SCHEDULE 14A
(RULE 14a-101)
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:
[ ] 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))
PREMIUMWEAR, 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] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions 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>
PREMIUMWEAR, INC.
5500 FELTL ROAD
MINNETONKA, MINNESOTA 55343
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1999
------------------
To All Holders of Common Stock:
The Annual Meeting of Shareholders of PremiumWear, Inc. will be held at the
Radisson Hotel South, 7800 Normandale Boulevard, Bloomington, MN 55439, on
Wednesday, May 19, 1999 at 3:30 p.m., Central Daylight Time, for the following
purposes:
1. To elect three directors to serve a three-year term and two directors
to serve a two-year term.
2. To ratify and approve the adoption of the Company's 1999 Stock Plan.
3. To transact such other business as may properly come before the
meeting, or any adjournment or adjournments thereof.
Shareholders of record at the close of business on March 25, 1999 are
entitled to notice of and to vote at the Annual Meeting. Since it is important
that your shares be represented at the meeting, whether or not you personally
plan to attend, you are requested to sign, date and return your proxy card
promptly in the enclosed envelope. If you are a record holder, you may also
submit your proxy by telephone or through the Internet by following the
instructions on the proxy card. If you own shares in "street name," i.e. through
a broker, you should follow the instructions provided by the broker. Returning
your signed proxy or submitting your proxy by telephone or through the Internet
will not prevent you from voting in person at the meeting, should you desire to
do so.
By Order of the Board of Directors
/s/ John R. Houston
John R. Houston, SECRETARY
Minneapolis, Minnesota
April 8, 1999
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YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY CARD TODAY
OR, IF YOU WISH, YOU MAY SUBMIT YOUR PROXY BY TELEPHONE OR THROUGH THE INTERNET
BY FOLLOWING THE INSTRUCTIONS ON THE PROXY CARD.
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<PAGE>
PREMIUMWEAR, INC.
5500 FELTL ROAD
MINNETONKA, MINNESOTA 55343
------------------
PROXY STATEMENT
------------------
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of PremiumWear, Inc. (the "Company") of proxies
for the Annual Meeting of Shareholders of the Company to be held at the Radisson
Hotel South, 7800 Normandale Boulevard, Bloomington, MN 55439, on Wednesday, May
19, 1999 at 3:30 p.m., Central Daylight Time, or any adjournment or adjournments
thereof. This Proxy Statement and the enclosed proxy card are being mailed to
shareholders on or about April 8, 1999.
There were outstanding at the close of business on March 25, 1999, the
record date for shareholders entitled to notice of and to vote at the meeting,
2,581,422 shares of Common Stock, and each of such shares is entitled to one
vote at the meeting. Only shareholders of record at the close of business on
March 25, 1999 will be entitled to vote at the Annual Meeting. The presence, in
person or by proxy, of the holders of a majority of the shares of Common Stock
entitled to vote at the Annual Meeting of Shareholders constitutes a quorum for
the transaction of business.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the meeting. This year, proxies may be
sent to the Company using the enclosed proxy card, or by record holders by
submitting a proxy by telephone or through the Internet, as permitted by
Delaware law. Shares represented by proxies properly signed, dated and returned,
or submitted by telephone or through the Internet, will be voted at the Annual
Meeting of Shareholders in accordance with the instructions set forth therein.
If a proxy is properly signed, or submitted by telephone or through the
Internet, but contains no instructions, the shares represented thereby will be
voted FOR the director nominees, FOR the adoption of the 1999 Stock Plan, and at
the discretion of the proxyholders as to any other matters which may properly
come before the Annual Meeting of Shareholders.
The election inspectors will treat abstentions as shares that are present
and entitled to vote for purposes of determining the presence of a quorum. With
respect to the election of directors (elected by a plurality of votes),
abstentions will not be taken into account in determining the outcome of the
election. With respect to the other matters being considered (approved by a
majority of shares represented at the Annual Meeting and entitled to vote),
abstentions will have the same effect as negative votes. If a broker indicates
on the proxy that it does not have discretionary authority as to certain shares
to vote on a particular matter, those shares will not be considered as present
and entitled to vote with respect to that matter and will not be taken into
account in determining the outcome of the votes on all matters being considered
at this Annual Meeting.
Each proxy may be revoked at any time before it is voted by signing and
returning a proxy bearing a later date, by giving written notice of revocation
to the Secretary of the Company, or by attending the Annual Meeting of
Shareholders and voting in person. To revoke a proxy previously submitted by
telephone or through the Internet, the shareholder could also simply vote again
at a later date using the same procedures in which case the later vote will be
recorded and the earlier vote revoked. Record holders wishing to vote by
telephone or through the Internet should note that they must do so before noon
on Tuesday, May 18, 1999. After that time, telephone and Internet voting will
not be permitted and a shareholder wishing to vote, or revoke an earlier proxy
after such time must submit a signed proxy card or vote in person.
1
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes of directors, each
director serving a three-year term. Approximately one-third of the directors
belong to each class. The Board of Directors is seeking shareholder election of
three directors: Messrs. Keith A. Benson and Thomas D. Gleason whose term
expires this year and Mr. Alan W. Kosloff who was appointed to the class whose
term expires this year in October 1998. If elected, their terms will expire in
2002. The Board of Directors is also seeking shareholder election of two
nominees for director, Timothy C. Klouda and David E. Berg, who were nominated
by the Board to the class of directors whose term expires in 2001. Mr. Klouda
was nominated to the Board in connection with the acquisition by the Company on
March 25, 1999 of Klouda-Lenz, Inc., the company in which Mr. Klouda was the
founder, director and executive officer.
