SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ___)*
SPORT-HALEY, INC.
- -----------------------------------------------------------------
(Name of Issuer)
Common Stock, no par value
- -----------------------------------------------------------------
(Title of Class of Securities)
848925103
- -----------------------------------------------------------------
(CUSIP Number)
J. Keith Benedict
1601 Elm Street, Suite 4000
Dallas, Texas 75201
(214) 720-1600
- -----------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 22, 1999
(Date of Event Which Requires Filing
of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box. [ ]
Note: Schedules filed in paper format shall include a
signed original and five copies of the schedule, including all
exhibits. See Rule 13d-7 for the parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a
Reporting Person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter the disclosures provided
in a prior cover page.
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
CUSIP NUMBER 848925103
(1) Name of Reporting Persons. Catalyst Master Fund, L.P.
I.R.S. Identification
Nos. of Above Persons (entities only) N/A
(2) Check the Appropriate Box if a (a) [ ]
Member of a Group (see instructions) (b) [X]
(3) SEC Use Only
(4) Source of Funds (see instructions) WC
(5) Check if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization
Number of Shares (7) Sole Voting 340,785
Power
Beneficially
(8) Shared Voting 0
Owned by Each Power
Reporting Person (9) Sole Dispositive 340,785
Power
with:
(10) Shared Dispositive 0
Power
(11) Aggregate Amount Beneficially Owned 345,785
by Each Reporting Person
(12) Check if the Aggregate Amount in [X]
Row (11) Excludes Certain Shares (see instructions)
(13) Percent of Class Represented by 9.0%
Amount in Row (11)
(14) Type of Reporting Person (see instructions) PN
-2-
<PAGE>
CUSIP NUMBER 848925103
(1) Name of Reporting Persons Newcastle Partners, L.P.
I.R.S. Identification
Nos. of Above Persons (entities only)
(2) Check the Appropriate Box if a (a) [ ]
Member of a Group* (b) [X]
(3) SEC Use Only
(4) Source of Funds (see instructions) WC
(5) Check if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization
Number of Shares (7) Sole Voting 5,000
Power
Beneficially
(8) Shared Voting 0
Owned by Each Power
Reporting Person (9) Sole Dispositive 5,000
Power
with:
(10) Shared Dispositive 0
Power
(11) Aggregate Amount Beneficially Owned 345,785
by Each Reporting Person
(12) Check if the Aggregate Amount in [X]
Row (11) Excludes Certain Shares (see instructions)
(13) Percent of Class Represented by 9.0%
Amount in Row (11)
(14) Type of Reporting Person (see instructions) PN
-3-
<PAGE>
SCHEDULE 13D
------------
Filed Pursuant to Rule 13d-1
ITEM 1. Security and Issuer.
-------------------
This Statement on Schedule 13D (this "Statement") relates to
common stock, no par value (the "Common Stock"), of SPORT-HALEY,
INC., a Colorado corporation (the "Issuer"). The principal
executive offices of the Issuer are located at 4600 E. 48th
Avenue, Denver, Colorado 80216.
ITEM 2. Identity and Background.
-----------------------
(a) Pursuant to Rule 13d-1(a) of
Regulation 13D of the General Rules and
Regulations Promulgated under the Securities
Exchange Act of 1934, as amended (the "Act"), this
Statement is hereby filed jointly by Catalyst
Master Fund, L.P. ("Catalyst") and Newcastle
(collectively the "Reporting Persons").
Additionally, pursuant to Instruction C to
Schedule 13D, information is included herein with
respect to the following persons (collectively,
the "Controlling Persons"): Catalyst GP, Ltd.,
("Catalyst GP"), HW Capital, L.P. ("HW Capital"),
HW Capital G.P., L.L.C. ("HW Capital LLC"), Clark
K. Hunt ("Hunt"), Mark E. Schwarz ("Schwarz") and
Barrett Wissman ("Wissman"). The Reporting
Persons and the Controlling Persons are sometimes
hereinafter collectively referred to as the
"Item 2 Persons." The Reporting Persons have
included as Appendix A to this Statement on
Schedule 13D an agreement in writing that this
Statement is filed on behalf of each of them.
(b) and (c) REPORTING PERSONS
Catalyst is a Cayman Islands exempted limited
partnership, the principal business of which is
the purchase, sale, exchange, acquisition and
holding of investment securities. The principal
address of Catalyst, which also serves as its
principal office, is Walker House, Mary Street,
P.O. Box 265GT, George Town, Grand Cayman, Cayman
Islands. Newcastle is a Texas limited
partnership, the principal business of which is
the purchase, sale, exchange, acquisition and
holding of investment securities. The principal
address of Newcastle, which also serves as its
principal office, is 4514 Cole Avenue, Suite 600,
Dallas, Texas 75205.
