<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 14, 1994.
REGISTRATION NO. 33-56367
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FORSTMANN & COMPANY, INC.
(Exact name of registrant as specified in its charter)
GEORGIA 58-1651326
- --------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 642-6900
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)
-----------------------
CHRISTOPHER L. SCHALLER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FORSTMANN & COMPANY, INC.
1185 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 642-6900
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
-----------------------
With a copy to:
JANE S. POLLACK, ESQ. JAMES L. SMITH, III, ESQ.
Vice President, Secretary Troutman Sanders
and General Counsel 600 Peachtree Street, N.E.
Forstmann & Company, Inc. Suite 5200
1185 Avenue of the Americas NationsBank Plaza
New York, New York 10036 Atlanta, Georgia 30308-2216
-----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT AS
DETERMINED BY MARKET CONDITIONS.
-----------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
-----------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
-----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
PROSPECTUS
30,000 SHARES
FORSTMANN & COMPANY, INC.
COMMON STOCK
($.001 PAR VALUE)
The 30,000 shares (the "Shares") of Common Stock, $.001 par value (the
"Common Stock"), of Forstmann & Company, Inc. ("Forstmann" or the "Company")
offered hereby are being offered for the account of Resolution Trust
Corporation (in its capacity as receiver for Columbia Savings & Loan
Association F.A.), a shareholder of the Company (the "Selling Shareholder").
The Company will not receive any proceeds from the sale of the Shares. See
"Selling Shareholder."
The Selling Shareholder may sell the Shares from time to time on terms to be
determined at the time of sale. The Selling Shareholder reserves the sole
right to accept or reject, in whole or in part, any proposed purchase of the
Shares. The Company has agreed to bear all expenses (other than commissions,
underwriting discounts or brokerage fees and fees and expenses for any
counsel, accountants or other experts of the Selling Shareholder) in
connection with the registration and sale of the Shares. See "Plan of
Distribution."
The Common Stock of the Company is included in the NASDAQ National Market
under the trading symbol "FSTM". On November 4, 1994, the closing sale price
of the Common Stock as reported on the NASDAQ National Market was $6.50 per
share.
The Selling Shareholder may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"), and
any profit on its resale of the Shares may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Plan of
Distribution" herein for indemnification arrangements among the Company and
the Selling Shareholder.
SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS WHICH
SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SECURITIES
OFFERED HEREBY.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------
The date of this Prospectus is ______________________, 1994.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by the Company with the
Commission can be inspected and copied at the office of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, or at its
Regional Offices located at 7 World Trade Center, 13th Floor, New York, New
York 10048, and Suite 1400, 500 West Madison Street, Chicago, Illinois 60661,
and copies of such materials can be obtained from the Public Reference
Section of the Commission, at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Common Stock is included in the NASDAQ
National Market, and reports, proxy statements and other information
concerning the Company can also be inspected at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington,
D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 (the "Registration Statement") filed by the Company with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). This
Prospectus omits certain of the information contained in the Registration
Statement as permitted by the rules and regulations of the Commission, and
reference is hereby made to the Registration Statement and related exhibits
for further information with respect to the Company and the securities
offered hereby. Any statements contained herein concerning the provisions of
any document are not necessarily complete, and in each instance reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been previously filed by the Company with
the Commission and are hereby incorporated by reference in this Prospectus as
of their respective dates:
(a) Annual Report on Form 10-K for the fiscal year ended October 31,
1993;
(b) Quarterly Report on Form 10-Q for the three months ended January 30,
1994;
(c) Quarterly Report on Form 10-Q for the three months ended May 1,
1994;
(d) Quarterly Report on Form 10-Q for the three months ended July 31,
1994; and
(e) Current Report on Form 8-K dated November 18, 1994 as filed with
the Commission on December 8, 1994.
(f) The description of Common Stock in the Company's Registration
Statement on Form 8-A filed on February 12, 1992, and any amendments
or reports filed for the purpose of amending such description.
