<PAGE> 1
-------------------------------------------------
SCHEDULE 14A
(Rule 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
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 sec.240.14a-11(c) or sec.240.14a-12
DUCK HEAD APPAREL COMPANY, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
BETTIS C. RAINSFORD
(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: ...........................................................
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<PAGE> 2
PROXY STATEMENT OF BETTIS C. RAINSFORD
IN OPPOSITION TO THE SOLICITATION
BY THE BOARD OF DIRECTORS OF
DUCK HEAD APPAREL COMPANY, INC.
ANNUAL MEETING OF SHAREHOLDERS
OF
DUCK HEAD APPAREL COMPANY, INC.
TO BE HELD ON NOVEMBER 8, 2000
DATE OF THIS PROXY STATEMENT - OCTOBER 27, 2000
To Fellow Shareholders of Duck Head Apparel Company, Inc.:
Bettis C. Rainsford ("Mr. Rainsford") is furnishing this Proxy
Statement in connection with the solicitation of proxies to be used for the
purposes set forth herein at the 2000 Annual Meeting of Shareholders of Duck
Head Apparel Company, Inc. (the "Company"), and any adjournment or postponement
thereof (the "Annual Meeting"). According to the Company's Proxy Statement,
dated October 16, 2000, relating to the Annual Meeting (the "Company Proxy
Statement"), the Annual Meeting is currently scheduled to be held on November 8,
2000 at 10:00 a.m., eastern time, at Chateau Elan, 100 Rue Charlemagne,
Braselton, Georgia.
At the Annual Meeting, eight directors of the Company will be elected.
For the reasons discussed in this Proxy Statement, Mr. Rainsford is soliciting
proxies from shareholders for the following purposes:
1. To nominate and elect to the Company's Board of Directors (the
"Board"), Bettis C. Rainsford, Talmadge Knight, Grace G. Young, Donald P.
Howard, Warren Daniel, Jack J. Jackson, Dr. Robert Sawyer and Roger H. Timpson
(collectively, the "Rainsford Nominees"), in opposition to the election of the
nominees of the Board;
2. To direct the Company's Board to cause the Company to take all
actions necessary to cancel the right previously granted to Robert D. Rockey,
Jr., the Company's Chairman of the Board, President and Chief Executive Officer,
to purchase one million shares of the Company's Common Stock (the "Million Share
Purchase Right"); and
3. To ratify the appointment of KPMG LLP as the independent
auditors for the Company for the 2001 fiscal year.
Item 2 above is referred to in this Proxy Statement as the "Rainsford
Proposal." THE RAINSFORD PROPOSAL IS PRECATORY IN NATURE AND CANNOT BIND THE
BOARD TO ACT.
<PAGE> 3
Each of Mr. Rainsford's proposals is separate and distinct from each
other proposal. You may approve or vote separately on any or all of the
proposals. The presence, either in person or by proxy, of the holders of
two-thirds of the outstanding shares of common stock at October 9, 2000 is
necessary to constitute a quorum at the Annual Meeting. Directors will be
elected by a plurality of the votes cast at the Annual Meeting and other
proposals will be approved if the votes cast favoring the proposal exceed the
votes cast opposing the proposal. Shareholders do not have the right to cumulate
their votes with respect to the election of directors. Abstentions and broker
non-votes, which are separately tabulated, are included in the determination of
the number of shares present for quorum purposes, but have no effect on the
votes respecting the matters to be voted upon at the meeting.
MR. RAINSFORD RECOMMENDS THAT YOU VOTE IN
FAVOR OF EACH OF THE RAINSFORD NOMINEES AND IN
FAVOR OF THE RAINSFORD PROPOSAL
According to the Company Proxy Statement, the principal executive
offices of the Company are located at 1020 Barrow Industrial Parkway, Winder,
Georgia 30680.
Shareholders of record of shares of the Company's common stock, par
value $0.01 (the "Common Stock"), on October 9, 2000 (the "Record Date") are
entitled to vote at the Annual Meeting. Holders of Common Stock are entitled to
one vote for each share of Common Stock they own. Copies of this Proxy Statement
and the enclosed BLUE form of proxy are first being sent or given to
shareholders on or about October 27, 2000. According to the Company Proxy
Statement, there were 2,407,213 shares of Common Stock outstanding as of the
Record Date. On the Record Date, Mr. Rainsford beneficially owned an aggregate
of 334,218 shares, or approximately 13.9%, of the Common Stock. See Annex I
hereto, which is hereby deemed to be a part of this Proxy Statement, for a
detailed summary of all purchases and sales of shares of Common Stock by Mr.
Rainsford and each of the other Rainsford Nominees. Mr. Rainsford intends to
cause all of the shares beneficially owned by him to be voted FOR the Rainsford
Nominees and FOR the Rainsford Proposal. Mr. Rainsford currently believes that
all of the shares owned by the other Rainsford Nominees will be voted for the
Rainsford Nominees and for the Rainsford Proposal.
IMPORTANT
YOUR VOTE IS EXTREMELY IMPORTANT. If you want to vote for the Rainsford
Nominees and/or the Rainsford Proposal, please sign, date and mail the enclosed
BLUE proxy card.
CERTAIN INFORMATION REGARDING MR. RAINSFORD AND
THE RAINSFORD NOMINEES
Mr. Rainsford and the other Rainsford Nominees may be deemed to be
"participants" within the meaning of Regulation 14A under the Securities
Exchange Act of 1934, as amended. Certain biographical information, business
background information and information relating to ownership of the Company's
Common Stock with respect to the Rainsford Nominees is set forth herein under
the heading "Election of Rainsford Nominees as Directors." Certain additional
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<PAGE> 4
information with respect to the Rainsford Nominees is set forth herein under
"Voting Securities and Principal Holders Thereof" and in Annex I hereto.
