SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ____)
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
LACROSSE FOOTWEAR, INC.
------------------------------------------------
(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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number, or the Form or Schedule and the date of its filing.
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LACROSSE FOOTWEAR, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 24, 2001
To the Shareholders of
LaCrosse Footwear, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of LaCrosse
Footwear, Inc. will be held on Thursday, May 24, 2001, at 9:30 A.M., local time,
at the Midway Hotel, 1835 Rose Street, La Crosse, Wisconsin 54601, for the
following purposes:
1. To elect three directors to hold office until the 2004 annual meeting of
shareholders and until their successors are duly elected and qualified.
2. To consider and act upon a proposal to approve the LaCrosse Footwear,
Inc. 2001 Stock Incentive Plan.
3. To consider and act upon a proposal to approve the LaCrosse Footwear,
Inc. 2001 Non-Employee Director Stock Option Plan.
4. To consider and act upon such other business as may properly come before
the meeting or any adjournment or postponement thereof.
The close of business on March 30, 2001 has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
meeting and any adjournment or postponement thereof.
A proxy for the meeting and a proxy statement are enclosed herewith.
By Order of the Board
of Directors LACROSSE
FOOTWEAR, INC.
/s/ Thomas S. Sleik
Thomas S. Sleik
Secretary
La Crosse, Wisconsin
April 24, 2001
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. TO
ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE DATE THE ENCLOSED PROXY, WHICH
IS SOLICITED BY THE BOARD OF DIRECTORS, SIGN EXACTLY AS YOUR NAME APPEARS
THEREON AND RETURN IMMEDIATELY.
LACROSSE FOOTWEAR, INC.
1319 St. Andrew Street
La Crosse, Wisconsin 54603
PROXY STATEMENT
For
ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 24, 2001
This proxy statement is being furnished to shareholders by the Board of
Directors (the "Board") of LaCrosse Footwear, Inc. (the "Company") beginning on
or about April 24, 2001 in connection with a solicitation of proxies by the
Board for use at the annual meeting of shareholders to be held on Thursday, May
24, 2001, at 9:30 A.M., local time, at the Midway Hotel, 1835 Rose Street, La
Crosse, Wisconsin 54601 and all adjournments or postponements thereof (the
"Annual Meeting") for the purposes set forth in the attached Notice of Annual
Meeting of Shareholders.
Execution of a proxy given in response to this solicitation will not affect
a shareholder's right to attend the Annual Meeting and to vote in person.
Presence at the Annual Meeting of a shareholder who has signed a proxy does not
in itself revoke a proxy. Any shareholder giving a proxy may revoke it at any
time before it is exercised by giving notice thereof to the Company in writing
or in open meeting.
A proxy, in the enclosed form, which is properly executed, duly returned to
the Company and not revoked will be voted in accordance with the instructions
contained therein. The shares represented by executed but unmarked proxies will
be voted FOR the three persons nominated for election as directors referred to
herein, FOR the proposal to approve the LaCrosse Footwear, Inc. 2001 Stock
Incentive Plan (the "2001 Incentive Plan"), FOR the proposal to approve the
LaCrosse Footwear, Inc. 2001 Non-Employee Director Stock Option Plan (the
"Director Plan") and on such other business or matters which may properly come
before the Annual Meeting in accordance with the best judgment of the persons
named as proxies in the enclosed form of proxy. Other than the election of
directors, the proposal to approve the 2001 Incentive Plan and the proposal to
approve the Director Plan, the Board has no knowledge of any matters to be
presented for action by the shareholders at the Annual Meeting.
Only holders of record of the Company's common stock, $.01 par value per
share (the "Common Stock"), at the close of business on March 30, 2001 are
entitled to vote at the Annual Meeting. On that date, the Company had
outstanding and entitled to vote 5,874,449 shares of Common Stock, each of which
is entitled to one vote per share.
ELECTION OF DIRECTORS
The Company's By-Laws provide that the directors shall be divided into
three classes, with staggered terms of three years each. At the Annual Meeting,
the shareholders will elect three directors to hold office until the 2004 annual
meeting of shareholders and until their successors are duly elected and
qualified. Unless shareholders otherwise specify, the shares represented by the
proxies received will be voted in favor of the election as directors of the
three persons named as nominees herein. The Board has no reason to believe that
any of the listed nominees will be unable or unwilling to serve as a director if
elected. However, in the event that any nominee should be unable to serve or for
good cause will not serve, the shares represented by proxies received will be
voted for another nominee selected by the Board. Directors will be elected by a
plurality of the votes cast at the Annual Meeting (assuming a quorum is
present). Consequently, any shares not voted at the Annual Meeting, whether due
to abstentions, broker non-votes or otherwise, will have no impact on the
election of directors. Votes will be tabulated by inspectors of election
appointed by the Board.
The following sets forth certain information, as of March 30, 2001, about
the Board's nominees for election at the Annual Meeting and each director of the
Company whose term will continue after the Annual Meeting.
Nominees for Election at the Annual Meeting
Terms expiring at the 2004 Annual Meeting
George W. Schneider, 78, was elected to the Board of Directors of the
Company's predecessor in 1968 and was the principal investor and motivating
force behind the management buyout of the Company's predecessor in 1982. Since
1982, Mr. Schneider also has served as Chairman of the Board of the Company. Mr.
Schneider's background is in banking and real estate. He was the principal
organizer of Bay Cities National Bank, Redondo Beach, California, and served as
its Chairman of the Board from 1982 until the bank was acquired in December
1995. Mr. Schneider also served as a director and Vice Chairman of the Board of
Directors of Little Company of Mary Health Systems, Little Company of Mary
Hospital and San Pedro Peninsula Hospital for many years, but relinquished those
positions in 1995.
Craig L. Leipold, 48, has served as a director of the Company since
November 1997 and served as President and Chief Executive Officer of the
Company's Rainfair, Inc. ("Rainfair") subsidiary from the May 1996 acquisition
of Rainfair until July 1999. Prior to joining the Company, Mr. Leipold was the
primary shareholder and Chief Executive Officer of Rainfair since 1989. Mr.
Leipold is Chief Executive Officer of the Nashville Predators, a National Hockey
League team, and a director of Levy Corp., Gaylord Entertainment Corporation and
PureSafety.com.
Joseph P. Schneider, 41, has served as a director of the Company since
March 1999 and as President and Chief Executive Officer since August 3, 2000.
Prior thereto, Mr. Schneider served as Executive Vice President-Danner of the
Company since May 1999, as
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President and Chief Executive Officer of the Company's Danner Shoe Manufacturing
Co. ("Danner") subsidiary since October 1998, as Vice President of the Company
since June 1996, as President and Chief Operating Officer of Danner since
December 1997, as Executive Vice President and Chief Operating Officer of Danner
since June 1996 and as Vice President - Retail Sales of the Company from January
1993 until June 1996. From 1985, when he joined the Company, until January 1993,
Mr. Schneider held various sales management positions.
THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND URGES
EACH SHAREHOLDER TO VOTE "FOR" ALL NOMINEES. SHARES OF COMMON STOCK REPRESENTED
BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" ALL NOMINEES.
Directors Continuing in Office
Terms expiring at the 2002 Annual Meeting
Richard A. Rosenthal, 68, has served as Vice Chairman of the Board of the
Company since May 2000 and as a director of the Company since June 1990. Mr.
Rosenthal was the Director of Athletics at the University of Notre Dame from
1987 until August 1, 1995. Mr. Rosenthal is a director of Athey Products
Corporation, Advanced Drainage Systems, Inc., Beck Corporation, Toefco
Engineering, Inc. and St. Joseph Capital Corporation and is a member of the
advisory board of CID Investment Partners and RFE Investment Partners.
Frank J. Uhler, Jr., 70, has served as a director since he joined the
Company in June 1978 and served as Vice Chairman of the Board from December 31,
1994 until May 2, 2000. From June 1978 until 1982, Mr. Uhler served as President
and from 1982 until December 31, 1994 he served as President and Chief Executive
Officer of the Company. Along with Mr. George W. Schneider, Mr. Uhler was the
other principal member of the management group that acquired the Company's
predecessor in 1982. Mr. Uhler is a director of the Franciscan Skemp Health Care
System.
Terms expiring at the 2003 Annual Meeting
Luke E. Sims, 51, has served as a director of the Company since December
1985. Mr. Sims has been a partner in the law firm of Foley & Lardner, Milwaukee,
Wisconsin, since 1984 and has been an attorney with such firm since 1976. Foley
& Lardner has acted as general counsel for the Company since 1982. Mr. Sims is a
director of Wilson-Hurd Mfg. Co.
John D. Whitcombe, 45, has served as a director of the Company since March
1998. Mr. Whitcombe has been a partner in the law firm of Greenberg, Fields &
Whitcombe, Torrance, California, since November 1994 and from 1992 until
November 1994 he was a partner in the law firm of Whitcombe, Makin & Pentis. Mr.
Whitcombe is a director of the Oarsmen Foundation, RHCDS Educational Scholarship
Fund and Little Company of Mary Hospital.
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George W. Schneider and Joseph P. Schneider are father and son. None of the
other directors or executive officers are related to each other.
BOARD OF DIRECTORS
General
The Board has standing Audit and Compensation Committees. The Audit
Committee presently consists of Messrs. Rosenthal (Chairman), G. Schneider and
Leipold. The Audit Committee is responsible for recommending to the Board the
appointment of independent auditors, reviewing and approving the scope of the
annual audit activities of the auditors, approving the audit fee payable to the
auditors and reviewing audit results. The Audit Committee held two meetings in
2000.
The Compensation Committee reviews and recommends to the Board the
compensation structure for the Company's directors, officers and other
managerial personnel, including salary rates, participation in incentive
compensation and benefit plans, fringe benefits, non-cash perquisites and other
forms of compensation, and administers the Company's 1993 Employee Stock
Incentive Plan (the "1993 Plan") and 1997 Employee Stock Incentive Plan (the
"1997 Plan"). Craig L. Leipold (Chairman), Luke E. Sims, Richard A. Rosenthal
and John D. Whitcombe are members of the Compensation Committee. The
Compensation Committee held five meetings in 2000.
The Board has no standing nominating committee. The Board selects the
director nominees to stand for election at the Company's annual meetings of
shareholders and to fill vacancies occurring on the Board. The Board will
consider nominees recommended by shareholders, but has no established procedures
which shareholders must follow to make a recommendation.
The Board held six meetings in 2000. Each director attended at least
seventy-five percent of the aggregate of (a) the total number of meetings of the
Board of Directors and (b) the total number of meetings held by all committees
of the Board on which the director served during 2000.
Director Compensation
Directors who are executive officers of the Company receive no compensation
as such for service as members of either the Board or committees thereof.
Directors who are not executive officers of the Company receive an annual
retainer of $12,500 (assuming four quarterly Board meetings), a pro rata fee in
the event of a major special Board meeting, and a fee of $1,000 for each
committee meeting attended if such meeting is held on a day other than a day on
which a regular Board meeting is held (except that the fee payable for such a
committee meeting is reduced to $500 if the meeting is one hour or less).
On January 1, 2001, Messrs. Leipold, Uhler, Rosenthal, Sims and Whitcombe
were automatically granted an option to purchase 3,000 shares of Common Stock
pursuant to
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the Director Plan. All of such options were granted contingent upon shareholder
approval of the Director Plan at the Annual Meeting. Assuming that shareholders
approve the Director Plan at the Annual Meeting, each non-employee director will
automatically receive an option to purchase 3,000 shares of Common Stock on the
first business day of January of each calendar year for so long as the Director
Plan remains in effect and a sufficient number of shares of Common Stock are
available under the Director Plan.
Report of the Audit Committee
The Audit Committee of the Board is responsible for providing independent,
objective oversight of the Company's accounting functions and internal controls.