2
<PAGE>
Additionally, all documents filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Prospectus and prior to the termination of the offering
of the securities made hereby shall be deemed to be incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of such
documents. Any statements contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide, upon request, without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, on the
written or oral request of such person, a copy of any or all of the documents
incorporated herein by reference (other than certain exhibits to such
documents which are not specifically incorporated by reference in such
documents). Requests for such copies should be directed to: Forstmann &
Company, Inc., 1185 Avenue of the Americas, New York, New York 10036
(telephone (212) 642-6900) Attention: Jane S. Pollack, Corporate Secretary.
---------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR A SUPPLEMENT TO THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE HEREBY, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING SHAREHOLDER OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY STATE OR
OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THE
DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------
3
<PAGE>
THE COMPANY
Forstmann is a leading designer, marketer and manufacturer of
innovative, high-quality fabrics which are used primarily in the production
of brand name and private label apparel for men and women. Forstmann's
fabrics are used in suits, dresses, sportswear, trousers, sportcoats and
outerwear made by some of the world's leading apparel manufacturers. The
Company also produces interior textiles and specialty fabrics.
The Company provides high-quality, value-added fabrics to its customers,
who are demanding increasingly high levels of service and innovation from
their suppliers. The Company currently offers over 10,000 different fabrics
serving the needs of the apparel, interior textile and specialty markets. To
create fabrics to meet shifting consumer tastes and stringent product
specifications, the Company works in partnership with its customers through
extensive product development and design efforts. To support its customer-
oriented marketing strategy, the Company's manufacturing operations can
accommodate relatively short production runs of these customized fabrics.
The principal executive offices of the Company are located at 1185
Avenue of the Americas, New York, New York 10036, and its telephone number is
(212) 642-6900.
INVESTMENT CONSIDERATIONS
Prospective purchasers of Shares should consider carefully the factors
set forth below, as well as the other information contained in this
Prospectus, in evaluating an investment in the Shares.
INDEBTEDNESS AND LIQUIDITY
The Company is highly leveraged and its debt service requirements are
substantial. The Company's outstanding long-term debt, including the current
portion thereof, as of July 31, 1994 was approximately $174.7 million,
approximately $30.0 million of which was attributable to the Company's Senior
Secured Floating Rate Notes due October 30, 1997 (the "Senior Secured
Notes"), approximately $73.2 million of which was outstanding under the five-
year $100 million senior secured credit facility with General Electric
Capital Corporation ("GECC"), as agent and lender (the "Loan Agreement"),
approximately $61.1 million (including $4.5 million of unamortized debt
premium) of which was attributable to the Company's 14-3/4% Senior
Subordinated Notes due April 15, 1999 (the "Subordinated Notes") and
approximately $10.4 million of which was attributable to equipment financing
and capital lease obligations. As of July 31, 1994, the Company's debt-to-
equity ratio (calculated by dividing long-term debt, including the current
portion thereof, by shareholders' equity) was 4.49. The Company's ability to
make scheduled payments with respect to its indebtedness will depend on its
future financial and operating performance, which in turn will be subject to
prevailing economic conditions and to financial, business and other factors
beyond its control. In addition, the Company's available
4
<PAGE>
cash flow is required to be applied to service senior indebtedness.
Accordingly, such funds applied to service senior indebtedness will not be
available to pay cash dividends on the Common Stock.
The Company believes that, based upon its current operations, including
its on-going cost-reduction efforts and operating strategy, it will have
sufficient cash flow from operations and additional borrowings under the Loan
Agreement to pay interest requirements relating to its indebtedness. If the
Company's cash flow and capital resources, however, are insufficient to fund
its debt service obligations, the Company may be required to refinance a
portion of its debt or sell assets. There can be no assurance that such
refinancing or sale of assets could be successfully accomplished.
