<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
RSI Holdings, 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.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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> 2
RSI HOLDINGS, INC.
28 EAST COURT STREET
POST OFFICE BOX 6847
GREENVILLE, SOUTH CAROLINA 29606
TELEPHONE (864) 271-7171
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 15, 1998
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of RSI Holdings, Inc. (the "Company"), will
be held at 10:00 a.m., local time, on January 15, 1998, at RSI Holdings, Inc.,
28 East Court Street, Greenville, South Carolina, for the purpose of considering
and acting upon the following:
1. The election of four directors to serve until the next annual meeting
of shareholders or until their successors have been duly elected and
qualified;
2. To vote on approval of the proposed amendment to the RSI Holdings, Inc.
Stock Option Plan to increase from 250,000 to 750,000 the aggregate
number of shares issuable thereunder;
3. The ratification of the appointment of Ernst & Young LLP as independent
auditors of the Company for fiscal year 1998; and
4. The transaction of such other matters as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on December 3, 1997, as
the record date for the determination of shareholders entitled to notice of and
to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
C. Thomas Wyche, Secretary
Greenville, South Carolina
December 12, 1997
A form of proxy is enclosed. To ensure that your shares will be voted at the
Annual Meeting, you are requested to complete and sign the enclosed proxy and
return it promptly in the enclosed, postage-paid, addressed envelope. No
additional postage is required if mailed in the United States. The giving of a
proxy will not affect your right to vote in the event you attend the meeting.
<PAGE> 3
RSI HOLDINGS, INC.
28 EAST COURT STREET
POST OFFICE BOX 6847
GREENVILLE, SOUTH CAROLINA 29606
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 15, 1998
This Proxy Statement (the "Proxy Statement") is furnished in connection
with the solicitation of proxies by the Board of Directors (the "Board") of RSI
Holdings, Inc., a North Carolina corporation (the "Company"), to be voted at the
annual meeting of shareholders of the Company (the "Annual Meeting") to be held
at 10:00 a.m., local time, on January 15, 1998, at RSI Holdings, Inc., 28 East
Court Street, Greenville, South Carolina. The approximate date of mailing this
Proxy Statement and the accompanying proxy is December 12, 1997.
Only shareholders of record at the close of business on December 3,
1997 are entitled to notice of and to vote at the Annual Meeting. As of such
date, there were outstanding approximately 7,900,822 shares of common stock,
$.01 par value per share ("Common Stock"), which constitute the only voting
securities of the Company. Each share is entitled to one vote.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by: (i)
delivery to the Secretary of the Company, at or before the Annual Meeting, of a
written notice of revocation bearing a later date than the proxy; (ii) duly
executing a subsequent proxy relating to the same shares and delivering it to
the Secretary of the Company at or before the Annual Meeting; or (iii) attending
the Annual Meeting and giving notice of revocation to the Secretary of the
Company or in open meeting prior to the proxy being voted (although attendance
at the Annual Meeting will not in and of itself constitute a revocation of a
proxy). Any written notice revoking a proxy should be sent to: RSI Holdings,
Inc., 28 East Court Street, Post Office Box 6847, Greenville, South Carolina
29606, Attention: Investor Relations.
All shares represented by valid proxies received pursuant to the
solicitation and prior to voting at the Annual Meeting and not revoked before
they are exercised will be voted, and, if a choice is specified with respect to
any matter to be acted upon, the shares will be voted in accordance with such
specification. If no contrary instructions are indicated, all shares represented
by a proxy will be voted FOR election to the Board of Directors of the nominees
described herein, FOR the approval of the proposed amendment to the Company's
Stock Option Plan, FOR ratification of the appointment of Ernst & Young LLP as
the independent auditors for the Company for fiscal year 1998, and in the
discretion of the proxy holders as to all other matters that may properly come
before the Annual Meeting or any adjournment thereof.
The presence, either in person or by proxy, of the holders of a
majority of the outstanding shares of Common Stock of the Company as of December
3, 1997, is necessary to constitute a quorum at the Annual Meeting. An automated
system administered by the Company's transfer agent tabulates votes cast in
connection with the Annual Meeting. The affirmative vote of the holders of a
majority of the outstanding shares of Common Stock at December 3, 1997 is
required to approve the amendment to the Stock Option Plan. Directors are
elected by a plurality of votes cast at the Annual Meeting. The proposal to
ratify the appointment of Ernst & Young LLP as the Company's independent
auditors for the Company's 1998 fiscal year will be approved if a greater number
of votes is cast for the proposal than is cast against the proposal. Abstentions
and broker non-votes, which are separately tabulated, are included in the
determination of the number of shares present and voting for purposes of
determining the presence of a quorum. Abstentions and broker nonvotes each count
as a vote
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<PAGE> 4
against the proposal to amend the Company's Stock Option Plan, but have no
effect upon the votes with respect to the other matters to be voted upon at the
meeting.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the number of directors to be
elected at any meeting of shareholders shall not be less than three (3) nor more
than ten (10), the exact number to be determined by the Board of Directors. The
Board has determined that four directors shall be elected at the Annual Meeting.
The Common Stock may not be voted cumulatively in the election of directors.
The following four persons are nominees for election as directors at
the Annual Meeting, to serve until the next annual meeting of shareholders of
the Company or until their successors are duly elected and qualified. Unless
authority to vote at the election of directors is withheld, it is the intention
of the persons named in the enclosed form of proxy to vote for the persons named
below, all of whom are currently directors of the Company. Each such person is a
citizen of the United States. There are no family relationships among the
directors and the executive officers of the Company, except that Buck Mickel is
the father of Buck A. Mickel.
