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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 Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
COLLEGIATE PACIFIC INC.
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(Name of Registrant as Specified In Its Charter)
BOARD OF DIRECTORS OF COLLEGIATE PACIFIC INC.
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(Name of Person(s) Filing Proxy Statement)
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 transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
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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:
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[ ] 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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1 Set forth the amount on which the filing fee is calculated and state
how it was determined.
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COLLEGIATE PACIFIC INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 14, 2000
As a stockholder of Collegiate Pacific Inc. (the "Company"), you are hereby
given notice of and invited to attend in person or by proxy the Annual Meeting
of Stockholders of the Company (the "Annual Meeting") to be held at the offices
of Collegiate Pacific Inc., 13950 Senlac, Suite 200, Farmers Branch, Texas
75234, on Friday, January 14, 2000, at 10:00 a.m., local time, for the following
purposes:
1. To elect six directors for one-year terms;
2. To consider and act upon a proposal to amend the Company's Certificate
of Incorporation to reclassify and change each share of the Company's Common
Stock issued and outstanding into one-fifth of a share to the Company's Common
Stock;
3. To approve Grant Thornton LLP as the Company's independent public
accountants and auditors; and
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on December 10, 1999
as the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting and any adjournment thereof. Only stockholders
of record at the close of business on the record date are entitled to notice of
and to vote at the Annual Meeting. The transfer books of the Company will not be
closed.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, MANAGEMENT DESIRES TO HAVE THE
MAXIMUM REPRESENTATION AT THE ANNUAL MEETING AND RESPECTFULLY REQUESTS THAT YOU
DATE, EXECUTE AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED STAMPED
ENVELOPE FOR WHICH NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. A proxy may be revoked by a stockholder any time prior to its use as
specified in the enclosed proxy statement.
By Order of the Board of Directors
MICHAEL J. BLUMENFELD,
President and Chief
Executive Officer
Farmers Branch, Texas
December 17, 1999
YOUR VOTE IS IMPORTANT.
PLEASE EXECUTE AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED HEREIN.
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COLLEGIATE PACIFIC INC.
13950 Senlac
Suite 200
Farmers Branch, Texas 75234
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PROXY STATEMENT
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FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 14, 2000
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TO OUR STOCKHOLDERS:
This Proxy Statement is furnished to stockholders of Collegiate Pacific
Inc. (the "Company") for use at the Annual Meeting of Stockholders to be held at
the offices of Collegiate Pacific Inc., 13950 Senlac, Suite 200, Farmers Branch,
Texas 75234, on Friday, January 14, 2000, at 10:00 a.m., local time, or at any
adjournment or adjournments thereof (the "Annual Meeting"). The enclosed proxy
is being solicited by the Board of Directors of the Company (the "Board") and is
subject to revocation at any time prior to the voting of the proxy. Unless a
different choice is indicated, all duly executed proxies received by the Company
will be voted in accordance with the instructions set forth on the back side of
the proxy card. The record of stockholders entitled to vote at the Annual
Meeting was taken at the close of business on December 10, 1999 (the "Record
Date"). This Proxy Statement and the enclosed proxy card are being sent or given
to stockholders on or about December 17, 1999.
VOTING PROCEDURES AND REVOCABILITY OF PROXIES
The accompanying proxy card is designed to permit each stockholder of
record at the close of business on the Record Date to vote with respect to the
election of directors, amending the Company's Certificate of Incorporation, and
on any other proposal properly brought before the Annual Meeting. The proxy card
provides space for a stockholder to (a) vote in favor of or to withhold voting
for each nominee for the Board, (b) vote for or against each proposal to be
considered at the Annual Meeting, or (c) abstain from voting on any proposal
other than the election of directors. The election of the directors will be
decided by a plurality of the votes cast at the Annual Meeting by the holders of
the Common Stock. The approval of the amendment to the Company's Certificate of
Incorporation will be decided by a majority of the outstanding stock entitled to
vote thereon. For all other matters, the affirmative vote of a majority of the
votes present or represented by proxy and entitled to be cast at the Annual
Meeting by holders of the Common Stock is required to take stockholder action.
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the votes entitled to be cast by all holders of the Common
Stock will constitute a quorum for the transaction of business at the Annual
Meeting. If a quorum is not present, in person or by proxy, the Annual Meeting
may be adjourned from time to time until a quorum is obtained. In the case of
any meeting called for the election of directors, those who attend the second
such adjourned meetings, although less than a majority, shall constitute a
quorum for the purpose of electing directors. Shares as to which authority to
vote has been withheld with respect to any matter brought to a vote before the
stockholders will not be counted as a vote in favor of such matter. Abstentions
and broker nonvotes will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business. With respect to all matters
other than the election of directors, an abstention will have the same effect as
a vote against any specified proposal. Stockholders are urged to sign the
accompanying proxy card and return it promptly.
