FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 1999.
Commission File Number: 0-24450
RAWLINGS SPORTING GOODS COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 43-1674348
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1859 Intertech Drive, Fenton, Missouri 63026
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (636) 349-3500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.
Yes X No _______
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting Common Stock held
by nonaffiliates of the registrant as of October 31, 1999 was
$74,093,953.
The number of shares of the registrant's Common Stock, $.01
par value, outstanding as of October 31, 1999 was 7,903,355.
DOCUMENTS INCORPORATED BY REFERENCE
There are no documents incorporated by reference herein.
AMENDMENT
The primary purpose of this Amendment is to provide
information required by Items 10, 11, 12 and 13 of Part III of
this report which the registrant intended to incorporate by
reference from the registrant's proxy statement for the annual
meeting of stockholders. In addition this Amendment provides
Exhibits 10.1.4-6 and Exhibit 10.16 that were inadvertently
omitted from the registrant's original filing of Form 10-K on
December 14, 1999.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) IDENTIFICATION OF DIRECTORS
TERM EXPIRES
AT ANNUAL
MEETING OF
STOCKHOLDERS
FOLLOWING THE
SERVED AS FISCAL YEAR
NAME, AGE AND DIRECTOR ENDING
PRINCIPAL OCCUPATION SINCE AUGUST 31,
CHARLES L. JARVIE, 62 1998 2002
President and director of
Host Communications, Inc.
since 1993; director of
Chase Bank of Texas,
Total Sports Manufacturing Co.
and Universal Sports America Co.
MICHAEL MCDONNELL, 60 1994 2002
President of West Union
Corporation, a holding company
for the distribution of hardware
and the manufacturing of building
products, since 1980; director of
National Commerce Bancorp.; part
owner of the St. Louis Cardinals
Major League Baseball team since 1996.
MICHAEL J. ROARTY, 71 1994 2002
Consultant to Anheuser-Busch
Companies, Inc., a brewery,
from October 1994 until
October 1996; previously
Executive Vice President -
Marketing of Anheuser-Busch
Companies, Inc.
ANDREW N. BAUR, 55 1994 2000
Chairman of Mississippi Valley
Bancshares, a bank holding company,
and Chairman of Southwest Bank of
St. Louis, the bank subsidiary of
Mississippi Valley Bancshares, since
1984; Secretary and Treasurer of the
St. Louis Cardinals Major League
Baseball team since 1996.
STEPHEN M. O'HARA, 44 1998 2000
Chairman of the Board and
Chief Executive Officer of the
Company since November 2, 1998;
previously since 1994 President of
Specialty Catalog Corp., a direct
marketer targeting niche
consumer products.
ROBERT S. PRATHER, JR., 55 1998 2000
President and Chief Executive
Officer of Bull Run Corporation
since 1992; director of Gray
Communications Systems, Inc.
since 1993 and interim Executive
Vice President-Acquisitions since
1996; Chairman of the Board of
Phoenix Corporation, a steel service
center, from 1980 to 1992.
LINDA L. GRIGGS, 50 1996 2001
Partner in the Business and
Finance Section of the law firm of
Morgan, Lewis & Bockius LLP.
WILLIAM C. ROBINSON, 49 1994 2001
President of The Treehouse
Florida Fancy, Inc. since 1990;
a consultant to F.W. Woolworth
Co. from 1988 to 1990; President
and Chief Executive Officer of
Robby's Sports, a 49 store sporting
goods retail chain, from 1973 to 1988.
(b) IDENTIFICATION OF EXECUTIVE OFFICERS
Information with respect to the executive officers of the
Company is set forth under the caption "Executive Officers of the
Registrant" contained in Part I, Item 1 of this report, which
information is incorporated herein by reference.
(c) COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") requires the Company's directors and
executive officers, and persons who own more than 10% of the
Company's outstanding Common Stock, to file with the Securities
and Exchange Commission initial reports of ownership and reports
of changes in ownership in the Company's Common Stock and other
equity securities. In addition, under Section 16(a), a director,
executive officer or 10% stockholder who is a trustee and has a
pecuniary interest (such interest includes situations where a
member of the trustee's immediate family is a beneficiary of the
trust) in any holding or transaction in the Company's securities
held by the trust, must report the holding or transaction
on the trustee's individual form. Securities and Exchange
Commission regulations require directors, executive officers,
greater than 10% stockholders and reporting trusts to furnish the
Company with copies of all Section 16(a) reports they file.
Except as described below, to the Company's knowledge, based
solely on a review of the copies of such reports furnished to the
Company and written representations that no other reports were
required, during the fiscal year ended August 31, 1999, all
Section 16(a) filing requirements applicable to the directors,
executive officers and greater than 10% stockholders were met.
Through a record-keeping error at the Company, one Report on Form
5 of one exempt grant of shares of Common Stock in lieu of
directors' fees pursuant to the Directors' Plan was not timely
filed on behalf of each of Messrs. Andrew N. Bauer, Charles L.
Jarvie, Michael McDonnell, Robert S. Prather, Jr. and Michael J.
Roarty, directors of the Company, one Report on Form 3 was not
timely filed on behalf of each of Messrs. Stanley W. Morrison,
Stephen M. O'Hara and Rexford K. Peterson, each executive
officers of the Company and one Report on Form 4 was not timely
filed on behalf of Mr. J. Michael Thompson, an executive officer
of the Company, reflecting the sale of shares of Common Stock by
his wife.
