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SCHEDULE 14A INFORMATION
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DELTA APPAREL, INC.
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2750 Premiere Parkway, Suite 100
Duluth, Georgia 30097
Telephone (678) 775-6900
NOVEMBER 9, 2006
1. | To elect eight directors to serve until the next annual meeting of shareholders or until their successors have been duly elected and qualified; | ||
2. | To ratify the appointment of Ernst & Young LLP as our independent auditors for the fiscal year ending June 30, 2007; and | ||
3. | To transact such other business as may properly come before the annual meeting or any adjournment or adjournments thereof. |
Martha M. Watson
Secretary
Duluth, Georgia
2750 Premiere Parkway, Suite 100
Duluth, Georgia 30097
Telephone (678) 775-6900
1. | To elect eight directors to serve until the next annual meeting of shareholders or until their successors have been duly elected and qualified; | ||
2. | To ratify the appointment of Ernst & Young LLP as our independent auditors for the fiscal year ending June 30, 2007; and | ||
3. | To transact such other business as may properly come before the annual meeting or any adjournment or adjournments thereof. |
(Item 1)
Committee | ||||||||
Name, Age & | Assignments 2006 | Director | ||||||
Business Address | Principal Occupation | and 2007 | Since | |||||
David S. Fraser (68)* 3010 Rivermeade Lane, NW Atlanta, GA 30327 | Business Consultant Atlanta, Georgia (1) | Audit | 2002 | |||||
William F. Garrett (65)* 1071 Avenue of the Americas New York, NY 10018 | President & Chief Executive Officer Delta Woodside Industries, Inc. Fountain Inn, South Carolina (2) | Compensation Compensation Grants | 1999 | |||||
Robert W. Humphreys (49) 300 N. Main Street, Suite 201 Greenville, SC 29601 | President & Chief Executive Officer Delta Apparel Duluth, Georgia (3) | 1999 | ||||||
Dr. Max Lennon (66)* Post Office Box 1775 Mars Hill, NC 28754 | President Education & Research Services (ERS) Mars Hill, North Carolina (4) | Audit Compensation Corporate Governance | 1999 | |||||
E. Erwin Maddrey, II (65)* 233 N. Main Street, Suite 200 Greenville, SC 29601 | President Maddrey & Associates Greenville, South Carolina (5) | Compensation Corporate Governance | 1999 | |||||
Philip J. Mazzilli, Jr. (65)* 321 Edwards Brook Lane Canton, GA 30115 | Business Consultant Atlanta, Georgia (6) | Audit | 2004 | |||||
Buck A. Mickel (50)* Post Office Box 6847 Greenville, SC 29606 | President & Chief Executive Officer RSI Holdings, Inc. Greenville, South Carolina (7) | Compensation Corporate Governance | 1999 | |||||
David Peterson (54)* 550 Pharr Road, Suite 850 Atlanta, GA 30305 | Chairman The North Highland Company Atlanta, Georgia (8) | Compensation Compensation Grants | 2003 |
* | Independent within the meaning of AMEX Rule 121A as determined by our board of directors. | |
(1) | David S. Fraser is currently a private investor and a business consultant. From 1998 until 2000, Mr. Fraser was Vice President and Chief Financial Officer of Crown Crafts, Inc., a publicly held manufacturer of home textile products. Previously, he served as Chief Financial Officer and Treasurer of Graphic Industries, Inc., a publicly held commercial printing company, from 1994 until 1997. Until July 2006, Mr. Fraser was also a director of Jameson Inns, Inc. and was chairman of its audit committee. | |
(2) | William F. Garrett is currently the President and Chief Executive Officer of Delta Woodside Industries, Inc., a publicly held textile company, and has served in this capacity since June 2000. From 1986 until June 2000, Mr. Garrett served as the President of Delta Mills Marketing Company, a division of a subsidiary of Delta Woodside Industries, Inc. or its predecessors (collectively, “Delta Woodside”). Previously, he served as a |
divisional Vice President of J. P. Stevens & Company, Inc., a textile company, from 1982 to 1984, and as a divisional President of J. P. Stevens & Company, Inc. from 1984 until 1986. Mr. Garrett is also a director of Delta Woodside. | ||
(3) | Robert W. Humphreys currently serves as President and Chief Executive Officer of Delta Apparel, Inc. and has served in this capacity since December 1999. Mr. Humphreys served as President of the Delta Apparel Company division of Delta Woodside from April 1999 until December 1999. Previously, he served as Vice President-Finance and Assistant Secretary of Delta Woodside from May 1998 to November 1999. From January 1987 to May 1998, Mr. Humphreys was President of Stevcoknit Fabrics Company, the former knit fabrics division of a subsidiary of Delta Woodside. | |
