<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Amendment No. ______)
Filed by the registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) Or ss.240.14a-12
EMPIRE OF CAROLINA, INC.
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] $125 per Exchange Act Rule O-11(c)(1)(ii), 14a-6(i)(2) or Item 22(a)(2) of
Schedule 14A.
[ ] 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 computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] 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: ________________________________________________
(2) Form, Schedule or Registration Statement No.: __________________________
(3) Filing party: __________________________________________________________
(4) Date filed: ____________________________________________________________
<PAGE>
EMPIRE OF CAROLINA, INC.
5150 LINTON BOULEVARD
DELRAY BEACH, FLORIDA 33484
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 25, 2000
To the Shareholders of EMPIRE OF CAROLINA, INC.:
You are cordially invited to attend the Annual Meeting of the
Shareholders (the "Annual Meeting") of Empire of Carolina, Inc. (the "Company")
which will be held at the offices of Greenberg Traurig, P.A., 777 South Flagler
Drive, Suite 300-East Tower, West Palm Beach, Florida 33401 on May 25, 2000, at
10:00 a.m., EDT. At the meeting, the shareholders will be asked to:
o elect a total of seven directors. The holders of the Series A
preferred stock will elect two members to the Board of
Directors and the Series A holders and the holders of common
stock voting together will elect five members to the Board;
o ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending
December 31, 2000; and
o transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Shareholders of record of common stock and Series A preferred stock at
the close of business on May 1, 2000 will be entitled to notice of, and to vote
at, the Annual Meeting or any adjournments or postponements of the meeting. A
list of shareholders entitled to vote at the Annual Meeting will be open to
examination by any stockholder, for any purpose germane to the meeting, at the
offices of Greenberg Traurig, P.A., 777 South Flagler Drive, Suite 300-East
Tower, West Palm Beach, Florida 33401, during ordinary business hours for ten
days prior to the Annual Meeting. The stockholder list will also be available
for review at the Annual Meeting. A copy of the Annual Report of the Company for
the fiscal year ended December 31, 1999 is enclosed.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. WHETHER OR NOT
YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE COMPLETE, DATE AND
SIGN THE ACCOMPANYING PROXY CARDS AND RETURN THEM WITHOUT DELAY IN THE ENCLOSED
POSTAGE PREPAID ENVELOPE. YOUR PROXY WILL NOT BE USED IF YOU ARE PRESENT AND
PREFER TO VOTE IN PERSON OR IF YOU REVOKE THE PROXY.
By order of the Board of Directors,
Timothy Moran, President and Chairman of the Board
May 4, 2000
Delray Beach, Florida
<PAGE>
EMPIRE OF CAROLINA, INC.
5150 LINTON BOULEVARD
DELRAY BEACH, FLORIDA 33484
----------
PROXY STATEMENT
----------
ANNUAL MEETING OF SHAREHOLDERS
May 25, 2000
SOLICITATION AND REVOCATION OF PROXIES
This proxy statement has been prepared and is furnished by the board of
directors of Empire of Carolina, Inc. for the annual meeting of shareholders to
be held on May 25, 2000, and at any adjournment of the meeting, for the purposes
indicated in the accompanying Notice of Meeting.
This proxy statement and the accompanying form of proxy will be mailed to
shareholders on or about May 4, 2000. Empire's annual report on Form 10-K,
including audited consolidated financial statements for the fiscal year ended
December 31, 1999, will be mailed or delivered with this proxy statement. The
annual report is not to be regarded as proxy soliciting material.
GENERAL INFORMATION ABOUT VOTING
WHO CAN VOTE?
You can vote your shares of common stock and Series A preferred stock
if our records show that you owned the shares at the close of business on May 1,
2000. A total of 20,967,839 shares of common stock and 1,322,487 shares of
Series A preferred stock can vote at the annual meeting.
HOW MANY VOTES DO I GET?
Series A Preferred Stock: You get one vote for each share of Series A
preferred stock you hold when you vote on the election of two directors by the
holders of Series A preferred stock under Proposal 1 and eight votes for each
share of Series A preferred stock you hold when you vote on the election of the
remaining five directors under Proposal 1 and when you vote on Proposal 2.
Common Stock: You get one vote for each share of common stock you hold
when you vote on Proposals 1 and 2.
HOW DO I TELL HOW MANY VOTES I GET?
The enclosed proxy card shows the number of shares you can vote. If you
own both common and Series A preferred stock, you will receive two proxy cards.
If you own only common stock, you will receive only one proxy card. If you
receive two proxy cards, be sure to vote and return both to ensure that all of
the votes to which you are entitled will be counted.
HOW DO I VOTE BY PROXY?
Follow the instructions on the enclosed proxy card to vote on each
proposal to be considered at the annual meeting. Sign and date the proxy card
and mail it back to us in the enclosed envelope. The proxyholders named on the
proxy card will vote your shares as you instruct. If you sign and return the
proxy card but do not vote on a proposal, the proxyholders will vote for you on
that proposal. Unless you instruct otherwise, the proxyholders will vote FOR
each of the director nominees, FOR the ratification of the appointment of
Deloitte & Touche LLP as the independent auditors of the company for the fiscal
year ending December 31, 2000, and FOR any other proposals to be considered at
the meeting.
<PAGE>
WHAT IF OTHER MATTERS COME UP AT THE ANNUAL MEETING?
The matters described in this proxy statement are the only matters we
know will be voted on at the annual meeting. If other matters are properly
present at the meeting, the proxyholders will vote your shares as they see fit.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. At any time before the vote on a proposal, you can change your
vote either by giving the company's secretary a written notice revoking your
proxy card or by signing, dating and returning to us a new proxy card.
We will honor the proxy card with the latest date.
CAN I VOTE IN PERSON AT THE ANNUAL MEETING RATHER THAN BY COMPLETING THE PROXY
CARD?
Although we encourage you to complete and return the proxy card to
ensure that your vote is counted, you can attend the annual meeting and vote
your shares in person.
WHAT DO I DO IF MY SHARES ARE HELD IN "STREET NAME"?
If your shares are held in the name of your broker or other nominee,
that party should give you instructions for voting your shares.
HOW ARE VOTES COUNTED?
We will hold the annual meeting if holders of a majority of the shares
of common stock entitled to vote either sign and return their proxy cards or
attend the meeting. If you sign and return your proxy card, your shares will be
counted to determine whether we have a quorum even if you abstain or fail to
vote on any of the proposals listed on the proxy card. WHO WILL COUNT THE VOTES?
