SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )

Check the appropriate box:

( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

EMPIRE OF CAROLINA, INC.
(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than 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)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

( ) Fee paid previously with preliminary materials.

( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule, or Registration Statement No.:

3) Filing Party:

4) Date Filed:

EMPIRE OF CAROLINA, INC.
5150 LINTON BOULEVARD
DELRAY BEACH, FLORIDA 33484

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 8, 1999

To the Stockholders of EMPIRE OF CAROLINA, INC.:

You are cordially invited to attend the Annual Meeting of the
Stockholders (the "Annual Meeting") of Empire of Carolina, Inc. (together with
its subsidiaries, the "Company"), which will be held at Chase Conference Center,
270 Park Avenue, 11th Floor, Room A, New York, New York on June 8, 1999, at 9:30
a.m., local time, for:

(1) The holders of the Series A Preferred Stock (the "Series A
Holders") to consider and act on a proposal to expand the number
of directors actually constituting the Company's Board of
Directors (the "Board") from six to seven.
(2) The Series A Holders to elect two members to the Board of
Directors and the Series A Holders and the holders of Common
Stock (the "Common Holders," and collectively with the Series A
Holders, the "Voting Holders"), voting together, to elect five
members to the Board, all such persons being elected to hold
office for a one-year term and until their respective successors
are duly elected and qualified.
(3) The Voting Holders to ratify the appointment of Deloitte & Touche
LLP as the Company's independent auditors for the fiscal year
ending December 31, 1999.
(4) The Voting Holders to transact such other business as may
properly come before the Annual Meeting or any adjournments
thereof.

Only holders of record of Common Stock and Series A Preferred Stock at
the close of business on April 15, 1999, will be entitled to notice of, and to
vote at, the Annual Meeting or any adjournments or postponements thereof. A list
of stockholders entitled to vote at the Annual Meeting will be open to
examination by any stockholder, for any purpose germane to the meeting, at the
offices of Greenberg, Traurig, P.A., 200 Park Avenue, New York, New York 10166
during ordinary business hours for ten days prior to the Annual Meeting. Such
list shall also be available during the Annual Meeting. A copy of the Annual
Report of the Company for the fiscal year ended December 31, 1998 is enclosed
herewith.

STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE COMPLETE, DATE
AND SIGN THE ACCOMPANYING PROXY CARDS AND RETURN THEM WITHOUT DELAY IN THE
ENCLOSED POSTAGE PREPAID ENVELOPE. YOUR PROXY WILL NOT BE USED IF YOU ARE
PRESENT AND PREFER TO VOTE IN PERSON OR IF YOU REVOKE THE PROXY.

By order of the Board of Directors,

Lawrence Geller, Secretary

April 23, 1999
Delray Beach, Florida

EMPIRE OF CAROLINA, INC.
5150 LINTON BOULEVARD
DELRAY BEACH, FLORIDA 33484

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
JUNE 8, 1999

SOLICITATION AND REVOCATION OF PROXIES

These proxy materials are furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board") of Empire of Carolina, Inc.,
a Delaware corporation (the "Company" or "Empire"), for use at the Annual
Meeting of Stockholders of the Company and for any adjournments or postponements
thereof (the "Annual Meeting"), to be held at Chase Conference Center, 270 Park
Avenue, 11th Floor, Room A, New York, New York on June 8, 1999, at 9:30 a.m.,
local time, for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders. A proxy (the "Proxy") for the Annual Meeting is
enclosed, by means of which you may indicate your votes as to the proposals
described in this Proxy Statement as to which your Proxy is being solicited.
This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders, the applicable Proxy, and the 1998 Annual Report to Stockholders
are first being mailed to stockholders on or about April 26, 1999.

Proxies are being solicited hereby from the holders (the "Series A
Holders") of the Company's Series A Preferred Stock, par value $.01 per share
("Series A Preferred Stock"), as to Proposal 1 (expansion of the Board), and
Proposal 2 (with respect to the election of two of the seven director nominees).
Proxies are being solicited hereby from the holders (the "Common Holders") of
the Company's Common Stock, par value $.01 per share ("Common Stock") and the
Series A Holders (collectively with the Common Holders, the "Voting Holders"),
as to the election of five (or if Proposal 1 is not approved, four) of the
nominees for the Board pursuant to Proposal 2 and as to Proposal 3 (ratification
of auditors).

Because of these circumstances, separate forms of proxy are applicable
to the Series A Holders and the Common Holders. To the extent that any Voting
Holder owns both Series A Preferred Stock and Common Stock, such stockholder
will receive two separate proxy cards, and must complete and return BOTH of such
proxies in order to ensure that the voting power represented by both the Series
A Preferred Stock and Common Stock held by such person are voted by proxies.

IN THE ABSENCE OF CONTRARY INSTRUCTIONS, SHARES REPRESENTED BY ANY PROXY
WILL BE VOTED FOR THE ELECTION OF THE APPLICABLE NOMINEES LISTED IN PROPOSAL 2
AND FOR ALL OF THE OTHER PROPOSALS AS TO WHICH SUCH PROXY APPLIES. All Proxies
which are properly completed, signed and returned to the Company prior to the
Annual Meeting, and which have not been revoked, will be voted in accordance
with the stockholder's instructions contained in such Proxy. A stockholder may
revoke his Proxy at any time before it is exercised by filing with the Secretary
of the Company at its executive offices in Delray Beach, Florida, either a
written notice of revocation or a duly executed Proxy bearing a later date, or
by appearing in person at the Annual Meeting and expressing a desire to vote his
or her shares in person.

The entire cost of preparing, assembling, printing and mailing this
Proxy Statement, the enclosed Proxy and other materials, and the cost of
soliciting Proxies with respect to the Annual Meeting, will be borne by the
Company. The Company will request banks and brokers to solicit their customers
who beneficially own shares listed of record in names of nominees, and will
reimburse those banks and brokers for the reasonable out-of-pocket expenses of
such solicitations. The original solicitation of Proxies by mail may be
supplemented by telephone, facsimile, telegram and personal contacts by officers
and other regular employees of the Company, but no additional compensation will
be paid to such individuals.

VOTING RIGHTS AND VOTING SECURITIES OUTSTANDING

The Company has fixed April 15, 1999 as the record date (the "Record
Date") for the determination of stockholders entitled to notice of and to vote
at the Annual Meeting or any adjournments or postponements thereof. As of March
31, 1999, the Company had outstanding 16,615,590 shares of Common Stock and
1,722,287 shares of Series A Preferred Stock, the only outstanding voting
securities of the Company. In addition, as of March 31, 1999, the Company had
outstanding 1,450.9607 shares of Series C Preferred Stock which is non-voting
except as expressly provided by law or the Company's Certificate of Designation
for the Series C Preferred Stock.

With respect to each proposal as to which the holders of the Series A
Preferred Stock vote separately (i.e., Proposal 1 and the election of two of the
directors pursuant to Proposal 2), each holder of Series A Preferred Stock is
entitled to one vote for each share held. With respect to such proposals,
holders of 50% of the outstanding shares of Series A Preferred Stock shall
constitute a quorum.