Management of the Company believes that all of the nominees will be
available and able to serve as directors, but in the event any nominee(s) is not
available or able to serve, the shares represented by the proxies will be voted
for such substitute(s) as shall be designated by the Board of Directors.
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<PAGE> 5
The table below sets forth certain information regarding the Company's
nominees for election as directors.
NOMINEES FOR ELECTION AS
DIRECTORS OF THE COMPANY
Name, Age and Tenure
as Director Principal Occupation and Background
- -------------------- --------------------------------------------
Buck Mickel (72) Chairman of the Board and Chief Executive
Director since 1978(1)(2) Officer of the Company. Mr. Mickel was
elected Chairman of the Board and Chief
Executive Officer of the Company in July
1989. Mr. Mickel has served in various
executive positions, including Vice Chairman
of the Board of Directors of Fluor
Corporation, which is engaged in the
engineering, construction and minerals
businesses, from which position he resigned
in March 1987; Chairman of the Board of
Directors of Daniel International
Corporation, a construction company
wholly-owned by Fluor Corporation, from
which position he resigned in March 1987;
and Chairman of the Board and Chief
Executive Officer of RSI Corporation,
Greenville, South Carolina (the former
parent of the Company), from February 1978
until November 1989. Mr. Mickel also serves
as a director of Fluor Corporation, Insignia
Financial Group, Inc., The Liberty
Corporation, Duke Power Company, Emergent
Group, Inc., and Delta Woodside Industries,
Inc.
C.C. Guy (65) Director of the Company. Mr. Guy served as
Director since 1978(1)(2) President of the Company from July 1989
until his retirement in January 1995. Since
his retirement, he has served as a
consultant to the Company on an as-needed
basis. Mr. Guy was Vice
President-Administration of the Company from
1978 to July 1989. Mr. Guy served from
October 1979 to November 1989 as President,
Treasurer and a director of RSI Corporation.
Mr. Guy currently serves as a director of
Delta Woodside Industries, Inc.
Charles M. Bolt (67) Director of the Company. Charles M. Bolt was
Director since 1982(1)(2) President and Chief Executive Officer of the
Company from 1984 to July 1989, when he was
elected President of Distribution, a
position that he held until his retirement
in January 1995. Since his retirement, he
has served as a consultant to the Company on
an as-needed basis. Mr. Bolt was Vice
President-Marketing of the Company from 1978
to 1984.
Buck A. Mickel (42) (1)(2) Director of the Company. Buck A. Mickel was
reelected Vice President of the Company
effective September 1, 1996. Mr. Mickel
served as a consultant to the Company from
January 17, 1995, the date that he resigned
as Vice President, until his reelection as
Vice President. Mr. Mickel was originally
elected Vice President of the Company in
July 1989. Mr. Mickel served as a director
on the Company or RSI Corporation from 1987
until December 1992. Mr. Mickel has served
as President of Wiegmann & Rose
International Corp. ("Wiegmann & Rose"), the
Company's wholly-owned subsidiary, since
August 1988. Mr. Mickel also currently
serves as a director of Delta Woodside
Industries, Inc.
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
The Board of Directors of the Company met in person three times
and by telephone conference one time during the fiscal year ended August 31,
1997. The Compensation Committee of the Company met once during the fiscal year.
The Audit Committee of the Company did not meet separately during the fiscal
year but the Board considered Audit Committee matters in the course of meetings
of the Board of Directors. Each Director attended at least 75% of the meetings
of the Board and of any committee of which he was a member. The Board does not
have a standing nominating committee.
The Compensation Committee reviews and submits to the Board of
Directors suggested salaries and other compensation for officers of the Company
and its subsidiaries for the ensuing year.
The Audit Committee generally makes recommendations to the Board
regarding the selection of the independent public accountants, reviews the
independence of such accountants, approves the
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<PAGE> 6
scope of the annual audit, approves the rendering of any material non-audit
services by the independent accountants, approves the fee payable to the
independent accountants, and reviews the audit results.
STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information as of December 3,
1997, regarding the beneficial ownership of the Common Stock by: (i) persons
beneficially owning more than five percent of the Common Stock; (ii) the
directors and executive officers of the Company; and (iii) all directors and
executive officers of the Company, as a group. Unless otherwise indicated in the
notes to the table, the Company believes that the persons named in the table
have sole voting and investment power with respect to all the shares of Common
Stock shown as beneficially owned by them.
Amount and
Nature of
Name and Address of Beneficial Percent
Beneficial Owner Ownership of Class (13)
- ------------------- ---------- -------------
Buck Mickel 475,160 (1) 6.0
415 Crescent Avenue
Greenville, SC 29605
Buck A. Mickel 1,199,196 (2) 15.1
28 East Court Street
P. O. Box 6847
Greenville, SC 29606
C.C. Guy 152,891 (3) 2.0
918 Elizabeth Road
Shelby, NC 28150
Charles M. Bolt 284,556 (4) 3.6
3000 N. E. 48th Street
No. 201
Fort Lauderdale, FL 33308
C. Thomas Wyche 359,449 (5) 4.5
Post Office Box 728
Greenville, SC 29602
Minor H. Mickel 475,160 (6) 6.0
415 Crescent Avenue
Greenville, SC 29605
Charles C. Mickel 907,181 (7) 11.5
28 East Court Street
P. O. Box 6847
Greenville, SC 29606
Minor Mickel Shaw 822,122 (8) 10.4
P. O. Box 795
Greenville, SC 29602
Mr. William R. Kimball 746,853 (9) 9.5
12 Eucalyptus Road
Belvedere, CA 94920
Joe F. Ogburn 155,976 (10) 2.1
208 Belvedere Avenue
Shelby, NC 28150
Matthew J. Marron, Jr. 40,100 (11) 0.5
63 Woodvale Avenue
Greenville, SC 29605
All Directors and Executive 2,667,328 (12) 33.8
Officers of the
Company as a Group
(7 persons)
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(1) Mr. Buck Mickel is Chairman of the Board of Directors and Chief Executive
Officer of the Company. The number of shares shown as beneficially owned by Mr.
