SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by Registrant [x]
Filed by a Party other than Registrant[ ]
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 to S240.14a-11(c) or S240.14a-12
DIXON TICONDEROGA COMPANY
(Name of Registrant as Specified In Its Charter)
.
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[DIXON LETTERHEAD]
Notice of 1999 Annual Meeting of Stockholders
Fellow Stockholder:
You are cordially invited to attend the 1999 Dixon Ticonderoga Company
Annual Meeting of Stockholders to be held at 10:00 a.m., Eastern Standard Time
on March 12, 1999 at our executive offices at 195 International Parkway,
Heathrow, Florida, to:
- Elect two directors, each for a term of three years; and
- Conduct other business properly brought before the meeting.
Stockholders of record at the close of business on January 25, 1999 may
vote at the meeting.
Your vote is important. Whether you plan to attend or not, please sign,
date, and return the enclosed proxy card in the envelope provided. If you
attend the meeting and prefer to vote in person, you may do so.
I look forward to seeing you at the meeting.
February 12, 1999 Sincerely yours,
[insert signature]
Gino N. Pala
Chairman
<PAGE>
TABLE OF CONTENTS
Notice of Annual Meeting.................................................Cover
Information About the Annual Meeting and Voting..............................1
The Dixon Ticonderoga Company Board of Directors and Executive Officers......3
Dixon Ticonderoga Company Stock Owned by Officers and Directors..............7
Persons Owning More than Five Percent of Dixon Ticonderoga Company Stock.....8
Performance Graph............................................................9
Report of the Compensation Committee on Executive Compensation..............10
Executive Compensation Tables...............................................11
Other Matters...............................................................12
Section 16(a) Beneficial Ownership Reporting Compliance .................12
Stockholder Proposals for the 2000 Annual Meeting .......................12
Solicitation ............................................................13
Stockholder List ........................................................13
Independent Public Accountants ..........................................13
<PAGE>
PROXY STATEMENT
for
DIXON TICONDEROGA COMPANY
1999 Annual Meeting of Stockholders
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
General
We sent you this Proxy Statement and the enclosed proxy card because Dixon
Ticonderoga Company's Board of Directors is soliciting your proxy to vote at the
1999 Annual Meeting of Stockholders. This Proxy Statement summarizes the
information you need to know to vote intelligently at the Annual Meeting.
However, you do not need to attend the Annual Meeting to vote your shares.
Instead, you may simply complete, sign and return the enclosed proxy card.
We will begin sending this Proxy Statement, the attached Notice of Annual
Meeting and the enclosed proxy card on February 12, 1999 to all stockholders
entitled to vote. Stockholders who own Dixon Ticonderoga Company common stock
at the close of business on January 25, 1999 are entitled to vote. On this
record date, there were 3,439,967 shares of common stock outstanding. We are
also sending along with this Proxy Statement, the Company's Annual Report on
Form 10-K, which includes our financial statements.
Voting Methods
You can vote on matters to come before the meeting in two ways:
- You can come to the Annual Meeting and cast your vote there; or
- You can vote by signing and returning the enclosed proxy card. If you
do so, the individuals named on the card will vote your shares in the
manner you indicate.
Each share of common stock you own entitles you to one vote. Votes cast
by proxy or in person at the Annual Meeting will be tabulated by the Inspector
of Elections appointed for that purpose.
Giving Your Proxy to Someone Other than Individuals Designated on the Card
If you want to give your proxy to someone other than individuals noted on
the proxy card:
1
<PAGE>
- Cross out the names of those individuals and insert the name of the
individual you are authorizing to vote; or
- Provide a written authorization to the individual you are authorizing
to vote along with your proxy card.
The Quorum Requirement
A quorum of stockholders is necessary to hold a valid meeting. If at least
a majority of the Company's stockholders are present in person or by proxy, a
quorum will exist. Abstentions and broker non-votes are counted as present for
establishing a quorum. A broker non-vote occurs when a broker votes on some
matters on the proxy card but not on others because he does not have the
authority to do so.