With respect to all other matters, each Series A Holder is entitled to
eight votes for each share of Series A Preferred Stock held, and each Common
Holder is entitled to one vote for each share of Common Stock held. The
affirmative vote by holders of Series A Preferred Stock and Common Stock
representing a majority of the voting power of all shares of Series A Preferred
Stock and Common Stock present, in person or by proxy, and entitled to vote at
the Annual Meeting is required for approval of these proposals. With respect to
Proposal 2, the holders of Common Stock and Series A Preferred Stock do not have
cumulative voting rights, which means (a) the directors to be elected by the
Series A Holders voting alone will be elected by the vote of the holders of a
plurality of the shares of Series A Preferred present, in person or by proxy,
and entitled to vote at the Annual Meeting and (b) the other directors to be
elected will be elected by the vote of the Series A Holders and Common Holders
representing a plurality of the voting power of all shares of Series A Preferred
Stock and Common Stock held by holders present in person or by proxy and
entitled to vote at the Annual Meeting.

Abstentions and broker non-votes are counted for the purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions and broker non-votes will have no effect upon the outcome of
Proposals 1, 2 or 3.

A list of stockholders entitled to vote at the Annual Meeting will be
open to examination by any stockholder, for any purpose germane to the meeting,
at the offices of Greenberg, Traurig, P.A., 200 Park Avenue, New York, New York
10166 during ordinary business hours for ten days prior to the Annual Meeting.
Such list also shall be available at the Annual Meeting.

SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

The following table sets forth, as of March 31, 1999, certain
information concerning those persons known to the Company, based on information
known to the Company, contained in statements filed with the Securities and
Exchange Commission pursuant to Section 13(d) or 13(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and/or obtained from such
persons, with respect to the beneficial ownership (as such term is defined in
Rule 13d-3 under the Exchange Act) of Common Stock, Series A Preferred Stock and
Series C Preferred Stock by (i) each person known by the Company to be the owner
of more than 5% of the outstanding Common Stock, (ii) each Director and nominee
for election as a director, (iii) each executive officer named in the Summary
Compensation Table, and (iv) all current directors and executive officers as a
group:

Common Stock Series A Series C Fully Diluted
Name and Address of Beneficial Owner (1) Ownership (2) Preferred Stock (3) Preferred Stock (4) Ownership (5)
- --------------------------------------------------- ------------------------------------------------------------------------------
DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
William H. Craig (6) 169,966 0 0 *
1.01%

John J. Doran (7) 106,667 10,000 0 *
* *

Lawrence Geller (8) 151,000 0 0 *
*

Charles S. Holmes (9) 4,311,908 145,000 0 8.62%
20.87% 8.42%

Timothy Moran (10) 1,683,332 50,000 0 3.37%
9.73% 2.90%

James J. Pinto (11) 3,815,419 110,000 0 7.63%
18.80% 6.39%

J. Artie Rogers (12) 30,000 0 0 *
*

Mark S. Rose (13) 2,475,000 50,000 0 4.95%
35 Boylan Lane 14.50% 2.90%
Blue Point, NY 11714

Frederick W. Rosenbauer, Jr. (14) 49,167 0 0 *
*

Lenore H. Schupak (15) 230,000 22,500 0 *
1.38% 1.38%

All Current or Proposed Directors and Executive 13,022,459 387,500 0 24.57%
Officers As A Group (10 persons above) 50.62% 21.99%

OTHER 5% STOCKHOLDERS
WPG Corporate Development Associates IV, 6,459,293 0 1,148 13.25%
L.P. (16) 29.47% 80.91%
One New York Plaza
New York, New York 10004

WPG Corporate Development Associates IV 1,557,556 0 277 3.12%
(Overseas), Ltd. (17) 8.65% 19.09%
One New York Plaza
New York, New York 10004

Steven E. Geller (18) 1,231,167 0 0 2.46%
17212 Whitehaven Drive 7.25%
Boca Raton, FL 33496

* less than 1%

(1) Unless otherwise indicated, the business address of the persons and
entities named in the above table is care of Empire of Carolina, Inc.,
5150 Linton Boulevard, Delray Beach, Florida 33484. Unless otherwise
indicated, each person has sole investment and voting power with respect
to the shares listed in the table, subject to community property laws,
where applicable.

(2) For purposes of this column, a person or group of persons is deemed to
have "beneficial ownership" of any shares of Common Stock which such
person has the right to acquire within 60 days. For purposes of
calculating the number and computing the percentage of outstanding
shares of Common Stock held by each person or group of persons, any
security which such person or group of persons has the right to acquire
within 60 days is deemed to be outstanding, including conversions of
preferred stock and warrants, but is not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person.

(3) Percentages are based solely upon the number of shares of Series A
Preferred Stock held as of March 31, 1999. As of March 31, 1999
1,722,287 shares of Series A Preferred Stock were outstanding. Each
share of Series A Preferred Stock has a stated value of $10 (the "Stated
Value"). Each share of Series A Preferred Stock is convertible at any
time at the option of the holder into Common Stock at a rate of one
share of Common Stock for each $1.25 of Stated Value of Series A
Preferred Stock. Each share of Series A Preferred Stock votes on all
matters to be voted on by the Common Holders on an as if converted
basis.

(4) There are a total of 1,500 shares of Series C Preferred Stock
authorized, and, as of March 31, 1999, 1450.9607 of such shares were
outstanding. Holdings of Series C Preferred Stock have been rounded to
the nearest whole number in the chart. Each share of Series C Preferred
Stock has a Stated Value per share of $10,000 and is convertible at any
time, at the option of the holder thereof, into one share of Common
Stock for every $2.00 of Stated Value of Series C Preferred Stock.
Except as otherwise expressly provided by law or the Company's
Certificate of Designation of the Series C Preferred Stock or Bylaws,
the Series C Preferred Stock is non-voting.

(5) On a fully diluted basis, as of March 31, 1999, a total of 49,995,414
shares of Common Stock would be outstanding. This amount is composed of
(i) the 16,615,590 shares of Common Stock outstanding, (ii) the
13,778,296 shares of Common Stock issuable upon conversion of the
1,722,287 shares of Series A Preferred Stock outstanding, (iii) the
10,194,725 shares of Common Stock issuable upon the exercise of the
warrants, (iv) the 7,254,803 shares of Common Stock issuable upon
conversion of the 1450.9607 shares of Series C Preferred Stock
outstanding, (v) the 1,699,500 shares of Common Stock issuable upon the
exercise of options issued pursuant to the Company's Amended and
Restated 1994 Stock Option Plan (the "1994 Stock Option Plan") and
outstanding (whether or not exercisable within 60 days), (vi) the
430,000 shares of Common Stock issuable upon the exercise of options
issued pursuant to the Company's 1998 Stock Option Plan (the "1998 Stock
Option Plan") and outstanding on the Record Date (whether or not
exercisable within 60 days of the Record Date) and (vii) the 22,500
shares of Common Stock issuable upon the exercise of options issued
pursuant to the Company's Non-Employee Director Stock Option Plan (the
"Non-Employee Director Stock Option Plan") and outstanding. The
calculation does not include shares (a) eligible for issuance but not
subject to outstanding awards pursuant to the 1994 and 1998 Stock Option
Plans and the Non-Employee Director Stock Option Plan or (b) eligible
for issuance but not actually issued pursuant to the Company's 1996
Employee Stock Purchase Plan. The percentage represents the percentage
of such total represented by the shares of Common Stock owned by each
such person as reflected in the column of this table headed "Common
Stock Ownership."