COVENANT RESTRICTIONS
Cash distributions on the Company's capital stock, including the Common
Stock and the Company's 5% Senior (Pay-in-Kind) Preferred Stock, par value
$1.00 per share, are prohibited by the Loan Agreement and restricted by the
indenture for the Senior Secured Notes (the "Senior Note Indenture") and the
indenture for the Subordinated Notes. The Loan Agreement and Senior Note
Indenture also contain a number of restrictive covenants limiting the
Company's ability to incur other indebtedness and make capital expenditures
in excess of certain amounts. There can be no assurance that such
restrictions will not adversely affect the Company's ability to conduct its
operations or finance its capital needs. Borrowings under the Loan Agreement
and the Senior Note Indenture are secured by substantially all of the assets
of the Company.
FLUCTUATIONS IN RAW MATERIAL PRICES
The Company's primary raw material is wool. The price of wool is
subject to the usual forces of supply and demand that affect the price of any
commodity. The Company purchases approximately 80% of its wool from
Australia. Wool prices have increased recently, a trend which the Company
expects to continue. The Company's foreign wool purchases are denominated in
U.S. dollars and, therefore, the Company generally does not incur any
currency exchange risk on outstanding contracts. However, future changes in
the relative exchange rates between the United States dollar and the
Australian dollar can materially affect the Company's results of operations.
INDUSTRY ECONOMIC CONDITIONS
The Company grants credit to certain customers, primarily in the men's
and women's apparel industries. The ability of such customers to honor their
debts is somewhat dependent upon the financial conditions that exist in the
apparel business sector. Due in part to some of the Company's customers'
going out of business or filing for protection under Title 11 of the United
States Code (the "Federal Bankruptcy Code"), the Company recognized an
allowance for uncollectible accounts receivable of $2.7 million, $1.8 million
and $1.6 million in Fiscal 1993, the thirty-nine week period ended August 1,
1993 and the thirty-nine week period ended July
5
<PAGE>
31, 1994, respectively. Although the Company is not aware that any of its
other customers intend to liquidate or file petitions for reorganization,
there can be no assurance that such an event will not occur.
VARIABILITY OF RESULTS DUE TO SEASONALITY
The Company's business is seasonal. The Company receives the majority
of its orders to manufacture from December through April, and most shipments
occur from February through July. Accordingly, the Company recognizes
greater revenues, though not cash flow, from February through July. Thus,
the Company's quarterly operating results may be subject to significant
fluctuations as a result of this seasonality.
CONCENTRATION OF SHARE OWNERSHIP
Odyssey Partners, L.P., a Delaware limited partnership ("Odyssey
Partners"), beneficially owns 2,832,713 shares of Common Stock, constituting
approximately 50.7% of the Common Stock currently outstanding. Currently, a
general partner of Odyssey and a former general partner of Odyssey (who
continues to hold an interest in the Common Stock held by Odyssey) are
members of the Company's Board of Directors. The six-member Board of
Directors currently has one vacancy, resulting from the resignation therefrom
of an employee of Odyssey. The Company's By-Laws permit remaining members of
the Board of Directors to fill the vacancy for the unexpired remainder of the
term. As a result of its equity ownership and the fact that two members of
the Company's current Board of Directors are either Odyssey's designees or
have an interest in Odyssey's holdings of Common Stock, Odyssey has been and
is in a position to influence and control the management and policies of the
Company. Also as a result of its equity ownership, Odyssey has the ability
to elect the members of the Board of Directors, although the Company's By-
Laws provide that two of the Directors must be independent of Odyssey as well
as independent of the Company and any other affiliates of the Company.
POTENTIAL ADVERSE EFFECTS OF FUTURE SALES OF SHARES; REGISTRATION RIGHTS
Sales of substantial amounts of Common Stock in the public market after
the offering made hereby could adversely affect the market price of the
Common Stock. The 2,832,713 shares of Common Stock owned by Odyssey have
been held by it for over two years and are eligible for resale under Rule 144
promulgated under the Securities Act. The Company has agreed to grant
registration rights to Odyssey with respect to 1,215,000 of such shares. If
Odyssey, by exercising its registration rights, causes a large number of
shares to be registered and sold in the public market, or if Odyssey sells a
large number of shares pursuant to Rule 144, such sales may have a material
adverse effect on the market price for the Common Stock.
