<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(X ) Filed by the Registrant
( ) Filed by a Party other than the Registrant
Check the appropriate box:
( ) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
(x ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to (section mark)240.14a-11(c) or
(section mark)240.14a-12
Speizman Industries, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement If Other Than Registrant)
PAYMENT OF FILING FEE (Check the appropriate box):
(X ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: *
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
(Set forth the amount on which the filing fee is calculated and state how
it was determined)
( ) Fee previously paid with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: $
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
SPEIZMAN INDUSTRIES, INC.
508 West Fifth Street
Charlotte, North Carolina 28202
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 16, 1995
To the Stockholders of Speizman Industries, Inc.:
The Annual Meeting of Stockholders of Speizman Industries, Inc. (the
"Company") will be held on Thursday, November 16, 1995, at 11:00 a.m., at the
offices of the Company, 508 West Fifth Street, Charlotte, North Carolina for the
following purposes:
1. To elect a Board of Directors of five directors to serve until the
next annual meeting of stockholders and until their successors are
elected and qualified,
2. To approve the Speizman Industries, Inc. Nonqualified Stock Option
Plan,
3. To approve the Speizman Industries, Inc. Stock Option Plan for
Non-Employee Directors,
4. To ratify the appointment of BDO Seidman, LLP as the Company's
independent certified public accountants for the fiscal year ending
June 29, 1996 and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record as of the close of business on September 29,
1995 will be entitled to notice of and to vote at the meeting or any adjournment
thereof.
By order of the Board of Directors,
JOSEF SKLUT
SECRETARY
Charlotte, North Carolina
October 17, 1995
YOUR VOTE IS IMPORTANT
REGARDLESS OF WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING OF
STOCKHOLDERS, YOU ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ACCOMPANYING
PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. NO POSTAGE IS REQUIRED
FOR MAILING IN THE UNITED STATES. YOUR PROMPT RESPONSE WILL ASSURE THAT A QUORUM
IS PRESENT AT THE MEETING AND SAVE THE COMPANY THE EXPENSE OF FURTHER
SOLICITATION OF PROXIES.
<PAGE>
SPEIZMAN INDUSTRIES, INC.
508 West Fifth Street
Charlotte, North Carolina 28202
PROXY STATEMENT
PROXY SOLICITATION AND GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Speizman Industries, Inc., a Delaware
corporation (the "Company"), for use at the Annual Meeting of Stockholders of
the Company to be held on November 16, 1995, at 11:00 a.m., at the offices of
the Company, 508 West Fifth Street, Charlotte, North Carolina, and at any
adjournment thereof (the "Meeting"). This Proxy Statement and the enclosed proxy
were first mailed to the Company's stockholders on or about October 17, 1995.
Only stockholders of record at the close of business on September 29, 1995
(the "Record Date"), will be entitled to notice of and to vote at the Meeting.
On the Record Date, 3,208,599 shares of the Company's common stock, par value
$.10 per share ("Common Stock"), having one vote each, were issued and
outstanding.
The accompanying proxy is for use at the Meeting if a stockholder does not
attend the Meeting in person or wishes to have his shares voted by proxy even if
he attends the Meeting. All shares of Common Stock represented at the Meeting by
valid proxies received pursuant to this solicitation and not revoked before they
are exercised will be voted in accordance with the directions given therein. If
no such directions are given, the shares of Common Stock so represented will be
voted FOR the nominees for election as directors named in this Proxy Statement,
FOR the approval of the Speizman Industries, Inc. Nonqualified Stock Option
Plan, FOR the approval of the Speizman Industries, Inc. Stock Option Plan for
Non-Employee Directors and FOR the ratification of BDO Seidman, LLP as the
Company's independent certified public accountants for the fiscal year ending
June 29, 1996. Any stockholder giving a proxy may revoke it at any time before
it is exercised by filing with the Secretary of the Company a written revocation
or an executed proxy having a later date, or by attending the Meeting and
electing to vote in person.
The Company will bear the entire cost of the solicitation of proxies,
including the reimbursement of brokers, banks and other record holders of shares
of Common Stock for their expenses in forwarding proxy materials to the
beneficial owners of such shares. Following the original solicitation of proxies
by mail, proxies may be solicited by officers and employees of the Company by
telephone, facsimile, telegraph or in person. Such officers and employees will
not be additionally compensated for soliciting proxies. In addition, the Company
has retained Corporate Investor Communications, Inc. to assist in the
solicitation of proxies for a fee of approximately $4,000 plus reimbursement of
expenses.
A majority of the outstanding shares of Common Stock must be represented at
the Meeting in person or by proxy to constitute the quorum needed for the
transaction of business. Shares that are withheld as to voting with respect to
one or more of the nominees for election as a director and abstentions will be
counted in determining the existence of a quorum. Shares held of record by a
broker or other nominee that are not voted with respect to any matter will not
be counted for such purpose.
A plurality of the votes cast by the holders of the shares of Common Stock
present in person or represented by proxy at the Meeting is required for the
election of directors. The approval of the Company's Nonqualified Stock Option
Plan and Stock Option Plan for Non-Employee Directors and the ratification of
the appointment of independent auditors each require the affirmative vote of the
holders of a majority of such shares. With respect to the election of directors,
votes may be cast in favor of, or withheld as to, one or more of the nominees
for election as director. With respect to the other matters to be voted on, the
holders of the shares of Common Stock present in person or represented by proxy
at the Meeting may cast votes in favor of or against a matter or may abstain
from voting. Votes that are withheld in the election of directors will have no
effect on the outcome of such election. Abstentions will be counted as shares
present and entitled to vote on the other matters to be voted on and, therefore,
will be treated as a vote against such matters. Shares held of record by a
broker or other nominee that are not voted with respect to one or more matters
(broker non-votes) will have no effect on the vote with respect to any such
matter. Votes at the Meeting will tabulated by the Company's transfer agent as
independent voting inspector.
ALL REFERENCES IN THIS PROXY STATEMENT TO FISCAL YEARS ARE TO THE COMPANY'S
52- OR 53-WEEK FISCAL YEAR ENDING ON THE SATURDAY CLOSEST TO JUNE 30. FISCAL
1992, 1994 AND 1995 EACH CONTAINED 52 WEEKS AND ENDED ON JUNE 27, 1992, JULY 2,
1994 AND JULY 1, 1995, RESPECTIVELY. FISCAL 1993 CONTAINED 53 WEEKS AND ENDED ON
JULY 3, 1993. FISCAL 1996 CONTAINS 52 WEEKS AND WILL END ON JUNE 29, 1996.
1
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ELECTION OF DIRECTORS
The Board of Directors has nominated the five persons named below for
election as directors at the Meeting to serve until the next annual meeting of
stockholders and until their successors are elected and qualified. The Company's
Bylaws provide that the Company's Board of Directors shall consist of one or
more directors and that the Board of Directors has the power to determine the
number of directors (when not determined by the stockholders) and to fill
vacancies on the Board of Directors. The number of directors is presently fixed
at five. Each of the five nominees named below is presently serving as a
director and has consented to have his name appear as a nominee in this Proxy
Statement and to serve as a director of the Company if elected. Should any
nominee become unable to serve as a director, shares of Common Stock represented
at the Meeting by valid proxies may be voted for the election of such substitute
nominee(s) as may be designated by the Board of Directors. The Board of
Directors has no reason to believe that any nominee will be unable to serve as a
director.
The following information is provided concerning the five nominees for
election as directors of the Company:
Robert S. Speizman Mr. Speizman, 55, has served as
President of the Company since November
1976. From 1969 to October 1976, Mr.
Speizman served as Executive Vice
President of the Company. Mr. Speizman
has been a director of the Company since
1967 and Chairman of the Board of
Directors since July 1987.
Josef Sklut Mr. Sklut, 66, has served as Vice
President-Finance of the Company since
1978, as Secretary of the Company since
1977, as Treasurer of the Company since
1969 and as a director of the Company
since 1977.
Steven P. Berkowitz Mr. Berkowitz, 54, has served as a
director of the Company since February
1992. Mr. Berkowitz has served as
President and a director of the Center
for Contemporary Art, Ltd., an art
gallery owned by him, since September
1987. In addition, Mr. Berkowitz has
served as Chairman of the Board of
Directors of the Marwen Foundation, a
nonprofit foundation, since December
1987. From 1968 to September 1988, Mr.
Berkowitz served as Chief Executive
Officer, President and Chairman of the
Board of Directors of Silvestri
Corporation, a company owned by him that
imported and distributed decorative
accessories and Christmas decorations.
William Gorelick Mr. Gorelick, 60, has served as a
director of the Company since March
1993. From May 1956 to June 1991, Mr.
Gorelick was employed by Capitol Finance
Group, Inc., a consumer finance company,
and its subsidiary companies, and served
these companies in various capacities
including as a director, Treasurer,
Secretary, Vice President and President.
Since April 1991, Mr. Gorelick has
served as President and/or a director of
CPP Holdings, Inc. and its subsidiary
company, Capitol Premium Plan, Inc., an
insurance premium finance company in
which he has a substantial interest.
Since November 1991, Mr. Gorelick has
held a substantial interest in, and has
served as President, Treasurer, director
and/or partner of, Title Insurance
Services Corporation, Atlantic Title
Insurance Company and Atlantic Assurance
Company. These companies underwrite
title insurance policies and sell
appraisal and abstract services to
consumer lenders. In addition, Mr.
Gorelick is a partner in several real
estate partnerships.
Scott C. Lea Mr. Lea, 63, has served as a director of
the Company since May 1993. Mr. Lea has
been a private investor since January
1992. From September 1974 to December
1991, Mr. Lea was employed by Rexham
Industries (formerly Rexham Corp.), a
manufacturer of packaging, technical
coatings and laminates. While at Rexham,
Mr. Lea served in various capacities,
including as President, Chief Executive
Officer and a director from September
1974 to April 1989, and as Chairman of
the Board of Directors from April 1989
to December 1991. Mr. Lea is also a
director of Lance, Inc.
All directors of the Company are elected annually to serve until the next
annual stockholders' meeting following their election and until their successors
are elected and qualified. The Company's executive officers are elected annually
by the Board of Directors to serve until their successors are elected and
qualified. The Company is not a party to an employment agreement with either of
its executive officers. There are no family relationships among any of the
directors and executive officers of the Company.
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<PAGE>
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
In fiscal 1995, the Board of Directors held four meetings and took action
by unanimous written consent four times. The Board of Directors presently has an
Audit Committee, a Compensation Committee and a Stock Option Committee, but has
no standing nominating committee. The Audit Committee is responsible for
recommending independent auditors, reviewing with the independent auditors the
scope and results of the audit engagement, establishing and monitoring the
Company's financial policies and control procedures, reviewing and monitoring
the provision of non-audit services by the Company's independent auditors and
reviewing all conflict of interest situations. The Compensation Committee is
responsible for determining the salaries, bonuses and all other compensation,
other than pursuant to the Company's equity-based plans, of the executive
officers of the Company. The Stock Option Committee is responsible for
administering the Company's equity-based plans including, to the extent
applicable or allowable with regard to a plan or an option thereunder, the
designation of person to whom options may be granted, the type and time of an
option and the number of shares of Common Stock subject thereto. The Stock
Option Committee, the Audit Committee and the Compensation Committee are each
presently comprised of Mr. Berkowitz, Mr. Gorelick and Mr. Lea. From September
1993 to September 1994, Mr. Speizman was a member of the Compensation Committee
and Mr. Sklut was a member of the Audit Committee (Mr. Speizman and Mr. Sklut
resigned from these committees in September 1994). Mr. Lea is the Chairman of
the Audit Committee, Mr. Berkowitz is the Chairman of the Compensation Committee
and Mr. Gorelick is Chairman of the Stock Option Committee. In fiscal 1995, the
Stock Option Committee and the Compensation Committee each held one meeting, and
the Audit Committee held two meetings and took action by unanimous written
consent one time. In fiscal 1995, all of the directors attended all of the
meetings of the Board of Directors and the above committees on which they served
except for Mr. Berkowitz, who was unable to attend one meeting of the Board of
Directors and one meeting of the Audit Committee.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of the Record Date (or such
different date as is indicated below) by (i) each director of the Company and
each nominee for election as a director who beneficially owns Common Stock, (ii)
each person that is known by the Company to beneficially own more than 5% of the
outstanding shares of Common Stock, (iii) each executive officer of the Company
and (iv) all directors and executive officers of the Company as a group. The
stockholders named below have sole voting and investment power with respect to
the shares of Common Stock shown as beneficially owned by them, except as
expressly disclosed to the contrary.
<TABLE>
<CAPTION>
PERCENT OF
SHARES SHARES
NAME BENEFICIALLY OWNED OUTSTANDING
<S> <C> <C>
Robert S. Speizman................................................................. 728,254(1) 22.0
Josef Sklut........................................................................ 39,600(2) 1.2
Steven P. Berkowitz................................................................ 2,000 *
William Gorelick................................................................... 15,000 *
Scott C. Lea....................................................................... 1,000(3) *
Dimensional Fund Advisors Inc...................................................... 178,800(4) 5.6
SAFECO Common Stock Trust, SAFECO Asset Management Company and SAFECO
Corporation...................................................................... 183,000(5) 5.7
All executive officers and directors as a group (5 persons)........................ 785,854 23.8
</TABLE>
* Less than 1%
(1) Includes 26,650 shares of Common Stock held by a child of Mr. Speizman and
an aggregate of 53,300 shares of Common Stock held by Mr. Speizman's spouse
as custodian for two of his children, as to which he disclaims beneficial
ownership, and 63,372 shares of Common Stock subject to options that are
presently exercisable or become exercisable in December 1995. Mr. Speizman's
address is 508 West Fifth Street, Charlotte, North Carolina 28202.
(2) Includes 600 shares of Common Stock owned of record by Mr. Sklut's spouse,
as to which he disclaims beneficial ownership, and 36,500 shares of Common
Stock subject to options that are presently exercisable or become
exercisable in December 1995.
(3) Represents shares of Common Stock owned by a limited partnership of which
Mr. Lea is a general partner.
3
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(4) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 178,800 shares of Common
Stock as of June 30, 1995, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company,
or in series of The DFA Investment Trust Company, a Delaware business trust,
or the DFA Group Trust and the DFA Participating Group Trust, investment
vehicles of qualified employees benefit plans, for all of which Dimensional
serves as investment manager. Dimensional disclaims beneficial ownership of
all such shares of Common Stock. Dimensional has sole voting power with
respect to 122,900 shares of Common Stock and sole dispositive power with
respect to 178,800 shares of Common Stock. Persons who are officers of
Dimensional also serve as officers of DFA Investment Dimensions Group, Inc.,
(the "Fund") and The DFA Investment Trust Company (the "Trust"), each an
open-end management investment company registered under the Investment
Company Act of 1940. In their capacity as officers of the Fund and the
Trust, these persons vote 27,600 additional shares which are owned by the
Fund and 28,300 shares which are owned by the Trust which shares are
included in the 178,800 shares of Common Stock with respect to which
Dimensional has sole dispositive power. The address of Dimensional is 1299
Ocean Avenue, 11th Floor, Santa Monica, California 90401.
(5) As reported on their Schedule 13G, filed with the Securities and Exchange
Commission on February 14, 1995, SAFECO Common Stock Trust (the "Trust")
beneficially owns 164,500 shares of Common Stock and SAFECO Asset Management
Company (the "Management Company") and SAFECO Corporation each beneficially
own 183,000 shares of Common Stock, all as of December 31, 1994. Each of
these three entities reported shared voting and dispositive power with
respect to the shares of Common Stock beneficially owned by it. The Trust is
the direct beneficial owner of 164,500 shares of Common Stock. The
Management Company is the investment advisor to the Trust and to another
entity that is the direct beneficial owner of an additional 18,500 shares of
Common Stock and SAFECO Corporation is the parent corporation of the
Management Company. The Management Company and SAFECO Corporation disclaim
beneficial ownership of all such shares of Common Stock. The address of all
of these entities is SAFECO Plaza, Seattle, Washington 98195.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information for fiscal 1993, 1994
and 1995 with respect to the compensation awarded to or earned by the Company's
executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL SECURITIES
COMPENSATION UNDERLYING ALL OTHER
SALARY BONUS OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (1) (#) ($)
<S> <C> <C> <C> <C> <C>
Robert S. Speizman,
President....................................... 1995 245,000 187,252 22,000/0 60,664(2)
1994 244,988 530,208 0/0 61,035(2)
1993 249,712 293,180 54,782/0 61,378(2)
Josef Sklut,
Vice President-Finance,
Secretary and Treasurer......................... 1995 98,000 37,450 7,500/0 980(3)
1994 98,000 106,041 0/0 980(3)
1993 99,885 58,636 0/0 1,018(3)
</TABLE>
(1) Represents amounts paid under the Company's Executive Bonus Plan, originally
adopted by the Board of Directors in February 1990. Under the plan, for the
periods presented, the Company's President and Vice President-Finance
received a cash bonus equal to 5% and 1%, respectively, of the first $1.0
million of the Company's consolidated income before taxes and before
executive officer bonuses, and 10% and 2%, respectively, of such income over
$1.0 million. No such bonuses were payable under the plan to the extent that
their accrual would decrease the Company's income before taxes to less than
$500,000, although this limitation did not affect bonuses paid during the
periods presented.
4
<PAGE>
(2) Represents the Company's contribution of $1,602, $2,248 and $2,182 in fiscal
1995, 1994 and 1993, respectively, to the account of Mr. Speizman under the
Company's 401(k) Profit Sharing Plan and payments of aggregate premiums of
$59,062, $58,787 and $59,196 in fiscal 1995, 1994 and 1993, respectively, on
split dollar life insurance policies on the life of Mr. Speizman.
(3) Represents contributions by the Company to the account of Mr. Sklut under
the Company's 401(k) Profit Sharing Plan.