American Stock Transfer & Trust Company, our transfer agent, will
tabulate the returned proxy votes by mail and the independent inspector of the
election will tabulate the votes at the meeting. The elections inspector will
treat shares represented by properly signed and returned proxies that reflect
abstentions from voting as shares that are present and entitled to vote for
purposes of determining the presence of a quorum on all matters. A majority of
the outstanding shares will constitute a quorum at the meeting.
WHO PAYS FOR THIS PROXY SOLICITATION?
We do. In addition to sending you these materials, some of our
employees may contact you by telephone, by mail, or in person. None of these
employees will receive any extra compensation for doing this. We have retained
Georgeson Shareholder Communications, Inc. to assist us in soliciting your proxy
for a fee plus reasonable out-of-pocket expenses.
2
<PAGE>
None of the actions to be voted upon at the 2000 annual meeting create
dissenters' rights under the Delaware General Corporation Law.
YOU ARE REQUESTED, REGARDLESS OF THE NUMBER OF SHARES YOU HOLD, TO SIGN
THE PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
VOTING RIGHTS AND VOTING SECURITIES OUTSTANDING
We have fixed May 1, 2000 as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting or any
adjournments or postponements of the Annual Meeting. As of May 1, 2000, we had
outstanding 20,967,839 shares of common stock and 1,322,487 shares of Series A
preferred stock, the only outstanding voting securities of the Company. In
addition, as of May 1, 2000, we had outstanding 1,450.9607 shares of Series C
preferred stock which is non-voting except as expressly provided by law or our
Certificate of Designation for the Series C preferred stock.
With respect to each proposal as to which the holders of the Series A
preferred stock vote separately (i.e., the election of two of the directors
pursuant to Proposal 1), each holder of Series A preferred stock is entitled to
one vote for each share held. With respect to such proposals, holders of 50% of
the outstanding shares of Series A preferred stock shall constitute a quorum.
With respect to all other matters, each Series A holder is entitled to
eight votes for each share of Series A preferred stock held, and each common
holder is entitled to one vote for each share of common stock held. The
affirmative vote by holders of Series A preferred stock and common stock
representing a majority of the voting power of all shares of Series A preferred
stock and common stock present, in person or by proxy, and entitled to vote at
the Annual Meeting is required for approval of these proposals. With respect to
Proposals 1 and 2, the holders of common stock and Series A preferred stock do
not have cumulative voting rights, which means (a) the two directors to be
elected by the Series A holders voting alone will be elected by the vote of the
holders representing a plurality of the shares of Series A preferred stock
present, in person or by proxy, and entitled to vote at the Annual Meeting and
(b) the other five directors to be elected will be elected by the vote of the
Series A holders and common holders, voting together as a class, representing a
plurality of the voting power of all shares of Series A preferred stock and
common stock held by holders present, in person or by proxy, and entitled to
vote at the Annual Meeting.
Abstentions and broker non-votes are counted for the purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions and broker non-votes will have no effect upon the outcome of
Proposals 1 and 2.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The table below shows, as of April 28, 2000, the number of
shares of common stock, Series A preferred stock and Series C preferred stock
beneficially owned by:
o each person who we know beneficially owns more than 5% of the
common stock or more than 5% of the Series A preferred stock,
o each director,
o each executive officer included in the Summary Compensation
Table, and
o all executive officers and directors as a group.
3
<PAGE>
<TABLE>
<CAPTION>
Common Stock Series A Series C Percentage
Name And Address of Beneficial Owner(1) Ownership(2) Preferred Preferred Stock Ownership on
Stock Ownership (4) an As Voted
Ownership (3) Basis(5)
- ------------------------------------------ ------------------ --------------- -- ----------------- -- ---------------
<S> <C> <C> <C> <C>
Timothy Moran 1,914,103(6) 50,000 0 6.0%
8.9% 3.8% 0.0%
Charles S. Holmes 4,517,742(7) 145,000 0 12.8%
18.1% 10.1% 0.0%
James J. Pinto 3,922,919(8) 110,000 0 11.2%
15.9% 8.3% 0.0%
Mark S. Rose 2,966,538(9) 50,000 0 9.4%
13.9% 3.8% 0.0%
John J. Doran 139,167(10) 10,000 0 *
* * 0.0%
Frederick W. Rosenbauer, Jr 81,667(11) 0 0 *
* 0.0% 0.0%
Lenore H. Schupak 262,501(12) 22,500 0 *
1.2% * 0.0%
Thomas Wenzler 16,667(13) 0 0 *
* 0.0% 0.0%
Thomas MacDougall 3,334(14) 0 0 *
* 0.0% 0.0%
All Current or Proposed Directors and 13,824,638 387,500 0 34.3%
Executive Officers as a Group(9 persons 45.9% 29.3% 0.0%
above)
Other 5% Stockholders
WPG Corporate Development Associates, 6,421,325(15) 0 1,148 17.4%
IV, L.P. 24.0% 0.0% 76.5%
One New York Plaza
New York, New York 10004
WPB Corporate Developments Associates, 1,513,006(16) 0 277 4.6%
IV (Overseas, Ltd.) 6.8% 0.0% 18.5%
One New York Plaza
New York, New York 10004
J. F. Shea Co., Inc. as Nominee 1,600,000(17) 200,000 0 4.9%
Edmund H. Shea, Jr., VP 7.1% 15.1% 0.0%
655 Brea Canyon Road
Walnut Creek, CA 91789
</TABLE>
* Less than 1%.
(1) Unless otherwise indicated, the business address of the persons and entities
named in the above table is care of Empire of Carolina, Inc., 5150 Linton
Boulevard, Delray Beach, Florida 33484. Unless otherwise indicated, each person
has sole investment and voting power with respect to the shares listed in the
table, subject to community property laws, where applicable.
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<PAGE>
(2) For purposes of this column, a person or group of persons is deemed to have
"beneficial ownership" of any shares of common stock which such person has the
right to acquire within 60 days. For purposes of computing the percentage of
outstanding shares of common stock held by each person or group of persons, any
security which such person or group of persons has the right to acquire within
60 days is deemed to be outstanding for the purpose of computing the percentage
ownership for such person or persons, but is not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person.
