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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of
the Commission only (as
Permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COLLEGIATE PACIFIC INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how is was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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February 21, 2001
Dear Stockholders:
You are cordially invited to attend the 2001 annual meeting of stockholders of
Collegiate Pacific Inc. which will be held on Tuesday, March 20, 2001, at 9:00
a.m., Central Time, at the company's corporate offices located at 13950 Senlac
Drive, Suite 200, Dallas, Texas. The official notice of the meeting together
with a proxy statement and proxy card are enclosed. Please give this information
your careful attention.
Whether or not you expect to attend the meeting in person, it is important that
your shares be voted at the meeting. I urge you to specify your choices by
marking the enclosed proxy card and returning it promptly. Sending in a signed
proxy will not affect your right to attend the annual meeting and vote in
person. You may revoke your proxy at any time before it is voted at the annual
meeting by giving written notice to the secretary of the company.
Sincerely,
/s/ Michael J. Blumenfeld
Michael J. Blumenfeld
Chairman of the Board and Chief Executive Officer
YOUR VOTE IS IMPORTANT
Please Sign, Date, and
Return Your Proxy Card
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MARCH 20, 2001
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To Our Stockholders:
The 2001 annual meeting of stockholders of Collegiate Pacific Inc. will be held
at the company's corporate offices at 13950 Senlac Drive, Suite 200, Dallas,
Texas, on Tuesday, March 20, 2001, at 9:00 a.m., Central Time, for the following
purposes, each as more fully described in the following pages of the proxy
statement, which are made a part of this notice:
1. To elect seven directors to serve until the annual meeting of
stockholders in 2002 or until their successors are duly
elected and qualified;
2. To approve an amendment to the company's Stock Option Plan to
increase the number of authorized shares under that plan to
1,000,000;
3. To ratify the selection of Grant Thornton LLP as the
independent auditor of the company for the year ending June
30, 2001; and
4. To transact such other business as may properly come before
the meeting or any postponement or adjournment of the meeting.
The board of directors has fixed the close of business on February 16, 2001, as
the record date for determining stockholders entitled to notice of and to vote
at the meeting. Only stockholders of record at the close of business on that
date will be entitled to notice of and to vote at the meeting.
You are cordially invited to attend the meeting in person. Whether or not you
expect to attend the meeting in person, you are urged to sign and date the
enclosed proxy card and return it promptly in the envelope provided for that
purpose. Sending in a signed proxy will not affect your right to attend the
annual meeting and vote in person. You may revoke your proxy at any
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time before it is voted at the annual meeting by giving written notice to the
secretary of the company.
By Order of the Board of Directors,
/s/ William R. Estill
William R. Estill
Chief Financial Officer and Secretary
Dallas, Texas
February 21, 2001
It is important that your stock be represented at the meeting regardless of the
number of shares you hold. Please complete, sign, date and mail the enclosed
proxy card in the accompanying envelope even if you intend to be present at the
meeting. Returning the proxy card will not limit your right to vote in person or
to attend the annual meeting, but will insure your representation if you cannot
attend. If you have shares in more than one name, or if your stock is registered
in more than one way, you may receive more than one copy of the proxy materials.
If so, please sign and return each copy of the proxy cards you receive so that
all of your shares may be voted. The proxy is revocable at any time before it is
voted at the annual meeting.
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COLLEGIATE PACIFIC INC.
13950 SENLAC DRIVE, SUITE 200
DALLAS, TEXAS 75234
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PROXY STATEMENT
FOR
ANNUAL MEETING
tO BE HELD ON
MARCH 20, 2001
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This Proxy Statement is furnished in connection with the solicitation of proxies
by Collegiate Pacific Inc., on behalf of the Board of Directors, for the 2001
Annual Meeting of Stockholders. This Proxy Statement and the related proxy form
are being distributed on or about February 21, 2001.
You can vote your shares by completing and returning the enclosed written proxy
card. You can also vote in person at the meeting, and submitting your proxy card
will not affect your right to attend the meeting and vote.
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ELECTION OF DIRECTORS
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The first proposal scheduled to be voted on at the meeting is the election of
seven directors. All of these directors will serve a one-year term. The Board of
Directors has nominated Michael J. Blumenfeld, Adam Blumenfeld, Arthur J.
Coerver, Harvey Rothenberg, Jeff Davidowitz, William A. Watkins, Jr., and Robert
W. Hampton. All of these individuals, except for Robert W. Hampton, are
currently serving as Collegiate Pacific directors and their current terms expire
at the annual meeting. Mr. Hampton has been nominated for election by our
stockholders for the first time and, if elected, will be appointed to the Stock
Option and Audit Committees of our Board of Directors. Mr. Robert W. Philip, who
was nominated by the Board of Directors and elected by our stockholders at the
2000 annual meeting, resigned from the Board of Directors in October 2000.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES
The Board has no reason to believe that any nominee would be unable or unwilling
to serve if elected. If a nominee becomes unable or unwilling to accept
nomination or election, the Board will either select a substitute nominee or
will reduce the size of the Board. If you have submitted a proxy to vote for the
directors nominated by the Board and a substitute nominee is selected, your
shares will be voted for the election of the substitute nominee.
