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:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
Hyde Athletic Industries, Inc.
...............................................................................
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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:
.......................................................................
<PAGE>
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:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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<PAGE>
HYDE ATHLETIC INDUSTRIES, INC.
Centennial Industrial Park
13 Centennial Drive
Peabody, Massachusetts 01960
The Annual Meeting of Stockholders of Hyde Athletic Industries, Inc. (the
"Company") will be held at the offices of the Company, Centennial Industrial
Park, 13 Centennial Drive, Peabody, Massachusetts, on Wednesday, May 22, 1996
at 10:00 a.m., local time, to consider and act upon the following matters:
1. To elect six directors.
2. To ratify the selection by the Board of Directors of Coopers & Lybrand
L.L.P. as the Company's independent accountants for the current fiscal
year.
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Holders of record of the Company's Class A Common Stock at the close of
business on April 5, 1996 will be entitled to vote at the meeting or any
adjournment thereof.
By Order of the Board of Directors,
David E. Redlick, Clerk
Peabody, Massachusetts
April 22, 1996
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN
ORDER TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF
THE PROXY CARD IS MAILED IN THE UNITED STATES.
<PAGE>
HYDE ATHLETIC INDUSTRIES, INC.
Centennial Industrial Park
13 Centennial Drive
Peabody, Massachusetts 01960
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
May 22, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Hyde Athletic Industries, Inc. (the
"Company") for use at the Annual Meeting of Stockholders to be held on May 22,
1996 and at any adjournment of that meeting (the "Annual Meeting"). All
shares of Class A Common Stock, $.33-1/3 par value per share, of the Company
(the "Class A Common Stock") for which proxies are submitted will be voted in
accordance with the stockholders' instructions, and if no choice is
specified, the shares will be voted in favor of the matters set forth in the
accompanying Notice of Meeting. Any proxy may be revoked by a stockholder at
any time before its exercise by delivery of written revocation to the Clerk
of the Company or by voting in person at the Annual Meeting.
The Company's Annual Report for the fiscal year ended January 5, 1996
("fiscal 1995") is being mailed to stockholders with the mailing of this
Notice and Proxy Statement, which is first being mailed to stockholders on or
about April 22, 1996.
A copy of the Company's Annual Report on Form 10-K for the fiscal year ended
January 5, 1996 as filed with the Securities and Exchange Commission (the
"Commission"), excluding exhibits, will be furnished without charge to any
stockholder upon written request to Charles A. Gottesman, Executive Vice
President, Hyde Athletic Industries, Inc., Centennial Industrial Park, 13
Centennial Drive, Peabody, Massachusetts 01960. Exhibits will be provided
upon written request and payment of an appropriate processing fee.
Voting Securities and Votes Required
The Board of Directors has fixed April 5, 1996 as the record date (the
"Record Date") for determining holders of Class A Common Stock who are
entitled to vote at the Annual Meeting. At the close of business on the
Record Date, there were outstanding and entitled to vote 2,701,727 shares of
Class A Common Stock. Each share is entitled to one vote. The holders of the
Company's Class B Common Stock, $.33-1/3 par value per share (the "Class B
Common Stock"), are not entitled to vote at the Annual Meeting.
The holders of a majority of the shares of Class A Common Stock outstanding
and entitled to vote at the Annual Meeting shall constitute a quorum for the
transaction of business at the Annual Meeting. Shares of Class A Common Stock
present in person or represented by proxy (including shares which abstain or
do not vote with respect to one or more of the matters presented for
stockholder approval) will be counted for purposes of determining whether a
quorum exists at the Annual Meeting.
The affirmative vote of the holders of a plurality of the shares of Class A
Common Stock voting on the matter is required for the election of directors.
The affirmative vote of the holders of a majority of the shares of Class A
Common Stock voting on the matter is required to ratify the selection of
Coopers & Lybrand L.L.P. as the Company's independent accountants for the
current fiscal year.
Shares which abstain from voting as to a particular matter, and shares held
in "street name" by brokers or nominees who indicate on their proxies that
they do not have discretionary authority to vote such shares as to a
particular matter, will not be counted as votes in favor of such matter, and
also will not be counted as shares voting on such matter. Accordingly,
abstentions and "broker non-votes" will have no effect on the voting on a
matter that requires the affirmative vote of a certain percentage of the
shares voting on the matter.
Stock Ownership of Certain Beneficial Owners and Management
The table below sets forth information concerning beneficial ownership of the
Company's Class A Common Stock and Class B Common Stock (collectively, the
"Common Stock") by (i) each stockholder known by the Company to be the
beneficial owner of more than 5% of the outstanding shares of Class A Common
Stock, (ii) all directors, (iii) each of the executive officers named in the
Summary Compensation Table set forth in "Compensation of Executive Officers"
below (the "Named Executive Officers")
<PAGE>
and (iv) all directors and executive officers as a group. Unless otherwise
indicated in the footnotes to the table, all information set forth in the
table is as of March 31, 1996.
The number of shares beneficially owned by each person is determined under
rules of the Commission, and the information is not necessarily indicative of
ownership for any other purpose. Under such rules, beneficial ownership
includes any shares as to which the person has sole or shared voting power or
investment power and also any shares which the individual has the right to
acquire within 60 days after March 31, 1996 through the exercise of any stock
option or other right. Unless otherwise indicated, each person has sole
investment and voting power with respect to the shares set forth in the
following table. The inclusion herein of any shares of Common Stock deemed
beneficially owned does not constitute an admission by such stockholder of
beneficial ownership of those shares of Common Stock.
