<PAGE> 1
DIXON TICONDEROGA COMPANY
195 International Parkway
Heathrow, Florida 32746
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 6, 1998
To the Shareholders of
DIXON TICONDEROGA COMPANY
Notice is hereby given that the Annual Meeting of Shareholders of DIXON
TICONDEROGA COMPANY a Delaware corporation (hereinafter called the "Company"),
will be held at 195 International Parkway, Heathrow, Florida, 32746 on March 6,
1998 at 11:00 a.m., for the following purposes:
(1) To elect two Directors for a three-year term.
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
In accordance with the By-Laws of the Company, the Board of Directors has
fixed the close of business on January 6, 1998 as the record date for the
determination of shareholders entitled to notice of, and to vote at such meeting
or any adjournment thereof.
By Order of the Board of Directors,
Laura Hemmings
Secretary
Heathrow, Florida
February 3, 1998
YOUR VOTE IS IMPORTANT
All shareholders are cordially invited to attend the meeting. Whether or not
you plan to attend in person, you are urged to mark, date and sign the enclosed
proxy and return it promptly in the envelope provided. This will assure your
representation at the meeting. If you do attend the meeting in person, you may
revoke your proxy by giving written notice of its revocation to the Secretary of
the meeting before the proxy is voted or by casting your vote in person.
<PAGE>
<PAGE> 2
DIXON TICONDEROGA COMPANY
195 International Parkway, Heathrow, Florida 32746
PROXY STATEMENT
The enclosed proxy statement is solicited on behalf of the Board of
Directors of Dixon Ticonderoga Company (hereinafter the "Company") for use at
the Annual Meeting of Shareholders to be held at the time, place and for the
purposes set forth in the accompanying Notice of Annual Meeting or at any
adjournment thereof. If the enclosed proxy card is executed and returned by a
shareholder, it nevertheless may be revoked at any time before it has been
voted. Abstentions and broker non-votes will be counted only for the purpose
of determining the existence of a quorum.
The shares represented at the meeting by the enclosed proxy will be voted
as marked on all matters to be acted upon at the meeting. Only shareholders of
record at the close of business on January 6, 1998 will be entitled to vote at
the meeting. The outstanding voting shares of the Company at the close of
business on January 6, 1998 consisted of 3,731,277 shares of the Common Stock
and each such share is entitled to one vote. Shareholders do not have
cumulative voting rights. On the record date there were 3,731,277 shares of the
Company's Common Stock outstanding and entitled to vote. A majority of the
shares entitled to vote, present in person or represented by proxy,
constitutes a quorum at the meeting.
The mailing of this Proxy Statement, together with the Company's Annual
Report on Form 10-K for fiscal year ended September 30, 1997, commenced on
February 3, 1998.
<PAGE>
<PAGE> 3
MAJOR STOCKHOLDERS
The only stockholders known by the Company to own beneficially more than
5% of the shares of common stock outstanding as of December 15, 1997, are as
follows:
Shares of Stock Percentage
Name & Address Nature of Beneficial Beneficially of Voting
Beneficial Owner Ownership Owned Securities
Gino N. Pala Sole Voting &
195 International Pkwy. Investment Power 524,570 15.5%
Heathrow, FL 32746 Sole Voting Power &
Shared Investment
Power 245,775 7.2%
Option 25,000 0.7%
Hollybank, Investments, L.P. Sole Voting &
One Financial Center Investment Power 371,700 11.0%
Suite 1600
Boston, MA 02111
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of December 15, 1997, the number of
shares of the Company's voting securities owned beneficially to the knowledge
of the Company by each director and by all executive officers and directors of
the Company as a group. All shares are subject to the person's sole voting and
investment power except where otherwise indicated.