In accordance with the company's bylaws, directors are elected by a plurality of
the votes of shares represented and entitled to be voted at the meeting. That
means, the seven nominees will be elected if they receive more affirmative votes
than any other nominees.
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DIRECTOR INFORMATION
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Set forth below is biographical and other information about the persons who will
make up the Board following the annual meeting, assuming election of the
nominees named above:
MICHAEL J. BLUMENFELD Mr. Blumenfeld has served as the company's
Age: 54 Chairman of the Board and Chief Executive
Director since February 1998 Officer since February 1998. Mr. Blumenfeld
No Board Committees served as President of the company from
February 1998 to January 2000. From July
1997 until February 1998, Mr. Blumenfeld
served as President and Chief Executive
Officer of Collegiate Pacific, Inc., a Texas
corporation, that sold all of its assets to
the company in February 1998. From 1992
until November 1996, Mr. Blumenfeld served
as Chairman of the Board and Chief Executive
Officer of Sport Supply Group, Inc., a New
York Stock Exchange company engaged in the
direct mail marketing of sports related
equipment. Mr. Blumenfeld is Adam
Blumenfeld's father.
ADAM BLUMENFELD Mr. Blumenfeld is the company's President
Age: 30 and has served in that capacity since
Director since January 2000 joining the company in January 2000. From
No Board Committees January 1998 through December 1999, Mr.
Blumenfeld was Vice President of Sales and
Marketing of Sport Supply Group, Inc., a New
York Stock Exchange company engaged in the
direct mail marketing of sports related
equipment. Mr. Blumenfeld's other positions
with Sport Supply Group included Vice
President of Youth Sales from January 1995
to January 1998, and Director of Youth Sales
from August 1993 to December 1994. Mr.
Blumenfeld is Michael Blumenfeld's son.
ARTHUR J. COERVER Mr. Coerver is the company's Chief Operating
Age: 58 Officer and has served in that capacity
Director since February 1998 since joining the company in February 1998.
No Board Committees From 1991 through 1997, Mr. Coerver was Vice
President of Sales and Marketing of Sport
Supply Group, Inc., a New York Stock
Exchange Company engaged in the direct mail
marketing of sports related equipment.
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HARVEY ROTHENBERG Mr. Rothenberg has served as the company's
Age: 59 Vice President of Marketing and served in
Director since December 1998 that capacity since February 1998. From 1977
No Board Committees to 1998, Mr. Rothenberg served as Vice
President of Sales for Sports Supply Group,
Inc., a New York Stock Exchange company
engaged in the direct mail marketing of
sports related equipment.
JEFF DAVIDOWITZ Mr. Davidowitz is the President of Penn
Age: 44 Footwear, a private investment company and
Director since June 1994 has served in that capacity since 1991.
Board Committees: Audit and Stock
Option
WILLIAM A. WATKINS, JR. Mr. Watkins is a partner in the public
Age: 57 accounting firm of Watkins, Watkins and
Director since February 1998 Keenan, and has served in that capacity
Board Committees: Audit and Stock since 1971.
Option
ROBERT W. HAMPTON Mr. Hampton is a director and the President
Age: 53 of Jones Financial Group, Ltd. Since 1985,
Not currently a Director Mr. Hampton has held various executive
Board Committees: Audit and Stock positions at Jones International, Ltd., a
Option, if elected to the Board holding company whose subsidiaries,
including Jones Financial Group, Ltd.,
conduct business in several areas including
cable television programming, radio
programming, advertising sales
representation, education and software
development. Prior to joining Jones
International, Ltd., Mr. Hampton held
various management positions at Xerox
Corporation.
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COMMITTEES
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The Board maintains two standing committees: Audit and Stock Option.
Audit Committee. The Audit Committee's primary duties include (1) recommending
the appointment of independent accountants and determining the appropriateness
of their fees, (2) reviewing the scope and results of the audit plans of the
independent accountants and internal auditors, (3) overseeing the scope and
adequacy of internal accounting control and record-keeping systems, (4)
reviewing the objectivity, effectiveness and resources of the internal audit
function and (5) conferring independently with the independent accountants.
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Stock Option Committee. The main responsibility of the Stock Option Committee is
to administer the 1998 Collegiate Pacific Inc. Stock Option Plan.
The Board of Directors does not have a standing nominating committee,
compensation committee, or any other committee performing similar functions. The
functions customarily attributable to a nominating committee or a compensation
committee are performed by the Board of Directors as a whole.
AUDIT COMMITTEE REPORT
The audit functions of the Audit Committee are focused on three areas:
o the adequacy of the company's internal controls and financial
reporting process and the reliability of the company's
financial statements;
o the independence and performance of the company's internal
auditors and independent auditors; and
o the company's compliance with legal and regulatory
requirements.
We meet with management periodically to consider the adequacy of the company's
internal controls and the objectivity of its financial reporting. We discuss
these matters with the company's independent auditors and with appropriate
company financial personnel and internal auditors. We regularly meet privately
with both the independent auditors and the internal auditors, each of whom has
unrestricted access to the committee. We also recommend to the Board the
appointment of the independent auditors and review periodically their
performance and independence from management. In addition, the committee reviews
the company's financing plans and reports recommendations to the full Board for
approval and to authorize action.