Number of Shares Percentage
Beneficially of Class
Owned Outstanding
-------------------------- ----------------
Class Class
5% Stockholders Class A Class B A B
- -------------------------- ---------- ----------- ----- -------
Phyllis H. Fisher ........ 414,472 5,002 15.3% *
c/o Hyde Athletic
Industries, Inc.
Centennial Industrial
Park
13 Centennial Drive
Peabody, MA 01960
John H. Fisher ........... 414,454 (1) 169,575 (2) 15.3 4.8%
c/o Hyde Athletic
Industries, Inc.
Centennial Industrial
Park
13 Centennial Drive
Peabody, MA 01960
Charles A. Gottesman and
Merrill F. Gottesman .. 403,654 (3) 161,876 (4) 14.9 4.6
c/o Hyde Athletic
Industries, Inc.
Centennial Industrial
Park
13 Centennial Drive
Peabody, MA 01960
Dimensional Fund Advisors
Inc. .................. 192,400 261,300 (5) 7.1 7.4
1299 Ocean Avenue
Santa Monica, CA 90401
Other Directors
- --------------------------
James A. Buchanan ........ 5,500 (6) 25,257 (6) * *
Jonathan O. Lee .......... -- 14,000 (7) -- *
John J. Neuhauser ........ -- 14,000 (8) -- *
Other Named Executive
Officers
- --------------------------
Wolfgang Schweim ........ -- 1,500 (9) -- *
James H. Noyes, Jr. ..... 400 (10) 7,917 (10) * *
All directors and
executive officers as a
group
(11 persons) ......... 1,240,390 (11) 407,970 (12) 45.8 11.2
* Represents holdings of less than one percent.
(1) Includes 83,410 shares held in trust for the benefit of Mr. Fisher for
which Mr. Fisher and his sister, Merrill F. Gottesman, are trustees and
share investment and voting power; 10,800 shares held in a generation
skipping trust for which Mr. Fisher exercises sole voting and investment
power; 6,382 shares held in trust for the benefit of Mr. Fisher's
children for which Mr. Fisher is the trustee and exercises sole
investment and voting power; and 1,333 shares held in the name of
Mr. Fisher's daugh-
2
<PAGE>
ter. Excludes 83,410 shares held in trust for the benefit of
Ms. Gottesman for which Mr. Fisher and Ms. Gottesman are trustees and
share investment and voting power. Mr. Fisher is the son of Phyllis H.
Fisher.
(2) Includes 23,410 shares held in trust for the benefit of Mr. Fisher for
which Mr. Fisher and his sister, Merrill F. Gottesman, are trustees and
share investment and voting power; 10,800 shares held in a generation
skipping trust for which Mr. Fisher exercises sole voting and investment
power; 1,582 shares held in trust for the benefit of Mr. Fisher's
daughter for which Mr. Fisher is the trustee and exercises sole
investment and voting power; and 34,152 shares which Mr. Fisher has the
right to acquire pursuant to outstanding options exercisable within 60
days after March 31, 1996. Excludes 23,410 shares held in trust for the
benefit of Ms. Gottesman for which Mr. Fisher and Ms. Gottesman are
trustees and share investment and voting power.
(3) Includes 69,031 shares which Mr. Gottesman jointly owns with his wife,
Merrill F. Gottesman, who is the daughter of Phyllis H. Fisher; 7,964
shares held in trust for the benefit of Mr. and Mrs. Gottesman's
daughters for which Ms. Gottesman is trustee and exercises sole
investment and voting power; 83,410 shares held in trust for the benefit
of Ms. Gottesman for which Ms. Gottesman and her brother, John H. Fisher,
are trustees and share investment and voting power; 25,750 shares held in
the name of Mr. Gottesman; 214,833 shares held in the name of Ms.
Gottesman; and an aggregate of 2,666 shares held in the names of Mr. and
Mrs. Gottesman's two daughters. Excludes 83,410 shares held in trust for
the benefit of John H. Fisher for which John H. Fisher and Ms. Gottesman
are trustees and share investment and voting power.
(4) Includes 69,031 shares which Mr. Gottesman jointly owns with his wife,
Merrill F. Gottesman; 3,164 shares held in trust for the benefit of Mr.
and Mrs. Gottesman's daughters for which Ms. Gottesman is trustee and
exercises sole investment and voting power; 23,410 shares held in trust
for the benefit of Ms. Gottesman for which Ms. Gottesman and her brother,
John H. Fisher, are trustees and share investment and voting power;
10,800 shares held in the name of Ms. Gottesman; 25,750 shares held in
the name of Mr. Gottesman; and 29,721 shares which Mr. Gottesman has the
right to acquire pursuant to outstanding options exercisable within 60
days after March 31, 1996. Excludes 23,410 shares held in trust for the
benefit of John H. Fisher for which John H. Fisher and Ms. Gottesman are
trustees and share investment and voting power.
(5) The information reported is based on Schedules 13G, dated January 31,
1995 and February 7, 1996, filed with the Securities and Exchange
Commission by Dimensional Fund Advisors Inc. ("Dimensional"). Dimensional
is a registered investment advisor and deemed to have beneficial
ownership of all of such shares. These 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 DFA Participation Group Trust,
investment vehicles for qualified employee benefit plans, and Dimensional
serves as investment manager for all of such entities. Dimensional
disclaims beneficial ownership of all such shares.
