UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 under Section 240.14a-12
SPORT-HALEY, INC.
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(Name of Registrant as Specified In Its Charter)
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 it 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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[Sport-Haley, Inc. logo]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF SPORT-HALEY, INC.
TO BE HELD MARCH 15, 2002
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Sport-Haley, Inc. will be held at the Company's offices, 4600 E. 48th Avenue,
Denver, Colorado 80216 on Friday, March 15, 2002, at 3:00 p.m., Mountain Time,
and thereafter as it may from time to time be adjourned, for the following
purposes:
1. To elect six directors to hold office for the term set forth in the
accompanying Proxy Statement and until their successors shall have
been duly elected and qualified;
2. To ratify the appointment of Hein + Associates LLP as independent
certified public accountants for the Company; and
3. To consider and transact such other business as may properly come
before the meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on January 21, 2002,
as the record date for the determination of shareholders entitled to notice of
and to vote at this meeting or any adjournment thereof. A complete list of the
shareholders entitled to vote at the meeting will be available for inspection at
the Annual Meeting and for a period of ten days prior to the Annual Meeting at
Sport-Haley, Inc., 4600 E. 48th Avenue, Denver, Colorado 80216, during normal
business hours.
A Proxy Statement which describes the formal business to be conducted at
the Annual Meeting is attached to this Notice.
By Order of the Board of Directors,
February 18, 2002 /s/ Patrick W. Hurley
Patrick W. Hurley, Corporate Secretary
and Chief Financial Officer
IMPORTANT
PLEASE MARK, DATE, SIGN, NOTE ANY CHANGE OF ADDRESS AND RETURN THE ENCLOSED
PROXY CARD IMMEDIATELY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, WE WILL BE
GLAD TO RETURN YOUR PROXY SO THAT YOU MAY VOTE IN PERSON.
SPORT-HALEY, INC.
4600 E. 48TH AVENUE
DENVER, COLORADO 80216
PROXY STATEMENT
RELATING TO THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD MARCH 15, 2002
GENERAL
THE ENCLOSED PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SPORT-HALEY,
INC. (hereinafter referred to as the "Company") for use at the Annual Meeting of
Shareholders to be held at the Sport-Haley, Inc., 4600 E. 48th Avenue, Denver,
Colorado 80216 on Friday, March 15, 2002, at 3:00 p.m., Mountain Time, for the
purposes set forth in the foregoing Notice of Annual Meeting of Shareholders.
This Proxy Statement and the form of proxy will be mailed to shareholders on or
about February 18, 2002.
The record date with respect to this solicitation is January 21, 2002. All
holders of record of Common Stock of Sport-Haley, Inc. as of the close of
business on that date are entitled to vote at the meeting. As of the record
date, the Company had 2,763,685 shares of Common Stock outstanding, excluding
treasury shares. Each share of Common Stock is entitled to one vote. A majority
of the votes entitled to be cast constitutes a quorum. If a quorum exists,
action on any matter other than the election of directors will be approved if
the votes cast in person or by proxy at the meeting favoring the action exceed
the votes cast opposing the action. In the election of directors, that number of
candidates equaling the number of directors to be elected having the highest
number of votes cast in favor of their election will be elected. Abstentions and
broker non-votes are not counted in the calculation of the vote.
A proxy may be revoked by the shareholder at any time prior to its being
voted. If a proxy is properly signed and is not revoked by the shareholder, the
shares it represents will be voted at the meeting in accordance with the
instructions of the shareholder, unless it is received in such form as to render
it invalid. If the proxy is signed and returned without specifying choices, the
shares will be voted in accordance with the recommendations of the Board of
Directors.
As a matter of policy, proxies, ballots and voting tabulations that
identify individual shareholders are held confidential by the Company. Such
documents are available for examination only by the inspectors of election, none
of whom is an employee of the Company, and certain employees associated with
tabulation of the vote. The identity of the vote of any shareholder is not
disclosed except as may be necessary to meet legal requirements.
The cost of this solicitation will be borne by the Company. Employees and
directors of the Company may solicit proxies but will not receive any additional
compensation for such solicitation. Proxies may be solicited personally or by
mail, facsimile, telephone or telegraph.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Under the securities laws of the United States, Sport-Haley's directors,
its executive officers, and any persons holding more than ten percent of its
Common Stock are required to report their initial ownership of Common Stock and
other equity securities and any subsequent changes in that ownership to the
Securities and Exchange Commission and Sport-Haley. Specific due dates for these
reports have been established and Sport-Haley is required to disclose in this
proxy statement any failure to file, or late filing, of such reports with
respect to the period ended June 30, 2001. Based solely on Sport-Haley's review
of the reports furnished to Sport-Haley and written representations that no
other reports were required during fiscal 2001, Sport-Haley's officers,
directors and beneficial owners of more than ten percent of its Common Stock
complied with all Section 16(a) filing requirements, with the exception that the
following two reports were filed late:
o Form 3 - James A. Saxon - filed August 17, 2001 (reporting status as
officer, beneficial ownership of options but no transactions).
o Form 3 - Donald W. Jewell - filed August 17, 2001 (reporting status as
officer, but no beneficial ownership or transactions).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Sport-Haley has adopted a policy pursuant to which material transactions
between Sport-Haley and its executive officers, directors and principal
shareholders (i.e. shareholders owning beneficially 5% or more of the
outstanding voting securities of Sport-Haley) shall be submitted to the Board of
Directors for approval by a disinterested majority of the directors voting with
respect to the transaction. For this purpose, a transaction is deemed material
if such transaction, alone or together with a series of similar transactions
during the same fiscal year, involves an amount which exceeds $60,000. No such
transactions occurred during the fiscal year ended June 30, 2001.
ANNUAL REPORT
The Annual Report to Shareholders for the fiscal year ended June 30, 2001
is being sent to all shareholders with this Proxy Statement. The Annual Report
to Shareholders does not form any part of the material for the solicitation of
any Proxy. The Annual Report to Shareholders contains the Company's Annual
Report on Form 10-K for the year ended June 30, 2001 as filed with the
Securities and Exchange Commission. An additional copy, without exhibits, is
available without charge to any shareholder of the Company upon written request
to the Secretary, Sport-Haley, Inc., 4600 E. 48th Avenue, Denver, Colorado
80216. The Company's Form 10-K for the year ended June 30, 2001, with exhibits,
can also be accessed online at the website of the Securities and Exchange
Commission, www.sec.gov.
SHAREHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING
Shareholders who intend to submit proposals for inclusion in the Proxy
Statement relating to the fiscal year beginning July 1, 2002 must do so by
sending the proposal and supporting
2
statements, if any, to the Company no later than October 12, 2002. Such
proposals should be sent to the attention of the Corporate Secretary,
Sport-Haley, Inc., 4600 East 48th Avenue, Denver, Colorado 80216.
OTHER MATTERS
Except for the matters described herein, management does not intend to
present any matter for action at the Annual Meeting and knows of no matter to be
presented at such meeting that is a proper subject for action by the
shareholders. However, if any other matters should properly come before the
Annual Meeting, it is intended that votes will be cast pursuant to the authority
granted by the enclosed Proxy in accordance with the best judgment of the person
or person acting under the Proxy.
PROPOSALS TO BE VOTED UPON
I. ELECTION OF DIRECTORS
Information concerning the six nominees for election as directors is shown
below. All nominees are now members of the Board of Directors. The Board of
Directors knows of no reason why any nominee would be unable to serve as a
director. If any nominee should for any reason become unable to serve, the
shares represented by all valid proxies will be voted for the election of such
other person as the Board of Directors may designate or the Board of Directors
may reduce the number of directors to eliminate the vacancy.
NAME AGE CAPACITIES IN WHICH SERVED
----------------------- --- --------------------------------------------------------
Robert G. Tomlinson 60 Chairman of the Board and Chief Executive Officer
Robert W. Haley 56 President and Director
Kevin M. Tomlinson 41 Executive Vice President-Operations, Chief Operating
Officer, and Director
Mark J. Stevenson(1)(2) 63 Director
Ronald J. Norick(1)(2) 60 Director
James H. Everest(1)(2) 53 Director
--------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
ROBERT G. TOMLINSON has served as Chairman of the Board and Chief Executive
Officer of the Company since October 1992. Since March 1998, he has also served
as a director of B & L Sportswear, Inc. (the "Subsidiary"), which ceased
operations in August 2001. Prior to joining the Company, Mr. Tomlinson was a
partner in Tomlinson Enterprises, a real estate investment partnership, and also
engaged in management of his personal investment portfolio. Mr. Tomlinson is the
father of Kevin Tomlinson, a director and the Executive Vice President and Chief
Operating
3
Officer of the Company.
KEVIN M. TOMLINSON has served as Executive Vice President - Operations and
Chief Operating Officer since January 1999 and was appointed to the Board of
Directors in November 1999. He also serves as a director and Secretary/Treasurer
of the Subsidiary, which ceased operations in August 2001. Mr. Tomlinson joined
the Company in December 1997 as Vice President of Operations. From 1992 until
joining the Company, Mr. Tomlinson was employed by Nu-Kote International, Inc.,
an office products manufacturer and distributor, in capacities including vice
president of product marketing, vice president of marketing, vice president of
global procurement and vice president of retail sales. Mr. Tomlinson is the son
of Robert G. Tomlinson, the Chairman and Chief Executive Officer of the Company.
ROBERT W. HALEY has served as President and a director of the Company since
May 1996. From January 1992 until his appointment to such positions, he served
as Vice President of Marketing of the Company. Prior to joining the Company, Mr.
Haley served in various marketing positions for golf apparel manufacturers. Mr.
Haley is a Class A PGA professional golfer with over 25 years of experience in
the golf industry.
MARK J. STEVENSON has been a director of the Company since November 1993.
Mr. Stevenson served as chairman of the board, president and chief executive
officer of Electronic Manufacturing Systems, Longmont, Colorado, a contract
manufacturer serving the computer, data storage, telecommunications and medical
equipment industries, from June 1, 1994 until that company was merged into
E-M-Solutions in January 1999. At that time he was appointed Executive Chairman
and Chairman of the Board of the successor company, in which position he
currently serves. From 1992 to 1994, Mr. Stevenson served as chairman of the
board of Micro Insurance Software, Inc., Boulder, Colorado, a manufacturer of
computer software oriented to the insurance industry. He currently serves as
Chairman of the American Electronics Association, the nation's largest high
technology trade association.
RONALD J. NORICK has been a director of the Company since November 1993.
From April 1987 until April 1998, Mr. Norick served as the elected Mayor of the
City of Oklahoma City, Oklahoma. From 1960 to 1992, Mr. Norick served in various
capacities, including, from 1981 to 1992, serving as president of a closely-held
printing company which was acquired by Reynolds & Reynolds in June 1992. Mr.
Norick serves on a number of civic, community, educational, corporate and public
boards, commissions and committees. Mr. Norick also serves as manager of Norick
Investments Company LLC, a family-owned limited liability company which is
engaged in investments.
JAMES H. EVEREST has been a director of the Company since November 1993.
Mr. Everest has served as president of the Jean I. Everest Foundation, Oklahoma
City, Oklahoma, since 1991. The Jean I. Everest Foundation was organized by Mr.
Everest's father to conduct charitable activities. Mr. Everest has been the
managing partner of Everest Brothers, a general partnership active in oil and
gas exploration and development, since 1984. Mr. Everest has also been engaged
in managing his personal investments since 1984. Mr. Everest is a member of the
Oklahoma Bar Association and
4
the American Bar Association and serves in a number of capacities for various
civic and community organizations.
PENDING OR THREATENED LEGAL PROCEEDINGS INVOLVING OFFICERS, DIRECTORS AND
NOMINEES
A former shareholder of the Company commenced a putative class action
lawsuit against the Company and three of its officers and directors. The action
was filed in the United States District Court for the District of Colorado on
October 15, 2001 by J. Roger Gregg on behalf of a putative class consisting of
all persons who acquired the Company's common stock during the period from
September 4, 1996 through October 16, 2000 and alleges claims against
Sport-Haley, Robert G. Tomlinson, Kevin M. Tomlinson and Robert W. Haley (the
"Defendants"). The action, which seeks unspecified damages, alleges that the
Defendants violated Section 10(b) of the Securities Exchange Act (the "Exchange
Act"), and Rule 10b-5 promulgated thereunder, by knowingly overstating the
Company's financial results, thereby causing the Company's stock price to be
artificially inflated. The complaint further alleges that the individual
Defendants are liable by virtue of being controlling persons of Sport-Haley,
pursuant to Section 20(a) of the Exchange Act. The allegations arise out of the
Company's restatements of its financial statements for the fiscal years ended
June 30, 1999 and 1998, which the Company previously reported. The Court
appointed a group of investors, including Mr. Gregg, to act as lead plaintiff in
the action. The Defendants intend to vigorously defend the action. The
Defendants filed a motion to dismiss the action in December 2001, which motion
is pending.