(6) Represents shares of Common Stock which Mr. Craig has the right to
acquire within sixty days pursuant to options granted under the 1994 and
1998 Stock Option Plans.

(7) Represents (a) 15,000 shares of Common Stock, (b) 10,000 shares of
Series A Preferred Stock which are convertible into 80,000 shares of
Common Stock, (c) 10,000 shares of Common Stock issuable upon the
exercise of warrants at an exercise price of $1.375 per share and (d)
1,667 shares of Common Stock which Mr. Doran has the right to acquire
within sixty days pursuant to options granted under the Non-Employee
Director Stock Option Plan.

(8) Represents (a) 1,000 shares of Common Stock and (b) options to purchase
150,000 shares issued pursuant to the 1994 Stock Option Plan which are
exercisable within sixty days.

(9) Represents (a) 145,000 shares of Series A Preferred Stock which are
convertible into 1,160,000 shares of Common Stock; (b) 2,773,752 shares
of Common Stock issuable upon the exercise of warrants by Mr. Holmes at
an exercise price of $1.375 per share; (c) 265,656 shares of common
stock and (d) 112,500 shares of common stock which Mr. Holmes has the
right to acquire within sixty days pursuant to options granted under the
1994 Stock Option Plan.

(10) Represents (a) 50,000 shares of Series A Preferred Stock which are
convertible into 400,000 shares of Common Stock, (b) 50,000 shares of
Common Stock issuable upon the exercise of warrants at an exercise price
of $1.375 per share, (c) 1,000,000 shares of Common Stock and (d)
options to purchase 233,332 shares pursuant to the 1994 and 1998 Stock
Option Plans which are exercisable within sixty days.

(11) Represents: (I) Securities owned directly by Mr. Pinto: (a) 24,500
shares of Series A Preferred Stock which are convertible into 196,000
shares of Common Stock; (b) 2,613,252 shares of Common Stock issuable
upon the exercise of warrants at an exercise price of $1.375 per share;
(c) 132,500 shares of common stock and (d) 114,167 shares of common
stock which Mr. Pinto has the right to acquire within sixty days
pursuant to options granted under the 1994 Stock Option Plan and the
Non-Employee Director Stock Option Plan; (II) Securities owned by TelCom
Partners, L.P. of which Mr. Pinto is the sole general partner and has
shared voting and investment power: (a) 72,500 shares of Series A
Preferred Stock which are convertible into 580,000 shares of Common
Stock and (b) 62,500 shares of Common Stock issuable upon the exercise
of warrants at an exercise price of $1.375 per share; and (III)
Securities owned by Churchill Associates, L.P., of which Mr. Pinto owns
50% of Churchill, Inc., the sole general partner and has shared voting
and investment power: (a) 13,000 shares of Series A Preferred Stock
which are convertible into 104,000 shares of Common Stock and (b) 13,000
shares of Common Stock issuable upon the exercise of warrants at an
exercise price of $1.375 per share.

(12) Represents shares of Common Stock which Mr. Rogers has the right to
acquire within sixty days pursuant to options granted under the 1994
Stock Option Plan.

(13) Represents (a) 1,900,000 shares of Common Stock, (b) 50,000 shares of
Series A Preferred Stock which are convertible into 400,000 shares of
Common Stock, and (c) 50,000 shares of Common Stock issuable upon the
exercise of warrants at an exercise price of $1.375 per share. Also
represents 125,000 shares of Common Stock owned by E. Joy Rose, over
which Mr. Rose has shared voting and investment power.

(14) Represents (a) 47,500 shares of Common Stock and (b) 1,667 shares of
Common Stock which Mr. Rosenbauer has the right to acquire within sixty
days pursuant to options granted under the Non-Employee Director Stock
Option Plan. Mr. Rosenbauer became a director of the Company in February
1998.

(15) Represents (a) 25,000 shares of Common Stock, (b) 22,500 shares of
Series A Preferred Stock which are convertible into 180,000 shares of
Common Stock, (c) 22,500 shares of Common Stock issuable upon the
exercise of warrants at an exercise price of $1.375 per share and (d)
2,500 shares of Common Stock which Ms. Schupak has the right to acquire
within sixty days pursuant to options granted under the Non-Employee
Director Stock Option Plan.

(16) Represents (a) 717,095 shares of Common Stock and (b) 1,148.4396 shares
of Series C Preferred Stock which are currently convertible into
5,742,198 shares of Common Stock. Voting and dispositive powers are
exercised through its fund investment adviser member, WPG P.E. Fund
Adviser, L.P.

(17) Represents (a) 172,913 shares of Common Stock and (b) 277 shares of
Series C Preferred Stock which are currently convertible into 1,384,643
shares of Common Stock. Voting and dispositive powers are exercised
through its overseas general partner, WPG CDA IV (Overseas), Ltd.

(18) Represents (a) 122,128 shares of Common Stock, (b) 734,039 shares of
Common Stock with respect to which Mr. Geller holds voting power
pursuant to a voting agreement with Barry S. Halperin, and (c) 375,000
shares of Common Stock which Mr. Geller has the right to acquire within
sixty days pursuant to options granted under the 1994 Stock Option Plan.

PROPOSAL 1

EXPANSION OF THE BOARD OF DIRECTORS
FROM SIX TO SEVEN DIRECTORS

Pursuant to the Certificate of Designation filed by the Company with
respect to the Series A Preferred Stock, an increase in the actual size of the
Board requires the approval of the Series A Holders.

The Board has determined that at the present time it would be beneficial
to increase the size of the Board so that (i) each of the currently serving
directors can continue to serve the Company, and (ii) Mr. Mark S. Rose can be
added to the Board. The Company believes that each of the current directors
brings a unique perspective and either represents a distinct constituency of the
Company's stockholders or is an independent director. The Board also believes
that Mr. Rose has significant personal experience and skills which could assist
the Company in its continued efforts to improve its financial condition and
operating results. Accordingly, the Board has recommended to the Series A
Holders that they approve the increase in the size of the Board from six to
seven directors. In the event the Proposal is not approved, the Board will
withdraw Mr. Rose's nomination. See "Proposal 2".

The affirmative vote of Series A Holders holding a majority of the
shares of Series A Preferred Stock present, in person or by proxy, and entitled
to vote at the Annual Meeting is required to approve this increase.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SERIES A HOLDERS VOTE FOR THE
APPROVAL OF THE INCREASE IN THE SIZE OF THE BOARD FROM SIX TO SEVEN DIRECTORS.

PROPOSAL 2

ELECTION OF DIRECTORS

The Board has nominated Charles S. Holmes, James J. Pinto, John J.
Doran, Timothy Moran, Mark S. Rose, Frederick W. Rosenbauer, Jr., and Lenore H.
Schupak for election as directors at the Annual Meeting to hold office for a
one-year term and until their successors are duly elected and qualified. With
the exception of Mr. Rose, each of the nominees currently serves as a Director.