The Directors who serve on the committee are all "Independent" for purposes of
the American Stock Exchange listing standards. That is, the Board of Directors
has determined that none of us has a relationship with Collegiate Pacific that
may interfere with our independence from Collegiate Pacific and its management.
The Board has adopted a written charter setting out the audit related functions
the committee is to perform. You can find a copy of that charter attached to
this proxy statement as Appendix A.
Management has primary responsibility for the company's financial statements and
the overall reporting process, including the company's system of internal
controls. The independent auditors audit the annual financial statements
prepared by management, express an opinion as to whether those financial
statements fairly present the financial position, results of operations and cash
flows of the company in conformity with generally accepted accounting principles
and discuss with us any issues they believe should be raised with us. We
reviewed the company's audited financial statements for the fiscal year ended
June 30, 2000, with both management and Grant Thornton, the company's
independent auditors, to discuss those financial statements.
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Management represented to us that the financial statements were prepared in
accordance with generally accepted accounting principles.
We received from and discussed with Grant Thornton the written disclosure and
the letter required by Independence Standards Board Standard No. 1,
(Independence Discussions with Audit Committees). These items relate to that
firm's independence from the company. We also discussed with Grant Thornton any
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).
Based on these reviews and discussions, we recommended to the Board that the
company's audited financial statements for the fiscal year ended June 30, 2000,
be included in its Annual Report on Form 10-KSB for filing with the Securities
and Exchange Commission. The Committee also recommended the reappointment,
subject to stockholder approval, of the independent auditors, and the Board of
Directors concurred in such recommendation.
Submitted by the Audit Committee of the Company's Board of Directors.
Jeff Davidowitz
William A. Watkins, Jr.
Robert W. Philip
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MEETINGS AND ATTENDANCE
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During fiscal 2000, the full Board held one meeting, the Audit Committee met
three times, and the Stock Option Committee held no formal meetings. All
directors attended at least 75% of the meetings of the full Board and the
meetings of the committees on which they served.
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DIRECTOR COMPENSATION
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Messrs. Michael and Adam Blumenfeld, Coerver, and Rothenberg, who are the
directors that are also Collegiate Pacific employees, do not receive any
additional compensation for serving on the Board of Directors.
Annual Retainer Fee. Each non-employee director receives an annual retainer fee
of $7,500. The director receives that amount in cash.
Other Benefits. Collegiate Pacific reimburses directors for the reasonable
expenses associated with attending Board meetings and provides them with
liability insurance coverage for their activities as directors of Collegiate
Pacific.
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EXECUTIVE COMPENSATION
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SUMMARY COMPENSATION TABLE
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The following table summarizes the total compensation, for each of the last
three fiscal years, for Mr. Michael Blumenfeld and the only other executive
officer who earned over $100,000 and who was serving as an executive officer at
the end of fiscal 2000.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
------------------------- --------------------------
Restricted Securities
Fiscal Stock Underlying
Name and Principal Positions Year Salary ($) Awards($) Options
---------------------------- ------ ---------- ---------- ----------
Michael J. Blumenfeld 2000 96,517 -- --
Chairman of the Board, 1999 78,000 -- --
Chief Executive Officer 1998 78,000 93,750 10,000
Arthur J. Coerver 2000 108,223 -- --
Chief Operating Officer 1999 108,000 46,875 5,000
1998 112,500 -- --
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AMENDMENT TO STOCK OPTION PLAN
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The Board of Directors has adopted and recommends the approval of an amendment
to increase the number of authorized shares under the company's 1998 Stock
Option Plan to 1,000,000 (the "Amendment"). As of February 15, 2001, the company
had granted incentive and nonstatutory stock options to purchase 252,000 shares,
1,000 of which have been exercised. There are currently 400,000 shares
authorized for issuance under the Stock Option Plan. The closing price of the
company's common stock on the American Stock Exchange was $4.00 on February 14,
2001.
THE STOCK OPTION PLAN
Subject to stockholder approval, the Board of Directors has adopted the
Amendment to the Stock Option Plan. The purpose of the Stock Option Plan is to
strengthen the ability of the Company to attract and retain well-qualified
executive and managerial personnel, to furnish additional incentive to those
persons responsible for the successful management of the Company, and thereby to
enhance stockholder value.
The Stock Option Plan requires that the exercise price for each incentive and
nonstatutory stock option must not be less than 100% of the fair market value
per share of the common stock at the time the option is granted. No incentive
stock option, however, may be granted to an employee who owns more than 10% of
the total combined voting power of all classes of outstanding stock of the
company unless the option price is at least 110% of the fair market value of the
common stock at the date of grant and the option period is not more than five
years from the date of grant. No employee may be granted incentive stock options
that first become exercisable during a calendar year to purchase common stock,
or stock of any affiliate (or a predecessor of the company or an affiliate),
with an aggregate fair market value (determined as of the date of grant of each
option) in excess of $100,000. An incentive stock option counts against the
annual limitation only in the year it first becomes exercisable. Incentive stock
options may be granted only to employees of the company.