Name of Amount and Nature of Percentage of
Beneficial Owner Beneficial Ownership Voting Securities
Gino N. Pala 795,345(1) 23.4%
Richard F. Joyce 34,435(2) 1.0%
John E. Ramondo 400 *
Joseph R. Sadowski 8,550 *
Philip M. Shasteen 9,969 *
Ben Berzin, Jr. 500 *
Kent Kramer 500 *
Richard Asta 32,645 (3) *
Richard H. D'Antonio 6,720 (4) *
Leonard D. Dahlberg, Jr. 9,594 (5) *
All Executive Officers and
Directors as a Group
(13 Persons) 924,637(6) 26.8%
- -------------------
* Indicates ownership is less than 1%.
<PAGE>
<PAGE> 4
(1) This includes 524,570 shares owned by him over which he has full voting
and investment power and 245,775 shares over which he has sole voting and shared
investment power only. In addition, this includes an option to purchase 25,000
shares that can be exercised within the next sixty days.
(2) This includes options to purchase 15,000 shares that can be exercised
within the next sixty days. This does not include an irrevocable trust having
97,420 shares for which Deborah Joyce (daughter of Gino N. Pala and spouse of
Richard F. Joyce) acts as Trustee.
(3) This includes options to purchase 16,750 shares that can be exercised
within the next sixty days.
(4) This includes options to purchase 6,500 shares that can be exercised within
the next sixty days.
(5) This includes options to purchase 4,000 shares that can be exercised within
the next sixty days.
(6) This includes options to purchase 78,750 shares that can be exercised
within the next sixty days.
<PAGE>
<PAGE> 5
ELECTION OF DIRECTORS
The Certificate of Incorporation of the Company provides that the members
of Dixon Ticonderoga Company Board of Directors shall be divided into three
classes, as nearly equal in number as possible, each of which is to serve for
three years, with one class being elected each year. The terms of the Directors
in Class I expire with this Annual Meeting. Currently eight members are seated
on the Board of Directors. Certain seats within the three classes remain
vacant. Directors are elected by plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to vote on the
election of directors.
Unless authority with respect thereto is withheld in the proxy, it is the
intention of the persons named as proxies in the enclosed proxy card to vote for
the election as directors the nominees named below to serve as directors until
their respective terms expire and until their successors shall have been elected
and qualified. In the event that any nominee shall become unable or unwilling
to serve as a director, the proxies named in the enclosed proxy card intend to
vote for such other person as they deem proper. The Board of Directors knows of
no reason why any nominee will be unable or unwilling to serve as a director.
The Company has not nominated a person to fill the board seat of one Class
I Director whose term expires at the annual meeting to be held on March 6, 1998
because it has not completed it's search for a suitable replacement. Proxies
cannot be voted for a greater number of persons that the number of nominees
named.
Shareholders may vote for, or withhold their vote from, the entire slate
of nominees by marking the appropriate box on the proxy card. Shareholders may
withhold their votes from any particular nominee by writing that nominee's name
in the place indicated on the proxy card.
At the 1997 Annual Meeting of Shareholders 95.7% of the Common Shares were
present in person or by proxy and the percentage of total shares cast for and
withheld from the vote for each nominee is shown in the following table:
Percentage
Withholding
Nominee Percentage For Authority
John E. Ramondo 89.7% 6.0%
Kent Kramer 89.7% 6.0%
Ben Berzin, Jr. 89.2% 6.5%
<PAGE>
<PAGE> 6
DIRECTORS WHO ARE NOMINATED FOR ELECTION
<TABLE>
<CAPTION>
Year First Class & Year
Became Principal Occupation or Employment During the Past Five In Which
Name Age Director Years and Directorships of Other Public Companies Term Expires
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gino N. Pala 69 1978 Chairman of the Board of the Company since February, 1989; Class I
(Father-in-law of President Chief Executive Officer since July 1985. 1998
Richard F. Joyce)
Richard F. Joyce 42 1982 Vice Chairman of the Board since January, 1990; President and Chief Class I
(Son-in-law of Operating Officer, Consumer Group since March 1996; Executive Vice 1998
Gino N. Pala) President and Chief Legal Executive, since February 1991.