BACKGROUND AND REASONS FOR THE SOLICITATION
The Company became an independent public company in June 2000, pursuant
to a "spin-off" transaction. The Company had previously operated as a division
of Delta Woodside Industries, Inc. ("Delta Woodside"). In the spin-off, the
Common Stock of the Company was distributed to the shareholders of Delta
Woodside.
Mr. Rainsford had been opposed to the spin-off because he believed that
the Company, as a separate entity, would not be positioned to maximize
shareholder value due to its relatively small market capitalization. The Board
had been warned by various investment banking firms, which had been engaged to
review potential long-term strategies for the Company, including a potential
spin-off, that public companies with relatively small market capitalizations
often have difficulty generating institutional interest, research coverage or
trading volume, and that the resulting illiquidity may translate into price
discounts to larger industry peers or to the inherent value of the Company's
Common Stock. Mr. Rainsford believes this has proven true for the Company
as evidenced by the low volume and trading price and thin capitalization of the
Company. The total market capitalization of the Company as of October 25, 2000
was about 23% of the Company's net tangible book value as of the end of the
Company's most recent fiscal quarter. Based on the most recent publicly
available information, the average market capitalization of leading comparable
companies (Haggar, Tropical Sportswear International, Garan, Ashworth and Osh
Kosh B'Gosh) is over two and one-half times their net tangible book values. Mr.
Rainsford believes that the Company is too small to operate as an independent
public company, and that maximum shareholder value could be achieved through a
sale of the Company. He believes that a sale would generate a significant
premium to the current market trading price for the Company's Common Stock. The
Rainsford Nominees currently intend that, if elected to the Board, they will
implement a proposal to effect a sale of the Company.
Mr. Rainsford believes that the Company's current Board has failed to
represent effectively and adequately the interests of the Company and its
shareholders, has failed to respond to concerns raised by certain of its largest
shareholders and has taken certain steps, including (i) the spin-off of the
Company and its companion apparel company, Delta Apparel, Inc., from Delta
Woodside, into separate public companies; (ii) the adoption of the shareholder
rights plan, commonly called a "poison pill"; (iii) the amendment to the Million
Share Purchase Right; (iv) the adoption of a Stock Option Plan providing for
grants of options for up to 500,000 shares and an Incentive Stock Award Plan
providing for grants of up to 200,000 shares; and (v) increasing the
compensation for the Company's directors, that otherwise have the effect of
entrenching management, reducing earnings per share and depressing the Company's
share price.
Mr. Rainsford, in the capacities of shareholder, director, and
previously as an executive officer of Delta Woodside, has repeatedly voiced his
concerns to the Board regarding management's failure to maximize shareholder
value. Because of the Board's failure to adequately respond to such concerns,
Mr. Rainsford believes that the only effective means of change available to the
Company's shareholders is the election of new directors to the Board. Mr.
Rainsford, therefore, has determined to nominate and to solicit proxies for the
election of eight new directors in lieu of any incumbents or other nominees
proposed by the Company for election at the Annual Meeting.
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<PAGE> 5
Mr. Rainsford believes that the current directors have consistently
demonstrated a disregard for the interests of the shareholders of the Company.
He thinks that the election as directors of individuals of solid integrity who
have pledged their commitment to the interests of the shareholders of the
Company is essential to maximizing shareholder value. Mr. Rainsford believes
that the Company would benefit from the election of the Rainsford Nominees. The
Rainsford Nominees are well-qualified individuals who will bring a wealth of
experience, diverse backgrounds, specialized knowledge, enthusiasm and vigor
that will help enhance the Company and its future activities and growth. They
are committed to help unlock the shareholder value that the present Board has
failed to enhance.
As previously discussed, the Rainsford Nominees, if elected, intend to
conduct an auction to sell the Company. As part of this auction process, one or
more of the Rainsford Nominees may make an offer to acquire the Company. There
can be no assurances that any of the Rainsford Nominees, or any other parties,
will make such a proposal, or, if made, that such a proposal would be adequate.
In the event that one of the Rainsford Nominees determines to make an offer to
acquire the Company, a special committee of the Board, consisting of the
disinterested directors, would be formed to ensure that the Board continues to
act in the best interests of the Company and its shareholders. In addition, the
Rainsford Nominees intend to pursue the redemption of the Company's poison pill.
Mr. Rainsford also believes that the Million Share Purchase Right
should be cancelled. Mr. Rockey, the Company's president, was previously granted
the right to acquire 1,000,000 shares of Common Stock at an exercise price of
$10.00 per share, which Mr. Rainsford supported, and at this price level would
continue to support. However, this Million Share Purchase Right was amended to
change the per share purchase price of the shares to the average daily closing
stock price for the six-month period following the Company's spin-off
transaction. Mr. Rainsford, in his capacity as a director of Delta Woodside,
opposed this amendment to the Million Share Purchase Right. He believed that the
spin-off would result in deeply discounted share values and that, therefore, the
exercise price would be fundamentally unfair to the Company's shareholders. This
has been proven to be true, as the Company Proxy Statement discloses that the
average trading value of the Company's Common Stock from June 30, 2000 to
October 5, 2000 was $1.11. If Mr. Rockey's exercise price winds up being $1.11,
this would constitute an approximate 60% discount to a per share purchase price
of a proposal to buy the Company in August, 2000 that was summarily rejected by
the Board as being less than the "liquidation value" of the Company and
"significantly too low," according to Mr. Rockey. This low exercise price, when
combined with the fact that the number of shares granted pursuant to this right
would equal about 30% of the Company's Common Stock, inclusive of such shares,
is overly burdensome to the shareholders. This shareholder proposal is precatory
and cannot bind the Board to take this action; further, the Board may be
prohibited from carrying out the proposal due to currently existing contractual
obligations or fiduciary duties. Mr. Rainsford is making this proposal in order
to give shareholders the opportunity to express their displeasure with the
Million Share Purchase Right and to give the Board a clear message that they
wish to see this right cancelled.