The time period during which an option may be exercised by the holder may not be
more than ten years from the date the option is granted. Options may be
exercised in annual installments as specified by the Stock Option Committee. All
installments that become exercisable are cumulative and may be exercised at any
time after they become exercisable until the option expires. Options are not
assignable or transferable other than by will or the laws of descent and
distribution or between spouses or incident to divorce.
Full payment for shares purchased upon exercise of an option must be made at the
time of exercise. No shares may be issued until full payment is made. The Stock
Option Plan provides that an option agreement may permit an optionee to tender
previously owned shares of Common Stock in partial or full payment for shares to
be purchased on exercising an option. Unless
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sooner terminated by action of the Board of Directors, the Stock Option Plan
will terminate on December 31, 2005.
The Board of Directors has retained the right to amend or terminate the Stock
Option Plan as it deems advisable. However, no amendment shall be made to
materially increase the number of shares of stock which may be optioned under
the Stock Option Plan or the number of options that may be granted to any
individual optionee, materially modify the requirements as to eligibility for
participation in the Stock Option Plan, or materially increases the benefits
which may accrue to participants under the Stock Option Plan without submitting
such amendments to stockholders for approval. In addition, no amendments to, or
termination of, the Stock Option Plan shall impair the rights of any individual
under options previously granted without such individual's consent.
FEDERAL INCOME TAX CONSEQUENCES
No tax obligation will arise for the optionee or the company upon the granting
of either incentive stock options or non-qualified stock options under the Stock
Option Plan. Upon exercise of a non-qualified stock option, an optionee will
recognize ordinary income in an amount equal to the excess, if any, of the fair
market value, on the date of exercise, of the stock acquired over the exercise
price of the option. Thereupon, the company will be entitled to a tax deduction
in an amount equal to the ordinary income recognized by the optionee. Any
additional gain or loss realized by an optionee on disposition of the shares
generally will be capital gain or loss to the optionee and will not result in
any additional tax deduction to the company. The taxable event arising from
exercise of non-qualified stock options by officers of the company subject to
Section 16(b) of the Securities Exchange Act of 1934 occurs on the later of the
date on which the option is exercised or the date six months after the date the
option was granted unless the optionee elects, within 30 days of the date of
exercise, to recognize ordinary income as of the date of exercise. The income
recognized at the end of any deferred period will include any appreciation in
the value of the stock during that period and the capital gain holding period
will not begin to run until the completion of such period.
Upon the exercise of an incentive stock option, an optionee recognizes no
immediate taxable income. The tax cost is deferred until the optionee ultimately
sells the shares of stock. If the optionee does not dispose of the option shares
within two years from the date the option was granted and within one year after
the exercise of the option, and the option is exercised no later than three
months after the termination of the optionee's employment, the gain on the sale
will be treated as long term capital gain. Subject to the limitations in the
Stock Option Plan, certain of these holding periods and employment requirements
are liberalized in the event of the optionee's death or disability while
employed by the company. The company is not entitled to any tax deduction,
except that if the stock is not held for the full term of the holding period
outlined above, the gain on the sale of such stock, being the lesser of (i) the
fair market value of the stock on the date of exercise minus the option price,
and (ii) the amount realized on disposition minus the option price, will be
taxed to the optionee as ordinary income and the company will be entitled to a
deduction in the same amount. Any additional gain or loss realized by an
optionee upon disposition of shares prior to the expiration of the full term of
the holding period outlined above generally will be capital gain or loss to the
optionee and will not result in any additional tax deduction to the company. The
"spread" upon exercise of an incentive stock option
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constitutes a tax preference item within the computation of the "alternative
minimum tax" under the Internal Revenue Code. The tax benefits which might
otherwise accrue to an optionee may be affected by the imposition of such tax if
applicable to the optionee's individual circumstances.
Other than the options to acquire 252,000 shares that have been issued under the
Stock Option Plan, no additional options have been conditionally granted by the
Company. If the Amendment is approved, there will be 748,000 shares available
for future option grants by the Company.
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VOTE REQUIRED AND BOARD RECOMMENDATION
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THE AMENDMENT TO THE STOCK OPTION PLAN MUST BE APPROVED BY A MAJORITY OF THE
VOTES CAST AT THE ANNUAL MEETING. THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO
APPROVE THE AMENDMENT TO INCREASE THE NUMBER OF AUTHORIZED SHARES UNDER THE
STOCK OPTION PLAN TO 1,000,000, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED
IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
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RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR
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The Board of Directors has approved and recommends the appointment of Grant
Thornton LLP, certified public accountants, to serve as independent auditor for
our company for the fiscal year ending June 30, 2001. Approval of the
appointment of the accountants is being sought in order to give stockholders the
opportunity to express their opinion on the matter. Approval will require the
affirmative vote of the holders of a majority of the shares of common stock
which are represented and entitled to vote at the meeting. Should approval not
be obtained, the Board of Directors would expect to reconsider the appointment.
Members of Grant Thornton LLP are expected to attend the annual meeting and, if
present, will be available to answer appropriate questions which may be asked by
stockholders. Those members will also have an opportunity to make a statement at
the annual meeting if they desire to do so.