OPTION TABLES
The following table sets forth certain information with respect to options
granted to the Company's executive officers in fiscal 1995 under the Company's
1991 Incentive Stock Option Plan (the "1991 Plan").
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL
PERCENT OF REALIZABLE
TOTAL VALUE AT ASSUMED
OPTIONS/ ANNUAL RATES OF
SARS STOCK
OPTIONS/ GRANTED TO EXERCISE PRICE
SARS EMPLOYEES OR BASE APPRECIATION
GRANTED IN FISCAL PRICE EXPIRATION FOR OPTION TERM
NAME (#)(1) YEAR(2) ($/SH) DATE 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Robert S. Speizman......................... 22,000/0 74.6 4.95 November 14, 1999 30,087 66,485
Josef Sklut................................ 7,500/0 25.4 4.50 November 14, 2004 21,225 53,789
</TABLE>
(1) The exercise price of the options granted under the 1991 Plan is the fair
market value of the Common Stock on the date of grant (the last sale price
of the Common Stock as reported on The Nasdaq Stock Market on such date) or
110% of such value for persons who control 10% of the outstanding Common
Stock on that date. The options have a date of grant of November 1994 and
become exercisable in cumulative increments of 20%, 50%, 80% and 100% on the
first, second, third and fourth anniversaries, respectively, of the date of
grant. The options are intended to qualify as "incentive stock options"
under Section 422 of the Internal Revenue Code of 1986, as amended.
(2) Options to purchase an aggregate of 29,500 shares of Common Stock were
granted in fiscal 1995 under the 1991 Plan, all of which were granted to Mr.
Speizman and Mr. Sklut.
The following table sets forth certain information with respect to the
value of unexercised options to purchase shares of Common Stock held by the
Company's executive officers at the end of fiscal 1995. No options were
exercised by these individuals during fiscal 1995.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL YEAR- AT FISCAL YEAR-
END (#) END ($)(1)
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
<S> <C> <C>
Robert S. Speizman.................................................................... 36,435/60,280 69,479/70,687
Josef Sklut........................................................................... 25,000/17,500 86,941/37,188
</TABLE>
(1) Represents the excess of the fair market value of the Common Stock (the last
sale price of the Common Stock as reported by The Nasdaq Stock Market) on
June 30, 1995 of $5.125 over the weighted average exercise price of the
options outstanding multiplied by the number of shares of Common Stock
subject to such options.
STOCK OPTION PLANS
Under the 1991 Plan, options to purchase 138,907 shares of Common Stock are
currently outstanding, and, through July 1, 2002, options to purchase up to an
additional 53,163 shares may be granted to officers and other key employees of
the
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<PAGE>
Company. In addition, options to purchase 11,522 shares of Common Stock are
currently outstanding under the Company's 1981 Incentive Stock Option Plan (the
"1981 Plan") and no additional options may be granted under such plan. The 1991
Plan and the 1981 Plan are presently administered by the Stock Option Committee
of the Board of Directors. Each option granted under the 1991 Plan or the 1981
Plan becomes exercisable in cumulative increments of 20%, 50%, 80% and 100% on
the first, second, third and fourth anniversaries of the date of grant,
respectively, and, subject to certain exceptions, must be exercised within 10
years from the date of the grant. The option price, subject to certain
exceptions, may not be less than 100% of the fair market value per share of
Common Stock on the date of the grant of the option or 110% of such value for
persons who control 10% or more of the voting power of the Company's stock on
the date of grant. All options granted under the 1991 Plan and the 1981 Plan are
intended to qualify as "incentive stock options" under Section 422 of the
Internal Revenue Code of 1986, as amended, subject to disqualification
thereunder.
COMPENSATION OF DIRECTORS
Each director who is not an officer or employee of the Company is paid
$1,000 for each meeting of the Board of Directors that he attends and is
reimbursed for out-of-pocket expenses incurred in connection with attending the
meeting.
EMPLOYMENT TERMINATION AGREEMENT
The Company and Mr. Sklut are parties to a deferred compensation agreement
dated February 9, 1972, as amended, that provides, subject to certain
exceptions, for the Company's payment to Mr. Sklut of certain amounts upon the
termination of his employment, as follows: (i) 180 monthly payments of $8,648 to
Mr. Sklut or his designated beneficiary if Mr. Sklut continues in the employment
of the Company until he reaches the age of 70 years and retires, (ii) 180
monthly payments of up to $9,342 to Mr. Sklut's designated beneficiary if Mr.
Sklut dies while employed by the Company before he reaches the age of 70 and
(iii) 180 monthly payments of up to $8,648 to Mr. Sklut or his designated
beneficiary if Mr. Sklut's employment is terminated (including a termination by
reason of disability) before he reaches the age of 70 other than by his
voluntary action, his death or discharge for fraudulent actions. No payments
will be made to Mr. Sklut under this agreement in the event his employment is
terminated as a result of his voluntary resignation or discharge by the Company
for fraudulent actions.
The Company is a party to a trust agreement under which the Company has
agreed to maintain, and pay all premiums on, a life insurance policy and an
annuity contract on Mr. Sklut. The trust owns and is the beneficiary under both
the life insurance policy and annuity contract, and the trustee has agreed to
use the cash surrender value or proceeds, as the case may be, to make the
required payments under the deferred compensation agreement. In the event the
available funds are not adequate to make such required payments, the deficiency
will be paid by the Company to Mr. Sklut, and in the event such funds exceed the
required payments, such excess will be paid by the trustee to the Company.
Management believes that the cash surrender value or the proceeds, as the case
may be, are adequate to fund the required payments to Mr. Sklut under the
deferred compensation agreement. The Company paid aggregate premiums of $40,131
in each of fiscal 1993, 1994 and 1995 on the life insurance policy and annuity
contract.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Speizman was a member of the Compensation Committee of the Board of
Directors during fiscal 1994 until September 1994, at which time he resigned
from this committee.
The Company leases its headquarters in Charlotte, North Carolina from a
partnership owned by Robert S. Speizman and Lawrence J. Speizman, Robert S.
Speizman's brother, under a lease agreement entered into in 1990 that originally
extended to March 1995. This lease agreement was amended in April 1995 to extend
the lease agreement to March 1996 and increase the rent payable thereunder. The
building in which the headquarters are located is approximately 89,000 square
feet. The Company paid rent of approximately $14,035 per month from July 1994 to
March 1995 and paid or will pay rent of $25,960 per month from April 1995 to
March 1996. The Company is required to bear the cost of taxes ($12,127 for
fiscal 1995), maintenance and insurance on the building.
The Company and Robert S. Speizman are parties to a redemption agreement
dated May 31, 1974, as amended, that provides for the Company's redemption of
the Common Stock owned by Mr. Speizman at his death. The agreement gives to Mr.
Speizman's legal representatives the option, for a two-year period following his
death, to require the Company to purchase such Common Stock at 95% of its "fair
market value," as defined in the agreement, provided that the aggregate purchase
price paid for Mr. Speizman's Common Stock may not exceed the excess of the
proceeds of certain life insurance policies obtained by the Company remaining
after repayment of any loans obtained by the Company under such insurance
6
<PAGE>
policies. Prior to September 1994, this agreement provided for the deduction of
additional amounts from the proceeds of such life insurance policies prior to
any redemption of Mr. Speizman's Common Stock thereunder relating to, among
other things, management transition as a result of Mr. Speizman's death
($200,000) and payment of amounts owed by the Company to Mr. Speizman. The
redemption agreement was amended in September 1994 principally to eliminate such
provisions. The agreement provides that the Company will maintain life insurance
on Mr. Speizman's life in the aggregate amount of $1.15 million to fund its
obligations thereunder. The Company paid aggregate premiums of approximately
$17,000 in fiscal 1995 on these life insurance policies and, as of July 1, 1995,
had no loans under any such policy.
From time to time during fiscal 1995, the Company paid certain personal
expenses on behalf of Robert S. Speizman and, Bryan D. Speizman, a son of Mr.
Speizman, who is an employee of the Company. Amounts owed to the Company under
this arrangement bear interest at 7%. During fiscal 1995, the largest aggregate
amount of such indebtedness outstanding was $128,920 in April 1995 ($103,090 of
which was owed by Mr. Speizman and the remainder of which was owed by Bryan
Speizman). As of July 1, 1995, the aggregate amount of such indebtedness,
including accrued interest, was $123,690 ($106,180 of which was owed by Mr.
Speizman and the remainder of which was owed by Bryan Speizman). Mr. Speizman
and Bryan Speizman repay this indebtedness through bi-weekly payroll deductions
of $1,058 and $150, respectively, and additional cash payments from time to time
in varying amounts.
Since April 1992, Robert S. Speizman has personally guaranteed, on an
informal and continuing basis, the Company's payment to the manufacturer of the
technologically-advanced sock knitting machines distributed by the Company of up
to $210,000 of the purchase price of such machines.
REPORT OF THE COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE ON EXECUTIVE
COMPENSATION
The Company's compensation program for its executive officers is
administered by the Compensation Committee and the Stock Option Committee of the
Company's Board of Directors. During fiscal 1995, the members of the Stock
Option Committee were Mr. Berkowitz, Mr. Gorelick and Mr. Lea and the members of
the Compensation Committee were these three directors and, until September 1994,
Mr. Speizman. Mr. Berkowitz is the Chairman of the Compensation Committee and
Mr. Gorelick is the Chairman of the Stock Option Committee. Other than Mr.
Speizman, none of these committee members has ever been an officer or employee
of the Company.
COMPENSATION POLICY
The present compensation policies of the Compensation Committee and the
Stock Option Committee regarding executive officer compensation are designed
principally to (i) motivate the Company's executive officers to improve the
measure of the Company's financial performance selected by the Compensation
Committee, as well as stockholder return on the Common Stock, and (ii) establish
a relationship between executive officer compensation on the one hand and such
Company performance and stockholder return on the other hand. These two
committees, in implementing these policies, provide the Company's executive
officers, in addition to base salaries, short-term and long-term incentive
opportunities, consisting of annual cash bonuses based on the selected measure
of the Company's financial performance and options granted under the Company's
stock option plans, respectively. The Compensation Committee believes that the
Company's Executive Bonus Plan described below motivates executive officers to
improve such financial performance and the Stock Option Committee believes that
the Company's stock option plans described below motivate the executive officers
to improve the stockholder return on the Common Stock.
The Compensation Committee has not yet established its policy with regard
to the qualification of compensation paid to executive officers for
deductibility under Section 162(m) of the Internal Revenue Code of 1986, as
amended. Section 162(m) does not prohibit a company from paying annual
compensation in excess of $1.0 million but may limit a company's ability to
deduct such excess amounts. The Compensation Committee has reviewed its
compensation policies with respect to the Company's executive officers and
determined that Section 162(m) should have no impact on such policies in fiscal
1996, since no executive officer is expected to receive compensation in such
fiscal year in excess of the $1.0 million threshold.
BASE SALARIES
Base salaries for the Company's executive officers have not been
significantly increased since fiscal 1991, although the annual incentive
compensation of the Company's executive officers has varied substantially from
year to year during this period.
7
<PAGE>
ANNUAL INCENTIVE OPPORTUNITIES -- EXECUTIVE BONUS PLAN
The Compensation Committee believes that the compensation of the Company's
executive officers should be significantly influenced by the Company's financial
performance and that the Company's consolidated income before taxes and before
executive officer bonuses is an appropriate measure of such financial
performance for purposes of executive officer incentive compensation
determinations because it most nearly reflects the results of the diverse
responsibilities and efforts of the Company's executive officers. The
Compensation Committee further believes that providing significant opportunities
for incentive compensation based on increases in such income focuses
management's attention on this measure of the Company's financial performance.
Accordingly, in fiscal 1991, the Board of Directors adopted the Company's
Executive Bonus Plan. The Compensation Committee approved the continuation of
this plan for fiscal 1995. Under this plan, the Company's President and Vice
President-Finance received cash bonuses equal to 5% and 1%, respectively, of the
first $1.0 million of the Company's consolidated income before taxes and before
executive officer bonuses, and 10% and 2%, respectively, of such income over
$1.0 million. No such bonuses are payable under this plan to the extent that
their accrual would decrease the Company's income before taxes to less than
$500,000. Bonuses under this plan decreased significantly in fiscal 1995 as
compared to fiscal 1994 due to the significant decrease in income before taxes
in fiscal 1995 as compared to the prior year.
LONG-TERM INCENTIVE OPPORTUNITIES -- STOCK OPTION PLAN
To encourage a long-term focus by executive officers, the Company provides
incentives through its 1991 Incentive Stock Option Plan (the "1991 Plan") and
1981 Incentive Stock Option Plan (the "1981 Plan"). Both of these plans are
administered by the Stock Option Committee of the Board of Directors. The
exercise price of the options granted, subject to certain exceptions, is the
fair market value of the Common Stock on the date of grant, and the options
granted become exercisable in cumulative increments of 20%, 50%, 80% and 100% on
the first, second, third and fourth anniversaries of the date of grant,
respectively. As a result, the value of the options granted depends on stock
price appreciation. The Board of Directors believes that use of such
equity-based incentives reinforces the identification of management with the
longer term interests of the Company's stockholders and motivates them to
improve the Company's performance in the respective areas of the Company's
management for which they are responsible. In fiscal 1995, the Stock Option
Committee granted options to purchase 29,500 shares of Common Stock to its two
executive officers in recognition of their important contributions to, and
diligent efforts on behalf of, the Company. The number of shares of Common Stock
subject to the option granted to each such executive officer was based on the
Committee's assessment, on a subjective basis, of each officer's relative
contribution and efforts. The Committee did consider the size of previous option
grants and the number of shares of Common Stock subject to options held by each
such executive officer neither of whom received an option grant in fiscal 1994.
The Committee does not have a specific time during the year when it grants
options.
PRESIDENT
For fiscal 1995, the Company paid Mr. Speizman, President, $245,000 as his
base salary. Mr. Speizman's annual base salary has not been significantly
increased since fiscal 1991. Under the Company's Executive Bonus Plan, for
fiscal 1995, Mr. Speizman received a cash bonus of $187,252. In fiscal 1995, the
Company's income before taxes decreased significantly as compared to fiscal
1994. Under the Company's Executive Bonus Plan, this decrease resulted in a
decrease in cash compensation payable to Mr. Speizman in the form of a bonus.
The Stock Option Committee granted an option to purchase 22,000 shares of Common
Stock to Mr. Speizman in fiscal 1995 based on the reasons set forth above.
<TABLE>
<CAPTION>
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
<S> <C>
STEVEN P. BERKOWITZ, CHAIRMAN STEVEN P. BERKOWITZ
WILLIAM GORELICK WILLIAM GORELICK, CHAIRMAN
SCOTT C. LEA SCOTT C. LEA
</TABLE>
8
<PAGE>
COMPARATIVE PERFORMANCE GRAPH
The graph set forth below compares the cumulative total stockholder return
on the Common Stock for the Company's last five fiscal years with the cumulative
total return of companies listed on the CRSP Total Return Index for Nasdaq Stock
Market (U.S. Companies) ("Nasdaq Market Index") and of the companies named
below, including the Company, with the Standard Industrial Classification code
508, Wholesale Trade -- Machinery, equipment and supplies that were included in
the CRSP Index for NASDAQ Stocks (U.S. and Foreign Companies) at any time during
the five-year measurement period (the "Peer Group Index"). The comparison
assumes the investment of $100 in the Common Stock, in the Nasdaq Market Index
and in the Peer Group Index on June 30, 1990 and the reinvestment of all
dividends (the Company paid no dividends during the periods shown). The
stockholder return of each of the companies in the Peer Group Index has been
weighted according to market capitalization at the beginning of each measurement
period.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG SPEIZMAN INDUSTRIES, INC,
NASDAQ MARKET INDEX AND PEER GROUP INDEX
JUNE 30, 1990 TO JULY 1, 1995
(The Comparison graph appears here. See the table below for plot points.)
<TABLE>
<CAPTION>
Index Description 6/29/90 6/28/91 6/26/92 7/02/93 7/01/94 6/30/95
<S> <C> <C> <C> <C> <C> <C>
Speizman Industries, Inc. $100 $ 75 $300 $1,075 $850 $512
Nasdaq Market Index 100 106 124 160 162 215
Peer Group Index 100 117 124 194 203 190
</TABLE>
The Peer Group Index consists of the following companies: Abatix
Environmental Corp., AERO Systems, Inc., AGCO Corp., Bernstein/Leibstone
Associates, Inc., Bio-Logic Systems Corp., Cedar Group, Inc., Computer Telephone
Corp., Conesco Industries, Ltd., Consolidated Stainless, Inc., Dataflex
Corporation, Diversicare Corporation of America, Ezcony Interamerica, Inc.,
Hi-Rise Recycling Systems, Inc., Hirsch International Corp., IIC Industries,
Inc., Industrial Holdings, Inc., Information Solutions, Inc., International
Airline Support Group, Inc., International Container Systems, Inc., Jayark
Corporation, Lawson Products, Inc., Micro Bio-Medics, Inc.,
Micros-to-Mainframes, Inc., Nyer Medical Group, Inc., Oce-van der Grinten N.V.,
Officeland Inc., Omni U.S.A., Inc., Omnicorp Limited, Orthomet, Inc.,
PerfectData Corporation, Quality Systems, Inc., RSI Holdings, Inc., Robec, Inc.,
Speizman Industries, Inc., Stewart & Stevenson Services, Inc., Strategic
Distribution, Inc., Tech Data Corporation, Transnet Corporation and The W. W.
Williams Company.
9
<PAGE>
The Common Stock has been listed on The Nasdaq Stock Market since January
24, 1992. Prior to January 24, 1992, it was quoted over-the-counter in the "pink
sheets" of the National Daily Quotation System published by the National
Quotation Bureau, Inc. As a result, the relevance of the comparison of the
stockholder return on the Common Stock to that of the companies listed on the
Nasdaq Market Index may be limited for the periods prior to January 24, 1992.
With regard to the Peer Group Index, the capital stock of the Company's direct
competitors is not publicly traded. As a result, there is no publicly available
information concerning the total stockholder return for such competitors and
they are not included in the Peer Group Index.
10
<PAGE>
APPROVAL OF SPEIZMAN INDUSTRIES, INC.
NONQUALIFIED STOCK OPTION PLAN
On September 21, 1995, the Board of Directors of the Company unanimously
adopted the Speizman Industries, Inc. Nonqualified Stock Option Plan (the
"Plan"), subject to the approval of the Plan by the stockholders of the Company.
