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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
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 o | |
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o Preliminary Proxy Statement | |
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
x Definitive Proxy Statement | |
o Definitive Additional Materials | |
o Soliciting Material Pursuant to §240.14a-12 |
Phoenix Footwear Group, Inc.
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1. To elect eight persons to the Board of Directors of the Company. | |
2. To transact such other business as may properly come before the meeting. |
By order of the Board of Directors | |
KENNETH WOLF, | |
Secretary |
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A. | Meetings of Board and Committees |
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B. | Compensation of Directors |
C. | Stock Ownership of Certain Beneficial Owners and Management |
Amount and | ||||||||
Nature of | ||||||||
Beneficial | Percent | |||||||
Name of Beneficial Owner | Ownership(1)(2)(3) | of Class | ||||||
Executive Officers, Directors, and Nominees | ||||||||
James R. Riedman(4) | 2,812,545 | 33.2 | % | |||||
Richard E. White | 215,000 | 2.6 | % | |||||
Greg A. Tunney | 217,435 | 2.7 | % | |||||
Kenneth E. Wolf(5) | 117,344 | 1.5 | % | |||||
Wilhelm Pfander | 47,413 | * | ||||||
Francisco Morales | 54,482 | * | ||||||
Steven M. DePerrior(6) | 782,141 | 9.9 | % |
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Amount and | ||||||||
Nature of | ||||||||
Beneficial | Percent | |||||||
Name of Beneficial Owner | Ownership(1)(2)(3) | of Class | ||||||
Gregory M. Harden | 39,398 | * | ||||||
John C. Kratzer | 25,000 | * | ||||||
Frederick R. Port(7) | 15,700 | * | ||||||
John M. Robbins | 18,500 | * | ||||||
All current directors and executive officers as a group (10 persons) | 3,532,953 | 38.9 | % | |||||
Beneficial Owners of 5% or more | ||||||||
Riedman Corporation | 632,710 | 7.8 | % | |||||
Retirement Committee of the Phoenix Footwear Group, Inc. Retirement Savings Partnership Plan(8) | 745,743 | 9.4 | % | |||||
AW Investment Company(9) | 493,500 | 6.2 | % | |||||
Austin W. Marxe(9) | 493,500 | 6.2 | % | |||||
David M. Greenhouse(9) | 493,500 | 6.2 | % | |||||
Harrison Trask | 393,133 | 5.0 | % |
* | Less than 1% of our outstanding common stock. |
(1) | Unless otherwise noted, each person has sole voting and dispositive power with respect to all shares of common stock beneficially owned. | |
(2) | Includes shares issuable upon the exercise of outstanding stock options as follows: |
James R. Riedman | 310,084 | |||
Richard E. White | 215,000 | |||
Greg A. Tunney | 114,754 | |||
Kenneth E. Wolf | 83,333 | |||
Wilhelm Pfander | 20,000 | |||
Francisco Morales | 50,000 | |||
Steven M. DePerrior | 35,398 | |||
Gregory M. Harden | 35,398 | |||
John C. Kratzer | 25,000 | |||
Frederick R. Port | 15,000 | |||
John M. Robbins | 15,000 | |||
All current directors and officers as a group (10 persons) | 918,967 | |||
Riedman Corporation | 250,000 |
(3) | Includes shares held in such person’s account under our 401(k) Plan over which, by the terms of the plan, each has investment control, but not voting control: |
James R. Riedman | 9,794 | |||
Greg A. Tunney | 36,276 | |||
Kenneth E. Wolf | 9,091 | |||
Wilhelm Pfander | 17,413 | |||
Francisco Morales | 3,482 |
(4) | Includes the following shares of which Mr. Riedman disclaims beneficial ownership: shares beneficially owned by Riedman Corporation, of which Mr. Riedman is President and director and a shareholder, shares owned by his children; shares held by an affiliated entity; and 745,743 shares held by our 401(k) Plan, including those shares allocated to his account. Mr. Riedman is a member of our board of directors’ retirement plan committee, which serves as fiduciary for the 401(k) Plan, and through that |
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committee he shares voting control over such shares, and shares investment control over shares not yet allocated to plan participants. | ||
(5) | Includes 920 shares owned by family members, as to which Mr. Wolf disclaims beneficial ownership. | |
(6) | Includes 745,743 shares held by our 401(k) Plan. Mr. DePerrior is a member of our board of directors’ retirement committee, which serves as fiduciary for the 401(k) Plan, and through that committee he shares voting control over such shares, and shares investment control over shares not yet allocated to plan participants. | |
(7) | Shares held by the Frederick and Linda Port Family Trust dated February 23, 2000, of which Mr. Port serves as trustee. | |
