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MOUNT GILEAD, N.C., Nov. 17 /PRNewswire-FirstCall/ -- McRae Industries,
Inc. (Amex: MRI.A; MRI.B) announced today that at a special meeting held on
November 17, 2005 its stockholders approved a 1-for-200 reverse stock split,
to be followed immediately by a 200-for-1 forward stock split, of the
outstanding shares of both classes of its common stock (Class A and Class B)
(the "transaction") for the purpose of permitting the company to deregister
the common stock under the Securities Exchange Act of 1934 (the "Exchange
Act").
The stockholder approval authorizes the Board of Directors to implement
the transaction at any time before December 31, 2005, subject to the right of
the Board of Directors to defer or abandon (and not implement) the transaction
if it determines that the transaction is not in the best interests of the
Company and its stockholders.
As discussed in the proxy statement for the special meeting, in
preparation for the anticipated implementation of the transaction the Company
established a process through the Depository Trust Company whereby beneficial
owners who held fewer than 200 shares of a particular class of common stock in
"street name" were able to submit their shares so that they could be cashed
out in the transaction. Through this process a significantly greater number
of shares were submitted than was anticipated. As a result, the estimated
number of shares that would be cashed out in the transaction has increased
from 56,140 to approximately 192,000 and the estimated cost to purchase these
shares, after estimated transaction expense of $190,000, has increased from
$800,000 to approximately $2.7 million.
Given this significant increase in the estimated number of shares that
would be purchased in the transaction, the Board of Directors is considering
whether implementation of the transaction would still be in the best interests
of the Company and its stockholders. The Board of Directors may choose to
implement the transaction at any time prior to December 31, 2005 or may
determine to abandon (and not implement) the transaction.
This release includes "forward-looking" information statements, as defined
in the Private Securities Litigation Reform Act of 1995, including the
estimated cost to implement the transaction. Actual results may differ from
those provided in the forward-looking statements. The cost to purchase shares
in the transaction may be different than the amount currently estimated based
on changes in the distribution of share ownership through the effective date
of the transaction.
McRae Industries, Inc., a Delaware corporation headquartered in Mt.
Gilead, North Carolina, is engaged in the manufacture, sale and distribution
of military footwear and western and work boots, and the sale and distribution
of bar code reading and printing devices.
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