<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<CAPTION>
<S> <C>
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Escalade Incorporated
(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)(1) 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> 2
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
March 19, 1999
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 Holiday Inn Select Airport, 2501
South High School Road, Indianapolis, Indiana, on Saturday, April 24, 1999 at
11:00 A.M., local time, for the following purposes:
1. To elect to the Board eight (8) Directors as set forth herein.
2. To approve the appointment of the firm Olive LLP, to serve as
independent auditors for the Company for the year 1999.
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 February 26, 1999 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
<PAGE> 3
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 Saturday, April 24, 1999, at 11:00
a.m. local time. Each of the 3,119,825 shares of common stock outstanding on
February 26, 1999 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 February 26, 1999 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
19, 1999.
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 1998 is being mailed to
you with this proxy statement, but such report and financial statements are not
a part of this proxy statement.
2
<PAGE> 4
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 February 26, 1999.
<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 548,563 (1) 17.6% (1)
817 Maxwell Avenue
Evansville, Indiana 47717
Common Stock C. W. "Bill" Reed 117,923 (2) 3.8% (2)
817 Maxwell Avenue
Evansville, Indiana 47717
Common Stock John R. Wilson 27,250 (3) .9% (3)
817 Maxwell Avenue
Evansville, Indiana 47717
OTHER 5% STOCKHOLDERS
---------------------
Common Stock Andrew and Charmenz Guagenti 234,902 (4) 7.5% (4)
216 Water Street
Newburgh, Indiana 47630
Common Stock Oak Forest Investment Management, Inc. 170,700 (5) 5.5% (5)
6701 Democracy Blvd., Suite 402
Bethesda, Maryland 20817
Common Stock Athena Capital Management, Inc. 164,400 (6) 5.5% (6)
621 East Germantown Pike, Suite 105
Plymouth Valley, PA. 19401
Common Stock Hillson Partners Limited Partnership 165,500 (7) 5.3% (7)
6900 Wisconsin Avenue, Suite 501
Bethesda, Maryland 20815
</TABLE>
(1) Includes 123,615 shares held in a Griffin Grantor Retained Annuity Trust,
157,386 shares held by a Family Limited Partnership and 108,078 held by his
children. Mr. Griffin disclaims beneficial ownership of those shares. Also
includes 1,063 shares issuable upon the exercise of outstanding stock
options.
(2) Includes 20,493 shares issuable upon the exercise of outstanding stock
options.
(3) Includes 8,750 shares issuable upon the exercise of outstanding stock
options.
(4) Includes 113,355 shares owned by Mr. Guagenti directly and in his directed
IRA and 121,547 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) Pursuant to a Schedule 13G filed with the Securities and Exchange
Commission, Oak Forest Investment Management, Inc. last informed the
Company that it is an investment advisor registered under Section 203 of
the Investment Advisors Act of 1940 and has shared power to vote or to
direct the vote of the 170,700 shares and shared power to dispose or to
direct the disposition of the 170,700 shares.
3
<PAGE> 5
(6) Pursuant to a Schedule 13G filed with the Securities and Exchange
Commission, Athena Capital Management, Inc. last informed the Company that
it is an investment advisor registered under Section 203 of the Investment
Advisors Act of 1940 and has shared power to vote or to direct the vote of
the 164,400 shares and shared power to dispose or to direct the disposition
of the 164,400 shares.
(7) Pursuant to a Schedule 13D filed with the Securities and Exchange
Commission, Hillson Partners Limited Partnership is a limited partnership
under the laws of Maryland formed for the purpose, among other things, of
investing its assets in stocks, bonds and other financial investments.
ITEM NO. 1
ELECTION OF DIRECTORS
The Board of Directors voted to set the size of the Board at eight 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 election. The
term of office of the Directors is until the next meeting of the stockholders
and until their successors are elected and qualified.
<TABLE>
<CAPTION>
Information with respect to each of the Directors is set forth as follows: SHARES OF COMMON
STOCK OF THE COMPANY
BENEFICIALLY OWNED ON
FEBRUARY 26, 1999
DIRECTOR PERCENT OF
NAME AND PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS SINCE(1) AGE NUMBER CLASS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
YALE A. BLANC - Consultant to Martin Yale Industries, Inc. 1972 77 10,730(2) .3%
(a subsidiary of the Company) . . . . . . . . . . . . . . . . . . . . . .