6
<PAGE>
COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS
By the nature of its operations, the Company's manufacturing facilities
are subject to various federal, state and local environmental laws and
regulations, including the Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act and the Comprehensive Environmental Response,
Compensation and Liability Act. Although the Company occasionally has been
subject to proceedings and orders pertaining to emissions into the
environment, the Company believes that it is in substantial compliance with
existing environmental laws and regulations. The Company has accrued
reserves for environmental matters based on information presently available.
Based on this information and the Company's established reserves, the Company
does not believe that these environmental matters will have a material
adverse effect on either the Company's financial condition or results of
operations. However, there can be no assurance that the costs associated
with environmental matters will not increase in the future.
COMPETITION
The textile business in the United States is highly competitive and the
Company competes with many other textile companies, some of which are larger
and have greater resources than the Company. The Company competes with both
domestic and foreign manufacturers primarily on an item-by-item basis.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby. All of the proceeds from the sale of the Shares
offered hereby will be received by the Selling Shareholder.
THE SELLING SHAREHOLDER
All of the Shares offered hereby are beneficially owned by the Selling
Shareholder and were acquired by the Selling Shareholder in connection with
the settlement of its claims in the Dissenters' Rights Litigation (as
hereinafter defined). The Selling Shareholder does not beneficially own any
shares of Common Stock or other securities of the Company other than the
Shares. Since the Selling Shareholder may sell all, or some or none of the
Shares, no estimate can be made of the aggregate number of Shares that are to
be offered hereby or that will be beneficially owned by the Selling
Shareholder upon completion of the offering contemplated by this Prospectus.
In September, 1991, the Office of Thrift Supervision of the United
States Department of Treasury appointed the Resolution Trust Corporation as
receiver for Columbia Savings & Loan Association F.A., a shareholder of the
Company. During Fiscal 1992, the Company completed a restructuring and
recapitalization whereby the Company (i) completed a merger with an
affiliated company (the "Merger") which had the effect of a reverse stock
split, (ii) exchanged
7
<PAGE>
certain of its obligations for cash and unregistered shares of Common Stock
and (iii) completed an initial public offering of Common Stock (the "1992
Recapitalization"). Record owners or beneficial holders of an aggregate of
1,473,562 shares of the Company's common stock, $.001 par value, outstanding
prior to the Merger (of which the Selling Shareholder held approximately 86%)
and the Company's non-voting common stock, $.001 par value, outstanding prior
to the Merger (collectively, the "Pre-Merger Stock"), which Pre-Merger Stock
after the Merger became the equivalent of approximately 626 shares of Common
Stock, were deemed to have dissented from the Merger. In April 1992, based,
in part, upon the advice of the Company's investment bankers regarding the
fair value of the Pre-Merger Stock, the Company offered to pay the defendants
approximately $0.004 per share (an aggregate of approximately $6,100) for
their Pre-Merger Stock. The Company's offers were not accepted. In July 1992,
the Company commenced a civil action against the dissenting shareholders
under the Georgia Business Corporation Code (the "Dissenters' Rights
Litigation"). On September 9, 1994 the Company and the Selling Shareholder
entered into a settlement agreement (the "Settlement Agreement") pursuant to
which the Selling Shareholder released all claims and actions it had in the
Dissenters' Rights Litigation and transferred its Pre-Merger Stock to the
Company in exchange for the payment by the Company of $475,000 and the
issuance to the Selling Shareholder of the Shares. On November 4, 1994, the
Company settled the Dissenters' Rights Litigation as to the remaining
defendants, agreeing to pay such defendants an aggregate of approximately
$365,000 in cash (the "Settlement Amount") on or before January 3, 1995. The
Company also agreed to pay the costs of the court-appointed appraiser, but
the parties will pay their respective fees and costs, including attorneys
fees, expert fees and costs of litigation. The Loan Agreement between the
Company and General Electric Capital Corporation ("GECC") was amended as of
November 4, 1994, to specifically allow for the payment by the Company of the
Settlement Amount, thus eliminating the need for the further consent of GECC.