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VOTE REQUIRED AND BOARD RECOMMENDATION
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THE APPOINTMENT OF GRANT THORNTON LLP MUST BE RATIFIED BY A MAJORITY OF THE
VOTES CAST AT THE ANNUAL MEETING. THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO
APPROVE THE RATIFICATION OF GRANT THORNTON LLP, AND PROXIES SOLICITED BY THE
BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED
OTHERWISE ON THE PROXY.
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STOCK OWNERSHIP
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The following table sets forth certain information, as of February 15, 2001,
about the ownership of Collegiate Pacific common stock by the directors and
executive officers. The company knows of no persons other than Messrs. Michael
Blumenfeld and Adam Blumenfeld, who own more than 5% of the total number of
shares outstanding. Unless otherwise indicated, each person named below holds
sole investment and voting power over the shares shown.
TOTAL AS A
OPTIONS/WARRANTS PERCENTAGE OF
NUMBER OF EXERCISABLE TOTAL SHARES
SHARES WITHIN 60 BENEFICIAL OUTSTANDING
BENEFICIAL OWNER OWNED DAYS OWNERSHIP (IF 1% OR MORE)(a)
---------------- --------- --------------- ---------- ------------------
Michael J. Blumenfeld 2,174,007 2,170,607 4,344,614 67.7%
13950 Senlac Drive, Suite 200
Dallas, TX 75234
Adam Blumenfeld 243,600 263,600 507,200 10.8%
13950 Senlac Drive, Suite 200
Dallas, TX 75234
Jeff Davidowitz 142,302(b) 155,802(b) 298,104 6.8%
13950 Senlac Drive, Suite 200
Dallas, TX 75234
William A. Watkins, Jr 42,803(c) 46,303(c) 89,106 2.0%
Arthur J. Coerver 37,790(d) 62,790(d) 100,580 1.9%
Harvey Rothenberg 18,432(e) 42,432(e) 60,864 1.4%
Chadd Edlein 14,000 35,500 49,500 --
William R. Estill -- 20,000 20,000 --
Directors and executive
officers as a group (8 persons) 2,672,934 2,797,034 5,469,968 77.7%
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(a) - Based on the number of shares outstanding (4,244,607) at the close of
business on December 29, 2000.
(b) - Includes (i) 34,751 shares and 34,751 shares issuable upon exercise of
a warrant held by Penn Footwear Retirement Trust of which Mr.
Davidowitz is a trustee, (ii) 67,551 shares and 67,551 shares issuable
upon exercise of a warrant held by JIBS Equities of which Mr.
Davidowitz is a general partner, (iii) 9,000 shares and 9,000 shares
issuable upon exercise of a warrant held by Penn Footwear of which Mr.
Davidowitz is President and a shareholder, (iv) 4,000 shares and 14,000
shares issuable upon exercise of a warrant held by Oldfield Company of
which Mr. Davidowitz is President and a shareholder, (v) 10,000 shares
and 10,000 shares issuable upon exercise of a warrant held by DVD
Partners of which Mr. Davidowitz is a general partner, and (vi) 10,000
shares and 10,000 shares issuable upon exercise of a warrant held by 3D
Partners of which Mr. Davidowitz is general partner.
(c) - Includes 30,303 shares held in trust for the benefit of Mr. Watkins and
30,303 shares issuable upon exercise of a warrant held in trust for
the benefit of Mr. Watkins.
(d) - Includes (i) 6,060 shares held in trust for the benefit of Mr. Coerver,
(ii) 1,212 shares held in trust for the benefit of Mr. Coerver's
spouse, (iii) 6,060 shares issuable upon exercise of a warrant held in
trust for the benefit of Mr. Coerver, and (iv) 1,212 shares issuable
upon exercise of a warrant held in trust for the benefit of Mr.
Coerver.
(e) - Includes (i) 1,687 shares held in trust for the benefit of Mr.
Rothenberg's child, (ii) 3,030 shares held in trust for the benefit of
Mr. Rothenberg, (iii) 1,000 shares issuable upon exercise of a warrant
held by Mr. Rothenberg's spouse, and (iv) 3,030 shares issuable upon
exercise of a warrant held in trust for the benefit of Mr. Rothenberg.
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OTHER DIRECTOR AND EXECUTIVE OFFICER INFORMATION
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On February 17, 1998, the company sold 1,960,000 of its shares to Michael J.
Blumenfeld and 40,000 shares to Adam Blumenfeld for $1.00 per share, or an
aggregate purchase price of $2,000,000, in cash, pursuant to the Stock Purchase
Agreement dated August 18, 1997 by and between the company and Michael and Adam
Blumenfeld. Neither individual was an officer or director of the Company at the
time of the execution of the Stock Purchase Agreement. The consideration paid
for the shares was based on the average of the high and low bid price of the
shares as reported by the NASD on August 18, 1997, the date of the Stock
Purchase Agreement.
Also on February 17, 1998, in connection with the Stock Purchase Agreement, the
Company sold:
o 20,000 shares to Arthur J. Coerver;
o 13,500 shares to Robert W. Philip; and
o 13,500 shares to William A. Watkins, Jr.