(6) Consists of 5,500 shares and 25,257 shares of Class A Common Stock and
Class B Common Stock, respectively, which Mr. Buchanan has the right to
acquire pursuant to outstanding stock options exercisable within 60 days
after March 31, 1996.
(7) Consists of 14,000 shares which Mr. Lee has the right to acquire pursuant
to outstanding options exercisable within 60 days after March 31, 1996.
(8) Consists of 14,000 shares which Mr. Neuhauser has the right to acquire
pursuant to outstanding options exercisable within 60 days after March
31, 1996.
(9) Consists of 1,500 shares which Mr. Schweim has the right to acquire
pursuant to outstanding options exercisable within 60 days after March
31, 1996. Mr. Schweim also has the right to acquire 1,500 and 1,500
shares of Class B Common Stock pursuant to outstanding options
exercisable within 60 days after March 31, 1996 if the closing price of
the Company's Class B Common Stock (based on the average closing price
over a period of 20 trading days) exceeds $6.75 and $9.25 per share,
respectively.
(10) Consists of 400 shares and 7,917 shares of Class A Common Stock and
Class B Common Stock, respectively, which Mr. Noyes has the right to
acquire pursuant to outstanding options exercisable within 60 days after
March 31, 1996.
3
<PAGE>
(11) Includes a total of 7,800 shares which all executive officers and
directors have the right to acquire pursuant to outstanding options
exercisable within 60 days after March 31, 1996.
(12) Includes a total of 135,380 shares which all executive officers and
directors have the right to acquire pursuant to outstanding options
exercisable within 60 days after March 31, 1996.
There are no agreements among any of the foregoing persons or entities with
respect to the voting of shares of Class A Common Stock of the Company.
ELECTION OF DIRECTORS
Unless otherwise instructed, the persons named in the accompanying proxy will
vote to elect as directors the six nominees named below, all of whom are
presently directors of the Company. The proxy may not be voted for more than
six directors. If a nominee becomes unable or unwilling to serve as a
director, the person acting under the proxy may vote the proxy for the
election of a substitute. It is not presently contemplated that any of the
nominees will be unwilling to serve as a director.
Set forth below are the name and age of each nominee for director and the
positions and offices held by him or her with the Company, his or her
principal occupation and business experience during the past five years, the
names of other publicly held companies of which he or she serves as a
director and the year of the commencement of his or her term as a director of
the Company.
James A. Buchanan, age 49, has been a director since 1991. Mr. Buchanan
joined the Company in 1989 as Vice President, Marketing. Since 1990 he has
been President and General Manager of the Company's subsidiary, Brookfield
Athletic Co., Inc. ("Brookfield"), which produces and markets outdoor
recreational products for children and young adults. From 1985 to 1989, he
was President of Marketing Associates International Ltd., a company engaged
in the marketing of entertainment products, including the European
introduction of the board game Trivial Pursuit.
John H. Fisher, age 48, has been a director since 1980. Mr. Fisher has been
Chief Executive Officer of the Company since 1991. He served as Chief
Operating Officer from 1985 to 1991, as Executive Vice President from 1981 to
1985 and as Vice President, Sales from 1979 to 1981. Mr. Fisher is a member
of the World Federation of Sporting Goods Industries, is the former Chairman
of the Athletic Footwear Council of the Sporting Goods Manufacturers
Association, and is a member of various civic associations. Mr. Fisher is the
son of Phyllis H. Fisher.
Phyllis H. Fisher, age 73, has been a director since 1982. In addition to her
services as a director of the Company, Mrs. Fisher provides consulting
services to the Company, which include maintaining certain long-standing
relationships with sporting goods associations, representing the Company at
certain trade shows and coordinating the Company's civic and charitable
events.
Charles A. Gottesman, age 45, has been a director since 1983. Mr. Gottesman
has served as Executive Vice President and Chief Operating Officer of the
Company since 1992, Executive Vice President, Finance from 1989 to 1992,
Senior Vice President from 1987 to 1989, Vice President from 1985 to 1987,
Treasurer from 1983 to 1989, and in a number of other capacities beginning in
1977. Mr. Gottesman is the son-in-law of Phyllis H. Fisher.
Jonathan O. Lee, age 45, has been a director since 1990. Mr. Lee has been
engaged for more than five years as General Partner of Lee Capital Holdings,
a limited partnership engaged in effecting corporate acquisitions and
operating the acquired companies. He presently serves as Chairman of the
Board of Southern Energy Homes, Inc., a company engaged in the manufactured
housing business.
John J. Neuhauser, age 53, has been a director since 1989. Mr. Neuhauser has
been Dean of Boston College's Carroll School of Management (business school)
since 1978. From 1971 to 1977, he held the position of Associate Professor
and Chairman of the Computer Science Department of Boston College. He is
presently a director of all of the mutual funds of the Colonial Group and in
recent years has been a director of Logic World, Inc. and of Wakefield
Software Systems, Inc., companies engaged in the computer industry. He
currently is a Corporator of Emerson Hospital and is a former member of the
Executive Committee of the Boston Management Consortium.
4
<PAGE>
Board and Committee Meetings
The Board of Directors met six times during fiscal 1995 and acted by written
consent on one occasion. With the exception of Mrs. Phyllis Fisher, each
director attended at least 75% of the aggregate number of Board meetings and
the number of meetings held by all committees on which he or she then served.