Pursuant to the Certificate of Designation filed by the Company with
respect to the Series A Preferred Stock, two board members are to be elected by
the Series A Holders, voting alone (the "Preferred Directors"), with the
remaining directors ("Other Directors") to be elected by the holders of Common
Stock and Series A Preferred Stock voting together as a class. Proposal 1 would
permit an increase in the size of the Board from six to seven. Accordingly, the
Board has made Mr. Rose's nomination contingent upon approval of Proposal 1 by
the Series A Holders. The nominees for directors are as follows:

Preferred Director Nominees Other Director Nominees
--------------------------- -----------------------
Charles S. Holmes John J. Doran
James J. Pinto Timothy Moran
Mark S. Rose
Frederick W. Rosenbauer, Jr.
Lenore H. Schupak

Proxies will be solicited from the Common Holders with respect to the
election of Messrs. Doran, Moran, Rose, Rosenbauer and Ms. Schupak. Proxies will
be solicited from the Series A Holders with respect to all seven nominees.

The voting persons named in the enclosed Proxy intend to vote in favor
of the election of each of the persons named below unless authorization is
withheld. If any of the nominees becomes unavailable for election, votes will be
cast for the election of such other person or persons as the proxy holders, in
their judgment, may designate. Management has no reason to believe that any of
the nominees will not be a candidate or will be unable to serve.

Set forth below is certain information as of the Record Date concerning
each nominee, including his or her age, present principal occupation and
business experience during the past five years and the period he or she has
served as a director.

Name Age Director Since
---- --- --------------
Charles S. Holmes................ 54 May 1997
John Doran....................... 49 November 1997
Timothy Moran.................... 35 May 1998
Mark S. Rose..................... 56 N/A
Frederick W. Rosenbauer, Jr...... 64 February 1998
James J. Pinto................... 47 September 1997
Lenore H. Schupak................ 44 May 1997

CHARLES S. HOLMES has served as a director of the Company since May 1997
and as Chairman of the Board of Directors since June 1997. Since 1991, Mr.
Holmes has served as principal and is the sole stockholder of Asset Management
Associates of New York, Inc., a New York-based firm specializing in acquisitions
of manufacturing businesses. Mr. Holmes has been an officer of HPA Associates,
LLC since October 1996.

JOHN J. DORAN has served as a director of the Company since November
1997. Since September 1985, Mr. Doran has been the President of Citizens Medical
Corporation, a pharmacy benefit management company.

TIMOTHY MORAN has served as a director, President and Chief Executive
Officer of the Company since May 1998. He was President and Chief Operating
Officer from February 1998 to May 1998. Since February 1993, Mr. Moran has been
President of Apple Sports, Inc. and Apple Golf Shoes, Inc. Mr. Moran is the
son-in-law of Mark S. Rose.

MARK S. ROSE is a first-time nominee to the Company's Board of
Directors. Mr. Rose has twelve years experience in the sporting goods industry.
He served as Chairman of the Board and Chief Executive Officer of Apple Sports,
Inc. from 1986 until May 1998 when Apple Sports Inc. was purchased by the
Company. Since 1991 he has been Chairman of the Board and Chief Executive
Officer of Clare Rose of Nassau, Inc., an Anheuser Bush wholesale beverage
distributor for Long Island, New York. Mr. Rose is the father-in-law of Timothy
Moran.

FREDERICK W. ROSENBAUER, JR. has served as a director of the Company
since February 1998. In December 1998, Mr. Rosenbauer retired from the United
States Trust Company of New York, where he served as a Vice President since
1988.

JAMES J. PINTO has served as a director of the Company since September
1997. Since 1990, Mr. Pinto has been the President of the Private Finance Group
Corp. a merchant banking company, and has been an officer of HPA Associates, LLC
since October 1996. Mr. Pinto is a director of the following publicly traded
companies: Anderson Group, Inc. (an electronics manufacturer), Bristol Hotels
and Resorts and National Capital Management Corp.

LENORE H. SCHUPAK has served as a director of the Company since May
1997. Since 1990, Ms. Schupak has been President and principal owner of LHS
Environmental Management, Inc., a New Jersey based company which provides
environmental management consulting services in North America and Europe. From
1979 to 1989, she was an executive with American Standard, Inc., most recently
serving as Corporate Director, Environmental Technology.

BOARD OF DIRECTORS

At the Annual Meeting of Shareholders held on September 25, 1997, the
shareholders of the Company approved a proposal amending the Company's
Certificate of Incorporation to provide that the Board of Directors shall be
comprised of a maximum of eight directors. The actual size of the Board is
restricted, however, by the Certificate of Designation filed for the Series A
Preferred Stock, which requires that increases in the actual size of the Board
above five be approved by the Series A Holders.

At the Annual Meeting of Stockholders held on September 25, 1997, the
Series A Holders approved an increase in the size of the Board to 6 members, and
6 members were elected to the Board. On May 28, 1998, the Board of Directors
approved a resolution electing Mr. Timothy Moran to serve as a seventh member of
the Board, in contravention of the Certificate of Designation of the Series A
Preferred Stock. Mr. Moran was also elected to the Executive Committee on May
28, 1998.

Mr. Steven Geller resigned from the Board on January 20, 1999 bringing
the size of the Board into compliance with the Certificate of Designation for
the Series A Preferred Stock. On April 8, 1999, the six member Board of
Directors approved a resolution ratifying all of the actions taken by the Board
of Directors and the Executive Committee during the period from May 29, 1998 to
January 20, 1999.

COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS

The Board has established three committees: an Executive Committee, a
Compensation Committee and an Audit Committee. Each such committee has two or
more members, who serve at the pleasure of the Board.

The Board of Directors met 4 times during 1998. The Compensation
Committee met 4 times, the Audit Committee met 1 time and the Executive
Committee met 5 times during 1998. All incumbent members of the Board attended
at least 75% of the meetings of the Board and each of the committees on which he
or she served during the period in which he or she was a director in 1998.

The Executive Committee is authorized to exercise all of the authority
of the Board that may be delegated to a committee of the Board under Delaware
law, other than the authority to authorize dividends and other distributions, to
fill vacancies on the Board or its committees, to amend, adopt or repeal
certificate of incorporation or by-law provisions, to approve mergers or matters
requiring stockholder approval, or (except within certain prescribed limits) to
authorize or approve the issuance or reacquisition of shares and related
matters. At the beginning of 1998 the Executive Committee consisted of Messrs.
Geller, Holmes and Pinto. On May 28, 1998, the Executive Committee was
reconstituted to consist of Messrs. Holmes, Moran and Pinto, who continue to
serve on the Executive Committee.

The Compensation Committee is responsible for reviewing and making
recommendations to the Board of Directors with respect to compensation of
executive officers, other compensation matters and awards under the Company's
equity benefit plans. Mr. Pinto and Ms. Schupak have served on the Compensation
Committee since March 15, 1998. Prior to March 15, 1998 Ms. Schupak and Mr.
Steven Hutchinson served on the Compensation Committee.

The Audit Committee is responsible for reviewing the Company's financial
statements, audit reports, internal financial controls and the services
performed by the Company's independent public accountants, and for making
recommendations with respect to those matters to the Board. Messrs. Doran,
Rosenbauer and Pinto have served on the Audit Committee since March 15, 1998.
Prior to March 15, 1998, Mr. Doran and Ms. Schupak served on the Audit
Committee.