These shares were sold at $1.00 per share, and Messrs. Coerver, Philip and
Watkins became directors of the Company upon consummation of the Stock Purchase
Agreement. Mr. Philip has since resigned from the Board of Directors.
Since April 14, 1997, Michael J. Blumenfeld has made loans, net of repayments,
to the company in an aggregate amount approximating $755,000. These loans were
payable on demand and bore interest at the rate of 12% per annum. On February 1,
2000, the aggregate outstanding amount under the loans was $994,307, and
pursuant to the Purchase Agreement, Mr. Blumenfeld exchanged his outstanding
loans for an equal amount of convertible notes.
In February 2000, the company issued $2,235,000 of convertible notes to certain
officers and directors of Collegiate Pacific and certain third parties.
Approximately $995,000 of the notes were issued to Michael J. Blumenfeld in
exchange for an equal amount of subordinated notes originally issued to Mr.
Blumenfeld in exchange for cash. The remaining notes were issued in exchange for
cash in the amount of approximately $1.4 million. In April 2000, all of the note
holders converted the outstanding balance under the notes into shares of
Collegiate Pacific at a conversion price of $3.30 per share, resulting in the
issuance of 677,267 shares of common stock.
The following table sets forth the principal amount of the notes and the number
of shares the notes were converted into by each officer and director of the
company.
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NUMBER OF SHARES
ISSUED UPON
PRINCIPAL AMOUNT CONVERSION
NAME OF NOTE HOLDER OF NOTE($) OF NOTE
------------------- ---------------- ----------------
Michael J. Blumenfeld 1,500,000 454,545
William A. Watkins, Jr. 100,000 30,303
Arthur J. Coerver 50,000 15,151
Jeff Davidowitz 150,000 45,455
Harvey Rothenberg 15,000 4,545
On September 7, 2000, the company acquired the stock of Kesmil Manufacturing,
Inc., a manufacturing company owned by Michael J. Blumenfeld, the majority
stockholder and Chief Executive Officer of the company, for the assumption of
approximately $581,000 in notes payable to the stockholder. The company is the
sole customer of the acquired company and the acquisition will be accounted for
similar to a pooling of interest. During fiscal 2000, the company purchased
approximately $1,000,000 of certain inventory items from Kesmil.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act of 1934, as amended, requires the company's
executive officers and directors and persons who own more than ten percent of a
registered class of the company's equity securities (collectively, the
"Reporting Persons") to file reports of ownership and changes in ownership with
the Securities and Exchange Commission and to furnish the company with copies of
these reports. The company believes that all filings required to be made by the
Reporting Persons during the fiscal year ended June 30, 2000 were made on a
timely basis, except for the filing of a Form 4 or Form 5 by Messrs. Adam
Blumenfeld, Arthur J. Coerver, Jeff Davidowitz, Harvey Rothenberg and William A.
Watkins, Jr. reporting the acquisition of shares of the company's common stock
upon the conversion of indebtedness and their receipt of options and warrants to
acquire shares of the company's common stock.
================================================================================
ADDITIONAL INFORMATION
================================================================================
RECORD DATE; SHARES OUTSTANDING
Stockholders of record at the close of business on February 16, 2001, are
entitled to vote their shares at the annual meeting. As of that date, there were
4,244,607 shares of common stock outstanding and entitled to be voted at the
meeting. The holders of those shares are entitled to one vote per share.
QUORUM
More than 50% of the stockholders entitled to vote must be represented at the
meeting before any business may be conducted. If a quorum is not present, the
stockholders who are represented may adjourn the meeting until a quorum is
present. The time and place of the adjourned meeting
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will be announced at the time the adjournment is taken, and no other notice need
be given. An adjournment will have no effect on the business that may be
conducted at the meeting.
PROXIES; RIGHT TO REVOKE
By submitting your proxy, you will authorize Michael J. Blumenfeld and William
R. Estill to represent you and vote your shares at the meeting in accordance
with your instructions. They may also vote your shares to adjourn the meeting
and will be authorized to vote your shares at any adjournments or postponements
of the meeting.
If you attend the meeting, you may vote your shares in person, regardless of
whether you have submitted a proxy. In addition, you may revoke your proxy by
sending a written notice of revocation to the company's Corporate Secretary, by
submitting a later-dated proxy or by voting in person at the meeting.
DEFAULT VOTING
If you submit a proxy but do not indicate any voting instructions, your shares
will be voted FOR the election of all nominees for director, and if any other
business properly comes before the stockholders for a vote at the meeting, your
shares will be voted according to the discretion of the holders of the proxy.
TABULATION OF VOTES
Continental Stock Transfer and Trust Company, the company's transfer agent, will
tabulate and certify the votes.
If your shares are treated as a broker non-vote, your shares will be included in
the number of shares represented for purposes of determining whether a quorum is
present. Because the election of directors is done by a plurality of votes, a
broker non-vote will have no effect on the outcome of the vote. However, because
the amendment to the Stock Option Plan and ratification of auditors are done by
a majority of votes cast at the meeting, a broker non-vote will count as a vote
against the matter being considered.