CONTINUING DIRECTORS WHOSE TERMS ARE NOT EXPIRING
Joseph R. Sadowski 66 1986 Retired Co-chairman, Atlas Energy Group, Inc., Coraopolis, PA, Class III
since December 1993. Founder and President, Atlas Energy Group, 1999
Inc., since 1971. (1)
Philip M. Shasteen 48 1986 Attorney/Shareholder, Johnson, Blakely, Pope, Ruppel Class III
& Burns, P.A., Tampa, FL, since August, 1992. (1) 1999
Kent Kramer 53 1997 Chief Executive Officer of Professional Sports Marketing, Inc., Class II
Dallas, TX, since November, 1996 (1) prior thereto President of 2000
Professional Sports Marketing, Inc., since 1985.
Ben Berzin, Jr. 49 1994 Senior Vice President, PNC Capital Recovery Corp. (formerly Class II
Midlantic Bank, N.A.), East Brunswick, NJ, since 1990. (1) 2000
John E. Ramondo 69 1986 President and CEO, Power Construction Consultants, Inc., (1) Class II
Bankston, AL; prior thereto Senior Vice President of 2000
Construction, Simco Corp.,(1) Brownsville, TN; prior
thereto Manager of Projects, Cogeneration Services, Inc. (1)
(a division of Kamine Development Corp.) Union, N.J. since 1990.
(1) Not parents, subsidiaries or other affiliates of the Company.
</TABLE>
<PAGE>
<PAGE> 7
MEETINGS AND COMMITTEES OF THE BOARD
For the fiscal year ending September 30, 1997, the Board of Directors of
the Company met five times, including the annual meeting of directors following
the 1997 Annual Meeting of Shareholders. No director attended less than
seventy-five percent (75%) of (a) the Board meetings or (b) the meetings of
all committees on which he serves held during fiscal year. Committee
appointments are reviewed by the Board in March each year. The Company does not
have a Nominating Committee.
Audit Committee
The Board of Directors has an Audit Committee currently composed of the
following directors: Ben Berzin Jr. (Chairman), Philip M. Shasteen and Kent
Kramer. The Audit Committee is primarily concerned with the effectiveness of
the Company's accounting policies and practices, financial reporting and
internal controls. Specifically, the Committee reviews and approves the scope
of the annual audit of the books and records of the Company and reviews the
findings and recommendations of the outside auditors on completion of the audit;
considers the organization, scope and adequacy of the Company's internal
controls function; monitors the extent to which the Company has implemented
changes recommended by the independent auditors or the Committee; and provides
oversight with respect to accounting principles employed in the Company's
financial reporting. The Committee, comprised entirely of non-employee
directors, met three times during the past fiscal year.
Compensation Committee
Compensation Committee Interlocks and Insider Participation
The Board of Directors has a Compensation Committee currently composed of
the following directors: John Ramondo (Chairman) Joseph R. Sadowski and Bobby
Brantley. The Compensation Committee is primarily concerned with the Company's
organization, salary and non-salary compensation and benefit programs. The
Committee also recommends to the Board of Directors annual salaries, bonus
programs and stock option plans covering the Chief Executive Officer. The
Committee met once during the past fiscal year. No Compensation Committee
members areor have been officers or employees of the Company and none had
interlocking relationships with any other entities, including any of the type
that would be required to be disclosed herein.
Board Compensation Committee Report on Executive Compensation
Under the guidelines established by the previously adopted Management
Incentive Program ("MIP"), the Committee evaluates Dixon Ticonderoga's manage-
ment employee performance. Factors which are considered under the MIP guidelines
include: corporate performance, business unit performance and personal
performance. The corporate performance rating is largely based upon the
Company's growth in earnings per share. The business unit ratings are based
primarily on profit performance, return on equity and budgetary success. The
personal performance can include such factors as meeting set strategic planning
goals and organizational and management development.