The Company has a standing Audit Committee of the Board of Directors, which
reviews the effectiveness of the auditors during the annual audit, reviews
the adequacy of financial statement disclosures, discusses the Company's
internal control policies and procedures and considers and recommends the
selection of the Company's independent accountants. The Audit Committee met
once during fiscal 1995. The members of the Audit Committee are Messrs.
Gottesman, Lee and Neuhauser.
The Company also has a standing Compensation Committee of the Board of
Directors, which is responsible for establishing compensation policies with
respect to the Company's executive officers, including the Chief Executive
Officer and the other Named Executive Officers, and setting the compensation
levels for these individuals. The Compensation Committee also considers and
makes recommendations to the Board of Directors with respect to such matters
as the establishment and implementation of employee incentive plans and
administers the Company's 1993 Equity Incentive Plan. The Compensation
Committee held three meetings and acted by written consent on one occasion
during fiscal 1995. The members of the Compensation Committee are Messrs. Lee
and Neuhauser. See "Report of the Compensation Committee on Executive
Compensation."
The Company has no standing nominating committee of the Board of Directors.
Compensation of Directors
Under the Company's 1993 Director Stock Option Plan (the "Director Option
Plan"), which was adopted by the Board of Directors on April 7, 1993 and
approved by the stockholders of the Company on May 25, 1993, non-employee
directors of the Company (other than Phyllis H. Fisher) are granted non-
statutory stock options to purchase shares of Class B Common Stock. Options
are granted automatically to eligible directors as follows: (i) each eligible
director was granted an option to purchase 6,000 shares of Class B Common
Stock on the 60th day following stockholder approval of the Director Option
Plan; (ii) each person who becomes an eligible director after May 25, 1993
(the date of approval of the Director Option Plan by the stockholders) shall
be granted an option to purchase 6,000 shares of Class B Common Stock on the
date of his or her initial election to the Board of Directors; and (iii) each
eligible director shall be granted an option to purchase 4,000 shares of
Class B Common Stock on April 15 of each year (or the next following business
day if April 15 is not a business day), provided he or she is an eligible
director on such date. All options granted under the Director Option Plan
have an exercise price equal to the fair market value of the Class B Common
Stock on the date of grant and will be exercisable at any time prior to the
fifth anniversary of the date of grant.
On April 17, 1995, each of Messrs. Neuhauser and Lee was granted an option to
purchase 4,000 shares of Class B Common Stock at $4.875 per share.
Non-employee directors are paid an annual retainer of $15,000. Mrs. Fisher is
a party to a consulting agreement with the Company under which she received a
fee of $90,000 for 1995. See "Employment and Consulting Agreements and Other
Arrangements."
Compensation of Executive Officers
Summary Compensation Table. The following table sets forth certain
information with respect to the compensation, for the last three fiscal
years, of the Company's Chief Executive Officer and each of the four other
most highly compensated executive officers during fiscal 1995:
5
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long-Term
Compensation (1) Compensation (2)
Awards
----------------------
Restricted
Stock Securities All Other
Name and Awards Underlying Compensation
Principal Position Year Salary Bonus (3) Options (4)
- ------------------------ ---- ------- ------- --------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
John H. Fisher 1995 $277,960 $105,967 $ -- 30,000 $12,000
President and Chief 1994 265,404 204,739 -- 24,150 15,192
Executive Officer 1993 258,000 340,840 284,276 28,728 21,891
Charles A. Gottesman 1995 250,164 105,967 -- 25,000 13,360
Executive Vice 1994 238,609 204,739 -- 22,220 16,230
President and Chief 1993 232,200 340,840 255,621 25,832 21,661
Operating Officer
James A. Buchanan 1995 220,807 55,351 -- 15,000 14,568
President, Brookfield 1994 211,151 47,425 -- 17,256 19,719
Athletic Co., Inc. 1993 210,569 -- 181,937 18,386 23,608
Wolfgang Schweim 1995 206,987 8,289 -- 22,500 1,169
President, Saucony
Division (5)
James H. Noyes, Jr. 1995 159,609 22,572 -- -- 10,643
Vice President, 1994 179,559 28,215 -- 12,516 11,896
International 1993 178,988 19,000 111,578 11,276 12,545
</TABLE>
(1) Perquisites for the Named Executive Officers listed in the table did not
exceed the lesser of $50,000 or 10% of total salary and bonus for the
respective fiscal years and accordingly have been omitted in accordance
with the rules of the Securities and Exchange Commission.
(2) The Company does not have a long-term compensation plan that includes
long-term incentive payouts. No stock appreciation rights (SARs) have
been granted to or are held by any of the Named Executive Officers.
(3) On April 27, 1993, the Company issued under its 1993 Equity Incentive
Plan 23,939, 21,526, 15,321 and 9,396 restricted shares of each of the
Class A Common Stock and Class B Common Stock to Messrs. Fisher,
Gottesman, Buchanan and Noyes, respectively. Each stock award provided
for vesting in equal annual installments over a five-year period,
beginning in April 1994. The purchase price of each award was $6-1/16 per
share (approximately 50% of the fair market value on the date the stock
was issued). On November 4, 1993 and June 27, 1994, the Company
repurchased all of the restricted shares of Class A Common Stock and
Class B Common Stock at $6-1/16 per share from the Named Executive
Officers. At the end of fiscal 1995, none of the Named Executive Officers
held shares of restricted stock.