VOTING BY STREET NAME HOLDERS
If you are the beneficial owner of shares held in "street name" by a broker, the
broker, as the record holder of the shares, is required to vote those shares
according to your instructions. If you do not give instructions to the broker,
the broker will be entitled to vote the shares in its discretion.
INDEPENDENT ACCOUNTANTS
The Board has again selected Grant Thornton LLP as independent accountants for
fiscal 2001. Representatives of that firm will be at the meeting to respond to
appropriate questions, and they will have an opportunity to make a statement if
they desire to do so.
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PROXY SOLICITATION
Collegiate Pacific will bear all costs of this proxy solicitation. Proxies may
be solicited by mail, in person, by telephone or by facsimile by officers,
directors and regular employees. Collegiate Pacific may also reimburse brokerage
firms, custodians, nominees and fiduciaries for their expenses to forward proxy
materials to beneficial owners.
STOCKHOLDER PROPOSALS FOR NEXT YEAR'S MEETING
Any stockholder who desires to present a proposal for consideration at next
year's annual meeting and to include such proposal in next year's proxy
statement must deliver the proposal to the company's principal executive offices
no later than the close of business on October 24, 2001. Proposals should be
addressed to Corporate Secretary, Collegiate Pacific, Inc., 13950 Senlac Drive,
Suite 200, Dallas, TX 75234.
STOCKHOLDER LIST
For at least ten days prior to the meeting, a list of the stockholders entitled
to vote at the annual meeting will be available for examination, for purposes
relevant to the meeting, during ordinary business hours at the company's
principal executive offices. The list will also be available for examination at
the meeting.
ANNUAL REPORT ON FORM 10-KSB
A copy of the fiscal 2000 Annual Report on Form 10-KSB (without exhibits) is
being distributed along with this Proxy Statement. It is also available via the
Internet at www.CollegiatePacific.com. In addition, the report (with exhibits)
is available at the World Wide Web site of the Securities and Exchange
Commission (www.sec.gov).
OTHER BUSINESS
The Board of Directors knows of no business that will come before the meeting
for action except as described in the accompanying Notice of Meeting. However,
as to any such business, the persons designated as proxies will have
discretionary authority to act in their best judgment.
By Order of the Board of Directors,
/s/ William R. Estill
William R. Estill
Chief Financial Officer and Secretary
Dallas, Texas
February 21, 2001
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ANNEX A
CHARTER OF THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OF
COLLEGIATE PACIFIC INC.
APRIL 2000
ARTICLE I
PURPOSE
The primary purpose of the Audit Committee (the "Committee") is to
assist the Board of Directors (the "Board") in fulfilling its oversight
responsibilities in connection with: (a) reviewing the financial reports and
other financial information prepared by the Company for submission to any
governmental or regulatory body or the public and monitoring the integrity of
such financial reports; (b) reviewing the Company's systems of internal controls
established by management for finance, accounting, legal compliance and ethics
that management and the Board have established; (c) reviewing the Company's
auditing, accounting and financial reporting processes generally; (d) monitoring
compliance with legal and regulatory requirements; and (e) monitoring the
independence and performance of the Company's internal and external auditors.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full power to retain
special legal, accounting or other consultants to advise the Committee. The
Committee may request any officer or employee of the Company or the Company's
outside counsel or independent auditor to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee.
ARTICLE II
MEMBERSHIP
The Committee shall be comprised of at least three members of the
Board, and the Committee's composition shall meet the following listing
requirements of the NASD (which apply to all Amex listed companies):
1. Each member of the Committee must not have any relationship with the
Company that may interfere with the exercise of the member's
independence;
2. Each member of the Committee must be financially literate(1) or become
financially literate within a reasonable period of time after
appointment to the Committee; and
- ----------
(1) The term "financial literacy" means that a member of an audit committee
must have the ability to read and understand fundamental financial
statements, including a balance sheet, income statement and statement
of cash flows or will become able to do so within a reasonable period
of time after being appointed to an audit committee. The term
"financial literacy" does not mean that a member must have a CFO's or
accounting practitioner's understanding of GAAP.
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3. At least one member of the Committee shall have expertise in accounting
or financial reporting.(2)
The members of the Committee shall select a chairman by a majority vote of the
members of the Committee.
ARTICLE III
KEY RESPONSIBILITIES
The following functions are the common recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this
function as appropriate given the circumstances.
1. Review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.
2. Review with management and the independent auditor the audited
financial statements to be included in the Company's Annual
Report on Form 10-KSB (or the Annual Report to Shareholders if
distributed prior to the filing of Form 10-KSB), including
major issues regarding accounting and auditing principles and
practices as well as the adequacy of internal controls that
could significantly affect the Company's financial statements,
and review and consider with the independent auditor the
matters required to be discussed by Statement on Auditing
Standards ("SAS") 61.
3. Review an analysis prepared by management and the independent
auditor of significant financial reporting issues and
judgments made in connection with the preparation of the
Company's financial statements.
4. As a whole, or through the Committee chair, the Committee
shall review with the independent auditor the Company's
interim financial results to be included in the Company's
quarterly reports to be filed with Securities and Exchange
Commission and the matters required to be discussed by SAS 61.