The names, business addresses, principal
occupations or employments and citizenships of
each officer of the Reporting Persons are set
forth on Schedule A attached hereto and
incorporated herein by reference.
-4-
<PAGE>
CONTROLLING PERSONS
Pursuant to Instruction C to Schedule 13D of
the Act, information with respect to the
Controlling Persons is set forth below. The
principal addres of Catalyst GP, which also serves
as its principal office, is Walker House, Mary
Street, P.O. Box 265GT, George Town, Grand Cayman,
Cayman Islands. The principal address of each
other Controlling Person, which also serves as
such person's principal office, is 1601 Elm
Street, Suite 4000, Dallas, Texas 75201.
Catalyst:
--------
Catalyst is a Cayman Islands exempted limited
partnership, the principal business of which is
the purchase, sale, exchange, acquisition and
holding of investment securities.
Catalyst GP is a Cayman Islands corporation, the
principal business of which is serving as the
general partner of Catalyst and activities related
thereto.
HW Capital owns 100% of Catalyst GP. HW
Capital is a Texas limited partnership, the
principal business of which is acting as an
advisor to investment funds and activities related
thereto.
HW Capital LLC is a Texas limited liability
company, the principal business of which is
serving as the general partner of HW Capital and
activities related thereto. Hunt and Wissman are
the Managers of HW Capital LLC.
Newcastle:
---------
Schwarz is the sole general partner of
Newcastle.
(d) and (e) During the last five (5) years, no
Item 2 Person has been convicted in any criminal
proceeding (excluding traffic violations or
similar misdemeanors) and no Item 2 Person was a
party to a civil proceeding of a judicial or
administrative body of competent jurisdiction such
that, as a result of such proceeding, any Item 2
Person was or is subject to a judgment, decree of
final order enjoining future violations of, or
prohibiting or mandating activities subject to,
federal or state securities laws or finding any
violation with respect to such laws.
(f) Hunt, Schwarz and Wissman are citizens
of the United States.
-5-
<PAGE>
ITEM 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
As reported on a Statement on Schedule 13D filed
by Sandera Partners, L.P. ("Sandera") and Newcastle on
September 7, 1999, Sandera and Newcastle had acquired,
in the aggregate, beneficial ownership of 240,285
shares of the Common Stock of the Issuer. Effective
September 8, 1999, Sandera contributed, as a capital
contribution, cash and marketable securities (including
all of its shares of Common Stock) to Catalyst in
exchange for a limited partnership interest therein.
As previously reported, Newcastle acquired a total of
11,500 shares of Common Stock for a total purchase
price of $133,721.25, or an average price of $11.63 per
share.
As of the date hereof, Catalyst has acquired a
total of 100,500 additional shares of Common Stock
through a series of open market transactions for a
total purchase price of $482,562.75, or an average
price of $4.80 per share. Newcastle has not acquired
any additional shares of Common Stock. Newcastle has
sold an aggregate of 6,000 shares of Common Stock on
the open market within the last 60 days for aggregate
proceeds totaling $29,638.97.
The funds used to acquire these shares of Common
Stock were derived from the Reporting Persons "working
capital" accounts. As used herein, the term "working
capital" includes income from the business operations
of the entity plus sums borrowed from, among other
sources, banks to operate such business in general.
ITEM 4. Purpose of Transaction.
----------------------
The Reporting Persons originally acquired
beneficial ownership of their shares of Common Stock
for the purpose of investment. The Reporting Persons
intend, however, to review continuously their
investment in the Issuer and may in the future
determine to: (i) acquire additional securities of the
Issuer through open market purchases, private
agreements or otherwise, (ii) dispose of all or a
portion of the Common Stock of the Issuer owned by
them, (iii) consider plans or proposals which would
relate to or result in: (a) the acquisition by any
person of additional securities of the Issuer; (b) an
extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or
any of its subsidiaries; (c) the sale or transfer of a
material amount of assets of the Issuer or any of its
subsidiaries; (d) any change in the board of directors
or management of the Issuer, including any plans or
proposals to change the number or terms of directors or
to fill any existing vacancies of the board of
directors of the Issuer; (e) any material change in the
present capitalization or dividend policy of the
Issuer; (f) any other material change in the Issuer's
business or corporate structure; (g) changes in the
Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the
acquisition of control of the Issuer by any person; (h)
any other action similar to those enumerated above.
