<PAGE> 1
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 [ ]
[ ] 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
SPORT-HALEY, INC.
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(Name of Registrant as Specified in Its Charter)
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(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 securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1 (Set forth
the amount on which the filing fee is calculated and state
how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
[HALEY LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 14, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Sport-Haley, Inc. will be held at the Company's principal offices, 4600 East
48th Avenue, Denver, Colorado on Friday, February 14, 1997, at 3:00 p.m.,
Mountain Standard Time, and thereafter as it may from time to time be
adjourned, for the following purposes:
1. To elect five directors to hold office for the term set forth
in the accompanying Proxy Statement and until their successors
shall have been duly elected and qualified;
2. To approve amendments to, and restatement of, the Company's
1993 Stock Option Plan to (i) permit the issuance of an
additional 250,000 shares of Common Stock pursuant to the
Plan, and (ii) to simplify administration of the Plan in
accordance with revisions to Section 16 of the Securities
Exchange Act of 1934;
3. To ratify the appointment of Levine Hughes & Mithuen, Inc. as
independent auditors; and
4. To consider and transact such other business as may properly
come before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on January 2,
1997, as the record date for the determination of shareholders entitled to
notice of and to vote at this meeting or any adjournment thereof.
By Order of the Board of Directors,
January 3, 1997 /s/ Steve S. Auger
----------------------------------
Steve S. Auger, Corporate Secretary
IMPORTANT
PLEASE MARK, DATE, SIGN, NOTE ANY CHANGE OF ADDRESS AND RETURN THE ENCLOSED
PROXY CARD IMMEDIATELY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, WE WILL
BE GLAD TO RETURN YOUR PROXY SO THAT YOU MAY VOTE IN PERSON.
<PAGE> 3
SPORT-HALEY, INC.
4600 E. 48TH AVENUE
DENVER, COLORADO 80216
PROXY STATEMENT
RELATING TO THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD FEBRUARY 14, 1997
GENERAL
The enclosed proxy is solicited by the Board of Directors of
Sport-Haley, Inc. (hereinafter referred to as the "Company") for use at the
Annual Meeting of Shareholders to be held at the Company's principal offices,
4600 E. 48th Avenue, Denver, Colorado at 3:00 p.m., Mountain Standard Time, on
Friday, February 14, 1996, for the purposes set forth in the foregoing Notice
of Annual Meeting of Shareholders. This Proxy Statement and the form of proxy
will be mailed to shareholders on or about January 7, 1997. A shareholder
giving a proxy has the power to revoke it at any time prior to its exercise by
notifying the Secretary of the Company. Unless the proxy is revoked, or unless
it is received in such form as to render it invalid, the shares represented by
it will be voted in accordance with the instructions contained therein.
The record date with respect to this solicitation is January 2, 1997.
All holders of record of Common Stock of Sport-Haley, Inc. as of the close of
business on that date are entitled to vote at the meeting. As of the record
date, the Company had 4,344,647 shares of Common Stock outstanding. Each share
of Common Stock is entitled to one vote. A majority of the votes entitled to
be cast constitutes a quorum. If a quorum exists, action on any matter other
than the election of directors will be approved if the votes cast in person or
by proxy at the meeting favoring the action exceed the votes cast opposing the
action. In the election of directors, that number of candidates equaling the
number of directors to be elected having the highest number of votes cast in
favor of their election will be elected. Abstentions and broker non-votes are
not counted in the calculation of the vote. A proxy may be revoked by the
shareholder at any time prior to its being voted. If a proxy is properly
signed and is not revoked by the shareholder, the shares it represents will be
voted at the meeting in accordance with the instructions of the shareholder.
If the proxy is signed and returned without specifying choices, the shares will
be voted in accordance with the recommendations of the Board of Directors. The
cost of this solicitation will be borne by the Company. Employees and
directors of the Company may solicit proxies but will not receive any
additional compensation for such solicitation. Proxies may be solicited
personally or by mail, facsimile, telephone or telegraph.
As a matter of policy, proxies, ballots and voting tabulations that
identify individual shareholders are held confidential by the Company. Such
documents are available for examination only by the inspectors of election,
none of whom is an employee of the Company, and certain employees associated
with tabulation of the vote. The identity of the vote of any shareholder is
not disclosed except as may be necessary to meet legal requirements.
<PAGE> 4
I. ELECTION OF DIRECTORS
The five nominees for election as directors are identified below. All
nominees are now members of the Board of Directors. The Board of Directors
knows of no reason why any nominee would be unable to serve as a director. If
any nominee should for any reason become unable to serve, the shares
represented by all valid proxies will be voted for the election of such other
person as the Board of Directors may designate or the Board of Directors may
reduce the number of directors to eliminate the vacancy.
The following material contains information concerning the nominees,
including their recent employment, positions with the Company, other
directorships and age as of the date of this Proxy Statement.
<TABLE>
<CAPTION>
NAME AGE CAPACITIES IN WHICH SERVED DIRECTOR SINCE
- ----------------- --- -------------------------- --------------
<S> <C> <C> <C>
Robert G. Tomlinson(1) 56 Chairman of the Board and Chief Executive Officer 1992
Robert W. Haley 41 President and Director 1996
Mark J. Stevenson(1)(2) 58 Director 1993
Ronald J. Norick(2) 55 Director 1993
James H. Everest(1)(2) 48 Director 1993
</TABLE>
- ---------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Robert G. Tomlinson has served as Chairman of the Board and Chief
Executive Officer of the Company since October 1992. Mr. Tomlinson was a
partner in Tomlinson Enterprises, a real estate investment partnership, from
1972 through 1993. From 1989 until he joined the Company, Mr. Tomlinson was
also engaged in management of his personal investment portfolio.
Robert W. Haley has served as President and a director of the Company
since May 30, 1996. From January 1992 until his appointment to such positions,
he served as Vice President - Marketing of the Company. From August 1991 to
January 1992, Mr. Haley served as the director of marketing for S.T.X. Golf
Company, Baltimore, Maryland, a men's and women's golf apparel manufacturer.