ELECTION OF RAINSFORD NOMINEES AS DIRECTORS
Currently, the Board consists of eight members. The terms of all of the
directors expire at the Annual Meeting. Mr. Rainsford is proposing that the
shareholders of the Company elect the Rainsford Nominees to the Board at the
Annual Meeting. The Rainsford Nominees named in the table below, each of whom
has consented to serve as a director if elected, would serve until the Company's
annual meeting of shareholders in 2001 and until his or her successor has been
duly elected and qualified. Certain additional information with respect to the
Rainsford Nominees is set forth herein under "Voting Securities and Principal
Holders Thereof" and in Annex I hereto.
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION, FIVE-YEAR EMPLOYMENT
HISTORY AND DIRECTORSHIPS
<S> <C>
Bettis C. Rainsford, age 49 Mr. Rainsford is a co-founder of Delta Woodside
108 1/2 Courthouse Square (including its predecessors), a textile and apparel
P.O. Box 388 company, and served as its Chief Financial Officer from
</TABLE>
4
<PAGE> 6
<TABLE>
<S> <C>
Edgefield, SC 29824 its founding in 1984 until October 1999. He is currently
the President of Rainsford Development Corporation, a
company engaged in general business development
activities. Mr. Rainsford is currently a director of the
Company.
Talmadge Knight, age 59 Mr. Knight is the founder, Chief Executive Officer and a
310 South Main Street director of Knight Textile Corporation, an apparel
Saluda, SC 29138 manufacturing company, and has served in these roles
since 1971.
Grace G. Young, age 51 Since October 1997, Ms. Young has served in numerous
100 CTC Dr. capacities with Concurrent Technologies Corporation, a
Edgefield, SC 29824 science, technology and management solutions company.
She was the Chief Business Analyst from October 1997 to
December 1999, the Executive Director, Southern
Division from December 1999 to May 2000 and has been
the Executive Director, Health Care Systems since June
2000. From January 1995 to June 1997, she was the
Cabinet Director for Governor David M. Beasley for
South Carolina Parks, Recreation and Tourism. She is a
director of Enterprise Ventures, a registered broker/dealer.
Donald P. Howard, age 55 From 1987 to present, Mr. Howard has been President of
565 Vann Road Genin Corporation, a retail industry consulting and real
Trenton, SC 29847 estate holding company. Mr. Howard has also been
an Assistant Professor of Management for Augusta State
University since 1996. Mr. Howard was employed by
Belk Stores, a retail department store chain, from 1968
to 1987, where he became a director and Vice President
in 1975 and Executive Vice President and a partner in 1981.
Warren A. Daniel, age 52 From 1997 to present, Mr. Daniel has been the President
608 Wheeler Executive Center of Group & Benefits Consultants, Inc., an insurance and
3540 Wheeler Road benefits consulting company. Additionally, since 1978,
Augusta, GA 30909 Mr. Daniel has been an agent for Northwestern Mutual
Life Insurance Company, an insurance company. He is a
director of Georgia Bank Financial Corp.
Dr. Robert Lee Sawyer, age 69 Dr. Sawyer has been engaged in the private practice of
P.O. Box 665 family medicine since 1959.
Saluda, SC 29138
Roger H. Timpson, age 52 Since 1982, Mr. Timpson has been a self-employed
317 Wigfall Street private investor.
Edgefield, SC 29824
</TABLE>
5
<PAGE> 7
<TABLE>
<S> <C>
Jack J. Jackson, age 54 Prior to his retirement in July 1999, Mr. Jackson served as
414 Pompano Street the Senior Vice President and as President, North America
Edisto Island, SC 29438 Market Region for Pharmacia & Upjohn, Inc., a
pharmaceuticals company, from December 1995. From
January 1993 to December 1995, he was the Senior Vice
President, Western Hemisphere Pharmaceutical
Operations and also assumed the temporary responsibility
for International Pharmaceutical Operations of Pharmacia
& Upjohn, Inc. in June 1995.
</TABLE>
It is anticipated that each Rainsford Nominee, if elected, will receive
director's fees limited to $10,000 per annum.
VOTE AND RECOMMENDATION WITH RESPECT TO
THE RAINSFORD NOMINEES
Each share of Common Stock issued and outstanding on the Record Date is
entitled to one vote. Assuming that a quorum is present, directors are elected
by the affirmative vote of a plurality of the votes cast by the shares of Common
Stock represented at the Annual Meeting. Accordingly, the eight nominees
receiving the greatest number of votes cast at the Annual Meeting upon the
presence of a quorum will be elected as directors. Because directors will be
elected on the basis of the number of votes cast, proxies that are marked
"Withhold Authority" or on which a broker or other nominee has indicated a lack
of discretionary authority (broker non-votes) will not be counted in the
election of directors.
Although it is anticipated that each Rainsford Nominee will be able to
serve as a director, should any Rainsford Nominee become unavailable to serve,
the proxies will be voted for such other person or persons as may be designated
by Mr. Rainsford.
MR. RAINSFORD RECOMMENDS A VOTE
"FOR" THE RAINSFORD NOMINEES
PROPOSAL TO DIRECT THE BOARD TO CANCEL
THE MILLION SHARE PURCHASE RIGHT
Mr. Rockey, the Company's president, was previously granted the right
to acquire 1,000,000 shares of Common Stock at an exercise price of $10.00 per
share. This "Million Share Purchase Right" was amended to change the per share
purchase price of the shares to the average daily closing stock price for the
six-month period following the Company's spin-off transaction.