(3) Percentages are based solely upon the number of shares of Series A preferred
stock held as of April 28, 2000. As of April 28, 2000, 1,322,487 shares of
Series A preferred stock were outstanding. Each share of Series A preferred
stock has a stated value of $10 (the "Stated Value"). Each share of Series A
preferred stock is convertible at any time at the option of the holder into
common stock at a rate of one share of common stock for each $1.25 of Stated
Value of Series A preferred stock. Each share of Series A preferred stock votes
on all matters to be voted on by the Common Holders on an as if converted basis.
(4) There are a total of 1,500 shares of Series C preferred stock authorized,
and, as of April 28, 2000, 1450.9607 of such shares were outstanding. Holdings
of Series C preferred stock have been rounded to the nearest whole number in the
chart. Each share of Series C preferred stock has a Stated Value per share of
$10,000 and is convertible at any time, at the option of the holder thereof,
into one share of common stock for every $2.00 of Stated Value of Series C
preferred stock. Except as otherwise expressly provided by law or the Company's
Certificate of Designation of the Series C preferred stock or Bylaws, the Series
C preferred stock is non-voting.
(5) On an "as voted" basis, as of April 28, 2000, a total of 31,277,735 shares
of common stock would be outstanding. This amount is composed of (i) the
20,967,839 shares of common stock outstanding and (ii) the 10,579,896 shares of
common stock issuable upon conversion of the 1,322,487 shares of Series A
preferred stock outstanding, reflecting a conversion rate of 8 for 1. Common
stock and Series A preferred stock are the only voting stock of the Company
which is currently outstanding. The percentage represents the percentage of such
total represented by the shares of common stock owned by each such person as
reflected in the column of this table headed "Common Stock Ownership."
(6) Represents (a) 50,000 shares of Series A preferred stock which Mr. Moran has
the right to convert into 400,000 shares of common stock, (b) 50,000 shares of
common stock issuable upon the exercise of warrants at an exercise price of
$1.375 per share, (c) 1,230,769 shares of common stock and (d) options to
purchase 233,334 shares pursuant to the 1994 and 1998 Option Plans which are
exercisable within 60 days of the Record Date.
(7) Represents (a) 145,000 shares of Series A preferred stock which are
convertible into 1,160,000 shares of common stock; (b) 2,773,752 shares of
common stock issuable upon the exercise of warrants by Mr. Holmes at an exercise
price of $1.375 per share; (c) 370,656 shares of common stock and (d) 113,334
shares of common stock which Mr. Holmes has the right to acquire within sixty
days pursuant to options granted under the 1994 Stock Option Plan.
(8) Represents: I. Securities owned directly by Mr. Pinto: (a) 24,500 shares of
Series A preferred stock which are convertible into 196,000 shares of common
stock; (b) 2,613,252 shares of common stock issuable upon the exercise of
warrants at an exercise price of $1.375 per share; (c) 237,500 shares of common
stock and (d) 116,667 shares of common stock which Mr. Pinto has the right to
acquire within sixty days pursuant to options granted under the 1994 Stock
Option Plan and the Non-Employee Director Stock Option Plan. II. Securities
owned by TelCom Partners, L.P. of which Mr. Pinto is the sole general partner
and has sole voting and investment power: (a) 72,500 shares of Series A
preferred stock which are convertible into 580,000 shares of common stock and
(b) 62,500 shares of common stock issuable upon the exercise of warrants at an
exercise price of $1.375 per share. III. Securities owned by Churchill
Associates, L.P., of which Mr. Pinto owns 50% of Churchill, Inc., the sole
general partner and has shared voting and investment power: (a) 13,000 shares of
Series A preferred stock which are convertible into 104,000 shares of common
stock and (b) 13,000 shares of common stock issuable upon the exercise of
warrants at an exercise price of $1.375 per share.
(9) Represents (a) 2,362,692 shares of common stock owned directly by Mr. Rose,
(b) 153,846 shares of common stock owned by E. Joy Rose, over which Mr. Rose has
shared voting and investment power, (c) 50,000 shares of Series A preferred
stock which are convertible into 400,000 shares of common stock, (d) 50,000
shares of common stock
5
<PAGE>
issuable upon the exercise of warrants at an exercise price of $1.375 per share,
and 1,667 shares of common stock which Mr. rose has the right to acquire within
sixty days pursuant to options granted under the Non-Employee Director Stock
Option Plan.
(10) Represents (a) 45,000 shares of common stock, (b) 10,000 shares of Series A
preferred stock which are convertible into 80,000 shares of common stock, (c)
10,000 shares of common stock issuable upon the exercise of warrants at an
exercise price of $1.375 per share and (d) 4,167 shares of common stock which
Mr. Doran has the right to acquire within sixty days pursuant to options granted
under the Non-Employee Director Stock Option Plan.
(11) Represents (a) 77,500 shares of common stock and (b) 4,167 shares of common
stock which Mr. Rosenbauer has the right to acquire within sixty days pursuant
to options granted under the Non-Employee Director Stock Option Plan.
(12) Represents (a) 55,000 shares of common stock, (b) 22,500 shares of Series A
preferred stock which are convertible into 180,000 shares of common stock, (c)
22,500 shares of common stock issuable upon the exercise of warrants at an
exercise price of $1.375 per share and (d) 5,001 shares of common stock which
Ms. Schupak has the right to acquire within sixty days pursuant to options
granted under the Non-Employee Director Stock Option Plan.
(13) Includes 16,667 shares of common stock which Mr. Wenzler has the right to
acquire within sixty days pursuant to options granted under the 1994 Employee
Stock Option Plan.
(14) Includes 3,334 shares of common stock which Mr. MacDougall has the right to
acquire within sixty days pursuant to options granted under the 1994 Employee
Stock Option Plan.
(15) Includes (a) 679,127 shares of common stock, and (b) 1,148.4396 shares of
Series C preferred stock which is currently convertible into 5,742,198 shares of
common stock. Voting and dispositive powers are exercised through its fund
investment adviser member, WPG P.E. Fund Adviser, L.P.
(16) Includes (a) 128,363 shares of common stock, and (b) 277 shares of Series C
preferred stock which is currently convertible into 1,384,643 shares of common
stock. Voting and dispositive powers are exercised through its overseas general
partner, WPG CDA IV (Overseas), Ltd.
(17) Includes 200,000 shares of Series A preferred stock which are convertible
into 1,600,000 shares of common stock.
6
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Board has nominated Charles S. Holmes, John J. Doran, Timothy
Moran, Mark S. Rose, Frederick W. Rosenbauer, Jr., James J. Pinto, and Lenore H.
Schupak for election as directors at the Annual Meeting to hold office for a
one-year term and until their successors are duly elected and qualified. Each of
the nominees currently serves as a Director. Mr. Moran is currently the Chairman
of the Board.