(4) Amounts shown in this column represent (i) the Company's payment of
split-dollar life insurance premiums, (ii) the Company's contributions
under its tax-qualified and deferred 401(k) savings plan and (iii) the
value of below-market loans made by the Company to the Named Executive
Officers (the value based on the difference between the market interest
rate and the actual interest rate). The Company paid split-dollar life
insurance premiums of $10,500, $11,050, $13,000, $0 and $8,333 for
Messrs. Fisher, Gottesman, Buchanan, Schweim and Noyes, respectively, for
the last fiscal year. The Company's contributions under its 401(k)
savings plan to Messrs. Fisher, Gottesman, Buchanan, Schweim and Noyes
for the last fiscal year were $1,500, $2,310, $1,568, $0 and $2,310,
respectively. In addition, Mr. Schweim received $1,169 in the last fiscal
year, representing the value of a below-market loan in the principal
amount of $12,000 made by the Company to Mr. Schweim. See "Employment and
Consulting Agreements and Other Arrangements."
(5) On June 1, 1995, Mr. Schweim was promoted to the position of President,
Saucony Division.
6
<PAGE>
Option Grant Table. The following table sets forth certain information
regarding options granted during fiscal 1995 by the Company to the Named
Executive Officers. The Company granted no SARs in fiscal 1995.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Percent Potential
of Total Realizable
Options Value at Assumed
Granted Exercise Annual Rates of
Number of to or Stock
Securities Employees Base Price
Underlying in Price Appreciation for
Options Fiscal Per Expiration Option Term (2)
Name Granted (1) Year Share Date 5% 10%
-------------- ------------- ------- ----- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John H. Fisher 30,000 (3) 29% $4.75 3/28/00 $39,370 $86,998
Charles A.
Gottesman 25,000 (3) 24 4.75 3/28/00 32,808 72,498
James A.
Buchanan 15,000 (3) 14 4.75 3/28/00 19,685 43,499
Wolfgang
Schweim 7,500 (4) 7 4.25 6/01/00 8,806 19,460
7,500 (5) 7 4.25 6/01/00 8,806 19,460
7,500 (6) 7 4.25 6/01/00 8,806 19,460
James H.
Noyes, Jr. -- -- -- -- -- --
</TABLE>
(1) The securities underlying the options are shares of Class B Common Stock.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These
gains are based on assumed rates of stock price appreciation of 5% and
10% compounded annually from the date the respective options were granted
to their expiration date. This table does not take into account actual
appreciation in the price of the Common Stock to date. Actual gains, if
any, on stock option exercises will depend on the future performance of
the Common Stock and the date on which the options are exercised. The
gains shown are net of the option exercise price, but do not reflect
taxes or other expenses associated with the exercise.
(3) The options are exercisable in two equal installments on each of March
28, 1996 and 1997.
(4) The option is exercisable in five equal annual installments commencing on
June 1, 1995.
(5) The option is exercisable in five equal annual installments commencing on
June 1, 1995; provided, however, that the option shall not become
exercisable until the first day on which the average of the closing sale
price of the Class B Common Stock on the Nasdaq National Market for the
period of 20 consecutive trading days prior to such date equals or
exceeds $6.75 per share.
(6) The option is exercisable in five equal annual installments commencing on
June 1, 1995; provided, however, that the option shall not become
exercisable until the first day on which the average of the closing sale
price of the Class B Common Stock on the Nasdaq National Market for the
period of 20 consecutive trading days prior to such date equals or
exceeds $9.25 per share.
Year End Option Table. The following table sets forth certain information
regarding stock options held as of January 5, 1996 by the Named Executive
Officers. None of the Named Executive Officers exercised any options during
fiscal 1995.
Fiscal Year-End Option Values
Number of Shares Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at Fiscal Year-End at Fiscal Year-End (1)
------------------------------ ------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------- --------------- ------------ -------- ------------
John H.
Fisher 24,152 (2) 58,726 (2) $3,591 $28,127
Charles A.
Gottesman 22,221 (2) 50,831 (2) 3,229 25,292
James A.
Buchanan 28,257 (3) 39,385 (4) 5,548 18,001
Wolfgang
Schweim 1,500 (2) 21,000 (2) 0 0
James H.
Noyes, Jr. 13,317 (5) 11,275 (2) 2,709 11,039
7
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(1) Value based on the fair market value of the Common Stock at the fiscal
year end ($3.875 per share) less the exercise price.
(2) Represents shares of Class B Common Stock.
(3) Consists of 5,500 shares of Class A Common Stock with an in-the-money
value of $1,625 and 22,757 shares of Class B Common Stock with an
in-the-money value of $3,923.
(4) Consists of 3,000 shares of Class A Common Stock with no in-the-money
value and 36,385 shares of Class B Common Stock with an in-the-money
market value of $18,001.
(5) Consists of 400 shares of Class A Common Stock with an in-the-money value
of $650 and 12,917 shares of Class B Common Stock with an in-the-money
value of $2,059.
Employment and Consulting Agreements and Other Arrangements
During 1995, the Company was a party to employment agreements with John H.
Fisher, Charles A. Gottesman, James A. Buchanan and Wolfgang Schweim. The
terms of the employment agreements with Messrs. Fisher, Gottesman and
Buchanan expired on December 31, 1995, and the Compensation Committee is
currently reviewing these agreements in their entirety with a view towards
authorizing the Company to renew these agreements or enter into new
agreements with these three executive officers. Mr. Schweim's employment
agreement remains in effect. Summaries of the employment agreements are set
forth below.
