' rights certify whether or not he or she, or, if he or
she is a nominee asserting dissenters' rights on behalf of a
beneficial shareholder, the beneficial shareholder, acquired
beneficial ownership of the shares before that date; (iii) set a
date by which the Company must receive the payment demand, which
date shall not be fewer than thirty nor more than sixty days
after the date of sending of such notice and set a date by which
certificates for shares must be deposited, which date shall not
be earlier than twenty days after the demand note; and (iv) be
accompanied by a copy of Chapter 13.
A shareholder who receives such notice must demand payment,
certify whether he or she (or the beneficial shareholder on whose
behalf he or she is asserting dissenters' rights) acquired
beneficial ownership of the shares before the date of the first
announcement of the terms of the Reverse Split Amendment, and
deposit his or her certificates in accordance with the terms of
the notice. If sixty days have passed from the date set for
demanding payment and the Company has not taken the action with
respect to which dissenters' rights have been asserted, the
Company is required to return any deposited certificates. If
after returning deposited certificates the Company takes the
action with respect to which dissenters' rights have been
asserted, it must send a new dissenters' notice and repeat the
payment demand procedure. A shareholder who does not comply
substantially with the requirements that he or she demand payment
and deposit his or her certificates where required, each by the
date set in the dissenters' notice, will not be entitled to
payment for his or her shares under Chapter 13.
Except as hereinafter described, as soon as the corporate
action with respect to which dissenters' rights have been
asserted is taken or upon receipt by the Company of a payment
demand, the Company shall pay each dissenter who has
substantially complied with the foregoing requirements the amount
which the Company estimates is the fair value of the dissenters'
shares, plus accrued interest. The payment shall be accompanied
by the following: (a) certain financial information with respect
to the Company, (b) a statement of the Company's estimate of fair
value of the shares and an explanation of how the fair value was
calculated, (c) an explanation of how the interest was
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<PAGE>
calculated, (d) a statement of the dissenters' right to demand
additional payment, and (e) a copy of Chapter 13. Instead of
making such payment, the Company may offer to make such payment
to, but not make payment until acceptance of the offer by, a
dissenter as to any shares of which he or she (or the beneficial
owner on whose behalf he or she is asserting dissenters' rights)
was not the beneficial owner on the date of the first
announcement of the terms of the transaction with respect to
which the shareholder has asserted dissenters' rights, unless the
beneficial ownership of the shares devolved upon him or her by
operation of law from a person who was the beneficial owner on
the date of the first amendment.
Within thirty days after the Company has made or offered
payment for the dissenters' shares, the dissenter may notify the
Company in writing of his or her own estimate of the fair value
of his or her shares and amount of interest due and demand
payment of his or her estimate (less any payment previously made
by the Company) or reject the Company's offer and demand payment
of the fair value of his or her shares and interest due. The
dissenter may make such notification if (i) the dissenter
believes that the amount paid or offered to be paid is less than
the fair value of his or her shares or that the interest due is
calculated incorrectly; (ii) the Company failed to make or offer
payment for shares as required above within sixty days after the
date set for demanding payment' or (iii) the Company, having
failed to take action with respect to which dissenters' rights
have been asserted, does not return the deposited certificates
within sixty days from the date set for demanding payment. A
dissenter waives his or her right to demand additional payment
unless he or she notifies the Company of his or her demand within
thirty days after the Company has made or offered to make payment
for his or her shares.
Within 60 days after receiving the demand for additional
payment, if the demand remains unsettled, the Company shall
commence a proceeding in the South Carolina Court of Common Pleas
in Greenville County, South Carolina seeking a determination by
the court of the fair value of the shares and accrued interest.
If the Company does not commence the proceeding within such 60
day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded. All dissenters whose demands
remain unsettled shall be parties to such action. Each dissenter
made a party to the proceeding will be entitled to judgment for
the amount, if any, by which the court finds the fair value of
his or her shares, plus interest, exceeds the amount paid by the
Company.
In any judicial appraisal proceeding, the court shall
determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court.
The court shall assess the costs against the Company, except that
the court may assess costs against all of some of the dissenters,
in amounts the court finds equitable, to the extend the court
finds the dissenters acted arbitrarily, vexatiously or not in
good faith in demanding additional payment for their shares. The
court also may assess the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds
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<PAGE>
equitable: (1) against the Company and in favor of any or all
dissenters if the court finds the Company did not comply
substantially with the operative provisions of Chapter 13, or (2)
against either the Company or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees
and expenses are assessed acted arbitrarily, vexatiously or not
in good faith with respect to the rights provided by Chapter 13.
If the court finds that the services of counsel of any dissenter
were of substantial benefit to other dissenters similarly
situated, and that the fees for those services should not be
assessed against the Company, the court may award to these
counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited.
Although the Company believes that the terms of the Reverse
Split Amendment are fair to its shareholders, the Company cannot
make any representation as to the outcome of any determination of
fair value made by the South Carolina Court of Common Pleas, and
shareholders should recognize that such an appraisal could result
in a determination of a lower, higher or equivalent value than
the value reflected in the terms of the Reverse Split Amendment.