This interim review will occur prior to the filing of each
Form 10-QSB and, when possible, prior to each quarterly
earnings release.
5. Meet periodically with management to review the Company's
major financial risk exposures and the steps management has
taken to monitor and control such exposures.
- ----------
(2) The term "expertise in accounting or financial reporting" means that at
least one member of the audit committee must have had some past
employment experience in finance or accounting, a professional
certification in accounting, or any other comparable experience or
background which results in the individual's financial sophistication,
including being or having been a CEO, CFO or other senior officer with
financial oversight responsibilities.
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6. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent
auditor, internal auditors or management.
7. Receive periodic reports from the independent auditor
regarding the auditor's relationships between the auditor and
the Company consistent with Independence Standards Board
Standard Number 1. The Committee shall also discuss with the
independent auditor any such disclosed relationships and their
impact on the auditor's independence. The Committee shall
recommend that the Board take appropriate action to ensure the
independence of the auditor.
8. Recommend to the Board, based on the review and discussions
specified in 2 and 7 above, that the financial statements be
included in the Annual Report on Form 10-KSB.
9. Recommend to the Board the appointment of the independent
auditor, which firm is ultimately accountable to the Committee
and the Board. The Committee shall have the ultimate authority
and responsibility to evaluate and, where appropriate, replace
the independent auditor. The Committee shall also approve the
fees to be paid to the independent auditor. The Committee
shall meet with the independent auditor prior to the Company's
audit to review the planning and staffing of the audit. After
the completion of the audit, the Committee shall review with
the independent auditor any problems or difficulties the
auditor may have encountered and any management letter
provided by the independent auditor (and the Company's
response to such letter). Such review shall include:
A. Any difficulties encountered in the course of the
audit work, including any restrictions on the scope
of activities or access to required information;
B. Any changes required in the planned scope of the
internal audit; and
C. The internal audit department responsibilities,
budget and staffing.
10. Review the appointment and replacement of senior internal
auditing executives, and review the significant reports to
management prepared by the internal auditing department and
management's responses thereto.
11. Obtain from the independent auditor assurance that Section 10A
of the Securities Exchange Act of 1934 has not been
implicated.
12. Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual
proxy statement.
13. Review with the Company's general counsel legal matters that
may have a material impact on the financial statements, the
Company's compliance policies and any material reports or
inquiries received from regulators or governmental agencies.
14. Meet at least annually with the chief financial officer, the
senior internal auditing executive and the independent auditor
in separate executive sessions.
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While the Audit Committee has the responsibilities and powers set forth
in this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor.
The Committee recognizes that the Company's management is responsible
for preparing the Company's financial statements, and the outside auditors are
responsible for auditing those financial statements. The Committee also
recognizes that management of the Company, including the internal audit staff,
as well as the outside auditors have more time, knowledge and more detailed
information on the Company than do Committee members. Consequently, in carrying
out its oversight responsibility, the Committee will not provide any special
assurances as to the Company's financial statements or any professional
certification as to the outside auditor's work. In addition, it is not the duty
of the Committee to conduct investigations, to resolve disagreements, if any,
between management and the outside auditor, or to assure compliance with laws
and regulations.
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ANNEX B
PROXY
COLLEGIATE PACIFIC INC.
SOLICITED ON BEHALF OF THE COMPANY AND APPROVED BY THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Michael J. Blumenfeld and
William R. Estill, and each of them, as attorneys and proxies of the
undersigned, with full power of substitution, for and in the name, place, and
stead of the undersigned, to appear at the 2001 Annual Meeting of Stockholders
of Collegiate Pacific Inc. to be held on the 20th day of March 2001 (pursuant to
the Notice of Annual Meeting dated February 2001 and accompanying proxy
statement), and at any postponement or adjournment thereof, and to vote all of
the shares of Collegiate Pacific Inc. that the undersigned is entitled to vote
with all the powers and authority the undersigned would possess if personally
present in accordance with the following instructions.
When properly executed, this Proxy will be voted in the manner directed herein
by the undersigned Stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, 3 AND 4.
1. ELECTION OF DIRECTORS NOMINEES: Michael J. Blumenfeld, Adam
FOR all nominees WITHHOLD Blumenfeld, Arthur J. Coerver, Harvey Rothenberg,
listed to the right AUTHORITY Jeff Davidowitz, William A. Watkins, Jr., and
(except as marked to vote for all Robert W. Hampton
to the contrary) nominees listed
to the right INSTRUCTION: To withhold authority to vote for
[ ] [ ] any individual nominee, write such individual's
name in the space provided below.
2. AMEND STOCK OPTION PLAN TO INCREASE THE
NUMBER OF AUTHORIZED SHARES TO 1,000,000. ------------------------------------------------
FOR AGAINST ABSTAIN
[ ] [ ] [ ] 4. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
3. RATIFICATION OF GRANT THORNTON LLP AS MAY PROPERLY COME BEFORE THE MEETING.
AS INDEPENDENT AUDITOR.
FOR AGAINST ABSTAIN
FOR AGAINST ABSTAIN [ ] [ ] [ ]
[ ] [ ] [ ]
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 the president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: , 2001
-------------------------------------
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(Signature)
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(Signature if held jointly)