(8) | The members of our board of directors’ retirement committee, which serves as fiduciary for our 401(k) plan, share voting control over these shares, and share investment control over shares not yet allocated to plan participants. The plan’s mailing address is c/ o Phoenix Footwear Group, Inc., 5759 Fleet Street, Suite 220, Carlsbad, California 92008. | |
(9) | Based solely on the Schedule 13G filed by Austin W. Marxe and David M. Greenhouse with the SEC on February 8, 2005. The Schedule 13G reports that that Messrs. Marxe and Greenhouse are the controlling principals of AWM Investment Company, Inc., (“AWM”), and that AWM is the general partner of MGP Advisers Limited Partnership (“MGP” and together with AWM, the “Investment Advisors”). It further reports that AWM is the general partner and investment advisor to the Special Situations Cayman Fund, L.P. (the “Cayman Fund”) and that MGP is the general partner of and investment adviser to Special Situations III, L.P., (“Special Situations Fund III” and together with the Cayman Fund, the “Special Situation Funds”). Each of the Special Situations Funds and the Investment Advisors has sole voting and dispositive power over the shares of Common Stock which are respectively beneficially owned by each such fund or advisor, as applicable. Messrs. Marxe and Austin have shared voting and dispositive power over the Company’s common stock held by the Special Situations Funds. The Cayman Fund holds 132,500 shares of the Company’s common stock and Special Situations Fund III holds 361,500 shares of the Company’s common stock. |
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• | forward the letter to the director or directors to whom it is addressed; | |
• | attempt to handle the matter directly (as where information about the Company or its stock is requested); or | |
• | not forward the letter if it is primarily commercial in nature or relates to an improper or irrelevant topic. |
A. | Summary Compensation Table |
Long-Term | |||||||||||||||||||||
Annual Compensation | Compensation | ||||||||||||||||||||
Other Annual | Securities | ||||||||||||||||||||
Name and Principal Position | Year | Salary | Bonus | Compensation | Underlying Options | ||||||||||||||||
James R. Riedman | 2004 | $ | 325,000 | — | $ | 39,509 | (4)(5) | 104,742 | |||||||||||||
(Chairman)(1) | 2003 | $ | 186,058 | — | — | 66,666 | |||||||||||||||
2002 | $ | 85,000 | — | — | 10,000 | ||||||||||||||||
Richard E. White | 2004 | $ | 269,231 | — | — | 215,000 | |||||||||||||||
(Chief Executive Officer)(2) | |||||||||||||||||||||
Greg A. Tunney | 2004 | $ | 275,000 | $ | 50,000 | $ | 39,509 | (4)(5) | 81,159 | ||||||||||||
(Former President & | 2003 | $ | 225,204 | $ | 20,028 | $ | 27,043 | (4) | — | ||||||||||||
COO)(3) | 2002 | $ | 200,280 | $ | 58,084 | — | 50,000 | ||||||||||||||
Kenneth E. Wolf | 2004 | $ | 180,000 | $ | 30,000 | 30,476 | (4) | 50,000 | |||||||||||||
(CFO, Treasurer & | 2003 | $ | 135,589 | — | — | 50,000 | |||||||||||||||
Secretary) | |||||||||||||||||||||
Francisco Morales | 2004 | $ | 160,000 | — | 27,090 | (4) | — | ||||||||||||||
(President Royal Robbins)(6) | 2003 | $ | 24,615 | — | — | 50,000 |
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(1) | Mr. Riedman became our full-time employee on March 1, 2003 with an annual salary of $225,000. Effective January 1, 2004, his salary was increased to $325,000 annually. Effective June 15, 2004, Mr. Riedman resigned as Chief Executive Officer, but continued to serve as the Chairman of the Board at the same annual salary. |
(2) | Mr. White became a director of the Company on May 11, 2004 and our Chief Executive Officer on June 15, 2004. Upon being elected as a director of the Company Mr. White received director options for the purchase of up to 15,000 shares at an exercise price of $13.33 per share. Upon becoming Chief Executive Officer Mr. White received options for the purchase of up to 200,000 shares at an exercise price of $11.40 per share. His employment agreement also provides he is eligible to receive options for up to an additional 185,000 shares in 2005 and 100,000 shares in 2006. |
(3) | Mr. Tunney resigned as President and Chief Operating Officer February 28, 2004. |
(4) | Represents the value of other compensation earned through the annual allocation of shares to our 401(k) plan. |
(5) | Includes other compensation of $4,800 for auto allowance. |
(6) | Mr. Morales joined the Company on October 31, 2003 in connection with our acquisition of Royal Robbins, Inc. |
B. | Equity Compensation Plan Information |
Number of securities | Number of securities | |||||||||||
to be issued upon | Weighted average | remaining available for | ||||||||||
exercise of | exercise price of | future issuance under | ||||||||||
outstanding options, | outstanding options, | equity comp plans | ||||||||||