The full text of the Plan is set forth in Exhibit A to this Proxy Statement.
Options may be granted under the Plan on or after September 21, 1995, the
effective date of the Plan, subject to stockholder approval of the Plan. A
maximum of 145,000 shares of Common Stock may be issued under the Plan and the
Board of Directors has reserved such number of shares for such issuance. The
Board of Directors adopted the Plan because, as of September 21, 1995, only
53,163 of the 250,000 shares of Common Stock originally authorized for issuance
under the Company's 1991 Incentive Stock Option Plan remained available for
future option grants under such plan, although additional shares of Common Stock
may become available for such future option grants as a result of expirations or
terminations of presently outstanding options under such plan.
The ability to offer Common Stock through options has been and will
continue to be a necessary and beneficial method by which the Company can retain
the services of employees and attract competent personnel. The Board of
Directors believes that the Plan will allow it to promote growth and prosperity
of the Company by providing employees and others with an additional incentive to
contribute their best efforts to the Company. The Board of Directors believes
that options to acquire Common Stock create this incentive by providing the
recipient with an opportunity to acquire a proprietary interest in the Company
and thereby providing a means to participate in the future growth of the
Company.
BENEFITS UNDER THE PLAN
No option has been granted under the Plan to date, and no determination has
been made with respect to any options which may be granted under the Plan in the
future. Such future options will be determined in accordance with the terms of
the Plan, which are described below. Consequently, it is not possible to
determine the benefits or amounts that will be received by or allocated to any
employees, executive officers or directors of the Company or other persons
pursuant to the Plan in the future and it is not possible to determine the
benefits or amounts that would have been received by or allocated to any such
person during fiscal 1995 if the Plan had been in effect during such period.
DESCRIPTION OF PLAN
The following description of the Plan is merely a summary of some of its
terms and provisions, is not intended to be a complete description of the Plan,
and is qualified in its entirety by reference to the full text of the Plan
attached hereto as Exhibit A. If any part of the description of the Plan
contained herein states anything different from the formal legal documents
governing the Plan, the formal legal Plan documents will be considered correct.
The Plan is not generally subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended. The Plan is not a qualified
plan under Section 401 of the Internal Revenue Code of 1986, as amended (the
"Code").
NATURE AND PURPOSE
The Plan provides for the grant of nonqualified stock options and is
designed, for the benefit of the Company, to attract and retain for the Company
personnel of exceptional ability, to motivate such personnel through added
incentives to make a maximum contribution to greater profitability, to develop
and maintain a highly competent management team and to be competitive with other
companies with respect to executive compensation.
ADMINISTRATION
The Plan will be administered by the Stock Option Committee or such other
committee as may be appointed by the Board of Directors to administer the Plan.
Members of the Stock Option Committee, or such other committee, are appointed by
the Board of Directors from among its members who are "disinterested persons" as
required under Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), to serve at the pleasure of the Board of Directors, and
may be removed by the Board of Directors in its discretion. The Stock Option
Committee has the exclusive right to interpret, construe, and administer the
Plan and to select the persons eligible to receive awards. The Stock Option
Committee will determine the number of shares of Common Stock subject to an
option granted under the Plan and the form, terms, conditions and duration of
each option. The Stock Option Committee's decisions will be conclusive, final
and binding upon all parties.
The Stock Option Committee is given broad discretion under the Plan to make
adjustments to options outstanding under the Plan upon any extraordinary event
affecting the Company or its financial condition or performance, including, for
example, a recapitalization or merger transaction or a change in control or
potential change in control of the Company. See " --
11
<PAGE>
Securities to be Offered" and " -- Effects of Change in Control" below. In
addition, the Stock Option Committee has full power and authority to determine
whether, to what extent and under what circumstances any option under the Plan
may be canceled or suspended.
SECURITIES TO BE OFFERED
The Company is authorized to issue 145,000 shares of Common Stock under the
Plan. The Common Stock subject to an option under the Plan will be made
available from the authorized and unissued shares of Common Stock. The last sale
price of the Common Stock on September 29, 1995 as reported on The Nasdaq Stock
Market was $3.625 per share.
To the extent any shares of Common Stock subject to options under the Plan
are not delivered or purchased, or are reacquired by the Company, such shares
will not be charged against the aggregate number of shares available for options
under the Plan and may again be granted under the Plan. This would occur, for
example, upon the termination, expiration, or cancellation of an option.
Proportionate and equitable adjustments will be made by the Stock Option
Committee upon the occurrence of certain events that result in changes in the
outstanding shares of Common Stock of the Company or that result in exchanges of
shares of Common Stock for a different number or class of Common Stock or other
securities of the Company or another corporation. These events include without
limitation a reorganization or recapitalization of the Company or
reclassification of its shares, stock split-up, stock dividend, or consolidation
of shares of Common Stock of the Company, merger, consolidation, or sale of
assets of the Company, or any distribution to stockholders other than a cash
dividend. Under such circumstances, adjustments may be made by the Stock Option
Committee in the limitation on the aggregate number of shares of Common Stock
that may be awarded under the Plan, the number and class of shares that may be
subject to an option, the purchase price for shares of Common Stock under
outstanding options under the Plan and the terms, conditions, or restrictions of
any option or agreement evidencing an option, including the price payable for
the acquisition of Common Stock.
The Stock Option Committee is also authorized to make adjustments in
performance-based criteria or in the terms and conditions of options under the
Plan in recognition of unusual or nonrecurring events affecting the Company or
its financial statements or changes in applicable laws, regulations, or
accounting principles. The Stock Option Committee may also correct any defects
or omissions or reconcile any inconsistencies in the Plan or any agreement
evidencing an option under the Plan in the manner and to the extent it shall
deem desirable to carry it into effect. Moreover, the Stock Option Committee
may, in its discretion, make such adjustments in the terms of options under the
Plan as it deems appropriate if the Company assumes any outstanding employee
benefit awards or the right or obligation to grant future such options in
connection with the acquisition of any other entity.
ELIGIBLE PARTICIPANTS
The Stock Option Committee has the exclusive right to determine those
persons eligible to participate in the Plan and shall select the persons
eligible to receive awards. Subject to the foregoing, any employee of the
Company, as well as any other person, including directors, other than certain
disinterested persons, may participate in the Plan if the Stock Option Committee
determines such participation is in the best interest of the Company, subject to
any limitations as may be provided by applicable law or the Stock Option
Committee. As of September 29, 1995, the Company had approximately 76 full-time
employees, one part-time employee and three directors who are not also employees
of the Company as of such date.
AWARD AGREEMENTS
Each option granted will be evidenced by a written agreement setting forth
the terms and conditions of the option. Each such agreement will also be subject
to and incorporate the applicable terms and conditions of the Plan and any other
terms and conditions, not inconsistent with the Plan, required by the Stock
Option Committee.
NONQUALIFIED STOCK OPTIONS
The options that may be granted under the Plan are nonqualified stock
options. The Company may grant such options to eligible participants to purchase
shares of Common Stock at such time or times as determined by the Stock Option
Committee.
The exercise price of an option under the Plan will be as established by
the Stock Option Committee in the agreement evidencing the award. Such exercise
price will not be limited under the Plan and may be less than 100% of the fair
market value at the time of grant. Thus, discounted stock options providing for
an exercise price of less than the fair market value of the Stock at the date of
the award may be granted as options under the Plan.
12
<PAGE>
An option under the Plan will be exercisable in full or in part from time
to time as specified by the Stock Option Committee or in the corresponding award
agreement. Upon termination of employment of the optionee, the option will lapse
and cease to be exercisable three months following such termination of
employment.
An option may also be subject to such other terms and conditions, not
inconsistent with the Plan, as determined by the Stock Option Committee and
specified in the award agreement.
EFFECTS OF CHANGE IN CONTROL
The Stock Option Committee is granted broad discretion under the Plan to
deal with options under the Plan upon an acceleration event, which will be
deemed to occur in the event of a change in control or a potential change in
control of the Company, as defined in the Plan. For these purposes, a "change in
control" will be deemed to have occurred if (a) any person, including a group,
but not the Company or any subsidiary or employee benefit plan thereof, makes a
tender or exchange offer for shares of the Stock pursuant to which any shares of
the Stock are purchased, or such person, together with its affiliates and
associates, becomes the beneficial owner of at least 20% of the Stock, or (b)
the stockholders of the Company approve a definitive agreement or plan to merge
the Company with or into another corporation, to sell or otherwise dispose of
all or substantially all of its assets, or to liquidate the Company, or (c)
during any period of 24 consecutive months the incumbent directors at the
beginning of such period cease for any reason other than death to constitute at
least a majority of the Board of Directors, provided that a director will be
deemed to be an incumbent director if such director, although not a director at
the beginning of such 24-month period, was elected by, or on the recommendation
of or with the approval of, at least two-thirds of the directors then qualified
as incumbent directors. A "potential change in control" is defined in the Plan
to mean (y) the approval by stockholders of the Company of an agreement by the
Company, the consummation of which would result in a change in control of the
Company, as described above, or (z) the acquisition of direct or indirect
beneficial ownership by any person (as described above) of securities of the
Company representing 5% or more of the combined voting power of the Company's
outstanding securities and the adoption by the Board of Directors of a
resolution to the effect that a potential change in control of the Company has
occurred for the purposes of the Plan. A "Board-approved change in control" will
be deemed to have occurred if the offer, acquisition, or transaction in question
is approved by a majority of the directors serving as members of the Board of
Directors at the time of the potential change in control or change in control.
Upon the occurrence of an acceleration event, the Stock Option Committee
will be authorized to take such action as it determines to be necessary or
advisable, and fair and equitable to participants, with respect to options under
the Plan. The Stock Option Committee's action may include without limitation,
establishing, amending or waiving the forms, terms, conditions, and duration of
an option and the corresponding award agreement, so as to provide for earlier,
later, extended, or additional times for exercise or payments, differing methods
for calculating payments, alternate forms and amounts of payment and accelerated
release of restrictions, or other modifications.
Upon the occurrence of an acceleration event, the Stock Option Committee in
its discretion may declare any and all then outstanding options not previously
exercisable and vested as immediately exercisable and fully vested, in whole or
in part. In the event of a change in control, the Stock Option Committee in its
discretion may cash out the value of all outstanding options in each case to the
extent vested, on the basis of the change in control price as of the date such
change in control or such potential change in control is determined to have
occurred or such other date as the Stock Option Committee may determine prior to
the change in control, less the option price (as established in the
corresponding Award Agreement). For this purpose, "change in control price"
means the highest price per share of the Common Stock paid in any transaction
reported on any exchange on which the Common Stock is traded or on The Nasdaq
Stock Market if the Common Stock is then traded thereon, or paid or offered in
any bona fide transaction related to a potential or actual change in control of
the Company at any time during the 60-day period immediately preceding, the
occurrence of the change in control, or, where applicable, the occurrence of the
potential change in control event, in each case as determined by the Stock
Option Committee.
AMENDMENT AND TERMINATION
The Plan will continue in effect until terminated by the Company as
provided in the Plan.
Upon the recommendation of the Stock Option Committee, or otherwise, the
Board of Directors may amend the Plan. To the extent required by Rule 16b-3
under the Exchange Act, no amendment to the Plan may be made without approval by
the Company's stockholders that would make certain changes, including altering
the group of persons eligible to participate in the Plan, increasing the maximum
number of shares of Common Stock available for options under the Plan (except as
otherwise provided in the Plan), limiting or restricting the powers of the Stock
Option Committee in administering the Plan,
13
<PAGE>
materially increasing the benefits accruing to participants under the Plan,
materially modifying the requirements of eligibility for participation in the
Plan or changing the amendment provisions of the Plan.
Notwithstanding the foregoing, no amendment to or discontinuation of the
Plan or any provision thereof may adversely affect any option previously granted
to a participant under the Plan, without the written consent of such
participant. The Stock Option Committee is empowered to determine whether an
amendment or discontinuation adversely affects any existing award.
Notwithstanding the foregoing, the Stock Option Committee retains the power to
annul any award if the participant is terminated for cause as determined by the
Stock Option Committee and provide for the forfeiture of shares of Common Stock
or other gain under an award as determined by the Stock Option Committee for
competing against the Company. If an acceleration event (change in control or
potential change in control) has occurred, no amendment or termination will
impair the rights of any person with respect to an outstanding award as
discussed under "Effects of Change in Control" above.
RESALE RESTRICTIONS
Resale restrictions on shares of Common Stock purchased under the Plan may
be imposed by virtue of the provisions of the Plan and the applicable award
agreement and/or by application of federal and state securities laws.
TAX EFFECTS
Options granted under the Plan will be treated as nonqualified stock
options for federal income tax purposes. The following discussion of the federal
income tax consequences of options granted under the Plan is intended only as a
summary of the present federal income tax treatment of options under the Plan.
The federal income tax laws pertaining to the Plan are highly technical, and
such laws are subject to change at any time. Some variations on the federal
income tax effects of Plan participation described below may occur with respect
to participation by persons subject to Section 16(b) of the Exchange Act.
Under the Code, an optionee granted an option under the Plan will realize
no taxable income upon receipt of the option but will be deemed to have realized
ordinary taxable income equal to the excess of the fair market value of the
stock acquired at the time of the exercise of the option over the option price
paid.
The Company will be entitled to a deduction for federal income tax purposes
in the year the optionee must report the income in an amount equal to the
ordinary income realized by the optionee as a result of exercise of his option.
The Company is required to withhold tax on the amount of income realized by the
optionee upon exercise of the option.
An optionee's tax basis in shares acquired upon the exercise of an option
will be the fair market value of such shares used to determine the amount of
ordinary taxable income reported by the optionee with respect to the exercise of
the option. Upon any sale of such shares of Common Stock, the optionee's gain or
loss will therefore equal the difference between the sale price and such tax
basis. Any such gain or loss will be short-term or long-term capital gain or
loss, depending on whether the shares have been held for more than the long-term
capital gain holding period. In general, when an option is exercised by the
exchange of previously acquired stock, the optionee receives a tax-free exchange
and basis carryover for old shares for an equivalent number of new shares. The
basis for any additional shares will equal the sum of the amount included in
gross income by reason of the exercise of the option, plus any amount of cash
paid by the optionee upon the exercise of the option.
The Plan authorizes the acceleration of the exercisability and vesting of
options in the event of a change in control or potential change in control of
the Company, as defined in the Plan. Such acceleration may give rise to
"parachute payments" under the Code, which may subject the recipient thereof to
a 20% excise tax and which may not be deductible by the Company for federal
income tax purposes.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE PLAN.
14
<PAGE>
APPROVAL OF SPEIZMAN INDUSTRIES, INC.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
On September 21, 1995, the Board of Directors of the Company unanimously
adopted the Speizman Industries, Inc. Stock Option Plan for Non-Employee
Directors (the "Non-Employee Directors' Plan"), subject to the approval of the
Non-Employee Directors' Plan by the stockholders of the Company. The full text
of the Non-Employee Directors' Plan is set forth in Exhibit B to this Proxy
Statement. A maximum of 15,000 shares of Common Stock may be issued under the
Non-Employee Directors' Plan and the Board of Directors has reserved such number
of shares for issuance. Pursuant to the Non-Employee Directors' Plan, each
member of the Board of Directors who is a "Non-Employee Director," within the
meaning of the Non-Employee Directors' Plan, will be automatically granted an
option to acquire 1,000 shares of Common Stock on December 1st of each year,
beginning December 1, 1995. Under the Non-Employee Directors' Plan, a director
is a Non-Employee Director if he is not a full-time or part-time employee of the
Company or its parent or subsidiary corporations.
The ability to offer the Company's Non-Employee Directors an opportunity to
acquire shares of the Common Stock of the Company provides a means by which the
Company may compensate its Non-Employee Directors. The Company believes that its
provision of equity-based compensation will assist it in attracting and
retaining highly qualified Non-Employee Directors. Further, the Board of
Directors believes that granting options to the Non-Employee Directors provides
an incentive to such persons to continue their service to the Company and
promotes the best interests of the Company because Non-Employee Directors have
an opportunity to acquire a proprietary interest in the Company and ultimately
to benefit from the future success of the Company's operations through
appreciation in the value of the Common Stock. By providing such options through
a formula plan meeting the requirements of Rule 16b-3 under the Exchange Act,
the Company may at the same time provide for disinterested administration of its
other equity-based plans. Disinterested administration is required so that
awards under such plans are exempt from being purchases of Common Stock of the
Company for purposes of determining liability under Section 16 of the Exchange
Act for insider participants. Rule 16b-3 provides that a plan will continue to
have disinterested administration if the plan is administered by persons who did
not receive a grant or award while administering any plan of the Company, or
during the year prior to becoming an administrator of any plan, except that
grants made pursuant to a qualifying formula plan will not disqualify such
person from serving as a disinterested administrator.
BENEFITS UNDER THE PLAN
The Non-Employee Directors' Plan provides that each Non-Employee Director
of the Company will receive an annual award thereunder on December 1st of each
year, beginning December 1, 1995, of an option to purchase 1,000 shares of
Common Stock (the "Annual Award"). The exercise price of such options will be
the fair market value of the Common Stock, as defined in the Non-Employee
Directors' Plan, on the date of grant. A director of the Company who is a Non-
Employee Director within the meaning of the Non-Employee Directors' Plan is
eligible to participate in the Non-Employee Directors' Plan. Presently there are
three Non-Employee Directors, Mr. Berkowitz, Mr. Gorelick and Mr. Lea, eligible
to participate in such plan.
The following table sets forth certain information concerning options that
will be granted automatically under the Non-Employee Directors' Plan in fiscal
1996, assuming that such plan is approved by the stockholders of the Company at
the Meeting and further assuming that the nominees for election as directors at
the Meeting are so elected and serve as directors of the Company on December 1,
1995. Based on such assumptions, Mr. Berkowitz, Mr. Gorelick and Mr. Lea, who
would be the only Non-Employee Directors, would each receive, on December 1,
1995, an option to purchase 1,000 shares of Common Stock under the Non-Employee
Director's Plan. No executive officers or other employees of the Company will
receive any options under the Non-Employee Directors' Plan.