GERALD J. FOX - Private Investor, Senior Vice President
of Oppenheimer & Co., Inc. in the Institutional Sales
Department from 1984 till 1992. (3) . . . . . . . . . . . . . . . . . 1968 64 90,554(4) 2.9%
ROBERT E. GRIFFIN - Chairman and Chief Executive Officer
of the Company since March, 1994, Previously President
and Chief Executive Officer since 1976 . . . . . . . . . . . . . . . 1973 64 548,563(5) 17.6%(5)
BLAINE E. MATTHEWS, JR. - Director and Corporate Secretary
of Matthews 1812 House, Inc. since 1979, a mail order
supplier of cakes and food gifts . . . . . . . . . . . . . . . . . . . . . . 1965 61 70,664(6) 2.3%(6)
ROBERT D. ORR - Private Investor, Ambassador to Singapore
from 1989 till 1992 and Governor of the State of Indiana
from 1981 till 1989 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1992 81 63,429(7) 2.0%
C. W. "BILL" REED - President and Chief Operating Officer of
the Company since February, 1994 and President of Martin
Yale Industries, Inc. since 1980 . . . . . . . . . . . . . . . . . . . . . 1997 52 117,923(8) 3.8%(8)
A. GRAVES WILLIAMS, JR. - Private 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) . . . . . . . . . . . . . 1958 66 81,819(9) 2.6%(9)
KEITH P. WILLIAMS - President of Good Earth Tools, Inc.,
Crystal City, Missouri since 1964, a company specializing
in wear-proofing with tungsten carbide. (3) . . . . . . . . . . . . 1982 71 60,539(10) 1.9%(10)
All (9) Directors and Executive Officers as a Group . . . . . . . 1,071,471 34.3%
</TABLE>
4
<PAGE> 6
(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 736 shares held by his spouse, Mr. Blanc disclaims beneficial
ownership of those shares. Also includes 246 shares issuable upon the
exercise of outstanding stock options.
(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. All
such persons disclaim beneficial ownership of shares held by any of the
foregoing persons of whom he or she is related.
(4) Includes 54,535 shares held by his spouse. Mr. Fox disclaims beneficial
ownership of those shares. Also includes 493 shares upon the exercise of
outstanding stock options.
(5) See note (1) under "Certain Beneficial Owners".
(6) Includes 14,000 shares held by his spouse. Also includes 531 shares
issuable upon the exercise of outstanding stock options.
(7) Includes 10,034 shares held by his spouse. Mr. Orr disclaims beneficial
ownership of those shares.
(8) See note (2) under "Certain Beneficial Owners".
(9) Includes 81,802 shares held by his spouse. Mr. Williams disclaims
beneficial ownership of those shares.
(10) Includes 3,829 shares held by his spouse. Mr. Williams disclaims beneficial
ownership of those shares. Also includes 493 shares issuable upon the
exercise of outstanding stock options.
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.
The executive officers of the Company are as follows: Robert E. Griffin
(age 64), Chairman and Chief Executive Officer, C.W. (Bill) Reed (age 52),
President and Chief Operating Officer, and John R. Wilson (age 57), Vice
President and Chief Financial Officer. The executive officers' terms expire
April 24, 1999.
5
<PAGE> 7
BOARD OF DIRECTORS, ITS COMMITTEES, MEETINGS, AND FUNCTIONS
The Board of Directors of the Company currently consists of two members who
are executive officers (Robert E. Griffin and C.W. "Bill" Reed) 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 1998 the Board of Directors had five meetings. All Directors
attended 100% of all Board and Commitee meetings except for Mr. Blanc who
attended 80% and Mr. Fox who attended 71%.
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 1998. 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 1998 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 met one time in 1998 to review the
granting of options. The Board of Directors has no nominating committee.
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 1998 except Mr. Orr who filed one
late Form 5 in March 1999 reporting that he had inadvertently failed to file two
Form 4's in 1998 reporting the sale and gifts of 700 shares in the aggregate.
6
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY
The following table is a summary of the compensation paid by the Company to
Messrs. Griffin, Reed, and Wilson, its executive officers, for the last three
years.
<TABLE>
<CAPTION>
Annual Long Term
Compensation 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. Griffin 1996 116,000 185,000 34,420 ----- 70,746
Chairman, CEO 1997 116,204 270,000 37,648 ----- 7,379
and Director 1998 118,217 (1) 125,282 41,180 1,063 304,588(4)
C.W. "Bill" Reed 1996 183,518 289,755 17,210 ----- 8,033
President and 1997 188,208 402,767 18,824 10,000 9,788
COO 1998 208,824 (1) 358,914 20,590 10,493 10,288
John R. Wilson 1996 75,000 100,585 12,856 ----- 3,644
Vice President 1997 81,242 146,260 14,062 5,000 6,190
and CFO 1998 84,661 (1) 139,857 15,381 5,000 6,591
</TABLE>
(1) Of the amounts shown, the following was deferred pursuant to the Company's
401K retirement plan; Mr. Griffin ($8,463), Mr. Reed ($9,952) and Mr.
