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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Lamonts Apparel, Inc.
(Name of Issuer)
Class A Common Stock, par value $0.01 per share
Class A Warrants to purchase Class A Common Stock
Class B Warrants to purchase Class A Common Stock
(Title of Class of Securities)
513628404
513628131
513628149
(CUSIP Number)
Debbie A. Brownfield
12413 Willows Road N.E., Kirkland, Washington 98034
(425) 814-5700
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
March 10, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of (S)(S) 240.13d-1(e), 240-13d-1(f) or 240.13d-1(g), check the
following box [_].
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CUSIP Nos. 513628404, 513628131 and 513628149
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(1) Name of Reporting Person
S.S. or I.R.S. Identification No. Dallas C. Troutman
of Above Person
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(2) Check the Appropriate Box if a (a) Not applicable
Member of a Group* (b) Not applicable
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(3) SEC Use Only
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(4) Source of Funds* AF
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(5) Check Box if Disclosure of Legal
Proceedings is Required
Pursuant to Items 2(d) or 2(e) Not applicable
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(6) Citizenship or Place of Organization Oregon
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(7) Sole Voting Power Class A Common Stock:
2,925,140 shares; 32.50%
Class A Warrants:
1,810,380 warrants; 82.17%
Class B Warrants:
Number of 581,181 warrants; 72.63%
Shares Bene- -------------------------------------------------------------
ficially
Owned by (8) Shared Voting Power -0-
Each Report- -------------------------------------------------------------
ing Person
With (9) Sole Dispositive Power Class A Common Stock:
2,925,140 shares; 32.50%
Class A Warrants:
1,810,380 warrants; 82.17%
Class B Warrants:
581,181 warrants; 72.63%
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(10) Shared Dispositive Power -0-
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(11) Aggregate Amount Beneficially Class A Common Stock:
Owned by Each Reporting Person 2,925,140
Class A Warrants: 1,810,380
Class B Warrants: 581,181
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(12) Check Box if the Aggregate Amount
in Row (11) Excludes Certain
Shares* Not applicable
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(13) Percent of Class Represented Class A Common Stock: 32.50%
by Amount in Row (11) Class A Warrants: 82.17%
Class B Warrants: 72.63%
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(14) Type of Reporting Person* IN
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Item 1. Security and Issuer.
This Schedule 13D relates to Class A Common Stock, par value $0.01 per
share, Class A Warrants to purchase Class A Common Stock and Class B Warrants to
purchase Class A Common Stock of Lamonts Apparel, Inc., a Delaware corporation
(the Issuer). The Issuer's principal executive offices are located at 12413
Willows Road N.E., Kirkland, Washington 98034.
Item 2. Identity and Background.
(a) The name of the person filing this Schedule 13D is Dallas C. Troutman
(Mr. Troutman).
(b) Mr. Troutman's business address is 86776 McVay Highway, Eugene, Oregon
97405.
(c) Mr. Troutman is the President of Troutman Investment Company (TIC).
TIC's principal business is the operation of retail stores selling
fashion apparel and home and fashion accessories. The address of TIC's
principal office is 86776 McVay Highway, Eugene, Oregon 97405.
(d) Not applicable.
(e) Not applicable.
(f) Mr. Troutman is a United States citizen.
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Item 3. Source and Amount of Funds or Other Consideration.
The total consideration for Mr. Troutman's acquisition of the Issuer's
Class A Common Stock, Class A Warrants and Class B Warrants was $1,842,847.20.
The purchase price was paid by Mr. Troutman executing and delivering to TIC, the
previous owner of the shares and warrants, a Nonrecourse Promissory Note secured
by a Stock Pledge Agreement. As pledgee under the Stock Pledge Agreement, TIC is
not specifically excluded from beneficial ownership of the shares and warrants
by Rule 13d-3(d)(3) because TIC is not a pledgee of securities in the ordinary
course of business and is not a person specified in Rule 13d-1(b)(1)(ii).
Notwithstanding the lack of specific exclusion from the definition of beneficial
owner. TIC has disclaimed beneficial ownership of the shares and warrants
transferred to Mr. Troutman.
Item 4. Purpose of Transaction.
Mr. Troutman acquired the shares and warrants reported in this Schedule
13Dfrom TIC, of which he is the majority owner, for estate planning purposes.
Item 5. Interest in Securities of the Issuer.
(a) Mr. Troutman owns the following securities of the Issuer: (i) 2,925,140
shares of Class A Common Stock, which constitute 32.50% of the outstanding
shares; (ii) Class A Warrants to purchase 1,810,380 shares of Class A Common
Stock, which constitute 82.17% of the outstanding Class A Warrants; and (iii)
Class B Warrants to purchase 581,181 shares of Class A Common Stock, which
constitute 72.63% of the outstanding Class B Warrants.