Buck Mickel includes 10,000 shares directly owned by him and 465,160 shares
directly owned by Mrs. Minor H. Mickel, as to which shares Mr. Mickel disclaims
beneficial ownership. Mrs. Minor H. Mickel is the wife of Mr. Buck Mickel. Mrs.
Minor H. Mickel and Mr. Buck Mickel are the parents of Mr. Buck A. Mickel, Mrs.
Minor Mickel Shaw and Mr. Charles C. Mickel. Mr. Buck Mickel disclaims
beneficial ownership of all shares owned by his wife.
(2) Mr. Buck A. Mickel is a Vice President and director of the Company. The
number of shares shown as beneficially owned by Mr. Buck A. Mickel includes
1,179,196 shares directly owned by him and 20,000 unissued shares subject to
employee stock options held by Mr. Mickel which are currently exercisable.
(3) Mr. C.C. Guy is a director and former President of the Company. The number
of shares shown as beneficially owned by Mr. Guy includes 78,923 shares directly
owned by him and 20,000 unissued shares subject to stock options held by Mr. Guy
which are currently exercisable. The number of shares shown also includes 53,968
shares of the Company's Common Stock held by Mr. Guy's wife, as to which shares
Mr. Guy disclaims beneficial ownership.
(4) Mr. Charles M. Bolt is a director and former President of Distribution of
the Company. The number of shares shown as beneficially owned by Mr. Bolt
includes 264,556 shares directly owned by him and 20,000 unissued shares subject
to stock options held by Mr. Bolt which are currently exercisable.
(5) Mr. C. Thomas Wyche is Secretary of the Company. The number of shares shown
as beneficially owned by Mr. Wyche includes 204,292 shares directly owned by
him, 44,523 shares owned of record by Center, Inc., of which Mr. Wyche owns all
of the outstanding common stock and is an officer and director, and 88,075
shares owned by the Profit Sharing Plan of Wyche, Burgess, Freeman & Parham,
P.A. (the "WBFP Plan"), of which Mr. Wyche is a trustee and participant and
which firm serves as general counsel to the Company. Of the shares owned by the
WBFP Plan, the number of shares allocated to Mr. Wyche's account varies from
year to year, depending on Mr. Wyche's respective interest in the WBFP Plan. Mr.
Wyche disclaims beneficial ownership of the shares that are not allocated to his
account. The figure shown also includes 22,559 shares owned by Mr. Wyche's wife.
Mr. Wyche disclaims beneficial ownership of all of the shares owned by Mrs.
Wyche.
(6) The number of shares shown as beneficially owned by Mrs. Minor H. Mickel
includes 465,160 shares directly owned by her and 10,000 shares directly owned
by her husband, Mr. Buck Mickel. Mrs. Mickel disclaims beneficial ownership of
the shares of stock owned by Mr. Mickel.
(7) The number of shares shown as beneficially owned by Mr. Charles C. Mickel
includes 862,658 shares directly owned by him, and all of the 44,523 shares
beneficially owned by Center, Inc. of which Mr. Mickel is an officer and
director. Mr. Mickel disclaims beneficial ownership of the shares owned by
Center, Inc.
(8) The number of shares shown as beneficially owned by Mrs. Minor Mickel Shaw
includes 802,188 shares directly owned by her, 2,748 shares owned by her as
custodian for her children, and 17,186 shares owned by her husband as custodian
for their children. Mrs. Shaw disclaims beneficial ownership of all shares
beneficially owned by her husband and children.
(9) The number of shares shown as beneficially owned by Mr. William R. Kimball
excludes 34,375 shares held by Mr. Kimball's deceased wife's estate, as to which
shares Mr. Kimball disclaims beneficial ownership.
(10) Mr. Joe F. Ogburn is the Treasurer and Vice President of the Company. The
number of shares shown as beneficially owned by Mr. Ogburn includes 135,426
shares directly owned by him and 20,000
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unissued shares subject to employee stock options held by Mr. Ogburn which are
currently exercisable. Such number also includes 550 shares held by Mr. Ogburn's
wife, as to which shares Mr. Ogburn disclaims beneficial ownership.
(11) Mr. Matthew J. Marron, Jr. is President of the Company's subsidiary,
HomeAdd Financial Corporation. The number of shares shown for Mr. Marron are
owned directly by him.
(12) This number includes all shares included in the table above with respect to
any director or executive officer and excludes the shares described in the notes
above as being excluded from the table.
(13) Pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended, (the "Exchange Act") percentages of total outstanding shares
have been computed on the assumption that shares of Common Stock that can be
acquired within 60 days upon the exercise of options by a given person are
outstanding, but no other shares similarly subject to acquisition by other
persons are outstanding.