<PAGE>
<PAGE> 8
Under the MIP, incentive awards are made annually to key management
employees as determined by top corporate management and approved by the
Committee and include both cash and stock incentives. The objectives of the
MIP are to motivate and reward the accomplishment of corporate and business
unit annual objectives, reinforce a strong performance orientation and
provide a fully competitive compensation package which will attract, reward and
retain individuals of the highest quality. As a pay-for-performance plan, year-
end cash bonus awards are paid only upon the achievement of performance
objectives established for the fiscal year. Appropriate performance objectives
are established for each fiscal year in support of the Company's annual
strategic plan and a weighting is established for each component based on the
relative importance of each to the individual. Stock options may also be
granted to key employees as part of the Company's incentive program.
The Committee meets annually to evaluate the Chief Executive Officer's
performance and reports on that evaluation to the independent directors of the
Board. In 1997, the Committee rated highly the Chief Executive Officer's role
in enhancing shareholder value, raising corporate earnings and his leadership
in developing the Company's management structure and succession and further
carrying out the Company's other strategic objectives. The Chief Executive
Officer's salary remained at $235,000 per annum and he received a bonus
payment of $81,013 under the Management Incentive Program discussed above.
The foregoing report is submitted by the members of the Compensation
Committee:
John E. Ramondo (Chairman)
Joseph R. Sadowski
Bobby Brantley
COMPENSATION OF DIRECTORS
Each non-employee director receives a retainer of $7,500.00 a year plus
$400.00 for each meeting of the Board of Directors he attends, and $450.00 for
each Committee meeting he attends. Officer-directors receive $350.00 for each
Board meeting attended. The Company also reimburses its directors for travel,
lodging and related expenses incurred in attending Board and committee meetings
and provides each director with liability insurance.
<PAGE>
<PAGE> 9
EXECUTIVE OFFICERS OF THE COMPANY
Name Age Title
---- --- -----
Gino N. Pala 69 Chairman of the Board since February, 1989;
President and Chief Executive Officer since
July, 1985.
Richard F. Joyce 42 Vice Chairman of the Board since January,
1990; President and Chief Operating Officer,
Consumer Group since March, 1996; Executive
Vice President and Chief Legal Executive since
February, 1991.
Richard A. Asta 41 Executive Vice President of Finance and Chief
Financial Officer since February, 1991. In
1996, Mr. Asta entered into a plea agreement
relating to his indictment in 1995 stemming
from his prior employment with the accounting
firm of Laventhol & Horwath and audits of a
client of that firm. In 1997, he was ordered
to make partial restitution and sentenced to
three years probation and community service.
Leonard D. Dahlberg, Jr. 46 Executive Vice President, Industrial Group,
since March, 1996; prior thereto Executive
Vice President of Manufacturing/Consumer
Products Division since August, 1995; prior there
to Senior Vice President of Manufacturing
since February, 1993; prior thereto Vice
President of Manufacturing since March, 1990.
Kenneth A. Baer 51 Vice President and Treasurer since January,
1991.
John Adornetto 56 Vice President and Corporate Controller since
January, 1991.
Richard H. D'Antonio 49 Senior Vice President and Chief Information
Officer since March, 1996; prior thereto Vice
President of Information Services since
October, 1993; prior thereto Principal of RHD
Consulting since May, 1990. RHD Consulting is
not a parent, subsidiary or other affiliate of
the Company.
Laura Hemmings 46 Corporate Secretary of the Company since
January, 1986.