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When a signed proxy card is returned with choices specified with respect to
voting matters, the shares represented will be voted by the proxies designated
on the proxy card in accordance with the stockholder's instructions. The proxies
for the stockholders are Michael J. Blumenfeld and William R. Estill. A
stockholder wishing to name another person as his or her proxy may do so by
crossing out the names of the designated proxies and inserting the name of such
other person to act as his or her proxy. In that case, it will be necessary for
the stockholder to sign the proxy card and deliver it to the person named as his
or her proxy and for the person so named to be present and vote at the Annual
Meeting. Proxy cards so marked should not be mailed to the Company.
If a signed proxy card is returned and the stockholder has made no
specifications with respect to voting matters, the shares will be voted (a) for
the election of the nominees for director, (b) for adopting the amendment to the
Company's Certificate of Incorporation, (c) to approve Grant Thornton LLP as the
Company's independent public accountants and auditors, and (d) at the discretion
of the proxies on any other matter that may properly come before the Annual
Meeting or any adjournment of the Annual Meeting. Valid proxies will be voted at
the Annual Meeting and at any adjournment of the Annual Meeting in the manner
specified.
Any stockholder giving a proxy has the unconditional right to revoke it at
any time before it is voted by any act inconsistent with the proxy, including
notifying the Secretary of the Company in writing, executing a subsequent proxy
or personally appearing at the Annual Meeting and casting a contrary vote.
However, no revocation will be effective unless notice of such revocation has
been received by the Company at or prior to the Annual Meeting.
Michael J. Blumenfeld, President and Chief Executive Officer, intends to
vote in favor of all proposals and owns sufficient shares to pass all proposals
without the votes of any other shareholders.
The total issued and outstanding shares of common stock, $.01 par value per
share (the "Common Stock"), as of November 10, 1999 consisted of 17,341,833
shares.
MATTERS TO BE BROUGHT BEFORE THE MEETING
PROPOSAL ONE -- ELECTION OF DIRECTORS
Six persons, Michael J. Blumenfeld, Arthur J. Coerver, Jeff Davidowitz,
Robert W. Philip, William H. Watkins, Jr., and Harvey Rothenberg are nominated
to be elected as directors at the Annual Meeting. All of these gentlemen are
currently directors. If elected, each of these directors will hold office until
the next annual meeting of stockholders or until his successor is duly elected
and qualified. The election of directors will be decided by a plurality of the
votes entitled to be cast at the meeting by holders of the Common Stock. The
nominees have consented to serve if elected, but, if the nominees become unable
to serve, the persons named as proxies may exercise their discretion to vote for
a substitute nominee. Management has no reason to believe that any nominee will
be unable to serve.
For information regarding each of the nominees for director, see
"Management".
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THE BOARD URGES STOCKHOLDERS TO VOTE "FOR"
EACH OF THE NOMINEES FOR DIRECTOR SET FORTH ABOVE
PROPOSAL TWO -- AMEND THE CERTIFICATE OF INCORPORATION
General
The Board has adopted, subject to stockholder approval, a resolution
proposing that the Company amend its Certificate of Incorporation, substantially
in the form of Exhibit A attached hereto (the "Charter Amendment"), to reduce
the outstanding number of shares of Common Stock and effect a reverse stock
split (the "Reverse Stock Split") pursuant to which each five shares of Common
Stock currently outstanding ("Old Common Stock") will become one share of the
Company's new common stock ("New Common Stock").
The Certificate of Incorporation presently authorizes 50,000,000 shares of
Common Stock, of which 17,341,833 shares were issued and outstanding as of the
Record Date. In addition, as of the Record Date, 582,000 shares of Common Stock
were subject to issuance upon exercise of outstanding warrants and options.
Purposes of the Reverse Stock Split
In deciding to approve and recommend the Reverse Stock Split, the Board
considered that the Common Stock, which is currently trading at approximately
$1.38 a share, may not be appealing to many brokerage firms which may be
reluctant to recommend lower priced securities to their clients and may
discourage individual brokers from dealing in lower priced stocks, for various
reasons including the perception that such stocks are unduly speculative.
Investors may also be dissuaded from purchasing lower priced stocks because the
brokerage commissions, as a percentage of the total transaction, tend to be
higher for such stocks. Moreover, the analysts at many brokerage firms will not
monitor the trading activity of lower priced stocks. In addition, the Board
believes that most investment funds are reluctant to invest in lower priced
stocks. The Board is hopeful that the Reverse Stock Split will result in a price
level for the Common Stock of the Company that will mitigate the present
reluctance on the part of brokers and investors to trade in the Company's Common
Stock. In addition, the Board is hopeful that the Reverse Stock Split will
permit the Common Stock to be eligible for quotation on a regional stock
exchange, or listed or admitted to trading on a national securities exchange,
which would result in a broader trading market for the Company's securities. The
Company's Common Stock is currently quoted on the Over-the-Counter Bulletin
Board.