Vote Necessary for Action
Directors are elected by a plurality vote of shares present at the meeting,
meaning that the director nominee with the most affirmative votes for a
particular slot is elected for that slot. In an uncontested election for
directors, the plurality requirement is not a factor. Other action is by an
affirmative vote of the majority of the shares present at the meeting.
Abstentions and non-votes have the effect of a no vote on matters other than
director elections.
Revocability of Proxy
If you give a proxy, you may revoke it at any time before it is exercised.
You may revoke your proxy in one of three ways:
- You may send in another proxy with a later date.
- You may notify the Company's Secretary in writing before the Annual
Meeting that you have revoked your proxy.
- You may vote in person at the Annual Meeting.
If you plan to attend the Annual Meeting and vote in person, we will give
you a ballot when you arrive. However, if your shares are held in the name of
your broker, bank or other nominee, you must bring an account statement or
letter from the nominee indicating that you are the beneficial owner of the
shares on January 25, 1999, the record date for voting.
Matters Raised at the Meeting not Included in this Statement
We do not know of any matters to be acted upon at the meeting other than
those discussed in this statement. If any other matter is presented, proxy
holders will vote on the matter in their discretion.
2
<PAGE>
THE DIXON TICONDEROGA COMPANY BOARD OF DIRECTORS
AND EXECUTIVE OFFICERS
Structure
Our Board of Directors consists of nine seats which are divided into three
classes for purposes of election. One class is elected at each annual meeting
of stockholders to serve for a three-year term.
At the 1999 Annual Meeting, the terms of two directors are expiring. One
of the Director seats in the class expiring at the Annual Meeting is vacant.
The Board has not nominated anyone to fill this seat, pending the selection of a
suitable candidate. Those directors nominated for election at this annual
meeting would hold office for a three-year term expiring in 2002. Other
directors are not up for election this year and will continue in office for the
remainder of their terms. One seat which will expire in 2001 is vacant. Under
the Company's Bylaws, the Board of Directors may fill vacancies in Board seats.
If a nominee is unavailable for election, proxy holders will vote for
another nominee proposed by the Board or, as an alternative, the Board may
reduce the number of directors to be elected at the meeting.
Directors Nominated This Year for Terms Expiring in 2002
HARVEY L. MASSEY, 57, President and Chief Executive Officer of Massey
Services, Inc. (pest control industry) since 1985.
PHILIP M. SHASTEEN, 49, attorney, stockholder and member of the Board of
Directors of Johnson, Blakely, Pope, Bokor, Ruppel & Burns, P.A. (law firm)
since 1992. Mr. Shasteen has been a director of the Company since 1986.
Your Board of Directors recommends a vote FOR these nominees.
Joseph R. Sadowski, a director of the Company since 1986, is not standing
for re-election. The Company wishes to thank Mr. Sadowski for his many years of
service on the Board.
Directors up for Election in 2000
BEN BERZIN, JR., 50, Senior Vice President, PNC Bank, N.A. (commercial
bank) since 1990. Mr. Berzin has been a director of the Company since 1994.
3
<PAGE>
KENT KRAMER, 54, Chief Executive Officer of Professional Sports Marketing,
Inc. (sports marketing) since 1992. Mr. Kramer has been a director of the
Company since 1997.
JOHN E. RAMONDO, 70, President and Chief Executive Officer, Power
Construction Consultants, Inc. (engineering/construction consulting), since
1993. Mr. Ramondo has been a director of the Company since 1986.
Directors up for Election in 2001
GINO N. PALA, 70, Chairman of the Board of Directors, President and Chief
Executive Officer of the Company since 1989. Mr. Pala has been a director of
the Company since 1978. Mr. Pala is the father-in-law of Mr. Joyce.
RICHARD F. JOYCE, 43, Vice Chairman of the Board of Directors, Executive
Vice President and Chief Legal Executive of the Company since 1991, and
President and Chief Operating Officer of the Company's Consumer Group since
1996. Mr. Joyce has been a director of the Company since 1982. Mr. Joyce is
the son-in-law of Mr. Pala.
One Board seat in this class is vacant.