Pursuant to the Certificate of Designation filed by the Company with
respect to the Series A preferred stock, two board members are to be elected by
the holders of Series A preferred stock, voting alone (the "Preferred
Directors"), with the remaining directors ("Other Directors") to be elected by
the holders of common stock and Series A preferred stock voting together as a
class. The nominees for directors are as follows:
PREFERRED DIRECTOR NOMINEES OTHER DIRECTOR NOMINEES
Charles S. Holmes John J. Doran
James J. Pinto Timothy Moran
Mark S. Rose
Frederick W. Rosenbauer, Jr.
Lenore H. Schupak
Proxies will be solicited from the holders of common stock with respect
to the election of Messrs. Doran, Moran, Rose, Rosenbauer and Ms. Schupak.
Proxies will be solicited from the Series A holders with respect to all seven
nominees.
The voting persons named in the enclosed Proxy intend to nominate and
vote in favor of the election of each of the persons named below unless
authorization is withheld. If any of the nominees becomes unavailable for
election, votes will be cast for the election of such other person or persons as
the proxy holders, in their judgment, may designate. Management has no reason to
believe that any of the nominees will not be a candidate or will be unable to
serve.
Set forth below is certain information as of May 1, 2000 concerning
each nominee, including his or her age, present principal occupation and
business experience during the past five years and the period he or she has
served as a director.
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
---- --- --------------
<S> <C> <C>
Charles S. Holmes 55 May 1997
Lenore H. Schupak 45 May 1997
James J. Pinto 48 September 1997
John J. Doran 50 November 1997
Frederick W. Rosenbauer, Jr. 65 February 1998
Timothy Moran 36 May 1998
Mark S. Rose 57 June 1999
</TABLE>
CHARLES S. HOLMES served as a director of the Company since May 1997
and as Chairman of the Board of Directors from June 1997 through June 1999.
Since 1991, Mr. Holmes has served as principal of and is the sole stockholder of
Asset Management Associates of New York, Inc., a New York-based firm
specializing in acquisitions of manufacturing businesses. Mr. Holmes has also
been an officer of HPA Associates, LLC. since 1996.
LENORE H. SCHUPAK has served as a director of the Company since May
1997. Since 1990, Ms. Schupak has been President and principal owner of LHS
Environmental Management, Inc., a New Jersey based company which
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<PAGE>
provides environmental management consulting services in North America and
Europe. From 1979 to 1989, she was an executive with American Standard, Inc.,
most recently serving as Corporate Director, Environmental Technology.
JAMES J. PINTO has served as a director of the Company since September
1997. Since 1990, Mr. Pinto has been the President of the Private Finance Group
Corp. a merchant banking company, and has been an officer of HPA Associates, LLC
since October 1996. Mr. Pinto is a director of the following publicly traded
companies: Anderson Group, Inc. Bristol Hotels and Resorts, and FragranceNet,
Inc.
JOHN J. DORAN has served as a director of the Company since November
1997. From September 1985 through December 1999, Mr. Doran was the President of
Citizens Medical Corporation, a pharmacy benefit management company. From
December 1999 to the present, he has been the owner of Doran Enterprises, LLC.
Mr. Doran is also Chairman of Mediweb, Inc.
FREDERICK W. ROSENBAUER, JR. has served as a director of the Company
since February 1998. In December 1998, Mr. Rosenbauer retired from the United
States Trust Company of New York, where he served as a Vice President since
1988.
TIMOTHY MORAN has served as a director, President and Chief Executive
Officer of the Company since May 1998. He was President and Chief Operating
Officer from February 1998 to May 1998. From June 1999, he has served as
Chairman of the Board. Since February 1993, Mr. Moran has been President of
Apple Sports, Inc. and Apple Golf Shoes, Inc.
MARK S. ROSE has served as a director of the Company since June 1999.
Mr. Rose has twelve years experience in the sporting goods industry. He served
as Chairman of the Board and Chief Executive Officer of Apple Sports, Inc. from
1986 until May 1998 when Apple Sports Inc. was purchased by the Company. Since
1991, he has been Chairman of the Board and Chief Executive Officer of Clare
Rose of Nassau, Inc., an Anheuser Busch wholesale beverage distributor for Long
Island, New York.
BOARD OF DIRECTORS
At the Annual Meeting of Shareholders held on September 25, 1997, the
shareholders of the Company approved a proposal amending the Company's
Certificate of Incorporation to provide that the Board of Directors shall be
comprised of a maximum of eight directors. The actual size of the Board is
restricted, however, by the Certificate of Designation filed for the Series A
preferred stock, which requires that increases in the actual size of the Board
above five be approved by the Series A holders.
At the Annual Meeting of Shareholders held on June 8, 1999, the Series
A holders approved an increase in the size of the Board to 7 members, and the
shareholders elected 7 members to the Board.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board has established three committees: an Executive Committee, a
Compensation Committee and an Audit Committee. Each committee has two or more
members, who serve at the pleasure of the Board.
The Board of Directors met 4 times during 1999. The Compensation
Committee met 2 times, the Audit Committee met 2 times and the Executive
Committee met 4 times during 1999. All incumbent members of the Board attended
at least 75% of the meetings of the Board and each of the committees on which he
or she served during the period in which he or she was a director in 1999.
The Executive Committee is authorized to exercise all of the authority
of the Board that may be delegated to a committee of the Board under Delaware
law, other than the authority to authorize dividends and other distributions, to
fill vacancies on the Board or its committees, to amend, adopt or repeal
certificate of incorporation or by-law provisions, to approve mergers or matters
requiring stockholder approval, or (except within certain prescribed limits) to
authorize or
8
<PAGE>
approve the issuance or reacquisition of shares and related matters. The
Executive Committee consists of Messrs. Holmes, Moran and Pinto.
The Compensation Committee is responsible for reviewing and making
recommendations to the Board of Directors with respect to compensation of
executive officers, other compensation matters and awards under the Company's
equity benefit plans. Mr. Pinto and Ms. Schupak have served on the Compensation
Committee since March 15, 1998.
The Audit Committee is responsible for reviewing the Company's
financial statements, audit reports, internal financial controls and the
services performed by the Company's independent public accountants, and for
making recommendations with respect to those matters to the Board. Messrs.
Doran, Rosenbauer and Pinto have served on the Audit Committee since March 15,
1998.