(4) | Dr. Max Lennon is currently the President of Education and Research Services (ERS), a nonprofit economic development organization, and has served in this capacity since 2002. From 1996 until 2002, Dr. Lennon served as President of Mars Hill College. Previously, he served a President and Chief Executive Officer of Eastern Foods, Inc., a food product manufacturer and distributor, from August 1994 until March 1996 and was President of Clemson University from March 1986 until August 1994. Dr. Lennon also serves as a director of Delta Woodside. | |
(5) | E. Erwin Maddrey, II is currently the President of Maddrey & Associates, which engages in the business of investing and providing consulting services. He served as President and Chief Executive Officer of Delta Woodside from its founding in 1984 until June 2000. Mr. Maddrey is currently the chairman of our board of directors. He also serves as a director of Delta Woodside and Kemet Corporation. | |
(6) | Philip J. Mazzilli, Jr. is currently a financial and business consultant. From February 2000 until December 2003, Mr. Mazzilli was the Chief Financial Officer of Equifax, a publicly traded company in the business of providing information for global commerce. Previously, he served as Executive Vice President and Chief Financial Officer of Nova Corporation, a payment services company, from 1999 until 2000. | |
(7) | Buck A. Mickel is currently the President, Chief Executive Officer and a director of RSI Holdings, Inc., which is in the business of locating and providing labor to industrial companies in the United States. He has served in this capacity since July 1998. Previously, Mr. Mickel served as Vice President RSI Holdings, Inc. from 1990 until 1998, and was a Vice President of Delta Woodside from its founding in 1984 until November 1989. Mr. Mickel also serves as a director of Delta Woodside. | |
(8) | David Peterson is currently the Chairman of The North Highland Company, a management and technology consulting services firm based in Atlanta, Georgia. Mr. Peterson served as the Chairman and Chief Executive Officer of The North Highland Company from the start of The North Highland Company in 1992 until January 2006. Previously, he held management positions with Georgia-Pacific Corporation and Arthur Andersen & Co. |
(a) | whether the potential nominee has leadership, strategic, or policy setting experience in a complex organization, including any governmental, educational, or other non-profit organization; | ||
(b) | whether the potential nominee has experience and expertise that is relevant to the company’s business, including any specialized business experience, technical expertise, or other specialized skills, and whether the potential nominee has knowledge regarding issues affecting the company; | ||
(c) | whether the potential nominee is highly accomplished in his or her respective field; | ||
(d) | in light of the relationship of the company’s business to the apparel industry, whether the potential nominee has received any awards or honors from any industry groups or associations or other relevant professional associations or actively participates in any such groups or associations; | ||
(e) | whether the addition of the potential nominee to our board would assist the board in achieving a mix of board members that represents a diversity of background and experience; | ||
(f) | whether the potential nominee has high ethical character and a reputation for honesty, integrity, and sound business judgment; |
(g) | whether the potential nominee is independent, as defined by AMEX listing standards, whether he or she is free of any conflict of interest or the appearance of any conflict of interest with the best interests of the company and its shareholders, and whether he or she is willing and able to represent the interests of all shareholders of the company; | ||
(h) | whether the potential nominee is financially sophisticated, as defined by AMEX listing standards, or qualifies as an “audit committee financial expert,” as defined by SEC rules and regulations; and | ||
(i) | any factor affecting the ability or willingness of the potential nominee to devote sufficient time to Board activities and to enhance his or her understanding of the company’s business. |
(i) | the name, telephone number, and address of the nominating shareholder and the name(s), telephone number(s), and address(es) of his or her nominee(s); | ||
(ii) | biographical information regarding each nominee, including each nominee’s employment and other relevant experience; and | ||
(iii) | the written consent of each nominee to serve as a director of the company. |