The Class A Warrants are exercisable, in whole or in part, on the first
date on which the Aggregate Equity Trading Value (as defined below) equals or
exceeds $20 million. The Class B Warrants are exercisable, in whole or in part,
on the first date on which the Aggregate Equity Trading Value equals or exceeds
$25 million. "Aggregate Equity Trading Value" means, as of any date, the
product of (a) either (i) if the Common Stock is listed on any national
securities exchange or quoted on a national quotation system, the average of the
daily closing prices of the Common Stock for the five trading days immediately
preceding that date, or (ii) if the Common Stock is not so listed or quoted, the
fair market value per share of the Common Stock determined in good faith by the
Issuer's board of directors as of a date within 30 days of that date, multiplied
by (b) the total number of issued and outstanding shares of Common Stock as of
that date (assuming, for purposes of determining that number of shares, the
exercise in full of all in-the-money options outstanding on that date to
purchase shares of Common Stock and the exercise of all Class B Warrants that
are exercisable as of that date).
If all the Class A Warrants and Class B Warrants were exercised, Mr.
Troutman would own a total of 5,316,701 shares of Class A Common Stock, or
59.07% of the outstanding shares. Troutman does not expect the warrants to be
exercised within the next 60 days.
(b) Mr. Troutman has sole voting and dispositive power with respect to all
2,925,140 shares of Class A Common Stock, 1,810,380 Class A Warrants and 581,181
Class B Warrants. Mr. Troutman does not share voting or dispositive power with
respect to any of the shares or warrants.
(c) Mr. Troutman acquired the shares and warrants covered by this Schedule
13D on March 10, 1999. The price per share for the Class A Common Stock was
$0.6214. The price per warrant for the Class A Warrants and Class B Warrants
was $0.01. The acquisition was
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effected pursuant to a Sale Agreement between Mr. Troutman and TIC.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
As described in Item 3, TIC is pledgee under a Stock Pledge Agreement
covering the shares and warrants reported on this Schedule 13D. In the event of
default under such agreement, TIC would have the right to transfer such shares
into the name of TIC or its designee, which transferee would be entitled to
exercise all voting rights represented therein. TIC is expected to assign such
pledge to its commercial lender (the Lender); alternatively, Mr. Troutman is
expected to grant a second pledge to the Lender, subject to the rights of TIC.
Item 7. Material to be Filed as Exhibits.
(1) Nonrecourse Promissory Note and Stock Pledge Agreement.
(2) Not applicable.
(3) See Item 7(1).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 18, 1999
/s/ Dallas C. Troutman
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Dallas C. Troutman
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NONRECOURSE PROMISSORY NOTE
$1,842,847.20 Eugene, Oregon March 10, 1999
DALLAS C. TROUTMAN promises to pay to the order of TROUTMAN INVESTMENT
COMPANY, an Oregon corporation, at 86776 McVay Highway, Eugene, Oregon 97405, or
to such other person or at such other place as the holder hereof may designate,
the amount of $1,842,847.20 plus interest thereon at the rate of 4.62 percent
per annum from the date hereof until paid, payable in annual interest only
installments, with the first such annual installment due on or before March 9,
2000, and a like annual installment due on March 9, 2001. The full remaining
balance, principal and interest, shall be paid on March 9, 2002.
Prepayment may be made at any time, wholly or partially, without penalty.
Provided, that no prepayment shall affect the regular payments due hereunder.
All payments, including any prepayments, shall be applied first to accrued
interest to the date of payment or prepayment and then to principal.
If any payment is not paid promptly as the same becomes due, the entire
amount of principal and accrued interest shall be immediately due and
collectible at the option of the holder of this note.
If this note is placed in the hands of an attorney for collection, the
undersigned promises and agrees to pay the holder's reasonable collection costs,
including reasonable attorney's fees, even though no legal proceeding is filed
hereon; however, if a legal proceeding is filed for the purpose of interpreting
or enforcing this Promissory Note, the holder shall be entitled to recover a
reasonable attorney's fee in such proceeding, or any appeal thereof, in addition
to the costs and disbursements allowed by law.
THIS NONRECOURSE PROMISSORY NOTE IS SECURED BY A STOCK PLEDGE AGREEMENT OF
EVEN DATE HEREWITH. Notwithstanding any other provision contained in this
Nonrecourse Promissory Note or in the Stock Pledge Agreement, the undersigned
shall not be personally liable for payment of any amounts due hereunder; in the
event of default in payment of any amounts due hereunder, or under the terms of
the Stock Pledge Agreement securing this Nonrecourse Promissory Note, the sole
remedy of the holder of this Nonrecourse Promissory Note shall be to realize
upon its collateral under such Stock Pledge Agreement; and specifically the
holder shall not be entitled to waive such security and enforce the indebtedness
represented by this Nonrecourse Promissory Note, nor shall the holder be
entitled to obtain a deficiency upon realizing upon such collateral.