ITEM 11. EXECUTIVE COMPENSATION.
COMPENSATION OF DIRECTORS
The Company's Directors, except for those who are also
employees of the Company, receive an annual retainer fee of
$15,000 for service as a Director. In addition, each
non-employee Director receives meeting attendance fees of $1,000
per meeting for special Board meetings or Committee meetings not
held in conjunction with a regular Board meeting. In 1999, the
directors elected to receive in lieu of cash payment of their
directors' fees a number of shares of Common Stock having a value
equal to the amount of the cash fees. The Company also
reimburses all of its Directors for their out-of-pocket expenses
incurred in the performance of their duties as Directors of the
Company.
Pursuant to the Rawlings Sporting Goods Company, Inc. 1994
Non-Employee Directors' Stock Plan (the "Directors' Plan"), the
non-employee Directors receive (i) a non-qualified stock option
having an exercise price equal to the fair market value on the
date of grant for 2,500 shares of the Common Stock upon their
initial election or appointment and, thereafter, a non-qualified
stock option for 1,000 shares of the Common Stock annually at the
date of the annual meeting, except that no more than one stock
option award may be granted to each non-employee Director in a
given calendar year, and (ii) the right to defer receipt of fees
in cash, and receive instead the right to delivery at a specified
future date of that number of shares of Common Stock having a
value at the time of deferral equal to the amount of cash
deferred.
EXECUTIVE COMPENSATION
BACKGROUND
The members of the Company's Compensation Committee during
the Company's fiscal year ended August 31, 1999, who are also
currently members of the Compensation Committee, were Michael
McDonnell, Michael J. Roarty, William C. Robinson and Charles L.
Jarvie.
Set forth below is the Compensation Committee's report on
executive compensation.
Notwithstanding anything to the contrary, the following
report of the Compensation Committee and the Performance
Graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this Report
into any filing under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, as
amended, except to the extent that the Company specifically
incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of
Directors is charged with the responsibility to administer
compensation programs for the Company's executives. To this end,
the Committee has established the following fundamental
philosophy for executive compensation:
An appropriate and significant portion of each
executive's total compensation should be performance-based
and linked to the creation of value for stockholders, and
Market practices and compensation levels must be
considered when establishing an appropriate program for
executives in order to assist the Company in attracting and
retaining high quality talent.
Pursuant to this philosophy, the Company's executive
compensation plans have been designed to remunerate executives
through three primary sources - base salary, annual cash
incentives and long-term equity-oriented incentives. The entire
program has been formulated so that the portion of an executive's
total compensation being derived from variable, performance-based
pay is greater at increasing levels of responsibilities.
Details regarding each of the primary facets of executive
compensation, along with a discussion of the awards made in
fiscal 1999, follows.
Base Salary
The Company targets salaries for executives at the median
(size-adjusted 50th percentile) of the competitive marketplace.
For purposes of each of the primary facets of compensation, the
competitive marketplace includes organizations of similar size in
the sporting goods industry.
In 1994, the Committee retained an independent, executive
compensation consultant. With the assistance of this consultant,
the Committee determined that salaries for the Company's
top executives needed to be increased to reflect the additional
duties and responsibilities resulting from the Company's spin-off
from Figgie. A multi-year process was implemented to move
salaries for these executives to market median levels within 2-3
years. Since the completion of that process, the Company has
increased salaries on an AD HOC basis, relying to a large extent
in the case of executives other than the Chief Executive Officer,
upon the recommendations of the Chief Executive Officer. The
salary increases depicted in the Summary Compensation Table
reflect this approach. Future increases to executive salaries
will be based on the Committee's discretionary evaluation of
Company and individual performance and increases occurring within
the marketplace.
Annual Cash Incentives
The Company maintains a management incentive plan whose
participants include certain management employees and all of the
Company's executives. The plan provides for the payment of
annual cash awards based upon the achievement of specified
Company goals and an evaluation of each executive's individual
performance.
Incentive opportunities are established for each executive
level at the beginning of each fiscal year, stated as a
percentage of base salary. These opportunities are set at levels
designed to approximate incentive opportunities for similar
positions within the competitive marketplace. Actual awards
earned are a function of the Company's performance; thus, actual
awards to the Company's executives may be below or above actual
median awards in the marketplace depending on how the Company
performs.
Annual incentives earned for fiscal 1999, as shown in the
Summary Compensation Table, reflect the Committee's evaluation of
the Company's performance against stated financial goals for
1999. As the Company did not achieve its planned goals
(primarily based on achievement of specified net income levels),
no incentive awards were granted.
Long-Term Equity-Based Compensation
The Company maintains a long-term incentive plan which
provides for the grant of stock-based incentive awards to certain
management employees and all of the Company's executives.
The Company utilizes nonqualified stock options granted at
fair market value as its primary long-term incentive. From time
to time, executives are granted stock options at levels
determined by the Committee based on a number of subjective
factors, including among other things, a general desire to
approximate median award levels within the competitive
marketplace. Since the executives derive no value from the
options unless the value of the Company's stock increase, these
awards support the Company's objective of linking executive
compensation to the creation of shareholder value.