(a) | the name and address of the shareholder who intends to make the nomination and the name and address of each of that shareholder’s nominees; | ||
(b) | the class and number of shares held of record, beneficially owned and represented by proxy by the nominator as of the record date of the meeting (if the record date has been established) and as of the date of the notice, the name in which those shares are registered and a representation that the nominator intends to appear in person or by proxy at the meeting to make the nominations; | ||
(c) | a description of all arrangements or understandings between the nominator, the nominee(s) and any other persons (whose names must be disclosed) relating to the nomination; | ||
(d) | the same information about the nominee(s) that we would be required to include in a proxy statement under the Securities and Exchange Commission’s proxy rules if we were making the nomination; | ||
(e) | the written consent of each nominee to serve as a director of the company; and | ||
(f) | any other information we may reasonably request. |
AND MANAGEMENT
Shares | ||||||||
Name and Address of | Beneficially | |||||||
Beneficial Owner | Owned | Percentage | ||||||
FMR Corporation (1) Edward C. Johnson Abigail P. Johnson 82 Devonshire Street Boston, MA 02109 | 851,700 | 10.0 | ||||||
Royce & Associates (2) 1414 Avenue of the Americas Ninth Floor New York, NY 10019 | 738,960 | 8.7 | ||||||
Franklin Resources, Inc. (3) Franklin Advisory Services, LLC Charles B. Johnson Rupert H. Johnson, Jr. One Franklin Parkway San Mateo, CA 94403 | 680,000 | 8.0 |
Shares | ||||||||
Name and Address of | Beneficially | |||||||
Beneficial Owner | Owned | Percentage | ||||||
Dimensional Fund Advisors Inc. (4) 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 | 709,688 | 8.3 | ||||||
E. Erwin Maddrey, II (5) 233 North Main Street, Suite 200 Greenville, SC 29601 | 1,058,240 | 12.4 | ||||||
Buck A. Mickel (6)(7) Post Office Box 6847 Greenville, SC 29606 | 686,820 | 8.0 | ||||||
Micco Corporation (7) Post Office Box 6847 Greenville, SC 29606 | 496,252 | 5.8 | ||||||
Minor M. Shaw (7)(8) Post Office Box 6847 Greenville, SC 29606 | 646,114 | 7.6 | ||||||
Charles C. Mickel (7)(9) Post Office Box 6847 Greenville, SC 29606 | 643,760 | 7.5 | ||||||
David S. Fraser (10) | 4,928 | (* | ) | |||||
William F. Garrett (10) | 4,296 | (* | ) | |||||
Robert W. Humphreys (11) | 441,932 | 5.2 | ||||||
Dr. Max Lennon (10) | 15,154 | (* | ) | |||||
Philip J. Mazzilli, Jr. (10) | 4,384 | (* | ) | |||||
Deborah H. Merrill (12) | 11,000 | (* | ) | |||||
David Peterson (10) | 8,076 | (* | ) | |||||
Martha M. “Sam” Watson (13) | 71,964 | (* | ) | |||||
All current directors and executive officers as a group (10 persons) (14) | 2,306,794 | 27.0 |
(1) | The information set forth above is based on a Schedule 13F-HR that was filed by FMR Corporation (“FMR”) with the Securities and Exchange Commission on August 14, 2006 with respect to our common stock. In Amendment No. 4 to Schedule 13G that was filed by FMR with the Securities and Exchange Commission on February 14, 2006 with respect to the company’s common stock, FMR reported that Fidelity Management & Research Company (“Fidelity”), which has the same business address as FMR, is a wholly-owned subsidiary of FMR and is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940. As a result of acting as investment adviser to various investment companies registered under Section 8 of the |
Investment Company Act of 1940, Fidelity is the beneficial owner of all of the shares reported above. The Schedule 13G/A reported that one investment company, Fidelity Low Priced Stock Fund, owns all shares set forth above. The Schedule 13G/A reported members of the family of Edward C. Johnson III, Chairman of FMR Corp., are the predominant owners, directly or through trusts, of Series B shares of common stock of FRM Corp., representing 49% of the voting power of FMR Corp. They have entered into a shareholders’ voting agreement with the other holders of all of the other Class B shares under which all Class B shares will be voted in accordance with the majority vote of Class B shares. Accordingly, through their ownership of voting common stock and the execution of the shareholders’ voting agreement, they may be deemed to form a controlling group with respect to FMR. The Schedule 13G/A indicates that neither FMR nor Edward C. Johnson III has the sole power to vote or direct the voting of the shares owned directly by the Fidelity Funds, which power resides with the Funds’ Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the Funds’ Boards of Trustees. | ||