Board Meetings and Committees
The Company's fiscal year runs from October 1 through September 30. In the
1998 fiscal year, our full Board met six times. In addition to meetings of the
full Board, directors attended meetings of individual Board committees and often
considered issues separate from these meetings. During the 1998 fiscal year,
Mr. Sadowski attended fewer than 75% of the Board and Compensation Committee
meetings.
Our Board has two standing committees.
The Audit Committee reviews management's independent accountant selection
and makes recommendations to the Board based on that review. The Committee also
questions management and independent accountants on the application of
accounting and reporting standards to Dixon Ticonderoga Company. Present
members of the Committee are Messrs. Ben Berzin, Jr. (Chairman), Philip M.
Shasteen, and Kent Kramer. During fiscal 1998, the Committee held three
meetings.
The Compensation Committee reviews Dixon Ticonderoga Company's compensation
practices and approves its compensation programs and plans. Present members of
the Committee are Messrs. John E. Ramondo (Chairman), Joseph R. Sadowski and
Philip M. Shasteen. During fiscal 1998, the Committee held two meetings.
Our Board does not have a nominating committee.
4
<PAGE>
Compensation Committee Interlocks and Insider Participation
No Compensation Committee members are or 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 in this Proxy
Statement.
Director Compensation
Of our current Board members, Messrs. Pala and Joyce are salaried employees
of Dixon Ticonderoga Company. Board members whom are not salaried employees of
Dixon Ticonderoga Company receive separate compensation for Board service. That
compensation includes:
Annual Retainer: $7,500
Attendance Fees: $400 for each Board meeting;
$450 for each Board Committee meeting;
Expenses related to attendance
Executive Officers
In addition to Messrs. Pala and Joyce, the following persons are executive
officers of the Company:
RICHARD A. ASTA, 42, Executive Vice President of Finance and Chief
Financial Officer of the Company since 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., 47, Executive Vice President, Industrial
Group of the Company, since March, 1996; Executive Vice President of
Manufacturing/Consumer Products Division from August, 1995 until March, 1996;
Senior Vice President of Manufacturing from February, 1993 until August, 1995;
Vice President of Manufacturing from March, 1990 until February, 1993.
Employment Agreements
The Company has an employment agreement with Mr. Pala which has a rolling
one-year term until the Company or Mr. Pala terminates it. Mr. Pala is to
receive base salary at a rate of not less than $200,000 per annum, subject to
increase from time to time in accordance with normal business practices of the
Company and, if so increased, the salary may not be decreased. Under the
agreement, Mr. Pala is also entitled to participate in other compensation
programs and other benefits of the Company.
5
<PAGE>
The Company may terminate Mr. Pala's employment for cause (as defined in
the Agreement), in which case the Company will pay Mr. Pala his full salary
through the date of termination. If the Company terminates the agreement other
than for cause or other than for Mr. Pala's disability, or if Mr. Pala
terminates the agreement for good reason (as defined in the agreement), Mr. Pala
will:
- Continue to receive his full salary through the date of termination;
- Receive an amount equal to the product of (i) his annual salary,
multiplied by (ii) the greater of the number of years remaining in the
term of employment under the agreement or the number two, such payment
to be made (a) if resulting from a termination based on a change of
control of the Company, in a lump sum on or before the fifth day
following the date of termination, or (b) if resulting from any other
cause, in substantially equal semi-monthly installments; and
- Receive a bonus in an amount determined by multiplying his base salary
by a percentage that is the average percentage of base salary that was
paid (or payable) to him as a bonus under any Company bonus plan or
arrangement, for the three full fiscal years of the Company
immediately preceding the termination.
The Company has entered into an employment agreement with Mr. Joyce which
is similar in its terms to the agreement the Company entered into with Mr. Pala,
except that Mr. Joyce's minimum salary is $130,000 per annum.
Certain Transactions
The Company has loans outstanding to Messrs. Pala, Joyce and Asta in the
principal amounts of $144,000, $89,000, and $87,000, respectively. The proceeds
of the loans were used by the borrowers to purchase common stock from the
Company at the time that they exercised stock options. At the time the shares
of common stock are sold, the loans must be repaid. Interest on the loans
accrues at the rate of 8% per annum.