Mr. Rainsford, in his capacity as a director of Delta Woodside, opposed
the amendment to the Million Share Purchase Right. He believed that the spin-off
would result in deeply discounted share values and that, therefore, the exercise
price would be fundamentally unfair to the Company's shareholders. This has been
proven to be true, as the Company Proxy Statement discloses that the average
trading value of the Company's Common Stock from June 30, 2000 to October 5,
2000 was $1.11. If Mr. Rocky's exercise price winds up being $1.11, this would
constitute an approximate 60% discount to a per share purchase price of a
proposal to buy the Company in August, 2000 that was summarily rejected by the
Board as being less than the "liquidation value" of the Company and
"significantly too low," according to Mr. Rockey. This low exercise price, when
combined with the fact that the number of shares granted pursuant to this right
would equal about 30% of the Company's Common Stock, inclusive of such shares,
is overly burdensome to the shareholders.
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<PAGE> 8
This shareholder proposal is precatory and cannot bind the Board to take this
action; further, the Board may be prohibited from carrying out the proposal due
to currently existing contractual obligations or fiduciary duties. Mr. Rainsford
is making this proposal in order to give shareholders the opportunity to express
their displeasure with the Million Share Purchase Right and to give the Board a
clear message that they wish to see this right cancelled.
MR. RAINSFORD RECOMMENDS A VOTE
"FOR" THE PROPOSAL TO DIRECT THE BOARD
TO CANCEL THE MILLION SHARE PURCHASE RIGHT
RATIFICATION OF SELECTION OF AUDITORS
Mr. Rainsford recommends the ratification of the appointment of KPMG
LLP, independent certified public accountants, as auditors for the Company and
its subsidiaries for the 2001 fiscal year and to audit and report to the
shareholders upon the financial statements of the Company as of and for the
period ending June 30, 2001.
KPMG LLP currently serves as the Company's independent auditors and was
originally engaged by Delta Woodside on August 19, 1994 to serve as principal
accountants for Delta Woodside's 1995 fiscal year.
Mr. Rainsford believes that representatives of KPMG LLP will 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 that the shareholders may have. To the best of Mr.
Rainsford's knowledge, neither the firm nor any of its members has any relation
with the Company except in the firm's capacity as auditors or as advisors.
The decision of the Board to appoint KPMG LLP was based on the
recommendation of the Audit Committee. Mr. Rainsford expects that, in the
future, the Board will continue to appoint the Company's auditors annually based
on the recommendation of the Audit Committee and subsequently submit the
appointment to the shareholders for ratification.
MR. RAINSFORD RECOMMENDS A VOTE
"FOR" THE RATIFICATION OF KPMG LLP AS AUDITORS
IF YOU PROPERLY SIGN, DATE AND RETURN THE BLUE PROXY CARD, BUT DO NOT
INDICATE YOUR INSTRUCTIONS THEREON, YOUR SHARES WILL BE VOTED FOR EACH OF THE
RAINSFORD NOMINEES AND FOR THE RAINSFORD PROPOSAL.
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<PAGE> 9
STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS
AND MANAGEMENT
The Company's Common Stock is the only outstanding class of voting
securities. The following table sets forth certain information as of October 5,
2000, regarding the beneficial ownership of the Company's Common Stock by (i)
persons beneficially owning more than five percent of the Common Stock, (ii) the
directors, (iii) the executive officers of the Company, (iv) all current
directors and executive officers as a group, and (v) each new nominee for
election to the Board at the Annual Meeting. Except for footnote 4 or as
otherwise noted, all information in this section is based on information
reported by the Company in the Company Proxy Statement.
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY CLASS
NAME OF BENEFICIAL OWNER OWNED OUTSTANDING
------------------------ ------------ -------------
<S> <C> <C>
Reich & Tang Asset Management L.P. (1) 284,300 11.8%
600 Fifth Avenue
New York, New York 10020
Dimensional Fund Advisors Inc. (2) 194,291 8.1%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
E. Erwin Maddrey, II (3) 347,593 14.4%
233 North Main Street
Suite 200
Greenville, SC 29601
Bettis C. Rainsford (4) 334,218 13.9%
108-1/2 Courthouse Square
Post Office Box 388
Edgefield, SC 29824
Buck A. Mickel (5) (6) 158,742 6.6%
Post Office Box 6721
Greenville, SC 29606
Micco Corporation (6) 124,063 5.2%
Post Office Box 795
Greenville, SC 29602
Minor H. Mickel (6) (7) 157,804 6.6%
415 Crescent Avenue
Greenville, SC 29605
Minor M. Shaw (6) (8) 152,008 6.3%
Post Office Box 795
Greenville, SC 29602
Charles C. Mickel (6) (9) 149,694 6.2%
Post Office Box 6721
</TABLE>
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<PAGE> 10
<TABLE>
<S> <C> <C>
Greenville, SC 29606
William F. Garrett (10) 17,671 (20)
Mark I. Goldman (11) 0 (20)
C. C. Guy (12) 3,848 (20)
Dr. James F. Kane (13) 4,055 (20)
Dr. Max Lennon (14) 2,881 (20)
Robert D. Rockey, Jr. (15) 100 (20)
13101 Preston Road #312
Dallas, Texas 75240
Michael H. Prendergast (16) 2,120 (20)
K. Scott Grassmyer (17) 16,802 (20)
William B. Mattison, Jr. (18) 2,200 (20)
All current directors and executive officer as a group (12 889,681 37.0%
persons) (19)
</TABLE>
-----------------------------------
(1) Reich & Tang Asset Management L.P. ("Reich & Tang") has not
yet filed with the Securities and Exchange Commission any document related
specifically to its ownership of the securities of the Company. The information
set forth above is based on an amendment to Schedule 13G that was filed with the
Securities and Exchange Commission on February 15, 2000 by Reich & Tang
pertaining to its ownership solely of Delta Woodside common stock and
confirmation obtained on September 20, 2000 from Reich & Tang. However, based on
the confirmation obtained from Reich & Tang, the Company understands that Reich
& Tang possesses the same ownership, voting and dispositive power with respect
to the Company's shares as it does for the shares of Delta Woodside (adjusted to
reflect that one share of Company Common Stock was distributed for every 10
Delta Woodside shares in the spin-off with cash paid in lieu of fractional
shares). In the amendment, Reich & Tang reported that, with respect to the
common stock of Delta Woodside, it has shared voting power and shared
dispositive power with respect to all of the shares shown. The amendment
reported that the shares of Delta Woodside common stock were held on behalf of
certain accounts for which Reich & Tang provides investment advice and as to
which Reich & Tang has full voting and dispositive power for as long as it
retains management of the assets. According to the amendment, each account has
the right to receive and the power to direct receipt of dividends from, or the
proceeds from the sale of, the Delta Woodside shares. The amendment reported
that none of such accounts has an interest with respect to more than 5% of the
outstanding shares of Delta Woodside.