Chapter 13 provides that the fair value of a dissenters'
shares shall be the value of the shares immediately before
effectuation of the corporate action to which the dissenter
objects, excluding any appreciation or depreciation in
anticipation of the corporate action to which the dissenter
objects unless such exclusion would be inequitable. Chapter 13
states that the value of the shares is to be determined by
techniques that are accepted generally in the financial
community. These techniques may include market value, value
based on prior sales, capitalized earnings value and asset value.
Until payment of the fair value of his or her shares under
Chapter 13, any shareholder of the Company who has duly demanded
payment and deposited his or her share certificates retains all
other rights of a shareholder.
The foregoing is a summary of the rights of shareholders
seeking appraisal under South Carolina law, does not purport to
be a complete statement thereof, and is qualified in its entirety
by reference to the applicable statutory provisions of the South
Carolina Code, which are attached to this Proxy Statement as
Appendix I.
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<PAGE>
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK TO 4,000,000
(Proxy Item 3)
The Board has determined that an amendment to the Company's
Articles of Incorporation to increase the authorized number of
shares of Common stock to 4,000,000 shares (the "Common Stock
Increase Amendment") is in the best interests of the Company.
The Board has determined that the Company's Articles of
Incorporation should be amended to increase the authorized shares
of Common stock from 133,333 shares (following approval of the
Reverse Split Amendment) to 4,000,000 shares. At the close of
business on the Record Date 200,574.56 shares of Common stock
were outstanding. In the event that the shareholders of the
Company approve the Reverse Split Amendment, the Common Stock
Increase Amendment would be implemented promptly following
consummation of the transaction contemplated by the Reverse Split
Amendment. In the event that the Company's shareholders do not
approve the Reverse Split Amendment, the Common Stock Increase
Amendment would be implemented promptly following the annual
meeting.
If approved, the increased number of authorized shares of
Common stock will be available for issuance from time to time for
such purposes and consideration as the Board may approve. No
further vote of the shareholders of the Company will be required,
except as provided under South Carolina law or the rules of any
exchange on which the shares may in the future be traded. The
availability of additional shares for issuance, without the delay
and expense of obtaining the approval of stockholders at a
special meeting, will provide the Company additional shares of
Common stock without the restrictions on transferability of the
Class A Common stock for issuance in any future merger or
acquisition as well as providing the Company with the means of
raising additional capital if future circumstances so require.
The Board of Directors has no present plan or intention of
issuing any additional shares of Common stock for the purpose of
engaging in any merger or acquisition or of raising additional
capital.
The additional shares of Common stock for which
authorization is sought would be identical to the shares of
Common stock currently authorized. Holders of Common stock do
not have preemptive rights to subscribe to additional shares of
Common stock which may be issued by the Company.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE COMMON STOCK
INCREASE AMENDMENT.
PROPOSED 1995 EMPLOYEE AND OFFICER STOCK OPTION PLAN
(Proxy Item 4)
The Board of Directors recommends that the shareholders
approve adoption by the Company of the 1995 Employee and Officer
Stock Option Plan (the "Employee and Officer Option Plan") under
which the Board of Directors (or committee thereof) would have
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<PAGE>
the discretion to grant options for up to 17,000 shares of the
Company's Common stock and up to 833,000 shares of the Company's
Class A Common stock. The Common stock and Class A Common stock
are referred to collectively as the "Shares". This maximum
number of shares may be adjusted to reflect any change in
capitalization of the Company resulting from a stock dividend,
stock split or consolidation, or other change in the
characteristics of the Shares. If the Reverse Split Amendment
were approved, the aggregate maximum shares of Common stock
available under the Employee and Officer Option Plan would be
reduced to 5,666 shares and the aggregate maximum shares of Class
A Common stock available under the Employee and Officer Option
Plan would be reduced to 277,666 shares. The Board recommends
approval of the Employee and Officer Option Plan because it will
provide the Company's employees who participate in the plan with
an incentive to maximize shareholder value.
The purpose of the plan is to promote the growth and
profitability of the Company and its subsidiaries by increasing
the personal participation of key employees and officers of the
Company and its subsidiaries in the continued growth and
financial success of the Company and its subsidiaries, while
enabling the Company and its subsidiaries to attract and retain
key employees and officers of outstanding competence and by
providing such key employees and officers with an equity
opportunity in the Company. The Board or a committee of the
Board will administer the Employee and Officer Option Plan.
Participation in the Employee and Officer Option Plan is
limited to those key employees and officers of the Company or its
subsidiaries who have the greatest impact on the Company's long-
term performance. In making any determination as to the key
employees and officers to whom options shall be granted and as to
the number of Shares to be subject thereto, the Board (or
committee) shall take into account, in each case, the level and
responsibility of the key employee's or officer's position, the
level of the key employee's or officer's performance, the key
employee's or officer's level of compensation, the assessed
potential of the key employee or officer and such other factors
as the Board (or committee) shall deem relevant to the
accomplishment of the purposes of the plan. At this time, the
Company believes that approximately 15 employees and officers of
the Company or its subsidiaries will be eligible to participate
in the plan.