6
<PAGE>
DIXON TICONDEROGA COMPANY STOCK
OWNED BY OFFICERS AND DIRECTORS
(As of December 31, 1998)
The following table shows, as of December 31, 1998, the Dixon Ticonderoga
Company common stock owned beneficially by the directors, nominees for directors
and executive officers of the Company.
<TABLE>
<S> <C> <C>
Amount and Nature Percentage of
Name of Beneficial Owner of Beneficial Voting Securities
Ownership
Gino N. Pala 802,445(1) 23.1%
Richard F. Joyce 59,585(2) 1.7%
John E. Ramondo 400 *
Joseph R. Sadowski 8,550 *
Philip M. Shasteen 9,969 *
Ben Berzin, Jr. 500 *
Kent Kramer 500 *
Harvey L. Massey - -
Richard A. Asta 46,645(3) 1.3%
Leonard D. Dahlberg, Jr. 15,594(4) *
----------
All directors and executive officers 944,188(5) 26.6%
as a group ==========
* Indicates ownership is less than 1%.
(1) Includes 521,170 shares owned by him over which he has sole voting and
investment power and 245,775 shares over which he has sole voting and
shared investment power only. In addition, includes an option to purchase
35,500 shares that can be exercised within the next sixty days.
(2) Includes options to purchase 36,250 shares that can be exercised within the
next sixty days. 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) Includes options to purchase 26,500 shares that can be exercised within the
next sixty days.
(4) Includes options to purchase 8,500 shares that can be exercised within the
next sixty days.
(5) Includes options to purchase 106,750 shares that can be exercised within
the next sixty days.
</TABLE>
7
<PAGE>
PERSONS OWNING MORE THAN FIVE PERCENT OF
DIXON TICONDEROGA COMPANY STOCK
(As of December 31, 1998)
The following table shows, as of December 31, 1998, all persons we know to
be "beneficial owners" of more than 5% of Dixon Ticonderoga Company common
stock.(1)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Total
Amount of Percent
Voting Authority Depositive Authority Beneficial of
Name and Address Sole Shareds Sole Shared Ownership Class
Gino N. Pala 766,945 -0- 521,170 245,775 802,445 23.1%
Hollybank 527,196 -0- 527,196 -0- 527,196 15.3%
Investments, LP
</TABLE>
(1) "Beneficial Ownership" is a technical term broadly defined by the SEC to
mean more than ownership in the usual sense. So, for example, you "beneficially
own" Company stock not only if you hold it directly, but also if you indirectly
(through a relationship, a position as a director or trustee, or a contract or
understanding), have (or share) the power to vote the stock, or to sell it, or
you have the right to acquire it within 60 days.
8
<PAGE>
PERFORMANCE GRAPH
The graph below compares the 5-year total return to stockholders for Dixon
Ticonderoga Company common stock with the comparable return of the two indexes
listed. The graph assumes that you invested $100 in Company common stock and in
each of the indexes on December 31, 1993. Points on the graph represent the
performance as of the last business day of the years indicated.
Comparison of Five Year Cumulative Total Stockholder
Return Among Dixon Ticonderoga Company, Russell 2000 and Peer Group
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
December 31, 1993 1994 1995 1996 1997 1998
Dixon Ticonderoga Company 100 159.18 126.53 124.49 210.20 151.02
Russell 2000 100 102.56 126.66 143.20 190.84 157.54
Peer Group 100 114.64 143.08 100.12 80.55 53.13
</TABLE>
9
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
Under the guidelines established by the Company's previously adopted
Management Incentive Program ("MIP"), the Committee evaluates the Company's
management 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 a
metric which measures creation of value for Company stockholders. The business
unit ratings are based primarily on a similar metric, profit performance, and
budgetary success. The personal performance can include such factors as meeting
set strategic planning goals and certain other key performance metrics.
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. Stock options may also be granted to key employees as part of the
Company's incentive program. During fiscal 1998, no stock options were granted
to executive officers of the Company.