There can be no assurance either that (i) the Reverse Stock Split will
result in a price level for the Common Stock of the Company that will mitigate
the present reluctance on the part of brokers and investors to trade in the
Company's Common Stock, especially since there are many other factors that
affect both demand for and price of stock or (ii) the Reverse Split will permit
the Common Stock to be eligible for quotation on a regional stock exchange or
listed or admitted to trading on a national securities exchange. The Board also
considered that the effect of the Reverse Stock Split could be a decrease in the
trading price of the Common Stock. Moreover, the Reverse Stock Split may result
in a stockholder owning an odd lot of Common Stock. Stockholders may incur
higher transactional costs to trade an odd lot of Common Stock than he or she
would incur to trade a round lot. Generally, an odd lot is fewer than 100 shares
and a round lot is 100 shares.
Effectiveness of the Reverse Stock Split
If Proposal No. 2 is approved by the stockholders, the Reverse Stock Split
would become effective at such time as the Company files the Charter Amendment
with the Secretary of State of Delaware (the "Effective Date"). Even if the
Reverse Stock Split is approved by the stockholders, it is within the discretion
of the Board of Directors not to carry out the Reverse Stock Split. Upon the
filing of the Charter Amendment, all the Old Common Stock will be converted into
New Common Stock as set forth in the Charter Amendment.
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No fractional shares will be issued. In lieu of any such fractional shares,
each holder of Old Common Stock who would otherwise have been entitled to a
fraction of a share of New Common Stock upon surrender of such holder's
certificates will be entitled to receive a cash payment (without interest)
determined by multiplying (i) five, (ii) the fractional interest to which such
holder would otherwise be entitled (after taking into account all shares of Old
Common Stock then held of record by such holder) and (iii) the average last sale
price of shares of Old Common Stock for the 20 trading days immediately prior to
the Effective Date or, if no such sale takes place on such days, the average of
the closing bid and asked prices thereof for such days, in each case as
officially reported on the Over-the-Counter Bulletin Board.
From and after the Effective Date, certificates representing shares of Old
Common Stock shall be deemed to represent only the right to receive shares of
New Common Stock to which an individual stockholder is entitled.
Certificates and Fractional Shares
As soon as practicable after the Effective Date, the Company will request
all stockholders to return their stock certificates representing issued shares
of Old Common Stock outstanding on the Effective Date ("Old Certificates") in
exchange for certificates representing the number of whole shares of New Common
Stock into which the shares of Old Common Stock have been converted ("New
Certificates") as a result of the Reverse Stock Split. Each stockholder will
receive a letter of transmittal from the Company's transfer agent, Continental
Stock Transfer & Trust Company (the "Transfer Agent"), containing instructions
on how to exchange certificates. STOCKHOLDERS SHOULD NOT SUBMIT THEIR OLD
CERTIFICATES TO THE TRANSFER AGENT UNTIL THEY RECEIVE THESE INSTRUCTIONS. In
order to receive New Certificates, stockholders must surrender their Old
Certificates pursuant to the Transfer Agent's instructions, together with the
properly executed and completed letter of transmittal and such evidence of
ownership of such shares as the Company may require.
Beginning with the Effective Date, each Old Certificate, until surrendered
and exchanged as described above, will be deemed for all corporate purposes to
evidence ownership of the whole number of shares of New Common Stock into which
the shares evidenced by such Old Certificates have been converted.
No fractional shares of New Common Stock will be issued as a result of the
Reverse Stock Split. In lieu of receiving fractional shares, stockholders who
hold a number of shares not evenly divisible immediately prior to the Reverse
Stock Split will be entitled to receive cash for any fractional share, as
described above.
Certain Effects of the Reverse Stock Split
The principal effect of the Reserve Stock Split will be to decrease the
number of shares of Common Stock outstanding from approximately 17.3 million to
approximately 3.5 million. In addition, the Board will take appropriate action
to adjust proportionately the number of shares of Common Stock issuable upon
exercise of outstanding warrants and options, and to adjust the related exercise
and conversion prices, to reflect the Reverse Stock Split. As a result,
following the Effective Date, the number of shares of Common Stock issuable upon
the exercise of outstanding warrants and options will be reduced from 582,000 to
116,400 shares. The authorized number of shares of Common Stock will remain at
50,000,000 shares.
The shares of New Common Stock will be fully paid and non-assessable. The
Charter Amendment does not change the terms of the Company's Common Stock. The
shares of the Company's Common Stock after giving effect to the Reverse Stock
Split will have the same voting rights, the same rights to dividends and
distributions and will be identical in all other respects to the shares of the
Company's Common Stock now authorized. Because no fractional shares of New
Common Stock will be issued, any stockholder who owns less than 5 shares of Old
Common Stock will cease to be a stockholder of the Company as of the Effective
Date; nevertheless, the Company does not anticipate that the Reverse Stock Split
will result in any material reduction in the number of holders of Common Stock.