Except as described above, the Selling Shareholder has had no other material
relationship with the Company.
Pursuant to the requirements of the Settlement Agreement, the Company
has entered into a Registration Rights Agreement dated September 9, 1994 with
the Selling Shareholder (the "Registration Rights Agreement") pursuant to
which the Company has filed the Registration Statement covering the Shares.
Pursuant to the Registration Rights Agreement, the Company is obligated to
use all reasonable efforts to cause the Registration Statement to become
effective under the Securities Act within 90 days after receipt by the
Company of the request by the Selling Shareholder for registration (which
occurred on September 16, 1994) and to keep the registration statement
continuously effective until the earlier of (i) the date on which all of the
Shares have been sold pursuant thereto and (ii) September 9, 1997, as such
date may be extended pursuant to the terms of the Registration Rights
Agreement. The Company has agreed to bear all expenses (other than
commissions, underwriting discounts or brokerage fees and fees and expenses
for any counsel, accountants or other experts of the Selling Shareholder) in
connection with the registration and sale of the Shares. Any of the Shares
sold pursuant to this Prospectus will no longer be entitled to the benefits
of the Registration Rights Agreement.
8
<PAGE>
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholder on
the NASDAQ National Market or any national securities exchange or automated
interdealer quotation system on which shares of Common Stock are then listed,
through negotiated transactions or otherwise at prices and on terms then
prevailing or at prices related to the then current market price or at
negotiated prices. The Selling Shareholder may effect sales of the Shares
directly and the Shares may be sold by one or more of the following methods:
(a) in "block" sales; (b) through the writing of options on the Shares; (c)
through transactions negotiated directly with purchasers; and (d) through
competitive bidding.
The Selling Shareholder may be deemed to be an "underwriter" within the
meaning of Section 2(11) of the Securities Act, and any profit on any resale
of the Shares as principals might be deemed to be underwriting discounts and
commissions under the Securities Act.
In certain states, the Shares may not be sold unless they have been
registered or qualified for sale in such states or an exemption from such
registration or qualification requirement is available and is complied with.
Pursuant to the Registration Rights Agreement between the Company and
the Selling Shareholder, the Company has filed the Registration Statement, of
which this Prospectus forms a part, with respect to the sale of the Shares.
The Company has agreed to use its reasonable efforts to keep the Registration
Statement continuously effective until the earlier of (i) the date on which
all the Shares have been sold pursuant thereto and (ii) September 9, 1997, as
such date may be extended pursuant to the terms of the Registration Rights
Agreement.
Pursuant to the terms of the Registration Rights Agreement, the Company
and the Selling Shareholder have agreed to indemnify each other and certain
other parties for certain liabilities, including liabilities under the
Securities Act, in connection with the registration of the Shares.
LEGAL MATTERS
The legality of the Shares offered hereby is being passed upon for the
Company by Troutman Sanders, Atlanta, Georgia.
EXPERTS
The financial statements and related financial statement schedules
incorporated in this Registration Statement by reference from the Company's
Annual Report on Form 10-K for the year ended October 31, 1993 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been
9
<PAGE>
so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the
periods ended January 30, 1994 and January 31, 1993, May 1, 1994 and May 2,
1993 and July 31, 1994 and August 1, 1993, which are incorporated herein by
reference, Deloitte & Touche LLP have applied limited procedures in
accordance with professional standards for a review of such information.
However, as stated in their reports included in the Company's Quarterly
Reports on Form 10-Q for the quarters ended January 30, 1994, May 1, 1994 and
July 31, 1994, and incorporated by reference herein, they did not audit and
they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their reports on such information
should be restricted in light of the limited nature of the review procedures
applied. Deloitte & Touche LLP are not subject to the liability provisions
of Section 11 of the Securities Act of 1933 for their reports on the
unaudited interim financial information because those reports are not
"reports" or a "part" of the registration statement prepared or certified by
an accountant within the meaning of Sections 7 and 11 of the Act.