From 1989 to 1991, Mr. Haley served as vice president of golf sales for Di
Fini, a manufacturer of men's and women's golf and active sportswear. Mr.
Haley is a Class A PGA professional golfer with 24 years experience in the golf
industry.
Mark J. Stevenson has been a director of the Company since November
1993. Since June 1, 1994, Mr. Stevenson has served as chairman of the board,
president and chief executive officer of Sherwood Enterprises, Inc., Longmont,
Colorado, a contract manufacturer serving the computer, data storage,
telecommunications and medical equipment industries. From 1992 to 1994, Mr.
Stevenson served as chairman of the board of Micro Insurance Software, Inc.,
Boulder, Colorado, a manufacturer of computer software oriented to the
insurance industry. From 1990 to 1992, he served as executive vice president
and a director of Solbourne Computer, Boulder, Colorado, a wholly-owned
subsidiary of Matsushita. Mr. Stevenson was responsible for worldwide sales,
marketing, customer support and product management in this position. Mr.
Stevenson currently serves as a director of Denta Lure, Inc. and Micro
Insurance Software, Inc., both of which are private companies.
-2-
<PAGE> 5
Ronald J. Norick has been a director of the Company since November
1993. Since 1987, Mr. Norick has served as the elected Mayor of the City of
Oklahoma City, Oklahoma. His current term of office expires in April 1998.
From 1960 to 1992, Mr. Norick served in various capacities, including as
president from 1981 to 1992, of Norick Brothers, Inc., a closely-held printing
company which was acquired by Reynolds & Reynolds in June 1992. Mr. Norick
serves on a number of public boards and commissions, including the Mayor's
Commission on Public Education, the National League of Cities and the United
States Conference of Mayors. Mr. Norick also serves as manager of Norick
Investments Company LLC, a family- owned limited liability company which is
engaged in investments.
James H. Everest has been a director of the Company since November
1993. Mr. Everest has served as president of the Jean I. Everest Foundation,
Oklahoma City, Oklahoma, since 1991. The Jean I. Everest Foundation was
organized to conduct charitable activities by Mr. Everest's father. Mr.
Everest has been the managing partner of Everest Brothers, a general
partnership active in oil and gas exploration and development, since 1984. Mr.
Everest has also been engaged in managing his personal investments since 1984.
Mr. Everest is a member of the Oklahoma Bar Association and the American Bar
Association and serves in a number of capacities for various civic and
community organizations.
COMMON STOCK OWNERSHIP
The following table sets forth certain information regarding
beneficial ownership of Common Stock as of December 31, 1996 by (i) each person
known by the Company to own beneficially more than 5% of the outstanding Common
Stock, (ii) each director or nominee, and (iii) all executive officers and
directors as a group. Each person has sole voting and sole investment or
dispositive power with respect to the shares shown except as noted.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME AND ADDRESS (1) SHARES (2) CLASS(3)
- ------------------------------- ------------ ------------
<S> <C> <C>
Robert G. Tomlinson(4) . . . . . . . . . . . . . . . . . . . . . . . . 70,334 1.60%
Robert W. Haley(5) . . . . . . . . . . . . . . . . . . . . . . . . . . 50,275 1.15%
Mark J. Stevenson(6) . . . . . . . . . . . . . . . . . . . . . . . . . 8,800 *
Ronald J. Norick(6)(7) . . . . . . . . . . . . . . . . . . . . . . . . 61,500 1.40%
James H. Everest(8) . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 *
All directors and officers as a group
(Eight persons)(9) . . . . . . . . . . . . . . . . . . . . . . . . . . 247,609 5.50%
</TABLE>
- -------------------------
* Less than 1%
(1) The address for all persons listed is 4600 E. 48th Avenue, Denver,
Colorado 80216.
(2) Ownership includes both outstanding Common Stock and shares issuable upon
exercise of options that are currently exercisable or will become
exercisable within 60 days after the date hereof.
(3) All percentages are calculated based on the number of outstanding shares
in addition to shares which a person or group has the right to acquire
within 60 days of the date of this Proxy Statement.
(4) Includes 50,000 shares subject to currently exercisable options.
(5) Includes 41,616 shares subject to currently exercisable options.
(6) Includes 8,333 shares subject to currently exercisable options.
(7) Excludes 37,500 shares of Common Stock owned of record by a limited
liability company of which Mr. Norick is the manager and a minority
shareholder and also excludes shares gifted by Mr. Norick to two adult
children as to which shares Mr. Norick disclaims beneficial ownership.
(8) Consists solely of 25,000 shares subject to currently exercisable options.
(9) Includes 158,282 shares subject to currently exercisable options held by
the five nominees for director and to Malcolm Goodridge, Vice President of
Corporate Sales, and Catherine Blair, Vice President of Marketing and
Design; 5,000 shares owned by Steve S. Auger, Treasurer; and 1,700 shares
owned by Ms. Blair. Excludes shares of Common Stock as to which officers
and directors disclaim beneficial ownership.
-3-
<PAGE> 6
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the annual and
long-term compensation for services in all capacities to the Company for the
three fiscal years in the period ended June 30, 1996 of Robert G. Tomlinson,
the Chief Executive Officer, and Robert W. Haley, President, the only executive
officers of the Company whose total annual salary and bonus exceeded $100,000
during the year ended June 30, 1996 (the "Named Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
FISCAL ------------------------ ---------------- ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (SHARES) COMPENSATION
- --------------------------- ------ ---------- --------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Robert G. Tomlinson, 1996 $117,308 $49,419 -0- -0-
Chairman of the Board and 1995 52,728 24,485 50,000 -0-
Chief Executive Officer 1994 24,000 -- -- -0-
Robert W. Haley, 1996 $112,115 $98,026 18,750 -0-
President 1995 98,328 62,008 17,375 -0-
1994 100,000 6,480 13,850 -0-
</TABLE>
Option Grants Table. The following table sets forth information on grants
of stock options pursuant to the Company's 1993 Stock Option Plan during the
fiscal year ended June 30, 1996 to the Named Officers.
