SPEIZMAN INDUSTRIES, INC.
701 Griffith Road
Charlotte, NC 28217
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 14, 2001
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NOTICE IS HEREBY GIVEN THAT a Special Meeting of Stockholders (the
"Special Meeting") of Speizman Industries, Inc. (the "Company") will be held on
February 14, 2001, at 11:00 a.m. local time at the principal executive offices
of the Company located at 701 Griffith Road, Charlotte, North Carolina 28217,
for the following purposes:
(1) To approve an amendment of the Company's Certificate of
Incorporation, as amended, to effect a reverse stock split whereby the
Company would issue one new share of its Common Stock, par value $.10
per share, in exchange for not less than two nor more than five
outstanding shares of its Common Stock; and
(2) To transact such other business as properly may come before the
Special Meeting and any adjournment or postponement thereof.
The reverse stock split and other related matters are more fully described
in the Proxy Statement accompanying this notice. All of our stockholders are
cordially invited to attend the Special Meeting. Only holders of record of our
common stock at the close of business on December 29, 2000 will be entitled to
vote at the Special Meeting and any adjournments or postponements thereof,
either in person or by proxy.
Your vote is important regardless of the number of shares you own. Each
stockholder, even though he or she now plans to attend the Special Meeting, is
requested to sign, date and return the enclosed proxy card without delay in the
enclosed postage-paid envelope. You may revoke your proxy at any time prior to
its exercise. Any stockholder present at the Special Meeting or any adjournment
or postponement thereof may revoke his or her proxy and vote personally on each
matter brought before the meeting.
By order of the Board of Directors,
JOHN C. ANGELELLA
Secretary
Charlotte, North Carolina
January 17, 2001
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SPEIZMAN INDUSTRIES, INC.
701 Griffith Road
Charlotte, NC 28217
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PROXY STATEMENT
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 14, 2001
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GENERAL INFORMATION
This Proxy Statement and the enclosed proxy card are being furnished to
stockholders 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 Special Meeting of Stockholders of the Company (the "Special
Meeting") to be held on February 14, 2001 at 11:00 a.m. local time at 701
Griffith Road, Charlotte, North Carolina 28217, and at any adjournment or
postponement thereof, for the purposes set forth in the accompanying Notice of
Special Meeting of Stockholders and in this Proxy Statement.
It is anticipated that this Proxy Statement and the enclosed proxy card
will first be mailed to the Company's stockholders on or about January 17,
2001.
Record Date
The Board of Directors has fixed the close of business on December 29,
2000 as the record date (the "Record Date") for the determination of
stockholders entitled to notice of, and to vote at, the Special Meeting and at
any adjournment or postponement thereof. At the close of business on the Record
Date, 3,252,428 shares of the Company's common stock, par value $.10 per share
("Common Stock"), were issued and outstanding.
Proxies
When a proxy card is returned, properly signed and dated, the shares
represented thereby will be voted in accordance with the instructions on the
proxy card. If a stockholder does not attend the Special Meeting and does not
return the signed proxy card, such stockholder's shares will not be voted. If a
stockholder returns a signed proxy card but does not indicate how his or her
shares are to be voted, such shares will be voted FOR approval of the amendment
of the Company's Certificate of Incorporation, as amended, to effect a reverse
stock split whereby the Company would issue one new share of Common Stock in
exchange for not less than two nor more than five shares of outstanding Common
Stock. As of the date of this Proxy Statement, the Board of Directors does not
know of any other matters that are to come before the Special Meeting. If any
other matters are properly presented at the Special Meeting for consideration,
the persons named in the enclosed proxy card and acting thereunder will have
discretion to vote on such matters in accordance with their best judgment.