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NEW PLAN BENEFITS
SPEIZMAN INDUSTRIES, INC.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE ($)(1) NUMBER OF OPTIONS
<S> <C> <C>
Non-Employee Director Group............................................................ -- 3,000
</TABLE>
(1) The dollar value of such options is not presently determinable. The exercise
price of such options will be the fair market value of the Common Stock, as
defined in the Non-Employee Directors' Plan, on December 1, 1995, the date
of grant of such options.
In addition, if the Non-Employee Directors' Plan had been in effect in
fiscal 1995, Mr. Berkowitz, Mr. Gorelick and Mr. Lea, the only Non-Employee
Directors as of December 1, 1994, would each have received an option to purchase
1,000 shares of Common Stock on such date, having an exercise price of $4.00 per
share (the last sale price as reported by The Nasdaq Stock Market on such date).
As of September 29, 1995, the fair market value of the Common Stock subject to
such options, of $3.625 per share (the last sale price of the Common Stock as
reported by The Nasdaq Stock Market on such date) would not have exceeded the
exercise price of such options. No executive officers or other employees of the
Company would have received any options under the Non-Employee Directors' Plan
in fiscal 1995.
DESCRIPTION OF NON-EMPLOYEE DIRECTORS' PLAN
The following description of the Non-Employee Directors' Plan is merely a
summary of some of its terms and provisions, is not intended to be a complete
description of the Non-Employee Directors' Plan and is qualified in its entirety
by reference to the full text of the Non-Employee Directors' Plan attached
hereto as Exhibit B. If any part of the description of the Plan contrary herein
states anything different from the formal legal documents governing the
Non-Employee Directors' Plan, such documents will be considered correct.
AUTHORIZED COMMON STOCK
A maximum of 15,000 shares of Common Stock may be issued pursuant to
options granted under the Non-Employee Directors' Plan. Such shares shall be
shares of authorized but unissued Common Stock. As of September 29, 1995, no
options have been granted pursuant to the Non-Employee Directors' Plan. The
Common Stock is traded on The Nasdaq Stock Market, and the last sale of the
Common Stock as reported by The Nasdaq Stock Market on September 29, 1995 was
$3.625 per share.
ADMINISTRATION
The Non-Employee Directors' Plan is administered by the Stock Option
Committee or such other committee as may be appointed by the Board of Directors
to administer the Non-Employee Directors' Plan. The Stock Option Committee, or
such other committee, shall consist of not less than two Non-Employee Directors
who are "disinterested persons" within the meaning of Rule 16b-3(c)(2)(i) under
the Exchange Act. The Stock Option Committee has authority to adopt such rules
and regulations and to make such determinations as are not inconsistent with the
Non-Employee Directors' Plan and as are necessary or desirable for its
implementation and administration. All decisions, determinations and
interpretations of the Stock Option Committee are final and binding on all
optionees. The number of shares of Common Stock subject to Annual Awards for
each Non-Employee Director and the terms of such Annual Awards are fixed by the
Non-Employee Directors' Plan. The Stock Option Committee will have no discretion
to select the Non-Employee Directors who will receive Annual Awards or to
determine the number of shares of Common Stock covered by such Annual Award, the
option price per share, the circumstances under which an Annual Award may be
granted, or the period within which options granted pursuant to Annual Awards
may be exercised or to alter any other terms or conditions in the Non-Employee
Directors' Plan with respect to Annual Awards to Non-Employee Directors, except
for administering the plan subject to the express provisions of the plan.
NUMBER OF SHARES FOR EACH ELIGIBLE DIRECTOR
On December 1st of each year, beginning December 1, 1995, each Non-Employee
Director then in office will be granted an Annual Award of an option to purchase
1,000 shares of Common Stock. Notwithstanding the foregoing, any Non-Employee
Director may elect (1) to decline an Annual Award, or (2) to revoke a previous
election to decline an Annual Award, in either event, at any time prior to the
date such Annual Award would otherwise be made. A Non-Employee Director who
elects to decline an Annual Award will receive no compensation in lieu thereof.
In the event that the number of shares
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available for grants under the Plan is insufficient to grant the number of
options determined as provided above to each Non-Employee Director, options for
the remaining number of shares of Common Stock available for grant under the
Plan will be granted in equal amounts to each Non-Employee Director.
EXERCISE PRICES
The exercise price of all options granted under the Non-Employee Directors'
Plan will equal the fair market value of the Common Stock of the Company on the
date of grant, determined as provided in the Non-Employee Directors' Plan.
EXERCISE AND TERM
Options granted pursuant to Annual Awards under the Non-Employee Directors'
Plan become exercisable in cumulative increments of 50% and 100% beginning on
the first and second anniversaries, respectively, of the date of grant, if, on
such dates, the Non-Employee Director remains a Non-Employee Director. In the
event a Non-Employee Director ceases to be a Non-Employee Director, any of his
then outstanding options that have not become exercisable will terminate
immediately. In addition, in the event of a merger or consolidation or other
capital reorganization as described in such plan, or the sale by the Company of
all or substantially all its assets, any outstanding option that was granted
more than six months prior to the date of the Company's adoption of a plan or
definitive agreement in respect of such merger, consolidation, reorganization or
asset sale, as the case may be, but has not yet become exercisable, shall become
exercisable in full as of such date. Upon the effectiveness of such merger,
consolidation, reorganization or asset sale, as the case may be, any then
outstanding options shall terminate.
An option granted pursuant to an Annual Award will not be exercisable
unless: (a) the option has become exercisable as provided above; (b) the person
exercising the option has been, at all times during the period beginning with
the date of grant of the option and ending on the date of such exercise, a
Non-Employee Director, except that (i) in the event a Non-Employee Director
ceases to be a Non-Employee Director for any reason, he may exercise any of his
options that are exercisable on the date he ceases to be a Non-Employee Director
at any time within one year after such date, subject to earlier termination of
any such option, following which period any unexercised option will terminate,
or (ii) if an optionee shall die holding an option that is exercisable on the
date of his death, his executors, administrators, heirs or distributees, as the
case may be, may exercise such option at any time within six months after the
date of such death, even if such six-month period extends beyond the one-year
period described above, but subject to any other earlier termination of such
option, following which period any unexercised option will terminate; (c)
payment in full is made for the shares of Common Stock being acquired thereunder
at the time of exercise in United States dollars by cash or check; and (d)
payment in full is made for any tax withholding obligation.
Each option granted under the Non-Employee Directors' Plan shall terminate
on the tenth anniversary of the date of grant, subject to earlier termination as
provided above.
ADJUSTMENT FOR CHANGES IN CAPITALIZATION
If the number of shares of Common Stock as a whole are increased,
decreased, changed into, or exchanged for a different number or kind of shares
or securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure or the
like, the Non-Employee Directors' Plan authorizes the Stock Option Committee to
make an appropriate and proportionate adjustment in the number and kind of
shares subject to the Non-Employee Directors' Plan, and in the number, kind, and
per share exercise price of shares subject to unexercised options or portions
thereof granted prior to any such change. Any such adjustment in an outstanding
option, however, will be made without a change in the total price applicable to
the unexercised portion of the option, but rather with a corresponding
adjustment in the price for each share covered by the option.
OTHER TERMS
No option under the Non-Employee Directors' Plan can be transferable except
by will or the laws of descent and distribution. During the lifetime of the
optionee, an option may be exercisable only by the optionee. The Non-Employee
Directors' Plan may be amended by the Board of Directors, subject to limitations
set forth in the Non-Employee Directors' Plan, including that the Non-Employee
Directors' Plan may not be amended more than once each six months. The
Non-Employee Directors' Plan may be terminated by the Board of Directors at any
time. No termination of the plan may materially and adversely affect any of the
rights or obligations of any person, without his consent, under any option
previously granted under
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the Plan except that upon the dissolution or liquidation of the Company, the
Non-Employee Directors' Plan and any options issued thereunder will terminate.
TAX EFFECTS OF NON-EMPLOYEE DIRECTORS' PLAN
Options granted under the Non-Employee Directors' Plan will be treated as
nonqualified stock options for federal income tax purposes. The following
discussion of the federal income tax consequences of the Non-Employee Directors'
Plan is intended only as a summary of the federal income tax treatment of
nonqualified stock options under the Non-Employee Directors' Plan as of the date
hereof. The federal income tax laws pertaining to the Non-Employee Directors'
Plan are highly technical, and such laws are subject to change at any time. Some
variations on the federal income tax effects of Non-Employee Directors' Plan
participation described below may occur with respect to participation by persons
subject to Section 16(b) of the Exchange Act. The Non-Employee Directors' Plan
is not subject to the provisions of the Employee Retirement Income Security Act
of 1974, as amended.
Under the Code, generally an optionee granted an nonqualified stock
realizes no taxable income upon receipt of the option, but is deemed to have
realized ordinary taxable income equal to the excess of the fair market value of
the Common Stock acquired at the time of the exercise of the option over the
option price paid, unless at the time of exercise the Common Stock remains
subject to a "substantial risk of forfeiture" as defined in Section 83 of the
Code. The Company will be entitled to a deduction for federal income tax
purposes in the year the optionee must report the income in an amount equal to
the ordinary income realized by the optionee as a result of exercise of his
option.
An optionee's tax basis in shares acquired upon the exercise of an option
will be the fair market value of such shares used to determine the amount of
ordinary taxable income reported by the optionee with respect to the exercise of
the option. Upon any sale of such shares of Common Stock, the optionee's gain or
loss will therefore equal the difference between the sale price and such tax
basis. Any such gain or loss will be short-term or long-term capital gain or
loss depending on whether the shares have been held for more than the long-term
capital gain holding period.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
NON-EMPLOYEE DIRECTORS' PLAN.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's directors, executive officers and persons who own more than 10% of the
outstanding shares of the Company's Common Stock file with the Securities and
Exchange Commission certain reports relating to their ownership of Common Stock
and changes in such ownership. To the Company's knowledge, based solely on a
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during fiscal 1995, all
such Section 16(a) filing requirements were complied with, except that Mr. Lea,
a director, failed to timely file a report relating to a change in the form of
his ownership of shares of Common Stock from direct to indirect that occurred in
November 1994.
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the Audit Committee, has
reappointed, subject to stockholder ratification, the firm of BDO Seidman, LLP
as the Company's independent certified public accountants for fiscal 1996. If
the stockholders do not ratify the appointment of BDO Seidman, LLP, the Board of
Directors will reconsider its appointment upon the recommendation of the Audit
Committee.
A representative of BDO Seidman, LLP is expected to be present at the
Meeting. Such representative will have the opportunity to make a statement if he
desires to do so and will be available to respond to appropriate stockholder
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF BDO SEIDMAN, LLP.
DATE FOR RECEIPT OF PROPOSALS
In order for stockholder proposals to be included in the proxy materials
for the Company's annual meeting of stockholders for the year ending June 29,
1996, any such proposal must be received by the Company at its executive offices
not later than June 19, 1996 and meet all other applicable requirements for
inclusion therein.
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OTHER BUSINESS
The Board of Directors is not aware of any other matter to come before the
Meeting. However, if any such matter does come before the Meeting which requires
a vote of the stockholders, it is the intention of the persons named in the
enclosed proxy to vote the shares of Common Stock represented thereby in
accordance with the recommendations of the Company's management and their
judgment on such matter.
ANNUAL REPORT ON FORM 10-K
A copy of the Company's Annual Report on Form 10-K for the year ended July
1, 1995 will be provided free of charge to stockholders upon written request
directed to: Speizman Industries, Inc., 508 West Fifth Street, Charlotte, North
Carolina 28202, Attention: Josef Sklut, Secretary.
By order of the Board of Directors,
JOSEF SKLUT
SECRETARY
Charlotte, North Carolina
October 17, 1995
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EXHIBIT A
SPEIZMAN INDUSTRIES, INC.
NONQUALIFIED STOCK OPTION PLAN
EFFECTIVE AS SEPTEMBER 21, 1995
ARTICLE I -- GENERAL PROVISIONS
1.1 The Plan is designed, for the benefit of the Company, to attract
and retain for the Company personnel of exceptional ability, to
motivate such personnel through added incentives to make a maximum
contribution to the Company, to develop and maintain a highly
competent management team and to be competitive with other
companies with respect to executive compensation.
1.2 Awards under the Plan may be made to Participants in the form of
nonqualified stock options.
1.3 The Plan shall be effective September 21, 1995 (the "Effective
Date"), subject to the approval of the stockholders of the
Company. Options may be granted prior to such approval, but such
Options shall be contingent upon such approval being obtained and,
in addition to any other terms thereof or restrictions thereon
under the Plan or an Award Agreement, may not be exercised or
transferred prior to such approval.
ARTICLE II -- DEFINITIONS
Except where the context otherwise indicates, the following definitions
apply:
2.1 "ACCELERATION EVENT" means the occurrence of an event defined in
Article XIII of the Plan.
2.2 "ACT" means the Securities Exchange Act of 1934, as now in effect
or as hereafter amended. All citations to sections of the Act or
rules thereunder are to such sections or rules as they may from
time to time be amended or renumbered.
2.3 "AWARD AGREEMENT" means the written agreement evidencing an
Option granted to a Participant.
2.4 "BOARD" means the Board of Directors of Speizman Industries, Inc.
2.5 "CODE" means the Internal Revenue Code of 1986, as now in effect
or as hereafter amended. All citations to sections of the Code
are to such sections as they may from time to time be amended or
renumbered.
2.6 "COMMITTEE" means the Stock Option Committee of the Board or such
other committee consisting of two or more members as may be
appointed by the Board to administer this Plan pursuant to
Article III. To the extent required by Rule 16b-3 under the Act,
the Committee shall consist of individuals who are members of the
Board and Disinterested Persons. Committee members may also be
appointed for such limited purposes as may be provided by the
Board.
2.7 "COMPANY" means Speizman Industries, Inc., a Delaware
corporation, and its successors and assigns. The term "Company"
shall include any corporation which is a member of a controlled
group of corporations (as defined in Section 414(b) of the Code,
as modified by Section 415(h) of the Code) which includes the
Company; any trade or business (whether or not incorporated)
which is under common control (as defined in Section 414(c) of
the Code, as modified by Section 415(h) of the Code) with the
Company; any organization (whether or not incorporated) which is
a member of an affiliated service group (as defined in Section
414(m) of the Code) which includes the Company; and any other
entity required to be aggregated with the Company pursuant to
regulations under Section 414(o) of the Code. With respect to all
purposes of the Plan, including, but not limited to, the
establishment, amendment, termination, operation and
administration of the Plan, Speizman Industries, Inc. shall be
authorized to act on behalf of all other entities included within
the definition of "Company."
2.8 "DISABILITY" means a disability as determined under procedures
established by the Committee or in any Option.
2.9 "DISINTERESTED PERSON" shall have the meaning set forth in Rule
16b-3 under the Act. 2.10 "ELIGIBLE PARTICIPANT" means any
employee of the Company, as shall be determined by the Committee,
as well as any other person, including directors, subject to such
limitations imposed on a person designated as a Disinterested
Person, whose participation the Committee determines is in the
best interest of the Company, subject to limitations as may be
provided by the Code, the Act or the Committee.
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2.11 "FAIR MARKET VALUE" means, if the Stock is listed for trading on
any national securities exchange, the last sale price regular way
of the Stock on the date of reference, or, if no sale of the
Stock takes place on such date, the average of the closing high
bid and low asked prices regular way of the Stock on such date,
in either case on such exchange. If the Stock is not listed for
trading on a national securities exchange, but is listed on The
Nasdaq Stock Market, then "fair market value" means the last sale
price of the Stock on the date of reference, or, if no sale of
the Stock takes place on such date, the average of the closing
high bid and low asked prices of the Stock on such date, in
either case as reported by The Nasdaq Stock Market. The Committee
may establish an alternative method of determining Fair Market
Value.
2.12 "OPTION" means a nonqualified stock option to purchase Stock
granted under Article IV of the Plan.
2.13 "OPTION GRANT DATE" means, as to any Option: (a) the date on
which the Committee grants the Option by entering into an Award
Agreement with the Participant; (b) the date the Participant
receiving the Option becomes an employee of the Company, to the
extent employment status is a condition of the grant or a
requirement of the Code or the Act; or (c) such other date as the
Committee may designate.
2.14 "PARTICIPANT" means an Eligible Participant to whom an Option has
been granted and who has entered into an Award Agreement
evidencing the Option.
2.15 "PLAN" means the Speizman Industries, Inc. Nonqualified Stock
Option Plan set forth herein, as amended from time to time.
2.16 "STOCK" means shares of the common stock, par value $.10 per
share, of Speizman Industries, Inc., as may be adjusted pursuant
to the provisions of Section 3.14.
2.17 "TERMINATION OF EMPLOYMENT" means the discontinuance of
employment of a Participant with the Company for any reason. The
determination of whether a Participant has discontinued
employment shall be made by the Committee in its discretion. In
determining whether a Termination of Employment has occurred, the
Committee may provide that service as a consultant or service
with a business enterprise in which the Company has a significant
ownership interest shall be treated as employment with the
Company. The Committee shall have the discretion, exercisable
either at the time an Option is granted or at the time the
Participant terminates employment, to establish as a provision
applicable to the exercise of one or more Options that during the
limited period of exercisability following Termination of
Employment, the Option may be exercised not only with respect to
the number of shares of Stock for which it is exercisable at the
time of the Termination of Employment but also with respect to
one or more subsequent installments for which the Option would
have become exercisable had the Termination of Employment not
occurred.
ARTICLE III -- ADMINISTRATION
3.1 This Plan shall be administered by the Committee. A Committee
member who is not a Disinterested Person, with respect to action
to be taken by the Committee, shall not be able to participate in
the decision to the extent prescribed by Rule 16b-3 under the
Act. The Committee, in its discretion, may delegate to one or
more of its members such of its powers as it deems appropriate.
The Committee also may limit the power of any member to the
extent necessary to comply with Rule 16b-3 under the Act or any
other law. Members of the Committee shall be appointed
originally, and as vacancies occur, by the Board, to serve at the
pleasure of the Board. The Board may serve as the Committee, if
by the terms of the Plan all Board members are otherwise eligible
to serve on the Committee.