(2) Dimensional Fund Advisors Inc. ("Dimensional") has not yet
made a filing with the Securities and Exchange Commission specifically related
to its ownership of securities of the Company. The information set forth above
is based on an amendment to Schedule 13G that was filed by Dimensional with the
Securities and Exchange Commission on February 3, 2000 with respect to its
ownership of shares of Delta Woodside and on confirmation obtained on September
20, 2000. However, based on the confirmation, the Company understands that
Dimensional possesses the same ownership, voting and dispositive power for the
shares of the Company as it does for those of Delta Woodside (adjusted to
reflect that one share of Company Common Stock was distributed for every 10
Delta Woodside shares in the spin-off with cash paid in lieu of fractional
shares). Dimensional reported that it had sole voting power and sole dispositive
power with respect to all of the shares. The amendment reports that Dimensional
furnishes investment advice to four investment companies and serves as
investment manager to certain other commingled group trusts and separate
accounts, that all of the shares of Delta Woodside's common stock were owned by
such investment companies, trusts or accounts, that in its role as investment
adviser or manager
9
<PAGE> 11
Dimensional possesses voting and/or investment power over the Delta Woodside
shares reported, that Dimensional disclaims beneficial ownership of such
securities and that, to the knowledge of Dimensional, no such investment
company, trust or account client owned more than 5% of the outstanding shares of
Delta Woodside's common stock.
(3) Mr. Maddrey is a director of the Company, Delta Woodside and
Delta Apparel, Inc. and was the President and Chief Executive Officer of Delta
Woodside until June 2000. The number of shares shown as beneficially owned by
Mr. Maddrey includes 43,147 shares held by the E. Erwin and Nancy B. Maddrey, II
Foundation, a charitable trust, as to which shares Mr. Maddrey holds sole voting
and investment power but disclaims beneficial ownership and approximately 107
shares allocated to the account of Mr. Maddrey in Delta Woodside's Savings and
Investment Plan (the "Delta Woodside 401(k) Plan"). Mr. Maddrey is fully vested
in the shares allocated to his account in the Delta Woodside 401(k) Plan.
(4) Mr. Rainsford is currently a director of the Company. Mr.
Rainsford reported beneficial ownership of 334,218 shares of Common Stock in
Amendment No. 1 to Schedule 13D, filed with the SEC on October 6, 2000. Mr.
Rainsford disclaims beneficial ownership of 4,794 of these shares registered in
the name of The Edgefield County Foundation over which he holds voting and
investment power. Mr. Rainsford has pledged a total of 218,593 shares of Common
Stock to Carolina First Bank as security for certain loans.
(5) Buck A. Mickel is a director of the Company, Delta Woodside
and Delta Apparel, Inc. The number of shares shown as beneficially owned by Buck
A. Mickel includes 34,392 shares directly owned by him, all of the 124,063
shares owned by Micco Corporation, and 287 shares held by him as custodian for a
minor. See Note (6).
(6) Micco Corporation owns 124,063 shares of the Company's common
stock. The shares of common stock of Micco Corporation are owned in equal parts
by Minor H. Mickel, Buck A. Mickel (a director of the Company), Minor M. Shaw
and Charles C. Mickel. Buck A. Mickel, Minor M. Shaw and Charles C. Mickel are
the children of Minor H. Mickel. Minor H. Mickel, Buck A. Mickel, Minor M. Shaw
and Charles C. Mickel are officers and directors of Micco Corporation. Each of
Minor H. Mickel, Buck A. Mickel, Minor M. Shaw and Charles C. Mickel disclaims
beneficial ownership of three quarters of the shares of the Company's common
stock owned by Micco Corporation. Minor H. Mickel directly owns 33,741 shares of
the Company's common stock. Buck A. Mickel, directly or as custodian for a
minor, owns 34,679 shares of the Company's common stock. Charles C. Mickel,
directly or as custodian for his children, owns 25,621 shares of the Company's
common stock. Minor M. Shaw, directly or as custodian for her children, owns
25,049 shares of the Company's common stock. Minor M. Shaw's husband, through an
individual retirement account and as custodian for their children, beneficially
owns approximately 1,448 shares of the Company's common stock, as to which
shares Minor M. Shaw may also be deemed a beneficial owner. Minor M. Shaw
disclaims beneficial ownership with respect to these shares and with respect to
the 274 shares of the Company's common stock held by her as custodian for her
children. The spouse of Charles C. Mickel owns 10 shares of the Company's common
stock, as to which shares Charles C. Mickel may also be deemed a beneficial
owner. Charles C. Mickel disclaims beneficial ownership with respect to these
shares and with respect to the 351 shares of the Company's common stock held by
him as custodian for his children. Buck A. Mickel disclaims beneficial ownership
with respect to the 287 shares of the Company's common stock held by him as
custodian for a minor.
(7) The number of shares shown as beneficially owned by Minor H.
Mickel includes 33,741 shares directly owned by her and all of the 124,063
shares owned by Micco Corporation. See Note (6).
(8) The number of shares shown as beneficially owned by Minor M.