(2) | The information set forth above is based on a Schedule 13F-HR that was filed by Royce & Associates, LLC with the Securities and Exchange Commission on August 11, 2006 with respect to our common stock. In Amendment No. 6 to Schedule 13G that was filed by Royce with the Securities and Exchange Commission on January 17, 2006 with respect to the company’s common stock, Royce reported that it has sole power to vote and/or dispose of the shares disclosed above. | |
(3) | The information set forth above is based on a Schedule 13F-HR that was filed by Franklin Resources, Inc. (“FRI”) with the Securities and Exchange Commission on August 11, 2006 with respect to our company’s common stock. In Amendment No. 3 to Schedule 13G that was filed by FRI with the Securities and Exchange Commission on February 10, 2004 with respect to our company’s common stock, FRI reported that the shares are beneficially owned by one or more investment companies or other managed accounts that are advised by direct and indirect investment advisory subsidiaries of FRI. The Schedule 13G/A reported that the advisory contracts grant to the applicable investment advisory subsidiary(ies) all investment and/or voting power over the securities owned by their investment advisory clients. Accordingly, such subsidiary(ies) may be deemed to be the beneficial owner of the shares shown in the table. The Schedule 13G/A reported that Charles B. Johnson and Rupert H. Johnson, Jr. (the “FRI Principal Shareholders”) (each of whom has the same business address as FRI) each own in excess of 10% of the outstanding common stock and are the principal shareholders of FRI and may be deemed to be the beneficial owners of securities held by persons and entities advised by FRI subsidiaries. The Schedule 13G/A reported that one of the investment advisory subsidiaries, Franklin Advisory Services, LLC (whose address is One Parker Plaza, Sixteenth Floor, Fort Lee, New Jersey 07024), has sole voting and dispositive power with respect to all of the shares shown. FRI, the FRI Principal Shareholders and the investment advisory subsidiaries disclaim any economic interest or beneficial ownership in the shares and are of the view that they are not acting as a “group” for purposes of the Securities Exchange Act of 1934, as amended. The Schedule 13G/A reported that Franklin Microcap Value Fund, a series of Franklin Value Investors Trust, a company registered under the Investment Company Act of 1940, has an interest in more than 5% of the class of securities reported. | |
(4) | The number of shares currently held by Dimensional Fund Advisors Inc. (“Dimensional”) is based on a Schedule 13F-HR that was filed by Dimensional with the Securities and Exchange Commission on July 28, 2006. In the Schedule 13F-HR, Dimensional reported that it has sole voting power with respect to 702,788 of these shares, and no voting power as to 6,900 of these shares. In an Amendment to Schedule 13G that was filed by Dimensional with the Securities and Exchange Commission on February 6, 2006, Dimensional reported that it furnishes investment advice to four investment companies and serves as investment manager to certain other commingled group trusts and separate accounts. The Schedule 13G/A reported that all of the shares of our company’s common stock were owned by such investment companies, trusts or accounts. The Schedule 13G/A reported that Dimensional disclaims beneficial ownership of such securities and that, to the knowledge of Dimensional, no such investment company, trust or account client owned more than 5% of the outstanding shares of our company’s common stock. |
(5) | Mr. Maddrey is the chairman of the board and a director of Delta Apparel. The number of shares shown as beneficially owned by Mr. Maddrey includes 172,588 shares held by the E. Erwin and Nancy B. Maddrey, II Foundation, a charitable trust, as to which shares Mr. Maddrey holds sole voting and investment power but disclaims beneficial ownership. The number of shares shown as beneficially owned in the table above includes 692 shares awarded pursuant to the 2004 Non-Employee Director Stock Plan that vested as of July 1, 2006 and were awarded on September 8, 2006, the date the company filed its Form 10-K for the fiscal year ended July 1, 2006. | |
(6) | Buck A. Mickel is a director of Delta Apparel. The number of shares shown as beneficially owned by Buck A. Mickel includes 190,568 shares directly owned by him, all of the 496,252 shares owned by Micco Corporation, and 3,500 shares held by him as custodian for a minor. Buck A. Mickel disclaims beneficial ownership with respect to the 3,500 shares of Delta Apparel’s common stock held by him as custodian for a minor. The number of shares shown as beneficially owned in the table above includes 692 shares awarded pursuant to the 2004 Non-Employee Director Stock Plan that vested as of July 1, 2006 and were awarded on September 8, 2006, the date the company filed its Form 10-K for the fiscal year ended July 1, 2006. | |