The Audit Committee operates under a written charter, a copy of which is
attached to this proxy statement as Appendix A, which was adopted by the Board
in May 2000.
The Company's management ("management") is responsible for the Company's
internal controls and the financial reporting process, including the system of
internal controls. The Company's independent auditors are responsible for
expressing an opinion on the conformity of the Company's audited consolidated
financial statements with generally accepted accounting principles. The Audit
Committee has reviewed and discussed the audited consolidated financial
statements with management and the independent auditors. The Audit Committee has
discussed with the independent auditors matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication With Audit Committees), as
amended.
The Company's independent auditors have provided to the Audit Committee the
written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and the Audit
Committee discussed with the independent auditors their independence. The
Committee considered whether the independent auditors provision of non-audit
services is compatible with maintaining the independent auditors' independence.
The fees paid to the independent auditors for 2000 were as follows:
Audit Fees, Review of the Company's Quarterly
Reports on 10-Q, Review Annual Report and 10-K
filing, Attendance at Audit Committee Meetings
and Consultation on Audit and Accounting Matters................. $164,000
Services and Design and Implementation Fees....................... $ 0
All Other Fees.................................................... $ 52,152
The Audit Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee meets with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, the evaluation
of the Company's internal controls and overall quality of the Company's
financial reporting.
Based on the Audit Committee's reviews and discussions with management, the
internal auditors and the independent auditors referred to above, the Audit
Committee
5
recommended to the Board that the audited consolidated financial statements be
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2000, for filing with the Securities and Exchange Commission.
The Audit Committee does not currently have three (3) directors who are
independent as defined in Rule 4200(a)(15) of the listing standards of the
National Association of Securities Dealers, Inc. The Board, however, intends to
comply with such rule by June 14, 2001, the date the independence requirements
take effect.
This report shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, and shall not be deemed filed under such Acts.
LACROSSE FOOTWEAR, INC.
AUDIT COMMITTEE
Richard A. Rosenthal, Chairman
George W. Schneider
Craig L. Leipold
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of March 30, 2001 by: (i) each director and
nominee; (ii) each of the executive officers named in the Summary Compensation
Table set forth below; (iii) all of the directors, nominees and executive
officers (including the executive officers named in the Summary Compensation
Table) as a group; and (iv) each person or other entity known by the Company to
own beneficially more than 5% of the Common Stock. Except as otherwise indicated
in the footnotes, each of the holders listed below has sole voting and
investment power over the shares beneficially owned.
Shares of Percent of
Common Stock Common Stock
Beneficially Beneficially
Name of Beneficial Owner Owned(1) Owned
Schneider Family Voting Trust(2).............. 2,961,299 50.4%
George W. Schneider(3)........................ 1,439,923(2) 24.5%
Virginia F. Schneider(3)...................... 1,439,923(2) 24.5%
Firstar Corporation and
Firstar Bank, N.A.(4)........................ 559,689 9.5%
Joseph P. Schneider........................... 231,304(2) 3.9%
Frank J. Uhler, Jr............................ 70,900(5) 1.2%
Luke E. Sims.................................. 58,000(6) *
Craig L. Leipold.............................. 36,700 *
6
Shares of Percent of
Common Stock Common Stock
Beneficially Beneficially
Name of Beneficial Owner Owned(1) Owned
Richard A. Rosenthal.......................... 23,750 *
Robert J. Sullivan............................ 23,400 *
John D. Whitcombe............................. 9,000 *
Mark E. Leopold............................... 3,100 *
Patrick K. Gantert............................ 250 *
All directors, nominees and
executive officers as a group
(12 persons)............................... 1,964,337(2) 33.1%
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* Denotes less than 1%.
1. Includes the following shares subject to stock options which are
exercisable within 60 days of March 30, 2001: Joseph P. Schneider, 19,400
shares; Craig L. Leipold, 17,500 shares; Robert J. Sullivan, 22,700 shares;
and all directors, nominees and executive officers as a group, 68,050
shares.
2. Substantially all of the shares of Common Stock beneficially owned by
George W. Schneider, Virginia F. Schneider and 12 other members (or
affiliated trusts) of the Schneider family have been deposited into a
voting trust ("Voting Trust"), pursuant to which the five trustees thereof
(currently, George W. Schneider, Virginia F. Schneider, Joseph P.
Schneider, Steven M. Schneider and Patrick Greene), acting by majority
action, have shared voting power (shared with the beneficiaries of the
Voting Trust) and sole investment power over all such shares. The terms of
the Voting Trust are more particularly described below under "--Voting
Trust." Shares held in the Voting Trust include shares reported above as
beneficially owned by other named persons as follows: (a) 1,267,005 of the
shares reported as beneficially owned by each of George W. Schneider and
Virginia F. Schneider, as co-trustees of the George W. and Virginia F.
Schneider Trust U/A dated September 1, 1987, (b) 137,254 of the shares
reported as beneficially owned by Joseph P. Schneider, and (c) 1,404,259 of
the shares reported as beneficially owned by the directors, nominees and
executive officers of the Company as a group. The address of the Voting
Trust is 1319 St. Andrew Street, La Crosse, Wisconsin 54603.
3. Shares of Common Stock reported as beneficially owned by George W.
Schneider and Virginia F. Schneider include (a) 120,919 shares which are
deposited in the George W. and Virginia F. Schneider Trust U/A dated
September 1, 1987 over which Mr. and Mrs. Schneider, as co-trustees, have
shared voting and investment power and (b) 51,999 shares which are held by
a charitable foundation in which Mr. and Mrs. Schneider are trustees (Mr.
and Mrs. Schneider disclaim beneficial ownership of these 51,999 shares).
See also footnote 2. The address of George W. and Virginia F. Schneider is
1319 St. Andrew Street, La Crosse, Wisconsin 54603. The address of the
George W. and Virginia F. Schneider Trust U/A dated September 1, 1987 is
P.O. Box 71, Redondo Beach, California 90277.
7
4. The information is based on Amendment Number 3 to a report on Schedule 13G,
dated February 8, 2001, filed by Firstar Corporation ("Firstar") and its
subsidiary, Firstar Bank, N.A., with the Securities and Exchange
Commission. Firstar Bank, N.A. reported beneficial ownership of only
514,290 shares, or 8.8%. The address of Firstar is 777 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202 and the address of Firstar Bank, N.A. is
425 Walnut Street, Cincinnati, Ohio 45202.
5. Includes 58,885 shares held by a trust in which Mr. Uhler is one of the
trustees. Mr. Uhler disclaims beneficial ownership of these 58,885 shares.
6. Includes 18,000 shares held of record by Mr. Sims' wife for the benefit of
their three children.
Voting Trust
To help ensure the continuity and stability of the management of the
Company, George W. and Virginia F. Schneider and 12 other members of their
family, including certain affiliated entities, entered into a voting trust
agreement in June 1982. Pursuant to the trust agreement, as amended, all shares
of Common Stock held by such individuals and entities were initially deposited
into the voting trust created thereunder (the "Voting Trust"). Each depositor
and beneficiary holding Voting Trust certificates issued thereunder (which now
includes 12 other members (or affiliated trusts) of the Schneider family) also
agreed (with certain limited exceptions) to transfer to the Voting Trust all
shares of Common Stock thereafter acquired.
Under the Voting Trust, the five trustees (currently, George W. Schneider,
Virginia F. Schneider, Joseph P. Schneider, Steven M. Schneider and Patrick
Greene), acting by majority action, are vested with the exclusive right to sell,
transfer or dispose of the deposited shares and to vote such deposited shares in
their discretion on all matters on which such shares are entitled to vote;
provided, however, that in the event of a proposed recapitalization,
reorganization, merger, consolidation, liquidation, sale of all or substantially
all of the assets of the Company or a comparable transaction, in addition to the
necessary vote of the trustees, any such action shall also require the
affirmative vote or consent of the beneficiaries holding Voting Trust
certificates representing at least 75% of the aggregate number of votes of the
then deposited shares. The beneficiaries also are entitled to receive all cash
dividends or other distributions (other than in capital stock of the Company)
declared and paid on the deposited shares.
The deposited shares may only be withdrawn from the Voting Trust by a
beneficiary prior to the expiration or termination of the Voting Trust if the
trustees allow such withdrawal; provided, however, that on January 31 of each
year (commencing on January 31, 1998) each beneficiary will automatically
receive 10,000 shares.
The Voting Trust continues in effect until April 1, 2005, and thereafter
for an additional five-year period if the trustees so elect. Notwithstanding the
foregoing, in the event of a reorganization, merger or consolidation in which
the Company does not survive, a liquidation of the Company, a sale of all or
substantially all of the assets of the Company or
8
sale of all the Common Stock held by the trustees under the Voting Trust, the
Voting Trust shall automatically terminate. Additionally, the Voting Trust may
be terminated at any time prior to the expiration thereof by the trustees with
the affirmative vote or consent of the beneficiaries holding Voting Trust
certificates representing at least 75% of the aggregate number of votes of the
then deposited shares.
The Voting Trust also provides that the trustees shall cause the then Chief
Executive Officer of the Company to be elected as a director of the Company and
shall not allow the number of directors of the Company who are members of the
Schneider family to exceed a majority of the directors, less one. Additionally,
the trustees, subject to certain exceptions, may correct defects and omissions
in the underlying trust agreement and make other amendments or modifications
thereto as in their judgment may be necessary or appropriate to effectively
carry out the trust agreement. The trustees are not entitled to receive any
remuneration for serving as such under the Voting Trust.
9
EXECUTIVE COMPENSATION
Summary Compensation Information
The following table sets forth certain information concerning the
compensation earned in each of the last three fiscal years by the Company's
Chief Executive Officer and each of the Company's other most highly compensated
executive officers whose total cash compensation exceeded $100,000 in the fiscal
year ended December 31, 2000. The persons named in the table are sometimes
referred to herein as the "named executive officers."
Summary Compensation Table
Long-Term Compensation
-------------------------
Awards Payouts
Annual Compensation ------ -------
------------------------------------- Securities Long-Term
Other Annual Underlying Incentive
Name and Compensa- Stock Compensation All Other
Principal Position Year Salary($) Bonus($) tion($)(1) Options(#) Payouts($) Compensation($)
------------------ ---- --------- -------- ------------ ---------- ------------ ---------------
George W. Schneider 2000 $121,692 $ 0 -- -- -- $ 10,906(2)
Chairman of the Board 1999 170,000 0 -- -- -- 12,638
1998 165,000 79,200 -- -- -- 12,870
Joseph P. Schneider(3) 2000 184,758 47,387 -- 5,000 -- 3,484(4)
President and Chief 1999 152,650 44,580 -- 3,500 -- 3,200
Executive Officer 1998 139,375 46,224 -- 2,500 -- 2,891
Robert J. Sullivan 2000 110,049 17,276 -- 5,000 -- 2,605(4)
Vice President-Finance & 1999 107,870 20,226 -- 5,000 -- 2,951
Administration and Chief 1998 99,293 29,049 -- 5,000 -- 2,553
Financial Officer
Patrick K. Gantert(3) 2000 165,985 0 -- 9,000 -- 186,247(5)
Former President and 1999 225,308 0 -- 9,000 -- 58,840
Chief Executive Officer 1998 177,000 121,600 -- 9,000 -- 10,470
Mark E. Leopold (6) 2000 174,900 18,270 -- 5,000 -- 13,335(7)
Former Executive Vice 1999 80,769 28,073 -- 10,000 -- 13,027
President and Chief
Operating Officer
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1. Certain personal benefits provided by the Company and its subsidiaries to the named executive officers are not included
in the table. The aggregate amount of such personal benefits for each named executive officer in each year reflected in
the table did not exceed the lesser of $50,000 or 10% of the sum of such officer's salary and bonus in each respective
year.