10
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid in connection with the issuance and distribution
of the securities being registered, other than underwriting discounts and
commissions, are as follows:
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee ......................... $ 70
Legal Fees and Expenses ...................... 84,000
Miscellaneous ................................ 5,000
-------
Total ..................................... $89,070
=======
</TABLE>
All of the above items are estimates except the SEC Registration Fee. All of
such estimated expenses will be borne by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is incorporated under the laws of the State of Georgia. The
Company's Articles of Incorporation provide that, to the fullest extent
permitted by Georgia law (as it exists or may be amended), a director of the
Company will not be liable to the Company or any of its shareholders for
damages caused by the director's action or inaction in his capacity as a
director, provided the director acted in good faith and in a manner which he
believed to be in the best interests of the Company.
Section 14-2-851 of the Georgia Business Corporation Code (the "GBCC")
provides that a corporation may indemnify or obligate itself to indemnify an
individual made a party to a proceeding because he is or was a director
against liability incurred in the proceeding if he acted in a manner he
believed in good faith to be in or not opposed to the best interests of the
corporation and, in the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful. Under the GBCC, a director's
conduct with respect to an employee benefit plan for a purpose he believed in
good faith to be in the interests of the participants in and beneficiaries of
the plan is conduct that satisfies the requirements of the GBCC. The GBCC
further provides that the termination of a proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo contendere or its
equivalent is not, of itself, determinative that the director did not meet
the standard of conduct required under the GBCC. Under the GBCC, a
corporation may not indemnify a director in connection with a proceeding by
or in the right of the corporation in which the director was adjudged liable
to the corporation or in connection with any other proceeding in which he was
adjudged liable on the basis that personal benefit was
II-1
<PAGE>
improperly received by him. Indemnification permitted under the GBCC in
connection with a proceeding by or in right of a corporation is limited to
reasonable expenses incurred in connection with the proceeding.
In addition, under the GBCC, unless limited by its articles of
incorporation, to the extent that a director of a corporation has been
successful, on the merits or otherwise, in the defense of any proceeding to
which he was a party, or in defense of any claim, issue, or matter therein,
because he is or was a director of the corporation, the corporation shall
indemnify the director against reasonable expenses incurred by him in
connection therewith. The Company's Articles of Incorporation have no such
limitation.
Section 14-2-857 of the GBCC provides that, unless a corporation's
articles of incorporation provide otherwise, an officer of a corporation who
is not a director is entitled to mandatory indemnification to the extent that
such officer has been successful, on the merits or otherwise, in the defense
of any proceeding to which he is a party, or in defense of any claim, issue
or matter therein, because he is or was an officer of the corporation. In
addition, a corporation may indemnify and advance expenses to an officer,
employee or agent who is not a director to the extent it is consistent with
public policy, provided by its articles of incorporation, by-laws, general or
specific action of its board of directors or contract. The Company's
Articles of Incorporation have no such limitation.
Article X of the Amended and Restated By-Laws of the Company (the "By-
Laws") provides that each director or officer of the Company, and each person
who at its request has served as an officer or director of another
corporation, partnership, joint venture, trust or other enterprise will be
indemnified by the Company against those expenses which are allowed by the
laws of the State of Georgia and which are reasonably incurred in connection
with any action, suit or proceeding, pending or threatened, in which such
person may be involved by reason of his being or having been a director or
officer of the Company or of such other enterprises. Such indemnification is
required to be made only in accordance with the laws of the State of Georgia
and subject to the conditions prescribed above.
The By-Laws further provide that the Company may purchase and maintain
insurance on behalf of any such directors and officers against any
liabilities asserted against such persons whether or not the Company would
have the power to indemnify such directors and officers against such
liability under the laws of the State of Georgia. If any expenses or other
amounts are paid by way of indemnification, other than by court order, action
by shareholders or by an insurance carrier, the Company is required to
provide notice of such payment to its shareholders in accordance with the
provisions of the laws of the State of Georgia.