<PAGE>
<PAGE> 10
EXECUTIVE COMPENSATION
To meet the goal of providing the shareholders a concise, comprehensive
overview of compensation awarded, earned or paid in the reporting period, the
Summary Compensation Table is presented below. The Summary Compensation Table
includes individual compensation information on the Chief Executive Officer and
four other most highly compensated executives, for services rendered in all
capacities during the fiscal years ended September 30, 1997, 1996 and 1995.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Securities
Underlying
ANNUAL COMPENSATION Options
Name/Title Year Salary Bonus Other(1) Granted
<S> <C> <C> <C> <C> <C>
Gino N. Pala 1997 $ 234,805 $81,013 $67,123 42,000
President and 1996 $ 204,375 $43,100 $30,821 -0-
Chief Executive Officer 1995 $ 200,000 $ -0- $53,581 10,000
Richard F. Joyce, 1997 $ 150,625 $40,414 $39,840 75,000-
President and Chief Operating 1996 $ 141,700 $23,780 $32,554 -0-
Officer, Consumer Group and 1995 $ 128,460 $ -0- $48,420 10,000
and Executive Vice President
and Chief Legal Executive
Richard A. Asta 1997 $ 147,373 $38,897 $35,370 36,000
Executive Vice President 1996 $ 141,110 $23,367 $21,353 -0-
of Finance and Chief 1995 $ 134,706 $ -0- $20,359 10,000
Financial Officer
Leonard D. Dahlberg, Jr. 1997 $ 110,000 $14,850 $24,960 20,000
Executive Vice President 1996 $ 97,665 $12,077 $19,826 -0-
Industrial Division 1995 $ 90,349 $ -0- $26,977 2,000
Richard H. D'Antonio 1997 $ 107,167 $19,800 $14,136 20,000
Senior Vice President, 1996 $ 99,083 $12,219 $ 7,740 2,000
Chief Information Officer 1995 $ 90,933 $ -0- $ 6,365 4,000
</TABLE>
(1) The totals in this column reflect the aggregate value of the Company
contributions under a modified 401(k) Thrift Plan, 401(k) Mirror Plan,
gain from the exercise of stock options and perquisites, (including
personal and non-plan benefits).
<PAGE>
<PAGE> 11
EMPLOYMENT AGREEMENTS
In March, 1995, the Company entered into employment agreements with the
Chief Executive Officer and the Executive Vice President and Chief Legal
Executive. The agreements provide for the continuation of salary and related
employee benefits for a period of 24 months following their termination of
employment under certain changes in control of the Company. In addition, all
options held by these officers would become immediately exercisable upon the
date of termination and remain exercisable for 90 days thereafter.
OUTSTANDING STOCK OPTIONS
The following table sets forth cumulative information concerning
outstanding options to purchase shares of the Company's Common Stock originally
granted prior to December 15, 1997. The options (except those made May 16,
1997) were granted pursuant to the 1988 Dixon Ticonderoga Company Executive
Stock Plan, as amended, (the "1988 Plan"). The 1988 Plan was amended again in
December 1996. The Dixon Ticonderoga Amended and Restated Stock Option Plan
("New Plan") was adopted by the Shareholders in 1997. The outstanding options
under the 1988 Plan vest 25% after one year; 25% after two years; and 50% after
three years, and remain exercisable for a period of three years from the date
of vesting. Under the New Plan, options vest on the same schedule but expire
five years from the date of vesting. All options expire three months after
termination of employment. At December 15, 1997, there were 519,495 options
outstanding and 100,927 shares available for future grants under the New Plan.
The New Plan provides for participation by officers or key management employees
of the Company or its subsidiaries. The following table discloses (for the Chief
Executive Officer and other named officers) the gain or "spread" that would be
realized if the options granted were exercised on the expiration date when the
Company's stock price had appreciated by the percentage levels indicated
annually from the market price on the date of the grant.
