NOTICE OF ANNUAL MEETINGS OF STOCKHOLDERS
March 22, 1996
To the Stockholders of
Escalade, Incorporated
You are hereby notified that the Annual Meeting of the Stockholders of
Escalade, Incorporated will be held at the offices of the Company, 817 Maxwell
Avenue, Evansville, Indiana, on April 26, 1996 at 1:30 P.M., local time, for the
following purposes:
1. To elect to the Board seven (7) Directors as set forth herein.
2. To approve the appointment of the firm Geo. S. Olive & Co.LLC, to
serve as independent auditors for the Company for the year 1996.
3. To transact such other business that may properly come before the
meeting or any adjournment thereof.
Stockholders of record at the close of business on March 1, 1996 will be
entitled to vote at the meeting.
All persons who find it convenient to do so are cordially invited to attend
the meeting in person. In any event, please sign, mark and return the Proxy
enclosed with this Notice at your earliest convenience.
By order of the Board of Directors
John R. Wilson
Vice President & Chief
Financial Officer
PROXY STATEMENT
The Board of Directors of Escalade, Incorporated (hereinafter referred
to as "Escalade" or the "Company"), 817 Maxwell Avenue, Evansville, Indiana
47717 ((812) 467-1200) is soliciting proxies the form of which is enclosed,
for the Annual Meeting of Stockholders to be held on April 26, 1996, at 1:30
p.m. local time. Each of 4,133,954 shares of common stock outstanding on
March 1, 1996 is entitled to one vote on all matters acted upon at the
meeting and only Stockholders of record on the books of the Company at the
close of business on March 1, 1996 will be entitled to vote at the meeting,
either in person or by proxy. The shares represented by all properly executed
proxies which are sent to the Company will be voted as designated and each
not designated will be voted affirmatively. Unless discretionary authority
is withheld, all other matters coming before the meeting will be voted
according to the best judgment of the proxies. Each person giving a proxy
may revoke it by giving notice to the Company in writing or in open meeting
at any time before it is voted. The proxy statement is being mailed to
shareholders on or about March 22, 1996.
The expense of soliciting proxies will be borne by the Company. Proxies
will be solicited principally by mail, but may also be solicited by Directors,
Officers, and other regular employees of the Company, who will receive no
compensation therefore in addition to their regular salaries. Bankers and
others who hold stock in trust will be asked to send proxy materials to the
beneficial owners of the stock, and the Company may reimburse them for their
expenses.
The Annual Report of the Company for the year of 1995 is being mailed to
you with this proxy statement, but such report and financial statements are
not a part of this proxy statement.
CERTAIN BENEFICIAL OWNERS
Under Rule 13(d) of the Securities Exchange Act of 1934, a beneficial
owner of a security is any person who directly or indirectly has or shares
voting power or investment power over such security. Such beneficial owner
under this definition needs not enjoy the economic benefit of such securities.
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock by its Executive Officers and by the
only stockholders deemed to be beneficial owners of 5% or more of the Common
Stock of the Company as of March 1, 1996.
<TABLE>
<CAPTION>
Title of Name and Address Amount and Nature Percentage
Class of Beneficial Owner of Ownership of Class
- -----------------------------------------------------------------------------------------
Executive Officers
<S> <C> <C> <C>
Common Stock Robert E. Griffin 546,625 (1) 13.2%
(1)
817 Maxwell Avenue
Evansville, Indiana 47717
Common Stock C. W. "Bill" Reed 93,044 (2) 2.3%
(2)
817 Maxwell Avenue
Evansville, Indiana 47717
Common Stock John R. Wilson 39,815 (3) 1.0%
(3)
817 Maxwell Avenue
Evansville, Indiana 47717
Other 5% Stockholders
Common Stock Lida M. Kinnicutt 234,395 5.7%
11 Highwood Road
Bloomfield, Connecticut 06002
Common Stock Andrew and Charmenz Guagenti 219,306 (4) 5.3%
(4)
216 Water Street
Newburgh, Indiana 47630
Common Stock Dimensional Fund 303,785 (5) 7.3%
(5)
Advisors, Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
<FN>
(1) Includes 8,050 shares held by his spouse. Mr. Griffin disclaims beneficial
ownership of those shares. Also, includes 672 shares held jointly with his
spouse and 6,900 shares issuable upon exercise of outstanding stock options.