Shaw includes 25,049 shares owned by her directly or as custodian for her
children, approximately 1,448 shares beneficially owned by her husband through
an individual retirement account or as custodian for their children, and all of
the 124,063 shares owned by Micco Corporation. See Note (6).
(9) The number of shares shown as beneficially owned by Charles C.
Mickel includes 25,621 shares owned by him directly or as custodian for his
children, 10 shares owned by his wife and all of the 124,063 shares owned by
Micco Corporation. See Note (6).
10
<PAGE> 12
(10) William F. Garrett is a director of the Company, Delta
Woodside and Delta Apparel, Inc. The number of shares shown as beneficially
owned by Mr. Garrett includes 208 shares allocated to the account of Mr. Garrett
in the Delta Woodside 401(k) Plan. Mr. Garrett is fully vested in the shares
allocated to his account in the Delta Woodside 401(k) Plan.
(11) Mark I. Goldman is a director of the Company.
(12) C. C. Guy is a director of the Company, Delta Woodside and
Delta Apparel, Inc. The number of shares shown as beneficially owned by Mr. Guy
includes 1,896 shares owned by his wife, as to which shares Mr. Guy disclaims
beneficial ownership.
(13) Dr. James F. Kane is a director of the Company, Delta Woodside
and Delta Apparel, Inc.
(14) Dr. Max Lennon is a director of the Company, Delta Woodside
and Delta Apparel, Inc.
(15) Mr. Rockey is Chairman of the Board, President and Chief
Executive Officer of the Company. Mr. Rockey has the right to acquire up to
1,000,000 shares of the Company's Common Stock from the Company on December 30,
2000 at a purchase price equal to the average daily closing stock price for the
Company Common Stock for the period from June 30, 2000 to December 30, 2000. If
Mr. Rockey exercises this right for the full amount of the shares subject
thereto, he would be the beneficial owner of approximately 29.4% of the then
outstanding shares of Company Common Stock, causing all directors and executive
officers as a group beneficially to own approximately 55.5% of the then
outstanding shares of Company Common Stock. Excluded from the table are 125,000
shares covered by options granted under the Company's Stock Option Plan that are
not exercisable within 60 days after October 5, 2000 and 75,000 shares subject
to awards under the Company's Incentive Stock Award Plan which will not vest
within 60 days after October 5, 2000.
(16) Michael H. Prendergast is Senior Vice President of Sales of
the Company. Excluded from the table are 20,000 shares covered by options
granted under the Stock Option Plan that are not exercisable within 60 days
after October 5, 2000 and 8,000 shares subject to awards under the Company's
Incentive Stock Award Plan which will not vest within 60 days after October 5,
2000.
(17) K. Scott Grassmyer is Senior Vice President, Chief Financial
Officer, Treasurer and Secretary of the Company. The number of shares
beneficially owned by Mr. Grassmyer includes 21 shares allocated to the account
of Mr. Grassmyer in the Company's Savings and Investment Plan (the "Company
401(k) Plan"). Mr. Grassmyer is fully vested in the shares allocated to his
account in the Company 401(k) Plan. Excluded from the table are 20,000 shares
covered by options granted under the Stock Option Plan that are not exercisable
within 60 days after October 5, 2000 and 8,000 shares subject to awards under
the Company's Incentive Stock Award Plan which will not vest within 60 days
after October 5,2000.
(18) William B. Mattison, Jr. is Senior Vice President of
Merchandising of the Company. Excluded from the table are 20,000 shares covered
by options granted under the Stock Option Plan that are not exercisable within
60 days after October 5, 2000 and 8,000 shares subject to awards under the
Company's Incentive Stock Award Plan which will not vest within 60 days after
October 5, 2000.
(19) Includes all shares deemed to be beneficially owned by any
current director or executive officer. Includes 331 shares held for the
directors and executive officers on October 5, 2000 by the Delta Woodside 401(k)
Plan and 21 shares held for the directors and executive officers on October 5,
2000 by the Company 401(k) Plan. Each participant in each 401(k) Plan has the
right to direct the manner in which the trustee of the plan votes the shares
held by the plan that are allocated to that participant's account. Except for
shares as to which such a direction is made, the shares held by either plan are
not voted.
(20) Less than one percent.
11
<PAGE> 13
The following table sets forth the ownership of the Common Stock as of
October 26, 2000, by each of the Rainsford Nominees. Unless otherwise indicated,
such persons have sole voting and investment power with respect to such shares,
and all such shares are owned beneficially by the person indicated.
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL
NAME OWNERSHIP PERCENT OF CLASS (1)
---- -------------------- --------------------
<S> <C> <C>
Bettis C. Rainsford (2) 334,218 13.9%
Talmadge Knight 98,300 4.1%
Grace G. Young 0 0
Donald P. Howard 0 0
Warren Daniel 0 0
Jack J. Jackson 0 0
Dr. Robert Sawyer 0 0
Roger H. Timpson 0 0
</TABLE>
(1) Based on the Common Stock shown as outstanding as of the Record
Date.
(2) Mr. Rainsford is currently a director of the Company. Mr. Rainsford
reported beneficial ownership of 334,218 shares of Common Stock in Amendment No.
1 to Schedule 13D, filed with the SEC on October 6, 2000. Mr. Rainsford
disclaims beneficial ownership over 4,794 of these shares registered in the name
of The Edgefield County Foundation over which he holds voting and investment
power. Mr. Rainsford has pledged a total of 218,593 shares of Common Stock to
Carolina First Bank as security for certain loans.