In the discretion of the Board of Directors (or committee),
options granted under the Employee and Officer Option Plan may be
"incentive stock options" for federal income tax purposes. The
Company is not allowed a deduction at any time in connection
with, and the participant is not taxed upon either the grant or
the exercise of, an "incentive stock option." The difference
between the option price of such an option and the market value
at the date of exercise, however, constitutes a tax preference
item for the participant in the year of exercise for alternative
minimum tax purposes. To qualify as an incentive stock option,
the Shares acquired by the participant must be held for at least
two years after the option is granted and one year after it is
exercised. If the participant holds the Shares for the period of
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<PAGE>
time required for incentive stock option qualification, then he
or she will be taxed only upon any gain realized upon disposition
of the stock. The participant's gain at that time will be equal
to the difference between the sales price of the Shares and the
stock option price. If an incentive stock option is exercised
after the death of the employee by the estate of the decedent, or
by a person who acquired the right to exercise such option by
bequest or inheritance or by reason of the death of the decedent,
none of the time limits described above shall apply.
If the participant fails to satisfy these time limits, the
option will be treated in a manner similar to options which are
not incentive stock options. The participant is generally not
taxed upon the grant of an option which is not an incentive stock
option. Upon exercise of any such option, the participant
recognizes ordinary income equal to the difference between the
fair market value on the date of exercise and the option price.
Generally, the Company receives a deduction for the amount the
participant reports as ordinary income arising from the exercise
of the option. Upon a subsequent sale or disposition of the
Shares, the holder would have taxable income equal to any excess
of the selling price over the fair market value at the date of
exercise. If the participant fails to satisfy the time limits
described above with respect to an option intended to be an
incentive stock option, the income to the participant and the
deduction for the Company shall arise at the time of the early
disposition and shall equal the excess of (a) the lower of the
fair market value of the Shares at the time of exercise or such
value at the time of disposition over (b) the exercise price.
The Employee and Officer Option Plan provides that no option
may be exercised more than three months after a participant's
termination of employment with the Company, unless the
participant dies while in the employ of the Company or within
such three-month period the participant's employment is
terminated by reason of having become permanently and totally
disabled, in which event the option may be exercised during the
one-year period after the date of termination of the
participant's employment. In no event may an option be exercised
after the expiration of its fixed term.
Options granted pursuant to the Employee and Officer Option
Plan are not transferable except by will or the laws of descent
and distribution or pursuant to a qualified domestic relations
order as defined by the Internal Revenue Code of 1986, as amended
(the "Code") or Title 1 of the Employee Retirement Income
Security Act, or the rules thereunder.
The price per share at which each option granted under the
Employee and Officer Option Plan may be exercised shall be such
price as shall be determined by the Board (or committee) at the
time of grant based on such criteria as may be adopted by the
Board (or committee) in good faith; provided, however, in the
case of an option intended to qualify as an incentive stock
option, the price per Share shall not be less than the fair
market value of the stock at the time such option is granted, or,
in the case of an option granted to an individual who owns stock
possessing more than 10% of the total combined voting power of
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<PAGE>
all classes of stock of the Company or any of its subsidiaries (a
"Ten Percent Shareholder"), the price per Share shall not be less
than 110% of the fair market value of the Shares at the time the
Option is granted.
The term of each option shall not exceed ten years (or five
years in the case of a Ten Percent Shareholder) and the option
will be exercisable according to such schedule as the Board of
Directors (or committee) may determine. The recipient of an
option will not pay the Company any amount at the time of receipt
of the option. If an option shall expire or terminate for any
reason without having been fully exercised, the unpurchased
Shares subject to the option shall again be available for the
purposes of the Employee and Officer Option Plan.
A participant may exercise an option by completing each of
the following steps: (i) indicating in writing the decision to
exercise the option and delivering such notice to the Company;
(ii) tendering to the Company payment in full in cash (or, if the
Board (or committee) so determines at the time of grant, in
Shares) of the exercise price for the Shares for which the option
is exercised; (iii) tendering to the Company payment in full in
cash of the amount of all federal and state withholding or other
employment taxes applicable to taxable income; and (iv) complying
with such other requirements as the Board (or committee) shall
establish.
The Employee and Officer Option Plan provides that it may be
terminated or amended by the Board of Directors (or committee),
except that shareholder approval would be required in the event
an amendment were to: (i) materially increase the benefits
accruing to the participants; (ii) increase the number of
securities issuable under the plan (other than an increase
pursuant to the anti-dilution provisions of the plan); (iii)
change the class of persons eligible to receive options; or (iv)
otherwise materially modify the requirements for eligibility.
The Employee and Officer Option Plan provides that no
person, estate or entity shall have any of the rights of a
shareholder with respect to Shares subject to an option until a
certificate(s) for such Shares has been delivered.
No certificate(s) for Shares shall be executed and delivered
upon exercise of an option until the Company shall have taken
such action, if any, as is then required to comply with the
provisions of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the South Carolina
Uniform Securities Act, as amended, any other applicable state
blue sky law(s) and the requirements of any exchange on which the
Shares may, at the time, be listed.
The Employee and Officer Option Plan provides that it shall
terminate on the close of business of May 31, 2005, and no option
shall be granted under the plan thereafter, but such termination
shall not affect any option theretofore granted under the plan.
As of May 5, 1995, the last bid and asked price for a share
of Class A Common stock was $1.13 and $1.38, respectively, and the
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<PAGE>
last bid and asked price for a share of Common stock was $1.00
and $1.63, respectively, each as reported by the National Daily
Quotation Service.
No awards have been granted to date under the Employee and
Officer Option Plan.