Awards made to the Company's executives in fiscal 1999,
including the 263,850 options granted to Mr. O'Hara, are believed
to approximate the level of awards made to executives in similar
positions within the competitive marketplace.
Section 162(m)
In December 1995, the IRS finalized rules regarding the
deductibility of compensation under Internal Revenue Code Section
162(m). The rules state that compensation in excess of $1
million annually to any one executive will be non-deductible for
income tax purposes unless the compensation is "performance
based." At this point, none of the compensation paid by the
Company to its executives is non-deductible. The Committee will
monitor IRS rules and the Company's executive compensation
program to ensure, to the extent appropriate, that full
deductibility for such payments continues.
Michael J. Roarty William C. Robinson
Michael McDonnell Charles L. Jarvie
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As discussed above under "Compensation Committee Report,"
the Compensation Committee has general responsibility for the
establishment, direction and administration of all aspects of the
compensation policies and programs for the Company's executive
officers. During the fiscal year ended August 31, 1999, the
members of the Compensation Committee were Michael McDonnell,
Michael J. Roarty, William C. Robinson and Charles L. Jarvie.
None of the members of the Compensation Committee were, during
the fiscal year ended August 31, 1999, an officer or employee of
the Company or any of its subsidiaries, or otherwise were
formerly an officer of the Company or any of its subsidiaries.
SUMMARY OF COMPENSATION
The following table shows information concerning
compensation earned by or paid to the Company's Chief Executive
Officer and each of the four other most highly compensated
Executive Officers of the Company whose salary and bonus for the
twelve months ended August 31, 1999 exceeded $100,000. This
information is provided for the fiscal years ended August 31,
1999, 1998 and 1997.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
AWARDS
________________________________________________________
NAME AND PRINCIPAL ALL OTHER
POSITION SECURITIES COMPENSA-
FISCAL OTHER ANNUAL UNDERLYING TION (1)
YEAR SALARY BONUS COMPENSATION OPTIONS
Stephen M. O'Hara (2) 1999 229,167 0 86,759(3) 263,850 32,406
Chairman and
Chief Executive Officer
Howard B. Keene 1999 161,250 0 -- 15,000 4,691
President and 1998 206,072 8,126 -- 33,000 4,095
Chief Operating Officer 1997 154,500 11,133 -- 15,384 4,214
Rexford K. Peterson (4) 1999 187,436 0 26,013(5) 0 0
Chief Financial Officer
Stan W. Morrison (6) 1999 145,454 0 94,338 (7) 40,000 400
Executive Vice President
Sales and Marketing
Jonathan Hodgins (8) 1999 150,000 0 87,716(9) 15,000 3,375
Vice President 1998 144,892 0 -- 25,000 3,000
Marketing
(1) The amounts indicated reflect 401(k) Plan contributions by the
Company on behalf of executive officers O'Hara, Keene, Morrison
and Hodgins of $2,406, $4,691, $400 and $3,375, respectively and
$30,000 in premiums on a life insurance policy for Mr. O'Hara.
(2) Mr. O'Hara was selected as Chairman and Chief Executive Officer
on October 15, 1998.
(3) In connection with Mr. O'Hara's relocation from Massachusetts,
the Company paid $51,781 of relocation expenses (including
airfare and temporary accommodation expenses in St. Louis,
Missouri, real estate commissions and other costs associated
with the sale of Mr. O'Hara's home and an amount equal to one
month's salary for other relocation expenses). In
addition, the Company paid Mr. O'Hara $15,272, which amount
represents the amount recognized by Mr. O'Hara for tax purposes
in connection with the Company's payment of the above-referenced
relocation expenses.
(4) Mr. Rexford K. Peterson was selected as interim Chief Financial
Officer on April 1, 1999. Mr. Peterson resigned as Chief
Financial Officer as of October 14, 1999. Mr. Michael L.
Luetkemeyer was selected by the Board of Directors to succeed
Mr. Peterson.
(5) Mr. Peterson lived in Dallas, Texas while he served as interim
Chief Financial Officer. The Company reimbursed Mr. Peterson
$6,457 for his travel expenses and $13,802 for his living
expenses while working for the Company in St. Louis, Missouri.
(6) Mr. Morrison joined the company in October 1998.
(7) In connection with Mr. Morrison's relocation, the Company paid
$55,543 of relocation expenses (including airfare and temporary
accommodation expenses in St. Louis, Missouri, real estate
commissions and transaction associated costs and an amount equal
to one month's salary for other relocation expenses). In
addition, the Company paid Mr. Morrison $22,149, which amount
represents the amount recognized by Mr. Morrison for tax
purposes in connection with the Company's payment of the
above-referenced relocation expenses.
(8) Mr. Hodgins joined the Company in 1997.
(9) In connection with Mr. Hodgins' relocation from Canada, the
Company paid $46,998 of relocation expenses that included real
estate commissions on the sale of Mr. Hodgins' home as well as
airfare and temporary living expenses in St. Louis, Missouri.
In addition, the Company paid Mr. Hodgins $22,577, which amount
represents the amount recognized by Mr. Hodgins for tax purposes
in connection with the Company's payment of the above-referenced
relocation expenses.