(7) | Micco Corporation owns 496,252 shares of Delta Apparel’s common stock. The shares of common stock of Micco Corporation are owned in equal parts by Buck A. Mickel (a director of the company), Minor M. Shaw and Charles C. Mickel, who are siblings. Each of them is an officer and director of Micco Corporation, and each of them disclaims beneficial ownership of two thirds of the Delta Apparel shares owned by Micco Corporation. | |
(8) | The number of shares shown as beneficially owned by Minor M. Shaw includes 149,862 shares owned by her directly, and all of the 496,252 shares owned by Micco Corporation. | |
(9) | The number of shares shown as beneficially owned by Charles C. Mickel includes 146,064 shares owned by him directly, 1,404 shares held by him as custodian for his children, 40 shares owned by his wife and all of the 496,252 shares owned by Micco Corporation. Charles C. Mickel disclaims beneficial ownership with respect to the 40 shares owned by his wife and to the 1,404 shares of the held by him as custodian for his children. | |
(10) | The number of shares shown as beneficially owned in the table above includes 692 shares awarded pursuant to the 2004 Non-Employee Director Stock Plan that vested as of July 1, 2006 and were awarded on September 8, 2006, the date the company filed its Form 10-K for the fiscal year ended July 1, 2006. | |
(11) | Robert W. Humphreys is President and Chief Executive Officer and a director of Delta Apparel. The number of shares shown as beneficially owned in the table above includes 125,000 shares subject to options exercisable within 60 days of the record date for the annual meeting. | |
(12) | Deborah H. Merrill is Vice President, Chief Financial Officer and Treasurer of Delta Apparel. The number of shares shown as beneficially owned in the table above includes 5,000 shares subject to options exercisable within 60 days of record date for the annual meeting. | |
(13) | Martha M. “Sam” Watson is Vice President and Secretary of Delta Apparel. The number of shares shown as beneficially owned in the table above includes 22,000 shares subject to options exercisable within 60 days of the record date for the annual meeting. | |
(14) | Includes all shares deemed to be beneficially owned by any current director or executive officer. | |
(*) | Less than one percent. |
Name and Age | Position | |
Robert W. Humphreys (49) | President and Chief Executive Officer (1) | |
Deborah H. Merrill (33) | Vice President, Chief Financial Officer and Treasurer (2) | |
Martha M. “Sam” Watson (53) | Vice President and Secretary (3) |
(1) | See information under the subheading “Election of Directors”. | |
(2) | Deborah H. Merrill is currently the Vice President, Chief Financial Officer and Treasurer of the company and has served in this capacity since July 2006. From March 2006 until July 2006, she served as Vice President, Chief Accounting Officer, and Treasurer of the company. From August 2004 until February 2006, she served as Director of Corporate Reporting, Planning and Administration of the company, and from July 2000 to July 2004, Ms. Merrill served as Director of Accounting and Administration of the company. From March 1999 to June 2000, Ms. Merrill served as Director of Accounting and Administration of the Delta Apparel division of Delta Woodside Industries, Inc. (the predecessor to the Company). From August 1998 to February 1999, Ms. Merrill served as Accounting Manager of the Delta Apparel division of Delta Woodside Industries, Inc. Ms. Merrill has served as Assistant Secretary of the Company since December 1999. Prior to joining Delta Apparel in 1998, she served as the Logistics Controller for GNB Technologies and as an Auditor for Deloitte & Touche LLP. | |
(3) | Martha M. Watson is currently the Vice President and Secretary of the company and has served in this capacity since October 2000. Prior to joining Delta Apparel, Inc., Ms. Watson served as President of Carolina Benefit Services, a payroll company (from September 1999 to October 2000), Vice President of Operations for Sunland Distribution, Inc., a public warehousing company (from January 1999 to September 1999), and Director of Human Resources for the following divisions of Delta Woodside: Stevcoknit Fabrics Company (from January 1990 to January 1999) and Delta Apparel Company (from July 1987 to January 1990). |
Long Term | ||||||||||||||||||||||||||||
Annual Compensation | Awards | |||||||||||||||||||||||||||