DIRECTORS' COMPENSATION

Prior to March 15, 1998, the Company agreed to pay each director who is
not an employee of the Company (a "Non-Employee Director") a retainer of $15,000
per year, plus $2,500 for each meeting of the Board or a committee attended in
person. In addition, each Non-Employee director receives 5,000 options to
purchase Common Stock of the Company at

the first Annual Meeting of Shareholders after their election, and 2,500 options
each year thereafter pursuant to the Non-Employee Director Stock Option Plan.

On February 19, 1998, the Board approved a resolution effective
March 15, 1998, setting compensation for service on Committees of the Board
at $2,500 per year, regardless of the number of Committee meetings attended. All
directors are reimbursed for out-of-pocket expenses incurred in connection with
attendance at meetings of the Board or its committees. Charles S. Holmes does
not receive any directors' fees, however, he was entitled to receive $10,000 per
month for serving as Chairman of the Board of Directors.

On December 10, 1998, the Board approve a resolution allowing the
Non-Employee directors to take all or any portion of their 1998 fees in
unregistered Company stock at $.50 per share, the closing price of the Stock on
December 10, 1998. Messrs. Pinto and Rosenbauer received 27,500 and 17,500
shares of Common Stock, respectively, in lieu of their directors' fees, and Mr.
Holmes received 160,656 in lieu of his compensation as Chairman of the Board.

On March 23, 1999 the Board approved a resolution setting the 1999
compensation for non-employee directors at 15,000 shares of unregistered stock
plus $10,000, in addition to the option grants described above, and allowing
directors to elect to take an additional 15,000 shares of unregistered stock in
lieu of the $10,000 cash payment. The Board further resolved that Charles S.
Holmes and James J. Pinto would receive an additional 75,000 shares of
unregistered stock each for their service on the executive committee.

In consideration of these resolutions, Mr. Holmes agreed to waive any
fees he was entitled to receive for his services as Chairman during 1999.
Furthermore, Messrs. Holmes, Pinto, and Rosenbauer elected to take the
additional 15,000 shares of unregistered stock in lieu of the $10,000. On March
24, 1999, pursuant to these resolutions and elections, the Company issued
unregistered stock to: Charles S. Holmes--105,000 shares; John Doran--15,000
shares; James J. Pinto--105,000 shares; Frederick W. Rosenbauer, Jr.--30,000
shares; Lenore H. Schupak--15,000 shares.

Directors who were officers or employees of the Company, and Steven
Geller, who served as a consultant to the Company, were not paid for their
service on the Board or its committees during 1998.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SERIES A HOLDERS VOTE FOR THE
APPROVAL OF THE PREFERRED DIRECTOR NOMINEES.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE VOTING HOLDERS VOTE FOR THE APPROVAL
OF THE OTHER DIRECTOR NOMINEES.

PROPOSAL 3

RATIFICATION OF APPOINTMENT OF AUDITORS

The Board has appointed Deloitte & Touche LLP, certified public
accountants, to continue as the Company's independent auditors and to audit the
books of account and other records of the Company for the fiscal year ending
December 31, 1999.

Representatives of Deloitte & Touche LLP are expected to be present at
the Annual Meeting to respond to appropriate questions from stockholders and to
make a statement if they desire to do so.

The affirmative vote of Series A Holders and Common Holders possessing a
majority of the voting power represented by the shares of Series A Preferred
Stock and Common Stock which actually are voted hereon is required to ratify the
appointment of Deloitte & Touche LLP as the Company's independent auditors.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE VOTING HOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.

EXECUTIVE COMPENSATION

The following summary compensation table (the "Compensation Table")
summarizes compensation information with respect to the Chief Executive Officer
of the Company and each of the Company's most highly compensated executive
officers who earned on an annualized basis more than $100,000 for services
rendered during the year ended December 31, 1998 (collectively, the "Named
Executive Officers").

SUMMARY COMPENSATION TABLE

Name and Principal Fiscal Salary Bonus Other Annual Securities All Other
Position(s) Year ($) ($) Compensation Underlying Compensation
Options (#) ($) (1)
- ------------------------------------------- -------- -------------------------------------------

Charles S. Holmes 1998 80,328 (2) - - 112,500(3) -
(Chairman of the Board) 1997 65,000 (2) - - - -
1996 - - - - -

Timothy Moran 1998 123,077 (4) 100,000 - 200,000(5) -
(Chief Executive 1997 - - - 250,000(6) -
Officer and President) 1996 - - - - -

Steven E. Geller 1998 75,962 (7) - 63,919 (8) - -
(Former Chief Executive 1997 287,615 (9) - 17,745 (10) 500,000 (3) 182,000
Officer and Former 1996 325,000 - - 250,000 (11) -
Chairman of the Board)

William H. Craig 1998 151,730 25,000 6,696(13) 230,000(3) 92,886
(Executive Vice 1997 75,288(12) - 3,850(13) 175,000(3) 15,106
President-Finance and 1996 - - - - -
Chief Financial Officer)

J. Artie Rogers 1998 119,250 - - - -
(Senior Vice President 1997 131,589 - - 40,000(3) -
-Finance and Assistant 1996 132,000 - - 5,000(11) -
Secretary)

Lawrence Geller 1998 100,000 - - - -
(Vice President- 1997 88,213 - - 200,000 (3) -
General Counsel and 1996 86,083 - - - -
Secretary)
- -----------------------------

(1) Relocation expenses including a gross-up for individual income taxes.
(2) Compensation as Chairman of the Board. See Directors' Compensation.
(3) Options granted pursuant to the 1994 Stock Option Plan.
(4) Mr. Moran became the Company's Chief Executive Officer on May 28, 1998.
See Compensation Committee Report on Executive Compensation.

(5) Options granted pursuant to the 1998 Stock Option Plan.
(6) Options granted pursuant to the 1994 Stock Option Plan while Mr. Moran
was a consultant to the Company.
(7) Includes salary through May 1998 when Mr. Geller agreed to terminate his
employment contract and resign his position as Chief Executive Officer.
(8) Includes $56,665 of a one year consulting agreement and $7,500 car
allowance (see employment contracts below.)
(9) Mr. Geller agreed to defer a total of $100,000 of his salary (with
$37,385 apportioned to the 1997 fiscal year) with the receipt of such
salary being conditioned upon the Company achieving certain financial
milestones. As the Company failed to achieve these milestones, Mr.
Geller did not receive the $37,385 that had been deferred in 1997.
(10) Represents $7,800 for automobile expenses and $9,945 for club dues.
(11) Options canceled in connection with the grant of a replacement option.
(12) Mr. William Craig became the Company's Executive Vice President and
Chief Financial Officer on May 13, 1997.
(13) Represents automobile expenses.