EXECUTIVE OFFICERS
The following provides certain information regarding the executive
officers of the Company:
Name and Age Position
- ------------ ---------------------------------------------
Buck Mickel (72) Chairman of the Board and Chief Executive
Officer (1)
Buck A. Mickel (42) Vice President (1)
C. Thomas Wyche (70) Secretary (2)
Joe F. Ogburn (59) Treasurer and Vice President (3)
Matthew J. Marron, Jr. (29) President, HomeAdd Financial Corporation (4)
- --------------------------
(1) See information under "Election of Directors".
(2) C. Thomas Wyche is a senior member of the law firm of Wyche, Burgess,
Freeman & Parham, P.A., with which firm he has practiced for the last four
decades. From 1979 to November 1989, Mr. Wyche was the Secretary and a director
of RSI Corporation. Wyche, Burgess, Freeman & Parham, P.A. serves as general
counsel to the Company. Mr. Wyche served as a director of the Company or RSI
Corporation from 1978 until January 1993.
(3) Joe F. Ogburn has served as Treasurer of the Company since September 1988
and Vice President of the Company since May 1995. Mr. Ogburn served as
Controller of the Company from 1981 to September 1988. Mr. Ogburn served as a
director of the Company from September 1987 to July 1989.
(4) During November 1996, the Company appointed Matthew J. Marron, Jr. as
President of HomeAdd Financial Corporation, formerly CambridgeBanc, Inc., a
recently acquired wholly-owned subsidiary of the Company through which the
Company originates and sells home improvement loans secured by liens on improved
property. Before joining the Company, Mr. Marron had served as Executive Vice
President of CambridgeBanc, Inc. from 1995 to 1996. Prior to that time, from
1994 to 1995, he served as President of The CPE Institute, Inc., a financial
education company for Certified Public Accountants, financial executives and tax
preparers. From 1992 to 1994 he served as Financial Analyst for BI-LO, Inc., a
supermarket chain. Prior to that time, he served as a Senior Auditor of Ernst &
Young LLP from 1990 to 1992.
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The Company's executive officers are appointed by the Board of
Directors and serve at the pleasure of the Board.
MANAGEMENT COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding
compensation paid by the Company during the last three fiscal years to the
Company's Chief Executive Officer (the "Named Executive Officer"). The salary
and bonuses of each executive officer of the Company was less than $100,000
during fiscal 1997.
<TABLE>
<CAPTION>
Annual Compensation
---------------------------------------------------------
Other Annual All Other
Fiscal Compensation Compensation
Name and Principal Position Year Salary ($) Bonus ($) ($)(a) ($)
- --------------------------- ------ ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Buck Mickel, Chairman of the 1997 2,400 0 --- ---
Board and Chief Executive Officer 1996 2,400 0 --- ---
1995 2,400 0 228 ---
</TABLE>
(a) The amounts shown in this column were paid for the benefit of the Named
Executive Officer for travel accident insurance that the Company has
purchased for the benefit of its employees, executive officers and
directors. The policy provides coverage to each executive officer and
director of up to $500,000 for accidental death or dismemberment and a
permanent total disability benefit, subject to certain conditions and
limitations set forth in the policy.
Most of the Company's employees, as well as its executive officers, are
eligible to participate in the Company's medical and health benefit plan.
The Company currently pays no cash directors' fees. On July 2, 1997, the
Company granted C. C. Guy and Charles M. Bolt options to purchase 10,000 shares
each of the Company's Common Stock at $.375, the market value of the Company's
Common Stock on the date of the grant. Fifty percent of the shares of Common
Stock covered by the options become exercisable on each of the first two
anniversaries of the date of the grant. The options are scheduled to expire on
July 2, 2007.
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-end Option Values
The Named Executive Officer had no unexercised options at the end of the
1997 fiscal year. No options relating to the Named Executive Officer were
granted or exercised during fiscal 1997.
Retirement Contracts
Messrs. C.C. Guy and Charles M. Bolt retired as officers of the Company
on January 17, 1995. In connection with Mr. Bolt's retirement, the Board of
Directors of the Company originally agreed to continue Mr. Bolt's salary (in the
annual amount of $100,000) for a period of one year following his retirement,
during which time he would serve as a consultant to the Company on an as-needed
basis. In November 1995 the Company recognized that it would continue to need
Mr. Bolt's services and agreed to pay Mr. Bolt $1,000 per month for consulting
services after January 1996, which payments continued during the 1997 fiscal
year. In connection with Mr. Guy's retirement, the Company originally agreed to
continue Mr. Guy's salary for a period of six months following his retirement at
$4,000 per month, during which time he would serve as a consultant to the
Company on an as-needed basis. In July 1995, the Company continued to need Mr.
Guy's consulting services and agreed to continue paying him $100 per month for
such services. This amount was increased to $200 per month in November 1995. The
Board determined that these payments were appropriate in light of these
officers' long records of service to the Company and value as consultants to the
Company. The Company anticipates that these individuals will continue to serve
as consultants during fiscal year 1998. In addition, Mr. Buck A. Mickel resigned
as Vice
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President of the Company on January 17, 1995. The Board had originally agreed to
continue Mr. Buck A. Mickel's salary following his resignation as Vice President
of the Company at $2,500 per month through June 30, 1995, during which time he
would serve as a consultant to the Company on an as-needed basis. Because of the
continuing need to oversee the management of the legal contingencies of Wiegmann
& Rose, however, Mr. Mickel continued to serve as President of Wiegmann & Rose
at a salary of $2,500 per month in lieu of consulting pay. Effective September
1, 1996, Mr. Buck A. Mickel was elected Vice President of the Company at a
salary of $4,000 per month.