<PAGE>
<PAGE> 12
<TABLE>
OPTION GRANTS
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
% of Total Exercise Final Assumed Stock Assumed Stock
Options Options Granted of Base Expiration Appreciation Appreciation
Name and Title Granted (#) in Year of Grant Price ($/Sh) Date 5% ($) 10% ($)
Gino N. Pala 20,000 <F2> 20.0% $8.62 10/00 $ 49,996 $112,060
President and Chief 10,000 <F3> 10.6% $6.75 12/01 $ 19,575 $ 43,875
Executive Officer 42,000 <F5> 12.0% $8.87 05/05 $158,330 $371,422
Richard F. Joyce 10,000 <F2> 10.0% $8.62 10/00 $ 24,998 $ 56,030
President and Chief 10,000 <F3> 10.6% $6.75 12/01 $ 19,575 $ 43,875
Operating Officer-Consumer 75,000 <F5) 21.4% $8.87 05/05 $282,731 $663,254
Group and Executive Vice
President and Chief Legal
Executive-Corporate
Richard A. Asta 3,500 <F1> 7.6% $7.75 12/98 $ 7,866 $ 17,631
Executive Vice President 10,000 <F2> 10.0% $8.62 10/00 $ 24,998 $ 56,030
of Finance and Chief 10,000 <F3> 10.6% $6.75 12/0l $ 19,575 $ 43,875
Financial Officer 36,000 <F5> 10.3% $8.87 05/05 $135,711 $318,362
Leonard D. Dahlberg, Jr. 2,000 <F1> 4.3% $7.75 12/98 $ 4,495 $ 10,075
Executive Vice President 2,000 <F3> 2.0% $8.62 10/00 $ 5,000 $ 11,206
Industrial Group 2,000 <F4> 2.1% $6.75 12/01 $ 3,915 $ 8,775
20,000 <F5> 5.7% $8.87 05/05 $ 75,395 $176,868
Richard H. D'Antonio 2,000 <F2> 100.0% $6.12 02/00 $ 3,550 $ 7,956
Senior Vice President 2,000 <F3> 2.0% $8.62 10/00 $ 5,000 $ 11,206
Chief Information Officer 4,000 <F4> 4.2% $6.75 12/01 $ 7,830 $ 17,550
2,000 <F5> 11.8% $7.12 08/02 $ 4,130 $ 9,256
20,000 <F6> 5.7% $8.87 05/05 $ 75,395 $176,868
<F1> Granted December 18, 1992 under the 1988 Dixon Ticonderoga Company
Executive Stock Option Plan.
<F2> Granted October 21, 1994 under the 1988 Dixon Ticonderoga Company
Executive Stock Option Plan.
<F3> Granted December 15, 1995 under the 1988 Dixon Ticonderoga Company
Executive Stock Option Plan.
<F4> Granted August 28, 1996 under the 1988 Dixon Ticonderoga Company
Executive Stock Option Plan.
<F5> Granted May 16, 1997 under the New Plan.
</TABLE>
<PAGE>
<PAGE> 13
The following table presents individual grants of options that were made
exercised and/or expired during the last three fiscal years to each of the named
executives. This table also is intended to allow shareholders to ascertain the
number and size of option grants made during the last three years, as well as
options exercisable, and their value as of September 30, 1997.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST THREE FISCAL YEARS AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Options at Value of Options at
Fiscal Year-End (#) Fiscal Year-End ($)<F1>
Shares Acquired Value ------------------------- -------------------------
Name and Title on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Gino N. Pala 39,300 <F2> $70,740 -0-<F2> -0-<F2> $ -0- $ -0-
President and Chief 21,400 <F3> $55,980 -0-<F3> -0-<F3> $ -0- $ -0-
Executive Officer 5,250 <F4><F8> $30,188 -0-<F4> -0-<F4> $ -0- $ -0-
20,000<F6> -0-<F6> $85,000 $ -0-
5,000<F7> 5,000<F7> $30,625 $ 30,625
-0-<F10> 42,000<F10> $ -0- $168,000
Richard F. Joyce 15,000 <F3> $44,062 -0-<F3> -0-<F3> $ -0- $ -0-
President and Chief 2,625 <F4><F8> $15,094 -0-<F4> -0-<F4> $ -0- $ -0-
Operating Officer-Consumer 10,000<F6> -0-<F6> $42,500 $ -0-