3.2 The Committee shall meet at such times and places as it
determines. A majority of its members shall constitute a quorum,
and the decision of a majority of those present at any meeting at
which a quorum is present shall constitute the decision of the
Committee. A memorandum signed by all of its members shall
constitute the decision of the Committee without necessity, in
such event, for holding an actual meeting.
3.3 The Committee shall have the exclusive right to interpret,
construe and administer the Plan, to select the persons who are
eligible to receive an Option, and to act in all matters
pertaining to the granting of an Option and the contents of the
Award Agreement evidencing the Option, including without
limitation the determination of the number of Options and the
form, terms, conditions and duration of each Option, and any
amendment thereof consistent with the Plan. All acts,
determinations and decisions of the Committee made or taken
pursuant to grants of authority under the Plan or with respect to
any questions arising in connection with the administration and
interpretation of the Plan, including the severability of any and
all of the provisions hereof, shall be conclusive, final and
binding upon all Participants, Eligible Participants and their
beneficiaries.
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3.4 The Committee may adopt such rules, regulations and procedures of
general application for the administration of this Plan, as the
Committee deems appropriate.
3.5 Without limiting the foregoing Sections 3.1, 3.2, 3.3 and 3.4,
and notwithstanding any other provisions of the Plan, the
Committee is authorized to take such action as it determines to
be necessary or advisable, and fair and equitable to
Participants, with respect to an Option in the event of an
Acceleration Event as defined in Article V. Such action may
include, but shall not be limited to, establishing, amending or
waiving the forms, terms, conditions and duration of an Option
and the corresponding Award Agreement so as to provide for
earlier, later, extended or additional times for exercise or
payments, differing methods for calculating payments, alternate
forms and amounts of payment, an accelerated release of
restrictions or other modifications. The Committee may take such
actions pursuant to this Section 3.5 by adopting rules and
regulations of general applicability to all Participants or to
certain categories of Participants, by including, amending or
waiving terms and conditions in an Option and the corresponding
Award Agreement, or by taking action with respect to individual
Participants.
3.6 In addition to such other rights of indemnification as they may
have as directors or as members of the Committee, the members of
the Committee shall be indemnified by the Company against
reasonable expenses, including attorney's 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 Option granted thereunder, and against all
amounts paid by them in settlement thereof, provided such
settlement is approved by independent legal counsel selected by
the Company, or paid by them in satisfaction of a judgment or
settlement in any such action, suit or proceeding, except as to
matters as to which the Committee member has been negligent or
engaged in misconduct in the performance of his duties; provided,
that within 60 days after institution of any such action, suit or
proceeding, a Committee member shall in writing offer the Company
the opportunity, at its own expense, to handle and defend the
same.
3.7 The Committee may require each person purchasing shares of Stock
pursuant to an Option to represent to and agree with the Company
in writing that he is acquiring the shares of Stock without a
view to distribution thereof. The certificates for such shares of
Stock may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.
3.8 The Committee shall be authorized to make adjustments in
performance based criteria or in the terms and conditions of
Options in recognition of unusual or nonrecurring events
affecting the Company or its financial statements or changes in
applicable laws, regulations or accounting principles. The
Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award Agreement in
the manner and to the extent it shall deem desirable to carry it
into effect. In the event the Company shall assume outstanding
employee benefit awards or the right or obligation to make future
such awards in connection with the acquisition of another
corporation or business entity, the Committee may, in its
discretion, make such adjustments in the terms of Options under
the Plan as it shall deem appropriate.
3.9 The Committee shall have full power and authority to determine
whether, to what extent and under what circumstances, any Option
shall be canceled or suspended. In particular, but without
limitation, all outstanding Options to any Participant may be
canceled if the Participant (a) without the consent of the
Committee, while employed by the Company or after termination of
such employment, becomes associated with, employed by, renders
services to, or owns any interest in, other than any
insubstantial interest, as determined by the Committee, any
business that is in competition with the Company or with any
business in which the Company has a substantial interest as
determined by the Committee; or (b) is terminated for cause as
determined by the Committee.
3.10 The aggregate number of shares of Stock which are available for
issuance pursuant to Options granted under the Plan shall be
145,000 or any larger number that, subsequent to the date this
Plan is adopted, may be authorized for issuance by the Company.
Such shares of Stock shall be made available from authorized and
unissued shares. If, for any reason, any shares of Stock awarded
or subject to purchase under the Plan are not delivered or
purchased, or are reacquired by the Company, for reasons
including, but not limited to, expiration or cancellation of an
Option or any other termination of an Option without payment
being made in the form of Stock, such shares of Stock shall not
be charged against the aggregate number of shares of Stock
available for Options under the Plan, and may again be available
for grants of Options under the Plan.
3.11 The Company shall not be required to issue or deliver any
certificates for shares of Stock prior to: (a) the listing of
such shares on any stock exchange on which the Stock may then be
listed; and
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(b) the completion of any registration or qualification of such
shares of Stock under any federal or state law, or any ruling
or regulation of any government body which the Company shall,
in its discretion, determine to be necessary or advisable.
3.12 All certificates for shares of Stock delivered under the Plan
shall also be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Stock is
then listed and any applicable federal or state laws, and the
Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.
In making such determination, the Committee may rely upon an
opinion of counsel for the Company.
3.13 Except as provided otherwise in the Plan or in an Award
Agreement, no Participant awarded an Option shall have any right
as a shareholder with respect to any shares of Stock covered by
such Option prior to the date of issuance to him or her of a
certificate or certificates for such shares of Stock.
3.14 If any reorganization, recapitalization, reclassification, stock
split-up, stock dividend, or consolidation of shares of Stock,
merger or consolidation of the Company or sale or other
disposition by the Company of all or a portion of its assets, any
other change in the Company's corporate structure, or any
distribution to stockholders other than a cash dividend results
in the outstanding shares of Stock, or any securities exchanged
therefor or received in their place, being exchanged for a
different number or class of shares of Stock or other securities
of the Company, or for shares of Stock or other securities of any
other corporation, or new, different or additional shares or
other securities of the Company or of any other corporation being
received by the holders of outstanding shares of Stock, then
equitable adjustments shall be made by the Committee in: (a) the
limitation on the aggregate number of shares of Stock that may be
issued as set forth in Section 3.10 of the Plan; (b) the number
and class of Stock that may be subject to a grant of an Option
and which have not been issued or transferred under an
outstanding Option; (c) the purchase price to be paid per share
of Stock under outstanding Options; and (d) the terms, conditions
or restrictions of any Option and Award Agreement.
ARTICLE IV -- OPTIONS
4.1 Options to purchase shares of Stock may be granted to Eligible
Participants at such time or times determined by the Committee,
following the Effective Date, subject to the terms and conditions
set forth in this Article IV.
4.2 Each Option shall be evidenced by a written Award Agreement which
shall be subject to and incorporate, by reference or otherwise,
the applicable terms and conditions of the Plan, and any other
terms and conditions not inconsistent with the Plan as may be
imposed by the Committee, including any provisions as to
continued employment as consideration for the grant or exercise
of the Option and any provisions which may be advisable to comply
with applicable laws, regulations or rulings of any governmental
authority.
4.3 The Option price per share of Stock shall be established in the
Award Agreement and may be less than 100% of the Fair Market
Value at the Option Grant Date.
4.4 The Option may be exercised in full or in part from time to time
within such period as may be specified by the Committee or in the
Award Agreement; provided, however, that in any event the Option
shall lapse and cease to be exercisable three months following
the Participant's Termination of Employment.
4.5 An Option shall not be transferable by the Participant other than
by will or by the laws of descent and distribution, or, to the
extent otherwise allowed by Rule 16b-3 under the Act or other
applicable law, pursuant to a qualified domestic relations order
as defined by the Code and the Employee Retirement Income
Security Act, as amended, and the rules thereunder, and shall be
exercisable during the lifetime of the Participant only by him or
by his guardian or legal representative. Unless otherwise
provided by the Committee or specified in an Award Agreement,
transfer restrictions shall only apply to the extent required by
federal or state securities laws. If any Participant makes such a
transfer in violation hereof, any obligation of the Company shall
forthwith terminate.
4.6 Shares of Stock purchased upon exercise of an Option shall be
paid for in such amounts, at such times and upon such terms as
shall be determined by the Committee, subject to limitations set
forth in the corresponding Award Agreement. Without limiting the
foregoing, the Committee may establish payment terms for the
exercise of Options which permit the Participant to deliver
shares of Stock, or other evidence of ownership of Stock
satisfactory to the Company, with a Fair Market Value equal to
the Option price as payment.
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4.7 No cash dividends shall be paid on shares of Stock subject to
unexercised Options. The Committee may provide, however, that a
Participant to whom an Option has been granted which is
exercisable in whole or in part at a future time for shares of
Stock shall be entitled to receive an amount per share equal in
value to the cash dividends, if any, paid per share on issued and
outstanding Stock, as of the dividend record dates occurring
during the period between the date of the grant and the time each
such share of Stock is delivered pursuant to exercise of such
Option. Such amounts (herein called "dividend equivalents") may,
in the discretion of the Committee, be: (a) paid in cash or Stock
either from time to time prior to, or at the time of the delivery
of, such Stock, or upon expiration of the Option if it shall not
have been fully exercised; or (b) converted into contingently
credited shares of Stock, with respect to which dividend
equivalents may accrue, in such manner, at such value, and
deliverable at such time or times, as may be determined by the
Committee. Such Stock, whether delivered or contingently
credited, shall be charged against the limitations set forth in
Section 3.10.
4.8 The Committee, in its sole discretion, may authorize payment of
interest equivalents on dividend equivalents which are payable in
cash at a future time.
4.9 In the event of Disability or death, the Committee, with the
consent of the Participant or his legal representative, may
authorize payment, in cash or in Stock, or partly in cash and
partly in Stock, as the Committee may direct, of an amount equal
to the difference at the time between the Fair Market Value of
the Stock subject to an Option and the option price in
consideration of the surrender of the Option.
4.10 The Company may make such provisions and take such steps as it
may deem necessary or appropriate for the withholding of any
taxes which the Company is required by any law or regulation of
any governmental authority, whether federal, state or local,
domestic or foreign, to withhold in connection with any Option or
the exercise thereof, including, but not limited to, withholding
the issuance of Stock pursuant to exercise of the Option until
the Participant reimburses the Company for the amount the Company
is required to withhold with respect to such taxes or canceling
any portion of the Option or another Option granted under the
Plan in an amount sufficient to reimburse the Company for the
amount the Company is required to so withhold.
4.11 If a Participant is required to pay to the Company an amount with
respect to income and employment tax withholding obligations in
connection with exercise of an Option, the Committee, in its
discretion and subject to such rules as it may adopt, may permit
the Participant to satisfy the obligation, in whole or in part,
by making an irrevocable election that a portion of the total
Fair Market Value of the shares of Stock subject to the Option be
paid in the form of cash in lieu of the issuance of Stock and
that such cash payment be applied to the satisfaction of the
withholding obligations. The amount to be withheld shall not
exceed the statutory minimum federal and state income and
employment tax liability arising from the Option exercise
transaction. Notwithstanding any other provision of the Plan, any
election under this Section 4.11 shall be effective only if it
satisfies the applicable requirements of Rule 16b-3 of the Act.
4.12 The Committee may permit the voluntary surrender of all or a
portion of any Option granted under the Plan to be conditioned
upon the granting to the Participant of a new Option for the same
or a different number of shares of Stock as the Option
surrendered, or may require such surrender as a condition
precedent to a grant of a new Option to such Participant. Subject
to the provisions of the Plan, such new Option shall be
exercisable at such price, during such period and on such other
terms and conditions as are specified by the Committee at the
time the new Option is granted. Upon surrender, the Options
surrendered shall be canceled and the shares of Stock previously
subject to them shall be available for the grant of other
Options.
ARTICLE V -- ACCELERATION EVENTS
5.1 For the purposes of the Plan, an Acceleration Event shall occur
in the event of a "Potential Change in Control," or "Change in
Control" or a "Board-Approved Change in Control," as those terms
are defined below.
5.2 A "Change in Control" shall be deemed to have occurred if: (a)
Any "Person" as defined in Section 3(a)(9) of the Act, including
a "group" (as that term is used in Sections 13(d)(3) and 14(d)(2)
of the Act), but excluding the Company and any employee benefit
plan sponsored or maintained by the Company, including any
trustee of such plan acting as trustee, who: (i) makes a tender
or exchange offer for any shares of the Company's Stock (as
defined below) pursuant to which any shares of the Company's
Stock are purchased (an "Offer"); or
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(ii) together with its "affiliates" and "associates" (as those
terms are defined in Rule 12b-2 under the Act) becomes the
"Beneficial Owner" (within the meaning of Rule 13d-3 under
the Act) of at least 20% of the Company's Stock (an
"Acquisition");
(b) The stockholders of the Company approve
a definitive agreement or plan to merge or consolidate the
Company with or into another corporation, to sell or
otherwise dispose of all or substantially all of its assets,
or to liquidate the Company (individually, a "Transaction");
or
(c) When, during any period of 24 consecutive months
during the existence of the Plan, the individuals who, at
the beginning of such period, constitute the Board (the
"Incumbent Directors") cease for any reason other than death
to constitute at least a majority thereof; provided,
however, that a director who was not a director at the
beginning of such 24 month period shall be deemed to have
satisfied such 24 month requirement, and be an Incumbent
Director, if such director was elected by, or on the
recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent
Directors either actually, because they were directors at
the beginning of such 24 month period, or by prior operation
of this Section 5.2(c).
5.3 A "Board-Approved Change in Control" shall be deemed to have
occurred if the Offer, Acquisition or Transaction, as the case
may be, is approved by a majority of the Directors serving as
members of the Board at the time of the Potential Change in
Control or Change in Control.
5.4 A "Potential Change in Control" means the happening of any one of
the following: (a) The approval by stockholders of an agreement
by the Company, the consummation of which would result in a
Change in Control of the Company, as defined in Section 5.2; or
(b) The acquisition of Beneficial Ownership, directly or
indirectly, by any entity, person or group, other than the
Company or any Company employee benefit plan, including any
trustee of such plan acting as such trustee, of securities of the
Company representing five percent or more of the combined voting
power of the Company's outstanding securities and the adoption by
the Board of a resolution to the effect that a Potential Change
in Control of the Company has occurred for the purposes of this
Plan.
5.5 Upon the occurrence of an Acceleration Event, the Committee in
its discretion may declare that any or all then outstanding
Options, that are not already exercisable and fully vested, shall
become immediately exercisable and fully vested in whole or in
part.
5.6 In the event of a Change in Control, the Committee may, in its
discretion, cash out the value of all outstanding Options, to the
extent vested, on the basis of the "Change in Control Price" (as
defined in Section 5.7) as of the date such Change in Control or
such Potential Change in Control is determined to have occurred
or such other date as the Committee may determine prior to the
Change in Control, less the Option price (as established in the
corresponding Award Agreements).
5.7 For purposes of Section 5.6, "Change in Control Price" means the
highest price per share of Stock paid in any transaction reported
on the exchange on which the Stock is then traded, or paid or
offered in any bona fide transaction related to a Potential or
actual Change in Control of the Company at any time during the 60
day period immediately preceding the occurrence of the Change in
Control, or, where applicable, the occurrence of the Potential
Change in Control event, in each case as determined by the
Committee.
ARTICLE VI -- AMENDMENT AND TERMINATION
6.1 The Board, upon recommendation of the Committee, or otherwise, at
any time and from time to time, may amend or terminate the Plan.
To the extent required by Rule 16b-3 under the Act, no amendment,
without approval by the Company's stockholders, shall:
(a) alter the group of persons eligible to participate in the Plan;
(b) except as otherwise provided herein, increase the maximum number
of shares of Stock or Options that are available for award under
the Plan;
(c) limit or restrict the powers of the Committee with
respect to the administration of this Plan;
(d) materially increase the benefits accruing to Participants under
this Plan;
(e) materially modify the requirements as to eligibility for
participation in this Plan; or
(g) change any of the provisions of this Article VI.
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6.2 No amendment to or discontinuance of this Plan or any provision
thereof by the Board or the stockholders of the Company shall,
without the written consent of the Participant, adversely affect,
as shall be determined by the Committee, any Option theretofore
granted to such Participant under this Plan; provided, however,
the Committee retains the right and power to:
(a) annul any Option if the Participant is terminated for cause as
determined by the Committee; and
(b) provide for the forfeiture of shares of Stock or other gain
under an Option, as determined by the Committee, in the event the
Participant competes against the Company.
6.3 If an Acceleration Event has occurred, no amendment or
termination shall impair the rights of any person with respect to
an outstanding Option as provided in Article V.
ARTICLE VII -- MISCELLANEOUS PROVISIONS
7.1 Nothing in the Plan or any Option granted hereunder shall confer
upon any Participant any right to continue in the employ of the
Company, or to serve as a director thereof, or interfere in any
way with the right of the Company to terminate his or her
employment at any time. Unless specifically provided otherwise,
no Option granted under the Plan shall be deemed salary or
compensation for the purpose of computing benefits under any
employee benefit plan or other arrangement of the Company for the
benefit of its employees unless the Company shall determine
otherwise. No Participant shall have any claim to an Option until
it is actually granted under the Plan. To the extent that any
person acquires a right to receive payments from the Company
under the Plan, such right shall, except as otherwise provided by
the Committee, be no greater than the right of an unsecured
general creditor of the Company. All payments to be made
hereunder shall be paid from the general funds of the company,
and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such
amounts, except as otherwise provided by the Committee.
7.2 The Plan and the grant of Options hereunder shall be subject to
all applicable federal and state laws, rules, and regulations and
to such approvals by any United States government or regulatory
agency as may be required. Any provision herein relating to
compliance with Rule 16b-3 under the Act shall not be applicable
with respect to participation in the Plan by Participants who are
not subject to Section 16(b) of the Act.
7.3 The terms of the Plan shall be binding upon the Company and its
successors and assigns.
7.4 This Plan and all actions taken hereunder shall be governed by
the laws of the State of North Carolina.