(2) Includes 23,000 shares issuable upon the exercise of outstanding stock options.
(3) Includes 1,731 shares held by his spouse. Mr. Wilson disclaims beneficial
ownership of those shares. Also includes 17,250 shares issuable upon exercise
of outstanding stock options.
(4) Includes 165,527 shares owned by Mr. Guagenti directly and in his directed IRA
and 53,779 shares owned by Mrs. Guagenti directly in her directed IRA and as
Trustee. Mr.and Mrs. Guagenti each disclaims beneficial ownership of the shares
held by the other.
(5) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 303,785 shares of
Escalade, Incorporated common stock as of December 31, 1995, all of which
shares are held in portfolios of DFA Investment Dimensions Group, Inc., a
registered open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and the DFA
Participating Group Trust, investment vehicles for qualified employee benefit plans,
all of which Dimensional Fund Advisors, Inc. serves as investment manager.
Dimensional disclaims beneficial ownership of such shares.
The executive officers of the Company are as follows: Robert E. Griffin (age
61), Chairman and Chief Executive Officer, C.W. (Bill) Reed (age 49), President and
Chief Operating Officer, and John R. Wilson (age 54), Vice President and Chief
Financial Officer. The executive officers terms expire April 26, 1996.
</TABLE>
ITEM NO. 1
ELECTION OF DIRECTORS
The Board of Directors voted to set the size of the Board at seven members.
All persons proposed for election to the Board of Directors are presently
Directors. Those persons whose names are set forth below are standing for
re-election. The term of office of the Directors is until the next meeting of
the stockholders and until their successors are elected and qualified.
Information with respect to each of the Directors is set forth as follows:
<TABLE>
<CAPTION>
Shares of Common
Stock of the Company
Beneficially owned on
March 1, 1996
Name and Principal Occupation Director Percent of
During the Past Five Years Since (1) Age Number Class
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Yale A. Blanc-Consultant to Martin Yale 1972 74 37,512 (2) 0.9% (2)
Industries, Inc.(a subsidiary of the Company)
Gerald J. Fox - Private Investor, 1968 61 34,540 (4) 0.8%(4)
Senior Vice President of Oppenheimer & Co.,
Inc.in the Institutional Sales Department
from 1984 till 1992.(3)
Robert E. Griffin - Chairman and Chief 1973 61 546,625 (5) 13.2%(5)
Executive Officer of the Company since
March, 1994, Previously President and
Chief Executive Officer since 1976
Blaine E. Matthews, Jr. - Director and 1965 58 118,771 (6) 2.9%(6)
Corporate Secretary of Matthews 1812
House, Inc. since 1979, a mail order
supplier of cakes and food gifts. (3)
Robert D. Orr - Private Investor, 1992 78 126,350 (7) 3.1%(7)
Ambassador to Singapore from 1989
till 1992 and Governor of the State
of Indiana from 1981 till 1989
A. Graves Williams, Jr. - Private 1958 63 81,819 2.0%
Investor, President and Director
of The Irwin Company, Wilmington,
Ohio, a manufacturer of drill bits,
screwdrivers, measuring tapes and
similar tools, from 1978 till 1993. (3)
Keith P. Williams - President of 1982 68 106,944 (8) 2.6%(8)
Good Earth Tools, Inc.,Crystal City,
Missouri since 1964, a company special-
izing in wear-proofing with tungsten
carbide. (3)
<FN>
All (9) Directors and Executive Officers as a Group 1,185,420 28.7%
(1) On March 8, 1973 the Board of Directors of the Williams Manufacturing Company
became the Board of Directors of Escalade, Incorporated pursuant to an
Agreement and Plan of Reorganization under which the Williams Manufacturing
Company merged into Escalade. The nominees whose period began prior to 1973 were
directors of Williams since the dates shown.