DIRECTORS' COMPENSATION
Prior to March 15, 1999, the Company agreed to pay each director who is
not an employee of the Company a retainer of $15,000 per year, plus $2,500 for
each meeting of the Board or a committee attended in person. In addition, each
non-employee director received 5,000 options to purchase common stock of the
Company at the first Annual Meeting of Shareholders after their election, and
2,500 options each year thereafter pursuant to the Non-Employee Director Stock
Option Plan. As of March 15, 1999, the Compensation Committee recommended, and
the Board approved, that in lieu of receiving the cash retainer and meeting
fees, each director could elect to receive 30,000 shares of common stock.
On March 15, 2000, ratifying the March 13, 2000 recommendation of the
Compensation Committee, the Board approved a resolution setting the 2000
compensation for non-employee directors at a $2,000 annual retainer and 30,000
shares of common stock. This compensation is in addition to the options granted
pursuant to the Non-Employee Director Stock Option Plan. The Board also awarded
to each of Charles S. Holmes and James J. Pinto an additional 75,000 shares of
common stock for their service on the Executive Committee.
Pursuant to these resolutions, the following shares of common stock
were issued as of March 13, 2000:
<TABLE>
<S> <C>
Charles S. Holmes 105,000
James J. Pinto 105,000
John Doran 30,000
Frederick W. Rosenbauer, Jr. 30,000
Lenore H. Schupak 30,000
Mark S. Rose 30,000
</TABLE>
Directors who were officers or employees of the Company were not paid
for their service on the Board or its committees during 1999.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE HOLDERS OF SERIES A PREFERRED STOCK
VOTE FOR THE ELECTION OF THE PREFERRED DIRECTOR NOMINEES.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE VOTING SHAREHOLDERS VOTE FOR THE
ELECTION OF THE OTHER DIRECTOR NOMINEES.
9
<PAGE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee, the Board has appointed
Deloitte & Touche LLP, certified public accountants, to continue as the
Company's independent auditors and to audit the books of account and other
records of the Company and its subsidiaries for the fiscal year ending December
31, 2000.
Representatives of Deloitte & Touche LLP are expected to be present at
the Annual Meeting to respond to appropriate questions from shareholders and to
make a statement if they desire to do so.
The affirmative vote of Series A holders and holders of common stock
voting together as a class possessing a majority of the voting power represented
by the shares of Series A preferred stock and common stock which actually are
voted hereon is required to ratify the appointment of Deloitte & Touche LLP as
the Company's independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE VOTING SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
10
<PAGE>
EXECUTIVE COMPENSATION
The following summary compensation table (the "Compensation Table")
summarizes compensation information with respect to the Chief Executive Officer
of the Company and each of the Company's most highly compensated executive
officers who earned on an annualized basis more than $100,000 for services
rendered during the year ended December 31, 1999 (collectively, the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Principal Fiscal Other Annual Securities Underlying All Other
Position(s) Year Salary ($) Bonus ($) Compensation Options (#) Compensation ($)
- --------------------------------- ------- ------------ ----------- ----------------- --------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Charles S. Holmes 1999 - - - - -
(Chairman of the Board 1998 80,328 (2) - - 112,500 # -
through 06/08/1999) 1997 65,000 (2) - - - -
Timothy Moran 1999 200,000 200,000 - -
(Chief Executive Officer and 1998 123,007 (4) 100,000 - 200,000 # -
President)(Chairman of the 1997 - - - 250,000 # -
Board- 06/08/1999 to present) -
Thomas Wenzler 1999 127,892 12,423 - 50,000 # -
(Vice President) 1998 - - - - -
1997 - - - - -
Thomas MacDougall 1999 73,462 1,404 - 10,000 # -
(Chief Financial Officer and 1998 - - - - -
Secretary since 8/99) 1997 - - - -
William H. Craig 1999 117,527 (7) - - - -
(Former Executive Vice 1998 151,730 25,000 6,696 (8) 230,000 (3) 92,886 (1)
President - Finance and 1997 75,288 (7) - 3,850 (8) 175,000 (3) 15,106 (1)
Chief Financial Officer)
</TABLE>
- ----------
(1) Relocation and living expenses.
(2) Compensation as Chairman of the Board. See Directors' Compensation.
(3) Options granted pursuant to the 1994 Stock Option Plan.
(4) Mr. Moran became the Company's Chief Executive Officer on May 28, 1998.
See Compensation Committee Report on Executive Compensation.
(5) Options granted pursuant to the 1998 Stock Option Plan.
(6) Options granted pursuant to the 1994 Stock Option Plan for services
rendered by Mr. Moran as a consultant to the Company.
(7) Mr. Craig became the Company's Executive Vice President and Chief
Financial Officer on May 13, 1997. His employment with the Company
terminated on August 27, 1999.
(8) Represents automobile expenses.
The following table sets forth certain information with respect to stock
options granted to each of the Named Executive Officers during 1999:
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------------------
Percent of
Shares Total Options
Underlying Granted to Exercise or
Options Employees Base Price Expiration Grant Date Present
Granted in 1999(%) ($/Share) Date Value ($)(1)
------------- -------------- -------------- ------------- ---------------------
<S> <C> <C> <C> <C> <C>
Timothy Moran 0 0.0 $ - - $ -
Thomas Wenzler 50,000 30.8 $ 1.00 2/26/04 $ 22,100.00
Thomas MacDougall 10,000 6.2 $ 1.00 2/26/04 $ 4,420.00
</TABLE>
- ----------
(1) The amounts shown as present values were estimated using the Black-Scholes
option-pricing model using the weighted-average assumptions of dividend yield of
0.0%, expected volatility of 114.98%, risk free interest rate of 5.05% and
expected life of 3 years.
The following table sets forth certain information with respect to stock
options granted to each of the Named Executive Officers that were outstanding at
December 31, 1999:
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Shares Value of Unexercised In-the-
Acquired Number of Unexercised Options Money Options (1)
Upon Value ----------------------------------- ------------------------------
Name Exercise (#) Realized Exercisable Unexercisable Exercisable Unexercisable
- ----------------------- ------------ --------- --------------- ------------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Timothy Moran 0 0 233,334 216,666 0 0
Thomas Wenzler 0 0 0 50,000 0 0
Thomas MacDougall 0 0 0 10,000 0 0
</TABLE>
(1) Based on the $0.219 per share closing price of the Company's common stock on
the American Stock Exchange on December 31, 1999.