2. Includes $8,944 for term life insurance premiums and a $1,962 matching contribution under the Company's 401(k) Plan.
10
3. Joseph P. Schneider has been the Company's President and Chief Executive
Officer since August 2000. Mr. Gantert resigned as the Company's President
and Chief Executive Officer in August 2000.
4. Matching contribution under the Company's 401(k) Plan.
5. Includes the dollar value of the benefits of the whole-life portion of the
premium for a split-dollar life insurance policy paid by the Company
projected on an actuarial basis of $42,816, Company payments of $7,080 to
cover the premiums attributable to the term life insurance portion of the
split-dollar life insurance policy, a $3,312 matching contribution under
the Company's 401(k) Plan and $133,039 in payments under a Severance
Agreement and Release (see description below under the caption
"--Agreements with Named Executive Officers"). In accordance with the terms
of the split-dollar life insurance policy, the Company was entitled to
recover all of the cumulative premiums paid by the Company; the Company
relinquished the rights to recover the cumulative premiums paid by the
Company under the severance agreement.
6. Effective December 2000, the Company eliminated the position of Executive
Vice President/Chief Operating Officer of the Company. As a result, the
Company terminated Mr. Leopold's employment effective December 13, 2000.
7. Includes $535 for term life insurance premiums, a $856 matching
contribution under the Company's 401(k) Plan, and $11,944 in payments under
a Severance Agreement and Release (see description below under the caption
"--Agreements with Named Executive Officers").
Stock Options
The Company has in effect the 1993 Plan and the 1997 Plan pursuant to which
options to purchase Common Stock may be granted to officers and other key
employees of the Company and its subsidiaries. The following table presents
certain information as to grants of stock options made during fiscal 2000 to
Joseph P. Schneider, Robert J. Sullivan, Patrick K. Gantert and Mark E. Leopold.
No other named executive officer was granted options in fiscal 2000.
11
Option Grants in 2000 Fiscal Year
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants For Option Term (2)
---------------------------------------------------------- --------------------------
Number of Percent of
Securities Total Options At 0% At 5% At 10%
Underlying Granted to Exercise or Annual Annual Annual
Options Granted Employees in Base Price Expiration Growth Growth Growth
Name Granted(#)(1) Fiscal Year ($/Share) Date Rate Rate Rate
---- --------------- ------------- ----------- ---------- ------ ------ ------
Joseph P. Schneider....... 5,000 4.8% $4.44 1/3/10 0 $13,961 $35,381
Robert J. Sullivan........ 5,000 4.8% 4.44 1/3/10 0 13,961 35,381
Patrick K. Gantert........ 9,000 8.6% 4.44 1/3/10 0 25,131 63,686
Mark E. Leopold........... 5,000 4.8% 4.44 1/3/10 0 13,961 35,381
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1. The options reflected in the table (which are nonstatutory options for purposes of the Internal Revenue Code) were
granted on January 3, 2000, and became or will become exercisable in 20% increments on January 2, 2001, 2002, 2003,
2004 and 2005.
2. This presentation is intended to disclose the potential value which would accrue to the optionee if the option were
exercised the day before it would expire and if the per share value had appreciated at the compounded annual rate
indicated in each column. The assumed rates of appreciation of 5% and 10% are prescribed by the rules of the
Securities and Exchange Commission regarding disclosure of executive compensation. The assumed annual rates of
appreciation are not intended to forecast possible future appreciation, if any, with respect to the price of the
Common Stock.
12
The following table sets forth information regarding the exercise of stock options by the named executive officers
during the 2000 fiscal year and the fiscal year-end value of unexercised options held by such persons. Mr. G. Schneider
did not hold any options to acquire Common Stock as of December 31, 2000 and is accordingly not reflected in the table.
Aggregated Option Exercises in 2000
Fiscal Year and Fiscal Year-End Option Values
Number of Securities Value of Unexercised In-
Underlying Unexercised the-Money Options at Fiscal
Options at Fiscal Year-End(#) Year-End ($)(1)
Shares Acquired Value ----------------------------- ---------------------------
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ----------- ------------- ----------- -------------
Joseph P. Schneider...... -- -- 16,000 11,000 (1) (1)
Robert J. Sullivan....... -- -- 18,200 14,300 (1) (1)
Patrick K. Gantert....... -- -- 0(2) 0(2) (1) (1)
Mark E. Leopold.......... -- -- 2,000 0(2) (1) (1)
- ------------
1. Not applicable. The fair market value of the underlying Common Stock at fiscal year-end was less than the exercise
price of the options.
2. Terminated upon leaving the employ of the Company pursuant to the terms of the 1993 Plan and the 1997 Plan.
Retirement Plan
The Company's Retirement Plan (the "Salaried Plan") covers a majority of
the salaried employees of the Company. The table set forth below illustrates the
estimated annual benefits payable as a single life annuity upon retirement
pursuant to the current Salaried Plan formula for various levels of compensation
and years of service, assuming retirement after attainment of age 65 during
2001.
Pension Plan Table
Average Years of Service
Annual -----------------------------------------------------------
Compensation 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
$100,000 $12,750 $17,000 $21,250 $25,500 $29,750
125,000 15,938 21,250 26,563 31,875 37,188
150,000 19,125 25,500 31,875 38,250 44,625
175,000 22,313 29,750 37,188 44,625 52,063
200,000 25,500 34,000 42,500 51,000 59,500
225,000 28,688 38,250 47,813 57,375 66,938
The Salaried Plan is a qualified noncontributory plan that provides for
fixed benefits to participants and their survivors in the event of normal (age
65) or early (age 55) retirement. Participants who have worked for the Company
for five years and who leave the Company for any reason other than death,
disability or early retirement are entitled to a portion of the benefits that
they would have earned under the Salaried Plan had they worked
13
for the Company until normal retirement age. Early retirement benefits are
reduced to reflect early commencement.
Compensation covered by the Salaried Plan is a participant's total
remuneration, including salary and bonus, as shown in the Summary Compensation
Table, but excluding deferred compensation and fringe and welfare benefits.
Benefits are based on a participant's average monthly compensation for the 60
consecutive calendar months of the 120 calendar months preceding termination of
employment for which his or her compensation was the highest. Under the Salaried
Plan, only compensation up to the limits imposed by the Internal Revenue Code is
taken into account. The 2000 compensation limit applicable to the Salaried Plan
was $170,000. Benefits are not subject to any deduction for Social Security or
other offset amounts. The number of credited years of service under the Salaried
Plan for each of the named executive officers as of December 31, 2000 are as
follows: Mr. G. Schneider, 19 years; Mr. Gantert, 16 years; Mr. J. Schneider, 12
years; and Mr. Sullivan, 8 years. Pursuant to the terms of the Salaried Plan,
Mr. G. Schneider began receiving benefits in 1994.
In connection with Joseph P. Schneider's election as Chief Operating
Officer of Danner in June 1996 (and, as a result thereof, the recognition that
under the terms of the Salaried Plan Mr. J. Schneider will not continue to
accrue benefits thereunder), the Company and Mr. J. Schneider reached an
understanding regarding an unfunded supplemental retirement plan for him.
Pursuant to such understanding, upon termination of employment with the Company,
or in the event of termination by reason of Mr. J. Schneider's death or
disability, Mr. J. Schneider (or his beneficiary) will be entitled to receive as
an unfunded monthly supplemental benefit from the Company an amount equal to the
difference between his current deferred vested benefit calculation and what his
benefit would have been had he continued to accrue benefits under the Salaried
Plan (or any successor plan that is in place as of his termination).
Agreements with Named Executive Officers
Mr. Gantert resigned as President and Chief Executive Officer of the
Company effective August 3, 2000. Pursuant to a severance agreement entered into
with Mr. Gantert, the Company agreed, among other things, to (a) pay Mr. Gantert
$287,900 over a two-year period; (b) transfer to Mr. Gantert all of the
Company's rights in the existing "split dollar" life insurance policy and
relinquish the Company's right under the former employment agreement with Mr.
Gantert to be reimbursed for the dollar amount of the premiums the Company
expended for the insurance policy; (c) continue to provide health insurance
coverage to Mr. Gantert until the earlier of February 4, 2001 or the date he
becomes eligible for group health insurance from another employer; (d) make a
lump sum payment to Mr. Gantert of $34,211.68, which amount represents the
present value of the benefits Mr. Gantert would have accrued under the Company's
Employees' Retirement Savings Plan and the Company's Retirement Plan through
August 3, 2002; (e) make outplacement services up to $25,000 available until
August 3, 2003; and (f) pay Mr. Gantert's legal and accounting fees up to $5,000
relating to the negotiation and execution of the severance agreement. Under the
severance agreement, Mr. Gantert agreed to not compete with the Company for a
two-year period and also agreed to not use or otherwise disclose any
confidential information of the
14
Company. In consideration for Mr. Gantert's covenant to not compete and
confidentiality covenant, the Company agreed to pay Mr. Gantert the aggregate of
$280,483, payable in four equal semiannual installments commencing February
2001. The severance agreement supersedes the former employment agreement between
the Company and Mr. Gantert.
Effective December 2000, the Company eliminated the position of Executive
Vice President/Chief Operating Officer. As a result, the Company terminated the
employment of Mark E. Leopold effective December 13, 2000. Pursuant to a
severance agreement entered into with Mr. Leopold, the Company agreed, among
other things, to (a) continue to pay Mr. Leopold his base salary through
December 13, 2001; (b) pay Mr. Leopold his 2000 incentive compensation of
$18,270; (c) pay Mr. Leopold incentive compensation of $28,438 for the year
2001; (d) continue to pay its share of Mr. Leopold's premium for group health
insurance; (e) transfer to Mr. Leopold the $500,000 life insurance policy the
Company had on his life (Mr. Leopold assumed the responsibility to pay the
premiums for such policy); and (f) make outplacement services, up to $5,000,
available until July 15, 2001.
Report on Executive Compensation
The Compensation Committee of the Board is responsible for all aspects of
the Company's compensation package offered to its corporate officers, including
the named executive officers. The following report was prepared by the
Compensation Committee.
The Company's executive compensation program is designed to be closely
linked to corporate performance. To this end, the Company has developed an
overall compensation strategy and specific compensation plans that tie a
significant portion of executive compensation to the Company's success in
meeting specified performance goals. The overall objectives of this strategy are
to attract and retain qualified executive talent, to motivate these executives
to achieve the goals inherent in the Company's business strategy, to link
executive and shareholder interests through the use of equity-based compensation
plans and to provide a compensation package that recognizes individual
contributions as well as overall business results.
During 1997, the Company retained nationally-recognized compensation
consultants to advise it with respect to compensation issues. The first step in
the overall review of executive compensation was an analysis of the duties and
responsibilities of each Company executive. This resulted in an objective
ranking of the relative duties and responsibilities of each Company executive
vis-a-vis other Company executives. Subsequently, the Company's consultants
compared the compensation for each Company executive with general market data
for individuals with comparable job responsibilities. The Company's consultants
summarized their conclusions on Company executive compensation in a report
finalized in October 1997. The results of this study have provided the framework
for determining compensation for executives of the Company.
The Compensation Committee determines the compensation of the Chairman of
the Board and the Chief Executive Officer, and sets the policy for, reviews and
approves the recommendations of management (subject to such adjustments as the
Compensation Committee deems appropriate and subject to the Board's and/or the
Compensation Committee's sole
15
discretion regarding awards of stock options) with respect to the compensation
awarded to other corporate officers (including the other named executive
officers).
The key elements of the Company's executive compensation program consist of
base salary, annual incentive compensation opportunity and grants of stock
options. Although the Compensation Committee believes strongly in offering
compensation opportunities competitive with those of comparable companies within
the Company's industry, the most important considerations in setting annual
compensation are Company performance and individual contributions. A general
description of the elements of the Company's compensation program, including the
basis for the compensation awarded to the Company's Chief Executive Officer for
2000, are discussed below.