Each stockholder's percentage ownership of the New Common Stock will not be
altered except for the effect of the elimination of fractional shares. The
Company estimates that it will cost less than $10,000 to pay for fractional
shares. Because the authorized Common Stock of the Company will not be reduced,
the overall effect will be an increase in authorized but unissued
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shares of Common Stock as a result of the Reverse Stock Split. Such shares may
be issued by the Board in its discretion. Any such future issuance will have the
effect of diluting the percentage of stock ownership and voting rights of the
present holders of Common Stock.
Moreover, while the Board believes it advisable to authorize and approve
the Reverse Stock Split for the reasons set forth above, the Board is aware that
the increase in the number of authorized but unissued shares of Common Stock may
have a potential anti-takeover effect in that it would enhance the ability of
the Company to issue additional shares which could be used to thwart persons, or
otherwise dilute the stock ownership of shareholders seeking to control the
Company. In addition, the mere availability of such additional shares may work
to discourage an attempt to acquire control of the Company other than through
negotiations with the Board. The Reverse Stock Split is not being recommended by
the Board as part of an anti-takeover strategy and the Board has no knowledge of
any party seeking to alter its current stockholding position in the Company.
The Reverse Stock Split will not change the par value of shares of Common
Stock. However, under applicable Delaware law, the total capital of the Company
will not be reduced as a result of the Reverse Stock Split, even though the
aggregate par value of all issued and outstanding shares will be reduced to
one-fifth of the aggregate par value prior to the Reverse Stock Split.
Certain Federal Income Tax Consequences
The following description of certain federal income tax consequences is
based on the Internal Revenue Code of 1986, as amended (the "Code"), the
applicable Treasury Regulations promulgated thereunder, judicial authority and
current administrative rulings and practices as in effect on the date of this
Proxy Statement. This discussion is for general information only and does not
discuss consequences which may apply to special classes of taxpayers (for
example, nonresident aliens, broker-dealers or insurance companies) or any
aspects of state, local or foreign tax laws. Stockholders are urged to consult
their own tax advisors to determine the particular tax consequences to them of
the Reverse Stock Split.
The Company has been advised that because the Reverse Stock Split is not
part of a plan to increase periodically a stockholder's proportionate interest
in the assets or earnings and profits of the Company, the Reverse Stock Split
should not result in the recognition by stockholders of any gain or loss for
federal income tax purposes (except to the extent of the cash received in lieu
of fractional shares). The holding period for each share of New Common Stock
received by a stockholder will include the stockholder's holding period for its
shares of Old Common Stock with respect to which such share of New Common Stock
is issued, provided that the shares of Old Common Stock were held as a capital
asset. The adjusted tax basis of each share of New Common Stock received by a
stockholder (including the fractional share for which cash is received) will be
the same as the adjusted tax basis of the shares of Old Common Stock with
respect to which such share of New Common Stock is issued. A stockholder who
receives cash in lieu of a fractional share of New Common Stock generally will
recognize taxable gain or loss equal to the difference, if any, between the
amount of cash received and the portion of such stockholder's aggregate adjusted
tax basis in the shares of Old Common Stock allocated to such fractional share.
If the shares of Old Common Stock allocated to such fractional shares were held
by such stockholder as capital assets, the gain or loss resulting from the
payment of cash in lieu of the issuance of a fractional share will be taxed as
capital gain or loss.
Miscellaneous
The Board may abandon the proposed Reverse Stock Split at any time before
or after the Meeting and prior to the filing of the Charter Amendment if for any
reason the Board deems it advisable to do so. In addition, the Board may make
any and all changes to the Charter Amendment that it deems necessary to file the
Charter Amendment with the Delaware Secretary of State and give effect to the
Reverse Stock Split.
THE BOARD RECOMMENDS A VOTE "FOR" THE AMENDMENT TO
THE CERTIFICATE OF INCORPORATION
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PROPOSAL THREE -- APPROVE GRANT THORNTON LLP AS AUDITORS
Grant Thornton LLP ("Grant Thornton") has been selected by the Board to
serve as the Company's principal accounting firm for Fiscal Year 2000.
Representatives of Grant Thornton are expected to be present at the Annual
Meeting, will have the opportunity to make a statement if they so desire, and
are expected to be available to respond to appropriate questions.
Sutton Frost LLP ("Sutton Frost") was the principal accounting firm for the
Company during Fiscal Year 1998. The Board originally selected King Griffen &
Adamson, P.C. to be the Company's principal accounting firm during Fiscal Year
1999, and later replaced it with Grant Thornton. The Company's Board approved
the decision to change accountants. The opinion of Sutton Frost on its report
dated August 25, 1998 did not contain any adverse opinions or disclaimers of
opinions or modifications as to uncertainty, audit scope or accounting
principles. There were no disagreements between the Company and Sutton Frost on
any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedures, which disagreements, if not resolved to the
satisfaction of Sutton, would have caused it to make reference to the subject
matter of the disagreements in connection with its report.