As previously reported, in November 2000, the United States Securities and
Exchange Commission (the "Commission") commenced an investigation related to the
Company's restatement of its financial statements for fiscal years 1999 and
1998, which restatements were reported in Sport-Haley's Form 10-K for the year
ended June 30, 2000. On December 20, 2001, the staff of the Commission advised
the Company and its Chairman and Chief Executive Officer, Robert G. Tomlinson,
that the staff plans to recommend that the Commission bring an enforcement
action against the Company and Mr. Tomlinson to obtain an injunction prohibiting
future violations of certain provisions of the securities laws, and possibly
other relief. The staff's recommended action primarily relates to errors
reported in the Company's restatements for fiscal years 1998 and 1999 for work
in process inventory, prepaid assets and the loss on the disposal of headwear
equipment, as well as alleged errors in the Company's quarterly reports for
fiscal 2000 in these accounts. The staff invited the Company and Mr. Tomlinson
to make written submissions setting forth legal and factual reasons why such
action should not be brought. The Company and Mr. Tomlinson made such
submissions. The Company and Mr. Tomlinson do not know what action, if any, the
staff will ultimately recommend to the Commission. If the staff recommends the
initiation of an enforcement action, it is not known whether the Commission will
accept the staff's recommendation. In the event the Commission brings an action,
the Company and Mr. Tomlinson intend to vigorously contest it. Based upon the
information currently available, management does not believe that the impact, if
any, of such an enforcement action would have a material adverse effect upon the
Company's financial position.
5
COMMITTEES OF THE BOARD
The Board of Directors has delegated certain of its authority to a
Compensation Committee and an Audit Committee. The Compensation Committee is
composed of Messrs. Stevenson, Norick and Everest. The Audit Committee is
composed of Messrs. Stevenson, Norick and Everest. Each of the members of the
Audit Committee qualifies as an "independent director" under the current listing
standards of the National Association of Securities Dealers, Inc. No member of
either committee is a former or current officer or employee of the Company.
The Compensation Committee held one meeting in fiscal 2001. The primary
function of the Compensation Committee is to review and make recommendations to
the Board with respect to the compensation, including bonuses, of the Company's
officers and to administer the Company's Option Plan. See "Compensation
Committee Report."
The Audit Committee had two formal meeting in fiscal 2001, which all audit
committee members attended. The function of the Audit Committee is to review and
approve the scope of audit procedures employed by the Company's independent
auditors, to review and approve the audit reports rendered by the Company's
independent auditors and to approve the audit fee charged by the independent
auditors. The Audit Committee reports to the Board of Directors with respect to
such matters and recommends the selection of independent auditors. The Board of
Directors adopted an Audit Committee Charter effective June 9, 2000, which
describes the Audit Committee's roles and responsibilities.
The Board of Directors authorized the hiring of a consultant to assist the
Audit Committee with the review of financial statements in accordance with
recently promulgated regulations of the Securities and Exchange Commission. The
consultant attended the Audit Committee meetings held during fiscal 2001. On
October 2, 2001, the Audit Committee submitted to the Board of Directors the
following report:
AUDIT COMMITTEE REPORT
We have reviewed and discussed with management the Company's audited
financial statements for the year ended June 30, 2001 (the "Fiscal Year 2001
Financial Statements").
We have discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, COMMUNICATION WITH AUDIT
COMMITTEES, as amended, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
We have received and reviewed the written disclosures and the letter from
the independent auditors required by Independence Standard No. 1, INDEPENDENCE
DISCUSSIONS WITH AUDIT COMMITTEES, as amended, by the Independence Standards
Board, and have discussed with the auditors the auditors' independence.
Based upon the reviews and discussions referred to above, we recommended to
the Board
6
of Directors that the Fiscal Year 2001 Financial Statements be included in the
Company's Form 10-K for the year ended June 30, 2001.
This Audit Committee Report shall not be deemed incorporated by reference
in any document previously or subsequently filed with the Securities and
Exchange Commission that incorporates by reference all or any portion of the
proxy statement, in connection with the Annual Meeting, except to the extent
that the Company specifically requests that this Report be specifically
incorporated by reference.
Date: October 2, 2001
James H. Everest
Ronald J. Norick
Mark J. Stevenson
BOARD AND COMMITTEE ATTENDANCE
In fiscal 2001, the Board of Directors held three formal meetings. Messrs.
Haley and Everest attended two of the three meetings and each other director
attended all board and committee meetings held during fiscal 2001.
EXECUTIVE OFFICERS AND KEY EMPLOYEES
Officers are appointed by and serve at the discretion of the Board of
Directors. Each of the Company's officers devote full-time to the Company's
business and affairs.
PATRICK W. HURLEY, age 49, has served as Controller of the Company since
October 1999 and as Chief Financial Officer since December 2000. From 1992 until
joining the Company, he was employed as Senior Staff Accountant at Saltzman
Hamma Nelson Massaro LLP, an accounting firm located in Denver, Colorado.
CATHERINE B. BLAIR, age 50, has served as Vice President of
Merchandising/Design since her appointment in May 1996. Ms. Blair has been part
of the Company's design team since 1992, and was appointed Director of Design in
1995. Prior to joining Sport-Haley, she was a designer for a golfwear company
and also worked as a freelance designer for companies such as Macy's,
Bloomingdale's, Ann Taylor and The Gap.