Base Salaries. Base salaries are initially determined by evaluating the
responsibilities of the position, the experience of the individual and the
salaries for comparable positions in the competitive marketplace. Base salary
levels for the Company's executive officers are generally positioned at market
competitive levels for comparable positions in manufacturing companies of
similar size. In determining annual salary adjustments for executive officers,
the Compensation Committee considers various factors including the individual's
performance and contribution, competitive salary increase levels provided by the
marketplace, the relationship of an executive officer's salary to the market
competitive levels for comparable positions, and the Company's performance. In
the case of executive officers with operating responsibility for a particular
division, such division's financial results are also considered. The
Compensation Committee, where appropriate, also considers nonfinancial
performance measures such as manufacturing efficiency gains, improvements in
product quality and relations with customers, suppliers and employees.
Nonfinancial measures used for executive officers are determined on a
case-by-case basis and the Compensation Committee does not assign any specific
weight to any one of these factors.
On August 3, 2000, Patrick K. Gantert, the Company's then President and
Chief Executive Officer, resigned to pursue other business opportunities. Mr.
Gantert's base salary for 2000 was $243,950, determined in accordance with his
Employment Agreement with the Company. In connection with Mr. Gantert's
resignation, the Company and Mr. Gantert terminated this Employment Agreement
and entered into a severance agreement providing certain benefits to Mr. Gantert
over a two-year period. As part of that severance agreement, Mr. Gantert
confirmed his obligations of confidentiality and non-disclosure to the Company,
and his covenant not to compete with the Company during such two-year severance
period.
On August 3, 2000, Joseph P. Schneider, who was then the President and
Chief Executive Officer of Danner, was elected the President and Chief Executive
Officer of the Company. In recognition of Mr. Schneider's expanded
responsibilities, his base salary was increased from $169,689 to $205,000 as of
that date.
Incentive Compensation. The Company's executive officers are eligible for
annual incentive compensation under incentive compensation plans which are
customized for each of the Company's three divisions. For 2000, incentive
compensation was based on operating profit, operating plan attainment and
individual performance. For 2001, all of the
16
Company's senior executive officers, including any officer who would be
identified in the Compensation Table, are eligible for incentive compensation
based solely on financial performance. Financial performance, for purposes of
determining incentive compensation, will be based 75% on operating profit and
25% on targeted inventory turns. Except for J. Schneider and Robert Sullivan
where incentive compensation is based on overall Company-wide goals, each
Company executive officer's incentive compensation is based upon the financial
performance for the division where the executive officer has his or her
principal operating responsibilities.
No incentive compensation was paid to George W. Schneider, the Company's
Chairman of the Board, for 2000. Joseph P. Schneider, the Company's President
and Chief Executive Officer, received incentive compensation of $47,387 for
2000, which reflected his performance as the Chief Executive Officer of Danner
from January 1, 2000, through August 3, 2000, and his additional
responsibilities as the Company's President and Chief Executive Officer
commencing on August 3, 2000.
Stock Options. The Company's 1993 Plan and the 1997 Plan are designed to
encourage and create ownership of Company common stock by key executives,
thereby promoting a close identity of interests between the Company's management
and its shareholders. The 1993 Plan and the 1997 Plan are designed to motivate
and reward executives for long-term strategic management and the enhancement of
shareholder value. The Compensation Committee has determined that annual stock
option grants to the Company's key employees, including key executive officers,
is consistent with the Company's best interest and the Company's overall
compensation program.
In determining the number of stock options to be granted, the Compensation
Committee considers a variety of factors, including the executive's level of
responsibility, relative contributions to the Company and existing level of
ownership of Company Common Stock. Consideration is also given to an executive's
potential for future responsibility and contributions to the Company, as well as
the aggregate number of stock options proposed to be granted with a view towards
ensuring that aggregate compensation for Company executives is appropriate.
Stock options are granted with an exercise price equal to the market value of
the Common Stock on the date of grant. Stock options granted in 2000 vest and
become exercisable in 20% increments over a five-year period from the date of
grant. Vesting schedules are designed to encourage the creation of shareholder
value over the long-term since the full benefit of the compensation package
cannot be realized unless stock price appreciation occurs over a number of years
and the executive remains in the employ of the Company.
The Board, acting on the recommendation of the Compensation Committee,
granted stock options during 2000 to key employees under an informal long-term
plan adopted in 1993 and designed to provide annual grants of stock options to
key employees.
17
Section 162(m) Limitation. The Company anticipates that all 2001
compensation to executives will be fully deductible under Section 162(m) of the
Internal Revenue Code. Therefore, the Compensation Committee determined that a
policy with respect to qualifying compensation paid to executive officers for
deductibility is not necessary.
LACROSSE FOOTWEAR, INC.
COMPENSATION COMMITTEE
Craig L. Leipold, Chairman
Richard A. Rosenthal
John D. Whitcombe
Luke E. Sims
Compensation Committee Interlocks and Insider Participation
The current members of the Compensation Committee are identified above.
Luke E. Sims is a partner in the law firm of Foley & Lardner, Milwaukee,
Wisconsin, which has served as general counsel for the Company since 1982.
Craig L. Leipold, the Chairman of the Compensation Committee, served as
President and Chief Executive Officer of the Company's Rainfair subsidiary from
the May 1996 acquisition of Rainfair until July 1999. In connection with the May
1996 acquisition of Rainfair, Rainfair entered into a sublease indirectly with a
Wisconsin corporation, which Mr. Leipold owns, for the Racine, Wisconsin
facility used by the Rainfair business. Under the sublease, Rainfair pays an
annual rent of $350,000, subject to increases based on changes in the "prime
rate," and all other costs associated with owning and operating such facility,
including utilities, taxes and insurance. In 2000, rent for the facility was
$381,630. The sublease also gives Rainfair an option to purchase the facility on
the last day of the sublease term. The terms of the foregoing arrangement were
negotiated between the Company and the Wisconsin corporation on an arms-length
basis at the time of the acquisition of Rainfair and, on that basis, the Company
believes the terms of the sublease are no less favorable to the Company and
Rainfair than could have been obtained from an unaffiliated third party.
18
PERFORMANCE INFORMATION
The following graph compares on a cumulative basis changes since December
31, 1995 in (a) the total shareholder return on the Common Stock with (b) the
total return on the Nasdaq Market Index and (c) the total return on the Media
General Financial Services Textile-Apparel Footwear/Accessories Industry Group
Index (the "MG Industry Group Index"). Such changes have been measured by
dividing (a) the sum of (i) the amount of dividends for the measurement period,
assuming dividend reinvestment, and (ii) the difference between the price per
share at the end of and the beginning of the measurement period, by (b) the
price per share at the beginning of the measurement period. The graph assumes
$100 was invested on December 31, 1995 in Common Stock, the Nasdaq Market Index
and the MG Industry Group Index.
[GRAPHIC OMITTED]
-------- --------- -------- -------- -------- --------
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1995 1996 1997 1998 1999 2000
- ----------------------- -------- --------- -------- -------- -------- --------
LACROSSE FOOTWEAR, INC. $100.00 $124.03 $168.85 $109.47 $ 54.05 $ 38.07
MG INDUSTRY GROUP INDEX 100.00 157.13 116.87 106.07 144.66 152.60
NASDAQ MARKET INDEX 100.00 124.27 152.00 214.39 378.12 237.66
- ----------------------- -------- --------- -------- -------- -------- --------
19
2001 STOCK INCENTIVE PLAN
General
The purpose of the 2001 Incentive Plan is to induce certain officers and
other key employees to remain in the employ of the Company or its subsidiaries
and to encourage such employees to secure or increase on reasonable terms their
stock ownership in the Company. The 2001 Incentive Plan is intended to promote
continuity of management and increased incentive and personal interest in the
welfare of the Company by those who are primarily responsible for shaping and
carrying out the long-range plans of the Company and securing its continued
growth and financial success.
The Company currently has in effect the 1993 Plan and the 1997 Plan. As of
March 30, 2001, a total of 16,433 shares of Common Stock remained available for
the granting of additional options under the 1993 Plan and a total of 116,883
shares of Common Stock remained available for the granting of additional options
under the 1997 Plan. To allow for additional equity-based compensation awards to
be made by the Company, the 2001 Incentive Plan was adopted by the Board on
December 11, 2000 and is effective as of such date, subject to approval by the
shareholders at the Annual Meeting.
The following summary description of the 2001 Incentive Plan is qualified
in its entirety by reference to the full text of the 2001 Incentive Plan which
is attached to this Proxy Statement as Appendix B.
Administration
The 2001 Incentive Plan will be administered by the Board and/or the
Compensation Committee of the Board consisting of not less than two directors
who are "non-employee directors" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, and who are "outside directors"
within the meaning of Section 162(m) of the Internal Revenue Code. If at any
time the Compensation Committee shall not be in existence or not consist of
directors who are qualified as "non-employee directors" and "outside directors,"
the Board shall administer the Plan. Among other functions, the Compensation
Committee and the Board each has full authority and discretion, subject to the
express provisions of the 2001 Incentive Plan, to establish rules and
regulations deemed necessary or advisable for the proper administration of the
2001 Incentive Plan and to determine the individuals to whom, and the time or
times at which, options will be granted, the type of options, the exercise
periods, limitations on exercise, the number of shares subject to each option
and any other terms, limitations, conditions and restrictions on any option
granted under the 2001 Incentive Plan. Subject to the express terms of the 2001
Incentive Plan, determinations and interpretations with respect thereto will be
conclusive and binding on all parties.
20
Eligibility
Options may be granted under the 2001 Incentive Plan to officers and other
key employees of the Company and of any of its present and future subsidiaries.
A director or an officer of the Company or of a subsidiary who is not also an
employee of the Company or of a subsidiary is not eligible to receive options
under the 2001 Incentive Plan. Approximately 70 persons are currently eligible
to receive options under the 2001 Incentive Plan.
Awards Under the 2001 Incentive Plan; Available Shares
The 2001 Incentive Plan permits the grant to officers and other key
employees of either "incentive stock options," which qualify for special income
tax treatment under the Internal Revenue Code, or "nonstatutory stock options,"
which do not so qualify. The aggregate fair market value (determined as of the
date of the option is granted) of the Common Stock for which an incentive stock
option is exercisable for the first time by a participant during any calendar
year under the 2001 Incentive Plan or any other plan of the Company may not
exceed $100,000.
The maximum number of shares of Common Stock which may be acquired upon the
exercise of options granted under the 2001 Incentive Plan is 300,000, subject to
adjustment in order to prevent dilution in certain cases as described below. In
the event that all or any portion of an option granted under the 2001 Incentive
Plan expires unexercised, is cancelled or terminates, the shares then subject to
such option will again be available for the granting of additional options under
the 2001 Incentive Plan. The 2001 Incentive Plan provides that no officer or key
employee may be granted options that could result in such participant receiving
more than 125,000 shares of Common Stock under the 2001 Incentive Plan, which
number of shares is subject to adjustment to prevent dilution in certain cases
as described below. Any shares delivered pursuant to the exercise of options
granted under the 2001 Incentive Plan may be either authorized and unissued
shares of Common Stock or treasury shares held by the Company.
Term of Options
The option exercise price per share of Common Stock subject to any option
granted to an officer or other key employee under the 2001 Incentive Plan will
be determined by the Compensation Committee or the Board, but may not be less
than 100% of the fair market value of a share of Common Stock on the date the
option is granted; provided, however, that no incentive stock option may be
granted to any officer or other key employee who, at the time such incentive
stock option is granted, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its subsidiaries
unless the option exercise price of such incentive stock option is at least 110%
of the fair market value of a share of Common Stock on the date of grant.