Any proxy given may be revoked by the person giving it at any time before
it is voted. Proxies may be revoked by (i) filing with the Secretary of the
Company, at or before the taking of the vote at the Special Meeting, a written
notice of revocation bearing a later date than the proxy, (ii) duly executing a
later dated proxy relating to the same shares of Common Stock and delivering it
to the Secretary of the Company at or before the taking of the vote at the
Special Meeting or (iii) attending the Special Meeting and voting in person
(although attendance at the Special Meeting will not in and of itself
constitute a revocation of a proxy). Any written notice of revocation or
subsequent proxy should be sent so as to be delivered to Speizman Industries,
Inc., 701 Griffith Road, Charlotte, NC 28217, Attention: Secretary, or hand
delivered to the Secretary of the Company at or before the taking of the vote
at the Special Meeting.
The Company will bear the cost of the solicitation of proxies from its
stockholders. In addition to solicitation by use of the mail, proxies may be
solicited by directors, officers and employees of the Company in person or by
telephone or other means of communication. Such directors, officers and
employees will not be additionally compensated, but may be reimbursed for
out-of-pocket expenses incurred in connection with such solicitation.
Arrangements also will be made with custodians, nominees and fiduciaries for
the forwarding of proxy solicitation materials to beneficial owners of shares
held of record by such custodians, nominees and fiduciaries, and the Company
will reimburse such custodians, nominees and fiduciaries for reasonable
expenses incurred in connection therewith. In addition, Corporate Investors
Communications, Inc. will assist in the solicitation of proxies by the Company
for a fee of $6,000, plus reimbursement of reasonable out-of-pocket expenses.
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Quorum
The presence, either in person or by properly executed proxies, of the
holders of a majority of the outstanding shares of the Common Stock is
necessary to constitute a quorum at the Special Meeting. Abstentions will be
treated as present for purposes of determining the presence or absence if a
quorum.
Vote Required
The Company's stockholders are entitled to one vote at the Special Meeting
for each share of Common Stock held by them on the Record Date. The affirmative
vote of a majority of the outstanding shares of Common Stock, represented in
person or by proxy, is required to approve the amendment of the Company's
Certificate of Incorporation, as amended, to effect a reverse stock split.
Votes may be cast for or against or to abstain from approval of the amendment.
Under applicable Delaware law, abstentions will have the effect of a vote
against approval of the amendment of the Company's Certificate of
Incorporation, as amended, to effect a reverse stock split.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as to the beneficial
ownership of shares of the Common Stock as of December 29, 2000 by (i) all
stockholders known by the Company to be the beneficial owners of more than five
percent of Common Stock, (ii) each director of the Company, (iii) the President
of the Company and each of the Company's four other most highly compensated
executive officers serving at the end of the Company's fiscal year ended July
1, 2000, and (iv) all executive officers and directors as a group. Unless
otherwise indicated, the holders listed below have sole voting and investment
power with respect to all shares beneficially owned by them.
<TABLE>
<CAPTION>
Beneficial Ownership(1)
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Shares Beneficially Percent of
Name Owned Shares Outstanding
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<S> <C> <C>
Robert S. Speizman
701 Griffith Road, Charlotte, NC 28217 .................... 798,927(2) 23.4%
C. Alexander Davis ......................................... 10,000 *
Bryan D. Speizman .......................................... 167,300(3) 5.0
Mark A. Speizman ........................................... 161,614(4) 4.8
William Gorelick ........................................... 54,375(5) 1.7
Scott C. Lea ............................................... 9,375(6) *
Josef Sklut ................................................ 10,975(7) *
Dimensional Fund Advisors, Inc.
1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401 ..... 198,600(8) 6.1
Heartland Advisors, Inc.
790 N. Milwaukee St., Milwaukee, WI 53202 ................. 300,000(9) 9.2
All executive officers and directors as a group (9 persons) 1,266,766(10) 34.9
</TABLE>
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* Less than 1%
(1) This table is based upon information supplied by officers, directors and
principal stockholders of the Company and by Schedules 13G filed with the
Securities and Exchange Commission (the "Commission"). Unless otherwise
indicated in the footnotes to this table and subject to marital property
laws where applicable, each of the stockholders named in this table has
sole voting and investment power with respect to the shares indicated as
beneficially owned. Applicable percentages are based on 3,252,428 shares
of Common Stock outstanding, adjusted as required by rules of the
Commission.