WILLIAM L. BLAIR, age 59, served as Vice President of Corporate Sales from
March 1998 through January 2001. From September 1996 until joining the Company,
Mr. Blair was director of marketing for the Activewear Division of Fruit of the
Loom. From 1992 to 1996, Mr. Blair was a director of and consultant to Osterman
API, Inc., a promotional product company.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth the annual and
long-term
7
compensation for services in all capacities to Sport-Haley for the three fiscal
years ended June 30, 2001 of Robert G. Tomlinson, Chief Executive Officer, Kevin
M. Tomlinson, Chief Operating Officer, Robert W. Haley, President, and William
L. Blair, Vice President-Corporate Sales, the only executive officers of
Sport-Haley whose total annual salary and bonus exceeded $100,000 during the
year ended June 30, 2001 (the "Named Officers").
LONG TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION ---------------------
FISCAL ----------------------- SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS(#) COMPENSATION
--------------------------- ------ -------- ----- --------------------- -------------
Robert G. Tomlinson, 2001 $170,000 $-0- $-0- $1,301 (1)
Chairman of the Board and 2000 176,539 -0- -0- 2,213 (1)
Chief Executive Officer 1999 202,692 -0- -0- 1,022 (1)
Kevin M. Tomlinson 2001 140,000 -0- -0- 1,255 (1)
Chief Operating Officer, 2000 129,885 -0- -0- 1,278 (1)
Executive Vice President-
Operations
Robert W. Haley, 2001 150,000 -0- -0- 124 (1)
President 2000 155,769 -0- -0- 1,000 (1)
1999 171,154 -0- -0- 1,022 (1)
William L. Blair, 2001 140,385 (3) -0- -0- 124 (2)
Vice President-Corporate 2000 124,154 -0- -0- 135 (2)
Sales 1999 114,461 -0- -0- 138 (2)
-----------------------
(1) Comprised of contributions by Sport-Haley to the Named Officer's 401(k)
plan and term life insurance premiums.
(2) Comprised solely of term life insurance premiums.
(3) Mr. Blair was employed by Sport-Haley as an executive officer until January
2001.
FISCAL YEAR-END OPTIONS/OPTION VALUES TABLE. The following table sets forth
information on the number of securities and value underlying exercisable and
unexercisable options and SARs for the year ended June 30, 2001.
NUMBER OF SECURITIES UNDER- VALUE OF UNEXERCISED IN-
LYING UNEXERCISED OPTIONS/ THE-MONEY(1) OPTIONS/SARS
SHARES SARS AT FISCAL YEAR-END AT FISCAL YEAR-END($)(2)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------- ----------- -------- ----------- ------------- ----------- -------------
Robert G. Tomlinson -0- -0- 68,333 16,667 -0- -0-
Kevin M. Tomlinson -0- -0- 53,333 16,667 -0- -0-
Robert W. Haley -0- -0- 58,334 16,667 -0- -0-
William L. Blair -0- -0- 13,334 21,666 -0- -0-
8
------------------------
(1) Options are "in the money" if the fair market value of the underlying
securities exceeds the exercise or base price of the option.
(2) The dollar values are calculated be determining the difference between the
fair market value of the securities underlying the options at fiscal year
end and the exercise or base price of the options. The closing bid price
for the Common Stock was $3.000 on June 30, 2001.
(3) Mr. Blair resigned as an officer of Sport-Haley on December 22, 2000. He
surrendered his outstanding options, which were canceled, on or about
January 31, 2001.
No employee of Sport-Haley receives any additional compensation for his
services as a director. Non-management directors receive no salary for their
services as such, but may receive a fee of $250 per meeting attended. The Board
of Directors has also authorized payment of reasonable travel or other
out-of-pocket expenses incurred by non-management directors in attending
meetings of the Board of Directors. During fiscal 2001, no non-employee
directors were granted any options.
EMPLOYMENT AGREEMENTS. Effective January 1, 1997, Sport-Haley entered into
an employment agreement with Mr. Robert G. Tomlinson. The agreement requires
that he devote his full business time to Sport-Haley as Chief Executive Officer
and/or Chairman of the Board at an annual salary of $200,000, be provided an
automobile and such bonuses as awarded by the Board of Directors. The employment
agreement extends for a three-year term. Mr. Tomlinson has the option to convert
the employment agreement to a consulting agreement in the event of a change in
control of Sport-Haley or upon his resignation. Subject to the right of
Sport-Haley to terminate the consulting agreement for cause, Mr. Tomlinson is
entitled to serve as a consultant to Sport-Haley for the duration of the
agreement and to continue to receive compensation in the amount of 60% of his
annual salary. If Mr. Tomlinson terminates the agreement with "cause" (as
defined in the agreement), or Sport-Haley terminates the agreement for other
than "cause" (as defined in the agreement), or if there is a change in control
of Sport-Haley or if Mr. Tomlinson dies, Mr. Tomlinson or his estate, as
applicable, is entitled to receive severance compensation for three years from
the date of termination in an amount equal to his annual salary and bonus
payments during the preceding 12 months. During the time he is receiving such
severance compensation, he is entitled to participate in all employee benefit
plans, at Sport-Haley's expense. The change of control provisions and death
benefits entitle Mr. Tomlinson or his estate, as applicable, to receive such
amount in a lump sum. If Mr. Tomlinson becomes totally disabled during the term
of the agreement, his full salary will be continued for one year from the date
of disability. If termination is for any reason other than by Sport-Haley with
cause, all options previously granted shall become fully vested on the date of
termination. The agreement contains a non-competition provision for one year
following termination.
Effective December 1, 1999, Sport-Haley entered into an employment
agreement with Mr. Kevin Tomlinson. The agreement requires that he devote his
full business time to Sport-Haley as Chief Operating Officer and Executive Vice
President-Operations at an annual salary of $140,000 per year and such bonuses
as awarded by the Board of Directors. The employment agreement extends from
December 1, 1999 to December 1, 2002, subject to automatic one (1) year
extensions at the end of each year. If Sport-Haley terminates the agreement for
other than "cause" (as defined in the agreement), Mr. Tomlinson is entitled to
receive severance compensation equal to 12 months salary and bonus and incentive
payments over the last 12 months. During the time he is receiving
9
any such severance compensation, he is eligible to participate in all employee
benefit plans, at Sport-Haley's expense. If there is a non-negotiated change in
control of Sport-Haley, he is entitled to lump sum severance compensation equal
to three times his annual salary and bonus payment during the preceding 12
months. If Mr. Tomlinson becomes disabled during the term of the agreement, his
full salary shall be continued for one year from the date of disability. If
termination is for any reason other than by Sport-Haley with cause, all options
previously granted shall become fully vested on the date of termination. The
agreement contains a non-competition provision for one-year following
termination.