The Reporting Persons also reserve the right to take
other
-6-
<PAGE>
actions to influence the management of the Issuer
should they deem such actions appropriate.
ITEM 5. Interest in Securities of the Issuer.
------------------------------------
(a) The following table provides the
aggregate number and percentage of Common Stock
beneficially owned by the Reporting Persons on
September 30, 1999 (based on 3,854,552 shares of
Common Stock outstanding as reported on the
Issuer's Form 10-K for the year ended June 30,
1999).
Sandera Newcastle Total
------- --------- -----
340,785 5,000 345,785
CONTROLLING PERSONS
Each of Catalyst GP, as the general partner of
Catalyst, HW Capital, as the 100% holder of
Catalyst, HW Capital LLC, as the general partner
of HW Capital, and Hunt and Wissman, as the
Managers of HW Capital LLC, may be deemed to be
the beneficial owners of the Common Stock held by
Catalyst pursuant to Rule 13d-3 of the Act,
although each of the foregoing disclaims
beneficial ownership thereof.
In his capacity as the general partner of
Newcastle, Schwarz may be deemed to be the
beneficial owner of the Common Stock held by
Newcastle pursuant to Rule 13d-3 of the Act,
although he disclaims beneficial ownership
thereof.
(b) REPORTING PERSONS
Catalyst would have the sole power to vote or to
direct the vote and to dispose or to direct the
disposition of the Common Stock held by it.
Newcastle would have the sole power to vote or to
direct the vote and to dispose or to direct the
disposition of the Common Stock held by it.
CONTROLLING PERSONS
Catalyst GP, as the general partner of Catalyst,
HW Capital, as the 100% holder of Capital, HW
Capital LLC, as the general partner of HW Catalyst
GP, and Hunt and Wissman, as the Managers of HW
Capital LLC, would have the sole power to vote or
to limit the vote and to dispose or to direct the
disposition of the Common Stock held by Catalyst,
although each of the foregoing disclaims
beneficial ownership thereof.
-7-
<PAGE>
Schwarz, as the general partner of Newcastle,
would have the sole power to vote or to direct the
vote and to dispose or to direct the disposition
of the Common Stock held by Newcastle, although he
disclaims beneficial ownership thereof.
(c) Newcastle has sold an aggregate of 6,000
shares of Common Stock on the open market within
the last 60 days for aggregate proceeds totaling
$29,638.37.
(d) Not applicable.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, or Understandings or
----------------------------------------------
Relationships with Respect to Securities of the Issuer.
------------------------------------------------------
Pursuant to that certain Assignment and Assumption
Agreement by and between Sandera and Catalyst dated as
of September 8, 1999 and attached as Exhibit 1 hereto,
Sandera contributed all of its shares of Common Stock
to Catalyst in exchange for a limited partnership
interest therein.
Pursuant to that certain Confidentiality and
Nondisclosure Agreement dated May 6, 1999 by and
between Sandera Capital Management, L.P. ("SCM") and
Donaldson, Lufkin and Jenrette, SCM agreed that neither
it nor any of its affiliates would acquire shares of
Common Stock. Pursuant to that certain Letter
Agreement dated August 2, 1999 by and between the
Issuer and SCM, the Issuer agreed to allow SCM and/or
its affiliates to acquire up to 9.9% of the outstanding
Common Stock.
ITEM 7. Material to be Filed as Exhibits.
--------------------------------
EXHIBIT TITLE
------- -----
1 Assignment and Assumption Agreement
dated as of September 8, 1999 by and between
Sandera Partners, L.P. and Catalyst Master Fund,
L.P.
-8-
<PAGE>
After reasonable inquiry, and to the best of their knowledge
and belief, the undersigned certify that the information set
forth in this Statement is true, complete and correct.
Date: October 4, 1999
CATALYST MASTER FUND, L.P.
By: Catalyst GP, Ltd.,
its general partner
By: /s/ J. KEITH BENEDICT
--------------------------------
J. Keith Benedict, Director
NEWCASTLE PARTNERS, L.P.
By: /s/ MARK E. SCHWARZ
-------------------------------------
Mark E. Schwarz, its general partner
Attention: Intentional misstatements or
omissions of fact constitute Federal
criminal violations (See 18 U.S.C. 1001).