(2) Includes 4,243 shares held by his spouse, Mr. Blanc disclaims beneficial
ownership of those shares.
(3) Mr. A. Graves Williams, Jr., Mr. Keith P. Williams, and Karen Williams Fox are
first cousins. Mr. Gerald J. Fox is married to Karen Williams Fox. Lida M.
Kinnicutt is the sister of Blaine E. Matthews, Jr. All such persons disclaim
beneficial ownership of shares held by any of the foregoing persons of whom he
or she is related.
(4) Does not include 184,585 shares held directly by Mr. Fox's spouse or 16,730
held indirectly by Mr. Fox as trustee for the benefit of Matthew Fox
and H. P. Korn. Mr. Fox disclaims beneficial ownership of those 201,315
shares.
(5) See note (1) under "Certain Beneficial Owners".
(6) Includes 1,750 shares held by his spouse and 1,200 shares in his children's
trusts. Mr. Matthews disclaims beneficial ownership of those shares.
(7) Includes 19,734 shares held by his spouse. Mr. Orr disclaims beneficial
ownership of those shares.
(8) Includes 3,829 shares held by his spouse. Mr. Williams disclaims beneficial
ownership of those shares.
While there is no reason to believe that any of the persons nominated will,
prior to the date of the meeting, refuse or be unable to accept the nomination,
should any person nominated so refuse or become unable to accept, it is the
intention of the persons named in the proxy to vote for such other person or persons
as the Directors recommend.
</TABLE>
BOARD OF DIRECTORS, ITS COMMITTEES, MEETINGS, AND FUNCTIONS
The Board of Directors of the Company consists of one member who is an
executive officer (Robert E. Griffin) and six non-employee members (Yale A.
Blanc, Gerald J. Fox, Blaine E. Matthews, Jr., Robert D. Orr, A. Graves
Williams, Jr., and Keith P. Williams).
During 1995 the Board of Directors had five meetings. All Directors
attended 100% of the meetings.
The Company has a standing Audit Committee of the Board of Directors. The
Audit Committee is composed of Blaine E. Matthews, Jr. and A. Graves Williams,
Jr. It held one meeting in 1995. The main functions performed by the Audit
Committee are to (1) review with the independent auditors their observations
on internal controls of the Company and the competency of financial accounting
personnel, (2) review with the chief accounting officer and independent
auditors, the accounting for specific items or transactions as well as
alternative accounting treatments and their effects on earnings, and (3)
recommend the firm of independent certified public accountants to be engaged
by the Company.
The Board of Directors has a Compensation Committee consisting of Gerald
J. Fox and A. Graves Williams, Jr. This committee met one time in 1995 to
review salaries and compensation levels within the Company. The Board of
Directors also has a Stock Option Committee consisting of A. Graves Williams,
Jr., Gerald J. Fox and Keith P. Williams. This committee did not meet during
1995 because the incentive stock option plan expired in 1994 and no option
awards were possible. The Board of Directors has no nominating committee.
To the best of the Company's knowledge, all of the Company's directors,
officers and 10% or more shareholders have timely filed with the Securities
and Exchange Commission all reports required to be so filed pursuant to
Section 16 of the Securities Exchange Act of 1934 for 1995.
EXECUTIVE COMPENSATION
Summary
The following table is a summary of the compensation paid by the Company
to Messrs. Griffin, Reed, and Wilson for the last three years.