Options granted under the 2001 Incentive Plan will expire at such time as
the Compensation Committee or Board determines, except that no incentive stock
option may be exercised more than ten years from the date of grant. Options
cannot be exercised until the period, if any, specified by the Compensation
Committee or Board has expired. If the
21
employment of an officer or key employee terminates for any reason whatsoever,
all rights to exercise an option granted pursuant to the 2001 Incentive Plan
also terminate unless otherwise determined by the Compensation Committee or the
Board or provided in the option agreement with such officer or key employee.
Except as otherwise provided by the Compensation Committee or the Board, options
are not transferable otherwise than by will or the laws of descent and
distribution, and may be exercised during the life of the officer or key
employee only by him or her. No options may be granted under the 2001 Incentive
Plan after December 10, 2010.
The purchase price for shares of Common Stock acquired upon exercise of
options under the 2001 Incentive Plan may be paid in cash, by delivery of
securities of the Company having a fair market value on the date of exercise
equal to the option exercise price or by delivery to the Company of an executed
irrevocable option exercise form together with irrevocable instructions to a
broker-dealer to sell or margin a sufficient portion of the shares and deliver
the sale or margin loan proceeds directly to the Company to pay for the option
exercise price. No shares of Common Stock will be issued under the 2001
Incentive Plan until full payment therefor has been made.
Capital Adjustments
In the event of a capital adjustment resulting from a stock dividend (other
than a stock dividend in lieu of an ordinary cash dividend), stock split,
reorganization, merger, consolidation, spin-off, recapitalization, split-up,
combination or exchange of shares, or otherwise, the aggregate number and class
of shares available under the 2001 Incentive Plan, the limits imposed on the
number of options that may be granted to any one participant, the number and
class of shares subject to each outstanding option and the exercise price for
shares subject to each outstanding option, shall be appropriately adjusted by
the Compensation Committee or the Board, whose determination shall be
conclusive.
Amendment and Termination
The 2001 Incentive Plan shall terminate on December 10, 2010, unless sooner
terminated as provided thereunder. The Board may at any time and from time to
time terminate or amend the 2001 Incentive Plan; provided, however, that
approval of the Company's shareholders for any such amendment shall also be
obtained if otherwise required by (i) the Internal Revenue Code or any rules
promulgated thereunder (in order to allow for incentive stock options to be
granted under the 2001 Incentive Plan or to enable the Company to comply with
the provisions of Section 162(m) of the Internal Revenue Code) or (ii) the
listing requirements of any principal securities exchange or market on which the
shares of Common Stock are then traded (in order to maintain the listing or
quotation of the Common Stock thereon). No termination or amendment of the 2001
Incentive Plan may, without the participant's consent, adversely affect the
rights of such participant under any option previously granted to such
participant.
22
Withholding
Under the 2001 Incentive Plan, the Company may deduct and withhold from any
cash otherwise payable to a participant such amount as may be required to
satisfy the Company's obligation to withhold Federal, state or local taxes. In
the event such amount withheld is insufficient for such purpose, the Company may
require that the participant pay to the Company upon demand or otherwise make
arrangements satisfactory to the Company for payment of an amount necessary to
satisfy the obligation to withhold any such taxes. A participant may be
permitted to satisfy the Company's withholding tax requirements by electing to
have the Company withhold shares of Common Stock otherwise issuable to such
participant.
Certain Federal Income Tax Consequences
The grant of a stock option under the 2001 Incentive Plan will create no
income tax consequences to the participant or the Company. A participant who is
granted a nonstatutory stock option will generally recognize ordinary income at
the time of exercise in an amount equal to the excess of the fair market value
of the Common Stock acquired at such time over the exercise price. Although the
Company will generally be entitled to a deduction in the same amount and at the
same time as ordinary income is recognized by the participant, the Company may
lose all or a portion of such deduction if any of the options granted do not
qualify as "performance-based compensation" under Section 162(m) of the Internal
Revenue Code. A subsequent disposition of the Common Stock will give rise to
capital gain or loss to the extent the amount realized from the sale differs
from the tax basis, i.e., the fair market value of the Common Stock on the date
of exercise. This capital gain or loss will be long-term capital gain or loss if
the Common Stock has been held for more than one year from the date of exercise.
In general, if a participant in the 2001 Incentive Plan holds the Common
Stock acquired pursuant to the exercise of an incentive stock option for at
least two years from the date of grant and one year from the date of exercise,
the participant will recognize no income or gain as a result of exercise for
regular income tax purposes. However, the excess of the fair market value of the
Common Stock acquired on the date of exercise over the exercise price (the
"Spread") is an adjustment for alternative minimum tax purposes and, as a
result, the participant may be taxed on all or a portion of the Spread under the
alternative minimum tax. Except as described below, any gain or loss realized by
the participant on the disposition of the Common Stock acquired pursuant to the
exercise of an incentive stock option will be treated as a long-term capital
gain or loss and no deduction will be allowed to the Company. If these holding
period requirements are not satisfied, the participant will recognize ordinary
income at the time of the disposition equal to the lesser of (a) the gain
realized on the disposition, or (b) the Spread. The Company will be entitled to
a deduction in the same amount and at the same time as the ordinary income
recognized by the participant. Any additional gain realized by the participant
over the fair market value at the time of exercise will be treated as a capital
gain. This capital gain will be a long-term capital gain if the Common Stock had
been held for more than one year from the date of exercise.
23
The Company cannot currently determine the options that may be granted to
eligible participants under the 2001 Incentive Plan in the future. Such
determinations will be made from time to time by the Compensation Committee
and/or the Board.
On March 30, 2001, the last reported price per share of the Common Stock on
The Nasdaq National Market was $2.5625.
Vote Required
The affirmative vote of the holders of a majority of the shares of Common
Stock represented and voted at the Annual Meeting with respect to the 2001
Incentive Plan (assuming a quorum is present) is required to approve the 2001
Incentive Plan. Any shares of Common Stock not voted at the Annual Meeting with
respect to the 2001 Incentive Plan (whether as a result of broker non-votes or
otherwise, except abstentions) will have no impact on the vote. Shares of Common
Stock as to which holders abstain from voting will be treated as votes against
the 2001 Inventive Plan.
THE BOARD RECOMMENDS A VOTE "FOR" THE 2001 INCENTIVE PLAN AND URGES EACH
SHAREHOLDER TO VOTE "FOR" THE 2001 INCENTIVE PLAN. SHARES OF COMMON STOCK
REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" THE 2001
INCENTIVE PLAN.
2001 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
General
The purpose of the Director Plan is to promote the long-term growth and
financial success of the Company. The Director Plan is intended to secure for
the Company and its shareholders the benefits of the long-term incentives
inherent in increased common stock ownership by members of the Board who are not
employees of the Company or its subsidiaries. It is intended that the Director
Plan will induce and encourage highly experienced and qualified individuals to
serve on the Board and assist the Company in promoting a greater identity of
interest between the non-employee directors and the shareholders of the Company.
The Director Plan was adopted by the Board on December 11, 2000 and is effective
as of such date, subject to approval by the shareholders at the Annual Meeting.
The following summary description of the Director Plan is qualified in its
entirety by reference to the full text of the Director Plan which is attached to
this Proxy Statement as Appendix C.
Administration
The Director Plan is intended to meet the "formula" plan requirements of
Rule 16b-3 (or any successor provision thereto) adopted under the Exchange Act
and accordingly is intended to be self-governing.
24
The Director Plan will be administered by the Board. The Board may delegate
part or all of its administrative powers with respect to the Director Plan.
Subject to the express provisions of the Director Plan, the Board's
determinations and interpretations with respect thereto shall be final and
conclusive.
Awards under the Director Plan; Shares Available
The Director Plan provides for the grant to non-employee directors of the
Company nonstatutory stock options, which do not qualify for special income tax
treatment under the Internal Revenue Code. The maximum number of shares of
Common Stock which may be acquired upon the exercise of options granted under
the Director Plan is 100,000, subject to adjustment to prevent dilution in
certain cased describe below. If any options granted under the Director Plan
terminate, expire or are canceled prior to the delivery of all of the shares
issuable thereunder, then such shares shall again be available for the granting
of additional options under the Director Plan. If the exercise price of any
option granted under the Director Plan is satisfied by tendering shares, only
the number of shares issued net of the shares tendered shall be deemed delivered
for purposes of determining the maximum number of shares available for delivery
under the Director Plan. Any shares delivered pursuant to the exercise of
options granted under the 2001 Incentive Plan may be either authorized and
unissued shares of Common Stock or treasury shares held by the Company.
Terms of Awards
Under the Director Plan, on the first business day of January of each
calendar year beginning in January, 2001, each non-employee director of the
Company will automatically be granted an option to purchase 3,000 shares of
Common Stock of the Company. The option exercise price per share of Common Stock
subject to the options granted under the Director Plan will be 100% of the fair
market value of a share of Common Stock on the date the option is granted. The
options granted under the Director Plan will be nonstatutory stock options,
which do not qualify for special income tax treatment under the Internal Revenue
Code. Option granted to a non-employee director will have a term of ten years
from the date the option is granted.
Options granted under the Director Plan cannot be exercised prior to the
first anniversary of the date of grant and thereafter may only be exercised with
respect to twenty percent (20%) of the shares subject to such options on and
after the first anniversary of the date of grant, with respect to forty percent
(40%) of the shares on a cumulative basis on and after the second anniversary of
the date of grant, with respect to sixty percent (60%) of the shares on a
cumulative basis on and after the third anniversary of the date of grant, with
respect to eighty percent (80%) of the shares on a cumulative basis on and after
the fourth anniversary of the date of grant and in full on and after the fifth
anniversary of the date of grant.
The purchase price for shares of Common Stock acquired upon exercise of
options under the Director Plan may be paid in cash, by delivery of securities
of the Company having a fair market value on the date of exercise equal to the
option exercise price or by
25
delivery to the Company of an executed irrevocable option exercise form together
with irrevocable instructions to a broker-dealer to sell or margin a sufficient
portion of the shares and deliver the sale or margin loan proceeds directly to
the Company to pay for the option exercise price. No shares of Common Stock will
be issued under the Director Plan until full payment therefor has been made.
If a non-employee director ceases being a director of the Company for any
reason other than his or her voluntary decision to resign or to not stand for
reelection as director, then all rights to exercise options granted under the
Director Plan will become immediately exercisable, and the non-employee director
will have the right to exercise the options within 24 months after the date of
termination; provided, however, that no option shall be exercisable after the
expiration of the term of that option. If a non-employee director voluntarily
resigns or decides to not stand for reelection as director (in either case,
prior to reaching age 70), then the director may exercise options granted under
the Director Plan, to the extent the options are exercisable at the time of
termination, for a period of three months, but in no event after the expiration
of the term of that option. Except as otherwise provided by the Board, options
granted under the Director Plan are not transferable otherwise than by will or
the laws of descent and distribution, and may be exercised during the life of
the non-employee director only by him or her.
Capital Adjustments
In the event of a capital adjustment resulting from a dividend or other
distribution, recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of shares or other similar corporate transaction that
affects shares of Common Stock, the Board may, in such manner as it deems
equitable, adjust the aggregate number and type of shares available under the
Director Plan and that thereafter may be made subject to options, the number and
type of shares subject to outstanding options and/or the exercise price for
shares subject to each outstanding option.
Amendment and Termination
The Director Plan will terminate on December 11, 2010, unless sooner
terminated as provided thereunder. The Board may at any time amend, alter,
suspend, discontinue or terminate the Director Plan. Termination of the Director
Plan shall not affect the rights of non-employee directors with respect to
options previously granted to them, and all unexpired options shall continue in
force and effect after termination of the Director Plan, except as they may
lapse or be terminated by their own terms and conditions. Any amendment to the
Director Plan will become effective when adopted by the Board, unless specified
otherwise. Rights and obligations under any option granted before any amendment
of the Director Plan will not be materially and adversely affected by amendment
of the Director Plan, except with the consent of the director who holds the
option.