12
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
On July 15, 1994, Steven Geller entered into an employment agreement
pursuant to which he became Chairman and Chief Executive Officer of EII, the
Company's principal subsidiary. Subsequently, the obligations of EII under such
agreement were assigned to the Company, and Mr. Geller became Chairman of the
Board and Chief Executive Officer of the Company. The agreement provided for a
base salary of $300,000 per annum, which was increased by the Compensation
Committee to $325,000 per annum effective January 1, 1995. The initial term of
the agreement expired on July 15, 1998, provided that such term was
automatically extended for successive one-year periods on July 15 of each year
(the "Extension Date") commencing July 15, 1996, unless either the Company or
Mr. Geller gives 60 days' prior written notice to the other party that it or he
elects not to extend the term of the agreement.
In May 1998, Mr. Geller agreed to terminate his employment contract in
consideration of the Compensation Committee's agreement to enter into a
consulting agreement with him. The agreement provided for a minimum one-year
term, a base salary of $100,000 per year and payment of certain expenses. In
addition, the Committee agreed to extend the period during which Mr. Geller's
stock options vest or may be exercised until June 1, 2003.
The Company did not renew Mr. Geller's consulting agreement beyond May 31, 1999.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16 of the Exchange Act, the Company's directors and
executive officers and beneficial owners of more than 10% of the common stock
are required to file certain reports, within specified time periods, indicating
their holdings of and transactions in the common stock. Based solely on a review
of such reports provided to the Company and written representations from such
persons regarding the necessity to file such reports, the Company has determined
that the Company's directors and executive officers and beneficial owners of
more than 10% of the common stock timely filed all required Section 16 reports
during 1999.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's compensation program for its executive officers is administered
and reviewed by the Compensation Committee (the "Committee") of the Board of
Directors. The Committee is comprised of two outside directors neither of whom
is an employee or former employee of the Company.
Compensation Philosophy
In determining the compensation payable to the Company's executive officers, the
Committee seeks to achieve the following objectives through a combination of
fixed and variable compensation:
o provide a total compensation opportunity that is consistent with
competitive practices, enabling the Company to attract and retain
qualified executives;
o create a direct link between the compensation payable to each executive
officer and the financial performance both of the Company generally and
of the specific business unit or units for which the executive is
responsible;
o create a common interest between executive officers and the Company's
shareholders through the use of stock options that link a portion of
each executive officer's compensation opportunity directly to the value
of the Company's common stock.
Base Salary
The Committee establishes the Chief Executive Officer's base salary by
comparison to competitive market levels for the executive's job function. Base
salaries for other executive officers generally approximate competitive rates
and are adjusted based on individual performance as suggested by the Chief
Executive Officer. Salaries are reviewed at regular intervals, approximately
annually, depending on job classification and competitive market levels.
13
<PAGE>
Annual Incentive
For fiscal year 1999, annual bonuses were not granted to officers based on
corporate performance, except for guaranteed bonuses paid in 1999 to Messrs.
Moran, Wenzler and MacDougall to induce them to remain in the Company's employ.
Equity Based Incentives
Stock options have been the Company's primary form of long-term incentive
compensation. In awarding stock options to executive officers in 1999, the
Committee's goal was that such options would represent a significant portion of
each such officer's total compensation opportunity, thus aligning the officer's
economic interests with those of the Company's shareholders. Consistent with
this goal, all option awards in 1999 were made at the fair market value of the
common stock as of the date of grant. The number of options granted was based on
the Committee's subjective evaluation of a number of factors, including
competitive market practice, past grants, management level and other matters
relating to an individual's performance and ability to influence corporate
results. The Committee believes that these awards were reasonable compared to
similar awards made by the Company's competitors for executive talent.
During 1999, Messrs. Wenzler and MacDougall were granted 50,000 and 10,000 stock
options, respectively. The Committee's evaluation of the appropriate size of
such awards was based on several factors, as subjectively evaluated by the
Committee with respect to each particular officer, including: (i) the ability of
the officer to affect the value of the common stock, and (ii) the long term
compensation opportunities available to the officer at his prior employer and
the extent to which such officer had to forfeit any such opportunities by
accepting employment with the Company.
Compensation of the Chief Executive Officer
Mr. Moran became President and Chief Executive Officer on May 28, 1998 and
continues to serve in those capacities. On June 8, 1999, he also became Chairman
of the Board.
As part of the negotiations to induce Mr. Moran to join the Company, and his
promotion to Chief Executive Officer, the Executive Committee agreed to provide
Mr. Moran a minimum annual base salary of $200,000 and guaranteed bonuses of
$100,000 for 1998 and $200,000 for 1999. This agreement was ratified by the
Compensation Committee and the full Board of Directors.
At the time of his retirement from the Company in May 1998, Mr. Steven Geller
had a three-year employment contract providing for a base salary of $325,000 per
year. In consideration of Mr. Geller's agreement to terminate his employment
contract, the Committee agreed to enter into a consulting agreement with him.
The agreement provided for a minimum one-year term, a base salary of $100,000
per year and payment of certain expenses. In addition, the Committee agreed to
extend the period during which Mr. Geller's stock option vest or may be
exercised until June 1, 2003. The Company did not renew Mr. Geller's consulting
agreement beyond May 31, 1999.
Policy as to Section 162(m) of the Code
Section 162(m) of the Internal Revenue Code 1986, as amended, generally denies a
publicly traded company a Federal income tax deduction for compensation in
excess of $1 million paid to certain of its executive officers unless the amount
of such excess is payable based solely upon the attainment of objective
performance criteria. The Company has undertaken to qualify substantial
components of the incentive compensation it makes available to its executive
officers for the performance exception to nondeductibility. However, in
appropriate circumstances, such as in connection with the hiring of a new
executive officer, it may be necessary or appropriate to pay compensation or
make incentive or retentive awards that do not meet the performance based
exception and therefore may not deductible by reason of Section 162(m). No
executive officer of the Company currently receives compensation in a manner or
amount which would make Section 162(m) applicable to the Company.
Members of the Compensation Committee
James J. Pinto
Lenore H. Schupak
14
<PAGE>
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the cumulative total returns
(assuming dividend reinvestment) of the Company's common stock, the Media
General Toys and Games Industry Group Index as a representative industry index
and the American Stock Exchange Market Index ("Amex Index") as the required
board equity market index. The Media General Toys and Games Industry Group Index
is comprised of 37 toy and game companies.