<TABLE>
<CAPTION>
Annual
Compensation
Long Term
Compensation
Name and Other Annual Stock All Other
Principal Year Salary Bonus Compensation Options Compensation
Position $ $ $ (2) (# Shares) $ (3)
- --------- ---- ------------ ------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. 1993 112,231 101,732 26,302 6,000 57,576
Griffin 1994 115,538 44,183 28,769 ----- 6,998
Chairman, CEO 1995 116,816 44,872 31,468 ----- 134,735(4)
and Director
C.W."Bill" Reed
President and 1994 175,000 74,441 14,385 11,500 7,531
COO (5) 1995 179,900(1) 87,500 15,734 ------ 7,187
John R. Wilson 1993 71,230 42,996 9,824 6,000 5,266
Vice President 1994 74,539 29,456 10,745 5,750 5,479
and CFO 1995 74,014(1) 29,915 11,753 ----- 2,154
<FN>
(1) Of the amounts shown, the following was deferred pursuant to the Company's 401K
retirement plan; Mr. Griffin ($7,993), Mr.Reed ($9,239) and Mr. Wilson ($6,661). This
amount also includes directors fees for Mr. Griffin ($28,000).
(2) The amounts shown are the interest earned pursuant to the Company's deferred
compensation plan.
(3) In 1995, the amounts shown include the Company's contribution to the 401K
retirement plan; Mr. Griffin ($1,410), Mr. Reed ($6,731) and Mr. Wilson
($1,175) and the dollar value of the group term life insurance premiums paid
by the Company; Mr. Griffin ($1,725), Mr. Reed ($456) and Mr. Wilson ($979).
(4) This amount also includes the dollar value ($131,600) of the benefit of
premiums paid by the Company (for 1994 and 1995) in 1995 for a split-dollar life
insurance policy for Mr. Griffin. The Company has a collateral assignment from the
policy equal to its payments. The Company will be reimbursed for all premium
payments made by the Company relating to the policy in the event of death or from
cash value of the policy at the time of termination of the split-dollar agreement.
(5) Mr. Reed became an executive officer of the Company in 1994. Prior to 1994 he
was employed by an Escalade subsidiary.
</TABLE>
Stock Options
In 1995, no stock options were granted to any of the Company's executive
officers nor did any such persons exercise any stock options. The following
table shows the number of outstanding stock options held by such persons and
the possible value of such options as of December 30, 1995.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN 1995 AND YEAR END OPTION VALUES
Value of
Number of Unexercised
Unexercised In-The-Money
Shares Options At Options At
Acquired 12-30-95 12-30-95
on Value Exercisable/ Exercisable/
Exercise Realized Unexercisable Unexercisable
Name (#) $ (#) $ (1)
- ------ -------- ----- -------------- -------------
<S> <C> <C> <C> <C>
Robert E. ---- ----- 3,450/3,450 0/0 (2)
Griffin
C.W. "Bill" Reed ---- ----- 9,775/13,225 1,690/564
John R. Wilson ---- ----- 8,338/8,912 1,690/564
<FN>
(1) The value of unexercised options is calculated by determining the difference
between $3.75 per share, the last reported sale price of the common stock on the
Nasdaq National Market on December 29, 1995, and the exercise price of the option
as of such date, multiplied by the number of shares subject to the option.
(2) All options held by Mr. Griffin have an exercise price of $6.93 per share.
Based upon the $3.75 per share market price of the common stock on December 29,
1995, these options have no value because the exercise price exceeded the
market price.
</TABLE>
Compensation of Directors
During 1995 non-employee Directors of the Company received a retainer of
$5,000 and a regular meeting fee of $2,000 for each meeting attended. The
Chairman of the Audit Committee and the Compensation Committee received a
$1,000 Chairman fee. Directors are reimbursed for their expenses incurred for
attending the meetings.
Mr. Griffin received $18,000 for performing his duties as Chairman of
the Board and for serving on the Board of Directors and its committees. Mr.
Griffin also receives a fee of $2,000 for each meeting attended.
Compensation and Stock Option Committee Report on Executive Compensation
Executive compensation is determined by the Compensation Committee of the
Board of Directors. Stock option grants are determined by the Stock Option
Committee of the Board of Directors. Both committees are comprised entirely
of non-management Directors. Based on the Company's past compensation
practices, the Company does not currently believe that Section 162 (m) of the
Internal Revenue Code, which limits the deductibility of executive
compensation in certain events, will adversely affect the Company's ability
to obtain a tax deduction for compensation paid to its executive officers.