7.5 The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any payments
not yet made to a Participant by the Company, nothing contained
herein shall give any such Participant any rights that are
greater than those of a general creditor of the Company. In its
sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created
under the Plan to deliver shares of Stock or payments in lieu of
or with respect to Options granted hereunder; provided, however,
that, unless the Committee otherwise determines with the consent
of the affected Participant, the existence of such trusts or
other arrangements is consistent with the "unfunded" status of
the Plan.
7.6 Each Participant exercising an Option hereunder agrees to give
the Committee prompt written notice of any election made by such
Participant under Section 83(b) of the Code, or any similar
provision thereof.
7.7 If any provision of this Plan or an Award Agreement is or becomes
or is deemed invalid, illegal or unenforceable in any
jurisdiction, or would disqualify the Plan or any Award Agreement
under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable
laws or if it cannot be construed or deemed amended without, in
the determination of the Committee, materially altering the
intent of the Plan or the Award Agreement, it shall be stricken
and the remainder of the Plan or the Award Agreement shall remain
in full force and effect.
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EXHIBIT B
SPEIZMAN INDUSTRIES, INC.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
PURPOSE
This Stock Option Plan for Non-Employee Directors (the "Plan") is designed
to advance the interest of Speizman Industries, Inc. (the "Company") and its
stockholders by providing an incentive to each member of the Board of Directors
of the Company (the "Board"), who is not a full-time or part-time employee of
the Company or its parent or subsidiary corporations ("Non-Employee Director"),
to continue in the service of the Company and by creating a direct interest of
the Non-Employee Directors in the future success of the Company's operations by
granting to such persons options to acquire shares of the common stock of the
Company, par value $.10 per share (the "Common Stock"). As used herein, "parent"
shall mean a "parent corporation" as defined in Section 424(e) of the Internal
Revenue Code of 1986, as amended (the "Code"), and "subsidiary" shall mean a
"subsidiary corporation" as defined in Section 424(f) of the Code.
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Stock Option Committee of the Board
or such other committee as may be appointed by the Board from among its members
to administer the Plan (the "Committee"). The Committee shall consist of not
less than two Non-Employee Directors who are "disinterested persons" within the
meaning of Rule 16b-3(c)(2)(i) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Committee shall have authority to adopt such
rules and regulations and to make such determinations as are not inconsistent
with the Plan and are necessary or desirable for its implementation and
administration. All decisions, determinations and interpretations of the
Committee shall be final and binding on all optionees.
It is intended that the Plan be nondiscretionary for purposes of Rule 16b-3
under the Exchange Act, and the powers of the Committee under the Plan shall be
limited to ministerial and nondiscretionary acts which do not affect the status
of the Plan as nondiscretionary.
The Committee shall hold its meetings at such times and places as it may
determine, with a majority of the Committee constituting a quorum. Any action
which the Committee has the power to take at a meeting may be taken by the
Committee without a meeting if all of the members of the Committee give their
consent to such action in writing.
ARTICLE III
STOCK
The shares to be optioned under the Plan ("Option Shares") shall be shares
of authorized but unissued Common Stock of the Company. The total number of
shares of Common Stock subject to awards of nonqualified stock options
("Options") granted under the Plan shall not exceed in the aggregate 15,000,
except as such number of shares shall be adjusted in accordance with the
provisions of Article X hereof. The Options granted under the Plan are not
intended to qualify as incentive stock options under Section 422 of the Code. If
an Option should expire, terminate or become unexercisable for any reason
without having been exercised in full, the unpurchased Option Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for the grant of other Options under the Plan.
ARTICLE IV
ELIGIBILITY OF PARTICIPANTS
Each Non-Employee Director shall be eligible to receive Options in
accordance with the provisions of the Plan.
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ARTICLE V
ANNUAL AWARDS
On December 1st of each year, commencing on December 1, 1995, each
Non-Employee Director shall be granted an Option to purchase 1,000 shares of
Common Stock, subject to adjustment as provided in Article X below (the "Annual
Award"). In the event that the number of shares of Common Stock available for
grants under the Plan is insufficient to grant the number of Options determined
as provided above, Options for the remaining number of shares of Common Stock
available for grant under the Plan shall be granted in equal amounts to each
Non-Employee Director. Notwithstanding the foregoing, any Non-Employee Director
may elect (1) to decline an Annual Award, or (2) to revoke a previous election
to decline an Annual Award, in either event, at any time prior to the date such
Annual Award would otherwise be made. A Non-Employee Director who elects to
decline an Annual Award will receive no compensation in lieu of such Annual
Award (either at the time of such election or at any time thereafter).
Upon the grant of each Annual Award, the Company and the Non-Employee
Director shall enter into a stock option award agreement which shall specify the
date of grant and the Option Price, as defined herein, and shall include or
incorporate by reference the substance of all of the provisions set forth in
Articles VI through IX below and such other provisions consistent with the Plan
as the Committee may determine. The Committee shall have no discretion to select
the Non-Employee Directors who will receive Annual Awards or to determine the
number of Option Shares covered by such Annual Award, the Option Price per
Option Share, the circumstances under which an Annual Award may be granted, or
the period within which Options granted pursuant to Annual Awards may be
exercised or to alter any other terms or conditions in the Plan with respect to
Annual Awards to Non-Employee Directors, except for administering the Plan
subject to the express provisions of the Plan.
TIMING OF GRANTING ANNUAL AWARDS
Grants of Annual Awards shall be made automatically under this Article
without any action by the Committee.
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ARTICLE VI
OPTION PRICE
The per share Option exercise price (the "Option Price") for all Options
granted under the Plan shall be the fair market value of the Common Stock of the
Company on the date the Annual Award is granted, subject to adjustments as
provided in Article X. If the Common Stock is listed for trading on any national
securities exchange, then the "fair market value" shall be the closing sale
price of the Common Stock on such exchange on the date of grant. If the Common
Stock is not listed for trading on a national securities exchange but is traded
on The Nasdaq Stock Market, then the "fair market value" shall be the last sale
price reported by The Nasdaq Stock Market on the date of grant. If the Common
Stock is neither traded on any national securities exchange nor traded on The
Nasdaq Stock Market, but is traded in the over-the-counter market, then the
"fair market value" shall be the average closing bid and asked prices on the
date of grant provided by any market maker in the Common Stock selected by the
Company to provide quotations for this purpose. If there is no market maker in
the Common Stock, the fair market value shall be the last sale price of the
Common Stock on the date of grant. In the event that on any date of the grant of
options there is no sale of at least 100 shares of Common Stock, the sale price
or the bid and asked prices on the last day on which there was a sale of at
least 100 shares of Common Stock shall be used to determine "fair market value."
ARTICLE VII
EXERCISE AND TERM OF OPTIONS
An Option shall not be exercisable unless: (a) the Option has become
exercisable as provided below; (b) the person exercising the Option has been, at
all times during the period beginning with the date of grant of the Option and
ending on the date of exercise of the Option, a Non-Employee Director, except
that in the event (i) a Non-Employee Director ceases to be a Non-Employee
Director for any reason, he may exercise any of his outstanding Options that are
exercisable on the date he ceases to be a Non-Employee Director at any time
within one year after such date, subject to earlier termination of any such
Option as provided herein, at the end of which one-year period any such Option
that has not been fully exercised shall terminate, or (ii) an optionee shall die
holding any outstanding Options that are exercisable on the date of his death,
his executors, administrators, heirs or distributees, as the case may be, may
exercise any such Option at any time within six months after the date of such
optionee's death, even if such six-month period extends beyond the one-year
period described
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in the preceding clause, but subject to any other earlier termination of any
such Option as provided herein, at the end of which six-month period any such
Option that has not been fully exercised shall terminate; (c) payment in full is
made for the shares of Common Stock being acquired thereunder at the time of
exercise in United States dollars by cash or check; and (d) payment in full is
made for any withholding obligation as provided in Article VIII below.
Options granted under the Plan shall become exercisable in cumulative
increments of 50% and 100% beginning on the first and second anniversaries,
respectively, of the date of grant if on such dates the Non-Employee Director to
whom any such Option was granted remains a Non-Employee Director. In the event a
Non-Employee Director ceases to be a Non-Employee Director, any of his then
outstanding Options that have not become exercisable as provided herein shall
terminate immediately.
In addition, in the event of a merger or consolidation in which the Company
is not the surviving entity, or any other capital reorganization in which more
than 50% of the then outstanding shares of Common Stock are exchanged, or the
sale by the Company of all or substantially all of its assets to another entity,
any outstanding Option that was granted under the Plan more than six months
prior to the date of the Company's adoption of a plan or definitive agreement in
respect of such merger, consolidation, reorganization or asset sale, as the case
may be, shall become exercisable in full as of such date. Upon the effectiveness
of such merger, consolidation, reorganization or asset sale, as the case may be,
any then outstanding Option shall terminate.
Any other provisions of the Plan notwithstanding, (a) no Option shall
become exercisable under any circumstances unless and until the Plan has been
approved by the Company's stockholders, and (b) each Option shall terminate on
the tenth anniversary of the date of grant of such Option subject to earlier
termination as provided herein.
ARTICLE VIII
PAYMENT OF SHARES
Payment of the Option Price for Option Shares shall be made in full upon
exercise of the Option. Any rights of the Non-Employee Director to exercise an
Option shall be conditioned upon the Non-Employee Director forwarding to the
Company, in addition to the Option Price of the Option Shares, cash payment of
an amount equal to the amount the Company is required by law or regulation of
any governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with such exercise of the Option, as
determined by the Committee in its discretion. The amount of such payment shall
be communicated to the Non-Employee Director as soon as practicable following
receipt by the Company of the Non-Employee Director's notice of exercise.
ARTICLE IX
NON-TRANSFERABILITY OF OPTION
No Option under the Plan shall be transferable except by will or the laws
of descent and distribution. During the lifetime of the optionee, an Option
shall be exercisable only by the optionee.
ARTICLE X
ADJUSTMENT FOR CHANGES IN CAPITALIZATION
If the number of issued and outstanding shares of Common Stock as a whole
are increased, decreased or changed into, or exchanged for, a different number
or kind of shares or securities of the Company, whether through merger,
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split, combination of shares, exchange of shares, change in
corporate structure or the like, an appropriate and proportionate adjustment
shall be made in the number and kind of shares subject to this Plan and in the
number, kind, and per share exercise price of shares subject to outstanding
Options or portions thereof granted prior to any such change. Any such
adjustment in an outstanding Option, however, shall be made without a change in
the total price applicable to the unexercised portion of the Option but with a
corresponding adjustment in the price for each share covered by the Option. No
fractional shares of Common Stock shall be issued under the Plan on account of
any adjustment specified above.
ARTICLE XI
NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation on the recipient to
exercise such Option.
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ARTICLE XII
RIGHTS AS A STOCKHOLDER
An optionee or a permitted transferee of an Option shall have no right as
stockholder with respect to any Option Shares covered by his Option until such
person shall have become the holder of such Option Shares, and such person shall
not be entitled to any dividends or distributions of other rights in respect of
such Option Shares for which the record date is prior to the date on which such
person shall have become the holder of record thereof.
ARTICLE XIII
REGULATORY MATTERS
Every Option under the Plan is granted upon the express condition that the
inability of the Company to comply with, or any delay in complying with, any
laws, rules or regulations governing the issuance of Option Shares necessary to
satisfy such Option (including but not limited to complying with the Securities
Act of 1933, as amended (the "Act") and all rules and regulations thereunder),
the fulfillment of which condition is deemed necessary by counsel for the
Company to the lawful issuance or transfer of any such shares, shall relieve the
Company of any liability for the non-issuance or non-transfer, or any delay in
the issuance or transfer of such shares. Further, it is the intention of the
Company that the Plan comply in all respects with Rule 16b-3 under the Exchange
Act ("Rule 16b-3"). If any Plan provisions is found not to be in compliance with
Rule 16b-3, the provision shall be deemed null and void.
ARTICLE XIV
AMENDMENTS OR DISCONTINUANCE OF THE PLAN
The Plan may be amended at any time and from time to time by the Board as
the Board shall deem advisable; provided, however, that except as provided in
Article X above, the Board may not, without further approval by the stockholders
of the Company, increase the maximum numbers of shares of Common Stock as to
which Options may be granted under the Plan, reduce the Option Price described
in Article VI above, extend the period during which Options may be granted or
exercised under the Plan or change the class of persons eligible to receive
Options under the Plan. No amendment of the Plan shall materially and adversely
affect any right of any Non-Employee Director with respect to any Option
theretofore granted without such Non-Employee Director's written consent.
Notwithstanding the foregoing, the Plan may not be amended to change the amount,
price or timing of the Annual Award until at least six months (or such longer or
shorter period required by Rule 16b-3) after the date of the last preceding
amendment except to comport with changes in the Code, the Employee Retirement
Income Security Act, or the rules and regulations promulgated thereunder.
ARTICLE XV
MISCELLANEOUS PROVISIONS
Except as expressly provided for in the Plan, no Non-Employee Director or
other person shall have any claim or right to be granted an Option under the
Plan. The expenses of the Plan shall be borne by the Company.
ARTICLE XVI
TERMINATION
This Plan shall terminate upon the adoption of a resolution of the Board
terminating the Plan. No termination of the Plan shall materially and adversely
affect any of the rights or obligations of any person, without his consent,
under any Option theretofore granted under the Plan except that upon the
dissolution or liquidation of the Company, this Plan and the Options issued
hereunder shall terminate.
ARTICLE XVII
EFFECTIVENESS
The Plan shall become effective upon approval by the Company's
stockholders.
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SPEIZMAN INDUSTRIES, INC.
NONQUALIFIED STOCK OPTION PLAN
Effective as September 21, 1995
ARTICLE I - GENERAL PROVISIONS
1.1 The Plan is designed, for the benefit of the Company, to
attract and retain for the Company personnel of exceptional
ability, to motivate such personnel through added
incentives to make a maximum contribution to the Company,
to develop and maintain a highly competent management team and
to be competitive with other companies with respect to
executive compensation.
1.2 Awards under the Plan may be made to Participants in the form
of nonqualified stock options.
1.3 The Plan shall be effective September 21, 1995 (the "Effective
Date"), subject to the approval of the stockholders of the Company.
Options may be granted prior to such approval, but such Options shall
be contingent upon such approval being obtained and, in
addition to any other terms thereof or restrictions thereon under
the Plan or an Award Agreement, may not be exercised or transferred
prior to such approval.
ARTICLE II - DEFINITIONS
Except where the context otherwise indicates, the following
definitions apply:
2.1 "Acceleration Event" means the occurrence of an event defined
in Article XIII of the Plan.
2.2 "Act" means the Securities Exchange Act of 1934, as now
in effect or as hereafter amended. All citations to sections
of the Act or rules thereunder are to such sections or rules as
they may from time to time be amended or renumbered.
2.3 "Award Agreement" means the written agreement evidencing an
Option granted to a Participant.
2.4 "Board" means the Board of Directors of Speizman Industries, Inc.
2.5 "Code" means the Internal Revenue Code of 1986, as now
in effect or as hereafter amended. All citations to sections
of the Code are to such sections as they may from time to time
be amended or renumbered.
2.6 "Committee" means the Stock Option Committee of the Board or
such other committee consisting of two or more members as may
be appointed by the Board to administer this Plan pursuant to
Article III. To the extent required by Rule 16b-3 under the
Act, the Committee shall consist of individuals who are members
of the Board and Disinterested Persons. Committee members
may also be appointed for such limited purposes as may be
provided by the Board.
2.7 "Company" means Speizman Industries, Inc., a Delaware
corporation, and its successors and assigns. The term
"Company" shall include any corporation which is a
member of a controlled group of corporations (as defined in
Section 414(b) of the Code, as modified by Section 415(h) of
the Code) which includes the Company; any trade or business
(whether or not incorporated) which is under common control
(as defined in Section 414(c) of the Code, as modified by
Section 415(h) of the Code)
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with the Company; any organization (whether or not
incorporated) which is a member of an affiliated service group
(as defined in Section 414(m) of the Code) which includes the
Company; and any other entity required to be aggregated with
the Company pursuant to regulations under Section 414(o) of the
Code. With respect to all purposes of the Plan, including,
but not limited to, the establishment, amendment, termination,
operation and administration of the Plan, Speizman Industries,
Inc. shall be authorized to act on behalf of all other entities
included within the definition of "Company."
2.8 "Disability" means a disability as determined under procedures
established by the Committee or in any Option.
2.9 "Disinterested Person" shall have the meaning set forth in Rule
16b-3 under the Act.
2.10 "Eligible Participant" means any employee of the Company, as
shall be determined by the Committee, as well as any other
person, including directors, subject to such limitations
imposed on a person designated as a Disinterested Person,
whose participation the Committee determines is in the best
interest of the Company, subject to limitations as may
be provided by the Code, the Act or the Committee.
2.11 "Fair Market Value" means, if the Stock is listed for
trading on any national securities exchange, the last sale
price regular way of the Stock on the date of reference, or, if
no sale of the Stock takes place on such date, the average of
the closing high bid and low asked prices regular way of the
Stock on such date, in either case on such exchange. If
the Stock is not listed for trading on a national securities
exchange, but is listed on The Nasdaq Stock Market, then
"fair market value" means the last sale price of the Stock
on the date of reference, or, if no sale of the Stock takes
place on such date, the average of the closing high bid and
low asked prices of the Stock on such date, in either case
as reported by The Nasdaq Stock Market. The Committee may
establish an alternative method of determining Fair Market
Value.
2.12 "Option" means a nonqualified stock option to purchase Stock
granted under Article IV of the Plan.
2.13 "Option Grant Date" means, as to any Option:
(a) the date on which the Committee grants the Option by
entering into an Award Agreement with the Participant;
(b) the date the Participant receiving the Option
becomes an employee of the Company, to the extent
employment status is a condition of the grant or a
requirement of the Code or the Act; or
(c) such other date as the Committee may designate.
2.14 "Participant" means an Eligible Participant to whom an
Option has been granted and who has entered into an Award
Agreement evidencing the Option.
2.15 "Plan" means the Speizman Industries, Inc. Nonqualified
Stock Option Plan set forth herein, as amended from time to
time.