Wilson ($7,941). This amount also includes directors fees for Mr. Griffin
($28,000) and Mr. Reed ($15,000).
(2) The amounts shown are the interest earned pursuant to the Company's
deferred compensation plan.
(3) In 1998, the amounts shown include the Company's contribution to the 401K
retirement plan; Mr. Griffin ($5,642), Mr. Reed ($10,000) and Mr. Wilson
($5,294) and the dollar value of the group term life insurance premiums
paid by the Company; Mr. Griffin ($1,946), Mr. Reed ($288) and Mr. Wilson
($1,297).
(4) This amount also includes the dollar value ($297,000) of the premiums paid
by the Company in 1998 for a split-dollar life insurance policy for Mr.
Griffin. The Company will be reimbursed for all premiums paid by the
Company on this policy in the event of death or from cash value of the
policy after 10 years.
7
<PAGE> 9
STOCK OPTIONS
The following table shows information concerning individual grants
of options to purchase the Company's common stock made in 1998 to the Company's
executive officers pursuant to the 1997 Incentive Stock Option Plan.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS IN 1998
Percent of Potential Realized Value
Options Total Options at Assumed Annual Rates of Stock
Granted Granted To Exercise Price Price Appreciation for Option Term
(# Shares) Employees in ($/Share) Expiration (2)
Name (1) Fiscal Year Date
5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Robert E. Griffin -- -- -- -- -- --
C.W. "Bill" Reed 10,000 51.95% $ 18.75 3/12/03 51,800 114,500
John R. Wilson 5,000 25.97% $ 18.75 3/12/03 25,900 57,250
</TABLE>
(1) Of the options granted, none are exercisable in the first year and then 25%
of the grant become exercisable in each of the next four years. Issued at
market price on day of grant.
(2) Calculated based upon assumed stock prices for the Company's common stock
of $23.93 and $30.20, respectively, if 5% and 10% annual rates of stock
appreciation are achieved over the full term of the option. The potential
realizable gain equals the product of the number of shares underlying the
stock option grant and the difference between the assumed stock price and
the exercise price of each option.
The following table shows information on the Company's executive officers
exercise of stock options during 1998 and the number of outstanding stock
options held by such persons and the possible value of such options as of
December 26, 1998.
AGGREGATED OPTION EXERCISES IN 1998 AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised In-The-Money
Shares Options At Options At
Acquired 12/26/98 12/26/98
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
(#) $ (1) (#) $ (2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert E. Griffin 6,900 79,833 0/ 1,063 0 / 9,429
C.W. "Bill" Reed 6,900 84,180 14,000/17,993 154,425 / 70,898
John R. Wilson 6,900 84,180 7,000/ 8,750 77,212 / 33,263
</TABLE>
(1) Value is calculated by determining the difference between the per share
exercise price and the per share fair market value of the common stock as
of the exercise date, multiplied by the number of shares acquired upon the
exercise of the options.
(2) The value of unexercised options is calculated by determining the
difference between $18.75 per share, the last reported sale price of the
common stock on the Nasdaq National Market on December 24, 1998, and the
exercise price of the option as of such date, multiplied by the number of
shares subject to the option.
8
<PAGE> 10
COMPENSATION OF DIRECTORS
During 1998 all Directors of the Company except Mr. Griffin 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.
Some of the Directors elected to receive some of these fees in shares of
the Company's common stock pursuant to the 1997 Director Stock Compensation and
Option Plan which was approved by shareholders at the 1997 annual meeting. Those
shares will not be issued until April 23, 1999. In 1998 there were 6,638 shares
issued and 3,319 stock options issued pursuant to the plan.
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
1998, in view of the increased income from operations to an income of $6,360,651
in 1997 from $5,247,117 in 1996 the Committee believed that base salaries for
executive officers and other management employees could be increased within a
range of 3 to 6%. The Committee honored Mr. Griffin's request that his base
salary not be increased for 1998.
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 $125,282 for
1998.
9
<PAGE> 11
In 1998, the Company's office and graphic arts machines and equipment
subsidiary and the company's sporting goods subsidiaries exceeded their target
levels for each of the three incentive profit sharing components and a bonus
pool was created with respect to those operations. Therefore, the 1998 bonus
amounts paid to Mr. Griffin and the Company's other executive officers were
generated from the Company's office and graphic arts machines and equipment
subsidiary and the Company's sporting goods subsidiaries. After incentive profit
sharing and taxes the Company's consolidated net income of $6,135,789 generated
a return on assets (on average beginning and ending assets) of 9.5% and a return
on equity (on beginning equity) of 26.1%.