The following table sets forth certain information with respect to stock
options granted to each of the Named Executive Officers during 1998:

OPTION GRANTS IN LAST FISCAL YEAR

Individual Grants
--------------------------------------------------------------------------
Percent of Total Exercise or Grant Date
Shares Underlying Options Granted to Base Price Expiration Present
Options Granted Employees in 1998(%) ($/Share)(1) Date Value ($)(2)
---------------------------------------------------------------------------------------------

Charles S. Holmes 112,500 (3) 14.7 1.380 9/17/2003 59,181

Timothy Moran 200,000 (4) 26.1 1.375 5/28/2003 140,981

William H. Craig 230,000 (4) 30.0 1.375 5/28/2003 162,128

J. Artie Rogers - - N/A N/A N/A

Lawrence A. Geller - - N/A N/A N/A

- ---------------------------

(1) The closing price of the Common Stock on the American Stock Exchange on
the date of grant for (3) was $.75 per share and $1.0625 for grant (4).
(2) The amounts shown as present values were estimated using the Black-Scholes
option-pricing model using the weighted-average assumptions of dividend
yield of 0.0%, expected volatility of 114.98%, risk free interest rate of
5.05% and expected life of 3 years.
(3) Granted pursuant to the 1994 Stock Option Plan on 9/17/98. Option vested on
3/18/99.
(4) Granted pursuant to the 1998 Stock Option Plan on 5/28/98. Option vests in
three approximately equal installments on 5/28/99, 5/28/00 and 5/28/01.

The following table sets forth certain information with respect to stock options
granted to each of the Named Executive Officers that were outstanding at
December 31, 1998:

AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES(1)

Value of Unexercised
Shares Acquired Number of Unexercised Options In-the-Money Options (2)
Upon Value --------------------------------------------------------
Name Exercise (#) Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------- -------------------- ----------- ------------- ------------- ----------- ---------------

Charles S. Holmes - - - 112,500 - -

Timothy Moran - - 83,333 366,667 - -

William H. Craig - - 58,300 346,700 - -

J. Artie Rogers - - 20,000 20,000 - -

- ------------------------

(1) Does not include warrants to acquire shares of Common Stock. See "Certain
Relationships and Transactions."
(2) Based on the $.625 per share closing price of the Company's Common Stock on
the American Stock Exchange on December 31, 1998.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS

On July 15, 1994, Steven Geller entered into an employment agreement
pursuant to which he became Chairman and Chief Executive Officer of EII, the
Company's principal subsidiary. Subsequently, the obligations of EII under such
agreement were assigned to the Company, and Mr. Geller became Chairman of the
Board and Chief Executive Officer of the Company. The agreement provided for a
base salary of $300,000 per annum, which was increased by the Compensation
Committee to $325,000 per annum effective January 1, 1995. The initial term of
the agreement expired on July 15, 1998, provided that such term was
automatically extended for successive one-year periods on July 15 of each year
(the "Extension Date") commencing July 15, 1996, unless either the Company or
Mr. Geller gives 60 days' prior written notice to the other party that it or he
elects not to extend the term of the agreement.

In May 1998, Mr. Geller agreed to terminate his employment contract in
consideration of the Compensation Committee's agreement to enter into a
consulting agreement with him. The agreement provided for a minimum one-year
term, a base salary of $100,000 per year and payment of certain expenses. In
addition, the Committee agreed to extend the period during which Mr. Geller's
stock options vest or may be exercised until June 1, 2003. The Company has
notified Mr. Geller that it shall not be renewing the consulting agreement
beyond May 31, 1999.

COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934

Pursuant to Section 16 of the Exchange Act, the Company's directors and
executive officers and beneficial owners of more than 10% of the Common Stock
are required to file certain reports, within specified time periods, indicating
their holdings of and transactions in the Common Stock. Based solely on a review
of such reports provided to the Company and written representations from such
persons regarding the necessity to file such reports, the Company has determined
that the Company's directors and executive officers and beneficial owners of
more than 10% of the Common Stock timely filed all required Section 16 reports
during 1998.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Company's compensation program for its executive officers is administered
and reviewed by the Compensation Committee (the "Committee") of the Board of
Directors. The Committee is comprised of two outside directors neither of whom
is an employee or former employee of the Company.

COMPENSATION PHILOSOPHY

In determining the compensation payable to the Company's executive officers, the
Committee seeks to achieve the following objectives through a combination of
fixed and variable compensation:

o provide a total compensation opportunity that is consistent with competitive
practices, enabling the Company to attract and retain qualified executives;

o create a direct link between the compensation payable to each executive
officer and the financial performance both of the Company generally and of the
specific business unit or units for which the executive is responsible;

o create a common interest between executive officers and the Company's
stockholders through the use of stock options that link a portion of each
executive officer's compensation opportunity directly to the value of the
Company's common stock.

BASE SALARY

The Committee establishes the Chief Executive Officer's base salary by
comparison to competitive market levels for the executive's job function. Base
salaries for other officers generally approximate competitive rates and are
adjusted based on individual performance as suggested by the CEO Salaries are
reviewed at regular intervals, approximately annually, depending on job
classification and competitive market levels.

ANNUAL INCENTIVE

For fiscal year 1998, annual bonuses were not widely granted to officers based
on corporate performance. Notwithstanding the foregoing, certain executive
officers, including Messrs. Moran and Craig were paid guaranteed minimum bonuses
in 1998 as part of the compensation provided to induce them to join the
Company's employ.

EQUITY BASED INCENTIVES

Stock options have been the Company's primary form of long-term incentive
compensation. In awarding stock options to executive officers in 1998, the
Committee's intent was that such options would represent a significant portion
of each such officer's total compensation opportunity, thus aligning the
officer's economic interests with those of the Company's stockholders.
Consistent with this goal, all option awards in 1998 were made at or above the
fair market value of the Common Stock as of the date of grant. The number of
options granted was based on the Committee's subjective evaluation of a number
of factors, including competitive market practice, past grants, management level
and other matters relating to an individual's performance and ability to
influence corporate results. The Committee believes that these awards were
reasonable compared to similar awards made by the Company's competitors for
executive talent.

During 1998, Messrs. Moran and Craig, were granted 200,000 and 230,000 stock
options, respectively. The Committee's evaluation of the appropriate size of
such awards was based on several factors, as subjectively evaluated by the
Committee with respect to each particular officer, including: (i) the ability of
the officer to affect the value of the Common Stock, and (ii) the long term
compensation opportunities available to the officer at his prior employer and
the extent to which such officer had to forfeit any such opportunities by
accepting employment with the Company.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER

During 1998, two individuals served as the Corporation's chief executive
officer. Mr. Steven Geller served as the Corporation's Chief Executive Officer
from January 1 to May 28, when he retired from the Company's employ. Mr. Moran
became President and Chief Executive Officer on May 28 and continues to serve in
those capacities.

At the time of his retirement from the Company, Mr. Geller had a three-year
employment contract providing for a base salary of $325,000 per year. In
consideration of Mr. Geller's agreement to terminate his employment contract,
the Committee agreed to enter into a consulting agreement with him. The
agreement provided for a minimum one-year term, a base salary of $100,000 per
year and payment of certain expenses. In addition, the Committee agreed to
extend the period during which

Mr. Geller's stock option vest or may be exercised until June 1, 2003. The
Company has notified Mr. Geller that it shall not be renewing the consulting
agreement beyond May 31, 1999.