<TABLE>
<CAPTION>
% OF TOTAL EXERCISE OR
OPTIONS OPTIONS GRANTED BASE PRICE
NAME GRANTED (SHARES) IN FISCAL YEAR ($/SHARE) EXPIRATION DATE
- -------------------- ---------------- ------------------ ------------- -----------------
<S> <C> <C> <C> <C>
R.G. Tomlinson -0- -0- -0- -0-
Robert W. Haley 18,750(1) 7.6% $ 2.50 November 3, 2003
</TABLE>
- ---------------
(1) All options are subject to expiration if the Named Officer's employment is
terminated for any reason with the date of expiration dependent upon the
reason for termination. All shares acquired through exercise of an option
may be repurchased by the Company if the Named Officer's employment is
terminated within five years of the date of the option agreement.
Fiscal Year-End Options/Option Values Table.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDER- VALUE OF UNEXERCISED IN-
LYING UNEXERCISED OPTIONS THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR-END(#) FISCAL YEAR-END($)(1)
----------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert G. Tomlinson . . . . . . . . . . . 50,000 -0- $ 325,000 $ -0-
Robert W. Haley . . . . . . . . . . . . . 41,616 -0- $ 510,593 $ -0-
</TABLE>
- ---------------
(1) The dollar values are calculated by determining the difference between the
exercise price of the options and the closing bid price for the Common
Stock of $14.625 on June 28, 1996.
No employee of the Company receives any additional compensation for his
services as a director. Non-management directors receive no salary for their
services as such, but receive a fee of $250 per meeting attended. The Board of
Directors has also authorized payment of reasonable travel or other
out-of-pocket expenses incurred by non-management directors in attending
meetings of the Board of Directors.
-4-
<PAGE> 7
In January 1996, the Company adopted a defined contribution savings plan
(the "401(k) Plan") to provide retirement income to employees of the Company.
The 401(k) Plan is intended to be qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended. The 401(k) Plan covers all
employees who are at least age 18 and have been employed at least three months.
It is funded by voluntary pre-tax contributions from employees up to a maximum
amount equal to 15% of annual compensation and through matching contributions
by the Company up to 5% of the employee's annual compensation. Upon leaving
the Company, each participant is 100% vested with respect to the participant's
contributions and is vested based on years of service with respect to the
Company's matching contributions. Contributions are invested as directed by
the participant in investment funds available under the 401(k) Plan. Full
retirement benefits are payable to each participant in a single cash payment or
an actuarial equivalent form of annuity on the first day of the month following
the participant's retirement.
Employment Agreement. In July 1995, the Company entered into an
employment agreement with Mr. Tomlinson. The agreement requires that he devote
his full business time to the Company, may be terminated by the Company for
"cause" (as defined in the agreement) and, as currently in effect, calls for
Mr. Tomlinson to receive an annual salary of $150,000. The employment
agreement extends for a three-year term, subject to Mr. Tomlinson's right to
convert the employment agreement to a consulting agreement in the event of a
change in control of the Company or upon Mr. Tomlinson's resignation. Subject
to the right of the Company to terminate the consulting agreement for cause,
Mr. Tomlinson is entitled to continue to serve as a consultant to the Company
for the duration of the agreement and to continue to receive compensation in
the amount of 60% of his annual salary. Mr. Tomlinson is also entitled to
receive lump sum compensation equal to approximately three times his annual
salary and bonus in the event of a change in control of the Company.
COMMITTEES OF THE BOARD
The Board of Directors has delegated certain of its authority to a
Compensation Committee and an Audit Committee. The Compensation Committee is
composed of Messrs. Stevenson, Norick and Everest and the Audit Committee is
composed of Messrs. Tomlinson, Stevenson and Everest. No member of either
committee, except Mr. Tomlinson, is a former or current officer or employee of
the Company.
The Compensation Committee held one meeting in fiscal year 1996. The
primary function of the Compensation Committee is to review and make
recommendations to the Board with respect to the compensation, including
bonuses, of the Company's officers and to administer the Company's Stock Option
Plan.
The Audit Committee held one meeting in fiscal year 1996. The function
of the Audit Committee is to review and approve the scope of audit procedures
employed by the Company's independent auditors, to review and approve the audit
reports rendered by both the Company's independent auditors and to approve the
audit fee charged by the independent auditors. The Audit Committee reports to
the Board of Directors with respect to such matters and recommends the
selection of independent auditors.
BOARD AND COMMITTEE ATTENDANCE
In fiscal year 1996, the Board of Directors held three meetings. All
directors attended more than 75% of the aggregate of board and committee
meetings held during fiscal year 1996.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE DIRECTOR NOMINEES IDENTIFIED ABOVE.
-5-
<PAGE> 8
II. PROPOSAL TO APPROVE AMENDMENTS
TO THE RESTATED 1993 STOCK OPTION PLAN
The Company's 1993 Stock Option Plan (the "Stock Option Plan" or "Plan")
was adopted in 1993 and was subsequently amended in 1995. The Board of
Directors feels that the Stock Option Plan has proven to be of substantial
value in stimulating the efforts of employees and increasing their ownership
stake in the Company. In light of the Company's continued growth, the number
of shares remaining for issuance under the Stock Option Plan is insufficient to
provide adequately for participation by eligible employees, directors and
consultants to whom the Compensation Committee would consider granting options
during the forthcoming years. The Board of Directors has adopted an amendment
to the Stock Option Plan to increase the number of shares available for
issuance under the Stock Option Plan by an additional 250,000 shares of Common
Stock. The proposed amendment to the Stock Option Plan also contains certain
changes which the Board of Directors believes are appropriate in response to
recent changes to the federal securities regulations which govern the Plan.