Other | Securities | All Other | ||||||||||||||||||||||||||
Annual | Underlying | Compen- | ||||||||||||||||||||||||||
Name and | Salary | Bonus | Compensation | Options | sation | |||||||||||||||||||||||
Principal Position | Year | ($)(a) | ($)(a)(b) | ($)(c) | (#)(d)(e) | ($) (h) | ||||||||||||||||||||||
Robert W. Humphreys | 2006 | 630,000 | 997,800 | — | (g | ) | 285,000 | 8,700 | ||||||||||||||||||||
President & Chief | 2005 | 618,750 | 740,200 | 535,561 | (f | ) | 16,000 | 3,675 | ||||||||||||||||||||
Executive Officer | 2004 | 568,462 | 427,294 | 165,328 | 16,000 | 3,714 | ||||||||||||||||||||||
Deborah H. Merrill (i) | 2006 | 113,013 | 143,040 | — | (g | ) | 13,400 | 4,557 | ||||||||||||||||||||
Vice President, Chief | 2005 | 99,510 | 51,720 | 12,244 | (f | ) | 400 | 2,538 | ||||||||||||||||||||
Financial Officer & Treasurer | 2004 | 92,077 | 37,390 | 3,159 | 400 | 2,607 | ||||||||||||||||||||||
Martha M. Watson | 2006 | 154,875 | 124,725 | — | (g | ) | 66,400 | 6,343 | ||||||||||||||||||||
Vice President & | 2005 | 143,500 | 89,400 | 94,793 | (f | ) | 3,200 | 4,133 | ||||||||||||||||||||
Secretary | 2004 | 134,890 | 68,910 | 26,666 | 3,200 | 3,606 | ||||||||||||||||||||||
Herbert M. Mueller (i) | 2006 | 158,083 | — | — | (g | ) | — | 83,141 | (j) | |||||||||||||||||||
Vice President, Chief | 2005 | 215,833 | 190,720 | 155,901 | (f | ) | 4,800 | 3,823 | ||||||||||||||||||||
Financial Officer & | 2004 | 200,385 | 160,067 | 49,143 | 4,800 | 3,810 | ||||||||||||||||||||||
Treasurer |
(a) | The amounts shown in the column include sums, the receipt of which were deferred pursuant to our company’s Savings and Investment Plan (the “Delta Apparel 401(k) Plan”) and our company’s deferred compensation plan. The deferred compensation plan was terminated in June 2005. | |
(b) | Amounts in this column are cash bonuses paid to reward performance. | |
(c) | The amounts shown in the column were paid by our company in connection with the vesting of awards under our company’s Incentive Stock Award Plan and were approximately sufficient to pay the participant’s federal and state income taxes attributable to the acquisition of the vesting shares and the receipt of the tax reimbursement itself. Shares are issued upon vesting, subject to payment of $0.01 (the par value) per share. The tax assistance related to the vesting of these awards is earned in, and shown above for, the fiscal year in which the related award vests (which is generally the last day of the fiscal year), though such amounts in some instances were actually paid in the fiscal year following vesting of the related award. | |
(d) | Includes awards under our Incentive Stock Award Plan. These awards are treated as options. | |
(e) | Adjusted to reflect the company’s 2-for-1 stock split effective on May 31, 2005. | |
(f) | The three-year performance portion of awards that were granted in fiscal 2003 (constituting 40% of each award) under our company’s Incentive Stock Award Plan vested on September 23, 2005 when we filed our Annual Report on Form 10-K for fiscal 2005 based on the achievement of performance criteria for the three-year period ended July 2, 2005 measured by financial data in the fiscal 2005 Form 10-K. The related payments to cover applicable income taxes were made later in fiscal year 2006; however, these amounts are included in fiscal 2005 compensation because the vesting of the performance portion of the awards was based on achieving fiscal 2005 performance goals. | |
(g) | The awards granted under our Incentive Stock Award Plan are two-year performance awards and vest when we file our Annual Report on Form 10-K for fiscal year 2007 based on the achievement of performance criteria for the two-year period ending June 30, 2007. As such, no awards vested and no compensation was earned during the fiscal year ended July 1, 2006. |
(h) | Represents the amount contributed by us to the Delta Apparel 401(k) Plan. The amount shown for the fiscal year was allocated to the participant’s account during that fiscal year, although all or part of the allocation may have been determined in whole or in part on the basis of the participant’s compensation during the prior fiscal year. | |
(i) | Mr. Mueller was Vice President, Chief Financial Officer and Treasurer until March 2006. Ms. Merrill served as Director of Corporate Reporting, Planning and Administration until March 2006 and served as Vice President, Chief Accounting Officer and Treasurer until July 2006, after which she served as Vice President, Chief Financial Officer and Treasurer. | |