The Company's employment agreement with John H. Fisher provided for a term
beginning November 1, 1991 and terminating December 31, 1995. The agreement
provided for a base salary of $250,000, subject to increases based on
increases in the consumer price index. The agreement also provided for
additional incentive compensation in a sum equal to four percent of the
amount of the Company's pre-tax profit in each fiscal year, as defined in the
agreement. In addition, pursuant to the agreement, Mr. Fisher is prohibited
from engaging in any business competitive with that of the Company during the
term of the agreement and for a period of two years thereafter.
The Company's employment agreement with Charles A. Gottesman provided for a
term beginning November 1, 1991 and terminating December 31, 1995. The
agreement provided for a base salary of $225,000, subject to increases based
on increases in the consumer price index. The agreement also provided for
additional incentive compensation in a sum equal to four percent of the
amount of the Company's pre-tax profit in each fiscal year, as defined in the
agreement. In addition, pursuant to the agreement, Mr. Gottesman is
prohibited from engaging in any business competitive with that of the Company
during the term of the agreement and for a period of two years thereafter.
The Company's employment agreement with James A. Buchanan provided for a term
beginning January 4, 1992 and terminating December 31, 1995. The Agreement
provided for a base salary of $200,000 per year, subject to increases based
on increases in the consumer price index. This agreement also provided for
additional compensation equal to three percent of Brookfield's pre-tax profit
in each fiscal year, as defined in the agreement, provided Brookfield has
earned a minimum of $1,000,000 pre-tax profit in such fiscal year. In
addition, pursuant to this agreement, the Company agreed to elect Mr.
Buchanan as a director of Brookfield and to use reasonable efforts to cause
Mr. Buchanan to be elected to the Board of Directors of the Company. If Mr.
Buchanan refuses to renew the agreement, he is prohibited, for a period of
three years after cessation of employment with the Company, from engaging in
the business of developing, producing, marketing or selling products
competitive with those of the businesses of the Company as to which Mr.
Buchanan had significant supervisory or operational responsibilities.
The Company has an employment agreement with Wolfgang Schweim for a term
beginning June 1, 1995 and terminating May 31, 1997. The Agreement provides
for a base salary of $200,000, subject to increase based on increases in the
consumer price index. Mr. Schweim is also eligible to receive a cash bonus of
up to 50% of his base salary, provided, however, that the Board of Directors,
in its sole discretion, may award a bonus of greater than 50%. If the Company
terminates Mr. Schweim without cause, the Company will continue to pay Mr.
Schweim his salary and benefits through May 31, 1997. So long as Mr. Schweim
is employed by the Company, and for a period of two years thereafter, he is
prohibited from engaging in the business of developing, producing, marketing
or selling products competitive with those
8
<PAGE>
of the Company, or under active consideration by the Company, while Mr.
Schweim was employed by the Company.
The Company has a compensation arrangement with Mr. Noyes whereby Mr. Noyes
received a base salary of $115,794 in fiscal 1995 and commissions at
specified rates and participates in the Vice President Bonus Plan (described
below).
All Vice Presidents of the Company are eligible to participate in the
Company's Vice President Bonus Plan, which was approved by the Board of
Directors, upon recommendation of the Compensation Committee. To be eligible
for this plan, an executive must be a Vice President for the entire fiscal
year. Bonuses awarded to a Vice President under this plan are capped at 25%
of such Vice President's salary for the previous fiscal year, and are based
on the level of attainment of certain sales and pre-tax profit objectives of
the Company or the division for which the Vice President is responsible.
The Company has a consulting agreement with Phyllis H. Fisher for a term of
five years beginning January 4, 1993. The agreement provides for an annual
fee of $40,000 during each of the first two years of the agreement and
$90,000 for each of the remaining three years of the agreement. Mrs. Fisher's
consulting services include maintaining certain long-standing relationships
with sporting goods associations, representing the Company at certain trade
shows and coordinating the Company's civic and charitable events.
In July 1993, James Buchanan, President of Brookfield, borrowed $100,000 from
the Company. As consideration for this loan, Mr. Buchanan issued the Company
a promissory note that was interest free through July 1994 and currently
bears interest at the prevailing prime rate and is collateralized by a
mortgage to the Company on two parcels of real estate. As of April 1, 1996,
the amount of indebtedness outstanding under the note was $100,000.
On March 2, 1995, Wofgang Schweim, President of the Company's Saucony
Division, borrowed $284,000 from the Company in connection with the purchase
of a home. Mr. Schweim repaid the loan in full on March 14, 1995.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Company's Board of Directors consists of
Messrs. Lee and Neuhauser.
Report of the Compensation Committee on Executive Compensation
The Compensation Committee of the Company's Board of Directors is responsible
for establishing compensation policies with respect to the Company's
executive officers, including the Chief Executive Officer and the other
executive officers named in the Summary Compensation Table, and setting the
compensation for these individuals.
The Compensation Committee seeks to achieve three broad goals in connection
with the Company's executive compensation programs and decisions regarding
individual compensation. First, the Compensation Committee structures
executive compensation programs in a manner that the Committee believes will
enable the Company to attract and retain key executives. In order to ensure
continuity of certain key members of management, the Compensation Committee
has approved in the past multi-year employment contracts. Second, the
Compensation Committee establishes compensation programs that are designed to
reward executives for the achievement of specified business objectives of the
Company and/or the individual executive's particular business unit. By tying
compensation in part to particular goals, the Compensation Committee believes
that a performance-oriented environment is created for the Company's
executives. Finally, the Company's executive compensation programs are
intended to provide executives with an equity interest in the Company so as
to link a portion of the compensation of the Company's executives with the
performance of the Company's Common Stock.