THE BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF APPOINTMENT
OF GRANT THORNTON AS AUDITORS
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SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
with respect to beneficial ownership of shares of Common Stock as of November
10, 1999 for:
- All persons who are beneficial owners of 5% or more of the Company's
Common Stock;
- Each director and nominee for director;
- The Company's Chief Executive Officer and the other Named Executive
Officer in the Summary Compensation Table above; and
- All executive officers and directors as a group.
NUMBER OF SHARES PERCENT OF
EXECUTIVE OFFICERS AND DIRECTORS (1) BENEFICIALLY OWNED CLASS (2)
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Michael J. Blumenfeld(4).................................... 9,742,611 56.1%
Arthur J. Coerver(5)........................................ 141,200 *
Harvey Rothenberg(6)........................................ 29,436 *
William R. Estill........................................... -- *
Chadd Edlein(9)............................................. 77,500 *
Jeff Davidowitz(3).......................................... 615,000 3.5%
Robert W. Philip(7)......................................... 47,500 *
William A. Watkins, Jr.(8).................................. 72,500 *
Executive Officers and Directors as a Group (7 persons)..... 10,725,747 61.8%
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* Less than 1%
(1) The address for each person listed is 13950 Senlac, Suite 200, Farmers
Branch, Texas 75234.
(2) Percentages are based on the total number of shares of Common Stock
outstanding as of September 28, 1999, plus the total number of outstanding
options held by each person that are exercisable within 60 days of such
date. Shares of Common Stock issuable upon exercise of outstanding options,
however, are not deemed outstanding for purposes of computing the percentage
ownership of any other person. Except as otherwise noted in the following
footnotes, other than shared property rights created under joint tenancy or
marital property laws as between the Company's directors and executive
officers and their respective spouses, each stockholder named in the table
has sole voting and investment power with respect to the shares of Common
Stock set forth opposite such stockholder's name.
(3) Consists of 610,000 shares of Common Stock and 5,000 shares issuable upon
exercise of an option expiring February 24, 2009.
(4) Consists of 9,692,611 shares of Common Stock and 50,000 shares issuable upon
exercise of an option expiring February 24, 2009.
(5) Consists of 116,200 shares of Common Stock and 25,000 shares issuable upon
exercise of an option expiring February 24, 2009.
(6) Consists of 1,000 shares of Common Stock, 8,436 shares of Common Stock held
in trust for the benefit of Mr. Rothenberg's child, and 15,000 shares
issuable upon exercise of an option expiring February 24, 2009, and 5,000 in
shares issuable upon exercise of an option expiring February 24, 2009 held
by the spouse of Mr. Rothenberg.
(7) Consists of 42,500 shares of Common Stock and 5,000 shares issuable upon
exercise of an option expiring February 24, 2009.
(8) Consists of 67,500 shares of Common Stock and 5,000 shares issuable upon
exercise of an option expiring February 24, 2009.
(9) Consists of 70,000 shares of Common Stock and 7,500 shares issuable upon
exercise of an option expiring February 24, 2009.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act of 1934, as amended (the "Exchange Act"),
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, 1999 were made on a timely basis.
MANAGEMENT
The following table sets forth the names, ages and positions of the
executive officers and directors of the Company as of December 17, 1999. Their
respective backgrounds are described following the table:
POSITIONS AND OFFICES HELD
NAME AGE WITH THE COMPANY
---- --- --------------------------
Michael J. Blumenfeld.................. 53 Chairman of the Board, President, and
Chief Executive Officer
Arthur J. Coerver...................... 56 Chief Operating Officer and Director
Harvey Rothenberg...................... 57 Vice President Marketing and Director
William R. Estill...................... 50 Chief Financial Officer, Secretary and
Treasurer
Chad H. Edlein......................... 28 Vice President Corporate Development
Jeff Davidowitz........................ 43 Director
Robert W. Philip....................... 63 Director
William A. Watkins, Jr................. 56 Director
Michael J. Blumenfeld has served as Chairman of the Board, President, and
Chief Executive Officer of the Company since February 1998. 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.
Arthur J. Coerver joined the Company in February 1998 as Chief Operating
Officer and a director. From 1991 through 1997, Mr. Coerver was Vice President,
Sales and Marketing, of Sport Supply Group, Inc., a New York Stock Exchange
company engaged in the direct mail marketing of sports related equipment.
Harvey Rothenberg joined the Company in February 1998 as Vice President of
Marketing and Secretary, and has served on the Board of Directors since December
1998. In August 1999, Mr. Rothenberg resigned as Secretary. From 1977 to 1998
Mr. Rothenberg served as Vice President of Sales for Sport Supply Group, Inc., a
New York Stock Exchange company engaged in the direct mail marketing of sports
related equipment.