Effective January 1, 1997, Sport-Haley entered into an employment agreement
with Mr. Robert W. Haley. The agreement requires that he devote his full
business time to Sport-Haley as President or Senior Executive Officer at an
annual salary of $160,000 and such bonuses as awarded by the Board of Directors.
The employment agreement extended through December 31, 1998 and was subsequently
automatically renewed for an additional one year term. If Sport-Haley terminates
the agreement for other than "cause" (as defined in the agreement), Mr. Haley is
entitled to receive severance compensation for one year from the date of
termination in an amount equal to his annual salary and bonus payment during the
preceding 12 months. If Mr. Haley terminates the agreement with or without
cause, Mr. Haley is entitled to receive severance compensation for one year in
an amount equal to 60% of his annual salary and bonus payment during the
preceding 12 months. During the time he is receiving any such severance
compensation, he is eligible to participate in all employee benefit plans, at
Sport-Haley's expense. If there is a non-negotiated change in control of
Sport-Haley or if Mr. Haley dies, Mr. Haley or his estate, as applicable, is
entitled to lump sum severance compensation equal to three times his annual
salary and bonus payment during the preceding 12 months. If Mr. Haley becomes
disabled during the term of the agreement, his full salary will be continued for
one year from the date of disability. If termination is for any reason other
than by Sport-Haley with cause, all options previously granted shall become
fully vested on the date of termination. The agreement contains a
non-competition provision for one year following termination.
Sport-Haley entered into an employment agreement with Mr. William Blair
effective March 2, 1998. The agreement was terminated by Mr. Blair in January
2001. The agreement, while in effect, required that he devote his full business
time to Sport-Haley as Vice President of Corporate Sales at an annual salary of
$120,000 and such bonuses as awarded by the Board of Directors. The employment
agreement for Mr. Blair extended through March 1, 2001 and would have by its
terms automatically renewed for one additional year had neither party given
notice of termination. The agreement provided that if Sport-Haley terminated the
agreement for other than "cause" (as defined in the agreement) or if Mr. Blair
terminated the agreement with or without "cause", he was entitled to receive
severance compensation equal to six months' salary and 50% of the last annual
bonus. During the time he was receiving any such severance compensation, he was
eligible to participate in all employee benefit plans, at Sport-Haley's expense.
The agreement also provided that if there were a non-negotiated change in
control of Sport-Haley, he is entitled to lump sum severance compensation equal
to three times his annual salary and bonus payment during the preceding 12
months. Options previously granted may become fully vested on the date of
termination, depending on the reason for termination. The agreement contained a
non-competition agreement for six months
10
following termination, provided Mr. Blair could have been released from the
non-compete if the agreement were terminated without cause and if he had elected
to forego any severance pay. Mr. Blair notified Sport-Haley of his resignation
from his position as Vice President - Corporate Sales on December 22, 2000. His
employment agreement was terminated effective January 5, 2001.
STOCK OPTION PLAN
Sport-Haley adopted a stock option plan in 1993 (as amended, the "Option
Plan"). The Option Plan provides for the granting of incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, non-qualified stock options and stock appreciation rights ("SARs"), up
to a maximum number of 2,520,000 shares. Non-qualified options may be granted to
employees, directors and consultants of Sport-Haley, while incentive options may
be granted only to employees. No options may be granted under the Option Plan
subsequent to February 28, 2003.
The Option Plan is administered by the Compensation Committee of the Board
of Directors, which determines the terms and conditions of the options and SARs
granted under the Option Plan, including the exercise price, number of shares
subject to the option and the exercisability thereof.
The exercise price of all incentive options granted under the Option Plan
must be at least equal to the fair market value of the Common Stock of
Sport-Haley on the date of grant. In the case of an optionee who owns stock
possessing more than ten percent of the total combined voting power of all
classes of stock of Sport-Haley, the exercise price of incentive options shall
be not less than 110% of the fair market value of the Common Stock on the date
of grant. The exercise price of all non-qualified stock options granted under
the Option Plan shall be determined by the Compensation Committee, but shall not
be less than 85% of the fair market value of the Common Stock. The term of all
non-qualified stock options granted under the Option Plan may not exceed ten
years and the term of all incentive options may not exceed five years. The
Option Plan may be amended or terminated by the Board of Directors.
The Option Plan provides the Board of Directors or the Compensation
Committee the discretion to determine when options granted thereunder shall
become exercisable and the vesting period of such options. Upon termination of a
participant's employment or consulting relationship with Sport-Haley, all
unvested options terminate and are no longer exercisable. Vested options shall
remain exercisable for a specified period of time following the termination
date. The length of such extended exercise period generally ranges from 30 days
to one year, depending on the nature and circumstances of the termination.
The Option Plan provides that, in the event Sport-Haley enters into an
agreement providing for the merger of Sport-Haley into another corporation or
the sale of substantially all of Sport-Haley's assets, any outstanding
unexercised option shall become exercisable at any time prior to the effective
date of such agreement. Upon the consummation of a merger or sale of assets,
such options shall terminate unless they are assumed or another option is
substituted therefor by the successor corporation.
11
As of June 30, 2001, a total of 780,881 non-qualified and incentive options
were outstanding, with exercise prices ranging from $2.50 to $10.625 per share
and a weighted average exercise price per share of $6.572.
401(k) PLAN
In January 1996, Sport-Haley adopted a defined contribution savings plan
(the "401(k) Plan") to provide retirement income to employees of Sport-Haley.
The 401(k) Plan is intended to be qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended. The 401(k) Plan covers all employees who are
at least age 18 and have been employed at least three months. It is funded by
voluntary pre-tax contributions from employees up to a maximum amount equal to
15% of annual compensation and through matching contributions by Sport-Haley of
$0.25 on the dollar for employee contributions on the first 5% of the employee's
annual compensation. Upon leaving Sport-Haley, each participant is 100% vested
with respect to the participant's contributions and is vested based on years of
service with respect to Sport-Haley's matching contributions. Contributions are
invested as directed by the participant in investment funds available under the
401(k) Plan. Full retirement benefits are payable to each participant in a
single cash payment or an actuarial equivalent form of annuity on the first day
of the month following the participant's retirement.