INFORMATION CONCERNING THE SOLICITATION OF PROXIES
The costs of this solicitation will be borne by Mr. Rainsford. Talmadge Knight
has agreed to reimburse Mr. Rainsford up to $62,500 of the cost of this
solicitation of proxies. In addition to solicitation by mail, Mr. Rainsford may
solicit proxies in person, by telephone, by telegram, by personal interview, by
e-mail or by telecopier. Mr. Rainsford will not receive any compensation for
such solicitations. Mr. Rainsford will request banks, brokerage houses and other
custodians, nominees and fiduciaries to forward Mr. Rainsford's proxy materials
to the beneficial owners of the shares of Common Stock they hold of record and
obtain authorization for the execution of proxy cards. Mr. Rainsford will
reimburse these record holders for customary mailing expenses incurred by them
in forwarding Mr. Rainsford's materials. Mr. Rainsford has retained Morrow & Co.
to assist Mr. Rainsford in connection with communications with shareholders and
to provide other services in connection with the solicitation of proxies. The
fee of Morrow & Co. is estimated to be $75,000, plus reasonable out-of-pocket
costs and expenses. To date, Mr. Rainsford has paid Morrow & Co. approximately
$50,000. Approximately 30 employees of Morrow & Co. are expected to be utilized
in connection with the solicitation of proxies. Neither Mr. Rainsford nor, to
the best of Mr.
12
<PAGE> 14
Rainford's knowledge, any person acting on his behalf has retained any other
person to make solicitations or recommendations to security holders on his
behalf in connection with the solicitation of proxies. Costs related to the
solicitation of proxies with respect to the election of the Rainsford Nominees
include expenditures for attorneys, proxy solicitors, printing, postage, and
related expenses and fees and are expected to aggregate approximately $150,000.
To date, Mr. Rainsford has spent approximately $50,000 of such total estimated
expenditures. Mr. Rainsford intends to seek reimbursement from the Company for
the costs incurred in connection with this proxy solicitation. Such request for
reimbursement will not be submitted to a vote of the Company's shareholders.
PROXY PROCEDURES
Unless contrary instructions are indicated on the proxy, all shares of
Common Stock represented by valid proxies received pursuant to this solicitation
(and not revoked before they are voted) will be voted FOR the election of the
Rainsford Nominees and FOR the Rainsford Proposal. A proxy executed by a holder
of shares may be revoked at any time before its exercise by sending a written
revocation (as provided below), by submitting another properly executed proxy
with a later date prior to the time of the Annual Meeting or by ballot at the
Annual Meeting. The mere presence of any shareholder at the Annual Meeting will
not operate to revoke his or her proxy. The revocation may be delivered to the
Secretary of the Company at the Company's principal executive offices. Although
a revocation or a later dated proxy delivered to the Company but not to Mr.
Rainsford will be effective, Mr. Rainsford requests that if a revocation or a
later dated proxy is delivered only to the Company, a photostatic copy of the
revocation or later dated proxy also be delivered to Mr. Rainsford so that he
will be aware of such revocation or later dated proxy. All revocations received
by Mr. Rainsford will be delivered to the Company immediately prior to the
convening of the Annual Meeting. Shareholders who have executed and returned a
proxy and who then attend the Annual Meeting and desire to vote in person are
requested to so notify Mr. Rainsford prior to the time of the Annual Meeting. IF
YOU WISH TO VOTE FOR THE ELECTION OF THE RAINSFORD NOMINEES TO THE BOARD AND FOR
THE RAINSFORD PROPOSAL, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED BLUE
PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED OR FAX BOTH SIDES OF THE
ENCLOSED BLUE PROXY CARD TO MR. RAINSFORD AT (803) 637-6066. MR. RAINSFORD
RECOMMENDS THAT YOU VOTE "FOR" THE RAINSFORD NOMINEES AND "FOR" THE RAINSFORD
PROPOSAL.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Pursuant to Section 2.14 of the Company's Bylaws, as amended, for any
shareholder proposal to be eligible for inclusion in the Company's proxy
statement and form of proxy for the next annual meeting, the proposals must be
received at the Company's executive offices not later than 120 calendar days
prior to the first anniversary date of the immediately preceding annual meeting
or not later than 10 days after notice or public disclosure of the date of the
annual
13
<PAGE> 15
meeting shall be given or made to shareholders, whichever date is earlier. Such
proposals should be submitted by certified mail, return receipt requested,
addressed to the Company, 1020 Barrow Industrial Parkway, Winder, Georgia 30680,
Attention: Secretary.
COMPANY INFORMATION
Except as otherwise noted herein, the information concerning the
Company contained in this Proxy Statement has been taken from or is based upon
documents and records on file with the SEC and other publicly available
information. Although Mr. Rainsford does not have any knowledge that would
indicate that any statement contained herein based upon such documents and
records is untrue, Mr. Rainsford does not take any responsibility for the
accuracy or completeness of the information contained in such documents and
records, or for any failure by the Company to disclose events that may affect
the significance or accuracy of any such information.
OTHER MATTERS
Except as otherwise noted herein, Mr. Rainsford knows of no other
matters that are likely to be brought before the Annual Meeting, but if other
matters do properly come before the meeting, the persons named in the enclosed
proxy, or their substitutes, will vote the proxy in accordance with their best
judgment.
**********
It is important that your BLUE proxy card be returned promptly. If
you do not plan to attend the Annual Meeting, we urge you to fill out, date and
mail the enclosed BLUE proxy card in the enclosed envelope, which requires no
postage if mailed in the United States.
Dated: October 27, 2000
Bettis C. Rainsford
14
<PAGE> 16
ANNEX I
Within the past two years, Mr. Rainsford and the Rainsford Nominees
have engaged in the following transactions in securities of the Company:
<TABLE>
<CAPTION>
TRADE QUANTITY
PARTICIPANT DATE (SHARES)
----------- ---- --------
<S> <C> <C>
Talmadge Knight 10/02/00 98,300
Bettis C. Rainsford 6/30/00 14,880*
</TABLE>
*Mr. Rainsford received these shares pursuant to Delta Woodside's Long
Term Incentive Plan.