William R. Estill joined the Company in July 1999 as Chief Financial
Officer and Treasurer, and has been Secretary since August 1999. From December
1997 until February 1999, Mr. Estill served as Vice President of Finance for
FWT, Inc., a manufacturer of telecommunication structures. From May 1996 to
November 1997, Mr. Estill served as Chief Financial Officer of Bearcom, Inc.
From April 1985 to May 1996, Mr. Estill served as Vice President, Chief
Financial Officer, Secretary and Treasurer for Sport Supply Group, Inc., a New
York Stock Exchange company engaged in the direct mail marketing of sports
related equipment. Mr. Estill was also a member of the Board of Directors during
his tenure with Sport Supply Group, Inc. Mr. Estill holds a Bachelor of Business
Administration degree in Accounting from the University of Texas at Arlington
and passed the CPA exam in 1983.
Chad H. Edlein joined the Company in July 1997. From 1994 to 1997 Mr.
Edlein served as Marketing Manager for Sport Supply Group, Inc., a New York
Stock Exchange company engaged in the direct mail marketing of sports related
equipment.
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Jeff Davidowitz has served as a director of the Company since June 1994.
Mr. Davidowitz also serves as President of Penn Footwear, a private investment
company, since January 1, 1991. Prior to that, Mr. Davidowitz was Vice President
of Penn Footwear.
Robert W. Philip has served as a director of the Company since February
1998. Mr. Philip served as Executive in Residence and Lecturer in the Department
of Accounting of the College of Business Administration at the University of
North Texas in Denton, Texas from September 1989 until May 1994. Prior to that
time, Mr. Philip served as an audit partner with Arthur Andersen, S.C. for
approximately 18 years. Mr. Philip is currently retired from the University of
North Texas and Arthur Andersen, S.C.
William A. Watkins, Jr. has served as a director since February 1998. Mr.
Watkins has been a partner of Watkins, Watkins and Keenan, a certified public
accounting firm, since December 1971.
MEETING ATTENDANCE AND COMMITTEES OF THE BOARD
The business of the Company is managed under the direction of the Board.
The Board meets during the Company's fiscal year to review significant
developments affecting the Company and to act on matters requiring Board
approval. The Board held 2 formal meetings and acted by unanimous written
consent 3 times during the fiscal year ended June 30, 1999. All of the directors
attended at least 100% of the Board meetings.
The Board of Directors has established an Audit Committee to devote
attention to specific subjects and to assist the Board in the discharge of its
responsibilities. The functions of these committees and their current members
are described below.
Audit Committee. During the fiscal year, the Audit Committee was comprised
of Messrs. Philip and Watkins. The Audit Committee reviews, acts on and reports
to the Board of Directors with respect to various auditing and accounting
matters, including the selection of the Company's independent accountants, the
scope of the annual audits, fees to be paid to the independent accountants and
the accounting practices of the Company. The Audit Committee held no formal
meetings during the last fiscal year.
Stock Option Committee. The Stock Option Committee administers the 1998
Collegiate Pacific Inc. Stock Option Plan, and is comprised of Messrs.
Davidowitz and Watkins. The Stock Option Committee held no formal meetings
during the last fiscal year.
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.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following Summary Compensation Table shows compensation for the 1999
and 1998 fiscal years of the Chief Executive Officer, and each executive officer
of the Company who earned over $100,000 (a "Named Executive Officer").
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------- -----------------------
OTHER AWARDS SECURITIES ALL
ANNUAL RESTRICTED UNDER- OTHER
COMPEN- STOCK LYING COMPEN-
NAME AND SALARY BONUS SATION AWARD(S) OPTIONS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($)
------------------ ---- ----------- ----- ------- ---------- ---------- -------
Michael J. Blumenfeld..................... 1999 $ 78,000.00 -- -- $93,750.00 50,000
Chairman, President & Chief 1998 $ 77,000.00 -- -- -- -- --
Executive Officer(1)
Arthur J. Coerver......................... 1999 $108,000.00 -- -- $46,875.00 25,000
Chief Operating Officer 1998 $112,500.00 -- -- -- -- --
& Director(2)
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(1) Mr. Blumenfeld became Chairman, President, and Chief Executive Officer on
February 17, 1998.
(2) Mr. Coerver became Chief Operating Officer on February 17, 1998.
DIRECTOR COMPENSATION
Directors receive $7,500.00 per year for their service on the Board of
Directors or any committee of the Board of Directors. Directors are reimbursed
for their reasonable out-of-pocket expenses associated with attending Board of
Directors and committee meetings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 17, 1998, the Company sold 9,800,000 shares of Common Stock to
Michael J. Blumenfeld and 200,000 shares to Adam Blumenfeld for $0.20 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. Adam Blumenfeld is the son of Mr. Blumenfeld. Mr.
Blumenfeld was not an officer or director of the Company at the time of the
execution of the Stock Purchase Agreement. The consideration paid by Mr.