[CHART OMITTED]
<TABLE>
<CAPTION>
Measurement Period Empire of Carolina, Inc. MG Toys & Games AMEX Index
Industry Group Index
- ------------------------------------- ---------------------------- ----------------------- ----------------------
<S> <C> <C> <C>
Year Ended December 31, 1994 $100.00 $100.00 $100.00
Year Ended December 31, 1995 105.66 111.42 128.90
Year Ended December 31, 1996 64.15 137.47 136.01
Year Ended December 31, 1997 20.75 172.46 163.66
Year Ended December 31, 1998 9.43 136.84 161.44
Year Ended December 31, 1999 3.30 105.93 201.27
</TABLE>
15
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company's policy is that all transactions between the Company
and its executive officers, directors and principal shareholders occurring
outside the ordinary course of the Company's business be on terms no less
favorable than could be obtained from unaffiliated third parties or are subject
to the approval of the Company's disinterested directors.
In connection with the Series A preferred stock transactions described in Note 8
to the Financial Statements contained in the Company's Annual Report, the
following members of the Company's Board of Directors made investments in the
Company during 1997, which balances may subsequently have changed through
December 31, 1999:
<TABLE>
<CAPTION>
SHARES OF WARRANTS TO
SERIES A ACQUIRE
PREFERRED STOCK COMMON STOCK
----------------- ----------------
<S> <C> <C>
Charles S. Holmes 125,000 2,753,752
James J. Pinto 100,000 2,678,752
Lenore H. Schupak 22,500 22,500
John Doran 10,000 10,000
</TABLE>
Timothy Moran, the Company's President and Chief Operating Officer, who was a
significant shareholder of the Apple Companies, and Mark S. Rose, the majority
shareholder of the Apple Companies, participated in the Series A preferred stock
transactions, acquiring 50,000 shares of Series A preferred stock and warrants
to acquire 50,000 shares of common stock, each. Mark S. Rose is the
father-in-law of Timothy Moran.
Weiss, Peck & Greer, L.L.C. ("WPG"), on behalf of investment funds for which
they were managers, in June 1997 exchanged $14,900,000 of debentures for 1,490
newly-issued Series C preferred stock of the Company. See Note 8 to the
Financial Statements. WPG released, among other things, their claims to accrued
and unpaid interest, fees and expenses. Two principals of WPG were members of
the Company's Board of Directors from 1994 through November 1997.
Steven Geller, former Chief Executive Officer and director of the Company, has
the right to vote 734,039 shares of common stock of the Company owned by Barry
Halperin. Mr. Geller's right to vote such shares terminates upon Mr. Halperin's
disposal thereof. Mr. Geller has certain rights of first refusal relative to Mr.
Halperin's disposal of the remaining shares. Mr. Geller had a one year
consulting agreement with the Company which expired in May 1999.
Mark S. Rose, a director of the Company and father-in-law of Timothy Moran, is
an 80% owner of Vets Park Associates, which is the landlord of office and
warehouse space in Ronkonkoma, New York, rented to Apple Sports, Inc. and Dorson
Sports, Inc. Apple Sports and Dorson Sports are subsidiaries of the Company.
During fiscal 1999, the Company paid rent to Vets Park Associates in the amount
of $313,997.
16
<PAGE>
EXECUTIVE OFFICERS
Information concerning the current executive officers of the Company,
their ages, position and business experience during the last five years is set
forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ---- --- -----------
<S> <C> <C>
Timothy Moran............ 35 President and Chief Executive Officer
Thomas Wenzler........... 35 Vice President and General Manager
Thomas MacDougall........ 36 Chief Financial Officer, Secretary and Treasurer
</TABLE>
TIMOTHY MORAN has served as a director, President and Chief Executive
Officer of the Company since May 1998. He was President and Chief Operating
Officer from February 1998 to May 1998. From June 1999, he has served as
Chairman of the Board. Since February 1993, Mr. Moran has been President of
Apple Sports, Inc. and Apple Golf Shoes, Inc.
THOMAS WENZLER has served as Vice President and General Manager of the
Company since September 1999. Since May 1997, Mr. Wenzler was Vice President and
General Manager of Apple/Dorson Sports Inc. Mr. Wenzler joined the Company in
May of 1991 as Regional Sales Manager. He was later promoted to General Manager
of Apple/Dorson Sports Inc. in May of 1993. Mr. Wenzler holds a Bachelor of
Science degree in Business Administration from Towson State University.
THOMAS MACDOUGALL has served as Chief Financial Officer, Secretary and
Treasurer of the Company since September 1999. Mr. MacDougall joined
Apple/Dorson Sports, Inc. in June of 1995 as controller. Prior to employment
with Apple Sports, Inc., Mr. MacDougall was the Financial Analyst for Collection
Clothing Corporation. Before Collection Clothing Corporation, Mr. MacDougall
served as controller of Stage II Apparel. Mr. MacDougall holds a Bachelor of
Business Administration degree in Accounting from Siena College.
STOCKHOLDER PROPOSALS
No person who intends to present a proposal for action at a forthcoming
shareholders' meeting of the Company may seek to have a proposal included in the
proxy statement or form of proxy for such meeting unless that person (a) is a
record beneficial owner of at least 1% or $1,000 in market value of shares of
common stock, has held such shares for at least one year at the time the
proposal is submitted, and such person shall continue to own such shares through
the date on which the meeting is held, (b) provides the Company in writing with
his name, address, the number of shares held by him and the dates upon which he
acquired such shares with documentary support for a claim of beneficial
ownership, (c) notifies the Company of his intention to appear personally at the
meeting or by a qualified representative under Delaware law to present his
proposal for action, and (d) submits his proposal timely. A proposal to be
included in the proxy statement or proxy for the Company's next annual meeting
of shareholders will be submitted timely only if the proposal has been received
at the Company's principal executive office in Delray Beach, Florida no later
than December 31, 2000. If the date of such meeting is changed by more than 30
calendar days from the date of the Annual Meeting, or if the proposal is to be
presented at any meeting other than the next annual meeting of shareholders, the
proposal must be received at the Company's principal executive office at a
reasonable time before the solicitation of proxies for such meeting is made.
If the foregoing requirements are satisfied, a person may submit only
one proposal of not more than 500 words with a supporting statement if the
latter is requested by the proponent for inclusion in the proxy materials, and
under certain circumstances enumerated in the Securities and Exchange
Commission's rules relating to the solicitation of proxies, the Company may be
entitled to omit the proposal and any statement in support thereof from its
proxy statement and form of proxy.