On February 7, 1994, the Company approved indemnity agreements with each
of its directors and certain of its executive officers, which provides that
the indemnitee will be entitled to receive indemnification to the full extent
permitted by law for all expenses, judgements, fines, penalties and
settlement payments incurred by the indemnitee in actions brought against the
indemnitee in connection with any act taken in the indemnitee's capacity, and
within the
II-2
<PAGE>
indemnitee's scope of authority, as a director or executive officer of the
Company. Such indemnity agreements also require the Company to maintain its
current level of directors and officers' liability insurance for so long as
the indemnitee may be subject to any possible, threatened or pending action,
except to the extent that the cost of such insurance is more than 150% of the
annualized cost thereof in fiscal year 1994.
The Company's Articles of Incorporation include a provision eliminating
liability for monetary damages for any breach of fiduciary or other duty as a
director, except for (1) any appropriation, in violation of his duties, of
any business opportunity of the Company, (2) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(3) any transaction for which the director received an improper personal
benefit, and (4) certain unlawful distributions. The Company's By-Laws
provide that the directors and the officers of the Company will be
indemnified against all expenses which are allowed by the laws of the State
of Georgia and which are reasonably incurred in connection with any action,
suit or proceeding, pending or threatened, in which such person may be
involved by reason of his being or having been a director or officer of the
Company. The foregoing provisions of the Articles of Incorporation may
reduce the likelihood of derivative litigation against the Company's
directors and may discourage or deter shareholders or management from
instituting a lawsuit against the Company's directors for breaches of their
fiduciary duties, even though such an action, if successful, might otherwise
have benefitted the Company and its shareholders.
ITEM 16. EXHIBITS.
EXHIBIT # EXHIBITS
--------- --------
+ 5.1 - Opinion of Troutman Sanders as to the legality of the
securities being registered.
+15.1 - Letter of Deloitte & Touche LLP, independent auditors
regarding unaudited interim financial information.
+23.1 - Consent of Troutman Sanders (contained in Exhibit 5.1).
+23.2 - Consent of Deloitte & Touche LLP, independent auditors.
+24.1 - Powers of attorney (see page II-5).
+99.1 - Registration Rights Agreement between the Company and the
Selling Shareholder dated September 9, 1994.
+99.2 - Eighth Amendment to Loan Agreement dated as of August
29,1994 among General Electric Capital Corporation and the
Company.
+99.3 - Ninth Amendment to Loan Agreement dated as of November 4,
1994 among General Electric Capital Corporation and the
Company.
-------------------
+ Previously filed.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change in such
information in the Registration Statement; provided, however, that the
registrant need not file a post-effective amendment to include the
information required to be included by subsection (i) or (ii) if such
information is contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement; (2) that, for the purpose of
determining any liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and (3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 15 above,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
amendment to its registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York on the 14th day of December, 1994.
FORSTMANN & COMPANY, INC.
By:/s/ Christopher L. Schaller
___________________________________
Christopher L. Schaller
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed by the following
persons in the capacities indicated below on December 14, 1994:
SIGNATURE TITLE
--------- -----
/s/ Christopher L. Schaller
- ------------------------------
Christopher L. Schaller President and Chief Executive Officer and
Director (Principal Executive Officer)
[Signatures continued on next page.]
II-5
<PAGE>
[Signatures continued from previous page.]
William B. Towne
---------------------------
William B. Towne Executive Vice President and Chief
Financial Officer (Principal Financial
and Accounting Officer)
*Stephen Berger
-----------------------------
Stephen Berger Director
*Cameron Clark, Jr.
-----------------------------
Cameron Clark, Jr. Director
*Steven M. Friedman
-----------------------------
Steven M. Friedman Director
*F. Peter Libassi
-----------------------------
F. Peter Libassi Director
*by: /s/Christopher L. Schaller
-----------------------------
Christopher L. Schaller
Attorney-in-fact
II-6