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over
$1,000,000 paid to its chief executive officer or any of its four other most
highly compensated executive officers. Qualifying performance-based
compensation is not subject to the deduction limit if certain requirements,
such as stockholder approval of a compensation plan, are met. Although the
Compensation Committee has considered the limitations on the deductibility of
executive compensation imposed by Section 162(m) in designing the Company's
executive compensation programs, the Committee believes that it is unlikely
that such limitations will affect the deductibility of the compensation to be
paid to the Company's executive officers in the near term. Based in part
9
<PAGE>
on this judgment, the Compensation Committee has determined not to recommend
to the Company's Board of Directors that the bonus arrangements for the
Company's executive officers be submitted to the Company's stockholders for
their approval. As a result of an amendment effected at the 1993 Annual
Meeting of Stockholders, the Compensation Committee believes that option
grants and stock awards made at fair market value under the Company's 1993
Equity Incentive Plan are exempt from the limitations of Section 162(m).
The compensation programs for the Company's executives established by the
Compensation Committee consist of three elements based upon the objectives
described above: base salary; annual cash bonus; and a stock-based equity
incentive in the form of participation in the Company's 1993 Equity Incentive
Plan. In establishing base salaries for executives, the Compensation
Committee monitors salaries at other companies, considers historic salary
levels of the individual and the nature of the individual's responsibilities
and compares the individual's base salary with those of other executives at
the Company. To the extent determined to be appropriate, the Compensation
Committee also considers general economic conditions, the Company's financial
performance and the individual's performance in establishing base salaries of
executives.
During fiscal 1995, four of the executive officers, including the Chief
Executive Officer, were parties to multi-year employment agreements with the
Company that fixed the executive's annual base salary during the term of the
agreement, subject to adjustment for changes in the consumer price index.
Thus, the only adjustments during 1995 to the base salaries of Messrs.
Fisher, Gottesman and Buchanan were cost-of-living adjustments in accordance
with the terms of the employment agreements signed by Messrs. Fisher and
Gottesman in November 1991 and Mr. Buchanan in January 1992. Mr. Schweim
entered into his employment agreement in June 1995, and the cost-of-living
adjustment will first take effect with the contract year beginning in June
1996. The Compensation Committee believes that the base salary levels
provided for in these contracts, including the agreement with the Chief
Executive Officer, established appropriate base salary levels for the covered
individuals in light of the factors described above. Moreover, each of these
agreements includes provisions prohibiting the executive from engaging in a
business competitive with the Company during the term of the agreement and,
subject to certain conditions in the case of Messrs. Buchanan and Schweim,
for a specified number of years thereafter. The terms of the employment
agreements with Messrs. Fisher, Gottesman and Buchanan expired on December
31, 1995, and the Compensation Committee is currently reviewing these
agreements in their entirety with a view towards authorizing the Company to
renew these agreements or enter into new employment agreements with these
three executive officers. Mr. Schweim's employment agreement expires on
May 31, 1997.
The Compensation Committee generally structures cash bonuses by linking them
to the achievement of specified Company and/or business unit performance
objectives. In the case of Mr. Fisher and two of the other executive
officers, the bonus was based upon a percentage of pre-tax net income (as
defined) of the Company or the applicable business unit, as set forth in
their employment agreements. For certain executive officers not covered by
employment agreements, the Board of Directors, upon recommendation of the
Compensation Committee, has adopted a Vice President Bonus Plan pursuant to
which Vice Presidents of the Company are eligible for bonuses (calculated as
a percentage of annual salary) upon the attainment of certain sales and
pre-tax profit objectives which are fixed by the Board of Directors for the
Company or certain of its divisions. The Compensation Committee believes that
these arrangements tie the executive's performance closely to a key measure
of success of the Company or the executive's business unit. The bonus for Mr.
Fisher for fiscal 1995 of $105,967 was equal to 4% of the Company's pre-tax
profit in such year, as specified in Mr. Fisher's employment contract.
Stock option grants in fiscal 1995 were designed to make a portion of the
overall compensation of the executive officers, including the Chief Executive
Officer, receiving such awards vary depending upon the performance of the
Company's Common Stock. Such grants, as a result of the applicable vesting
arrangements, also serve as a means for the Company to retain the services of
these individuals. The Chief Executive Officer received an option to purchase
30,000 shares of Class B Common Stock in fiscal 1995 as part of a new round
of option grants. The 30,000 share stock option grant to Mr. Fisher was based
on the Compensation Committee's evaluation of Mr. Fisher's overall
performance in fiscal 1994.
Jonathan O. Lee
John J. Neuhauser
10
<PAGE>
Stock Performance Chart
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the five fiscal
years ended January 5, 1996 with the total return on the S&P 500 Composite
Index and a peer group of companies (the "Shoes Index"). The comparison
assumes $100 was invested on December 31, 1990 in the Company's then
outstanding Common Stock (the "Prior Common Stock") and in each of the
foregoing indices and assumes reinvestment of dividends. On May 26, 1993, the
Prior Common Stock ceased trading and the Class A Common Stock and Class B
Common Stock began trading on the Nasdaq National Market.