RELATED PARTY TRANSACTIONS
Certain information concerning related party transactions respecting the
members of the Compensation Committee, members of their families, and other
executive officers, directors and owners of 5% or more of the outstanding Common
Stock of the Company (a "5% or More Owner") is set forth below.
Purchase of HomeAdd Financial Corporation
On November 4, 1996, the Company purchased for cash all of the
outstanding common stock of HomeAdd Financial Corporation ("HomeAdd"), formerly
CambridgeBanc, Inc. from Emergent Group, Inc. for a total purchase price of
$15,000. This sum represents the Company's estimate of the fair value of the
furniture and equipment owned by CambridgeBanc, Inc. CambridgeBanc, Inc. was
formed by Emergent Group, Inc. in 1995. Through HomeAdd, the Company originates
and sells loans secured by liens on improved property.
In addition to the purchase agreement to acquire the common stock of
HomeAdd, the Company executed a lease agreement with Emergent Group, Inc. in
which the Company paid $18,000 for the use of additional furniture and equipment
for one year. HomeAdd executed a sublease agreement to rent through November 4,
1997, from Emergent Group, Inc. the office space that it occupied at that time
at $1,757 per month.
Mr. Buck Mickel, Chairman of the Board and Chief Executive Officer of
the Company and a 5% or More Owner, also serves on the board of directors of
Emergent Group, Inc. and beneficially owns less than 5% of its outstanding
common stock. C. Thomas Wyche, Secretary of the Company, also serves as
Secretary of Emergent Group, Inc. and is a shareholder of Emergent Group, Inc.,
owning less than 5% of its outstanding common stock. In addition, each of Buck
A. Mickel, Charles C. Mickel and Minor Mickel Shaw are 5% or More Owners of the
Company as well as shareholders of Emergent Group, Inc., each owning less than
5% of its outstanding common stock. Buck A. Mickel is a Vice President and
director of the Company, and President of Wiegmann & Rose.
Salary and Other Compensation Arrangements
As described herein under the subheading "Election of
Directors"--"Management Compensation"--"Retirement Contracts", the Company pays
consulting fees to Messrs. C.C. Guy, Charles M. Bolt and Buck A. Mickel.
Guarantees by Directors and Officers
During October 1994 the Company executed a $500,000 unsecured line of
credit with a bank. This credit facility was guaranteed by Mr. Buck Mickel and
expired on December 31, 1995. This credit facility was not used during fiscal
1996 or 1997.
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Corporate Office Arrangement
During the 1997 fiscal year the Company leased approximately 1,545
square feet of floor space at 245 East Broad Street, Greenville, South Carolina,
for its principal executive offices under a month-to-month lease arrangement
with Micco Corporation at a monthly rental of $885 per month. Effective
September 1, 1996, the lease amount was increased from $354 per month to reflect
the increased usage of the offices as the result of the new business that the
Company had acquired. The monthly lease amount had been reduced from $1,180 per
month to $590 per month in January 1993, and from $590 per month to $354 per
month in September 1993. The Company shared common areas of this office space
with Micco Corporation. Micco Corporation reimbursed the Company each month for
a portion of the office expenses relating to this office space, including a
portion of the costs of the Company's administrative assistant. During fiscal
1995 and 1996, Micco Corporation reimbursed the Company for 70% of these
expenses; effective September 1, 1996, this percentage was decreased to 25% to
reflect the Company's increased usage of this office space and services. Such
reimbursements amounted to $38,040 and $8,430 during fiscal 1996 and 1997,
respectively, after offset by the amount of rent owed to Micco Corporation. The
Company believes that the terms of this arrangement have been, since inception,
at least as favorable as could be obtained from a third party. Micco Corporation
is owned by, and its directors, principal officers and shareholders are, Buck A.
Mickel (President of Wiegmann & Rose, Vice President and a director of the
Company and a 5% or More Owner), Minor H. Mickel (a former director and 5% or
More Owner), Minor Mickel Shaw (a 5% or More Owner) and Charles C. Mickel (a 5%
or More Owner). Minor H. Mickel is the wife of Buck Mickel, and Buck A. Mickel,
Charles C. Mickel and Minor Mickel Shaw are the adult children of Minor H. and
Buck Mickel.
During September 1997, the Company moved its executive offices to a
facility consisting of approximately 3,000 square feet of floor space located at
28 East Court Street, Greenville, South Carolina. The monthly rental expense to
be incurred by the Company beginning in September 1997 is $2,250 under a
month-to-month lease arrangement. The lease at 28 East Court Street, Greenville,
South Carolina includes office furniture and equipment. The office space at 28
East Court Street, Greenville, South Carolina is leased from CTST, LLC. CTST,
LLC is owned by three shareholders: Buck A. Mickel, Charles C. Mickel and Minor
Mickel Shaw. As described above, each of these individuals is a beneficial owner
of more than 5% of the outstanding Common Stock of the Company. Buck A. Mickel
is a Vice President and a director of the Company, and President of Wiegmann &
Rose, and the other two shareholders are his adult siblings. The Company
believes that this lease contains provisions as favorable to the Company as
could be obtained from a third-party landlord. Micco Corporation also moved its
offices to the office facility at 28 East Court Street, Greenville, South
Carolina. Micco Corporation pays rent to CTST, LLC for the space it occupies.
Micco Corporation and the Company share common areas of this office space. Micco
Corporation reimburses the Company for 25% of other office expense, including
25% of the salary and benefits of the Company's administrative assistant,
incurred by the Company at its executive offices. The Company estimates that
reimbursements in the approximate amount of $20,000 will be paid by Micco
Corporation to the Company in fiscal year 1998 pursuant to this arrangement. The
Company believes that this approximates Micco Corporation's usage of office
services and that the terms of this arrangement are at least as favorable as
could be obtained from a third party.