STOCK OPTIONS
The following tables set forth certain information concerning
options granted during the fiscal year ended August 31, 1999 to the
Executive Officers named in the Summary Compensation Table and the
number and value of the unexercised options held by such persons on
August 31, 1999:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (1)
(a) (b) (c) (d) (e) (g) (h)
% OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARs
UNDERLYING GRANTED TO EXERCISE
NAME OPTION/ EMPLOYEES OR
SARs IN FISCAL BASE PRICE EXPIRATION
GRANTED (#) YEAR ($/Sh) DATE 5% ($) 10% ($)
Stephen M. O'Hara 50,000 (2) $10.00 11/2/2003 $138,141 $305,255
50,000 (2) $11.00 11/2/2003 $151,955 $335,781
50,000 (2) $12.00 11/2/2003 $165,769 $366,306
50,000 (2) $13.00 11/2/2003 $179,583 $396,832
50,000 (2) $14.00 11/2/2003 $193,397 $427,357
12,000 (3) $10.04 3/14/2004 $ 33,286 $ 73,554
1,850 (3) 65% $10.13 3/14/2004 $ 5,178 $ 11,441
Howard B. Keene 15,000 (4) 4% $ 8.875 4/9/2009 $ 83,722 $212,167
Stan W. Morrison 15,000 (4) $ 9.875 10/14/2008 $ 93,155 $236,073
25,000 (4) 6% $ 8.875 4/9/2009 $139,536 $353,612
Jonathan Hodgins 15,000 (4) 4% $ 8.875 4/9/2009 $ 83,722 $212,167
(1) The potential realizable value represents the amount each
Executive Officer might realize if the stock appreciates
annually at the assumed rates of 5% and 10% for the full period
of the options (10 years, except the options granted to Mr.
O'Hara which have a period of 5 years). The amounts represent
only hypothetical values and there can be no assurance that such
growth rates in stock price will be achieved. The actual amount
realized by each Executive Officer will be determined at the
time the options are exercised and will be based on the excess
of the fair market value of the stock at the time of exercise
over the exercise price.
(2) The options granted to Mr. O'Hara become exercisable in 20
percent increments on each of the date of grant and the first,
second, third and fourth anniversary dates of the date of grant,
November 2, 1998, subject to acceleration in the event of death
or disability of Mr. O'Hara, a change in control (as defined in
Mr. O'Hara's Employment Agreement with the Company) or as
otherwise determined by the Compensation Committee.
(3) The options have an exercise price equal to the market price on
the date of grant and become exercisable immediately upon grant.
(4) The options have an exercise price equal to the market price on
the date of grant and become exercisable as to one-third of the
initial number of underlying shares of Common Stock on each of
the first, second and third anniversaries of the date of grant,
subject to acceleration in the event of death or disability of
the optionee, a change in control (as defined in the Stock
Option Plan) or as otherwise determined by the Compensation
Committee.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION/SAR VALUES
(a) (b) (c) (d) (e)
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARs
SHARES OPTIONS/SARs AT AT
ACQUIRED VALUE FY-END (#) FY-END ($)
NAME ON REALIZED EXERCISABLE/ EXERCISABLE/
EXERCISE ($) UNEXERCISABLE UNEXERCISABLE
(#) (1)
Stephen M. O'Hara -0- -0- 113,850/150,000 0/0
Rexford K. Peterson -0- -0- 0/0 0/0
Howard B. Keene -0- -0- 84,745/37,000 5,347/6,563
Stan W. Morrison -0- -0- 0/35,000 0/10,938
Jonathan Hodgins -0- -0- 8,750/31,250 0/6,563
(1) The closing price of the Common Stock on the Nasdaq National
Market on August 31, 1999 was $9.3125 per share. Value is
calculated by determining the difference between the option
exercise price and $9.3125, multiplied by the number of shares
of Common Stock underlying the options.
RETIREMENT PLANS
All of the Executive Officers of Rawlings who were previously
employees of Figgie accrued retirement income credits under Figgie's
Retirement Income Plan II (the "Figgie Plan") until the date of the
initial public offering of the Company's shares (the "IPO"). Such
employees will receive, upon retirement, benefits accrued under the
Figgie Plan up until the date of the IPO. In connection with the
acquisition of the Rawlings Business from Figgie, each of the
Company's employees has been given credit for vesting and eligibility
to receive benefits under the Company's retirement plan for service
as an employee of Figgie. In return, Figgie has provided full
vesting under the Figgie Plan for all employees of Rawlings who were
previously employees of Figgie.
As of July 8, 1994, the date of the IPO, the amount of annual
benefits payable upon retirement under the Figgie Plan, including
accrued benefits from a prior plan which was terminated on November
21, 1988, to Mr. Keene who was an employee of Figgie is $9,372.
The Company has not adopted a retirement plan.
EMPLOYMENT AGREEMENT
Effective November 2, 1998, the Company entered into an
employment agreement with Stephen M. O'Hara which provides for (i) an
initial annual salary of $275,000, with an annual salary review and
adjustment by the Compensation Committee, (ii) an annual bonus of up
to 75% of salary, which will be based upon subjective and objective
criteria established by the Compensation Committee, (iii) the
issuance of stock options to purchase 250,000 shares of Common Stock
having the terms discussed below, (iv) severance benefits if his
employment with the Company is terminated under certain circumstances
following a change in control of the Company, (v) a termination
benefit, unless Mr. O'Hara is terminated for cause, as defined in the
employment agreement, equal to two times Mr. O'Hara's base salary at
the time of termination and the continuation of certain benefits for
a period of two years following such termination, provided that Mr.