Group and Executive Vice 5,000<F7> 5,000<F7> $30,625 $ 30,625
President and Chief Legal -0-<F10> 75,000<F10> $ -0- $300,000
Officer-Corporate
Richard A. Asta 15,000 <F3> $56,250 -0-<F3> -0-<F3> $ -0- $ -0-
Executive Vice President 875 <F4><F8> $ 4,484 1,750<F4> -0-<F4> $ 8,969 $ -0-
of Finance and Chief 10,000<F6> -0-<F6> $42,500 $ -0-
Financial Officer 5,000<F7> 5,000<F7> $30,625 $ 30,625
-0-<F10> 36,000<F10> $ -0- $144,000
Leonard D. Dahlberg, Jr. 16,376 <F2> $66,977 -0-<F2> -0-<F2> $ -0- $ -0-
Executive Vice President, 7,094 <F3> $25,336 -0- -0- $ -0- $ -0-
Industrial Group 500 <F4><F8> $ 3,438 1,000<F4> -0-<F4> $ 5,125 $ -0-
2,000<F6> -0-<F6> $ 8,510 $ -0-
1,000<F7> 1,000<F7> $ 6,125 $ 6,125
-0-<F10> 20,000<F10> -0- $80,100
Richard H. D'Antonio 2,000<F5> -0-<F5> $13,510 $21,562
Senior Vice President 2,000<F6> -0-<F6> $ 8,510 $60,000
Chief Information Officer 2,000<F7> 2,000<F7> $12,250 $12,250
500<F9> 1,500<F9> $ 2,878 $ 8,633
-0-<F10> 20,000<F10> -0- $80,100
<PAGE> 14
<F1> Closing price at fiscal year end was $12.875 per share.
<F2> Granted at $4.20 per share on July 28, 1986 under the 1979
Dixon Ticonderoga Company Executive Stock Option Plan.
<F3> Granted February 22, 1991 under the 1988 Dixon Ticonderoga
Company Executive Stock Option Plan.
<F4> Granted December 18, 1992 under the 1988 Dixon Ticonderoga
Company Executive Stock Option Plan.
<F5> Granted October 21, 1994 under the 1988 Dixon Ticonderoga
Company Executive Stock Option Plan.
<F6> Granted December 15, 1995 under the 1988 Dixon Ticonderoga
Company Executive Stock Option Plan.
<F7> An additional 1,750 options were allowed to expire for Gino N.
Pala, 875 options were allowed to expire for Richard F.
Joyce and Richard A. Asta and 500 options were allowed to expire
for Leonard Dahlberg.
<F8> Granted August 28, 1996 under the 1988 Dixon Ticonderoga
Company Executive Stock Option Plan.
<F9> Granted May 16, 1997 under the New Plan.
<PAGE>
<PAGE> 15
The following graph demonstrates a five-year comparison of cumulative
total returns based upon (1) the Company's fiscal year end and (2) an initial
investment of $100.00 in Company stock, as compared with the Russell 2000 Broad
Market Index and the Standard Industry Group of Listed Securities for Office
Equipment and Supplies.
</TABLE>
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
Dixon
Measurement Period Ticonderoga Industry Broad
(Fiscal Year Covered) Co. Index Market
------------------- ----------- -------- ------
1992 100 100 100
1993 122.50 111.55 133.16
1994 195.00 121.15 136.72
1995 155.00 155.34 168.67
1996 152.50 114.53 191.01
1997 257.50 105.82 254.35
EMPLOYEE 401(k) THRIFT PLAN
The Company adopted a 401(k) Thrift Plan effective January 1, 1985. The plan
permits domestic non-union employee contributions of up to 26% of salary; 16% of
which is tax deferred. The Company matches up to 50% of the first 8% providing
such match will be contributed from pre-federal income tax profit or accumulated
profits and the Company will contribute 3% of gross wages of all domestic non-
union employees regardless of profits or employee contributions. Certain tax
legislation enacted since 1985 has put further limitation on the tax deferral of
matching and employee contributions.