(j) | In connection with Mr. Mueller’s resignation from the company in March 2006, we agreed to pay to Mr. Mueller as severance an amount equal to his base salary for one year, payable twice a month until December 29, 2006 with a lump sum payment of the remaining amount on December 29, 2006. In addition to amounts contributed by us to the Delta Apparel 401(k) Plan as described above in (h), the amount set forth under All Other Compensation also represents severance amounts paid through July 1, 2006 and an amount for unused vacation. |
Individual Grants | ||||||||||||||||||||
Number of | Percent Of | |||||||||||||||||||
Securities | Total Options | |||||||||||||||||||
Underlying | Granted To | Exercise Or | ||||||||||||||||||
Options Granted | Employees | Base Price | Expiration | Grant Date | ||||||||||||||||
Name | (#) | In Fiscal Year | ($/Sh) | Date | Value | |||||||||||||||
Robert W. Humphreys | 35,000 | (a) | 28.0 | $ | 0.01 | (a | ) | 466,900 | (c) | |||||||||||
President & CEO | 250,000 | (b) | 34.1 | $ | 13.35 | (b | ) | 1,295,500 | (d) | |||||||||||
Deborah H. Merrill Vice President, CFO | 1,400 | (a) | 1.1 | $ | 0.01 | (a | ) | 18,676 | (c) | |||||||||||
& Treasurer | 12,000 | (b) | 1.6 | $ | 13.35 | (b | ) | 62,184 | (d) | |||||||||||
Martha M. Watson Vice President & | 10,400 | (a) | 8.3 | $ | 0.01 | (a | ) | 138,736 | (c) | |||||||||||
Secretary | 56,000 | (b) | 7.6 | $ | 13.35 | (b | ) | 290,192 | (d) | |||||||||||
Herbert M. Mueller Vice President, CFO | 12,000 | (a) | 9.6 | $ | 0.01 | (a | ) | 160,080 | (c) | |||||||||||
& Treasurer | 60,000 | (b) | 8.2 | $ | 13.35 | (b | ) | 310,920 | (d) |
(a) | Represents shares covered by an award granted during fiscal year 2006 under our company’s Incentive Stock Award Plan, pursuant to which a participant can acquire shares of our company’s common stock for $0.01 cash |
per share upon the vesting of the award respecting such shares. Each award provided that the award would vest in full if the recipient remained employed with our company on June 30, 2007 or upon a change of control occurring before such date and that any part of an award that did not vest would be forfeited. In connection with the vesting of any award, our company pays the participant cash in an amount approximately sufficient to pay the participant’s federal and state income taxes attributable to the vesting of the award and the receipt of the tax reimbursement itself. | ||
(b) | Represents shares covered by an option granted during fiscal year 2006 under the Company’s Stock Option Plan, pursuant to which a participant is granted the right to acquire shares of the Company’s Common Stock for an exercise price per share equal to the fair market value on the date of the grant. Each option granted under the plan sets forth the circumstances under which all or part of the option can be exercised. Each option became exercisable, or will become exercisable, with respect to the shares underlying that option in 25% increments on the first four anniversaries of the date of grant. These options expire on July 3, 2015. | |
(c) | The grant date values are calculated in accordance with the provisions of Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123R (revised 2004), “Share Based Payment.” These options contain certain provisions that require it to be accounted for as a liability under FAS 123R. Amounts represent the fair value of these options on the date of grant. | |
(d) | The grant date values are calculated in accordance with the provisions of Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123R (revised 2004), “Share Based Payment.” These values are used by the Company in determining stock option expense. The values are calculated based on the following: |
2006 | ||||
Risk-free interest rate | 4.0 | % | ||
Expected life | 7 yrs | |||
Expected volatility | 35.8 | % | ||
Expected dividend yield | 1.3 | % | ||
Weighted-average fair value of options granted | $ | 5.182 |
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Shares Acquired on | Underlying Unexercised | In-the-Money Options at | ||||||||||||||||||||||
Exercise | Value Realized | Options at FY-End (#)(a) | FY-End ($)(a)(b) | |||||||||||||||||||||
Name | (#)(a) | ($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Robert W. Humphreys | 32,000 | (c) | 460,160 | (d) | 125,000 | 222,500 | 603,438 | 1,310,175 | ||||||||||||||||
Deborah H. Merrill | 800 | (c) | 11,504 | (d) | 5,000 | 10,400 | 23,100 | 58,092 | ||||||||||||||||
Martha M. Watson | 6,400 | (c) | 92,032 | (d) | 22,000 | 52,400 | 99,980 | 337,332 | ||||||||||||||||
Herbert M. Mueller | 9,600 | (c) | 138,048 | (d) | — | — | — | — | ||||||||||||||||
14,000 | (e) | 78,680 | (f) |
(a) | Adjusted to reflect the company’s 2-for-1 stock split effective on May 31, 2005. | |