Blumenfeld for the Common Stock was based on the average of the high and low bid
price of the Common Stock 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:
- 100,000 shares of Common Stock to Arthur J. Coerver;
- 67,500 shares of Common Stock to Robert W. Philip; and
- 67,500 shares of Common Stock to William A. Watkins, Jr.
These shares were sold at $.20 per share, and Messrs. Coerver, Philip and
Watkins became directors of the Company upon consummation of the Stock Purchase
Agreement
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 are payable on demand and bear interest at the rate of 12% per annum. The
aggregate amount outstanding for such loans (including accrued interest) at June
30, 1999 and June 30, 1998 was $980,720 and $899,836, respectively.
STOCKHOLDER PROPOSALS
A proper proposal submitted by a stockholder in accordance with applicable
rules and regulations for presentation at the Company's next annual meeting that
is received at the Company's principal executive office between July 20, 2000
and August 19, 2000 will be included in the Company's proxy statement and form
of proxy for that meeting.
PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company. The cost of soliciting proxies in the accompanying form will be paid by
the Company. Officers of the Company may solicit proxies by mail, telephone or
telegraph. Upon request, the Company will reimburse brokers, dealers, banks and
trustees, or their nominees, for reasonable expenses incurred by them in
forwarding proxy material to beneficial owners of shares of the Common Stock.
INDEPENDENT PUBLIC ACCOUNTANTS
Grant Thornton LLP, independent certified public accountants, has been
selected by the Board of Directors as the Company's independent auditor for the
current fiscal year. A representative of Grant
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Thornton LLP is expected to be present at the Annual Meeting, will have an
opportunity to make a statement if he or she desires to do so and is expected to
be available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the meeting other than the matters set forth herein. Should any other
matter requiring a vote of stockholders arise, the proxies in the enclosed form
confer upon the person or persons entitled to vote the shares represented by
such proxies discretionary authority to vote the same in accordance with their
best judgment in the interest of the Company.
FINANCIAL STATEMENTS
A copy of the Company's Annual Report on Form 10-KSB for the year ended
June 30, 1999 accompanies this Proxy Statement. The consolidated balance sheet
of the Company as of June 30, 1999, and the related consolidated statements of
operations, stockholders' equity and cash flows for the year ended June 30, 1999
contained on pages through of the Company's Annual Report on Form 10-KSB,
the Management's Discussion and Analysis or Plan of Operation contained on pages
though of such Annual Report, and the Changes in and Disagreements With
Accountants on Accounting and Financial Disclosure on page of such Annual
Report are incorporated by reference in this Proxy Statement. The remainder of
the Annual Report does not constitute a part of the proxy solicitation material.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON TO WHOM A COPY OF
THIS PROXY STATEMENT IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON AND BY FIRST CLASS MAIL OR OTHER EQUALLY PROMPT MEANS WITHIN ONE BUSINESS
DAY OF RECEIPT OF SUCH REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB. REQUESTS SHOULD BE DIRECTED TO THE ATTENTION OF WILLIAM R. ESTILL,
COLLEGIATE PACIFIC INC., 13950 SENLAC, SUITE 200, FARMERS BRANCH, TEXAS 75234.
By Order of the Board of Directors,
MICHAEL J. BLUMENFELD,
President and Chief
Executive Officer
December 17, 1999
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EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
COLLEGIATE PACIFIC INC.
The undersigned, the President Collegiate Pacific Inc., a Delaware
corporation (the "Corporation"), do hereby certify as follows:
1. The Board of Directors of Collegiate Pacific Inc. duly adopted a
resolution, in accordance with Section 242 of the General Corporation Law
of the State of Delaware, to amend the Certificate of Incorporation of
Collegiate Pacific Inc. to effect a one-for-five reverse stock split on the
Common Stock and declaring the advisability thereof.
2. At the Annual Meeting of Stockholders held on January 14, 2000,
duly called and held in accordance with the provisions of Section 222 of
the General Corporation Law of the State of Delaware, a majority of the
shares of the outstanding stock entitled to vote thereon, were voted in
favor of such amendment in accordance with Section 242 of the General
Corporation Law of the State of Delaware.