Plan Category | warrants and rights | warrants and rights | (excluding (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by stockholders(1) | 1,082,000 | $ | 7.53 | 397,000 | ||||||||
Equity compensation plans not approved by stockholders(2) | 448,000 | $ | 3.51 | — | ||||||||
Total | 1,530,000 | $ | 6.35 | 397,000 | ||||||||
(1) | Consists of the following plans: 2001 Long-Term Incentive Plan and the 1995 Stock Incentive Plan. No shares are available for grant under the 1995 Stock Incentive Plan at January 1, 2005. The 2001 Long-Term Incentive Plan permits the award of stock options, restricted stock and various other stock-based awards. |
(2) | Consists of a) options to purchase 398,000 shares of common stock granted to James R. Riedman and Riedman Corporation at a weighted average exercise price of $2.07 per share in connection with financial guaranties and loans granted to us; and b) outstanding underwriter warrants to purchase up to 50,000 shares at an exercise price of $15.00 per share issued in July 2004 in connection with our follow-on public offering. |
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Potential Realizable | ||||||||||||||||||||||||
Value at Assumed | ||||||||||||||||||||||||
Percent of Total | Annual Rates of Stock | |||||||||||||||||||||||
Options | Price Appreciation for | |||||||||||||||||||||||
Number of Shares | Granted to | Exercise | Option Term | |||||||||||||||||||||
Underlying | Employees in | Price Per | Expiration | |||||||||||||||||||||
Name | Options Granted | Fiscal Year(1) | Share | Date(2) | 5% | 10% | ||||||||||||||||||
James A. Riedman | 104,742 | 17% | $ | 8.91 | 2/5/2009 | $ | 586,917 | $ | 1,487,362 | |||||||||||||||
Richard E. White(3) | 200,000 | 33% | $ | 11.40 | 6/15/2014 | $ | 1,333,880 | $ | 3,633,733 | |||||||||||||||
Richard E. White(4) | 15,000 | 2% | $ | 13.33 | 5/11/2014 | $ | 125,700 | $ | 318,549 | |||||||||||||||
Greg A. Tunney(5) | 81,159 | 13% | $ | 8.10 | 2/5/2014 | $ | 413,428 | $ | 1,047,707 | |||||||||||||||
Kenneth E. Wolf | 50,000 | 8% | $ | 8.10 | 2/5/2014 | $ | 254,702 | $ | 645,466 | |||||||||||||||
Francisco Morales | — | — | — | — | — | — |
(1) | Based on options to purchase 611,401 shares granted to our employees and directors in fiscal 2004. |
(2) | The options were initially exercisable in cumulative one-third installments vesting annually beginning on the first anniversary of the date of grant. The grant dates for Messrs. Riedman, White, Tunney and Wolf, were February 5, 2004, June 15, 2004, February 5, 2004 and February 5, 2004, respectively. On February 24, 2005, the Compensation Committee approved the acceleration of the vesting of options to purchase 440,000 shares of common stock held by certain participants in the Company’s 2001 Long-Term Incentive Plan, which included Mr. Riedman’s options for 100,000 shares of the Company’s common stock, Mr. White’s options for 215,000 shares of the Company’s common stock, Mr. Wolf’s options for 50,000 shares of the Company’s common stock and Mr. Morales options for 50,000 shares of the Company’s common stock. |
(3) | Mr. White became Chief Executive Officer of the Company on June 15, 2004. Under the terms of his employment agreement, Mr. White received an option to purchase up to 200,000 shares at an exercise price of $11.40 per share. The agreement also provides that Mr. White is eligible to receive options to purchase up to an aggregate of 185,000 shares and 100,000 shares, on the one-year and two year anniversaries, respectively, following his entry into the employment agreement. The exercise price will be the market price on the date of grant. |
(4) | Mr. White received these options in 2004 as part of his annual retainer fee as director and not as part of his compensation. |
(5) | Mr. Tunney resigned as President and Chief Operating Officer on February 28, 2004 and consequently all unvested options granted to him during fiscal 2004 were forfeited. |
D. | Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End (FYE) Option Values |
Number of Shares | ||||||||||||||||
Underlying Unexercised | Value of Unexercised In | |||||||||||||||
In the Money Options | the Money Options at | |||||||||||||||
at FYE Exercisable/ | FYE Exercisable/ | |||||||||||||||
Shares Acquired | Value | Unexercisable | Unexercisable | |||||||||||||
Name | On Exercise | Realized | (#) | ($)(2) | ||||||||||||
James R. Riedman | — | — | 183,120/44,444 | (1) | $1,031,800/ | $193,776 | ||||||||||
Richard E. White | — | — | —/ | — | —/ | — | ||||||||||
Greg A. Tunney(3) | 16,405 | $ | 91,735 | 133,595/ | — | $709,320/ | — | |||||||||
Kenneth E. Wolf | — | — | 16,667/ | 33,333 | $70,085/ | $130,499 | ||||||||||
Francisco Morales | — | — | 16,667/ | 33,333 | $12,834/ | $16,000 |