(b) | Based on the closing price of our company’s common stock on June 30, 2006, the last trading day of fiscal year 2006, of $17.14 per share. All of the unexercised options were in-the-money on July 1, 2006. | |
(c) | Amounts represent shares acquired through the vesting of awards granted under our company’s Incentive Stock Award Plan. | |
(d) | Based on the closing price of our common stock on September 26, 2005, the date of the filing of our Annual Report on Form 10-K for the fiscal year ended July 2, 2005, the date of vesting of the applicable incentive stock awards, of $14.39 per share. | |
(e) | Amounts represent shares acquired through the exercise of options granted under our company’s Stock Option Plan. | |
(f) | Based on the closing price of our company’s stock on March 14, 2006, the date of exercise of the applicable stock options, of $16.90 per share. |
INDEX, AND AMEX WHOLESALE & RETAIL TRADE INDEX
2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | ||||||||||||||||||||||
Delta Apparel, Inc. | $ | 100.00 | $ | 196.00 | $ | 308.07 | $ | 369.96 | $ | 555.53 | $ | 624.53 | $ | 826.10 | ||||||||||||||
AMEX US Market Index | 100.00 | 91.22 | 79.31 | 79.59 | 96.44 | 107.52 | 120.62 | |||||||||||||||||||||
AMEX Wholesale & Retail Trade Index | 100.00 | 74.84 | 86.86 | 81.39 | 100.10 | 124.60 | 164.44 |
COMPENSATION GRANTS COMMITTEE
• | Payment of base salaries at levels that are competitive with those paid by a peer group of companies, | ||
• | Cash bonuses to reward the achievement of specific performance goals, | ||
• | Grants of stock awards under an incentive stock award plan, and | ||
• | Grants of stock options under a stock option plan. |
AND INSIDER PARTICIPANTS
(Item 2)
2006 | 2005 | |||||||
Audit Fees | $ | 1,030,000 | $ | 333,942 | ||||
Audit-Related Fees | 144,996 | 9,200 | ||||||
Tax Fees | — | 58,199 | ||||||
All Other Fees | 2,485 | — | ||||||
Total | $ | 1,177,481 | $ | 401,341 | ||||
1. | The audit committee has reviewed and discussed the audited financial statements with the company’s management. | ||
2. | The audit committee has discussed with Ernst & Young LLP the matters required to be discussed by Statement on Auditing Standards No. 61, as amended. | ||
3. | The audit committee has received the written disclosures and the letter from Ernst & Young LLP required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and has discussed with Ernst & Young LLP their independence from the company. |
Martha M. Watson | ||
Secretary | ||
Duluth, Georgia | ||
September 22, 2006 |
your proxy card in the
envelope provided as soon
as possible.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREx |
1. | Election of Directors: | ||||||||
NOMINEES: | |||||||||
o | FOR ALL NOMINEES | O | D. S. Fraser | ||||||
O | W. F. Garrett | ||||||||
o | WITHHOLD AUTHORITY | O | R. W. Humphreys | ||||||
FOR ALL NOMINEES | O | M. Lennon | |||||||
O | E. E. Maddrey ll | ||||||||
o | FOR ALL EXCEPT | O | P. Mazzilli | ||||||
(See instructions below) | O | B. A. Mickel | |||||||
O | D. Peterson | ||||||||
INSTRUCTION:To withhold authority to vote for any individual nominee(s), mark“FOR ALL EXCEPT”and fill in the circle next to each nominee you wish to withhold, as shown here: l | |||||||||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | o | ||||||||
FOR | AGAINST | ABSTAIN | ||||||
2. | Proposal to ratify selection of Ernst & Young LLP as independent auditors of Delta Apparel, Inc. for fiscal year 2007. | o | o | o | ||||
3. | At their discretion upon such other matters as may properly come before the meeting and any adjournment. | |||||||
A majority of said attorneys and proxies who shall be present and acting as such at the meeting or any adjournment or adjournments thereof (or, if only one such attorney and proxy may be present and acting, then that one) shall have and may exercise all the powers hereby conferred. | ||||||||
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders dated September 22, 2006 and the Proxy Statement furnished therewith. |
Signature of Stockholder | Date: | Signature of Stockholder | Date: |
Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |
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The undersigned shareholder of Delta Apparel, Inc. a Georgia corporation, hereby constitutes and appoints Robert W. Humphreys, Deborah H. Merrill, and E. Erwin Maddrey ll, and each of them, attorneys and proxies on behalf of the undersigned to act and vote at the Annual Meeting of Shareholders to be held at 2750 Premiere Parkway, Suite 100, Duluth, Georgia, on November 9, 2006 at 10:00 A.M., and any adjournment or adjournments thereof, and the undersigned instructs said attorneys to vote as specified on the reverse side hereof.
14475 |