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. 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.
Shareholders approved the 1997 Incentive Stock Option Plan at the 1997
annual meeting. Pursuant to that plan the committee felt it was appropriate to
grant stock options to certain executive officers of the Company in 1998. The
committee honored Mr. Griffin's wish that no options be issued to him.
A. Graves Williams, Jr. Gerald J. Fox Keith P. Williams
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
In 1998, 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.
10
<PAGE> 12
The following graph assumes the investment of $100 in the Company's common
stock on December 31, 1993 and the investment of an equal amount in each of the
above referenced indices.
[GRAPHIC OMITTED]
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 Option Committee Report on Executive Compensation" 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).
11
<PAGE> 13
1993 1994 1995 1996 1997 1998
ESCALADA 100.00 61.71 50.74 118.40 192.83 253.72
NASDAQ U.S. 100.00 97.75 138.26 170.02 208.30 293.52
NASDAQ NON-FINANCIAL 100.00 96.16 134.03 162.84 190.73 280.02
12
<PAGE> 14
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 Olive LLP to serve as
independent auditors for the Company for the year 1999. The firm has served as
independent auditors for the Company since 1977. Audit services performed by
Olive LLP 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 Olive LLP, as independent auditors for 1999
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 1999 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 Olive LLP.
RESULTS OF THE 1998 ANNUAL MEETING
2,666,854 shares or 87.1 % of the outstanding shares of the Company were
voted in person or by proxy at the 1998 annual meeting which was held April 25,
1998. The proposals to elect to the Board eight Directors, and to approve the
appointment of Olive LLP to serve as independent auditors for the Company for
the year 1998 were approved by the shareholders.
SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
Shareholder proposals for shareholder action at the 2000 annual meeting
must be presented in writing at the offices of the Company on or before January
15, 2000. Any shareholder who intends to propose any other matter to be acted
upon at the 2000 annual meeting of shareholders must inform the Company no later
than March 10, 2000. If notice is not provided by that date, the persons named
in the Company's proxy for the 2000 annual meeting will be allowed to exercise
their discretionary authority to vote upon any such proposal without the matter
having been discussed in the proxy statement for the 2000 annual meeting. 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 2000 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. No
shareholder has informed the Company of any intention to propose any other
matter to be acted upon at the meeting. Accordingly, the persons named in the
accompanying Proxy are allowed to exercise their discretionary authority to vote
upon any such proposal without the matter having been discussed in this proxy
statement. 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
Vice-President & Chief Financial Officer
13
<PAGE> 15
<TABLE>
<S> <C>
ESCALADE, INCORPORATED PROXY CARD
817 MAXWELL AVENUE, EVANSVILLE, INDIANA 47717 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert E. Griffin, Yale A. Blanc, and A. Graves Williams, Jr. as Proxies, each with the power
to appoint his or her substitute and hereby authorizes them to represent and to vote as designated below, all the shares of common
stock of Escalade, Incorporated, held of record by the undersigned on February 26, 1999 at the annual meeting of shareholders to be
held on April 24, 1999 or any adjournment thereof.
1. ELECTION OF DIRECTORS For all nominees [ ] Withhold Authority to vote for [ ] Exceptions [ ]
listed below all nominees listed below.
Nominees: Yale A. Blanc, Gerald J. Fox, Robert E. Griffin, Blaine E. Matthews, Jr., Robert D. Orr, C.W. "Bill" Reed, A. Graves
Williams, Jr., Keith P. Williams
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEES NAME IN
THE SPACE PROVIDED)
--------------------------------------------------------------------------------------------------------------
2. PROPOSAL TO APPROVE THE APPOINTMENT OF OLIVE LLP, as the independent public accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
- ------------------------------------------------------------------------------------------------------------------------------------
This proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder.
If no direction is made, this proxy will be voted for Proposals 1 and 2
Please sign exactly as name appears below. When
shares are held by joint tenants, both should
sign. When signing as attorney, as executor,
administrator, trustee of guardian, please give
full title as such. If a corporation, please
sign in full corporate name by President or
other authorized officer. If a partnership,
please sign in partnership name by authorized
person.
DATED: , 1999 --------------------------------------------------
----------------------------------- Signature
PLEASE MARK, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE --------------------------------------------------
ENCLOSED ENVELOPE Signature if held jointly
</TABLE>