(2) Includes an aggregate 160,830 shares of Common Stock subject to presently
exercisable options.
(3) Includes an aggregate of 104,750 shares of Common Stock subject to
presently exercisable options.
(4) Includes an aggregate of 103,750 shares of Common Stock subject to
presently exercisable options.
(5) Includes an aggregate of 4,375 shares of Common Stock subject to presently
exercisable options.
(6) Represents shares of Common Stock owned by a revocable trust of which Mr.
Lea and certain of his family members are beneficiaries and an aggregate
of 4,375 shares of Common Stock subject to presently exercisable options.
(7) Includes 600 shares of Common Stock owned of record by Mr. Sklut's spouse,
as to which he disclaims beneficial ownership, and 375 shares of Common
Stock subject to a presently exercisable option.
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(8) Dimensional Fund Advisors Inc. ("Dimensional"), an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies registered under
the Investment Company Act of 1940, and serves as investment manager to
certain other commingled group trusts and separate accounts. These
investment companies, trusts and accounts are the "Funds." In its role as
investment adviser or manager, Dimensional possesses voting and/or
investment power over the securities of the Issuer described in this
schedule that are owned by the Funds. All securities reported in this
schedule are owned by the Funds. Dimensional disclaims beneficial
ownership of such securities.
(9) These shares of Common Stock are held in investment advisory accounts of
Heartland Advisors, Inc. As a result, various persons have the right to
receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the securities. The interests of one such
account, Heartland Value Fund, a series of Heartland Group, Inc., a
registered investment company, relates to more than 5% of the class.
(10) Includes an aggregate of 378,455 shares of common stock subject to
presently exercisable options.
PROPOSAL TO AMEND CERTIFICATE OF INCORPORATION
TO EFFECT REVERSE STOCK SPLIT
General
In December 2000, the Company's Board of Directors approved, and
recommended that the stockholders approve, an amendment to Article Fourth (A)
of the Company's Certificate of Incorporation, as amended (the "Amendment"), to
effect a reverse split (the "Reverse Split") of the Common Stock, whereby the
Company would issue one new share of Common Stock in exchange for not less than
two nor more than five outstanding shares of Common Stock. If approved, the
Amendment would be effective on such date as a Certificate of Amendment (the
"Certificate of Amendment") reflecting the Reverse Split is filed with the
Secretary of State of the State of Delaware (the "Effective Date"). The Board
of Directors has the authority, in its discretion, to abandon the Reverse Stock
Split based on its consideration of factors more fully discussed below.
The complete text of the Certificate of Amendment that would be filed in
the office of the Secretary of State of the State of Delaware to effect the
Reverse Split is set forth in Appendix A to this Proxy Statement, provided,
however, that such text is subject to amendment to include such changes as may
be required by the office of the Secretary of State of the State of Delaware
and as the Company's Board of Directors deems necessary and advisable to effect
the Reverse Split in the range described above.
Purpose of the Proposed Reverse Split
The Common Stock is currently listed on the Nasdaq National Market. In
order for the Common Stock to continue to be listed on the Nasdaq National
Market, the Company must satisfy various continued listing requirements
established by Nasdaq. Among other things, persons other than officers and
directors of the Company must hold at least 750,000 shares of Common Stock with
an aggregate market value of at least $5.0 million, at least 400 persons must
own at least 100 shares of Common Stock and the Common Stock must have a
minimum bid price of at least $1.00 per share.
In October 2000, the Company received a letter from Nasdaq advising it
that the Common Stock had failed to maintain a minimum market value of public
float of $5.0 million over the 30 consecutive trading days preceding the date
of the letter. The letter stated that if the Company was unable to demonstrate
compliance with this requirement for a minimum of 10 consecutive trading days
during the 90 days ending January 18, 2001, the Common Stock would be delisted
at the opening of business on January 22, 2001. The Company has not regained
compliance with this requirement and at December 29, 2000, the market value of
the Company's public float was approximately $1.3 million.