Legal Fees
The law firm of Wyche, Burgess, Freeman & Parham, P.A. serves as general
counsel to the Company. C. Thomas Wyche, the Secretary of the Company, is a
senior member of such law firm. Fees paid to such law firm by the Company were
less than one percent of the law firm's gross revenues during the firm's last
fiscal year. The Company believes that the terms of its relationship with the
law firm are at least as favorable as could be obtained from a third party.
9
<PAGE> 12
PROPOSED AMENDMENT TO STOCK OPTION PLAN
(Item No. 2 on the Proxy)
The Board of Directors and the Compensation Committee recommend that the
shareholders approve adoption by the Company of Amendment No. 3 to the RSI
Holdings, Inc. Stock Option Plan (the "Option Plan", and as proposed to be
amended the "Amended Option Plan"). The proposed amendment increases the number
of shares of the Company's Common Stock that may be issued pursuant to options
granted under the plan from an aggregate of 250,000 to an aggregate of 750,000.
The Board and the Compensation Committee recommend approval of the proposed
amendment because they believe that the Option Plan is an effective component of
management compensation and, if all currently outstanding options were exercised
in full, additional options covering only 12,500 shares could currently be
granted pursuant to the plan, which was originally adopted in 1991. Except as
set forth above, the Option Plan would remain unaltered in all material
respects.
Under the Amended Option Plan, the Board or (Committee) would have the
discretion to grant options for up to an aggregate maximum of 750,000 shares of
the Company's Common Stock (including shares previously issued under the plan).
As of December 3, 1997, an aggregate of 237,500 shares of the Company's Common
Stock had previously been issued or are covered by outstanding options under the
plan.
The purpose of the Amended Option Plan is to promote the growth and
profitability of the Company and its subsidiaries by increasing the personal
participation of key and middle level executives in the continued growth and
financial success of the Company and its subsidiaries, by enabling the Company
and its subsidiaries to attract and retain key and middle level executives of
outstanding competence and by providing such key and middle level executives
with an equity opportunity in the Company. The Board or a committee of the Board
administers the Amended Option Plan.
Participation in the Amended Option Plan is determined by the Board or a
committee of the Board and is limited to those key and middle level executives,
who may or may not be officers or members of the Board, of the Company or its
subsidiaries who have the greatest impact on the Company's long-term
performance. In making any determination as to the key and middle level
executives to whom options shall be granted and as to the number of shares to be
subject thereto, the Board (or committee) shall take into account, in each case,
the level of responsibility of the key or middle level executive's position, the
level of the key or middle level executive's performance, the key or middle
level executive's level of compensation, the assessed potential of the key or
middle level executive and such other factors as the Board (or committee) shall
deem relevant to the accomplishment of the purposes of the plan. Directors who
are not also key or middle level executives will not be eligible to participate
in the Amended Option Plan. At this time, the Company believes that
approximately six employees of the Company are currently eligible to participate
in the plan.
The term of each option shall be established by the Board (or
committee), but shall not exceed ten years, and the option will be exercisable
according to such schedule as the Board of Directors (or committee) may
determine. The recipient of an option will not pay the Company any amount at the
time of receipt of the option. If an option shall expire or terminate for any
reason without having been fully exercised, the unpurchased shares subject to
the option shall again be available for the purposes of the Amended Option Plan.
In the discretion of the Board of Directors (or committee), options
granted under the Amended Option Plan may be "incentive stock options" for
federal income tax purposes. The Company is not allowed a deduction at any time
in connection with, and the participant is not taxed upon either the grant or
the exercise of, an "incentive stock option." The difference between the
exercise price of such option and the market value of the shares of Common Stock
at the date of exercise, however, constitutes a tax preference item for the
participant in the year of exercise for alternative minimum tax purposes. To
qualify as an incentive stock option, among other things, the stock acquired by
the participant must be held for at least two years after the option is granted
and one year after it is exercised. If the participant holds the stock for the
period of time required for incentive stock option qualification, then he or she
will
10
<PAGE> 13
be taxed only upon any gain realized upon disposition of the stock. The
participant's gain at that time will be equal to the difference between the
sales price of the stock and the exercise price. If an incentive stock option is
exercised after the death of the employee by the estate of the decedent, or by a
person who acquired the right to exercise such option by bequest or inheritance
or by reason of death of the decedent, none of the time requirements described
in this paragraph shall apply.
If the participant fails to satisfy these time requirements, the option
will be treated in a manner similar to options that are not incentive stock
options. The participant is generally not taxed upon the grant of an option that
is not an incentive stock option. Upon exercise of any such option, the
participant recognizes ordinary income equal to the difference between the fair
market value of the shares of Common Stock acquired on the date of exercise and
the exercise price. Generally, the Company receives a deduction for the amount
the participant reports as ordinary income arising from the exercise of the
option. Upon a subsequent sale or disposition of the stock, the holder would be
taxable on any excess of the selling price over the fair market value at the
date of the exercise. If the participant fails to satisfy the time requirements
described above with respect to an option intended to be an incentive stock
option, the income to the participant and the deduction for the Company shall
arise at the time of the early disposition and shall equal the excess of (a) the
lower of the fair market value of the shares at the time of exercise or such
value at the time of disposition over (b) the exercise price. The Amended Option
Plan does not satisfy all the requirements of Section 162(m) of the Internal
Revenue Code of 1986, as amended ("Section 162(m)"). Nonetheless, the Company
anticipates that none of the compensation payable pursuant to the plan will lose
its deductibility by reason of Section 162(m), because no Covered Employee as
(as defined in Section 162(m)) who can participate in the plan is expected to
receive in any fiscal year aggregate compensation that exceeds $1 million and
does not qualify as performance-based compensation under Section 162(m).