26
Certain Federal Income Tax Consequences
The grant of a stock option under the Director Plan will create no income
tax consequences to the non-employee director or the Company. A non-employee
director who is granted a nonstatutory stock option will generally recognize
ordinary income at the time of exercise in an amount equal to the excess of the
fair market value of the Common Stock acquired at such time over the exercise
price. Although the Company will generally be entitled to a deduction in the
same amount and at the same time as ordinary income is recognized by the
non-employee director, the Company may lose all or a portion of such deduction
if any of the options granted do not qualify as "performance-based compensation"
under Section 162(m) of the Internal Revenue Code. A subsequent disposition of
the Common Stock will give rise to capital gain or loss to the extent the amount
realized from the sale differs from the tax basis, i.e., the fair market value
of the Common Stock on the date of exercise. This capital gain or loss will be a
long-term capital gain or loss if the Common Stock has been held for more than
one year from the date of exercise.
Future Awards
On January 1, 2001, each non-employee director of the Company was
automatically granted an option to purchase 3,000 shares of Common Stock
pursuant to the Director Plan. All of such options were granted contingent upon
shareholder approval of the Director Plan at the Annual Meeting. Assuming that
shareholders approve the Director Plan at the Annual Meeting, each non-employee
director will automatically receive an option to purchase 3,000 shares of Common
Stock on the first business day of January of each calendar year for so long as
the Director Plan remains in effect and a sufficient number of shares of Common
Stock are available under the Director Plan.
On March 30, 2001, the last reported price per share of the Common Stock on
The Nasdaq National Market was $2.5625.
Vote Required
The affirmative vote of the holders of a majority of the shares of Common
Stock represented and voted at the Annual Meeting with respect to the Director
Plan (assuming a quorum is present) is required to approve the Director Plan.
Any shares of Common Stock not voted at the Annual Meeting with respect to the
Director Plan (whether as a result of broker non-votes or otherwise, except
abstentions) will have no impact on the vote. Shares of Common Stock as to which
holders abstain from voting will be treated as votes against the Director Plan.
THE BOARD RECOMMENDS A VOTE "FOR" THE DIRECTOR PLAN AND URGES EACH
SHAREHOLDER TO VOTE "FOR" THE DIRECTOR PLAN. SHARES OF COMMON STOCK REPRESENTED
BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" THE DIRECTOR PLAN.
27
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers to file reports concerning their ownership of
Company equity securities with the Securities and Exchange Commission and the
Company. Based solely upon information provided to the Company by individual
directors and executive officers, the Company believes that during the fiscal
year ended December 31, 2000 all its directors and executive officers complied
with the Section 16(a) filing requirements.
MISCELLANEOUS
Independent Auditors
McGladrey & Pullen, LLP acted as the independent auditors for the Company
in 2000 and it is anticipated that such firm will be similarly appointed to act
in 2001. Representatives of McGladrey & Pullen, LLP are expected to be present
at the Annual Meeting with the opportunity to make a statement if they so
desire. Such representatives are also expected to be available to respond to
appropriate questions.
Shareholder Proposals
Proposals which shareholders of the Company intend to present at and have
included in the Company's proxy statement for the 2002 annual meeting of
shareholders pursuant to Rule 14a-8 under the Securities Exchange Act of 1934,
as amended ("Rule 14a-8"), must be received by the Company by the close of
business on December 26, 2001. Additionally, if the Company receives notice of a
shareholder proposal submitted otherwise than pursuant to Rule 14a-8 (i.e.,
proposals shareholders intend to raise at the 2002 annual meeting of
shareholders but do not intend to have included in the Company's proxy statement
for such meeting) after March 11, 2002, the persons named in proxies solicited
by the Board of Directors of the Company for the 2002 annual meeting of
shareholders may exercise discretionary voting power with respect to such
proposal.
Other Matters
The cost of soliciting proxies will be borne by the Company. In addition to
soliciting proxies by mail, proxies may be solicited personally and by telephone
by certain officers and regular employees of the Company. The Company will
reimburse brokers and other nominees for their reasonable expenses in
communicating with the persons for whom they hold Common Stock.
By Order of the Board
of Directors LACROSSE
FOOTWEAR, INC.
/s/ Thomas S. Sleik
Thomas S. Sleik
Secretary
April 24, 2001
28
Appendix A
LACROSSE FOOTWEAR, INC.
AUDIT COMMITTEE CHARTER
PURPOSE
The primary function of the Audit Committee is to assist the Board of Directors
("Board") of LaCrosse Footwear, Inc. ("Company") in fulfilling its oversight
responsibilities by reviewing and monitoring: the financial reports and other
financial information provided by the Company to its shareholders, any
governmental agency or the general public; the Company's systems of internal
controls regarding financial, accounting, legal compliance and/or ethical
matters that the Board and management have established; and the Company's
auditing, accounting and financial reporting processes generally. Consistent
with the foregoing, the Audit Committee should foster free and open
communication between the Board, the independent auditors and Company
management. The independent auditors for the Company are ultimately accountable
to the Board and the Audit Committee, as representatives of the shareholders.
The Board and the Audit Committee have authority to select, evaluate and, where
appropriate, replace the independent auditors.
ORGANIZATION
There shall be a committee of the Board to be known as the Audit Committee. The
Audit Committee shall be comprised of three (3) directors, at least two (2) of
whom are "independent" of management of the Company, financially literate and
free of any relationship that, in the opinion of the Board, would interfere with
the exercise of such director's independent judgment as an Audit Committee
member. "Independent", when used in this Audit Committee Charter, shall have the
meaning given to that term in the applicable rules and regulations of the
National Association of Securities Dealers, Inc. ("NASD"). On and after June 14,
2001, at least one (1) member of the Audit Committee shall be financially
sophisticated in accordance with the applicable NASD rules.
GENERAL ACTIVITIES
o Provide an open avenue of communication between the independent auditors,
Company management and the Board.
o Meetas circumstances require, but at least two (2) times a year. The Audit
Committee may ask members of management or others to attend meetings and
provide pertinent information as necessary.
o Ensure that the Company's independent auditors submit periodic reports to
the Audit Committee delineating all relationships between the independent
auditors and the Company, to discuss such reports with the independent
auditors and to recommend that the Board take appropriate action to satisfy
itself of the independence of the independent auditors.
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o Obtain annual written confirmation from the Company's independent auditors
that they are independent from the Company within the meaning of the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, and within the requirements of the accounting
profession.
o Review with the independent auditors and management the coordination of
audit efforts to assure completeness of coverage, reduction of redundant
efforts and the effective use of audit resources.
o Inquire of the independent auditors and management about significant risks
or exposures, and assess the steps management has taken to minimize such
risks to the Company.
SPECIFIC ACCOUNTING ISSUES AND POLICIES
o Consider and review with management and the independent auditors:
(a) Significant findings during the year, including the status of previous
audit recommendations.
(b) Any difficulties encountered in the course of audit work including any
restrictions on the scope of activities or access to required
information.
o Meet periodically with the independent auditors and management in separate
executive sessions to discuss any matters that the Audit Committee believes
should be discussed privately.
o Report periodically to the Board on any significant issue or matter which
comes to the attention of the Audit Committee in carrying out its duties.
o Conduct or authorize investigations into any matter within the Audit
Committee's scope of responsibilities. The Audit Committee shall be
empowered to retain independent counsel and other professionals to assist
it in the conduct of any investigation.
o Review and discuss annual audited financial statements with management and,
based upon such review, recommend to the Board whether to include the
audited financial statements in the Company's Annual Report on Form 10-K to
be filed with the Securities and Exchange Commission.
o Discuss with the independent auditors matters required to be discussed by
Statement on Auditing Standards No. 61 ("SAS 61"), as it may be
supplemented or amended, relating to the conduct of the audit.
o When appropriate, discuss with the independent auditors matters required to
be discussed by SAS 61 relating to the conduct of the independent auditors'
review of the financial information in any Quarterly Report on Form 10-Q.
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o Advise management and the independent auditors that they are expected to
provide a timely analysis of significant current and prospective financial
reporting issues and practices.
o Inquire of the independent auditors their views about whether management's
choice of accounting principles are conservative, moderate, or aggressive
from the perspective of income, asset, and liability recognition. Inquire
of the independent auditors their qualitative judgments about the
appropriateness, not just the acceptability, of the accounting principles
and the clarity of the financial disclosure practices used or proposed to
be adopted by the Company.
o Review with the independent auditors and management the reasoning for, and
the appropriateness of, the accounting principles and disclosure practices
adopted by management in reporting new transactions or events.
o Review with the independent auditors and management the reasoning for, and
the appropriateness of, any change in accounting principles and disclosure
practices.
SCHEDULED ACTIVITIES
o Recommend the selection of the independent auditors for approval by the
Board, approve the compensation of the independent auditors, and, where
appropriate, review and approve the discharge of the independent auditors.
o Review with the independent auditors and management the results of annual
audits and related comments, including, but not limited to:
(a) Any significant changes required in the independent auditors' audit
plans;
(b) Any difficulties or disputes with management encountered during the
course of the audit; and
(c) Any other matters related to the conduct of the audit which are to be
communicated to the Audit Committee under generally accepted auditing
standards.
o Review with the independent auditors periodically their reasoning in
accepting significant estimates by management.
o Prepare a report of the Audit Committee to be included in the Company's
proxy statement for its annual meeting of shareholders in compliance with
Item 306 of Regulation S-K under the Securities Exchange Act of 1934.
o Cause the Company to include a copy of this Charter in the Company's proxy
statement for its annual meeting of shareholders at least once every three
(3) years.
o Review and update this Charter no less frequently than annually.
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Appendix B
LACROSSE FOOTWEAR, INC.
2001 STOCK INCENTIVE PLAN
Section 1. Establishment
LACROSSE FOOTWEAR, INC. (the "Company") hereby establishes a stock
incentive plan for certain officers and other key employees, as described
herein, which shall be known as the "LACROSSE FOOTWEAR, INC. 2001 STOCK
INCENTIVE PLAN" (the "Plan"). It is intended that stock options (including both
incentive stock options and nonstatutory stock options) may be granted under the
Plan.
Section 2. Purpose
The purpose of the Plan is to induce certain officers and other key
employees to remain in the employ of the Company or its subsidiaries and to
encourage such employees to secure or increase on reasonable terms their stock
ownership in the Company. The Board of Directors of the Company (the "Board")
believes that the Plan will promote continuity of management and increased
incentive and personal interest in the welfare of the Company by those who are
primarily responsible for shaping and carrying out the long-range plans of the
Company and securing its continued growth and financial success.
Section 3. Effective Date of the Plan
The effective date of the Plan is the date of its adoption by the Board,
December 11, 2000, subject to the approval and ratification of the Plan by the
shareholders of the Company within twelve months of the effective date, and any
and all awards made under the Plan prior to such approval shall be subject to
such approval.
Section 4. Stock Subject to Plan
Subject to adjustment in accordance with the provisions of Section 8,
common stock, $.0l par value per share, not to exceed 300,000 shares, may be
issued pursuant to the Plan. Such shares may be authorized and unissued or
treasury shares. If any options expire, are canceled, or terminate for any
reason without having been exercised in full, the shares subject to the
unexercised portion thereof shall again be available for the purposes of the
Plan.
Section 5. Administration
The Plan shall be administered by the Board and/or the Compensation
Committee (the "Committee") of the Board consisting of not less than two
directors, each of whom shall qualify as a "non-employee director" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any successor rule or regulation, and an "outside director"
within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), and Treasury Regulation Section 1.162-27 promulgated
thereunder. If at any time the Committee shall not be in existence or not
consist of directors who are qualified as "non-employee directors" and "outside
directors" as defined above, the Board shall administer the Plan. To the extent
permitted by applicable law, the
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Board may, in its discretion, delegate to another committee of the Board or to
one or more senior officers of the Company any or all of the authority and
responsibility of the Committee with respect to options to participants other
than participants who are subject to the provisions of Section 16 of the
Exchange Act ("Section 16 Participants"). To the extent that the Board has
delegated to such other committee or one or more officers the authority and
responsibility of the Committee, all references to the Committee herein shall
include such other committee or one or more officers.