To avoid delisting from The Nasdaq Stock Market, if the market value of
the Company's public float does not return to $5.0 million, the Board of
Directors plans to apply for transfer to the Nasdaq SmallCap Market. The
requirements for listing the Common Stock on that market include a public float
of at least 500,000 shares with an aggregate market value of at least $1.0
million and a minimum bid price of $1.00 per share of Common Stock. The Company
currently does not currently meet the listing requirements of the Nasdaq
SmallCap Market. The Common Stock traded below $1.00 per share from November
22, 2000 through December 17, 2000 and has traded below $1.00 since December
21, 2000. The Board of Directors expects that the Reverse Split will achieve,
at least initially, compliance with the minimum bid price requirement. Although
the Reverse Split will not be effective by January 18, 2001 and the per share
bid price of the Common Stock will not have increased by this date as a result,
the Company expects to request a hearing concerning its delisting from Nasdaq
which, the Company believes, will give it additional time to effect the Reverse
Split prior to delisting.
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If effected, the Reverse Split will reduce the number of shares of Common
Stock issued and outstanding. The Board of Directors expects that this
reduction will result initially in an increase in the bid price of the Common
Stock to a level above the current bid price and to above $1.00 per share.
However, since there are numerous factors and contingencies that could affect
the bid price of the Common Stock, there can be no assurance that an increase
in the bid price will occur, or if it occurs, that the bid price will be over
$1.00 per share for a sustained period.
Under Nasdaq's listing maintenance standards, if the closing bid price of
the Common Stock is under $1.00 per share for 30 consecutive trading days and
does not thereafter regain compliance for a minimum of 10 consecutive trading
days during the 90 days following notification by Nasdaq, Nasdaq may delist the
Common Stock from trading on The Nasdaq Stock Market. If a delisting were to
occur, the Common Stock would trade on the OTC Bulletin Board or in the "pink
sheets" maintained by the National Quotation Bureau, Inc. Such alternatives are
generally considered to be less efficient markets and not as broad a market as
The Nasdaq Stock Market.
The effect of the Reverse Split upon the market price for the Common Stock
cannot be predicted, and the history of similar stock split combinations for
companies in like circumstances is varied. There can be no assurance that the
market price per share of the Common Stock after the Reverse Split will rise in
proportion to the reduction in the number of shares of the Common Stock
outstanding resulting from the Reverse Split. There can be no assurance that
the market price per Share of the Common Stock after the Reverse Split will
either exceed or remain in excess of the $1.00 minimum bid price as required by
Nasdaq, or otherwise meet the requirements of Nasdaq for continued listing on
the Nasdaq SmallCap Market, including the minimum public float requirement of
$1.0 million. The market price of the Common Stock may also be based on the
Company's performance and other factors, some of which may be unrelated to the
number of shares outstanding.
Effect of Reverse Split
If the Amendment is approved by the stockholders at the Special Meeting,
the Board of Directors, in its discretion, will determine whether to effect the
Reverse Split, when to effect the Reverse Split and the appropriate number of
outstanding shares of Common Stock (the "Reverse Split Number") to be exchanged
for a single new share of Common Stock in the Reverse Split. The Reverse Split
Number will be not less than two nor more than five. The actual Reverse Split
Number will be determined in a manner that takes into consideration the
prevailing market conditions at the time.