The Amended Option Plan provides that no option may be exercised more
than three months after a participant's termination of employment with the
Company, unless the participant dies while in the employ of the Company or
within such three-month period or the participant's employment is terminated by
reason of having become permanently and totally disabled, in which event the
option may be exercised during the one-year period after the date of termination
of the participant's employment. In no event may an option be exercised after
the expiration of its fixed term.
Options granted pursuant to the Amended Option Plan are not transferable
except by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Internal Revenue Code of
1986, as amended, or Title I of the Employee Retirement Income Security Act, or
the rules thereunder.
The price per share at which each option granted under the Amended
Option Plan may be exercised shall be such price as shall be determined by the
Board (or committee) at the time of grant based on such criteria as may be
adopted by the Board (or committee) in good faith; provided, however, in the
case of an option intended to qualify as an incentive stock option, the price
per share shall not be less than the fair market value of the stock at such time
such option is granted.
A participant may exercise an option by completing each of the following
steps: (i) indicating in writing the decision to exercise the option and
delivering such notice to the Company; (ii) tendering to the Company payment in
full in cash (or, if the Board (or committee) so determines at the time of
grant, in shares of the Company's Common Stock) of the exercise price for the
shares for which the option is exercised; (iii) tendering to the Company payment
in full in cash of the amount of all federal and state withholding or other
employment taxes applicable to taxable income; and (iv) complying with such
other requirements as the Board (or committee) shall establish.
The Amended Option Plan provides that it may be terminated or amended by
the Board of Directors (or committee), except that shareholder approval would be
required in the event an amendment were to: (i) materially increase the benefits
accruing to the participants; (ii) increase the number of securities issuable
under the plan (other than an increase pursuant to the antidilution provision of
the
11
<PAGE> 14
plan); (iii) change the class of employees eligible to receive options; or (iv)
otherwise materially modify the requirements for eligibility.
The Amended Option Plan provides that no person, estate or entity shall
have any of the rights of a shareholder with respect to shares subject to an
option until a certificate(s) for such shares has been delivered.
No certificate(s) for shares shall be executed and delivered upon
exercise of an option until the Company shall have taken such action, if any, as
is then required to comply with the provisions of the Securities Act of 1933, as
amended, the Exchange Act, the South Carolina Uniform Securities Act, as
amended, any other applicable state blue sky law(s) and the requirements of any
exchange on which the Common Stock of the Company may, at the time, be listed.
The following table provides certain information with respect to the
Option Plan:
<TABLE>
<CAPTION>
Shares
Shares Shares Aggregate Covered Shares
Covered by Covered by Market Value by Covered by Dollar Value of
Options Options in Excess of Options Options In-The-Money Options
Granted Exercised Exercise Price Terminated Outstanding Outstanding at
Since Since of Exercised Since at December December 3, 1997 (2)
Name and Position Inception Inception Options (1)($) Inception 3, 1997 ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Buck A. Mickel, Vice 35,000 0 0 0 35,000 6,250
President of the Company
Joe F. Ogburn, Treasurer 35,000 0 0 0 35,000 6,250
and Vice President of the
Company
Matthew J. Marron, Jr., 20,000 0 0 0 20,000 0
President HomeAdd
Financial Corporation
All current executive 90,000 0 0 0 90,000 12,500
officers, as a group
C. C. Guy, Director 20,000 0 0 0 20,000 6,250
Charles M. Bolt, Director 20,000 0 0 0 20,000 6,250
All non-executive officer
employees, as a group 87,500 5,000 1,250 45,000 37,500 1,563
</TABLE>
(1) Based on the bid per share price of the Common Stock on July
2, 1997.
(2) Based on the bid per share price of the Common Stock on
December 3, 1997.
The Amended Option Plan provides that it shall terminate on the close of
business of June 27, 2000, and no option shall be granted under the plan
thereafter, but such termination shall not affect any option theretofore granted
under the plan.
As of December 3, 1997, the bid price for a share of Common Stock of the
Company was $.4375.
Each of Buck A. Mickel, Joe F. Ogburn and Matthew J. Marron, Jr.
currently participates in the plan and could be deemed to have an interest in
approval of the proposed amendment to such plan.
The Amended Option Plan is being submitted to the shareholders of the
Company for approval because the Plan requires approval of the proposed
amendment and in order to continue to qualify the plan under the "incentive
stock option" rules of the Internal Revenue Code of 1986, as amended. The
proposed amendment to the Option Plan will not become effective if the requisite
shareholder vote on approval is not obtained.
12
<PAGE> 15
RATIFICATION OF ELECTION OF ACCOUNTANTS
(Item No. 3 on the Proxy)
The Board of Directors recommends the ratification of the appointment of
Ernst & Young LLP, independent certified public accountants, as auditors for the
Company and its subsidiaries for fiscal year 1998 and to audit and report to the
shareholders upon the financial statements as of and for the period ending
August 31, 1998. Based upon the recommendation of the Company's Audit Committee,
the Board has appointed the accounting firm of Ernst & Young LLP as the
Company's independent auditors for the Company's 1998 fiscal year.