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 1998, the Committee rated highly the Chief Executive Officer's role
in focusing the Company towards enhancing stockholder value, achieving corporate
earnings and his leadership in developing the Company's management structure and
succession to further carry out the Company's other strategic objectives. His
salary was increased for the first time since 1996 to $253,800 per annum. He
also received a bonus payment of $44,148 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
Philip M. Shasteen
10
<PAGE>
EXECUTIVE COMPENSATION TABLES
The tables on pages 11 and 12 show salaries and bonuses paid during the
last three fiscal years and aggregate options exercised in fiscal 1998 for the
Chief Executive Officer and the Company's other executive officers. No options
were granted to executive officers in fiscal 1998.
Summary Compensation Table
<TABLE>
<S> <C> <C> <C> <C> <C>
Annual Long-Term
Compensation Compensation
Awards
Securities
Other Annual Underlying
Name and Principal Position Year Salary Bonus Compensation(1) Options (#)
Gino N. Pala 1998 $44,148 $79,471 -0-
President and 1997 $235,585 $81,013 $67,123 42,000
Chief Executive Officer 1996 $204,375 $43,100 $30,821 -0-
Richard F. Joyce 1998 $157,855 $25,738 $51,716 -0-
President and Chief Operating 1997 $150,625 $40,414 $39,840 75,000
Officer, Consumer Group and 1996 $141,700 $23,780 $32,554 -0-
Executive Vice President and
Chief Legal Executive
Richard A. Asta 1998 $154,872 $19,414 $41,596 -0-
Executive Vice President 1997 $147,373 $38,897 $35,370 36,000
of Finance and 1996 $141,110 $23,367 $21,353 -0-
Chief Financial Officer
Leonard D. Dahlberg, Jr. 1998 $117,875 $ 4,829 $19,379 -0-
Executive Vice President, 1997 $110,000 $14,850 $24,960 20,000
Industrial Group 1996 $ 97,665 $12,077 $19,826 -0-
</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, directors fees and perquisites
(including personal and non-plan benefits).
11
<PAGE>
Aggregated Option Exercises in Fiscal 1998 and
Fiscal 1998 Year-End Option Values
<TABLE>
<S> <C> <C> <C> <C> <C>
Number of Securities Value of Unexercised In-the
Underlying Unexercised Money Options at Fiscal
Options at Fiscal Year-End Year-End (1)
Shares
Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Gino N. Pala 10,250 $35,812 35,500 31,500 $38,312 $11,812
Richard F. Joyce 5,125 $17,906 36,250 56,250 $36,718 $21,094
Richard A. Asta 5,125 $10,797 26,500 27,000 $33,062 $10,125
Leonard D. Dahlberg, Jr. 2,000 $ 5,999 8,500 15,000 $ 7,812 $ 5,625
</TABLE>
(1) Calculated on the basis of the fair market value of the underlying common
stock at fiscal year-end minus the exercise price. "In-the-money" stock
options are options for which the exercise price is less than the market
price of the underlying common stock on a particular date.
OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance
Based upon a review of our records, all reports required to be filed
pursuant to Section 16(a) of the Exchange Act were filed on a timely basis.
Stockholder Proposals for the 2000 Annual Meeting
If you want to submit proposals pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934 for possible inclusion in the Company's 2000 Proxy
Statement, you must do so on or before October 17, 1999. Notice to the Company
of a stockholder proposal submitted other than pursuant to Rule 14a-8 will be
considered untimely, and you may not be bring it before the 2000 Annual Meeting,
if we receive it after December 29, 1999.
12
<PAGE>
Solicitation
The Company is soliciting this proxy at its expense on behalf of its Board
of Directors. This solicitation is being made by mail but also may be made by
telephone or in person.
Stockholder List
A stockholder list will be available for your examination during normal
business hours at the Company's executive offices at 195 International Parkway,
Heathrow, FL 32746, at least ten days prior to the annual meeting.
Independent Public Accountants
Based on a recommendation from the Company's Audit Committee, the Board of
Directors of the Company has selected PriceWaterhouseCoopers to serve as the
Company's auditor for the 1999 fiscal year. Representatives of
PriceWaterhouseCoopers will be in attendance at the Annual Meeting 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
stockholders.
99904/#33240
1/26/99 1:22 PM
13