Upon the Effective Date, each fixed number of shares of Common Stock
issued and outstanding ("Old Common Stock") equal to the Reverse Split Number
will be combined, reclassified and changed into one fully paid and
non-assessable share of Common Stock ("New Common Stock"). Each holder of
record of a certificate representing shares of Old Common Stock will be
entitled to receive, upon surrender of such certificate, a certificate
representing the number of whole shares of New Common Stock to which the holder
is entitled pursuant to the Reverse Split. Any certificates for shares of Old
Common Stock not so surrendered shall be deemed to represent one share of New
Common Stock for each such fixed number of shares equal to the Reverse Split
Number of Old Common Stock previously represented by such certificate. No
fractional shares of Common Stock or scrip representing fractional shares will
be issued as a result of the Reverse Split. Although the number of each
stockholder's shares of Common Stock will be reduced as a result of the Reverse
Split, such stockholder's voting rights and pro rata equity interest in the
Company and its shares of outstanding Common Stock will not be reduced, except
for possible immaterial changes due to the Company's purchase of fractional
shares as described below.
Each of the Company's equity compensation plans provides for either
automatic or permissive equitable adjustments on account of a stock split to
both the aggregate number of shares of Common Stock available for issuance
under the plan and the terms of the stock options outstanding under the plan.
Each of these plans is administered either by the Board of Directors or its
Compensation Committee. The Board of Directors and the Compensation Committee
intend to make these equitable adjustments on account of the Reverse Split. As
a result, the number of shares of Common Stock authorized for issuance under
each plan will be divided by the Reverse Split Number. In addition, the number
of shares of Common Stock subject to each stock option outstanding under the
plans will be divided by the Reverse Split Number and the per share exercise
price under each such option will be multiplied by the Reverse Split Number.
Except for changes resulting from the receipt of cash in lieu of
fractional shares as described below, the Reverse Split will not change the
equity interests of the stockholders in the Company and will not affect the
relative rights of any stockholder or result in a dilution or diminution of any
stockholder's proportionate interest in the Company. Management does not
believe, nor does it intend, that the Reverse Split will result in a
significant number of stockholders being cashed out by virtue of holding less
than one share after the Reverse Split.
If adopted, the Amendment will not affect the par value of the Common
Stock of $.10 per share however, an amount equal to the difference between the
aggregate par value of the Old Common Stock and the aggregate par value of the
New
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Common Stock will be transferred for accounting purposes from the Common Stock
account to the Company's additional paid-in capital account.
Fractional Shares
Stockholders who otherwise would be entitled to receive fractional shares
because they hold a number of shares of Old Common Stock that is not evenly
divisible by the Reverse Split Number will be entitled, upon surrender of
certificates representing such shares, to a cash payment in lieu thereof at a
price equal to the fraction to which the stockholder would otherwise be
entitled multiplied by the closing price of New Common Stock on the Effective
Date as reported on The Nasdaq Stock Market. The ownership of a fractional
interest will not give the holder thereof any voting, dividend or other rights,
except to receive payment therefor as described above.
Procedure for Implementing the Reverse Split
If the Amendment is approved by the stockholders at the Special Meeting,
the Board of Directors, in its discretion, will determine the necessity for the
Reverse Split and Reverse Split Number as soon as practicable. The Certificate
of Amendment will become effective upon the filing with the Secretary of State
of the State of Delaware. Based on the recent minimum bid price of the Common
Stock, the Company intends to effect the Reverse Split as soon as practicable
subsequent to receiving the requisite stockholder approval. The Company expects
to notify stockholders of the effectiveness of the Reverse Split and the
Reverse Split Number by a press release.
Each stockholder of record as of the close of business on the Effective
Date will be entitled to receive, upon surrender of a certificate of shares of
Old Common Stock, a new stock certificate representing the number of whole
shares of the Company's New Common Stock to which the holder shall be entitled
pursuant to the Reverse Split. For example, if the Reverse Split Number
determined by the Board is three and a stockholder owned 300 shares of the
Company's Old Common Stock on the Effective Date, upon surrender of the
certificate for 300 shares, the Company would mail to the stockholder a share
certificate for 100 shares of the Company's New Common Stock. Any certificates
for shares of Old Common Stock not so surrendered after the Effective Date
shall be deemed to represent one share of New Common Stock for each such fixed
number equal to the Reverse Split Number of Old Common Stock previously
represented by such certificate. Holders of fractional share interests will be
entitled to receive cash in lieu of fractional shares as described above.