Report of the Compensation Committee
The Company's compensation package for its executive officers consists
primarily of base salary, incentive profit sharing bonuses and stock option
grants. Stock option grants are determined by the Stock Option Committee and
are discussed under that Committee's separate report. Base salaries and
incentive profit sharing bonuses are determined by this Committee.
In general, base salary levels are set at the beginning of each year at
levels believed by this Committee to be sufficient to attract and retain
qualified executives when considered with the other components of the
Company's compensation structure. The primary considerations in determining
whether base salaries will be adjusted is the Company's income level
generated in the previous year and any changes in level of responsibility.
The Committee also subjectively reviews the individual performance of each
executive officer. For 1995, in view of the decreased income from operations
to a loss of $2,403,421 in 1994 from an income of $3,123,243 in 1993 the
Committee believed that base salaries should be held at the same level or not
increased more than 3%. Consistent with this analysis the Committee honored
Mr. Griffin's request that his base salary not be increased for 1995.
This Committee believes that a significant portion of total annual cash
compensation should be subject to the Company's actual performance achieved
in that year. Consequently, the incentive profit sharing bonuses of the
Company's executive officers can be a significant percentage of their overall
compensation. Each of the Company's subsidiaries has in place an incentive
profit sharing plan where the amounts payable thereunder are based primarily
upon the subsidiary's after tax return on equity and after tax return on assets
and, to a lesser degree, upon the results of customer satisfaction surveys.
At the beginning of each year, the Committee reviews, approves and/or modifies
target levels suggested by management for each of these three components for
each subsidiary.
If the subsidiary meets or exceeds its targets in one or more of the
performance components, a bonus pool is created with respect to such component
for payment to the subsidiary's employees. An additional 20% of any amounts
payable under the subsidiary's incentive profit sharing plan is payable to
the Company. The Company in turn distributes the incentive compensation
received from each subsidiary to the Company's executive officers based on a
pre-determined percentage. Accordingly, each executive officer's incentive
profit sharing is directly linked to the performance by each of the Company's
operating subsidiaries. The percentage and amount attributable to each
individual executive officer is reviewed by this Committee on an annual basis.
This Committee approved Mr. Griffin's portion, under the plan, of $44,872
for 1995.
In 1995, the Company's office and graphic arts machines and equipment
subsidiary exceeded its target levels for each of the three incentive profit
sharing components and a bonus pool was created with respect to those
operations. The Company's sporting goods subsidiaries did not meet their
target levels and no bonus pool was created with respect to those operations.
Therefore, the 1995 bonus amounts paid to Mr. Griffin and the Company's other
executive officers were generated entirely from the Company's office and
graphic arts machines and equipment subsidiary.
Gerald J. Fox A. Graves Williams, Jr.
Report of Stock Option Committee
The Company maintains a Stock Option Committee of the Board of Directors,
whose primary purpose is to determine annual stock option grants to the
Company's executive officers and other eligible employees. No stock options
were granted in 1995 due to the expiration of the Company's 1984 Incentive
Stock Option Plan in 1994.
The Stock Option Committee continues to believe that stock options are an
effective incentive to encourage stock ownership by officers and key employees
of the Company and its subsidiaries so that those persons acquire or increase
their proprietary interest in the success of the Company. Beginning in 1995
and continuing in 1996, the members of the Stock Option Committee and other
members of the Company's Board of Directors have considered ways in which the
Company could more effectively use stock options to motivate enhanced
performance throughout the Company. Upon the conclusion of such studies and
analysis, the Stock Option Committee may recommend that the Company adopt a
new stock option plan in the future although no determination has been made
at this time.
A. Graves Williams, Jr. Gerald J. Fox Keith P. Williams
Compensation Committee and Stock Option Committee Interlocks and Insider
Participation
In 1995, Messrs. Fox, Graves Williams and Keith Williams were non-employee
Directors of the Company and comprised the Company's Compensation and Stock
Option Committees. No other Director or executive officer of the Company
serves on any board of directors or compensation committee of any entity
which compensates any of Messrs. Fox, Graves Williams or Keith Williams.