COMPENSATION COMMITTEE REPORT
Notwithstanding anything to the contrary set forth in any of the previous
filings made by Sport-Haley under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including, but not limited to, this proxy statement, in whole or in
part, the following Compensation Committee Report shall not be deemed to be
"filed" with the Securities and Exchange Commission nor shall it be incorporated
by reference into any such future filings.
This Compensation Committee Report discusses Sport-Haley's executive
compensation policies and the basis for the compensation paid to Sport-Haley's
executive officers, including its Chief Executive Officer, during fiscal 2001.
COMPENSATION POLICY. Sport-Haley's policy with respect to executive
compensation has been designed to:
o Adequately and fairly compensate executive officers in relation to
their responsibilities, capabilities and contributions to Sport-Haley
in a manner that is commensurate with compensation paid by companies
of comparable size or within the golf apparel industry;
o Reward executive officers for the achievement of short-term operating
goals and for the enhancement of the long-term value of Sport-Haley;
and
o Align the interests of the executive officers with those of
Sport-Haley's shareholders.
12
The components of compensation paid to certain executive officers consist
of (a) base salary, (b) incentive compensation in the form of discretionary
annual bonus payments, (c) long-term incentive compensation in the form of
awards under Sport-Haley's Option Plan, and (d) various other benefits.
BASE SALARY. For fiscal 2001, the Compensation Committee reviewed the base
salary paid by Sport-Haley to its executive officers under their respective
employment agreements. Annual adjustments to base salaries, if any, are
determined based upon a number of factors, including Sport-Haley's performance
(to the extent such performance can fairly be attributed or related to each
executive officer's performance), as well as the value of each executive
officer's responsibilities, capabilities and contributions and internal
compensation equity considerations. In addition, for fiscal 2001, the
Compensation Committee reviewed the base salaries of its executive officers in
an attempt to ascertain whether those salaries fairly reflect job
responsibilities and prevailing market conditions and rates of pay. The
Compensation Committee believes that base salaries for Sport-Haley's executive
officers have been reasonable in relation to its size and performance in
comparison with the compensation paid by similarly sized companies or companies
within the golf apparel industry. The Compensation Committee did not increase
the base pay of any executive officer in fiscal 2001, except for one officer.
INCENTIVE CASH BONUS COMPENSATION. The Compensation Committee feels that a
relatively lower level of base salary and relatively higher level of incentive
compensation, in the form of bonuses and grants of options, most effectively
aligns the interests of management with that of shareholders. It also believes
that its policy regarding incentive compensation is similar to policies of other
companies of comparable size within the golf apparel industry. The decision on
whether to award incentive cash bonus compensation is based on a combination of
achievement of business targets and objectives and certain other financial
measures which the Compensation Committee feels will dictate, in large part,
Sport-Haley's future operating results, and on an officer's responsibilities,
capabilities and contribution to Sport-Haley. There is no formal written bonus
incentive plan for executive officers', although certain executive officers
employment agreements provide that the executive is eligible for a discretionary
bonus of up to a specified percentage of his or her base salary. Although all of
the executive officers' contributions were noted and commended, the Compensation
Committee did not award any incentive cash bonuses to any of the executive
officers because it did not believe that such bonuses were merited in view of
the continued negative sales and profitability trends of Sport-Haley in fiscal
2001.
LONG-TERM INCENTIVE (OPTION) COMPENSATION. The Compensation Committee also
has authority to select the executive officers and employees who will be granted
options and other awards and to determine the timing, pricing and amount of any
such options or awards. As stated above, the Compensation Committee believes
that incentive compensation, in the form of bonuses and grants of options, most
effectively aligns the interests of management with that of shareholders. In
fiscal 2001, the Compensation Committee did not grant any options to executives
or employees of the Company.
OTHER BENEFITS. Executive officers are eligible for various benefits,
including health and welfare plans generally available to all full-time
employees. In addition, the executive officers are eligible to participate in
the 401(k) Plan, also generally available to all employees, whereby they may
13
elect to defer part or all of their base and incentive cash compensation, with
matching contributions from Sport-Haley. Sport-Haley does not maintain any other
plans and arrangements for the benefit of its executive officers except to
provide a life insurance policy for the benefit of certain executive officers'
named beneficiaries and vehicles for its Chief Executive Officer and Chief
Operating Officer. The Compensation Committee believes these benefits are
reasonable in relation to the executive compensation practices of other
similarly sized companies or companies within the golf apparel industry.
TAX CONSIDERATIONS. Beginning in 1994, the Internal Revenue Code limited
the federal income tax deductibility of compensation paid to a company's chief
executive officer and to each of the four most highly compensated executive
officers. For this purpose, compensation can include, in addition to cash
compensation, the difference between the exercise price of stock options and the
value of the underlying stock on the date of exercise. A company may deduct
compensation with respect to any of these individuals only to the extent that
during any fiscal year such compensation does not exceed $1 million or meets
certain other conditions (such as shareholder approval). Considering current
compensation plans and policy and the exercise price of currently outstanding
stock options held by the executive officers, the Compensation Committee
believes that, for the near future, there is little risk that Sport-Haley will
lose any significant tax deduction relating to executive compensation. At such
time, if any, that the deductibility of executive compensation becomes an issue,
modifications to compensation plans and policies will be considered by the
Compensation Committee.
CEO COMPENSATION. In reviewing the Chairman and Chief Executive Officer's
compensation package, the Committee pursues the same objectives, which apply for
other executive officers. The overall goal is to base the Chairman and Chief
Executive Officer's salary at a base comparable to those of persons employed in
similar capacities with competitors that are similar in industry size and
performance. However, the actual level approved by the Committee may be higher
or lower based upon the Committee's subjective evaluation of the annual and
long-term performance of Sport-Haley, the individual performance of the Chairman
and Chief Executive Officer particularly with respect to leadership and
strategic vision, and the cash resources and needs of Sport-Haley. The Committee
believes that Mr. Tomlinson's leadership has been essential in growing
Sport-Haley's revenues up to seven fold from 1994 to 2001. The Compensation
Committee noted that Mr. Tomlinson previously had made a voluntary decision to
reduce his base salary and commended that action as a demonstration of his
continued leadership and administration of resources. In fiscal 2001, no raises
or cash bonuses were awarded to Mr. Tomlinson. Mr. Tomlinson's voluntary
reduction in his salary has continued into fiscal 2001 and he is currently being
paid at an annual rate of $170,000, rather than the $200,000 to which he is
entitled under his employment agreement.