Representatives of Ernst & Young LLP are expected to be present at the Annual
Meeting, and such representatives will have the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions which shareholders may have. Neither Ernst & Young LLP nor any of its
members has any relationship with the Company except in the firm's capacity as
such auditors and as the Company's tax advisor.
The appointment of auditors is approved annually by the Board of
Directors and subsequently submitted to the shareholders for ratification.
SOLICITATION OF PROXIES
The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by mail, proxies may be solicited by
directors, officers and other employees of the Company by telephone, telegram or
personal interview for no additional compensation. Arrangements will be made
with brokerage houses and other custodians, nominees and fiduciaries to forward
solicitation materials to beneficial owners of the stock held of record by such
persons, and the Company will reimburse such persons for reasonable
out-of-pocket expenses incurred by them in so doing. The Company has engaged
American Stock Transfer & Trust Company, its transfer agent, to assist in these
contacts with brokerage houses, custodians, nominees and fiduciaries in exchange
for reimbursement of reasonable out-of-pocket expenses.
PROPOSALS OF SHAREHOLDERS
Any shareholder of the Company who desires to present a proposal at the
Annual Meeting of Shareholders to be held after the end of fiscal 1998 for
inclusion in the proxy statement and form of proxy relating to that meeting must
submit such proposal to the Company at its principal executive offices on or
before August 14, 1998.
OTHER INFORMATION
The Company's annual report is mailed with this Proxy Statement. The
Company will provide without charge to any shareholder of record as of December
3, 1997, and to each person to whom this Proxy Statement is delivered in
connection with the Annual Meeting of Shareholders, upon written or oral request
of such person, a copy of the Company's fiscal 1997 annual report on Form
10-KSB, including financial statements and financial statement schedules, but
excluding exhibits, filed with the Securities and Exchange Commission. Upon
payment of the reasonable copying cost thereof, the Company will make available
the exhibits to the Company's fiscal 1997 annual report on Form 10-KSB. Any such
request should be directed to RSI Holdings, Inc., 28 East Court Street, Post
Office Box 6847, Greenville, South Carolina 29606, Attention: Investor
Relations.
13
<PAGE> 16
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors was not
aware that any business not described above would be presented for consideration
at the Annual Meeting. If any other business properly comes before the meeting
or any adjournment thereof, it is intended that the shares represented by
proxies will be voted with respect thereto in accordance with the best judgment
of the person voting them.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
C. Thomas Wyche, Secretary
Greenville, South Carolina
December 12, 1997
14
<PAGE> 17
APPENDIX A
PROXY
RSI HOLDINGS, INC.
ANNUAL MEETING, JANUARY 15, 1998
The undersigned shareholder of RSI Holdings, Inc., a North Carolina
corporation, hereby constitutes and appoints Buck Mickel, Buck A. Mickel and C.
Thomas Wyche, and each of them, attorneys and proxies on behalf of the
undersigned to act and vote at the Annual Meeting of Shareholders, to be held at
the offices of RSI Holdings, Inc., 28 East Court Street, Greenville, South
Carolina, on January 15, 1998, at 10:00 A.M., and any adjournment or
adjournments thereof, and the undersigned instructs said attorneys to vote:
Please sign on reverse side and return in the enclosed postage-paid
envelope.
<PAGE> 18
[ ] Please mark
your votes as
in this
example.
FOR all nominees WITHHOLD
listed at right AUTHORITY
(except to vote for
as marked to the all
contrary below) nominees Nominee(s):
1. ELECTION OF DIRECTORS [ ] [ ] Buck Mickel
C. C. Guy
Charles M. Bolt
Buck A. Mickel
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR AN
INDIVIDUAL NOMINEE WRITE THAT NOMINEE'S NAME IN THE
SPACE PROVIDED BELOW.)
____________________________________________________________
FOR AGAINST ABSTAIN
2. To vote on approval of the proposed
amendment to the RSI Holdings, Inc. Stock
Option Plan to increase from 250,000 to
750,000 the aggregate number of shares of
the Company's common stock issuable
thereunder.
[ ] [ ] [ ]
3. The ratification of the appointment of Ernst
& Young LLP as independent auditors of the
Company for fiscal year 1998.
[ ] [ ] [ ]
4. The transaction of such other matters as may
properly come before the meeting or any
adjournment thereof.
A majority of said attorneys and proxies who shall be present and
acting as such at the meeting or any adjournment or adjournments thereof (or, if
only one such attorney and proxy is present and acting, then that one) shall
have and may exercise all the powers hereby conferred.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF RSI
HOLDINGS, INC. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NOT OTHERWISE SPECIFIED, THIS
PROXY WILL BE VOTED FOR APPROVAL OF PROPOSALS 1, 2 AND 3, and Proxy holders will
vote, in their discretion, upon such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders dated December 12, 1997 and the Proxy Statement
furnished herewith.
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
SIGNATURE
- --------------------------------------------------------------------------------
DATED SIGNATURE IF JOINTLY OWNED DATED
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
<PAGE> 19
EXHIBIT A
AMENDMENT NO. 3 TO RSI HOLDINGS, INC.
STOCK OPTION PLAN
This Amendment is made as of the ______ day of _______, 1997 to the RSI
Holdings, Inc. Stock Option Plan, as amended to date (the "Plan").
1. The second sentence of Section 4 entitled "Stock Subject to Plan"
shall be deleted and replaced with the following:
An aggregate of 750,000 shares are reserved for the grant
under this Plan of Options, any or all of which, at the
Board's (or Committee's, as applicable) discretion, may be
intended to qualify as incentive stock options under Section
422 of the Code.
In all other respects the Plan shall remain unchanged.