The provisions of the existing Plan, as well as the proposed amendments
thereto, are summarized below. A copy of the Plan containing the proposed
amendments thereto is attached hereto as Exhibit A.
SUMMARY OF PLAN
The Option Plan provides for the granting of incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), nonqualified stock options and
stock appreciation rights ("SARs"), up to a maximum number of 950,000 shares.
Nonqualified stock options may be granted to employees, directors and advisors
of the Company, while Incentive Stock Options may be granted only to employees.
No options may be granted under the Option Plan subsequent to February 28,
2003.
The Option Plan is administered by the Compensation Committee of the
Board of Directors, which determines the terms and conditions of the options
and SARs granted under the Option Plan, including the exercise price, number of
shares subject to the option and the exercisability thereof.
The exercise price of all Incentive Stock Options granted under the
Option Plan must be at least equal to the fair market value of the Common Stock
of the Company on the date of grant. In the case of an optionee who owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company, the exercise price of Incentive Stock Options
shall be not less than 110% of the fair market value of the Common Stock on the
date of grant. The exercise price of all nonqualified stock options granted
under the Option Plan shall be determined by the Compensation Committee, but
shall not be less than 85% of the fair market value of the Common Stock. The
term of all nonqualified stock options granted under the Option Plan may not
exceed ten years and the term of all incentive stock options may not exceed
five years. The Option Plan may be amended or terminated by the Board of
Directors, but no such action may impair the rights of a participant under a
previously granted option.
The Option Plan provides the Board of Directors or the Compensation
Committee the discretion to determine when options granted thereunder shall
become exercisable and the vesting period of such options. Upon termination of
a participant's employment or consulting relationship with the Company, all
unvested options terminate and are no longer exercisable. Vested options shall
remain exercisable for a specified period of time following the termination
date. The length of such extended exercise period generally ranges from 30
days to one year, depending on the nature and circumstances of the termination.
-6-
<PAGE> 9
The Option Plan provides that, in the event the Company enters into an
agreement providing for the merger of the Company into another corporation or
the sale of substantially all of the Company's assets, any outstanding
unexercised option shall become exercisable at any time prior to the effective
date of such agreement. Upon the consummation of the merger or sale of assets,
such options shall terminate unless they are assumed or another option is
substituted therefor by the successor corporation.
The Company has also entered into option agreements with four touring
golf professionals which call for the vesting of a predetermined number of
options based on the golf professional achieving certain benchmarks at
designated PGA Tour events or other major tournaments. The Company has also
granted options to independent sales representatives and the President which
vest upon the Company achieving designated levels of net sales.
As of June 30, 1996, a total of 423,940 nonqualified and Incentive Stock
Options were outstanding, with exercise prices ranging from $1.60 to $12.75 per
share and a weighted average exercise price per share of $5.30.
SUMMARY OF AMENDMENTS
The Board of Directors proposes to amend the Plan by making an additional
250,000 shares of Common Stock available for grant. Assuming adoption of the
amendment, a total of 1,200,000 shares of Common Stock would be available under
the Plan.
The Board of Directors also proposes that the Plan be amended and
restated in response to certain changes made to Rule 16b-3 ("Rule 16b-3") of
the Securities Exchange Act of 1934, as amended. The changes to Rule 16b-3
were announced by the Securities and Exchange Commission in May 1996, and
became effective as of November 1, 1996. The changes to Rule 16b-3 are
designed to simplify administration of stock option plans. Consistent with the
changes to Rule 16b-3, the proposed amendment provides for the following:
(i) The Compensation Committee may consist of two or more members
rather than three or more members, as currently required.
Members of the Compensation Committee are eligible to receive
options or other awards granted under the Plan;
(ii) Options or other awards granted under the Plan to persons
subject to Section 16(b) will be subject to a six-month
holding period only if the Committee does not approve such
grant in advance; and
(iii) The Plan may be amended by the Board of Directors from time to
time without shareholder approval; provided, however, to the
extent Rule 16b-3, as the same may be amended from time to
time, requires shareholder approval, then the Plan shall be
amended by shareholder approval.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED AND RECOMMENDS THAT
SHAREHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT TO AND RESTATEMENT OF THE 1993
STOCK OPTION PLAN TO PERMIT THE ISSUANCE OF AN ADDITIONAL 250,000 SHARES
PURSUANT TO THE PLAN, AND TO SIMPLIFY ADMINISTRATION OF THE PLAN IN THE MANNER
DESCRIBED ABOVE.
-7-
<PAGE> 10
III. SELECTION OF AUDITORS
The firm of Levine Hughes & Mithuen, Inc. has examined the financial
statements of the Company for the period from July 1, 1993 to June 30, 1996.
Subject to shareholder approval, Levine Hughes & Mithuen, Inc. has been re-
appointed by the Board of Directors to serve as the Company's independent
auditors for the 1996-1997 fiscal year. Representatives of Levine Hughes &
Mithuen, Inc. are expected to be present at the Annual Meeting with the
opportunity to make a statement if it is their desire to do so, and will be
available to respond to appropriate questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF LEVINE
HUGHES & MITHUEN, INC. AS INDEPENDENT AUDITORS FOR THE COMPANY.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under the securities laws of the United States, the Company's
directors, its executive officers, and any persons holding more than ten
percent of the Company's Common Stock are required to report their initial
ownership of the Company's Common Stock and any subsequent changes in that
ownership to the Securities and Exchange Commission, The Nasdaq Stock Market,
Inc., the Pacific Stock Exchange and the Company. Specific due dates for these
reports have been established and the Company is required to disclose in this
proxy statement any failure to file, or late filing, of such reports with
respect to the period ended June 30, 1996. Based solely on the Company's
review of Forms 3, 4 and 5 and amendments thereto furnished to the Company and
all written representations with respect to filing of such Forms, the Company
is aware that a Form 4 to report the exercise of 16,667 options was not timely
filed by Mr. Ronald Norick, a director of the Company; a Form 4 to report the
exercise of 1,666 options was not timely filed by Mr. Auger, the Treasurer of
the Company, and a Form 3 to report ownership of stock options was not timely
filed by Catherine Blair upon her appointment as an executive officer of the
Company. All three of such omitted reports were filed with the Securities and
Exchange Commission as soon as such persons became aware of the omission.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has adopted a policy pursuant to which material
transactions between the Company and its executive officers, directors and
principal shareholders (i.e. shareholders owning beneficially 5% or more of the
outstanding voting securities of the Company) shall be submitted to the Board
of Directors for approval by a disinterested majority of the directors voting
with respect to the transaction. For this purpose, a transaction is deemed
material if such transaction, alone or together with a series of similar
transactions during the same fiscal year, involves an amount which exceeds
$60,000.