/s/ Dallas C. Troutman
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Dallas C. Troutman
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STOCK PLEDGE AGREEMENT
Date: March 10, 1999
PARTIES:
DALLAS C. TROUTMAN (Debtor)
Address: P.O. Box 5467
Eugene, Oregon 97405
TROUTMAN INVESTMENT COMPANY (Secured Party)
Address: P.O. Box 5467
Eugene, Oregon 97405
AGREEMENTS:
1. OBLIGATIONS SECURED. The obligations secured hereby are a certain
Nonrecourse Promissory Note dated March 9, 1999, in the face amount of
$1,842,847.20, wherein Debtor is the maker and Secured Party is the payee.
2. GRANT OF SECURITY INTEREST. Debtor hereby grants to Secured Party a
security interest to secure the obligations hereinabove mentioned in the
following described property:
Two Million Nine Hundred Twenty-five Thousand One Hundred Forty shares
of the Class A common stock of Lamonts Apparel, Inc., One Million
Eight Hundred Ten Thousand Three Hundred Eighty Class A warrants of
Lamonts Apparel, Inc., and Five Hundred Eighty-one Thousand One
Hundred Eighty-one shares of Class B warrants of Lamonts Apparel, Inc.
(Corporation), now owned by Debtor, together with all products and
proceeds thereof.
3. ACCELERATION. If Debtor fails to perform any obligation of Debtor
under this agreement, or fails to pay when due any obligation secured hereby, or
in the event Secured Party, with reasonable cause, deems the collateral, or any
part thereof, in danger of loss, misuse or confiscation, Secured Party may, at
the option of Secured Party, declare all unpaid balances of any indebtedness
owing to Secured Party by Debtor immediately due and payable and may exercise
any of the remedies for default hereinafter set forth.
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4. ASSIGNMENT. Secured Party shall have the right to assign this
agreement or the security interest evidenced by this agreement or to repledge
the collateral upon terms which do not impair the rights of Debtor under this
agreement.
5. STANDARD OF CARE. Secured Party shall use reasonable care in the
custody and preservation of the collateral in the possession of Secured Party
but shall have no duty to take any action to preserve, enforce or establish any
rights against the issuer or third parties.
6. PROCEEDS. If Debtor is in default, Secured Party shall have the right
to receive all income from the collateral and may hold the same as additional
collateral or apply the same to any of the indebtedness secured hereby, such
application to be in the sole discretion of Secured Party.
7. NOTICES. Any notice required to be given to Debtor under this
agreement or under the Uniform Commercial Code shall be deemed given if such
notice is mailed with postage prepaid to the address of Debtor shown on page 1
of this agreement, or to such other address as Debtor may designate to Secured
Party prior to the time of the giving of such notice. A notice of sale or other
disposition of the collateral upon default shall be reasonable if given five
days before the time of sale or disposition.
8. DEFAULT. Time is of the essence of this agreement. If Debtor fails
to perform any obligation of Debtor under this agreement or fails to pay when
due any obligation secured hereby, or if Secured Party, with reasonable cause,
deems the collateral to be in danger of loss, misuse or confiscation, Secured
Party shall have and may exercise each and all of the remedies granted to
Secured Party by the Uniform Commercial Code, together with any other remedies
which may be available to Secured Party under applicable law. In connection
with any sale of the collateral, it is agreed that it would be commercially
reasonable to sell the same as one lot or in several lots and at prices that are
substantially lower than those which might be reflected by the book value of the
collateral. By setting forth these factors concerning disposition by sale, it
is not intended to limit disposition to sale only.
9. TRANSFER AND VOTING RIGHTS. At any time when Secured Party is
entitled to exercise Secured Party's rights and remedies under the Uniform
Commercial Code, Secured Party may present the collateral for transfer into the
name of Secured Party or Secured Party's designee and Debtor hereby appoints
Secured Party as Debtor's attorney-in-fact for such transfer without inquiry as
to whether or not Secured Party is entitled to transfer such collateral under
the terms of this agreement, and agrees to indemnify, and hold the transfer
agent harmless, from any claim or liability arising out of such transfer. Until
such time as the collateral is transferred, Debtor shall be entitled to exercise
all voting rights represented by the collateral.
10. LEGAL EXPENSE. If any legal proceeding is commenced for the purpose
of interpreting or enforcing any provision of this agreement, or for the purpose
of collecting any obligation secured hereby, Secured Party shall be entitled to
recover a reasonable attorney's fee
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in such proceeding, or any appeal thereof, in addition to the costs and
disbursements allowed by law. In addition, Secured Party shall be entitled to
recover reasonable attorney's fees and legal expenses incurred by Secured Party
in connection with any disposition of the collateral.
11. WAIVER. No waiver by Secured Party of any default in any of the
terms, conditions or provisions of this agreement, or obligation secured hereby,
shall operate as a waiver of any other default by Debtor.
12. INTERPRETATION. All rights of Secured Party hereunder shall inure to
the benefit of the successors or assigns of Secured Party, and all obligations
of Debtor shall bind the successors and assigns of Debtor.
DEBTOR:
/s/ Dallas C. Troutman
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Dallas C. Troutman
SECURED PARTY:
TROUTMAN INVESTMENT COMPANY
By: /s/ Dallas C. Troutman
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President