(1) | Options for 2,898 shares and for 10,000 shares were granted in 2001 and 2002, respectively, to Mr. Riedman and each of our other directors who was not a full-time employee as part of his annual retainer fee as director. We do not deem these options to Mr. Riedman as compensation for his services as CEO. |
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(2) | Based on the last reported sale price of our common stock of $7.78 on December 31, 2004, the last trading day of fiscal 2004, as reported by the AMEX, minus the exercise price per share. |
(3) | Mr. Tunney resigned as President and Chief Operating Officer on February 28, 2004 and consequently 50,000 unvested options held by him as of that date were forfeited. |
E. | Compensation Committee Interlocks and Insider Participation/ Compensation Committee Report on Executive Compensation |
• | an officer or employee of the Company or its subsidiary, or | |
• | an employee of an entity whose board of directors (or compensation committee) includes an executive officer of the Company or | |
• | an employee of a entity who directly or indirectly benefits from its transactions with the Company or | |
• | a family member of a person whose compensation is in any way affected by any Company executive officer. |
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Respectfully submitted, | |
The Compensation Committee: | |
Steven M. DePerrior,Chair | |
John C. Kratzer | |
Frederick R. Port |
F. | Employment Agreements |
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![(GRAPH)](https://capedge.com/proxy/DEF 14A/0000950137-05-004729/a07943a0794347.gif)
1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |||||||||||||||||||
Phoenix Footwear | 100.00 | 102.53 | 115.15 | 173.23 | 378.79 | 392.93 | ||||||||||||||||||
S&P 600 Footwear | 100.00 | 192.35 | 142.17 | 166.60 | 274.26 | 319.57 | ||||||||||||||||||
S&P Small Cap 600 | 100.00 | 111.02 | 117.39 | 99.41 | 136.72 | 166.24 |
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A. | Audit Committee Report |
Respectfully submitted, | |
The Audit Committee: | |
Gregory M. Harden,Chair | |
Frederick R. Port | |
John M. Robbins |
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B. | Fees for Audit and Other Services |
2004 | 2003 | |||||||
Audit Fees(1) | $ | 448,000 | $ | 117,000 | ||||
Audit Related Fees(2) | 70,000 | 112,000 | ||||||
Tax Fees(3) | 106,000 | 39,000 | ||||||
Deloitte Total Fees | $ | 624,000 | $ | 268,000 | ||||
(1) | Fees for audit services billed in 2004 consisted of audit of the Company’s annual financial statements, reviews of the Company’s quarterly financial statements and comfort letters, consents and other services related to SEC matters. Fees for audit services billed in 2003 consisted of audit of the Company’s annual financial statements, reviews of the Company’s quarterly financial statements and other services related to SEC matters. |
(2) | Audit related fees in 2004 and 2003 represented fees for acquisition due diligence and other related services. |
(3) | Tax Fees represent fees billed for professional services rendered by Deloitte & Touche for tax compliance (including federal, state and local sales and use and property returns), fees for acquisition due diligence and tax examination assistance. |
JAMES R. RIEDMAN | |
Chairman |
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DETACH HERE | ZDGR62 |
PROXY
PHOENIX FOOTWEAR GROUP, INC.
ANNUAL MEETING OF STOCKHOLDERS — WEDNESDAY, MAY 18, 2005 AT 9:00 A.M.
The undersigned stockholder in Phoenix Footwear Group, Inc. (the “Company”) hereby appoints James R. Riedman, proxy for the undersigned with all the powers the undersigned would possess if personally present, to vote all common stock of the undersigned in the Company at the Annual Meeting of Stockholders of said Company on Wednesday, May 18, 2005 and at all adjournments thereof, for the election of eight directors and, in his discretion, upon any other matter which may properly come before said meeting or any adjournment. The undersigned hereby revokes all previous proxies.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. UNLESS OTHERWISE INSTRUCTED, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 SET FORTH ON THE REVERSE SIDE.
SEE REVERSE
SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
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PHOENIX FOOTWEAR GROUP, INC.
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
DETACH HERE | ZDGR61 |
x | Please mark votes as in this example. |
MANAGEMENT RECOMMENDS A VOTE FOR ITEM 1.
Nominees: | Steven M. DePerrior, Gregory M. Harden, John C. Kratzer, Wilhelm Pfander, Frederick R. Port, James R. Riedman, John M. Robbins and Richard E. White |
FOR ALL NOMINEES | o | o | WITHHELD FROM ALL NOMINEES |
o |
PLEASE COMPLETE, SIGN, DATE AND RETURN IN
THE ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
Signature: | Date: | Signature: | Date: | |||||||||||