As part of the negotiations to induce Mr. Moran to join the Company, and his
promotion to Chief Executive Officer, the Executive Committee agreed to provide
Mr. Moran a minimum annual base salary of $200,000 and guaranteed bonuses of
$100,000 for 1998 and $200,000 for 1999. This agreement was ratified by the
Committee, which also awarded Mr. Moran options to purchase the 200,000 shares
of the Company's common stock discussed above. These options become exercisable
in installments over a period of three years, and expire 5 years from the date
of their grant. The number of shares subject to this award were determined
pursuant to a formula based on the value of the benefits expected to be lost or
foregone and the value of the Common Stock on the date his employment commenced.

POLICY AS TO SECTION 162(M) OF THE CODE

Section 162(m) of the Internal Revenue Code 1986, as amended, generally denies a
publicly traded company a Federal income tax deduction for compensation in
excess of $1 million paid to certain of its executive officers unless the amount
of such excess is payable based solely upon the attainment of objective
performance criteria. The Company has undertaken to qualify substantial
components of the incentive compensation it makes available to its executive
officers for the performance exception to nondeductibility. However, in
appropriate circumstances, such as in connection with the hiring of a new
executive officer, it may be necessary or appropriate to pay compensation or
make incentive or retentive awards that do not meet the performance based
exception and therefore may not deductible by reason of Section 162(m).

Members of the Compensation Committee

James J. Pinto
Lenore H. Schupak

STOCKHOLDER RETURN PERFORMANCE PRESENTATION

Set forth below is a line graph comparing the cumulative total returns
(assuming dividend reinvestment) of the Company's Common Stock, the Media
General Toys and Games Industry Group Index as a representative industry index
and the American Stock Exchange Market Index ("Amex Index") as the required
board equity market index. The Media General Toys and Games Industry Group Index
is comprised of 37 toy and game companies.

Performance Graph appears below indicating plot points.

MG Toys & Games
Measurement Period Empire of Carolina, Inc. Industry Group Index AMEX Index
------------------ ------------------------ -------------------- -----------

Year Ended December 31, 1993 $100.00 $100.00 $100.00
Year Ended December 31, 1994 101.92 76.88 88.33
Year Ended December 31, 1995 107.69 85.66 113.86
Year Ended December 31, 1996 65.38 105.68 120.15
Year Ended December 31, 1997 21.15 132.59 144.57
Year Ended December 31, 1998 9.62 105.20 142.61

CERTAIN RELATIONSHIPS AND TRANSACTIONS

The Company's policy is that all transactions between the Company and
its executive officers, directors and principal stockholders occurring outside
the ordinary course of the Company's business be on terms no less favorable than
could be obtained from unaffiliated third parties or are subject to the approval
of the Company's disinterested directors.

In connection with the Series A Preferred Stock transactions, the
following members of the Company's current Board of Directors made investments
in the Company during 1997, which balances may subsequently have changed through
December 31, 1998:

SHARES OF WARRANTS TO
SERIES A ACQUIRE
PREFERRED COMMON STOCK
STOCK
------------- -------------
Charles S. Holmes 125,000 2,753,752
James J. Pinto 100,000 2,678,752
Lenore H. Schupak 22,500 22,500
John Doran 10,000 10,000

Timothy Moran, the Company's President and Chief Operating Officer, who was a
significant shareholder of the Apple Companies, and Mark Rose, the majority
shareholder of the Apple Companies, participated in the Series A preferred stock
transactions, acquiring 50,000 shares of Series A Preferred Stock and warrants
to acquire 50,000 shares of Common Stock, each. Mark Rose is the father-in-law
of Timothy Moran.

Weiss, Peck & Greer, L.L.C. ("WPG"), on behalf of investment funds for which
they were managers, in June 1997 exchanged $14,900,000 of debentures for 1,490
newly-issued Series C Preferred Stock of the Company. WPG released, among other
things, their claims to accrued and unpaid interest, fees and expenses. Two
principals of WPG were members of the Company's Board of Directors from 1994
through November 1997.

Steven Geller, former Chief Executive Officer and director of the Company, has
the right to vote 734,039 shares of Common Stock of the Company owned by Barry
Halperin. Mr. Geller's right to vote such shares terminates upon Mr. Halperin's
disposal thereof. Mr. Geller has certain rights of first refusal relative to Mr.
Halperin's disposal of their remaining shares. Mr. Geller has a one year
consulting agreement with the Company which expires May 1999.

EXECUTIVE OFFICERS

Information concerning the current executive officers of the Company,
their ages, position and business experience during the last five years is set
forth below:

Name Age Position(s)
---- --- -----------

Charles S. Holmes.............. 54 Chairman of the Board
Timothy Moran.................. 35 President and Chief Executive Officer
William H. Craig............... 43 Executive Vice President- Finance and Chief
Financial Officer
J. Artie Rogers................ 39 Senior Vice President - Finance and Assistant Secretary
Lawrence A. Geller............. 35 Vice President - General Counsel and Secretary

For information concerning the business experience of Charles S. Holmes
and Timothy Moran, see "Proposal 1".

WILLIAM H. CRAIG has served as Executive Vice President-Finance and
Chief Financial Officer since May 1997. Prior to joining the Company, Mr. Craig
was President of Wm. Craig & Co., a financial services firm specializing in
workouts and turnarounds with middle market companies. Formation of his own firm
was preceded by nearly five years with GE Capital, lending and investing in
industrial companies, with a particular emphasis in the plastics industry,
including various cross-selling and co-investing activities with GE Plastics.
Before GE Capital, Mr. Craig was with a merchant bank in

Texas, providing expansion and acquisition capital on a mezzanine or equity
basis in middle market companies, with particular emphasis on manufacturing,
plastics, and consumer products. Mr. Craig's early career was as a consultant
with the predecessor of Deloitte & Touche LLP, as well as GMAC.

J. ARTIE ROGERS has 13 years experience in the toy industry. Mr. Rogers
has served as Senior Vice President - Finance of the Company since December
1994. From 1987 to December 1994, Mr. Rogers served as Vice President - Finance
of the Company. From 1987 to December 1995, Mr. Rogers served as Secretary of
the Company, and has served as Assistant Secretary since December, 1995. Prior
to joining the Company in 1986, Mr. Rogers worked for Deloitte Haskins & Sells,
predecessor to the Company's current independent public accountants.

LAWRENCE A. GELLER has served as Vice President and General Counsel
since January, 1997 and as Secretary of the Company since December, 1995. Mr.
Geller joined the Company in April, 1995 as corporate counsel. Prior to joining
the Company, Mr. Geller was engaged in the practice of law as a partner with the
firm of Imhoff & Geller in Norwalk, Connecticut from 1993 to 1995. Mr. Geller is
the son of Steven Geller, the former Chairman and Chief Executive Officer of the
Company.

STOCKHOLDER PROPOSALS

No person who intends to present a proposal for action at a forthcoming
stockholders' meeting of the Company may seek to have a proposal included in the
proxy statement or form of proxy for such meeting unless that person (a) is a
record beneficial owner of at least 1% or $1,000 in market value of shares of
Common Stock, has held such shares for at least one year at the time the
proposal is submitted, and such person shall continue to own such shares through
the date on which the meeting is held, (b) provides the Company in writing with
his name, address, the number of shares held by him and the dates upon which he
acquired such shares with documentary support for a claim of beneficial
ownership, (c) notifies the Company of his intention to appear personally at the
meeting or by a qualified representative under Delaware law to present his
proposal for action, and (d) submits his proposal timely. A proposal to be
included in the proxy statement or proxy for the Company's next annual meeting
of stockholders will be submitted timely only if the proposal has been received
at the Company's principal executive office in Delray Beach, Florida no later
than December 31, 1999. If the date of such meeting is changed by more than 30
calendar days from the date of the Annual Meeting, or if the proposal is to be
presented at any meeting other than the next annual meeting of stockholders, the
proposal must be received at the Company's principal executive office at a
reasonable time before the solicitation of proxies for such meeting is made.