During May 1996, the Company entered into a consulting agreement (the
"Agreement") with Nancy Haley who formerly served as an officer and director of
the Company. The Agreement provides for certain consulting services to be
rendered in the areas of product design, advertising and public relations. The
Agreement is for a term of three years, commencing June 1, 1996 with annual
compensation of $90,000 per year, payable in equal monthly installments of
$7,500. Generally, the Agreement is not terminable by the Company and any
termination by the Company will not affect the Company's obligation to pay the
full amount pursuant to the Agreement. Additionally, the Agreement may be
terminated by Ms. Haley at any time after the first 90 days of the Agreement by
giving written notice at least ten days prior to the date of termination. The
Agreement provides for certain covenants by Ms. Haley during the term of the
Agreement which includes, among other things, a covenant not to compete.
-8-
<PAGE> 11
ANNUAL REPORT
The Annual Report to Shareholders for the fiscal year ended June 30,
1996 is being sent to all shareholders with this Proxy Statement. The Annual
Report to Shareholders does not form any part of the material for the
solicitation of any Proxy.
A COPY OF THE ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED JUNE 30, 1996 AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WITHOUT EXHIBITS, IS
AVAILABLE WITHOUT CHARGE TO ANY SHAREHOLDER OF THE COMPANY UPON WRITTEN REQUEST
TO THE SECRETARY, SPORT-HALEY, INC., 4600 E. 48TH AVENUE, DENVER, COLORADO
80216.
SHAREHOLDER PROPOSALS
Shareholders who intend to submit proposals for inclusion in the Proxy
Statement relating to the year ending June 30, 1997 (1997 Proxy) must do so by
sending the proposal and supporting statements, if any, to the Company no later
than September 8, 1997. Such proposals should be sent to the attention of the
Corporate Secretary, Sport-Haley, Inc., 4600 East 48th Avenue, Denver, Colorado
80216.
OTHER MATTERS
Except for the matters described herein, management does not intend to
present any matter for action at the Annual Meeting and knows of no matter to
be presented at such meeting that is a proper subject for action by the
shareholders. However, if any other matters should properly come before the
Annual Meeting, it is intended that votes will be cast pursuant to the
authority granted by the enclosed Proxy in accordance with the best judgment of
the person or person acting under the Proxy.
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<PAGE> 12
EXHIBIT A
SPORT-HALEY, INC.
AMENDED AND RESTATED
1993 STOCK OPTION PLAN
1. PURPOSE
The purpose of this Plan is to promote the interest of the Corporation
and its shareholders and the Corporation's success by providing a method
whereby equity-based incentive Awards may be granted to Employees and Directors
of the Corporation and its Subsidiaries and to selected Consultants who, in the
course of their business activities, direct a significant amount of business to
the Corporation or provide services to the Corporation.
2. DEFINITIONS
A. "AWARD" means any form of stock option granted under the Plan.
B. "AWARD NOTICE" means any written notice from the Corporation to a
Participant or agreement between the Corporation and a Participant that
establishes the terms applicable to an Award.
C. "BOARD OF DIRECTORS" means the Board of Directors of the
Corporation.
D. "CODE" means the Internal Revenue Code of 1986, as amended.
E. "COMMITTEE" means the Compensation Committee of the Board of
Directors, or such other committee designated by the Board of Directors, which
is authorized to administer the Plan under Section 3 hereof. The number of
persons who shall serve on the Committee shall be specified from time to time
by the Board of Directors; however, in no event shall there be fewer than two
members of the Committee. The Committee will be composed in a manner such that
the Plan will qualify under Rule 16b-3 with regard to Awards to persons who are
subject to Section 16 of the Exchange Act. If at any time the Committee has
fewer than two members or the Committee otherwise ceases to exist, then the
Plan shall be administered by the Board of Directors, and all references herein
to the Committee shall refer to the Board of Directors.
F. "COMMON STOCK" means Common Stock of the Corporation, no par
value per share.
G. "CONSULTANT" means any individual who renders services directly
to the Corporation or to the Corporation's customers, any individual defined
and designated from time to time by the Committee as a Consultant, or any
individual from a group of individuals defined and designated from time to time
by the Committee.
H. "CORPORATION" means Sport-Haley, Inc.
I. "DIRECTOR" means a member of the Board of Directors.
J. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
K. "FAIR MARKET VALUE" means, on any date, the average of the high
and low sales prices of the Common Stock on the principal national securities
exchange, which includes the National Association of Securities Dealers
Automated Quotation System (NASDAQ), on which such Common Stock is listed or
admitted to trading or if not traded on that date, then on the date last
traded; or if such Common Stock is not so listed or admitted to trading, the
arithmetic mean of the per share closing bid price and per share closing asked
price on such date as quoted on any other system of NASDAQ or such other market
in which such prices are regularly quoted; or if there have been no published
bid or asked quotations, the Committee shall, in good faith and in accordance
with Section 422 of the Code, establish the method for determining the Fair
Market Value of the Common Stock.
<PAGE> 13
L. "EMPLOYEE" means any employee of the Corporation or a Subsidiary
whose performance the Committee determines can have a significant effect on the
success of the Corporation.