The Committee and the Board each shall have authority to grant stock
options ("Awards") to eligible employees of the Company and its present and
future subsidiaries under the Plan. Subject to the express provisions of the
Plan, the Committee and the Board each shall have authority to establish such
rules and regulations as they deem necessary or advisable for the proper
administration of the Plan, and, in their discretion, to determine the
individuals to whom, and the time or times at which Awards shall be granted, the
type of Awards, the exercise periods, limitations on exercise, the number of
shares to be subject to each Award and any other terms, limitations, conditions
and restrictions on Awards as the Committee or the Board, in its discretion,
deems appropriate; provided, however, that the maximum number of shares, subject
to adjustment in accordance with the provisions of Section 8, subject to Award
that any one Participant (as hereinafter defined in Section 6 hereof) can be
granted under the Plan during its term is 150,000. In making such
determinations, the Committee and the Board may take into account the nature of
the services rendered by the respective employees, their present and potential
contributions to the success of the Company or its subsidiaries, and such other
factors as the Committee or the Board in its discretion shall deem relevant.
Subject to the express provisions of the Plan, the Committee and the Board each
shall also have authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it, to determine the terms and provisions of
the respective Award agreements (which need not be identical), to waive any
conditions or restrictions with respect to any Award and to make all other
determinations necessary or advisable for the administration of the Plan. The
Committee and Board determinations on the matters referred to in this Section 5
shall be conclusive.
Section 6. Eligibility
Awards may be granted to officers and other key employees of the Company
and of any of its present and future subsidiaries ("Participants") under the
Plan. A director or an officer of the Company or of a subsidiary who is not also
an employee of the Company or of a subsidiary shall not be eligible to receive
an Award.
Section 7. Grants of Options
(a) Grant. Subject to the provisions of the Plan, the Committee and the
Board each may grant stock options to Participants in such amounts as they shall
determine. The Committee and the Board each shall have full discretion to
determine the terms and conditions (including vesting) of all options. The
Committee or Board shall determine whether an option is to be an incentive stock
option within the meaning of Section 422 of the Code or a nonstatutory stock
option and shall enter into option agreements with Participants accordingly.
B-5
(b) Option Price. The per share option price, as determined by the
Committee or Board, shall be an amount not less than 100% of the fair market
value of the stock on the date such option is granted (110% in the case of
incentive stock options granted pursuant to Section 422(c)(5) of the Code), as
such fair market value is determined by such methods or procedures as shall be
established from time to time by the Committee or Board ("Fair Market Value").
(c) Option Period. The term of each option shall be as determined by the
Committee or Board, but in no event shall the term of an incentive stock option
exceed a period of ten (10) years from the date of its grant.
(d) Maximum Per Participant. The aggregate Fair Market Value of the stock
for which an incentive stock option is exercisable by a Participant for the
first time during any calendar year under the Plan and any other plans of the
Company or its subsidiaries may not exceed $100,000. To the extent this
limitation is exceeded, such incentive stock option shall automatically be
treated as a nonqualified stock option.
(e) Exercise of Option. The Committee or Board shall prescribe the manner
in which a Participant may exercise an option which is not inconsistent with the
provisions of this Plan. An option may be exercised, subject to limitations on
its exercise and the provisions of subparagraph (g), from time to time, only by
(i) providing written notice of intent to exercise the option with respect to a
specified number of shares, and (ii) payment in full to the Company of the
option price at the time of exercise. Payment of the option price may be made
(i) by delivery of cash and/or securities of the Company having a then Fair
Market Value equal to the option price, or (ii) by delivery (including by fax)
to the Company or its designated agent of an executed irrevocable option
exercise form together with irrevocable instructions to a broker-dealer to sell
or margin a sufficient portion of the shares and deliver the sale or margin loan
proceeds directly to the Company to pay for the option price.
(f) Transferability of Option. The options are not transferable otherwise
than by will or the laws of descent and distribution, and may be exercised
during the life of the Participant only by the Participant, except that a
Participant may, to the extent allowed by the Committee or Board and in a manner
specified by the Committee or Board, (a) designate in writing a beneficiary to
exercise the option after the Participant's death, and (b) transfer any option.
(g) Termination of Employment. In the event a Participant leaves the employ
of the Company and/or its subsidiaries whether voluntarily or by reason of
dismissal, disability or retirement, all rights to exercise an option shall
terminate immediately unless otherwise determined by the Committee or Board or
provided in the option agreement granted to such Participant.
Section 8. Capital Adjustment Provisions
In the event of any change in the shares of common stock of the Company by
reason of a declaration of a stock dividend (other than a stock dividend
declared in lieu of an
B-6
ordinary cash dividend), stock split, reorganization, merger, consolidation,
spin-off, recapitalization, split-up, combination or exchange of shares, or
otherwise, the aggregate number and class of shares available under this Plan,
the number and class of shares subject to the individual Participant limits
specified in Section 5, the number and class of shares subject to each
outstanding Award, and the exercise price for shares subject to each outstanding
option, shall be appropriately adjusted by the Committee or Board, whose
determination shall be conclusive.
Section 9. Termination and Amendment of Plan
The Plan shall terminate on December 10, 2010, unless sooner terminated as
hereinafter provided. The Board may at any time terminate the Plan, or amend the
Plan as it shall deem advisable including (without limiting the generality of
the foregoing) any amendments deemed by the Board to be necessary or advisable
to assure the Company's deduction under Section 162(m) of the Code for all
Awards granted under the Plan, to assure conformity of the Plan and any
incentive stock options granted thereunder to the requirements of Section 422 of
the Code and to assure conformity with any requirements of other state or
federal laws or regulations; provided, however, that shareholder approval of any
amendment of the Plan shall also be obtained if otherwise required by (i) the
Code or any rules promulgated thereunder (in order to allow for incentive stock
options to be granted under the Plan or to enable the Company to comply with the
provisions of Section 162(m) of the Code) or (ii) the listing requirements of
any principal securities exchange or market on which the shares are then traded
(in order to maintain the listing or quotation of the shares thereon). No
termination or amendment of the Plan may, without the consent of the
Participant, adversely affect the rights of such Participant under any Award
previously granted. Notwithstanding the foregoing, the authority of the
Committee and the Board to administer the Plan, or waive any conditions or
restrictions with respect to an option, shall extend beyond the date of the
Plan's termination.
Section 10. Rights of Employees
Nothing in this Plan or in any Awards shall interfere with or limit in any
way the right of the Company and any of its subsidiaries to terminate any
Participant's or employee's employment at any time, nor confer upon any
Participant or employee any right to continue in the employ of the Company or
any of its subsidiaries.
Section 11. Rights as a Shareholder
A Participant shall have no rights as a shareholder with respect to shares
covered by any option until the date of issuance of the stock certificate to
such Participant and only after such shares are fully paid. No adjustment will
be made for dividends or other rights for which the record date is prior to the
date such stock is issued.
Section 12. Tax Withholding
The Company may deduct and withhold from any cash otherwise payable to a
Participant such amount as may be required for the purpose of satisfying the
Company's
B-7
obligation to withhold Federal, state or local taxes in connection with any
Award. Further, in the event the amount so withheld is insufficient for such
purpose, the Company may require that the Participant pay to the Company upon
its demand or otherwise make arrangements satisfactory to the Company for
payment of such amount as may be requested by the Company in order to satisfy
its obligation to withhold any such taxes.
A Participant may be permitted to satisfy the Company's withholding tax
requirements by electing to have the Company withhold shares of stock otherwise
issuable to the Participant. The election shall be made in writing and shall be
made according to such rules and in such form as the Committee or Board may
determine.
Section 13. No Fractional Shares
No fractional shares shall be issued or delivered pursuant to the Plan, and
the Committee or the Board shall determine whether cash, other securities or
other property shall be paid or transferred in lieu of any fractional shares, or
whether such fractional shares or any rights thereto shall be canceled,
terminated or otherwise eliminated.
Section 14. Requirements of Law
The granting of Awards under the Plan and the issuance of shares in
connection with an Award shall be subject to all applicable laws, rules and
regulations and to such approvals by any governmental agencies or national
securities exchanges as may be required. Notwithstanding any other provision of
the Plan or any award agreement, the Company shall have no liability to deliver
any shares under the Plan or make any payment with respect to any award unless
such delivery or payment would comply with all applicable laws and the
applicable requirements of any securities exchange or similar entity.
Section 15. Miscellaneous
The grant of any Award under the Plan may also be subject to other
provisions as the Committee or Board determines appropriate, including, without
limitation, provisions for (a) one or more means to enable Participants to defer
recognition of taxable income relating to Awards, which means may provide for a
return to a Participant on amounts deferred as determined by the Committee or
Board; (b) the purchase of stock under options in installments; and (c)
compliance with federal or state securities laws and stock exchange or Nasdaq
National Market requirements.
Section 16. Agreements
Awards granted pursuant to the Plan shall be evidenced by written
agreements in such form as the Committee or Board shall from time to time adopt.
Section 17. Governing Law
The Plan and all determinations made and actions taken pursuant thereto
shall be governed by and construed in accordance with the internal laws of the
State of Wisconsin
B-8
without reference to conflict of law principles thereof. If any provision of
this Plan or any award agreement or any Award, (a) is or becomes or is deemed to
be invalid, illegal or unenforceable in any jurisdiction, or as to any person or
Award, or (b) would disqualify the Plan, any award agreement or any Award under
any law deemed applicable by the Committee or Board, then such provision shall
be construed or deemed amended to conform to applicable laws, or if it cannot be
so construed or deemed amended without, in the determination of the Committee or
Board, materially altering the intent of the Plan, award agreement or Award,
such provision shall be stricken as to such jurisdiction, person or Award, and
the remainder of the Plan, such award agreement and such Award shall remain in
full force and effect.
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LACROSSE FOOTWEAR, INC.
2001 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
Section 1. Establishment
LACROSSE FOOTWEAR, INC. (the "Company") hereby establishes a stock option
plan for non-employee directors, as described herein, which shall be known as
the "LACROSSE FOOTWEAR, INC. 2001 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN" (the
"Plan"). It is intended that only nonstatutory stock options may be granted
under the Plan.
Section 2. Purpose
The purpose of the Plan is to promote the long-term growth and financial
success of the Company. The Plan is intended to secure for the Company and its
shareholders the benefits of the long-term incentives inherent in increased
common stock ownership by members of the Board who are not employees of the
Company or its Affiliates. It is intended that the Plan will induce and
encourage highly experienced and qualified individuals to serve on the Board and
assist the Company in promoting a greater identity of interest between the
Non-employee Directors and the shareholders of the Company.
Section 3. Definitions
The following terms shall have the respective meanings set forth below,
unless the context otherwise requires:
(a) "Affiliate" shall mean any corporation, partnership, joint venture, or
other entity in which the Company holds an equity, profit, or voting interest of
more than fifty percent (50%).
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(e) "Fair Market Value per Share" shall mean for any day the average of the
high and low sales prices for a Share in the over-the-counter market, as
reported by the Nasdaq Stock Market on the business day immediately preceding
such day, or, if there were no trades of Shares on such business day, on the
most recent preceding business day on which there were trades. If Shares are not
listed or admitted to trading on the Nasdaq Stock Market when the determination
of fair market value is to be made, Fair Market Value per Share shall be the
mean between the highest and lowest reported sales prices of Shares on that date
on the principal exchange on which the Shares are then listed. If the Shares are
not listed on any national exchange, Fair Market Value per Share shall be the
amount determined in good faith by the Board to be the fair market value of a
Share at the relevant time.