If the foregoing requirements are satisfied, a person may submit only
one proposal of not more than 500 words with a supporting statement if the
latter is requested by the proponent for inclusion in the proxy materials, and
under certain circumstances enumerated in the Securities and Exchange
Commission's rules relating to the solicitation of proxies, the Company may be
entitled to omit the proposal and any statement in support thereof from its
proxy statement and form of proxy.

OTHER INFORMATION

The Board of Directors does not know of any other matters that may be
brought before the Annual Meeting. In the event that any other matter shall come
before the Annual Meeting, the persons named in the enclosed Proxy will have
discretionary authority to vote all Proxies not marked to the contrary with
respect to such matter in their discretion.

By Order Of The Board Of Directors,

Lawrence Geller
Secretary

Delray Beach, Florida
April 23, 1999

************************************APPENDIX************************************

PROXY
EMPIRE OF CAROLINA, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
EMPIRE OF CAROLINA, INC.
FROM THE HOLDERS OF SERIES A PREFERRED STOCK

The undersigned, a holder of Series A Preferred Stock of Empire of
Carolina, Inc., a Delaware corporation (the "Company"), hereby appoints CHARLES
S. HOLMES, TIMOTHY MORAN, and each of them, the proxies of the undersigned, each
with full power of substitution, to attend, represent and vote for the
undersigned, all of the shares of the Company's Series A Preferred Stock which
the undersigned would be entitled to vote, at the Annual Meeting of Stockholders
of the Company to be held on June 8, 1999 and any adjournments or postponements
thereof, as follows:

The undersigned hereby revokes any other proxy to vote the shares of
Series A Preferred Stock owned by the undersigned at such Annual Meeting, and
hereby ratifies and confirms all that said attorneys and proxies, and each of
them, may lawfully do by virtue hereof. With respect to matters not known at the
time of the solicitations hereof, said proxies are authorized to vote in
accordance with their best judgment.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE OTHER SIDE HEREOF. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE ELECTION OF THE SEVEN DIRECTORS NAMED, "FOR" THE ADOPTION OF
EACH OF THE OTHER PROPOSALS AND AS SAID PROXIES SHALL DEEM ADVISABLE ON SUCH
OTHER BUSINESS AS MAY COME BEFORE THE MEETING AND ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF.

(PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.)

SEE REVERSE SIDE

1. ELECTION OF DIRECTORS, as provided in Proposal 2 of the Company's Proxy
Statement

/ / FOR ALL NOMINEES LISTED BELOW

/ / WITHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW

NOMINEES: Charles S. Holmes, Timothy Moran, John J. Doran, James J. Pinto, Mark
S. Rose, Frederick W. Rosenbauer, Jr., Lenore H. Schupak,

(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE(S) NAME BELOW:)

- ------------------------------------------------------------

2. The proposal to increase the actual size of the Company's Board of Directors
from six to seven directors as described in Proposal 1 of the Company's Proxy
Statement

/ / FOR / / AGAINST / / ABSTAIN

3. The ratification of the appointment of Deloitte & Touche LLP as the Company's
auditors for the fiscal year ending December 31, 1999 as described in
Proposal 3 in the Company's Proxy Statement.

/ / FOR / / AGAINST / / ABSTAIN

4. Upon such other matters as may properly come before the meeting or any
adjournments or postponements thereof.

/ / FOR / / AGAINST / / ABSTAIN

THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF A COPY OF THE NOTICE OF ANNUAL MEETING,
THE ACCOMPANYING PROXY STATEMENT RELATING TO THE ANNUAL MEETING AND THE ANNUAL
REPORT TO STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1998.

Dated _______________________________, 1999

- ----------------------------------------- ------------------------------------
Signature of Shareholder Signature if held jointly

NOTE: The signature(s) hereon should correspond exactly with the name(s) of the
Stockholder(s) appearing on the Stock Certificate representing the shares of
Series A Preferred Stock owned by the undersigned. If stock is jointly held, all
joint owners should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If signer is a
corporation, please sign the full corporate name, and give title of signing
office.

PROXY
EMPIRE OF CAROLINA, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
EMPIRE OF CAROLINA, INC.
FROM THE HOLDERS OF COMMON STOCK

The undersigned, a holder of Common Stock of Empire of Carolina, Inc., a
Delaware corporation (the "Company"), hereby appoints CHARLES S. HOLMES, TIMOTHY
MORAN, and each of them, the proxies of the undersigned, each with full power of
substitution, to attend, represent and vote for the undersigned, all of the
shares of the Company's Common Stock which the undersigned would be entitled to
vote, at the Annual Meeting of Stockholders of the Company to be held on June 8,
1999 and any adjournments or postponements thereof, as follows:

The undersigned hereby revokes any other proxy to vote the shares of
Common Stock owned by the undersigned at such Annual Meeting, and hereby
ratifies and confirms all that said attorneys and proxies, and each of them, may
lawfully do by virtue hereof. With respect to matters not known at the time of
the solicitations hereof, said proxies are authorized to vote in accordance with
their best judgment.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE OTHER SIDE HEREOF. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" THE ELECTION OF THE FIVE DIRECTORS NAMED, "FOR" THE ADOPTION OF
EACH OF THE OTHER PROPOSALS AND AS SAID PROXIES SHALL DEEM ADVISABLE ON SUCH
OTHER BUSINESS AS MAY COME BEFORE THE MEETING AND ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF.

(PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.)

SEE REVERSE SIDE

1. ELECTION OF DIRECTORS, as provided in Proposal 2 of the Company's Proxy
Statement

/ / FOR ALL NOMINEES LISTED BELOW

/ / WITHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW

NOMINEES: Timothy Moran, John J. Doran, Mark S. Rose, Frederick W. Rosenbauer,
Jr., Lenore H. Schupak,

(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE(S) NAME BELOW:)

- ---------------------------------------------------------

2. The ratification of the appointment of Deloitte & Touche LLP as the Company's
auditors for the fiscal year ending December 31, 1999 as described in
Proposal 3 in the Company's Proxy Statement.

/ / FOR / / AGAINST / / ABSTAIN

3. Upon such other matters as may properly come before the meeting or any
adjournments or postponements thereof.

/ / FOR / / AGAINST / / ABSTAIN

Dated _______________________________, 1999

- ----------------------------------------- ------------------------------------
Signature of Shareholder Signature if held jointly

NOTE: The signature(s) hereon should correspond exactly with the name(s) of the
Stockholder(s) appearing on the Stock Certificate representing the shares Common
Stock owned by the undersigned. If stock is jointly held, all joint owners
should sign. When signing as attorney, executor, administrator, trustee, or
guardian, please give full title as such. If signer is a corporation, please
sign the full corporate name, and give title of signing office.