M. "PARTICIPANT" means any individual to whom an Award is granted
under the Plan.
N. "PLAN" means this Plan, which shall be known as the Sport-Haley,
Inc. Restated 1993 Stock Option Plan.
O. "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange Act,
as amended effective November 1, 1996, or any successor rule.
P. "SUBSIDIARY" means a corporation or other business entity (i) of
which the Corporation directly or indirectly has an ownership interest of 50%
or more, or (ii) of which it has a right to elect or appoint 50% or more of the
board of directors or other governing body.
3. ADMINISTRATION
A. The Plan shall be administered by the Committee. The Committee
shall have the authority to:
(i) construe and interpret the Plan;
(ii) promulgate, amend and rescind rules relating to the
implementation of the Plan;
(iii) make all determinations necessary or advisable for the
administration of the Plan, including the selection of Employees,
Directors and Consultants who shall be granted Awards, the number
of shares of Common Stock to be subject to each Award, the Award
price, the vesting or duration of Awards, and the designation of
Awards as incentive stock options or non-qualified stock options;
(iv) determine the disposition of Awards in the event of a
Participant's divorce or dissolution of marriage;
(v) determine whether Awards will be granted alone or in combination
or in tandem with other Awards; and
(vi) determine whether cash will be paid or Awards will be granted in
replacement of, or as alternatives to, other grants under the
Plan or any other incentive or compensation plan of the
Corporation, a Subsidiary or an acquired business unit; and
(vii) approve in advance each particular Award to be granted hereunder
in a manner which will cause the Award to be exempt from Section
16(b) of the Exchange Act by virtue of Rule 16b-3.
B. Subject to the requirements of applicable law, the Committee may
correct any defect, supply any omission, or reconcile any inconsistency in the
Plan, any Award, or any Award Notice; take any and all other actions it deems
necessary or advisable for the proper administration of the Plan; designate
persons other than members of the Committee to carry out its responsibilities;
and prescribe such conditions and limitations as it may deem appropriate;
except that the Committee may not delegate its authority with regard to the
selection for participation of, or the granting of Awards to, persons under
Section 16 of the Exchange Act. Any determination, decision, or action of the
Committee in connection with the construction, interpretation, administration,
or application of the Plan shall be final, conclusive and binding upon all
persons validly claiming under or through persons participating in the Plan.
C. The Committee may at any time, and from time to time amend or
cancel any outstanding Award, but only with the consent of the person to whom
the Award was granted.
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<PAGE> 14
4. ELIGIBILITY
A. Any Employee is eligible to become a Participant in the Plan.
B. Directors who are not Employees of the Corporation or a
Subsidiary shall receive Awards in accordance with Section 7.
C. Consultants who are not Employees or Directors of the Corporation
shall be eligible to receive Awards in accordance with Section 8.
5. SHARES AVAILABLE
A. Subject to Section 13 of the Plan, the maximum number of shares
of Common Stock available for Award grants (including incentive stock options)
shall be 1,200,000. Shares of Common Stock subject to an unexercised and
expired or terminated Award shall be available for an Award subsequently
granted in accordance with the Plan.
6. TERM
The Plan became effective upon approval of the Plan by the Corporation's
stockholders on March 1, 1993 and shall continue in effect until February 28,
2003.
7. AWARDS TO NON-EMPLOYEE DIRECTORS
Options granted to Directors who are not Employees of the Corporation or
a Subsidiary shall be subject to the following terms:
(i) The exercise price shall be equal to 100% of the Fair Market
Value of the underlying shares of Common Stock on the date of the
grant, payable in accordance with the alternatives stated in
Section 9.B.(ii) of the Plan;
(ii) The term of the options shall not be greater than ten (10) years
from the date of the grant;
(iii) The options shall be exercisable beginning 6 months after the
date of the grant; and
(iv) The options shall be subject to Section 11 of the Plan.
8. AWARDS TO CONSULTANTS
Consultants shall receive Awards in accordance with the following terms:
A. No Awards of incentive stock options shall be made to
Consultants.
B. Awards of non-qualified stock options to such Consultants shall
be subject to the following terms:
(i) The exercise price shall be not less than 100% of the Fair Market
Value of the underlying shares of Common Stock on the date of the
grant, payable in accordance with the alternatives stated in
Sections 9.B(ii) and (iii) of the Plan;
(ii) The term of the options shall not be greater than ten (10) years
from the date of grant;
(iii) The options shall be exercisable beginning 12 months after the
date of the grant; and
(iv) The options shall be subject to Section 11 of the Plan.
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<PAGE> 15
9. STOCK OPTIONS
A. Awards shall be granted in the form of stock options. Stock
options may be incentive stock options within the meaning of Section 422A of
the Code or non-qualified stock options (i.e., stock options which are not
incentive stock options).
B. Subject to Section 9.C. relating to incentive stock options and
to Sections 7 and 8 relating to awards to Directors who are not Employees and
to Consultants, options shall be in such form and contain such terms as the
Committee deems appropriate. While the terms of options need not be identical,
each option shall be subject to the following terms:
(i) The exercise price shall be the price set by the Committee but
may not be less than 100% of the Fair Market Value of the
underlying shares of Common Stock on the date of the grant.
(ii) The exercise price shall be paid in cash (including check, bank
draft, or money order), or at the discretion of the Committee,
all or part of the purchase price may be paid by delivery of the
optionee's full recourse promissory note, delivery of Common
Stock already owned by the Participant for at least six (6)
months and valued at its Fair Market Value, or any combination of
the foregoing methods of payment. In the case of incentive stock
options, the terms of payment shall be determined at the time of
grant.
(iii) Promissory notes given as payment of the exercise price, if
permitted by the Committee, shall contain such terms as set by
the Committee which are not inconsistent with the following: the
unpaid principal shall bear interest at a rate set from time to
time by the Committee; payments of principal and interest shall
be made no less frequently than annually; no part of the note
shall be payable later than ten (10) years from the date of
purchase of the underlying shares of Common Stock; the note must
be negotiable and be secured by collateral, other than the shares
issued upon exercise, having a fair market value at least equal
to the principal amount of the note; and there must be an
obligation to pay independent of collateral.