Each of the officers of the Company and its subsidiaries, as
a potential participant in the Employee and Officer Option Plan,
could be deemed to have an interest in approval of such plan.
The Company does not intend to make any grants pursuant to
the Employee and Officer Option Plan during 1995. The first
grants pursuant to this plan are not expected to be made until
1996 and the number of Shares to be granted and the recipients of
such grants will be determined at that time by the committee
administering the Employee and Officer Option Plan.
The Employee and Officer Option Plan is being submitted to
the shareholders of the Company for approval in order to qualify
the plan under the "incentive stock option" rules of the Code,
and to qualify certain aspects of the operation of the plan for
an exemption from the six-month short-swing-profit rules of the
Exchange Act. The Employee and Officer Option Plan will not
become effective if the requisite shareholder vote on approval is
not obtained.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE EMPLOYEE AND
OFFICER OPTION PLAN.
PROPOSED 1995 DIRECTOR STOCK OPTION PLAN
(Proxy Item 5)
The Board of Directors recommends that the shareholders
approve adoption by the Company of the Emergent Group, Inc. 1995
Director Stock Option Plan (the "Director Option Plan") under
which options covering shares of the Company's Common stock and
Class A Common stock, in an amount determined pursuant to a
formula, would be granted annually to the non-employee directors
of the Company. An aggregate of 1,000 shares of Common stock and
49,000 shares of Class A Common stock could be covered by options
granted under the Director Option Plan. This maximum number of
shares, as well as the number of shares subject to any
outstanding option or to be subject to any future option, shall
be adjusted to reflect any stock dividend, split or
consolidation, merger, reorganization, recapitalization or
similar transaction. If the Reverse Split Amendment were
approved, the aggregate maximum number of shares of Common stock
available under the Director Option Plan would be reduced to 333
shares and the aggregate maximum number of shares of Class A
Common stock available under the Director Option Plan would be
reduced to 16,333 shares. The Company's Shares do not have
preemptive rights. The Board recommends approval of the Director
Option Plan because the Board believes the plan will promote the
growth and profitability of the Company by increasing the
personal participation of non-employee directors in the financial
performance of the Company, by enabling the Company to attract
25
<PAGE>
and retain non-employee directors of outstanding competence and
by providing such directors with an equity opportunity in the
Company. The plan shall be administered by the Company's Board
of Directors.
The grant of options under the Director Option Plan shall be
limited to those directors of the Company who, on the date of
grant, are not employees of the Company (each an "Eligible
Director").
The Director Option Plan provides that, on each Grant Date
(as defined below), each Eligible Director shall automatically
receive from the Company an option for 20 shares of Common stock
and 980 shares of Class A Common stock, with an exercise price
for each share of Common stock equal to the average of the bid
and ask price per share of Common stock as quoted by the National
Daily Quotation Service and an exercise price for each share of
Class A Common stock equal to the average of the bid and ask
price per share of Class A Common stock as quoted by the National
Daily Quotation Service on such Grant Date. If the Reverse Split
Amendment were approved, on each Grant Date each Eligible
Director would automatically receive from the Company an option
for 7 shares of Common stock and 326 shares of Class A Common
stock. For purposes of the plan, the Grant Date shall be
December 15 of each calendar year commencing with the 1995
calendar year (or, if December 15 is not a business day, the
immediately preceding business day).
The Director Option Plan provides that each option shall be
immediately exercisable commencing on the date of its grant, and at
any time and from time to time thereafter until and including the
date which is the business day immediately preceding the tenth
anniversary of the date of grant of the option.
Any option granted under the Director Option Plan shall
terminate in full prior to the expiration of its fixed term on the
date which is one year after the date the optionee ceases to be a
director of the Company for any reason whatsoever. If the optionee
shall die while a director of the Company, the director's
legatee(s) under his or her last will or the director's personal
representative(s) may exercise all or part of the previously
unexercised portion of such option at any time within one year
after the director's death to the extent the optionee could have
exercised the option immediately prior to his or her death.
The recipient of an option granted under the Director Option
Plan will not pay the Company any amount at the time of receipt of
the option. The exercise price shall be payable in cash at the
time of exercise. Any such option may be exercised for any lesser
number of Shares than the full amount for which it could be
exercised. Such a partial exercise of an option shall not affect
the right to exercise the option for the remaining Shares subject
to the option.
The Shares subject to any option or portion thereof that
terminates shall no longer be charged against the Share limitation
and may again, subject to such limitation, become Shares available
for purposes of the Director Option Plan.
26
<PAGE>
An option granted to a participant under the Director Option
Plan shall not be transferable by him or her except by will or
the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title 1 of the
Employee Retirement Income Security Act, or the rules thereunder.
Under current law, for Federal income tax purposes, the
participant will not be taxed upon the grant of an option under the
Director Option Plan. Upon exercise of any such option, the
participant generally will recognize ordinary income equal to the
difference between the Shares' fair market value on the date of
exercise and the exercise price. Generally, the Company will
receive a deduction for the amount the participant reports as
ordinary income arising from the exercise of the option. Upon a
subsequent sale or disposition of the stock, the holder will
generally have taxable income equal to any excess of the selling
price over the fair market value at the date of exercise.