O'Hara may not receive such termination benefit in the event of a
change in control of the Company for which Mr. O'Hara receives the
benefits described below under "Severance Agreements," (vi) a $2
million life insurance policy, (vii) an automobile allowance, and
(viii) certain relocation expenses and miscellaneous perquisites.
The stock options referred to above vest over a four year period
in 20% increments. The options that vest on the date of grant are
exercisable at a price per share equal to the current market price of
the Common Stock on October 30, 1998 ($10.00), and those vesting on
the second, third and fourth anniversaries are exercisable at $11.00,
$12.00, $13.00 and $14.00, respectively. In addition, for each share
of Common Stock purchased by Mr. O'Hara, up to the first 20,000
shares purchased annually, Mr. O'Hara shall receive pursuant to the
employment agreement the option to purchase two shares of Common
Stock at an exercise price equal to the price at which such shares of
Common Stock were purchased.
SEVERANCE AGREEMENTS
The Company has entered into severance agreements with each of
the Executive Officers named in the Summary Compensation Table
(except Mr. Peterson and Mr. Hodgins) which provide various
severance benefits to certain Executive Officers if
their employment with the Company is terminated under certain
circumstances following a change in control of the Company. The
agreements provide that a change in control of the Company is deemed
to have occurred if (i) a person acquires beneficial ownership of 20%
or more of the Company's voting stock, (ii) individuals who, at the
date of the agreement or the beginning of a two-year period
thereafter, constitute the Board of Directors, cease for any reason
to constitute a majority of the Board, (iii) the stockholders approve
a liquidation of the Company, a sale or disposition of all or
substantially all of the Company's assets, or a merger, consolidation
or reorganization of the Company other than one that would result in
(a) the holders of the Company's voting stock continuing to own
beneficially more than 50% of the outstanding stock of the resulting
corporation, (b) no person who did not own voting stock prior to the
transaction owning 20% or more of the outstanding stock of the
resulting corporation, and (c) at least a majority of the board of
directors of the resulting corporation being members of the Board of
Directors of the Company at the date the severance agreement was
signed or at the beginning of a two-year period thereafter that
precedes the corporate transaction, or (iv) the Board concludes that
the Executive Officer is entitled to the benefits because of the
occurrence, threat or imminence of an event with consequences similar
to the foregoing.
Each of the agreements provides for severance payments in the
event of termination of the Executive Officer's employment within a
specified period after a change in control of the Company (two and
one-half years for Mr. Keene and two years for other Executive
Officers), unless the Executive Officer's employment is terminated by
the Company or its successors for "cause" or "disability", because of
the Executive Officer's death or "retirement" or by the Executive
Officer's voluntary termination for other than "good reason", in each
case as such terms are defined in the agreements. The benefits
consist of the following: (a) an amount equal to (two and one-half
times for Mr. Keene and two times the highest base salary paid to
certain of the other Executive Officers) at any time up to the
termination of such Executive Officer's employment Mr. O'Hara is
equal to two times his base salary at the time of termination; (b)
salary and bonus (prorated assuming annual bonuses were paid at the
target level) to the date of termination (Mr. O'Hara would receive an
amount equal to his prior year's bonus); (c) medical, dental,
long-term disability and group term life insurance benefits for (two
and one-half years for Mr. Keene, one year for Mr. O'Hara, and two
years for other Executive Officers) if the Executive Officer makes
his or her required contribution; and (d) acceleration of the vesting
of all stock options. Under the Deficit Reduction Act of 1984,
severance payments that exceed a certain amount subject both the
Company and the Executive Officer to adverse U.S. federal tax
consequences. Each of the agreements provides that the Company shall
pay the Executive Officer (i) the severance benefits reduced to the
extent necessary to avoid an excise tax or (ii) unreduced severance
benefits if, after application of the excise tax, the severance
benefits would be greater than the severance benefits provided for in
clause (i) above.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder
return on an investment of $100 in the Common Stock on August 31,
1994 to August 31, 1999 with the cumulative total return over the
same period of (i) the Nasdaq Composite Market Index and (ii) the
Standard & Poor's Leisure Time Index and assumes dividend
reinvestment through the fiscal year ending August 31, 1999:
TOTAL STOCKHOLDER RETURN (6/30/94-8/31/99)
STOCK APPRECIATION AND DIVIDENDS
[graphical information omitted]
1994 1995 1996 1997 1998 1999
Rawlings $100.00 $ 76.00 $ 77.00 $ 85.00 $ 73.00 $ 75.00
Nasdaq Composite
Market Index $100.00 $133.00 $149.00 $207.00 $196.00 $378.00
S & P Leisure Time
(Products) Index $100.00 $118.00 $136.00 $171.00 $158.00 $141.00
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The stockholders named in the following table are the only
stockholders known to the Company to be the beneficial owners of five
percent (5%) or more of the Company's Common Stock as of November 17,
1999. For purposes of this table, the term "beneficial owner" means
any person who, directly or indirectly, has or shares the power to
vote, or to direct the voting of, a security or the power to dispose,
or to direct the disposition, of a security.