3. Paragraph A of Article IV of the Certificate of Incorporation of
the Corporation is hereby amended in its entirety to read as follows:
"A. The total number of shares of all classes of stock which the
Company shall have the authority to issue is 51,000,000 shares,
consisting of (a) 1,000,000 shares of Preferred Stock, $0.01 par value
per share, and (b) 50,000,000 shares of Common Stock $0.01 par value per
share. Upon amendment of this Article as herein set forth (the
"Effective Date"), each five (5) shares of Common Stock issued and
outstanding on the Effective Date (the "Old Common Stock") shall be
converted into one (1) share of Common Stock (the "New Common Stock"),
subject to the treatment of fractional share interests as described
below. A holder of each such 5 shares of Old Common Stock shall be
entitled to receive upon surrender of the certificates representing such
Old Common Stock (the "Old Certificates," whether one or more) to the
Company's Transfer Agent for cancellation, a certificate or certificates
(the "New Certificates," whether one or more) representing the number of
whole shares of the New Common Stock into which and for which the shares
of the Old Common Stock formerly represented by such Old Certificates so
surrendered, are reclassified under the terms hereof. From and after the
Effective Date, Old Certificates shall represent only the right to
receive New Certificates pursuant to the provisions hereof. No
certificates or scrip representing fractional share interests in New
Common Stock will be issued, and no such fractional share interest will
entitle the holder thereof to vote, or to any rights of a shareholder of
the Company. In lieu of any such fractional shares, each holder of
Common Stock who would otherwise have been entitled to a fraction of a
share of Common Stock upon surrender of such holder's Certificates will
be entitled to receive a cash payment (without interest) determined by
multiplying (i) five, (ii) the fractional interest to which such holder
would otherwise be entitled (after taking into account all shares of Old
Common Stock then held of record by such holder) and (iii) the average
last sale price of shares of Old Common Stock for the 20 trading days
immediately prior to the Effective Date or, if no such sale takes place
on such days, the average of the closing bid and asked prices thereof
for such days, in each case as officially reported on the OTC Bulletin
Board. If more than one Old Certificate shall be surrendered at one time
for the account of the same stockholder, the number of full shares of
New Common Stock for which New Certificates shall be issued shall be
computed on the basis of the aggregate number of shares represented by
the Old Certificates so surrendered. In the event that the Company's
Transfer Agent determines that a holder of Old Certificates has not
tendered all his or her certificates for exchange, the Transfer Agent
shall carry forward any fractional share until all certificates of that
holder have been presented for exchange such that payment for fractional
shares to any one person shall not exceed the value of one share. If any
New Certificate is
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to be issued in a name other than that in which the Old Certificates
surrendered for exchange are issued, the Old Certificates so surrendered
shall be properly endorsed and otherwise in proper form for transfer,
and the person or persons requesting such exchange shall affix any
requisite stock transfer tax stamps to the Old Certificates surrendered,
or provide funds for their purchase, or establish to the satisfaction of
the Transfer Agent that such taxes are not payable. From and after the
Effective Date the amount of capital represented by the shares of the
New Common Stock into which and for which the shares of the Old Common
Stock are reclassified under the terms hereof shall be the same as the
amount of capital represented by the shares of Old Common Stock so
reclassified, until thereafter reduced or increased in accordance with
applicable law."
IN WITNESS WHEREOF, said Collegiate Pacific Inc. has caused this
Certificate of Amendment to be signed by Michael J. Blumenfeld its President,
and William R. Estill, its Secretary, this day of January, 2000.
COLLEGIATE PACIFIC INC.
By:
-----------------------------------
Michael J. Blumenfeld
President
ATTEST:
- ------------------------------------------------------
William R. Estill
Secretary
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16
COLLEGIATE PACIFIC INC.
BOARD OF DIRECTORS PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS AT
10:00 A.M., FRIDAY, JANUARY 14, 2000
The undersigned stockholder of Collegiate Pacific Inc. (the "Company")
hereby appoints Michael J. Blumenfeld and William R. Estill, or either of them,
as proxies, each with full powers of substitution, to vote the shares of the
undersigned at the above-stated Annual Meeting and at any adjournment(s)
thereof:
(1) ELECTION OF DIRECTORS:
[ ] FOR the nominee listed below [ ] WITHHOLD AUTHORITY
(except as provided to the contrary below) to vote for the nominee listed below
Michael J. Blumenfeld Jeff Davidowitz Harvey Rothenberg
Arthur J. Coerver Robert W. Philip William H. Watkins, Jr.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW):
- --------------------------------------------------------------------------------
(2) Approval of the amendment of the Company's Certificate of Incorporation:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Approval of Grant Thornton as the Company's principal auditing firm:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) On any other business that may properly come before the meeting; hereby
revoking any proxy or proxies heretofore given by the undersigned.
(Please sign on the reverse side)
(Continued from reverse side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE REVERSE SIDE. IF A
CHOICE IS NOT INDICATED WITH RESPECT TO ITEMS (1), (2) AND (3), THIS PROXY WILL
BE VOTED "FOR" SUCH ITEMS. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO
ANY MATTER REFERRED TO IN ITEM (4). THIS PROXY IS REVOCABLE AT ANY TIME BEFORE
IT IS EXERCISED.
Receipt herewith of the Company's Annual Report and Notice of Meeting and Proxy
Statement, dated December 17, 1999, is hereby acknowledged.
Dated:
---------------------------------------
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(Signature of Stockholder(s))
(Joint owners must EACH sign. Please
sign EXACTLY as your name(s) appear(s)
on this card. When signing as attorney,
trustee, executor, administrator,
guardian or corporate officer, please
give your FULL title.)
PLEASE SIGN, DATE AND MAIL TODAY.