Generally, the Board may amend or terminate the Director
Option Plan, except that, in addition to Board approval, a majority
shareholder approval vote would be required if the amendment would:
(i) materially increase the benefits accruing to participants; (ii)
increase the number of securities issuable under the plan (other
than an increase pursuant to the anti-dilution provisions thereof);
(iii) change the class of individuals eligible to receive options
under the plan; or (iv) otherwise materially modify the
requirements for eligibility under the plan.
The Director Option Plan shall terminate at the close of
business on May 31, 2005, and no option shall be granted under it
thereafter, but such termination shall not affect any option
theretofore granted under the plan.
On May 12, 1995, five directors of the Company will be Eligible
Directors for purposes of the Director Option Plan. Mr. Sterling,
Mr. Giddens and Mr. Davis will not be eligible as they are
employees of the Company.
27
<PAGE>
New Plan Benefits
Subsequent Per
1995 Option Year Options
Name and Position Number of Shares Number of Shares
Common Class A Common Class A
Stock Stock Stock Stock
Clarence B. Bauknight 20 980 20 980
Director
Tecumseh Hooper, Jr. 20 980 20 980
Director
Jacob H. Martin 20 980 20 980
Director
Buck Mickel 20 980 20 980
Director
Porter B. Rose 20 980 20 980
Director
Current Executive 0(1) 0(1) 0(1) 0(1)
Officers as a Group
Non-Employee Director 100 4,900 100 4,900
Group (5 persons)
All Employees, Excluding 0(1) 0(1) 0(1) 0(1)
Executive Officers, as a
Group
(1) Employees of the Company are not eligible to participate in
the Director Option Plan.
Each of the Eligible Directors can be deemed to have an
interest in approval of the Director Option Plan.
The Director Option Plan is being submitted to the
shareholders of the Company for approval in order to qualify
certain aspects of the operation of the plan and certain of the
Company's other option plans for an exemption from the six-month-
short-swing-profit rules of the Exchange Act. The Director
Option Plan will not become effective if the requisite
shareholder vote on approval is not obtained.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE DIRECTOR OPTION
PLAN.
28
<PAGE>
APPOINTMENT OF AUDITORS
(Proxy Item 6)
The Board of Directors recommends the ratification of the
appointment of the accounting firm of Elliott, Davis and Company,
L.L.P., independent certified public accountants, as auditors for
the Company and its subsidiaries for fiscal year 1995 and to
examine and report to the shareholders upon the financial
statements of the Company as of and for the period ending
December 31, 1995. Representatives of Elliott, Davis and
Company, L.L.P., will be present at the meeting. Such
representatives will have the opportunity to make a statement if
they desire to do so and will be available to respond to
appropriate questions which the shareholders may have. Elliott,
Davis and Company, L.L.P., has acted for the Company in this
capacity since 1993, and neither the firm nor any of its members
has any relation with the Company except in the firm's capacity
as such auditors.
The accounting firm of Ernst & Young resigned as principal
independent auditors for the Company on April 14, 1993. In
connection with its audits for the 1992 and 1991 fiscal years
and its work for the Company during the subsequent interim period
preceding April 14, 1993, there had been no disagreements between
the Company and Ernst & Young on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of the auditors, would have caused it to make
reference to the subject matter of the disagreement in connection
with its report. Moreover, Ernst & Young's reports as principal
auditor of the financial statements of the Company for its 1992
and 1991 fiscal years did not contain an adverse opinion or a
disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope or accounting principles.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF THE ACCOUNTING FIRM OF
ELLIOTT, DAVIS AND COMPANY, L.L.P. AS DESCRIBED ABOVE.
ANNUAL REPORT
The Company's Annual Report to Shareholders for its fiscal
year ended December 31, 1994 (the "Annual Report") is enclosed.
Additional copies may be obtained from the Company. In addition,
the Company will provide without charge to any shareholder of
record as of April 14, 1995, who so requests in writing, a copy
of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1994 (without exhibits). Any such request should be
directed to the Company, P. O. Box 17526, Greenville, South
Carolina 29606, Attention: Robert S. Davis, Chief Financial
Officer. Management's Discussion and Analysis of Financial
Condition and Results of Operations included on pages 13 through
17 of the 1995 Annual Report to Shareholders and the Consolidated
Financial Statements included on pages 18 through 45 of the 1995
Annual Report to Shareholders are incorporated herein by
reference.
29
<PAGE>
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Any shareholder who, in accordance with and subject to the
provisions of the proxy rules of the Securities and Exchange
Commission, wishes to submit a proposal for inclusion in the
Company's proxy statement for its 1996 meeting of Shareholders,
must deliver such proposal in writing to the Secretary of the
Company at the Company's principal executive offices at Post
Office Box 17526, Greenville, South Carolina 29606, not later
than December 14, 1995 and must otherwise comply with the rules
of the Securities and Exchange Commission.
OTHER MATTERS
The Board of Directors does not know of any matters to be
presented for consideration other than the matters described in
the Notice of Annual Meeting, but if any matters are properly
presented, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with
their judgment.
By Order of the Board of Directors,
C. Thomas Wyche, Secretary
Dated: May 12, 1995
30
<PAGE>
APPENDIX I
CHAPTER 13 OF THE SOUTH CAROLINA BUSINESS CORPORATION ACT
ARTICLE 1
RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
SEC.
33-13-101.Definitions.
33-13-102.Right to dissent.
33-13-103.Dissent by nominees and beneficial owners.