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNERS OWNERSHIP OF CLASS
First Pacific Advisors, Inc. 893,500(1) 11.3%
11400 West Olympic Boulevard, Suite 1200
Los Angeles, California 90064
Bull Run Corporation 806,500(2) 10.2%
4370 Peachtree Rd. NE
Atlanta, Georgia 30319
Samuel R. Shapiro 554,650(3) 7.0%
3060 Peachtree Rd. N.W., Suite 1555
Atlanta, Georgia 30305
(1) This amount, as reflected in an amended report on Schedule 13G
dated February 12, 1999, consists of no sole voting power,
shared voting power with respect to 368,500 shares, no sole
dispositive power and shared dispositive power with respect to
893,500 shares.
(2) This amount, as reflected in an amended report on Schedule 13D
dated July 9, 1999, does not include 925,804 shares of Common
Stock issuable to Bull Run Corporation upon exercise of a Common
Stock Purchase Warrant which is not currently exercisable.
Robert S. Prather, Jr. is the President and Chief Executive
Officer of Bull Run Corporation. Pursuant to a Standstill
Agreement, dated November 21, 1998, as amended, between the
Company and Bull Run Corporation, Bull Run Corporation is
entitled to select two nominees to the Board of Directors of the
Company. Mr. Prather and Charles L. Jarvie were selected by
Bull Run Corporation as its nominees and appointed to the Board
of Directors during the Company's fiscal year ended August 31,
1998.
(3) This amount is reflected in an amended report on Schedule 13D
dated November 17, 1999, filed jointly by Samuel R. Shapiro and
Shapiro Capital Management Company, Inc. ("Shapiro Capital").
The Schedule 13D reports that Mr. Shapiro is the president,
director and majority shareholder of Shapiro Capital. Mr.
Shapiro and Shapiro Capital shared voting and dispositive power
with respect to the entire amount of shares of Common Stock.
Shapiro Capital is an investment adviser under the Investment
Advisers Act of 1940, having authority to direct the investments
of its advisory clients.
STOCK OWNERSHIP OF DIRECTORS,
THE NOMINEES FOR DIRECTOR AND EXECUTIVE OFFICERS
The following table and notes thereto set forth information, as
of October 31, 1999, with respect to the beneficial ownership of
shares of Common Stock by each Director, each person nominated by the
Board for election to the Board of Directors and each Executive
Officer named in the Summary Compensation Table and by the Directors
and Executive Officers of the Company, as a group, based upon
information furnished to the Company by such persons:
AMOUNT OF BENEFICIAL OWNERSHIP
AS OF OCTOBER 31, 1999(1)
AMOUNT AND
NATURE OF
NAME OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
Andrew N. Baur (d) 24,607 (2) *
Linda L. Griggs (d) 4,253 (3) *
Jonathan Hodgins 12,202 (4) *
Charles L. Jarvie (d) 3,356 (5) *
Howard B. Keene 96,942 (6) 1.2%
Michael McDonnell (d) 79,709 (7) *
Stan W. Morrison 5,007 (8) *
Stephen M. O'Hara (d) 120,846 (9) 1.5%
Rexford K. Peterson 0 *
Robert S. Prather, Jr. (d) 812,056 (10) 10.3%
Michael J. Roarty (d) 16,128 (11) *
William C. Robinson (d) 37,628 (12) *
All Current Directors
and Executive
Officers as a Group
(14 persons) 1,294,338 16.4%
______________________________
(d) Director
* Less than 1%
(1) Each Director and Executive Officer owning shares listed or
included in this table exercises sole voting and dispositive
power over such shares, except as otherwise indicated in
footnotes (2) through (12). Included in the table are shares
underlying options that are exercisable within sixty days after
October 31, 1999.
(2) This amount includes 5,000 shares of Common Stock underlying
options granted under the Rawlings Sporting Goods Company, Inc.
Non-Employee Directors' Stock Plan ("Directors' Plan") and 6,607
shares of Common Stock Mr. Baur is entitled to receive in lieu
of directors' fees pursuant to the Directors' Plan.
(3) This amount includes 2,625 shares of Common Stock underlying
options granted under the Directors' Plan and 1,128 shares of
Common Stock Ms. Griggs is entitled to receive in lieu of
directors' fees pursuant to the Directors' Plan.
(4) This amount includes 11,667 shares of Common Stock underlying
options granted under the Stock Option Plan and 535 shares of
Common Stock beneficially owned under the 401(k) Plan as to
which Mr. Hodgins has sole voting and dispositive power.
(5) This amount includes 625 shares of Common Stock underlying
options granted under the Directors' Plan and 2,731 shares
of Common Stock Mr. Jarvie is entitled to receive in lieu of
directors' fees pursuant to the Directors' Plan.
(6) This amount includes 84,745 shares of Common Stock underlying
options granted under the Stock Option Plan and 12,197 shares
beneficially owned under the 401(k) Plan as to which Mr. Keene
has sole voting and dispositive power.
(7) This amount includes 5,000 shares of Common Stock underlying
options granted under the Director's Plan and 2,731 shares of
Common Stock Mr. McDonnell is entitled to receive in lieu of
directors' fees pursuant to the Directors' Plan.
(8) This amount includes 5,000 shares of Common Stock underlying
options granted under the Stock Option Plan, and 7 shares of
Common Stock beneficially owned under the 401(k) Plan as to
which Mr. Morrison has sole voting and dispositive power.
(9) This amount includes 113,850 shares of Common Stock underlying
options granted under the Rawlings Sporting Goods Company, Inc.