(iv) The term of an option may not be greater than ten (10) years from
the date of the grant.
(v) Neither a person to whom an option is granted nor such person's
legal representative, heir, legatee or distributee shall be
deemed to be the holder of, or to have any of the rights of a
holder or owner with respect to, any shares of Common Stock
subject to such option unless and until such person has exercised
the option.
C. The following special terms shall apply to grants of incentive
stock options:
(i) Subject to Section 9.C.(iii) of the Plan, the exercise price of
each incentive stock option shall not be less than 100% of the
Fair Market Value of the underlying shares of Common Stock on the
date of the grant.
(ii) No incentive stock option shall be granted to any Employee who
directly or indirectly owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the
Corporation, unless at the time of such grant the exercise price
of the option is at least 110% of the Fair Market Value of the
underlying shares of Common Stock subject to the option and such
option is not exercisable after the expiration of five (5) years
from the date of the grant.
(iii) No incentive stock option shall be granted to a person in his
capacity as a Employee of a Subsidiary if the Corporation has
less than a 50% ownership interest in such Subsidiary.
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<PAGE> 16
(iv) Options shall contain such other terms as may be necessary to
qualify the options granted therein as incentive stock options
pursuant to Section 422A of the Code, or any successor statute.
10. DEFERRAL OF AWARDS
At the discretion of the Committee, payment of an Award or any portion
thereof may be deferred until a time established by the Committee. Deferrals
shall be made in accordance with guidelines established by the Committee to
ensure that such deferrals comply with applicable requirements of the Code and
its regulations. Deferrals shall be initiated by the delivery of a written,
irrevocable election by the Participant to the Committee or its nominee. Such
election shall be made prior to the date specified by the Committee. The
Committee may also (A) credit interest equivalents on cash payments that are
deferred and set the rates of such interest equivalents and (B) credit
dividends equivalents on deferred payments denominated in the form of shares of
Common Stock.
11. EXERCISE OF STOCK OPTIONS UPON TERMINATION OF EMPLOYMENT OR SERVICES.
A. Options granted to Participants other than Consultants shall be
exercisable upon the Participant's termination of service within the following
periods only. The definition of termination of service applicable to
Consultants shall be defined and determined by the Committee in its sole
discretion. Subject to Section 19, stock options granted to Participants other
than Consultants may permit the exercise of options upon the Participant's
termination of employment within the following periods, or such shorter periods
as determined by the Committee at the time of grant:
(i) If on account of death, within twelve (12) months of such event
by the person or persons to whom the Participant's rights pass by
will or the laws of descent or distribution.
(ii) If on account of retirement (as defined from time to time by
Corporation policy), stock options may be exercised within three
(3) months of such termination.
(iii) If on account of resignation, options may be exercised within one
(1) month of such termination.
(iv) If for cause (as defined from time to time by Corporation
policy), no unexercised option shall be exercisable to any extent
after termination.
(v) If on account of disability or leave of absence for the purpose
of serving the government or the country in which the principal
place of employment of the Participant is located, either in a
military or a civilian capacity, or for such other purpose or
reason as the Committee may approve subsequent to the time of
grant, a Participant shall not be deemed during the period of any
such absence alone to have terminated his service, except as the
Committee may otherwise expressly provide.
(vi) If for any reason other than death, retirement, resignation,
cause, or disability, options may be exercised within three (3)
months of such termination.
B. An unexercised option shall be exercisable only to the extent
that such option was exercisable on the date the Participant's employment or
service terminated. Notwithstanding the foregoing, and except as provided in
Section 11.A. above, terms relating to the exercisability of options may be
amended by the Committee before or after such termination, except in respect to
options granted under Section 7.
C. In no case may an unexercised option be exercised to any extent
by anyone after expiration of its term.
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<PAGE> 17
12. NONASSIGNABILITY
The rights of a Participant under the Plan or under an Award shall not
be assignable by such Participant, by operation of law or otherwise, except by
will or the laws of descent and distribution. During the lifetime of the
Participant to whom a stock option is granted, such Participant alone may
exercise the stock option. No Participant may create a lien on any funds,
securities, rights or other property to which such Participant may have an
interest under the Plan, or which is held by the Corporation for the account of
the Participant under the Plan.
13. ADJUSTMENT OF SHARES AVAILABLE
The Committee shall make appropriate and equitable adjustments in the
shares of Common Stock available for future Awards, the number of shares of
Common Stock covered by unexercised, unvested or unpaid Awards and the exercise
prices of Awards upon the subdivision of the outstanding shares of Common
Stock; the declaration of a dividend payable in Common Stock; the declaration
of a dividend payable in a form other than Common Stock in an amount that has a
material effect on the price of the shares of Common Stock; the combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a lesser number of shares of Common Stock; a recapitalization;
or a similar event.
14. PAYMENT OF WITHHOLDING TAXES
As a condition to receiving or exercising an Award, as the case may be,
the Participant shall pay to the Corporation or any employer Subsidiary the
amount of all applicable Federal, state, local and foreign taxes required by
law to be paid or withheld relating to receipt or exercise of the Award.
Alternatively, the Corporation may withhold shares of Common Stock with an
aggregate Fair Market Value equal to such withholding taxes, from any Award in
shares of Common Stock, to the extent the withholding is required by law. The
Corporation also may deduct such withholding taxes from any Award paid in cash.
15. AMENDMENTS
The Board of Directors shall have the authority to amend the Plan from
time to time without Shareholder approval, provided however, that the adoption
of any such amendment shall be permitted by Rule 16b-3. Rights and obligations
under any Award granted before any amendment of the Plan shall not be
materially altered or impaired adversely by such amendment, except with consent
of the person to whom the Award was granted.