-9-
<PAGE>
Appendix A
------------
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k) under the Securities Exchange
Act of 1934, as amended, the persons named below agree to the
joint filing on behalf of each of them of a Statement on Schedule
13D (including amendments thereto) with respect to the Common
Stock of Sport-Haley, Inc. This Joint Filing Agreement shall be
included as an exhibit to such filing. In evidence thereof, each
of the undersigned, being duly authorized where appropriate,
hereby executes this Joint Filing Agreement as of the 1st day of
October, 1999.
CATALYST MASTER FUND, L.P.
By: Catalyst GP, Ltd.,
its general partner
By: /s/ J. KEITH BENEDICT
---------------------------------
J. Keith Benedict, Director
NEWCASTLE PARTNERS, L.P.
By: /s/ MARK E. SCHWARZ
--------------------------------------
Mark E. Schwarz, its general partner
-10-
EXHIBIT 1
TRANSFER AUTHORIZATION
LETTER OF AUTHORIZATION FOR TRANSFER OF ASSETS FROM EXISTING
ACCOUNT TO NEW ENTITY FOR CONVERSION TO MASTER - FEEDER
STRUCTURE.
The parties to this Assignment and Assumption Agreement are
Sandera Partners, L.P. ("Transferor"), Catalyst Master Fund, L.P.
("Transferee") and Bear, Stearns Securities Corp. ("BSSC").
Transferor is a client of any or all of Bear, Stearns & Co.,
BSSC, Bear Stearns International, Ltd. ("BSIL"), or a Broker-
Dealer that introduces Transferor's account to BSSC, pursuant to
which BSSC clears Transferor's securities, carries Transferor's
account(s), and may finance Transferor's positions (together, the
"Services"). Transferor is also a party to other agreements with
BSSC including but not limited to a certain Professional Account
Agreement (collectively, "Customer Agreements") governing its
account held at BSSC.
Transferee is a client of any or all of Bear, Stearns & Co.,
BSSC, Bear Stearns International, Ltd. ("BSIL"), or a Broker-
Dealer that introduces Transferee's account to BSSC, pursuant to
which BSSC clears Transferee's securities, carries Transferee's
account(s), and may finance Transferee's positions (together, the
"Services"). Transferee is also a party to other agreements with
BSSC including but not limited to a certain Professional Account
Agreement (collectively, "Customer Agreements") governing its
account held at BSSC.
Effective September 8, 1999 (the "Effective Time").
Transferor hereby transfers to Transferee Transferor's right,
title and interest in and to and all obligations and liabilities
indicated below, and any representations, liabilities, and
obligations between Transferor and BSSC (collectively, the
"Obligations") connected with this transfer. Transferee hereby
accepts the foregoing transfer and assumes all of the
Transferor's Obligations to BSSC, its successors and assigns,
existing prior to at the Effective Time for this transfer.
Transferor and Transferee each represents, covenants and
warrants to BSSC as follows: (i) This Transfer and the
performance contemplated hereunder has been fully authorized and
duly executed and delivered by it and constitutes a legal, valid
and binding obligation, enforceable in accordance with its terms;
and (ii) The execution, delivery and performance contemplated
hereunder will not violate any provision of any law applicable to
it, its charter or by-laws, any order of any court or agency or
other governmental instrumentality, or any agreement to which it
is a party or by which any of its properties are bound.
Transferor and Transferee hereby jointly and severally agree
to indemnify and hold harmless BSSC from and against any loss,
liability, damage, claim, cost or expenses (including fees and
expenses of legal counsel) arising out of or incurred in
connection with the effectuation of this Transfer.
-1-
<PAGE>
The terms of this Transfer Authorization shall be governed
by and construed in accordance with the laws of the State of New
York, without giving effect to any conflicts of law principles
thereof. Any dispute concerning this Transfer Authorization
shall be submitted to binding arbitration before the New York
Stock Exchange, Inc. unless the transaction which gives rise to
the dispute was effected in another U.S. market which provides
arbitration facilities, in which case it shall be settled by
arbitration under such facilities.
The parties hereto shall signify their consent to the foregoing
by executing below where indicated.
Transferor:
Sandera Partners, L.P.
By: /s/ MARK SCHWARZ
-------------------------------
Mark Schwarz, V.P.
Transferee:
Catalyst Master Fund, L.P.
By: /s/ J.KEITH BENEDICT
--------------------------------
J. Keith Benedict, Director, Catalyst GP, Ltd.
its General Partner
Accepted And Agreed To:
BEAR, STEARNS SECURITIES CORP.
By: __________________________