Except as set forth in this Proxy Statement, none of the Rainsford
Nominees or any associate or any other participant of the foregoing, directly or
indirectly owns any securities of the Company or any subsidiary of the Company
beneficially or of record, has the right to acquire beneficial ownership within
60 days or has purchased or sold such securities within the past two years.
To the knowledge of the Rainsford Nominees, except as set forth in this
Proxy Statement, none of the Rainsford Nominees or any other participant has any
substantial interest, direct or any indirect, by securities holdings or
otherwise, in any matter to be acted upon at the Annual Meeting, except for the
election of directors.
No part of the purchase price of the shares of Common Stock
beneficially owned by any the Rainsford Nominees, or any other participant is
represented by funds borrowed or otherwise obtained for the purpose of acquiring
or holding securities.
Except as set forth in this Proxy Statement, none of the Rainsford
Nominees, or any other participant is, or within the past year has been a party
to any contract, arrangement, or understanding with any person with respect to
any securities of the Company.
Except as set forth in this Proxy Statement, none of the Rainsford
Nominees or any other participant, or any associate of the foregoing, has any
arrangement or understanding with any person (A) with respect to any future
employment by the Company or its affiliates or (B) with respect to its future
transactions to which the Company or any affiliates will or may be a party.
There are no pending legal proceedings in which any Rainsford Nominees
or any other Participant, or any of their respective associates, is a party
adverse to the Company or any of its affiliates or in which any Rainsford
Nominees, or any other Participant, or any of their respective associates has an
interest adverse to the Company or its affiliates.
15
<PAGE> 17
Except as set forth in this Proxy Statement, there are no transactions,
or series of transactions, since the beginning of the Company's last fiscal
year, or any currently proposed transactions, in which the Company or any of its
subsidiaries was a party, in an amount which exceeds $60,000 and in which any
Rainsford Nominee has a material interest.
16
<PAGE> 18
2000 ANNUAL MEETING OF THE SHAREHOLDERS OF
DUCK HEAD APPAREL COMPANY, INC.
TO BE HELD ON NOVEMBER 8, 2000
THIS PROXY IS SOLICITED BY BETTIS C. RAINSFORD ("MR. RAINSFORD")
AND NOT BY THE COMPANY'S BOARD OF DIRECTORS
The undersigned hereby appoints Bettis C. Rainsford and Roger H. Timpson,
and each of them, with full power of substitution, as proxy of the undersigned
to vote all of the common stock, par value $0.01 (the "Common Stock"), of Duck
Head Apparel Company, Inc. (the "Company") that the undersigned is entitled to
vote if personally present at the Annual Meeting of Shareholders of the Company
to be held at: Chateau Elan, 100 Rue Charlemagne, Braselton, GA on Wednesday,
November 8, 2000, at 10:00 A.M., eastern time, and at any and all adjournment(s)
or postponement(s) thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER MARKED HEREIN
BY THE UNDERSIGNED. IF NO MARKING IS MADE, THIS PROXY WILL BE VOTED "FOR" THE
ELECTION OF THE RAINSFORD NOMINEES DESCRIBED ABOVE AND "FOR" PROPOSALS 2 AND 3.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT FROM MR.
RAINSFORD, SOLICITING PROXIES FOR THE ANNUAL MEETING.
ALL PREVIOUS PROXIES GIVEN BY THE UNDERSIGNED TO VOTE AT THE ANNUAL MEETING
OR AT ANY ADJOURNMENT(S) OR POSTPONEMENT(S) THEREOF ARE HEREBY REVOKED.
(Continued and to be dated and signed on the reverse side)
(Continued from other side)
ELECTION OF DIRECTORS
MR. RAINSFORD RECOMMENDS A VOTE "FOR" THE FOLLOWING DIRECTOR NOMINEES:
1. Bettis C. Rainsford, Talmadge Knight, Grace G. Young, Donald P. Howard,
Warren Daniel, Jack J. Jackson, Dr. Robert Sawyer and Roger H. Timpson.
<TABLE>
<S> <C> <C> <C>
[ ] FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY TO
LISTED ABOVE (EXCEPT VOTE FOR ALL NOMINEES
AS MARKED TO THE LISTED ABOVE
CONTRARY BELOW)
</TABLE>
INSTRUCTIONS
To withhold authority to vote for the election of one or more of such
candidate(s), mark FOR above and write the name(s) of the person(s) with whom
you wish to withhold authority in the following space.
-------------------------------------------------------------
MR. RAINSFORD RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS:
2. To direct the Board to cause the Company to take all actions necessary to
cancel the Million Share Purchase Right.
<TABLE>
<S> <C> <C>
[ ] [ ] [ ]
FOR AGAINST ABSTAIN
</TABLE>
3. To ratify the selection of KPMG LLP as the independent auditors for the
Company for the 2001 fiscal year.
<TABLE>
<S> <C> <C>
[ ] [ ] [ ]
FOR AGAINST ABSTAIN
</TABLE>
MR. RAINSFORD RECOMMENDS YOU VOTE "FOR" ITEMS 2 AND 3. PROPOSAL 2 IS PRECATORY
IN NATURE ONLY AND CANNOT BIND THE BOARD TO ACT.
The above-named proxies of the undersigned are authorized to vote, in their
discretion, upon such other matters as may properly come before the Annual
Meeting and any adjournment(s) or postponement(s) thereof.
Dated: , 2000
----------------------------------
----------------------------------------
Signature
----------------------------------------
Signature, if held jointly
----------------------------------------
Title of Authority
Please date this Proxy and sign it
exactly as your name or names appear on
your stock certificates or on a label
affixed hereto. When shares are held
jointly, EACH joint owner should sign.
When signing as attorney, executor,
administrator, trustee, guardian,
corporate officer, etc., give full title
as such. If shares are held by a
corporation, please sign in full the
corporate name by President or other
authorized officer. If shares are held
by a partnership, please sign in the
partnership name by an authorized
person.
IMPORTANT: PLEASE SIGN, DATE AND MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE.