1994 Long-Term Incentive Plan (the "Stock Option Plan") and 71
shares beneficially owned under the Rawlings Sporting Goods
Company, Inc. Savings Plan (the "401(k) Plan") as to which Mr.
O'Hara has sole voting and dispositive power.
(10) This amount does not include Common Stock which may be purchased
by Bull Run Corporation pursuant to Common Stock Purchase
Warrants because such Warrants are not currently exercisable.
Mr. Prather is President and Chief Executive Officer of Bull Run
Corporation. This amount includes 625 shares of Common Stock
underlying options granted under the Director's Plan and 2,731
shares of Common Stock Mr. Prather is entitled to receive in
lieu of directors' fees pursuant to the Directors' Plan.
(11) This amount includes 5,000 shares of Common Stock underlying
options granted under the Directors' Plan and 1,128 shares of
Common Stock Mr. Roarty is entitled to receive in lieu of
directors' fees pursuant to the Directors' Plan.
(12) This amount includes 5,000 shares of Common Stock underlying
options granted under the Directors' Plan and 1,128 shares of
Common Stock Mr. Robinson is entitled to receive in lieu of
directors' fees pursuant to the Directors' Plan.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Mr. Baur is the Secretary and Treasurer of St. Louis Cardinals
L.P. During the fiscal year ended August 31, 1999, the Company sold
approximately $285,000 of product to St. Louis Cardinals L.P. The
Company believes that the terms and prices for the sale of these
products are no less favorable than those obtained from unaffiliated
parties.
Mr. Jarvie is the President and a director of Host
Communications, Inc. During the fiscal year ended August 31, 1999,
the Company purchased approximately $442,000 of catalogues and
promotional posters from Host Communications, Inc.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K.
(a) (1) Financial Statements: The financial statements filed
as a part of this report are listed in Part II, Item 8.
(a) (2) Financial Statement Schedules: None.
(a) (3) Exhibits
2.1 Asset Purchase Agreement, dated September 10,
1997 among Les Equipments Sportif Davtec, Inc.
USA Skate Corporation, California Pro Sports,
Inc., Rawlings Canada, Inc. and the Company,
included as Exhibit 2.1 to the Company's Form
8-K filed on October 21, 1997 is hereby
incorporated herein by reference.
3.1 Certificate of Incorporation, included as
Exhibit 3.1 to the Company's Registration
Statement on Form S-1 (File No. 33-77906), is
hereby incorporated herein by reference.
3.2 By-Laws, included as Exhibit 3.2 to the
Company's Registration Statement on Form S-1
(File No. 33-77906), is hereby incorporated
herein by reference.
3.3 By-Law amendment included as exhibit 3.3 to the
Company's Form 10-K for the fiscal year ended
August 31, 1996, is hereby incorporated herein
by reference.
4.1 Rights Agreement dated as of July 1, 1994
between the Company and Boatmen's Trust
Company as Rights Agent, included as Exhibit
4.1 to the Company's Form 10-Q for the quarter
ended June 30, 1994, is hereby incorporated
herein by reference.
4.2 Amendment of Rights Agreement dated November
21, 1997 between the Company, Boatmen's Trust
Company and ChaseMellon Shareholder Services,
Inc., included as Exhibit 4.2 to the Company's
Form 8-K dated November 21, 1997 is hereby
incorporated herein by reference.
4.2.1 Second Amendment to Rights Agreement, dated
April 19, 1999, between the Company and the
Rights Agent, included as Exhibit 4.1 to the
Company's Form 8-K dated April 30, 1999, is
hereby incorporated herein by reference.
4.2.2 Third Amendment to Rights Agreement, dated
April 23, 1999, between the Company and the
Rights Agent, included as Exhibit 4.2 to the
Company's Form 8-K dated April 30, 1999, is
hereby incorporated herein by reference.
4.3 Common Stock Purchase Warrant dated November
21, 1997 issued by the Company to Bull Run
Corporation included as Exhibit 4.1 to the
Company's Form 8-K dated November 21, 1997 is
hereby incorporated herein by reference.
10.1 Amended and Restated Credit Agreement dated as
of September 12, 1997 among the Company, The
First National Bank of Chicago, as agent, and
certain lenders named therein included as
Exhibit 99.1 to the Company's Form 8-K filed on
October 21, 1997 is hereby incorporated herein
by reference.
10.1.1 First Amendment to Amended and Restated Credit
Agreement dated May 31, 1998 by and among
Rawlings Sporting Goods Company, Inc., the
First National Bank of Chicago, as agent, and
certain lenders named therein included as
Exhibit 10 to the Company's Form 10-Q for the
quarter ended May 31, 1998, is hereby
incorporated herein by reference.
10.1.2 Amendment Number 2 to Amended and Restated
Credit Agreement by and between the Company
and the First National Bank of Chicago, as
agent and certain lenders named therein, dated
as of February 28, 1999 included as Exhibit
10.1 to the Company's Form 10-Q for the
quarter ended May 31, 1999, is hereby
incorporated herein by reference.
10.1.3 Amendment Number 3 to Amended and Restated
Credit Agreement by and between the Company
and the First National Bank of Chicago, as
agent and certain lenders named therein, dated
as of July 14, 1999 included as Exhibit 10.2
to the Company's Form 10-Q for the quarter
ended May 31, 1999, is hereby incorporated
herein by reference.