The Compensation Committee believes that the concepts discussed above
further the shareholders interests and that officer compensation encourages
responsible management of Sport-Haley. The Compensation Committee considers the
effect of management compensation on shareholder interests. In the past, the
Board of Directors based its review in part on the experience of its own members
and on information requested from management personnel. These same factors will
be used in the future in determining officer compensation. This report was
furnished by Mark J. Stevenson, Ronald J. Norick and James H. Everest, all of
the members of the Compensation Committee.
14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All of the Compensation Committee members are independent directors of
Sport-Haley. None of these members have ever been an officer or employee of
Sport-Haley or its Subsidiary nor have any of them had a relationship which
would require disclosure under the "Certain Relationship and Related
Transactions" captions of any of Sport-Haley's filings with the Commission
during the past three fiscal years.
PERFORMANCE GRAPH
Notwithstanding anything to the contrary set forth in any of the previous
filings made by Sport-Haley under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including, but not limited to, this proxy statement, in whole or in
part, the following performance graph shall not be deemed to be incorporated by
reference into any such future filings.
Set forth below is a line graph prepared by Media General Financial
Services comparing the yearly percentage change in Sport-Haley's cumulative
total shareholder return (share price appreciation plus dividends) on
Sport-Haley's Common Stock with the cumulative total return of (i) a Nasdaq
Market Index and (ii) the stocks of apparel manufacturers having Standard
Industrial Classification codes from industry group numbers 231 through 235,
which is deemed as a market weighted index of publicly traded peers, for the
period from July 1, 1996 through June 30, 2001 (the "Measurement Period"). The
graph assumes that $100 is invested in each of Sport Haley's Common Stock, the
Nasdaq Market Index and the publicly traded peers on July 1, 1996 and that all
dividends were reinvested (there were no dividends paid by Sport-Haley during
the Measurement Period). Sport-Haley's shareholder return is calculated by
dividing (i) the difference between Sport-Haley's share price at July 1, 1996
and at each June 30 of the Measurement Period by (ii) the share price at the
beginning of the Measurement Period.
[performance graph]
15
FISCAL YEAR ENDED JUNE 30,
-----------------------------------------------------------------
1996 1997 1998 1999 2000 2001
------ ------ ------ ------ ------ ------
Sport-Haley, Inc. 100.00 114.53 89.74 32.91 28.21 20.51
Industry Peer Group Index 100.00 117.41 139.83 127.94 103.98 132.85
Nasdaq Market Index 100.00 120.46 159.68 223.77 336.71 186.46
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of Sport-Haley's Common Stock as of January 21, 2002 by (i) each
person known by Sport-Haley to own beneficially more than 5% of the outstanding
Common Stock, (ii) each director or nominee, and (iii) all executive officers
and directors as a group. The information with respect to institutional
investors is derived solely from statements filed with the Commission under
Section 13(d) of the Securities Exchange Act. Each person has sole voting and
sole investment or dispositive power with respect to the shares shown except as
noted.
SHAREHOLDINGS ON JANUARY 21, 2002
------------------------------------------
NAME AND ADDRESS (1) NUMBER OF SHARES(2) PERCENT OF CLASS (3)
-------------------- ------------------- --------------------
Robert G. Tomlinson(4) .......................................... 129,667 4.7%
Kevin M. Tomlinson(7) ........................................... 61,667 2.2
Robert W. Haley(5) .............................................. 88,284 3.2
Patrick W. Hurley(7) ............................................ 10,000 *
Catherine Blair(6) .............................................. 32,500 1.2
Mark J. Stevenson(7) ............................................ 25,000 *
Ronald J. Norick(8) ............................................. 63,117 2.3
James H. Everest(8) ............................................. 115,000 4.2
U.S. Bancorp(9) ................................................. 314,500 11.4
601 Second Avenue South, Minneapolis, Minnesota 55402
Catalyst Master Fund, L.P. (10) ................................. 210,085 7.6
c/o W.S. Walker & Co.
Walker House, Mary Street P.O. Box 265GT
George Town, Grand Cayman, Cayman Islands
Hillson Partners Limited Partnership(11) ........................ 274,600 9.9
6900 Wisconsin Avenue, Suite 501
Bethesda, Maryland 20815
Kennedy Capital Management, Inc.(12) ............................ 250,400 9.1
10829 Olive Blvd .............................................
St. Louis, Missouri 63141
Dimensional Fund Advisors Inc.(13) .............................. 259,500 9.4
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Michael W. Cook Asset Management, Inc.(14) ...................... 523,100 18.9
d/b/a Cook Mayer Taylor
5170 Sanderlin Avenue, Suite 200
Memphis, Tennessee 38117
16
Tilson Growth Fund, LP (15) ..................................... 142,700 5.2
175 East 62nd Street, #11A
New York, NY 10021
All directors and officers as a group
(Nine persons)(16) .............................................. 421,735 15.3
------------------------
* Less than 1%
(1) Except as noted above, the address for all persons listed is 4600 E. 48th
Avenue, Denver, Colorado 80216.
(2) Ownership includes both outstanding Common Stock and shares issuable upon
exercise of options that are currently exercisable or will become
exercisable within 60 days after the date hereof.
(3) All percentages are calculated based on the number of outstanding shares in
addition to shares which a person or group has the right to acquire within
60 days of January 21, 2002.
(4) Includes 76,667 shares subject to currently exercisable options or options
which will become exercisable within 60 days after the date hereof.
(5) Includes 66,668 shares subject to currently exercisable options or options
which will become exercisable within 60 days after the date hereof.
(6) Includes 30,000 shares subject to currently exercisable options or options
which will become exercisable within 60 days after the date hereof.