33-13-101. Definitions.
In this chapter:
(1) "Corporation" means the issuer of the shares held by a dissenter before
the corporation action, or the surviving or acquiring corporation by
merger or share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from corporate
action under Section 33-13-102 and who exercises that right when and in
the manner required by Sections 33-13-200 through 33-13-280.
(3) "Fair value", with respect to a dissenter's shares, means the value of the
shares immediately before the effectuation of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation
in anticipation of the corporate action to which the dissenter objects,
excluding any appreciation or depreciation in anticipation of the
corporate action unless exclusion would be inequitable. The value of the
shares is to be determined by techniques that are accepted generally
in the financial community.
(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by
the corporation on its principal bank loans or, if none, at a rate that
is fair and equitable under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of
shares to the extent of the rights granted by a nominee certificate on
file with a corporation.
(6) "Beneficial shareholder" means the person who is a beneficial owner of
shares held by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial shareholder.
1
<PAGE>
33-13-102. Right to dissent.
A shareholder is entitled to dissent from, and obtain payment of the fair
value of, his shares in the event of any of the following corporate actions:
(1) consummation of a plan of merger to which the corporation is a party (i)
if shareholder approval is required for the merger by Section 33-11-103
or the articles of incorporation and the shareholder is entitled to vote
on the merger or (ii) if the corporation is a subsidiary that is merged
with its parent under Section 33-11-104 or 33-11-108 or if the corporation
is a parent that is merged with its subsidiary under the Section 33-11-108;
(2) consummation of a plan of share exchange to which the corporation is a party
as the corporation whose shares are to be acquired, if the shareholder is
entitled to vote on the plan;
(3) consummation of a sale or exchange of all, or substantially all, of the
property of the corporation other than in the usual and regular course
of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which
all or substantially all of the net proceeds of the sale must be
distributed to the shareholders within one year after the date of sale;
(4) an amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(i) alters or abolishes a preferential right of the shares;
(ii) creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption
or repurchase, of the shares;
(iii) alters or abolishes a preemptive right of the holder of the shares to
acquire shares or other securities;
(iv) excludes or limits the right of the shares to vote on any matter, or to
cumulate votes, other than a limitation by dilution through issuance
of shares or other securities with similar voting rights; or
(v) reduces the number of shares owned by the shareholder to a fraction of
share if the fractional share so created is to be acquired for cash under
Section 33-6-104; or
(5) the approval of a control share acquisition under Article 1 of Chapter 2 of
Title 35;
(6) any corporate action to the extent the articles of incorporation, bylaws, or
a resolution of the board of directors provides that voting or nonvoting
shareholders are entitled to dissent and obtain payment for their shares.
2
<PAGE>
33-13-103. Dissent by nominees and beneficial owners.
(a) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one person and notifies the corporation
in writing of the name and address of each person on whose behalf he
asserts dissenters' rights. The rights of a partial dissenter under this
subsection are determined as if the shares to which he dissents and his
other shares were registered in the names of different shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to shares held
on his behalf only if he dissents with respect to all shares of which
he is the beneficial shareholder or over which he has power to direct
the vote. A beneficial shareholder asserting dissenters' rights to shares
held on his behalf shall notify the corporation in writing of the name
and address of the record shareholder of the shares, if known to him.
ARTICLE 2
PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
SEC.
33-13-200.Notice of dissenters' rights.
33-13-210.Notice of intent to demand payment.
33-13-220.Dissenters' notice.
33-13-230.Shareholders' payment demand.
33-13-240.Share restrictions.
33-13-250.Payment.
33-13-260.Failure to take action.
33-13-270.After-acquired shares.
33-13-280.Procedure if shareholder dissatisfied with payment or offer.
33-13-200. Notice of dissenters' rights.
(a) If proposed corporate action creating dissenters' rights under Section
33-13-102 is submitted to a vote at a shareholders' meeting, the
meeting notice must state that shareholders are or may be entitled to
assert dissenters' rights under this chapter and be accompanied by a
copy of this chapter.
(b) If corporate action creating dissenters' rights under Section 33-13-102
is taken without a vote of shareholders, the corporation shall notify
in writing all shareholders entitled to assert dissenters' rights that
the action was taken and send them the dissenters' notice described in
Section 33-13-220.
3
<PAGE>
33-13-210. Notice of intent to demand payment.
(a) If proposed corporate action creating dissenters' rights under Section
33-13-102 is submitted to a vote at a shareholders' meeting, a
shareholder who wishes to assert dissenters' rights (1) must give to
the corporation before the vote is taken written notice of his intent
to demand payment for his shares if the proposed action is effectuated
and (2) must not vote his shares in favor of the proposed action.
A vote in favor of the proposed action cast by the holder of a proxy
solicited by the corporation shall not disqualify a shareholder form
demanding payment for his shares under this chapter.
(b) A shareholder who does not satisfy the requirements of subsection (a) is
not entitled to payment for his shares under this chapter.
33-13-220. Dissenters' notice.
(a) If proposed corporate action creating dissenters' rights under Section
33-13-102 is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who
satisfied the requirements of Section 33-13-201(a).