******************************* [LINE GRAPH] *******************************
DOLLARS
1990 1991 1992 1993 1994 1995
---------------------------------------------------------
Hyde
Athletic
Industries,
Inc. 100 113 413 275 240 193
---------------------------------------------------------
S & P Index 100 131 141 154 157 216
---------------------------------------------------------
Shoes Index 100 93 81 66 49 34
---------------------------------------------------------
*****************************************************************************
(1) Shoes Index includes L.A. Gear, Inc., Ryka, Inc. and K-Swiss Inc.
(publicly traded during the entire period covered by the chart) and Vans,
Inc. (commenced public trading in 8/91), and the returns of each
component company of the Shoes Index is weighted according to the
respective company's stock market capitalization at the beginning of the
period.
RATIFICATION OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the stockholders, the Board of Directors, on the
recommendation of its Audit Committee, has selected the firm of Coopers &
Lybrand L.L.P. as the Company's independent accountants for the current
fiscal year. Coopers & Lybrand L.L.P. has been the Company's independent
accountants for the five most recent fiscal years. Although stockholder
approval of the Board of Directors' selection of Coopers & Lybrand L.L.P. is
not required by law, the Board of Directors believes that it is advisable to
give stockholders an opportunity to ratify this selection. If this proposal
is not approved at the Annual Meeting, the Board of Directors will reconsider
this selection.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at the
Annual Meeting. They will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate
questions from stockholders.
OTHER MATTERS
Management does not know of any other matters which may come before the
Annual Meeting. However, if any other matters are properly presented to the
Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote, or otherwise act, in accordance with their judgment on such
matters.
All costs of solicitations of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and
regular employees, without additional remuneration, may solicit
11
<PAGE>
proxies by telephone, telecopy, personal interviews, and other means.
Brokers, custodians and fiduciaries will be requested to forward proxy
soliciting material to the owners of stock held in their names, and the
Company will reimburse them for their out-of-pocket expenses in connection
therewith.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's Common Stock to file with the
Securities and Exchange Commission (the "Commission") initial reports of
ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Except as set forth below, the Company
believes that during 1995 its officers, directors and holders of more than
10% of the Company's Common Stock complied with all Section 16(a) filing
requirements. Merrill F. Gottesman, a principal stockholder of the Company,
failed to file on a timely basis the Initial Statement of Beneficial
Ownership of Securities on Form 3, which she was obligated to file with the
Commission on July 30, 1995, ten days after Mrs. Gottesman acquired by gift a
sufficient number of shares of Class B Common Stock to be considered the
beneficial owner of more than 10% of such class of securities. Mrs. Gottesman
is the wife of Charles A. Gottesman, the daughter of Phyllis H. Fisher and
the sister of John H. Fisher.
Stockholder proposals to be included in the Company's proxy statement for the
1997 Annual Meeting of Stockholders must be received by the Company, for
consideration, on or before December 24, 1996.
By Order of the Board of Directors,
David E. Redlick, Clerk
April 22, 1996
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED.
12
<PAGE>
PROXY HYDE ATHLETIC INDUSTRIES, INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS - May 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY.
The undersigned, having received notice of the meeting and
the proxy statement therefor, and revoking all prior proxies,
hereby appoint(s) John H. Fisher and Charles A. Gottesman, and
each of them, attorneys or attorney of the undersigned (with full
power of substitution in them and each of them) for and in the
name(s) of the undersigned to attend the Annual Meeting of
Stockholders of Hyde Athletic Industries, Inc. (the "Company") to
be held at the Company's headquarters, Centennial Industrial Park,
13 Centennial Drive, Peabody, Massachusetts 01960 at 10:00 a.m.
(local time), on Wednesday, May 22, 1996 and any adjourned
sessions thereof, and there to vote and act upon the following
matters in respect of shares of Class A Common Stock of the
Company which the undersigned would be entitled to vote or act
upon, with all powers the undersigned would possess if personally
present. Each of the following matters is being proposed by the
Company.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING, OR ANY
ADJOURNMENT THEREOF.
(To Be Signed on Reverse Side)
-1-
<PAGE>
[X] Please mark your
votes as in this
example.
(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, print that nominee's name in the line provided below.)
1. Election of directors [ ] FOR [ ] WITHHELD
FOR (all nominees except as marked below)
_________________________________________
Nominees: James A. Buchanan, John H. Fisher, Phyllis H. Fisher,
Charles A. Gottesman, Jonathan O. Lee and John J.
Neuhauser
2. Ratification of the selection of Coopers & Lybrand L.L.P. as
the Company's independent accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares represented by this proxy will be voted as
directed by the undersigned. If no direction is given with
respect to any election to office or proposal specified above,
this proxy will be voted for such election to office or proposal.
Attendance of the undersigned at the meeting or at any
adjourned session thereof will not be deemed to revoke this proxy
unless the undersigned shall affirmatively indicate thereat the
intention of the undersigned to vote said shares in person. If
the undersigned hold(s) any of the shares of the Company in a
fiduciary, custodial or joint capacity or capacities, this proxy
is signed by the undersigned in every such capacity as well as
individually.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING
THE ENCLOSED ENVELOPE.
SIGNATURE(S)_____________________________ DATE___________________
Note: Please sign name(s) exactly as appearing hereon. When
signing as attorney, executor, administrator, or other
fiduciary, please give your full title as such. Joint
owners should each sign personally.
-2-