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(f) "Non-employee Director" shall mean a member of the Board who is not an
employee of the Company or any Affiliate.
(g) "Shares" shall mean shares of common stock of the Company, $.01 par
value per share, and such other securities or property as may become subject to
Options pursuant to an adjustment made under Section 11 of the Plan.
Section 4. Effective Date of the Plan
The effective date of the Plan is the date of its adoption by the Board,
December 11, 2000, subject to the approval and ratification of the Plan by the
shareholders of the Company, and any and all awards made under the Plan prior to
such approval shall be subject to such approval.
Section 5. Shares Available for Options
Subject to adjustment in accordance with the provisions of Section 11, the
number of Shares which may be issued pursuant to the Plan shall not exceed
100,000. Such Shares may be authorized and unissued Shares or treasury shares.
If, after the effective date of the Plan, any Options terminate, expire or are
canceled prior to the delivery of all of the Shares issuable thereunder, then
the number of Shares counted against the number of Shares available under the
Plan in connection with the grant of such Option, to the extent of any such
termination, expiration or cancellation, shall again be available for the
granting of additional Options under the Plan. If the exercise price of any
Option granted under the Plan is satisfied by tendering Shares (by either actual
delivery or by attestation), only the number of Shares issued net of the Shares
tendered shall be deemed delivered for purposes of determining the maximum
number of Shares available for delivery under the Plan.
Section 6. Plan Operation
(a) Formula Plan. The Plan is intended to meet the "formula" plan
requirements of Rule 16b-3 (or any successor provision thereto), as interpreted,
adopted under the Exchange Act and accordingly is intended to be self-governing.
(b) Administration. The Plan shall be administered by the Board. The Board
may, by resolution, delegate part or all of its administrative powers with
respect to the Plan. The Board shall have all of the powers vested in it by the
terms of the Plan, such powers to include the authority, within the limits
prescribed herein, to establish the form of the agreement embodying grants of
Options made under the Plan. The Board shall, subject to the provisions of the
Plan, have the power to construe the Plan, to determine all questions arising
thereunder and to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable, such administrative
decisions of the Board to be final and conclusive. Except to the extent
prohibited by applicable law, the Board may authorize any one or more of their
number or the Secretary or any other officer of the Company to execute and
deliver documents on behalf of the Board.
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Section 7. Nonstatutory Stock Option Awards to Non-employee Directors
(a) Eligibility. Non-employee Directors shall automatically be granted
Options under the Plan in the manner set forth in this Section 7 for no cash
consideration. A Non-employee Director may hold more than one Option under the
Plan in his or her capacity as a Non-employee Director of the Company, but only
on the terms and subject to the conditions set forth herein. All options granted
to Non-employee Directors pursuant to the Plan shall be nonstatutory stock
options which do not qualify for special tax treatment under Code Sections 421
or 422.
(b) Grant. On the first business day of January of each calendar year
beginning in January, 2001, each Non-employee Director at such time shall be
granted an Option to purchase three thousand (3,000) Shares under the Plan (the
"Option"). The price per Share of the Company's common stock which may be
purchased upon exercise of an Option shall be one hundred percent (100%) of the
Fair Market Value per Share on the date the Option is granted. Such exercise
price shall be subject to adjustment as provided in Section 11 hereof. The term
of each Option granted to a Non-employee Director shall be for ten (10) years
from the date of grant, unless terminated earlier pursuant to the provisions of
Section 9 hereof.
(c) Option Agreement. Each Option granted under the Plan shall be evidenced
by a written agreement in such form as the Board shall from time to time adopt.
Each agreement shall be subject to, and incorporate, by reference or otherwise,
the applicable terms of the Plan.
(d) Option Period. No Option shall be granted under the Plan after the
tenth anniversary of the effective date of the Plan. However, the term of any
Option theretofore granted may extend beyond such date. Options shall
automatically be granted to Non-employee Directors under the Plan only for so
long as the Plan remains in effect and a sufficient number of Shares are
available hereunder for the granting of such Options.
(e) Vesting. Except as otherwise provided in Section 9 hereof, an Option
cannot be exercised prior to the first anniversary of the date of grant and
thereafter may only be exercised with respect to twenty percent (20%) of the
Option Shares on and after the first anniversary of the date of grant, with
respect to forty percent (40%) of the Option Shares on a cumulative basis on and
after the second anniversary of the date of grant, with respect to sixty percent
(60%) of the Option Shares on a cumulative basis on and after the third
anniversary of the date of grant, with respect to eighty percent (80%) of the
Option Shares on a cumulative basis on and after the fourth anniversary of the
date of grant and in full on and after the fifth anniversary of the date of
grant.
Section 8. Exercise of Option
An Option may be exercised, subject to limitations on its exercise and the
provisions of Section 9, from time to time, only by (i) providing written notice
of intent to exercise the Option with respect to a specified number of Shares;
and (ii) payment in full to the Company of the exercise price at the time the
Option is exercised (except that, in the case of an
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exercise under paragraph (iii) below, payment may be made as soon as practicable
after the exercise). Payment of the exercise price may be made:
(i) in cash or by certified check,
(ii) by delivery to the Company of Shares which shall have been owned
for at least six (6) months and have a Fair Market Value per Share on the
date of surrender equal to the exercise price, or
(iii) by delivery (including by fax) to the Company or its designated
agent of a properly executed exercise notice together with irrevocable
instructions to a broker to sell or margin a sufficient portion of the
Option Shares and promptly deliver to the Company the sale or margin loan
proceeds required to pay the exercise price.
Section 9. Effect of Termination of Membership on the Board
The right to exercise an Option granted to a Non-employee Director shall be
limited as follows, provided the actual date of exercise is in no event after
the expiration of the term of the Option:
(a) If a Non-employee Director ceases being a director of the Company for
any reason other than the reason identified in subparagraph (b) of this Section
9, the Options become immediately exercisable upon such date of termination and
the Non-employee Director shall have the right to exercise the Options within
twenty-four (24) months after such termination without regard to the vesting
restrictions of Section 7(e), subject to the condition that no Option shall be
exercisable after the expiration of the term of the Option; and
(b) If a Non-employee Director ceases being a director of the Company due
to the director's voluntary decision to resign or voluntary decision not to
stand for reelection to the Board, in either case prior to reaching age 70, the
Non-employee Director may exercise the Options, to the extent they were
exercisable at the time of termination, for a period of three (3) months after
such termination of service, but in no event beyond the expiration of the term
of the Options.
Section 10. Transferability of Options
The Options and rights under the Options are not assignable, alienable,
saleable or transferable by a Non-employee Director otherwise than by will or by
the laws of descent and distribution, and may be exercised during the lifetime
of the Non-employee Director only by such individual or, if permissible under
applicable law, by such individual's guardian or legal representative, except
that a Non-employee Director may, to the extent allowed by the Board and in a
manner specified by the Board, (a) designate in writing a beneficiary to
exercise the Option after the Non-employee Director's death; and (b) transfer
any Option.
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Section 11. Capital Adjustment Provisions
In the event that the Board shall determine that any dividend or other
distribution (whether in the form of cash, Shares, other securities or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase or exchange
of Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event (individually referred to as "Event" and
collectively referred to as "Events") affects the Shares such that an adjustment
is determined by the Board to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Board may, in such manner as it may deem equitable,
adjust any or all of (i) the number and type of Shares subject to the Plan and
which thereafter may be made the subject of Options under the Plan; (ii) the
number and type of Shares subject to outstanding Options; and (iii) the exercise
price with respect to any Option (collectively referred to as "Adjustments");
provided, however, that Options subject to grant or previously granted to
Non-employee Directors under the Plan at the time of any such Event shall be
subject to only such Adjustments as shall be necessary to maintain the
proportionate interest of the Non-employee Directors and preserve, without
exceeding, the value of such Options
Section 12. Amendment and Termination of the Plan
The Plan shall terminate on December 11, 2010, unless sooner terminated as
herein provided. The Board may at any time amend, alter, suspend, discontinue or
terminate the Plan. Termination of the Plan shall not affect the rights of
Non-employee Directors with respect to Options previously granted to them, and
all unexpired Options shall continue in force and effect after termination of
the Plan, except as they may lapse or be terminated by their own terms and
conditions. Any amendment to the Plan shall become effective when adopted by the
Board, unless specified otherwise. Rights and obligations under any Option
granted before any amendment of this Plan shall not be materially and adversely
affected by amendment of the Plan, except with the consent of the person who
holds the Option, which consent may be obtained in any manner that the Board
deems appropriate.
Section 13. General Provisions
(a) Other Compensation. Nothing contained in the Plan shall prevent the
Company or any Affiliate from adopting or continuing in effect other or
additional compensation arrangements for Non-employee Directors, and such
arrangements may be either generally applicable or applicable only in specific
cases.
(b) Rights of Directors. The grant of an Option to a Non-employee Director
pursuant to the Plan shall confer no right on such Non-employee Director to
continue as a director of the Company. Except for rights accorded under the
Plan, Non-employee Directors shall have no rights as shareholders with respect
to Shares covered by any Option until the date of issuance of the stock
certificates to the Non-employee Director and only after such Shares are fully
paid. No adjustment will be made for dividends or other rights for which the
record date is prior to the date such stock is issued.
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(c) Securities Laws. Notwithstanding any other provision of the Plan, the
Company shall have no liability to deliver any Shares under the Plan or make any
other distribution of benefits under the Plan unless such delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933), and the applicable
requirements of any securities exchange or similar entity.
(d) Governing Law. The validity, construction and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the internal laws of the State of Wisconsin and applicable federal law.
(e) Miscellaneous. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision hereof.
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LACROSSE FOOTWEAR, INC.
2001 ANNUAL MEETING OF SHAREHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints George W. Schneider, Frank J. Uhler, Jr. and
Joseph P. Schneider, and each of them, as Proxies with the power of substitution
(to act jointly or if only one acts then by that one) and hereby authorizes them
to represent and to vote as designated below all of the shares of Common Stock
of LaCrosse Footwear, Inc. held of record by the undersigned on March 30, 2001,
at the annual meeting of shareholders to be held on May 24, 2001, or any
adjournment or postponement thereof.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted
"FOR" the election of the Board's nominees, "FOR" the approval of the LaCrosse
Footwear, Inc. 2001 Stock Incentive Plan and "FOR" the approval of the LaCrosse
Footwear, Inc. 2001 Non-Employee Director Stock Option Plan.
PLEASE DETACH BELOW, SIGN, DATE AND RETURN PROMPTLY USING THE ENVELOPE PROVIDED
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LACROSSE FOOTWEAR, INC. 2001 ANNUAL MEETING
1. ELECTION OF DIRECTORS: 1-George W. Schneider 2-Craig L. Leipold [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
Terms expiring at the 3-Joseph P. Schneider listed to the to vote for all
2004 Annual Meeting left (except as nominees listed
specified below). to the left.
---------------------------------
(Instructions: To withhold authority to vote for any indicated nominee, ->
write the number(s) of the nominee(s) in the box provided to the right.)
---------------------------------
2. TO APPROVE THE LACROSSE FOOTWEAR, INC. [ ] FOR [ ] AGAINST [ ] ABSTAIN
2001 STOCK INCENTIVE PLAN:
3. TO APPROVE THE LACROSSE FOOTWEAR, INC. [ ] FOR [ ] AGAINST [ ] ABSTAIN
2001 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN:
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED
TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING.
Date ______________________, 2001 NO. OF SHARES
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Check appropriate box Indicate changes below:
Address Change? [ ] Name Change? [ ]
----------------------------------
Signature(s) in Box
Please sign exactly as name appears
hereon. 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.