(b) The dissenters' notice must be delivered no later than ten days after
the corporate action was taken and must:
(1) state where the payment demand must be sent and where certificates
for certified shares must be deposited,
(2) inform holders of uncertified shares to what extent transfer of the
shares is to be restricted after the payment demand is received;
(3) supply a form for demanding payment that includes that date of the
first announcement to news media or to shareholders of the terms of
the proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not he or, if he is a
nominee asserting dissenters' rights on behalf of a beneficial
shareholder, the beneficial shareholder acquired beneficial
ownership of the shares before that date;
(4) set a date by which the corporation must receive the payment demand,
which may not be fewer than thirty nor more than sixty days after
the date the subsection (a) notice is delivered and set a date
by which certificates for certificated shares must be
deposited, which may not be earlier than twenty days after the
demand date; and
(5) be accompanied by a copy of this chapter.
4
<PAGE>
33-13-230. Shareholders' payment demand.
(a) A shareholder sent a dissenters' notice described in Section 33-13-220
must demand payment, certify whether he (or the beneficial shareholder
on whose behalf he is asserting dissenters' rights) acquired
beneficial ownership of the shares before the date set forth in the
dissenters' notice pursuant to Section 33-13-220 (b)(3), and deposit
his certificates in accordance with the terms of the notice.
(b) The shareholder who demands payment and deposits his share
certificates under subsection (a) retains all other rights of a
shareholder until these rights are canceled or modified by the taking
of the proposed corporate action.
(c) A shareholder who does not comply substantially with the requirements
that he demand payment and deposit his share certificates where
required, each by the date set in the dissenters' notice, is not
entitled to payment for his shares under this chapter.
33-13-240. Share restrictions.
(a) The corporation may restrict the transfer of uncertificated shares
from the date the demand for payment for them is received until the
proposed corporate action is taken or the restrictions are released
under Section 33-13-260.
(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder
until these rights are canceled or modified by the taking of the
proposed corporate action.
33-13-250. Payment.
(a) Except as provided in Section 33-13-270, as soon as the proposed
corporate action is taken, or upon receipt of a payment demand, the
corporation shall pay each dissenter who substantially complied with
Section 33-13-230 the amount the corporation estimates to be the fair
value of his shares, plus accrued interest.
(b) The payment must be accompanied by:
(1) the corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen months before the date of payment,
an income statement for that year, a statement of changes in
shareholders' equity for that year, and the latest available
interim financial statements, if any;
(2) a statement of the corporation's estimate of the fair value of
the shares and an explanation of how the fair value was
calculated;
(3) an explanation of how the interest was calculated;
5
<PAGE>
(4) a statement of the dissenter's right to demand additional payment
under Section 33-13-280; and
(5) a copy of this chapter.
33-13-260. Failure to take action.
(a) If the corporation does not take the proposed action within sixty days
after the date set for demanding payment and depositing share
certificates, the corporation, within the same sixty-day period, shall
return the deposited certificates and release the transfer restrictions
imposed on uncertificated shares.
(b) If, after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send
a new dissenters' notice under Section 33-13-220 and repeat the
payment demand procedure.
33-13-270. After-acquired shares.
(a) A corporation may elect to withhold payment required by section
33-13-250 from a dissenter as to any shares of which he (or the
beneficial owner on whose behalf he is asserting dissenters' rights)
was not the beneficial owner on the date set forth in the dissenters'
notice as the date of the first announcement to news media or to
shareholders of the terms of the proposed corporate action, unless
the beneficial ownership of the shares devolved upon him by operation
of law from a person who was the beneficial owner on the date of
the first announcement.
(b) To the extent the corporation elects to withhold payment under
subsection (a), after taking the proposed corporate action, it shall
estimate that fair value of the shares, plus accrued interest, and
shall pay this amount to each dissenter who agrees to accept it in
full satisfaction of his demand. The corporation shall send with its
offer a statement of its estimate of the fair value of the shares, an
explanation of how the fair value and interest were
calculated, and a statement of the dissenter's right to demand
additional payment under Section 33-13-280.
33-13-280. Procedure if shareholder dissatisfied with payment or offer.
(a) A dissenter may notify the corporation in writing of his own estimate
of the fair value of his shares and amount of interest due and demand
payment of his estimate (less any payment under Section 33-13-250)
or reject the corporation's offer under Section 33-13-270 and demand
payment of the fair value of his shares and interest due, if the:
(1) dissenter believes that the amount paid under Section 33-13-250 or
offered under Section 33-13-270 is less than the fair value of his
shares or that the interest due is calculated incorrectly.
6
<PAGE>
(2) corporation fails to make payment under Section 33-13-250 or to
offer payment under Section 33-13-270 within sixty days after the
date set for demanding payment; or
(3) corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer
restrictions imposed on uncertificated shares within sixty days
after the date set for demanding payment.
(b) A dissetner waives his right to demand additional payment under this
section unless he notifies the corporation of his demand in writing
under subsection (a) within thirty days after the corporation made
or offered payment for his shares.
ARTICLE 3
JUDICIAL APPRAISAL OF SHARES
SEC.
33-13-300.Court action.
33-13-310.Court costs and counsel fees.
33-13-300. Court action.
(a) If a demand for additional payment under Section 33-13-280 remains
unsettled, the corporation shall commence a proceeding within sixty
days after receiving the demand for additional payment and petition
the court to determine the fair value of the shares and accrued
interest. If the corporation does not commence the proceeding within
the sixty-day period, it shall pay each dissenter whose demand remains
unsettled the amount demanded.