16. REGULATORY APPROVALS AND LISTINGS
Notwithstanding any other provision in the Plan, the Corporation shall
have no obligation to issue or deliver certificates for shares of Common Stock
under the Plan prior to (A) obtaining approval from any governmental agency
which the Corporation determines is necessary or advisable, (B) admission of
such shares to listing on the stock exchange on which the Common Stock may be
listed, and (C) completion of any registration or other qualification of such
shares under any state or Federal law or ruling of any governmental body which
the Corporation determines to be necessary or advisable.
17. NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS
Participation in the Plan shall not give any Employee any right to
remain in the employ of the Corporation or any Subsidiary. Further, the
adoption of this Plan shall not be deemed to give any Employee or other
individual the right to be selected as a Participant or to be granted an Award.
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<PAGE> 18
18. NO RIGHT, TITLE, OR INTEREST IN CORPORATION ASSETS
No Participant shall have any rights as a shareholder of the Corporation
until he acquires an unconditional right under an Award to have shares of
Common Stock issued to him.
19. SPECIAL PROVISION PERTAINING TO PERSONS SUBJECT TO SECTION 16
A. Notwithstanding any other item of this Plan, the following shall
apply to persons subject to Section 16 of the Exchange Act who receive an Award
prior to February 14, 1996, except in the case of death or disability:
(i) Restricted stock or other equity securities (within the
meaning used in Rule 16b-3 of the Exchange Act or any
successor rule) offered pursuant to this Plan must be held
for at least six (6) months from the date of grant; and
(ii) At least six (6) months must elapse from the date of
acquisition of any stock option, Performance Unit,
Performance Share, stock appreciation right or other
derivative security (within the meaning used in Rule 16b-3
of the Exchange Act or any successor rule) issued pursuant
to the Plan to the date of disposition of such derivative
security (other than upon exercise or conversion) or its
underlying equity security.
B. The restrictions contained in paragraphs A(i) and (ii) of this
Section 22 shall also apply to any Award made on or after February 14, 1996, to
a person subject to Section 16 of the Exchange Act without the advance approval
of the Committee in the manner described in paragraph 3A(vii) above. Such
restrictions shall be applied and construed in a manner which will cause the
Award to be exempt from Section 16(b) of the Exchange Act by virtue of Rule
16b-3.
20. INDEMNIFICATION
In addition to such other rights of indemnification as they may have as
Directors or otherwise, the members of the Board of Directors or the Committee
administering the Plan shall be indemnified by the Corporation against the
reasonable expenses, including attorneys' fees actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or
in connection with any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or in connection
with the Plan or any Award granted thereunder, and against all amounts paid by
them in settlement thereof (provided such settlement is approved by legal
counsel selected by the Corporation) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
member is liable for negligence or misconduct in the performance of his duties;
provided that within 60 days after institution of any such action, suit or
proceeding, the member shall in writing offer the Corporation the opportunity,
at its own expense, to handle and defend the same.
21. SAVINGS PROVISION
The amendment and restatement of the Plan as provided herein, effective
February 14, 1997, shall not adversely affect the rights of Participants to
whom an Award was granted under the Plan prior to such amendment and
restatement.
22. GOVERNING LAW
The Plan shall be governed by and construed in accordance with the laws
of the State of Colorado.
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<PAGE> 19
SPORT-HALEY, INC.
Annual Meeting of Shareholders to be held on February 14, 1997
KNOW ALL MEN BY THESE PRESENTS: that the undersigned shareholder of
Sport-Haley, Inc. (the "Company") hereby constitutes and appoints Robert G.
Tomlinson, as attorney and proxy, with the power to appoint his substitute, and
hereby authorizes him to represent and vote, as designated below, all of the
shares of Common Stock of the Company which the undersigned is entitled to vote
at the Annual Meeting of Shareholders of the Company to be held February 14,
1997, and at any and all adjournments thereof with respect to the matters set
forth below and described in the Notice of Annual Meeting of Shareholders and
Proxy Statement dated January 3, 1997, receipt of which is acknowledged.
1. To consider and act upon a proposal to elect Messrs. Robert G.
Tomlinson, Robert W. Haley, Mark J. Stevenson, Ronald J. Norick and
James H. Everest as directors to hold office for one-year terms or
until their successors are elected and qualified.
[ ] FOR ELECTION OF ALL NOMINEES (Except as shown below)
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
Instructions: To withhold authority to vote for any individual
nominee, strike through the nominee's name below
Robert G. Tomlinson
Robert W. Haley
Mark J. Stevenson
Ronald J. Norick
James H. Everest
2. To consider and act upon a proposal to approve amendments to, and a
restatement of, the Company's 1993 Stock Option Plan to (i) permit the
issuance of an additional 250,000 shares of Common Stock pursuant to the
Plan, and (ii) to simplify administration of the Plan in accordance with
revisions to Section 16 of the Securities Exchange Act of 1934.
[ ] FOR PROPOSAL
[ ] AGAINST PROPOSAL
[ ] ABSTAIN
3. To ratify the appointment of Levine Hughes & Mithuen, Inc. as auditors
of the Company.
[ ] FOR RATIFICATION
[ ] AGAINST RATIFICATION
[ ] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any and all
adjournments thereof.
[ ] AUTHORIZED TO VOTE
[ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder(s). IF NO INDICATION IS MADE, THIS
PROXY WILL BE VOTED FOR THE NOMINEES LISTED AND FOR PROPOSALS 2 AND 3 AND
THE PROXY HOLDERS WILL VOTE ON ANY PROPOSAL UNDER 4 IN THEIR DISCRETION AND IN
THEIR BEST JUDGMENT.
Please mark, date, and sign exactly as your name appears on your stock
certificate. When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person. If this Proxy is not dated, the Proxy
will be deemed to bear the date the form was mailed to the shareholder.
Dated:
--------------------------- ------------------------------------
Signature
Dated:
--------------------------- ------------------------------------
Signature if held jointly