2.16 "Stock" means shares of the common stock, par value $.10 per
share, of Speizman Industries, Inc., as may be adjusted
pursuant to the provisions of Section 3.14.
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2.17 "Termination of Employment" means the discontinuance of
employment of a Participant with the Company for any reason.
The determination of whether a Participant has discontinued
employment shall be made by the Committee in its discretion.
In determining whether a Termination of Employment has
occurred, the Committee may provide that service as a
consultant or service with a business enterprise in which
the Company has a significant ownership interest shall be
treated as employment with the Company. The Committee shall
have the discretion, exercisable either at the time an Option
is granted or at the time the Participant terminates
employment, to establish as a provision applicable to the
exercise of one or more Options that during the
limited period of exercisability following Termination of
Employment, the Option may be exercised not only with respect
to the number of shares of Stock for which it is
exercisable at the time of the Termination of Employment but
also with respect to one or more subsequent installments for
which the Option would have become exercisable had the
Termination of Employment not occurred.
ARTICLE III - ADMINISTRATION
3.1 This Plan shall be administered by the Committee. A
Committee member who is not a Disinterested Person, with
respect to action to be taken by the Committee, shall not be
able to participate in the decision to the extent prescribed
by Rule 16b-3 under the Act. The Committee, in its discretion,
may delegate to one or more of its members such of its
powers as it deems appropriate. The Committee also may limit
the power of any member to the extent necessary to comply with
Rule 16b-3 under the Act or any other law. Members of
the Committee shall be appointed originally, and as vacancies
occur, by the Board, to serve at the pleasure of the Board.
The Board may serve as the Committee, if by the terms of the
Plan all Board members are otherwise eligible to serve on the
Committee.
3.2 The Committee shall meet at such times and places as it
determines. A majority of its members shall constitute a
quorum, and the decision of a majority of those present at any
meeting at which a quorum is present shall constitute the
decision of the Committee. A memorandum signed by all of its
members shall constitute the decision of the Committee
without necessity, in such event, for holding an actual
meeting.
3.3 The Committee shall have the exclusive right to
interpret, construe and administer the Plan, to select the
persons who are eligible to receive an Option, and to act in
all matters pertaining to the granting of an Option and
the contents of the Award Agreement evidencing the Option,
including without limitation the determination of the
number of Options and the form, terms, conditions and duration
of each Option, and any amendment thereof consistent
with the Plan. All acts, determinations and decisions of
the Committee made or taken pursuant to grants of authority
under the Plan or with respect to any questions arising
in connection with the administration and interpretation
of the Plan, including the severability of any and all of the
provisions hereof, shall b e conclusive, final and
binding upon all Participants, Eligible Participants and
their beneficiaries.
3.4 The Committee may adopt such rules, regulations and
procedures of general application for the administration of
this Plan, as the Committee deems appropriate.
3.5 Without limiting the foregoing Sections 3.1, 3.2, 3.3
and 3.4, and notwithstanding any other provisions of the
Plan, the Committee is authorized to take such action as it
determines to be necessary or advisable, and fair and
equitable to Participants, with respect to an Option in the
event of an Acceleration Event as defined in Article V.
Such action may include, but shall not be limited to,
establishing, amending or waiving the forms, terms, conditions
and duration of an Option and the corresponding Award
Agreement so as to provide for earlier, later, extended or
additional times for exercise or payments, differing
methods for calculating payments, alternate forms and amounts
of
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payment, an accelerated release of restrictions or other
modifications. The Committee may take such actions pursuant
to this Section 3.5 by adopting rules and regulations of
general applicability to all Participants or to certain
categories of Participants, by including, amending or waiving
terms and conditions in an Option and the corresponding Award
Agreement, or by taking action with respect to individual
Participants.
3.6 In addition to such other rights of indemnification as they
may have as directors or as members of the Committee, the
members of the Committee shall be indemnified by the Company
against reasonable expenses, including attorney's 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 Option granted
thereunder, and against all amounts paid by them in settlement
thereof, provided such settlement is approved by independent
legal counsel selected by the Company, or paid by them in
satisfaction of a judgment or settlement in any such action,
suit or proceeding, except as to matters as to which the
Committee member has been negligent or engaged in
misconduct in the performance of his duties; provided, that
within 60 days after institution of any such action, suit or
proceeding, a Committee member shall in writing offer the
Company the opportunity, at its own expense, to handle and
defend the same.
3.7 The Committee may require each person purchasing shares of
Stock pursuant to an Option to represent to and agree with
the Company in writing that he is acquiring the shares of Stock
without a view to distribution thereof. The certificates
for such shares of Stock may include any legend which the
Committee deems appropriate to reflect any restrictions on
transfer.
3.8 The Committee shall be authorized to make adjustments in
performance based criteria or in the terms and conditions of
Options in recognition of unusual or nonrecurring events
affecting the Company or its financial statements or changes
in applicable laws, regulations or accounting principles. The
Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award Agreement
in the manner and to the extent it shall deem desirable to
carry it into effect. In the event the Company shall assume
outstanding employee benefit awards or the right or obligation
to make future such awards in connection with the
acquisition of another corporation or business entity, the
Committee may, in its discretion, make such adjustments in the
terms of Options under the Plan as it shall deem appropriate.
3.9 The Committee shall have full power and authority to determine
whether, to what extent and under what circumstances, any
Option shall be canceled or suspended. In particular, but
without limitation, all outstanding Options to any Participant
may be canceled if the Participant (a) without the consent of
the Committee, while employed by the Company or after
termination of such employment, becomes associated with,
employed by, renders services to, or owns any interest
in, other than any insubstantial interest, as determined by
the Committee, any business that is in competition with the
Company or with any business in which the Company has a
substantial interest as determined by the Committee; or (b) is
terminated for cause as determined by the Committee.
3.10 The aggregate number of shares of Stock which are available
for issuance pursuant to Options granted under the Plan
shall be 145,000 or any larger number that, subsequent to
the date this Plan is adopted, may be authorized for issuance
by the Company. Such shares of Stock shall be made available
from authorized and unissued shares. If, for any reason, any
shares of Stock awarded or subject to purchase under the Plan
are not delivered or purchased, or are reacquired by the
Company, for reasons including, but not limited to, expiration
or cancellation of an Option or any other termination of an
Option without payment being made in the form of Stock,
such shares of Stock shall not be charged against the
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aggregate number of shares of Stock available for Options under
the Plan, and may again be available for grants of Options
under the Plan.
3.11 The Company shall not be required to issue or deliver any
certificates for shares of Stock prior to:
(a) the listing of such shares on any stock exchange on
which the Stock may then be listed; and
(b) the completion of any registration or
qualification of such shares of Stock under any
federal or state law, or any ruling or regulation of
any government body which the Company shall, in its
discretion, determine to be necessary or advisable.
3.12 All certificates for shares of Stock delivered under the
Plan shall also be subject to such stop- transfer orders and
other restrictions as the Committee may deem advisable
under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed and any applicable federal or
state laws, and the Committee may cause a legend or legends to
be placed on any such certificates to make appropriate
reference to such restrictions. In making such
determination, the Committee may rely upon an opinion of
counsel for the Company.
3.13 Except as provided otherwise in the Plan or in an Award
Agreement, no Participant awarded an Option shall have any
right as a shareholder with respect to any shares of Stock
covered by such Option prior to the date of issuance to
him or her of a certificate or certificates for such shares of
Stock.
3.14 If any reorganization, recapitalization, reclassification,
stock split-up, stock dividend, or consolidation of shares
of Stock, merger or consolidation of the Company or sale or
other disposition by the Company of all or a portion of
its assets, any other change in the Company's corporate
structure, or any distribution to stockholders other than a
cash dividend results in the outstanding shares of Stock, or
any securities exchanged therefor or received in their place,
being exchanged for a different number or class of shares of
Stock or other securities of the Company, or for shares of
Stock or other securities of any other corporation, or new,
different or additional shares or other securities of the
Company or of any other corporation being received by the
holders of outstanding shares of Stock, then equitable
adjustments shall be made by the Committee in:
(a) the limitation on the aggregate number of shares of
Stock that may be issued as set forth in Section 3.10
of the Plan;
(b) the number and class of Stock that may be subject to a
grant of an Option and which have not been issued or
transferred under an outstanding Option;
(c) the purchase price to be paid per share of Stock under
outstanding Options; and
(d) the terms, conditions or restrictions of any Option and
Award Agreement.
ARTICLE IV - OPTIONS
4.1 Options to purchase shares of Stock may be granted to
Eligible Participants at such time or times determined by the
Committee, following the Effective Date, subject to the terms
and conditions set forth in this Article IV.
4.2 Each Option shall be evidenced by a written Award
Agreement which shall be subject to and incorporate, by
reference or otherwise, the applicable terms and conditions
of the Plan, and any other
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terms and conditions not inconsistent with the Plan as
may be imposed by the Committee, including any provisions as
to continued employment as consideration for the grant or
exercise of the Option and any provisions which may be
advisable to comply with applicable laws, regulations or
rulings of any governmental authority.
4.3 The Option price per share of Stock shall be established in
the Award Agreement and may be less than 100% of the Fair
Market Value at the Option Grant Date.
4.4 The Option may be exercised in full or in part from
time to time within such period as may be specified by the
Committee or in the Award Agreement; provided, however, that in
any event the Option shall lapse and cease to be
exercisable three months following the Participant's
Termination of Employment.
4.5 An Option shall not be transferable by the Participant other
than by will or by the laws of descent and distribution, or,
to the extent otherwise allowed by Rule 16b-3 under the Act or
other applicable law, pursuant to a qualified domestic
relations order as defined by the Code and the Employee
Retirement Income Security Act, as amended, and the rules
thereunder, and shall be exercisable during the lifetime of
the Participant only by him or by his guardian or legal
representative. Unless otherwise provided by the Committee
or specified in an Award Agreement, transfer restrictions shall
only apply to the extent required by federal or state
securities laws. If any Participant makes such a transfer in
violation hereof, any obligation of the Company shall forthwith
terminate.
4.6 Shares of Stock purchased upon exercise of an Option shall be
paid for in such amounts, at such times and upon such terms as
shall be determined by the Committee, subject to limitations
set forth in the corresponding Award Agreement. Without
limiting the foregoing, the Committee may establish payment
terms for the exercise of Options which permit the
Participant to deliver shares of Stock, or other evidence of
ownership of Stock satisfactory to the Company, with a Fair
Market Value equal to the Option price as payment.
4.7 No cash dividends shall be paid on shares of Stock subject to
unexercised Options. The Committee may provide, however, that
a Participant to whom an Option has been granted which is
exercisable in whole or in part at a future time for
shares of Stock shall be entitled to receive an amount per
share equal in value to the cash dividends, if any, paid per
share on issued and outstanding Stock, as of the dividend
record dates occurring during the period between the date of
the grant and the time each such share of Stock is delivered
pursuant to exercise of such Option. Such amounts (herein
called "dividend equivalents") may, in the discretion of the
Committee, be:
(a) paid in cash or Stock either from time to time prior
to, or at the time of the delivery of, such Stock, or
upon expiration of the Option if it shall not have been
fully exercised; or
(b) converted into contingently credited shares of
Stock, with respect to which dividend equivalents
may accrue, in such manner, at such value, and
deliverable at such time or times, as may be determined
by the Committee.
Such Stock, whether delivered or contingently credited, shall
be charged against the limitations set forth in Section 3.10.
4.8 The Committee, in its sole discretion, may authorize
payment of interest equivalents on dividend equivalents which
are payable in cash at a future time.
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4.9 In the event of Disability or death, the Committee, with the
consent of the Participant or his legal representative, may
authorize payment, in cash or in Stock, or partly in cash and
partly in Stock, as the Committee may direct, of an amount
equal to the difference at the time between the Fair Market
Value of the Stock subject to an Option and the option price
in consideration of the surrender of the Option.
4.10 The Company may make such provisions and take such steps as it
may deem necessary or appropriate for the withholding of any
taxes which the Company is required by any law or
regulation of any governmental authority, whether federal,
state or local, domestic or foreign, to withhold in
connection with any Option or the exercise thereof,
including, but not limited to, withholding the issuance of
Stock pursuant to exercise of the Option until the Participant
reimburses the Company for the amount the Company is required
to withhold with respect to such taxes or canceling any portion
of the Option or another Option granted under the Plan in an
amount sufficient to reimburse the Company for the amount the
Company is required to so withhold.
4.11 If a Participant is required to pay to the Company an amount
with respect to income and employment tax withholding
obligations in connection with exercise of an Option,
the Committee, in its discretion and subject to such rules
as it may adopt, may permit the Participant to satisfy the
obligation, in whole or in part, by making an irrevocable
election that a portion of the total Fair Market Value of the
shares of Stock subject to the Option be paid in the form of
cash in lieu of the issuance of Stock and that such cash
payment be applied to the satisfaction of the withholding
obligations. The amount to be withheld shall not exceed
the statutory minimum federal and state income and employment
tax liability arising from the Option exercise transaction.
Notwithstanding any other provision of the Plan, any election
under this Section 4.11 shall be effective only if it satisfies
the applicable requirements of Rule 16b-3 of the Act.
4.12 The Committee may permit the voluntary surrender of all or a
portion of any Option granted under the Plan to be
conditioned upon the granting to the Participant of a new
Option for the same or a different number of shares of
Stock as the Option surrendered, or may require such surrender
as a condition precedent to a grant of a new Option to such
Participant. Subject to the provisions of the Plan, such new
Option shall be exercisable at such price, during such period
and on such other terms and conditions as are specified by
the Committee at the time the new Option is granted. Upon
surrender, the Options surrendered shall be canceled and the
shares of Stock previously subject to them shall be available
for the grant of other Options.
ARTICLE V - ACCELERATION EVENTS
5.1 For the purposes of the Plan, an Acceleration Event shall
occur in the event of a "Potential Change in Control," or
"Change in Control" or a "Board-Approved Change in Control,"
as those terms are defined below.
5.2 A "Change in Control" shall be deemed to have occurred if:
(a) Any "Person" as defined in Section 3(a)(9) of the
Act, including a "group" (as that term is used in
Sections 13(d)(3) and 14(d)(2) of the Act), but
excluding the Company and any employee benefit plan
sponsored or maintained by the Company, including any
trustee of such plan acting as trustee, who:
(i) makes a tender or exchange offer for any shares of the
Company's Stock (as defined below) pursuant to which any
shares of the Company's Stock are purchased (an "Offer"); or
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(ii) together with its "affiliates" and "associates" (as those
terms are defined in Rule 12b-2 under the Act) becomes the
"Beneficial Owner" (within the meaning of Rule 13d- 3 under the
Act) of at least 20% of the Company's Stock (an "Acquisition");
(b) The stockholders of the Company approve a
definitive agreement or plan to merge or
consolidate the Company with or into another
corporation, to sell or otherwise dispose of all or
substantially all of its assets, or to liquidate
the Company (individually, a "Transaction"); or
(c) When, during any period of 24 consecutive months
during the existence of the Plan, the individuals who,
at the beginning of such period, constitute the
Board (the "Incumbent Directors") cease for any reason
other than death to constitute at least a majority
thereof; provided, however, that a director who was
not a director at the beginning of such 24 month period
shall be deemed to have satisfied such 24 month
requirement, and be an Incumbent Director, if such
director was elected by, or on the recommendation of or
with the approval of, at least two-thirds of the
directors who then qualified as Incumbent Directors
either actually, because they were directors at the
beginning of such 24 month period, or by prior
operation of this Section 5.2(c).
5.3 A "Board-Approved Change in Control" shall be deemed to have
occurred if the Offer, Acquisition or Transaction, as the case
may be, is approved by a majority of the Directors serving as
members of the Board at the time of the Potential Change in
Control or Change in Control.
5.4 A "Potential Change in Control" means the happening of any one
of the following:
(a) The approval by stockholders of an agreement by the
Company, the consummation of which would result in a
Change in Control of the Company, as defined in Section
5.2; or
(b) The acquisition of Beneficial Ownership, directly
or indirectly, by any entity, person or group, other
than the Company or any Company employee benefit plan,
including any trustee of such plan acting as such
trustee, of securities of the Company representing five
percent or more of the combined voting power of the
Company's outstanding securities and the adoption by
the Board of a resolution to the effect that a
Potential Change in Control of the Company has occurred
for the purposes of this Plan.
5.5 Upon the occurrence of an Acceleration Event, the Committee in
its discretion may declare that any or all then outstanding
Options, that are not already exercisable and fully
vested, shall become immediately exercisable and fully vested
in whole or in part.
5.6 In the event of a Change in Control, the Committee may, in its
discretion, cash out the value of all outstanding Options, to
the extent vested, on the basis of the "Change in Control
Price" (as defined in Section 5.7) as of the date such
Change in Control or such Potential Change in Control is
determined to have occurred or such other date as the
Committee may determine prior to the Change in Control, less
the Option price (as established in the corresponding Award
Agreements).
5.7 For purposes of Section 5.6, "Change in Control Price"
means the highest price per share of Stock paid in any
transaction reported on the exchange on which the Stock is
then traded, or paid or offered in any bona fide
transaction related to a Potential or actual Change in
Control of the Company at any time during the 60 day period
immediately preceding the occurrence of the Change in Control,
or, where
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applicable, the occurrence of the Potential Change in
Control event, in each case as determined by the Committee.
ARTICLE VI - AMENDMENT AND TERMINATION
6.1 The Board, upon recommendation of the Committee, or otherwise,
at any time and from time to time, may amend or terminate
the Plan. To the extent required by Rule 16b-3 under the
Act, no amendment, without approval by the Company's
stockholders, shall:
(a) alter the group of persons eligible to participate in
the Plan;
(b) except as otherwise provided herein, increase the
maximum number of shares of Stock or Options that are
available for award under the Plan;
(c) limit or restrict the powers of the Committee with
respect to the administration of this Plan;
(d) materially increase the benefits accruing to
Participants under this Plan;
(e) materially modify the requirements as to eligibility
for participation in this Plan; or
(g) change any of the provisions of this Article VI.