Financial Performance
The graph below compares the Company's cumulative shareholder return on
Company common stock to a broad equity market index and to an industry index
for the past five years. The broad equity market index selected by the
Company is the CRSP Total Return Index for The Nasdaq Stock Market (U.S.
Companies) which includes all domestic companies traded on the Nasdaq market
as are the Company's shares. The published industry index selected by the
Company is the Nasdaq Total Return Industry Index for Nasdaq Non-Financial
Stock which is comprised of all Nasdaq traded companies having the standard
industrial classification (SIC) code of 1 through 59 and 70 and above, which
are all of the non-financial industries (SIC) codes. The Company's SIC code
falls within these parameters and the Company is not aware of any other single
company that is engaged in both the same industries as Escalade.
The following graph assumes the investment of $100 in the Company's
common stock on December 31, 1990 and the investment of an equal amount in
each of the above referenced indices.
1990 1991 1992 1993 1994 1995
Escalade 100.000 145.936 184.452 261.131 161.131 132.509
Nasdaq U. S. 100.000 160.564 186.866 214.511 209.686 296.304
Nasdaq Non-Financial 100.000 160.983 176.089 203.323 194.855 267.923
The Company's line graph has been plotted based upon its actual year
end dates which is the last Saturday in December of each year. The line
graphs for each of the two indices have been plotted based upon the last
trading date in such calender years.
Other Securities Filings
The information contained in this Proxy Statement
under the sub-headings "Compensation and Stock Options Committees" and
"Financial Performance" are not, and should not be deemed to be, incorporated
by reference into any prior filings by the Company under the Securities Act of
1933 or the Securities Exchange Act of 1934 that purport to incorporate
future filings or portions thereof by reference (including this proxy
statement).
ITEM NO. 2
APPROVAL OF AUDITORS
The Management proposes and recommends that the
Stockholders approve the selection by the Board of Directors of the firm of
Geo. S. Olive & Co.LLC to serve as independent auditors for the Company for
the year 1996. The firm has served as independent auditors for the Company
since 1977. Audit services performed by Geo. S. Olive & Co.LLC during the
fiscal year most recently completed include examinations of the financial
statements of the Company and its subsidiaries, services related to filings
with the Securities and Exchange Commission, and consultations on matters
related to accounting, financial reporting and filing of Federal and State
Income Tax Returns.
In the event the appointment of Geo. S. Olive & Co.
LLC, as independent auditors for 1996 is not approved by the shareholders,
the adverse vote will be considered as a direction to the Board of Directors
to select other auditors for the following year. However, because of the
difficulty and expense of making any substitution of auditors so long after
the beginning of the current year, it is contemplated that the appointment
for the year 1996 will be permitted to stand unless the Board finds
other good reason for making a change. Management recommends a vote "FOR"
the approval of the appointment of Geo. S. Olive & Co.LLC.
RESULTS OF THE 1995 ANNUAL MEETING
3,786,581 shares or 91.6% of the outstanding shares of the Company
were voted in person or by proxy at the 1995 annual meeting which was held
April 28, 1995. The proposals to elect to the Board seven Directors and to
approve the appointment of Geo. S. Olive & Co.LLC to serve as independent
auditors for the Company for the year 1995 were approved by the shareholders.
SHAREHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
Shareholder proposals for shareholder action at the
1997 annual meeting must be presented in writing at the offices of the Company
on or before January 15, 1997. Only such proposals as are (1) required by
Securities and Exchange Commission Rules, and are (2) permissible shareholder
motions under the Corporation Law of the State of Indiana will be included on
the 1997 meeting docket.
OTHER BUSINESS
The management does not know of any other business to be presented to
the meeting and does not intend to bring any other matters before the meeting.
However, if any matters properly come before the meeting, it is intended that
the persons named in the accompanying Proxy will vote thereon according to
their best judgment and interest of the Company.
By order of the Board of Directors
JOHN R. WILSON
--------------
JOHN R. WILSON
Vice-President & Chief Financial Officer