(7) Consists solely of shares subject to currently exercisable options or
options which will become exercisable within 60 days after the date hereof
(8) Includes 25,000 shares subject to currently exercisable options or options
which will become exercisable within 60 days after the date hereof.
(9) U.S. Bancorp beneficially owns 314,500 (with sole power to vote or direct
the vote of 312,100 of such shares and with shared power to dispose or
direct the disposition of 4,100 of such shares) shares owned of record by
The Small Cap Value Fund, a mutual fund of the First American Investment
Funds, Inc., an open-end investment company.
(10) Catalyst Master Fund, L.P. has sole voting power and sole dispositive power
over 210,085 shares.
(11) Hillson Partners Limited Partnership has sole voting power and sole
dispositive power of 274,600 shares.
(12) Kennedy Capital Management, Inc., is an investment advisor company which
beneficially owns 250,400 shares.
(13) Dimensional Funds Advisors Inc., is an investment advisor company, which,
beneficially owns shares owned of record by advisory clients of Dimensional
Funds Advisors, Inc.
(14) Michael W. Cook Asset Management, Inc., has sole voting power and sole
dispositive power over 523,100 shares.
(15) Tilson Growth Fund, LP, a Delaware limited partnership, has shared voting
power and shared dispositive power over 142,700 shares.
(16) Includes 320,002 shares of Common Stock subject to currently exercisable
options. Excludes shares of Common Stock which the officers and directors
disclaim beneficial ownership.
The Board of Directors has unanimously approved and recommends that
shareholders vote FOR the director nominees identified above.
II. SELECTION OF AUDITORS
As previously reported, as of July 13, 2000, at the recommendation of the
Audit Committee, the Company terminated the services of its former accountants,
Levine, Hughes & Mithuen, Inc. The reports of Levine, Hughes & Mithuen, Inc. on
the Company's financial statements for the years
17
ending June 30, 1999 and 1998 did not contain any adverse opinions or
disclaimers of opinion, and were not qualified or modified as to uncertainty,
audit scope or accounting principles. At the advice of the Audit Committee, the
Company retained the services of Hein + Associates LLP on or about July 13,
2000. During the two years preceding the termination of Levine, Hughes &
Mithuen, Inc., there were no disagreements with the Company's former accountants
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope of procedure which would have caused the former
accountants to make reference to such disagreements in connection with their
report.
The firm of Hein + Associates, LLP has examined the financial statements of
the Company for the period from July 1, 1997 to June 30, 2001. Subject to
shareholder approval, Hein + Associates, LLP will serve as the Company's
independent auditors for the fiscal year ending June 30, 2002. Representatives
of Hein + Associates, LLP are expected to be present at the Annual Meeting with
the opportunity to make a statement if it is their desire to do so, and will be
available to respond to appropriate questions from shareholders.
AUDIT FEES. The aggregate fees billed for audit of Sport-Haley's annual
financial statements for fiscal 2001 and reviews of financial statements
included in Sport-Haley's Forms 10-Q was $55,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. Sport-Haley
did not engage the former or present principal accountant for services of this
nature during fiscal 2001.
ALL OTHER FEES. The aggregate of all other fees billed by the present
principal accountant during fiscal 2001 was $63,000, which consisted primarily
of fees and expenses related to tax services.
The Audit Committee considers the services provided by Hein + Associates,
LLP to be compatible with maintaining Hein + Associates, LLP's independence.
The Board of Directors recommends a vote FOR ratification of Hein +
Associates, LLP as independent auditors for the Company.
18
[Sport-Haley, Inc. Logo]
SPORT - HALEY, INC.
4600 East 48th Avenue
Denver, CO 80216
(303) 320-8800
www.sporthaley.com
APPENDIX A
SPORT-HALEY, INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MARCH 15, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SPORT-HALEY, INC.
KNOW ALL MEN BY THESE PRESENTS: that the undersigned shareholder of
Sport-Haley, Inc. (the "Company") hereby constitutes and appoints Robert G.
Tomlinson, as attorney and proxy, with the power to appoint his substitute, and
hereby authorizes him to represent and vote, as designated below, all of the
shares of Common Stock of the Company which the undersigned is entitled to vote
at the Annual Meeting of Shareholders of the Company to be held March 15, 2002
and at any and all adjournments thereof with respect to the matters set forth
below and described in the Notice of Annual Meeting of Shareholders and Proxy
Statement dated February 18, 2002, receipt of which is acknowledged.
THE BOARD OF DIRECTORS RECOMMEND A VOTE FOR PROPOSALS 1 AND 2.
1. TO CONSIDER AND ACT UPON A PROPOSAL TO ELECT MESSRS. ROBERT G.
TOMLINSON, ROBERT W. HALEY, KEVIN M. TOMLINSON, MARK J. STEVENSON,
RONALD J. NORICK AND JAMES H. EVEREST AS DIRECTORS TO HOLD OFFICE FOR
ONE-YEAR TERMS OR UNTIL THEIR SUCCESSORS ARE ELECTED AND QUALIFIED.
/ / FOR ELECTION OF ALL NOMINEES (Except as shown below)
/ / WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
Instructions: To withhold authority to vote for any individual
nominee, strike through the nominee's name below:
ROBERT G. TOMLINSON
ROBERT W. HALEY
KEVIN M. TOMLINSON
MARK J. STEVENSON
RONALD J. NORICK
JAMES H. EVEREST
2. TO RATIFY THE APPOINTMENT OF HEIN + ASSOCIATES LLP AS AUDITORS OF THE
COMPANY.
/ / FOR RATIFICATION
/ / AGAINST RATIFICATION
/ / ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY AND ALL
ADJOURNMENTS THEREOF.
/ / AUTHORIZED TO VOTE
/ / ABSTAIN
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). IF NO INDICATION IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEES LISTED IN PROPOSAL 1, FOR PROPOSAL 2 AND THE PROXY HOLDER
WILL VOTE ON ANY PROPOSAL UNDER ITEM 3 IN HIS DISCRETION AND IN HIS BEST
JUDGMENT.
Please mark, date, and sign exactly as your name appears on your stock
certificate. When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person. If this Proxy is not dated, the Proxy
will be deemed to bear the date the form was mailed to the shareholder.
Dated:
-------------------- --------------------------------
Signature
Dated:
-------------------- --------------------------------
Signature if held jointly