6.2 No amendment to or discontinuance of this Plan or any
provision thereof by the Board or the stockholders of the
Company shall, without the written consent of the Participant,
adversely affect, as shall be determined by the Committee,
any Option theretofore granted to such Participant under this
Plan; provided, however, the Committee retains the right and
power to:
(a) annul any Option if the Participant is terminated for
cause as determined by the Committee; and
(b) provide for the forfeiture of shares of Stock or
other gain under an Option, as determined by the
Committee, in the event the Participant competes
against the Company.
6.3 If an Acceleration Event has occurred, no amendment or
termination shall impair the rights of any person with respect
to an outstanding Option as provided in Article V.
ARTICLE VII - MISCELLANEOUS PROVISIONS
7.1 Nothing in the Plan or any Option granted hereunder shall
confer upon any Participant any right to continue in the
employ of the Company, or to serve as a director thereof, or
interfere in any way with the right of the Company to
terminate his or her employment at any time. Unless
specifically provided otherwise, no Option granted under the
Plan shall be deemed salary or compensation for the purpose of
computing benefits under any employee benefit plan or other
arrangement of the Company for the benefit of its employees
unless the Company shall determine otherwise. No Participant
shall have any claim to an Option until it is actually
granted under the Plan. To the extent that any person acquires
a right to receive payments from the Company under the Plan,
such right shall, except as otherwise provided by the
Committee, be no greater than the right of an unsecured general
creditor of the Company. All payments to be made hereunder
shall be paid from the general funds of the company, and no
special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such
amounts, except as otherwise provided by the Committee.
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7.2 The Plan and the grant of Options hereunder shall be
subject to all applicable federal and state laws, rules, and
regulations and to such approvals by any United States
government or regulatory agency as may be required. Any
provision herein relating to compliance with Rule 16b-3 under
the Act shall not be applicable with respect to participation
in the Plan by Participants who are not subject to Section
16(b) of the Act.
7.3 The terms of the Plan shall be binding upon the Company and its
successors and assigns.
7.4 This Plan and all actions taken hereunder shall be
governed by the laws of the State of North Carolina.
7.5 The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any
payments not yet made to a Participant by the Company, nothing
contained herein shall give any such Participant any
rights that are greater than those of a general creditor of
the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet
the obligations created under the Plan to deliver shares of
Stock or payments in lieu of or with respect to Options
granted hereunder; provided, however, that, unless the
Committee otherwise determines with the consent of the
affected Participant, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the
Plan.
7.6 Each Participant exercising an Option hereunder agrees to give
the Committee prompt written notice of any election made by
such Participant under Section 83(b) of the Code, or any
similar provision thereof.
7.7 If any provision of this Plan or an Award Agreement is or
becomes or is deemed invalid, illegal or unenforceable in any
jurisdiction, or would disqualify the Plan or any Award
Agreement under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform
to applicable laws or if it cannot be construed or deemed
amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award
Agreement, it shall be stricken and the remainder of the Plan
or the Award Agreement shall remain in full force and effect.
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SPEIZMAN INDUSTRIES, INC.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
Purpose
This Stock Option Plan for Non-Employee Directors (the "Plan")
is designed to advance the interest of Speizman Industries, Inc. (the
"Company") and its stockholders by providing an incentive to each member
of the Board of Directors of the Company (the "Board"), who is not
a full-time or part-time employee of the Company or its parent or
subsidiary corporations ("Non-Employee Director"), to continue in the
service of the Company and by creating a direct interest of the
Non-Employee Directors in the future success of the Company's
operations by granting to such persons options to acquire shares
of the common stock of the Company, par value $.10 per share (the
"Common Stock"). As used herein, "parent" shall mean a "parent
corporation" as defined in Section 424(e) of the Internal Revenue Code
of 1986, as amended (the "Code"), and "subsidiary" shall mean a
"subsidiary corporation" as defined in Section 424(f) of the Code.
ARTICLE II
Administration
The Plan shall be administered by the Stock Option Committee
of the Board or such other committee as may be appointed by the Board
from among its members to administer the Plan (the "Committee"). The
Committee shall consist of not less than two Non-Employee Directors
who are "disinterested persons" within the meaning of Rule
16b-3(c)(2)(i) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Committee shall have authority to
adopt such rules and regulations and to make such determinations as are
not inconsistent with the Plan and are necessary or desirable for
its implementation and administration. All decisions, determinations
and interpretations of the Committee shall be final and binding on all
optionees.
It is intended that the Plan be nondiscretionary for purposes
of Rule 16b-3 under the Exchange Act, and the powers of the
Committee under the Plan shall be limited to ministerial and
nondiscretionary acts which do not affect the status of the Plan as
nondiscretionary.
The Committee shall hold its meetings at such times and
places as it may determine, with a majority of the Committee
constituting a quorum. Any action which the Committee has the power to
take at a meeting may be taken by the Committee without a meeting if
all of the members of the Committee give their consent to such action in
writing.
ARTICLE III
Stock
The shares to be optioned under the Plan ("Option Shares")
shall be shares of authorized but unissued Common Stock of the
Company. The total number of shares of Common Stock subject to awards
of nonqualified stock options ("Options") granted under the Plan
shall not exceed in the aggregate 15,000, except as such number of
shares shall be adjusted in accordance with the provisions of
Article X hereof. The Options granted under the Plan are not intended
to qualify as incentive stock options under Section 422 of the Code.
1
<PAGE>
If an Option should expire, terminate or become unexercisable for any
reason without having been exercised in full, the unpurchased Option
Shares which were subject thereto shall, unless the Plan shall have
been terminated, become available for the grant of other Options under
the Plan.
ARTICLE IV
Eligibility of Participants
Each Non-Employee Director shall be eligible to receive
Options in accordance with the provisions of the Plan.
ARTICLE V
Annual Awards
On December 1st of each year, commencing on December 1,
1995, each Non-Employee Director shall be granted an Option to
purchase 1,000 shares of Common Stock, subject to adjustment as provided
in Article X below (the "Annual Award"). In the event that the
number of shares of Common Stock available for grants under the Plan
is insufficient to grant the number of Options determined as provided
above, Options for the remaining number of shares of Common Stock
available for grant under the Plan shall be granted in equal amounts to
each Non-Employee Director. Notwithstanding the foregoing, any
Non-Employee Director may elect (1) to decline an Annual Award, or
(2) to revoke a previous election to decline an Annual Award, in either
event, at any time prior to the date such Annual Award would otherwise
be made. A Non-Employee Director who elects to decline an Annual
Award will receive no compensation in lieu of such Annual Award (either
at the time of such election or at any time thereafter).
Upon the grant of each Annual Award, the Company and the
Non-Employee Director shall enter into a stock option award agreement
which shall specify the date of grant and the Option Price, as defined
herein, and shall include or incorporate by reference the substance of
all of the provisions set forth in Articles VI through IX below and
such other provisions consistent with the Plan as the Committee may
determine. The Committee shall have no discretion to select the
Non-Employee Directors who will receive Annual Awards or to determine
the number of Option Shares covered by such Annual Award, the Option
Price per Option Share, the circumstances under which an Annual Award
may be granted, or the period within which Options granted pursuant to
Annual Awards may be exercised or to alter any other terms or
conditions in the Plan with respect to Annual Awards to Non-Employee
Directors, except for administering the Plan subject to the express
provisions of the Plan.
Timing of Granting Annual Awards
Grants of Annual Awards shall be made automatically under
this Article without any action by the Committee.
2
<PAGE>
ARTICLE VI
Option Price
The per share Option exercise price (the "Option Price") for
all Options granted under the Plan shall be the fair market value of
the Common Stock of the Company on the date the Annual Award is granted,
subject to adjustments as provided in Article X. If the
Common Stock is listed for trading on any national securities
exchange, then the "fair market value" shall be the closing sale price
of the Common Stock on such exchange on the date of grant. If
the Common Stock is not listed for trading on a national securities
exchange but is traded on The Nasdaq Stock Market, then the "fair
market value" shall be the last sale price reported by The Nasdaq
Stock Market on the date of grant. If the Common Stock is neither
traded on any national securities exchange nor traded on The Nasdaq
Stock Market, but is traded in the over-the-counter market, then the
"fair market value" shall be the average closing bid and asked prices on
the date of grant provided by any market maker in the Common
Stock selected by the Company to provide quotations for this purpose.
If there is no market maker in the Common Stock, the fair market value
shall be the last sale price of the Common Stock on the date of grant.
In the event that on any date of the grant of options there is no sale
of at least 100 shares of Common Stock, the sale price or the bid and
asked prices on the last day on which there was a sale of at least 100
shares of Common Stock shall be used to determine "fair market value."
ARTICLE VII
Exercise and Term of Options
An Option shall not be exercisable unless: (a) the Option has
become exercisable as provided below; (b) the person exercising the
Option has been, at all times during the period beginning with the date
of grant of the Option and ending on the date of exercise of the
Option, a Non-Employee Director, except that in the event (i) a
Non-Employee Director ceases to be a Non-Employee Director for any
reason, he may exercise any of his outstanding Options that are
exercisable on the date he ceases to be a Non-Employee Director at any
time within one year after such date, subject to earlier
termination of any such Option as provided herein, at the end of
which one-year period any such Option that has not been fully
exercised shall terminate, or (ii) an optionee shall die holding any
outstanding Options that are exercisable on the date of his death, his
executors, administrators, heirs or distributees, as the case may be,
may exercise any such Option at any time within six months after the
date of such optionee's death, even if such six-month period extends
beyond the one-year period described in the preceding clause, but
subject to any other earlier termination of any such Option as
provided herein, at the end of which six-month period any such Option
that has not been fully exercised shall terminate; (c) payment in
full is made for the shares of Common Stock being acquired thereunder
at the time of exercise in United States dollars by cash or check; and
(d) payment in full is made for any withholding obligation as provided
in Article VIII below.
Options granted under the Plan shall become exercisable in
cumulative increments of 50% and 100% beginning on the first and
second anniversaries, respectively, of the date of grant if on such
dates the Non-Employee Director to whom any such Option was granted
remains a Non-Employee Director. In the event a Non-Employee Director
ceases to be a Non-Employee Director, any of his then outstanding
Options that have not become exercisable as provided herein shall
terminate immediately.
In addition, in the event of a merger or consolidation in
which the Company is not the surviving entity, or any other capital
reorganization in which more than 50% of the then outstanding shares of
Common Stock are exchanged, or the sale by the Company of all or
substantially all of its assets to another entity, any outstanding
Option that was granted under the Plan more than six months
prior to the date of the Company's
3
<PAGE>
adoption of a plan or definitive agreement in respect of such merger,
consolidation, reorganization or asset sale, as the case may be, shall
become exercisable in full as of such date. Upon the effectiveness of
such merger, consolidation, reorganization or asset sale, as the case
may be, any then outstanding Option shall terminate.
Any other provisions of the Plan notwithstanding, (a) no
Option shall become exercisable under any circumstances unless and
until the Plan has been approved by the Company's stockholders, and (b)
each Option shall terminate on the tenth anniversary of the date of
grant of such Option subject to earlier termination as provided herein.
ARTICLE VIII
Payment of Shares
Payment of the Option Price for Option Shares shall be made in
full upon exercise of the Option. Any rights of the Non-Employee
Director to exercise an Option shall be conditioned upon the
Non-Employee Director forwarding to the Company, in addition to the
Option Price of the Option Shares, cash payment of an amount equal to
the amount the Company is required by law or regulation of any
governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with such exercise of the Option, as
determined by the Committee in its discretion. The amount of
such payment shall be communicated to the Non-Employee Director as
soon as practicable following receipt by the Company of the Non-Employee
Director's notice of exercise.
ARTICLE IX
Non-Transferability of Option
No Option under the Plan shall be transferable except
by will or the laws of descent and distribution. During the
lifetime of the optionee, an Option shall be exercisable only by the
optionee.
ARTICLE X
Adjustment for Changes in Capitalization
If the number of issued and outstanding shares of Common Stock
as a whole are increased, decreased or changed into, or exchanged
for, a different number or kind of shares or securities of the Company,
whether through merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate
structure or the like, an appropriate and proportionate adjustment
shall be made in the number and kind of shares subject to this Plan and
in the number, kind, and per share exercise price of shares
subject to outstanding Options or portions thereof granted prior to
any such change. Any such adjustment in an outstanding Option,
however, shall be made without a change in the total price
applicable to the unexercised portion of the Option but with a
corresponding adjustment in the price for each share covered by the
Option. No fractional shares of Common Stock shall be issued under the
Plan on account of any adjustment specified above.
4
<PAGE>
ARTICLE XI
No Obligation to Exercise Option
The granting of an Option shall impose no obligation on the
recipient to exercise such Option.
ARTICLE XII
Rights as a Stockholder
An optionee or a permitted transferee of an Option shall have
no right as stockholder with respect to any Option Shares covered by
his Option until such person shall have become the holder of such Option
Shares, and such person shall not be entitled to any dividends or
distributions of other rights in respect of such Option Shares for
which the record date is prior to the date on which such person
shall have become the holder of record thereof.
ARTICLE XIII
Regulatory Matters
Every Option under the Plan is granted upon the express
condition that the inability of the Company to comply with, or any
delay in complying with, any laws, rules or regulations governing the
issuance of Option Shares necessary to satisfy such Option
(including but not limited to complying with the Securities Act of
1933, as amended (the "Act") and all rules and regulations
thereunder), the fulfillment of which condition is deemed necessary
by counsel for the Company to the lawful issuance or transfer of any
such shares, shall relieve the Company of any liability for the
non-issuance or non-transfer, or any delay in the issuance or transfer
of such shares. Further, it is the intention of the Company that the
Plan comply in all respects with Rule 16b-3 under the Exchange Act
("Rule 16b-3"). If any Plan provisions is found not to be in compliance
with Rule 16b-3, the provision shall be deemed null and void.
ARTICLE XIV
Amendments or Discontinuance of the Plan
The Plan may be amended at any time and from time to
time by the Board as the Board shall deem advisable; provided,
however, that except as provided in Article X above, the Board may not,
without further approval by the stockholders of the Company,
increase the maximum numbers of shares of Common Stock as to which
Options may be granted under the Plan, reduce the Option Price
described in Article VI above, extend the period during which
Options may be granted or exercised under the Plan or change the class
of persons eligible to receive Options under the Plan. No amendment
of the Plan shall materially and adversely affect any right of any
Non-Employee Director with respect to any Option theretofore
granted without such Non-Employee Director's written consent.
Notwithstanding the foregoing, the Plan may not be amended to change
the amount, price or timing of the Annual Award until at least six
months (or such longer or shorter period required by Rule 16b-3) after
the date of the last preceding amendment except to comport with changes
in the Code, the Employee Retirement Income Security Act, or
the rules and regulations promulgated thereunder.
5
<PAGE>
ARTICLE XV
Miscellaneous Provisions
Except as expressly provided for in the Plan, no Non-Employee
Director or other person shall have any claim or right to be
granted an Option under the Plan. The expenses of the Plan shall be
borne by the Company.
ARTICLE XVI
Termination
This Plan shall terminate upon the adoption of a resolution
of the Board terminating the Plan. No termination of the Plan shall
materially and adversely affect any of the rights or obligations of any
person, without his consent, under any Option theretofore granted
under the Plan except that upon the dissolution or liquidation of the
Company, this Plan and the Options issued hereunder shall terminate.
ARTICLE XVII
Effectiveness
The Plan shall become effective upon approval by the Company's
stockholders.
6
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APPENDIX
SPEIZMAN INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE
HELD ON NOVEMBER 16, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
THE UNDERSIGNED HEREBY APPOINTS ROBERT S. SPEIZMAN AND JOSEF SKLUT, AND EACH
OF THEM, AS ATTORNEYS AND PROXIES, EACH WITH FULL POWER OF SUBSTITUTION, AND
HEREBY AUTHORIZES THEM TO REPRESENT AND TO VOTE, AS DIRECTED BELOW, ALL THE
SHARES OF COMMON STOCK OF SPEIZMAN INDUSTRIES, INC. (THE "COMPANY") HELD OF
RECORD BY THE UNDERSIGNED ON SEPTEMBER 29, 1995, AT THE ANNUAL MEETING OF
STOCKHOLDERS OF THE COMPANY TO BE HELD ON NOVEMBER 16, 1995 AT 11:00 A.M. AT THE
OFFICES OF THE COMPANY, 508 WEST FIFTH STREET, CHARLOTTE, NORTH CAROLINA, OR ANY
ADJOURNMENT THEREOF. THE UNDERSIGNED HEREBY DIRECTS THAT SUCH SHARES BE VOTED AS
FOLLOWS:
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS: [ ] FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY WITHHOLD AUTHORITY TO
LISTED BELOW TO VOTE FOR ALL NOMINEES VOTE FOR THOSE NOMINEES
WRITTEN IN THE SPACE
PROVIDED BELOW: AND FOR
ALL OTHER NOMINEES
</TABLE>
NOMINEES: ROBERT S. SPEIZMAN, JOSEF SKLUT, STEVEN P. BERKOWITZ, WILLIAM GORELICK
AND SCOTT C. LEA.
INSTRUCTION -- TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW:
2. APPROVAL OF THE SPEIZMAN INDUSTRIES, INC. NONQUALIFIED STOCK OPTION PLAN.
<TABLE>
<S> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
<PAGE>
3. APPROVAL OF THE SPEIZMAN INDUSTRIES, INC. STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS.
<TABLE>
<S> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
4. RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING JUNE
29, 1996.
<TABLE>
<S> <C> <C>
FOR [ ] AGAINST [ ] ABSTAIN [ ]
</TABLE>
5. THE PROXIES ARE AUTHORIZED TO VOTE THE SHARES REPRESENTED BY THIS PROXY IN
ACCORDANCE WITH THEIR JUDGMENT ON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY, IF SIGNED
AND RETURNED, WILL BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED IN ITEM 1 AND
FOR ITEMS 2, 3 AND 4.
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. 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 OFFICERS. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
DATED: , 1995
SIGNATURE
SIGNATURE IF HELD JOINTLY
PLEASE COMPLETE, SIGN, DATE AND
RETURN THIS PROXY PROMPTLY IN
THE ENCLOSED ENVELOPE