The Company expects that its transfer agent will act as exchange agent
(the "Exchange Agent") for purposes of implementing the exchange of stock
certificates. Shortly after the Effective Date, each holder of an outstanding
certificate theretofore representing shares of Old Common Stock will receive
from the Exchange Agent instructions for the surrender of such certificate to
the Exchange Agent. No new certificates or cash in lieu of fractional shares
will be issued to a stockholder until such stockholder has surrendered to the
Exchange Agent such stockholder's outstanding certificates together with a
properly completed and executed letter of transmittal. Stockholders should not
destroy any stock certificate and should not submit any certificate until
requested to do so by the Company or the Exchange Agent.
No Appraisal Rights
Under Delaware law, stockholders of the Company are not entitled to
appraisal rights with respect to the proposed Reverse Split.
Federal Income Tax Consequences
The following discussion generally describes certain federal income tax
consequences of the proposed Reverse Split to stockholders of the Company. The
following does not address any foreign, state, local tax or alternative minimum
income or other federal tax consequences of the proposed Reverse Split. The
actual consequences for each stockholder will be governed by the specific facts
and circumstances pertaining to such stockholder's acquisition and ownership of
the Common Stock.
Thus, the Company makes no representations concerning the tax consequences
for any of its stockholders and recommends that each stockholder consult with
such stockholder's own tax advisor concerning the tax consequences of the
Reverse Split, including federal, state and local or other income tax.
The Company has not sought and will not seek an opinion of counsel or a
ruling from the Internal Revenue Service regarding the federal income tax
consequences of the proposed Reverse Split. However, the Company believes that,
because
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the Reverse Split is not part of a plan to periodically increase a
stockholder's proportionate interest in the assets or earnings and profits of
the Company, the proposed Reverse Split will have the following income tax
effects:
1. A stockholder will not recognize taxable gain or loss as a result of
the Reverse Split, except to the extent a stockholder receives cash in lieu of
fractional shares. Cash payments in lieu of a fractional share of New Common
Stock should be treated as if the fractional share were issued to the
stockholder and then redeemed by the Company for cash. Generally, a stockholder
receiving such payment should recognize gain or loss equal to the difference,
if any, between the amount of cash received and the stockholder's basis in the
fractional share. Such gain or loss generally will be capital gain or loss.
2. In the aggregate, the stockholder's basis in New Common Stock will
equal his basis in the shares of Old Common Stock exchanged therefor (but not
including the basis allocated to a fractional share for which the stockholder
is entitled to receive cash), and such stockholder's holding period for New
Common Stock will include the holding period for Old Common Stock exchanged
therefor if the shares of Old Common Stock were capital assets in the hands of
such stockholder.
3. The proposed Reverse Split will constitute a reorganization within the
meaning of Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the Company will not recognize any gain or loss as a
result of the Reverse Split.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS VOTE
"FOR" THE AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION TO EFFECT THE
REVERSE SPLIT AND TO REDUCE PROPORTIONATELY THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK.
STOCKHOLDER PROPOSALS AT THE COMPANY'S
NEXT ANNUAL MEETING OF STOCKHOLDERS
The 2001 Annual Meeting of Stockholders ("2001 Annual Meeting") is
anticipated to be held in November 2001. 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 30, 2001, any such proposal must be
received by the Company at its executive offices not later than June 21, 2001
and meet all other applicable requirements for inclusion therein.
Notices of intention to present proposals at the 2001 Annual Meeting or
requests in connection therewith should be addressed to Speizman Industries,
Inc., 701 Griffith Road, Charlotte, North Carolina 28217, Attention: Corporate
Secretary.
Other Matters
Management does not know of any other business to come before the Special
Meeting. If, however, other matters do properly come before the Special
Meeting, it is the intention of the persons named in the enclosed proxy card to
vote on such matters in accordance with their best judgment.
By order of the Board of Directors,
JOHN C. ANGELELLA
Secretary
Charlotte, North Carolina
January 17, 2001
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