17
<PAGE>
OTHER INFORMATION
The Board of Directors does not know of any other matters that may be
brought before the Annual Meeting. In the event that any other matter shall come
before the Annual Meeting, the persons named in the enclosed Proxy will have
discretionary authority to vote all Proxies not marked to the contrary with
respect to such matter in their discretion.
By Order Of The Board Of Directors,
Timothy Moran
President and Chairman of the Board
Delray Beach, Florida
May 4, 2000
18
<PAGE>
PROXY
EMPIRE OF CAROLINA, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
EMPIRE OF CAROLINA, INC.
FROM THE HOLDERS OF SERIES A PREFERRED STOCK
The undersigned, a holder of Series A Preferred Stock of Empire of
Carolina, Inc., a Delaware corporation (the "Company"), hereby appoints CHARLES
S. HOLMES, TIMOTHY MORAN, and each of them, the proxies of the undersigned, each
with full power of substitution, to attend, represent and vote for the
undersigned, all of the shares of the Company's Series A Preferred Stock which
the undersigned would be entitled to vote, at the Annual Meeting of Stockholders
of the Company to be held on May 25, 2000 and any adjournments or postponements
thereof, as follows:
The undersigned hereby revokes any other proxy to vote the shares of
Series A Preferred Stock owned by the undersigned at such Annual Meeting, and
hereby ratifies and confirms all that said attorneys and proxies, and each of
them, may lawfully do by virtue hereof. With respect to matters not known at the
time of the solicitations hereof, said proxies are authorized to vote in
accordance with their best judgment.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH
THE INSTRUCTIONS ON THE OTHER SIDE HEREOF. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE SEVEN DIRECTORS NAMED, "FOR" THE
ADOPTION OF EACH OF THE OTHER PROPOSALS AND AS SAID PROXIES SHALL DEEM ADVISABLE
ON SUCH OTHER BUSINESS AS MAY COME BEFORE THE MEETING AND ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF.
(PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.)
SEE REVERSE SIDE
19
<PAGE>
PAGE 2 OF SERIES A PREFERRED PROXY]
1. ELECTION OF DIRECTORS, as provided in Proposal 1 of the Company's Proxy
Statement
/ / FOR ALL NOMINEES LISTED BELOW
/ / WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
NOMINEES: Charles S. Holmes, Timothy Moran, John J. Doran, James J. Pinto, Mark
S. Rose, Frederick W. Rosenbauer, Jr., Lenore H. Schupak,
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE(S) NAME BELOW:)
- -----------------------------------------------------------
2. The ratification of the appointment of Deloitte & Touche LLP as the Company's
auditors for the fiscal year ending December 31, 2000 as described in Proposal 2
in the Company's Proxy Statement.
/ / FOR / / AGAINST / / ABSTAIN
3. Upon such other matters as may properly come before the meeting or any
adjournments or postponements thereof.
/ / FOR / / AGAINST / / ABSTAIN
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF A COPY OF THE NOTICE OF ANNUAL MEETING,
THE ACCOMPANYING PROXY STATEMENT RELATING TO THE ANNUAL MEETING AND THE ANNUAL
REPORT TO STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1999.
Dated _______________________________, 2000
- -------------------------------- --------------------------------
Signature of Shareholder Signature if held jointly
NOTE: The signature(s) hereon should correspond exactly with the name(s) of the
Stockholder(s) appearing on the Stock Certificate representing the shares of
Series A Preferred Stock owned by the undersigned. If stock is jointly held, all
joint owners should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If signer is a
corporation, please sign the full corporate name, and give title of signing
office.
20
<PAGE>
PROXY
EMPIRE OF CAROLINA, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
EMPIRE OF CAROLINA, INC.
FROM THE HOLDERS OF COMMON STOCK
The undersigned, a holder of Common Stock of Empire of Carolina, Inc.,
a Delaware corporation (the "Company"), hereby appoints CHARLES S. HOLMES,
TIMOTHY MORAN, and each of them, the proxies of the undersigned, each with full
power of substitution, to attend, represent and vote for the undersigned, all of
the shares of the Company's Common Stock which the undersigned would be entitled
to vote, at the Annual Meeting of Stockholders of the Company to be held on May
25, 2000 and any adjournments or postponements thereof, as follows:
The undersigned hereby revokes any other proxy to vote the shares of
Common Stock owned by the undersigned at such Annual Meeting, and hereby
ratifies and confirms all that said attorneys and proxies, and each of them, may
lawfully do by virtue hereof. With respect to matters not known at the time of
the solicitations hereof, said proxies are authorized to vote in accordance with
their best judgment.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH
THE INSTRUCTIONS ON THE OTHER SIDE HEREOF. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE FIVE DIRECTORS NAMED, "FOR" THE ADOPTION
OF EACH OF THE OTHER PROPOSALS AND AS SAID PROXIES SHALL DEEM ADVISABLE ON SUCH
OTHER BUSINESS AS MAY COME BEFORE THE MEETING AND ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF.
(PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.)
SEE REVERSE SIDE
21
<PAGE>
PAGE 2 OF COMMON STOCK PROXY]
1. ELECTION OF DIRECTORS, as provided in Proposal 1 of the Company's Proxy
Statement
/ / FOR ALL NOMINEES LISTED BELOW
/ / WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
NOMINEES: Timothy Moran, John J. Doran, Mark S. Rose, Frederick W. Rosenbauer,
Jr., Lenore H. Schupak,
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE(S) NAME BELOW:)
- ------------------------------------------------------
2. The ratification of the appointment of Deloitte & Touche LLP as the Company's
auditors for the fiscal year ending December 31, 2000 as described in Proposal 2
in the Company's Proxy Statement.
/ / FOR / / AGAINST / / ABSTAIN
3. Upon such other matters as may properly come before the meeting or any
adjournments or postponements thereof.
/ / FOR / / AGAINST / / ABSTAIN
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF A COPY OF THE NOTICE OF ANNUAL
MEETING, THE ACCOMPANYING PROXY STATEMENT RELATING TO THE ANNUAL MEETING AND THE
ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1999.
Dated _______________________________, 2000
- -------------------------------- --------------------------------
Signature of Shareholder Signature if held jointly
NOTE: The signature(s) hereon should correspond exactly with the name(s) of the
Stockholder(s) appearing on the Stock Certificate representing the shares Common
Stock owned by the undersigned. If stock is jointly held, all joint owners
should sign. When signing as attorney, executor, administrator, trustee, or
guardian, please give full title as such. If signer is a corporation, please
sign the full corporate name, and give title of signing office.
22