(b) The corporation shall commence the proceeding in the circuit court of
the county where the corporation's principal office (or, if none in
this State, its registered office) is located. If the corporation is a
foreign corporation without a registered office in this State, it
shall commence the proceeding in the county in this State where the
principal office (or, if none in this State, the registered office)
of the domestic corporation merged with or whose shares were acquired
by the foreign corporation was located.
(c) The corporation shall make all dissenters (whether or not residents of
this State) whose demands remain unsettled parties to the proceeding
as in an action against their shares and all parties must be served
with a copy of the petition. Nonresidents may be served by registered
or certified mail or by publication, as provided by law.
(d) The jurisdiction of the court in which the proceeding is commenced under
subsection (b) is plenary and exclusive. The court may appoint persons
as appraisers to receive evidence and recommend decisions on the
question of fair value. The appraisers have the powers described in the
7
<PAGE>
order appointing them or in any amendment to it. The dissenters are
entitled to the same discovery rights as parties in other civil
proceedings.
(e) Each dissenter made a party to the proceeding is entitled to judgement
for the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the corporation.
33-13-310. Court costs and counsel fees.
(a) The court in an appraisal proceeding commenced under Section 33-13-300
shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The
court shall assess the costs against the corporation, except that the
court may assess costs against all or some of the dissenters, in amounts
the court finds equitable, to the extent the court finds the dissenters
acted arbitrarily, vexatiously, or not in good faith in demanding
payment under Section 33-13-280.
(b) The court also may assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
(1) against the corporation and in favor of any or all
dissenters if the court finds the corporation did not comply
substantially with the requirements of Sections 33-13-200
through 33-13-280; or
(2) against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the
fees and expenses are assessed acted arbitrarily, vexatiously, or
not good faith with repect to the rights provided by this chapter.
(c) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that
the fees for whose services should not be assessed against the
corporation, the court may award to these counsel reasonable fees to be
paid out of the amounts awarded the dissenters who were benefited.
(d) In a proceeding commenced by dissenters to enforce the liability under
Section 33-13-300 (a) of a corporation that has failed to commence an
appraisal proceeding within the sixty-day period, the court shall
assess the costs of the proceeding and the fees and expenses of
dissenters' counsel against the corporation and in favor of the
dissenters.
8
<PAGE>
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APPENDIX
EMERGENT GROUP, INC.
15 S. MAIN STREET, SUITE 750
P. O. BOX 17526
GREENVILLE, SC 29606
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints C. T. Wyche and Robert S. Davis or
either of them as Proxies, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as
designated below, all of the shares of Class A Common Stock and Common
Stock of Emergent Group, Inc. held of record by the undersigned on
April 14, 1995 at the annual meeting of Shareholders to be held June
9, 1995, or any adjournment thereof.
Proxy for Class A Common Stock and Common Stock
________________________________________________________________________
1. ELECTION OF DIRECTORS
For the eight nominees listed below (except as marked to the
contrary below)
WITHHOLD AUTHORITY to vote for the eight nominees listed below
Clarence B. Bauknight, Robert S. Davis, Keith B. Giddens,
Tecumseh Hooper, Jr., Jacob H. Martin, Buck Mickel, Porter B.
Rose, John M. Sterling, Jr.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name on the space provided below.
If you desire to cumulate your votes for any particular
nominee(s), in the event cumulative voting is elected, write your
instructions as to the number of votes cast for each in the space
provided below.
________________________________________________________________________
2. PROPOSAL TO ADOPT AN AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO EFFECT A ONE-FOR-THREE REVERSE SPLIT OF THE
COMPANY'S COMMON AND CLASS A COMMON STOCK.
FOR AGAINST ABSTAIN
________________________________________________________________________
3. PROPOSAL TO ADOPT AN AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK
TO 4,000,000 SHARES.
FOR AGAINST ABSTAIN
________________________________________________________________________
4. APPROVAL OF THE COMPANY'S 1995 EMPLOYEE AND OFFICER STOCK OPTION
PLAN.
FOR AGAINST ABSTAIN
________________________________________________________________________
5. APPROVAL OF THE COMPANY'S 1995 DIRECTOR STOCK OPTION PLAN.
FOR AGAINST ABSTAIN
________________________________________________________________________
6. RATIFICATION OF THE BOARD'S APPOINTMENT OF ELLIOTT, DAVIS &
COMPANY, L.L.P. AS INDEPENDENT AUDITORS OF THE COMPANY FOR THE
1995 FISCAL YEAR.
FOR AGAINST ABSTAIN
________________________________________________________________________
7. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
<PAGE>
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholders. If no direction is made, this
proxy will be voted in favor of proposals 1 through 6 and in the
discretion of the Proxies, upon such other business as may properly
come before the meeting.
Please sign exactly as your name appears herein. When shares are held
by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign full corporate name by
President or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
DATE____________________________________
________________________________________
SIGNATURE
________________________________________
SIGNATURE IF HELD JOINTLY
Please mark, sign, date and return the
proxy card promptly using the enclosed
envelope.
The above person hereby acknowledges
receipt of the notice of Annual Meeting
of Shareholders dated May 12, 1995 and
the proxy statement furnished therewith.