10.1.4 Amendment Number 4 to Amended and Restated
Credit Agreement by and between the Company
and First National Bank of Chicago, as agent
and certain lenders named therein, dated as of
August 11, 1999.
10.1.5 Amendment Number 5 to Amended and Restated
Credit Agreement by and between the Company
and the First National Bank of Chicago, as
agent and certain lenders named therein, dated
as of September 3, 1999.
10.1.6 Amendment Number 6 to Amended and Restated
Credit Agreement by and between the Company
and the First National Bank of Chicago, as
agent and certain lenders named therein, dated
as of September 30, 1999.
10.2 Assets Transfer Agreement dated as of July 8,
1994 by and among Figgie, Figgie Licensing
Corporation, Figgie International Real Estate,
Inc., Figgie Properties, Inc. and the Company,
included as Exhibit 10.1 to the Company's Form
10-Q for the quarter ended June 30, 1994, is
hereby incorporated herein by reference.
10.3 Transitional Services Agreement dated as of
July 8, 1994 between Figgie and the Company,
included as Exhibit 10.2 to the Company's Form
10-Q for the quarter ended June 30, 1994, is
hereby incorporated herein by reference.
10.4 Tax Sharing and Separation Agreement dated
July 8, 1994 between the Company and Figgie,
included as Exhibit 10.3 to the Company's Form
10-Q for the quarter ended June 30, 1994, is
hereby incorporated herein by reference.
* 10.5 The Company's 1994 Long-Term Incentive Plan,
included as Exhibit A to the Company's proxy
statement dated December 9, 1994, is hereby
incorporated herein by reference.
* 10.6 The Company's 1994 Non-Employee Directors'
Stock Plan, included as Exhibit B to the
Company's proxy statement dated December 9,
1994, is hereby incorporated herein by
reference.
10.7 Amendment Agreement between Rawlings Sporting
Goods Company and ASICS Corporation, dated
January 21, 1991, included as Exhibit 10.6 to
the Company's Registration Statement on Form
S-1 (File No. 33-77906), is hereby incorporated
herein by reference.
* 10.8 Form of Indemnity Agreement entered into with
Directors and executive officers, included as
Exhibit 10.7 to the Company's Form 10-K for
the fiscal year ended August 31, 1994, is
hereby incorporated herein by reference.
* 10.9 Form of Severance Agreement entered into with
executive officers included as Exhibit 10.8 to
the Company's Form 10-K for the year ended
August 31, 1995 is hereby incorporated herein
by reference.
10.10 Investment Purchase Agreement dated
November 21, 1997 between the Company and Bull
Run Corporation, included as Exhibit 99.1 to
the Company's Form 8-K dated November 21, 1997
is hereby incorporated herein by reference.
10.11 Standstill Agreement dated November 21, 1997
between the Company and Bull Run Corporation,
included as Exhibit 99.2 to the Company's Form
8-K dated November 21, 1997 is hereby
incorporated herein by reference.
10.11.1 Amendment Number 1 of Standstill Agreement
dated April 23, 1999, between the
Company and Bull Run Corporation included as
Exhibit 99.1 to the Company's Form 8-K dated
April 30, 1999, is hereby incorporated herein
by reference.
10.12 Registration Rights Agreement dated November
21, 1997 between the Company and Bull Run
Corporation, included as Exhibit 99.3 to the
Company's Form 8-K dated November 21, 1997 is
hereby incorporated herein by reference.
10.13 Pledge and Security Agreement by and between
the Company and the First National Bank of
Chicago, as agent and certain lenders named
therein, dated as of July 14, 1999 included as
Exhibit 10.3 to the Company's Form 10-Q for
the quarter ended May 31, 1999, is hereby
incorporated herein by reference.
10.14 Stock Pledge Agreement by and between the
Company and the First National Bank of
Chicago, as agent and certain lenders named
therein, dated as of July 14, 1999 included as
Exhibit 10.4 to the Company's Form 10-Q for
the quarter ended May 31, 1999, is hereby
incorporated herein by reference.
10.15 Intellectual Property Assignment of Security
Interest by and between the Company and the
First National Bank of Chicago, as agent and
certain lenders named therein, dated as of
July 14, 1999 included as Exhibit 10.5 to the
Company's Form 10-Q for the quarter ended May
31, 1999 is hereby incorporated herein by
reference.
* 10.16 Employment Agreement entered into between the
Company and Stephen M. O'Hara, dated as of
November 2, 1998.
10.17 Standstill Agreement, dated April 23, 1999
among the Company and the Shapiro Parties,
included as Exhibit 99.2 to the Company's Form
8-K dated April 30, 1999 is hereby
incorporated herein by reference.
21. Subsidiaries of the Company.
23. Consent of Arthur Andersen LLP.
27. Financial Data Schedule.
* Management contract or compensatory plan or arrangement required
to be filed as an exhibit pursuant to the Item 14(c) of this
report.
(b) REPORTS ON FORM 8K
On June 7, 1999, the Company filed a current report
regarding its voluntary recall of certain aluminum softball
bats.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
RAWLINGS SPORTING GOODS
COMPANY, INC.
Date: December 29, 1999 By: /s/Michael L. Luetkemeyer
Michael L. Luetkemeyer
Chief Financial Officer