401(k) MIRROR PLAN
In April 1996, the Company adopted the Dixon Ticonderoga Company 410(k) Mirror
Plan for certain officers. The 401(k) Mirror Plan is a non-qualified plan for
federal income tax purposes. The Plan was created to provide similar benefits
to officers that had previously been available under the 401(k) Thrift Plan
discussed above, before limitations adopted under certain tax legislation.
<PAGE>
<PAGE> 16
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors, and persons who beneficially own more than ten percent
(10%) of the Company's stock, to file initial reports of ownership and reports
of changes in ownership with the Securities & Exchange Commission (SEC) and the
American Stock Exchange. Executive officers, directors and greater than ten
percent (10%) beneficial owners are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Executive Officers and Directors,
the Company believes that all Section 16(a) filing requirements applicable to
its Executive Officers, Directors and greater than ten percent (10%) beneficial
owners were complied with.
SHAREHOLDERS' RIGHTS PLAN
In March, 1995, the Company declared a dividend distribution of one
Preferred Stock Purchase Right on each share of Company common stock. Each
Right will entitle the holder to buy one-thousandth of a share of a new
series of preferred stock at a price of $30.00 per share. The Rights will be
exercisable only if a person or group (other than the Company's chairman,
Gino N. Pala, and his family members) acquires 20% or more of the outstanding
shares of common stock of the Company or announces a tender offer following
which it would hold 30% or more of such outstanding common stock. The Rights
entitle the holders other than the acquiring person to purchase Company common
stock having a market value of two times the exercise prices of the Right. If,
following the acquisition by a person or group of 20% or more of the Company's
outstanding shares of common stock, the Company were acquired in a merger or
other business combination, each Right would be exercisable for that number of
the acquiring company's shares of common stock having a market value of two
times the exercise prices of the Right.
The Company may redeem the Rights at one cent per Right at any time until
ten days following the occurrence of an event that causes the Rights to become
exercisable for common stock. The Rights expire in ten years.
INDEPENDENT PUBLIC ACCOUNTANTS
Based on a recommendation from the Audit Committee, the Board of Directors
of the Company has selected Coopers & Lybrand L.L.P. to serve as the Company's
auditor for the next fiscal year.
Representatives of Coopers & Lybrand L.L.P. will be in attendance at the
Annual Meeting of Shareholders and will have an opportunity to make a statement
if they so desire. Such representatives are expected to be available to respond
to appropriate questions from the shareholders.
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OTHER MATTERS WHICH MAY COME BEFORE THE MEETING
The Board of Directors is not at present aware of any other matters to be
brought before the meeting, except those incidental to the conduct of the
meeting. However, if any such matters should come before the meeting, the
persons appointed in the accompanying proxy intend to vote the shares
represented thereby in their discretion.
SHAREHOLDERS PROPOSALS
Any proposal that a shareholder may desire to have included in the
Company's proxy material for presentation at the next Annual Meeting must be
received at the Company's principal office on or prior to September 29, 1998.
SOLICITATION OF PROXIES AND EXPENSES THEREOF
It is presently contemplated that proxies will be solicited only by mail and,
possibly, by telephone, telegraph or personal calls by officers, directors or
regular employees of the Company. However, if the circumstances warrant, the
Company may retain the services of a proxy soliciting firm. Any expense
incurred in the solicitation of proxies, including the expenses of brokers and
other nominees in soliciting non-record owners and of any proxy soliciting firm
retained, will be borne by the Company.
COPIES OF FORM 10-K
The Company will provide without charge to each shareholder, upon written
request of such shareholder, a copy of the Company's Annual Report on Form
10-K, including the financial statements and the financial statement schedules,
required to be filed with the Securities and Exchange Commission pursuant to
Rule 13a-1 under the Securities Exchange Act of 1934 for the Company's most
recent fiscal year. Requests for such copies should be made to Laura Hemmings,
Secretary, Dixon Ticonderoga Company, 195 International Parkway, Heathrow,
Florida 32746.
By Order of the Board of Directors,
Laura Hemmings
Secretary
Heathrow, Florida
February 3, 1998