The Company believes that each nominee will be able to serve; but should he
be unable to serve as a director, the persons named in the proxies have advised
that they will vote for the election of such substitute nominee as the Board may
propose.
Information regarding Messrs. Benson, Gleason, Kosloff, Berg and Klouda and
other incumbent directors and their principal occupations are set forth below,
based upon information furnished to the Company by such persons. Unless
otherwise indicated, each of the directors has held their respective identified
positions for more than the past five years.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- ------------ -------------------------------------------------- --------
<S> <C> <C>
NOMINATED FOR A TERM ENDING IN 2002:
Keith A. Benson (55) Vice Chairman, Chief Financial Officer and 1993
Director of Musicland Stores Corporation and The
Musicland Group, Inc. (retail stores).
Thomas D. Gleason (63) Chairman and Chief Executive Officer of the 1995
Company; Vice Chairman of Wolverine World Wide,
Inc. (footwear manufacturing and marketing), 1993
through April 1996; Chief Executive Officer of
Wolverine World Wide, Inc. from 1972 to 1993;
Director and non-executive Chairman of United
States Leather Co. (leather tanner).
Alan W. Kosloff (58) Chairman and Chief Executive Officer of Kosloff & 1999
Partners, LLC (financial consulting and investment
banking) since 1996; from 1976 through 1995, Mr.
Kosloff served in various capacities, most
recently as Chairman, President and CEO, at
American Marketing Industries, Inc., a private
company in the corporate promotional
products/advertising specialty industry with
incentive and premium apparel.
NOMINATED FOR A TERM ENDING 2001:
Timothy C. Klouda (46) Founder in 1986, director and Chief Executive
Officer of Klouda-Lenz, Inc., an independent sales
representative for the Company acquired by the
Company in March 1999.
David E. Berg (42) President of the Company since August 1997; Chief
Operating Officer of the Company since December
1996; Executive Vice President of Sales and
Marketing of the Company from May 1995 to August
1997; Vice President, National Sales Manager,
Retail Division, of the Company from January 1990
to October 1993.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS SINCE
- ------------ -------------------------------------------------- --------
<S> <C> <C>
OTHER DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING AND
WHOSE TERM EXPIRES IN 2000:
C. Derek Anderson (57) Senior Managing Partner and director of 1991
Plantagenet Capital Management LLC (investment
partnership); Director, Anderson Capital
Management, Inc. (investment management firm);
Director of various private companies.
Mark B. Vittert (51) Private Investor; Director of Lee Enterprises, 1991
Inc. (communi- cations company) and Dave &
Busters, Inc. (restaurant and entertainment
company).
OTHER DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING AND
WHOSE TERM EXPIRES IN 2001:
Gerald E. Magnuson (68) Of Counsel to Lindquist & Vennum PLLP (law firm); 1982
Partner of Lindquist & Vennum PLLP to December
1994; Director of Research, Incorporated,
Sheldahl, Inc. and WSI Industries, Inc.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH NOMINEE.
VOTE REQUIRED
Directors are elected by a plurality of the votes cast at the Annual
Meeting. The four nominees who receive the most votes will be elected director.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS AND MEMBERSHIP
During the last fiscal year the Board of Directors met seven times. Each
director attended more than 75% of the meetings of the Board of Directors and
any committee on which he served.
The Board of Directors has established three standing committees, the Audit
Committee, the Compensation Committee and the Governance Committee. The Audit
Committee, which met two times during the last fiscal year, is currently
comprised of Messrs. Benson (Chairman), Magnuson and Kosloff. Among other
duties, the Audit Committee reviews the internal and external financial
reporting of the Company, reviews the scope of the independent audit and
considers comments by the independent public accountants regarding internal
controls and accounting procedures and management's response to those comments.
The Compensation Committee, which met three times during the last fiscal year,
is currently comprised of Messrs. Anderson (Chairman), Benson and Vittert. The
Compensation Committee approves the compensation arrangements for senior
management. The Board of Directors established a Stock Grant Subcommittee of the
Compensation Committee, currently comprised of Messrs. Benson and Vittert, for
the purpose of granting awards under the 1991 Stock Plan and the new 1999 Stock
Plan. The Company does not have a nominating committee. In December 1996, the
Board of Directors established a Governance Committee, currently comprised of
Messrs. Magnuson (Chairman), Vittert and Gleason, for the purpose of reviewing
Board governance and membership matters. The Governance Committee met once
during the last fiscal year.
DIRECTOR FEES AND STOCK OPTIONS
Non-employee members of the Board of Directors receive an annual fee of
$6,000 plus $750 for each Board meeting attended in person, $150 for each
meeting attended by telephonic conference, $500 for each committee meeting held
more than 24 hours before or after a Board meeting and $150 for each committee
meeting held within 24 hours of a Board meeting.
The 1991 Stock Plan provides for the annual, automatic granting of a
defined number of options to directors who are not employees of the Company.
Such options are granted to each director who is not an employee of the Company
and who (i) is elected or re-elected as a director by the shareholders at any
annual or special meeting of the shareholders or (ii) is serving an unexpired
term as a director on the date of an annual meeting at which any other director
is elected. Each such person shall, as of the
3
<PAGE>
date of such annual meeting, automatically receive a non-qualified option to
purchase 1,000 shares of Common Stock with the option price equal to the fair
market value of the Company's Common Stock on such date. These options will have
five-year terms. The 1991 Stock Plan also permits granting of additional or
alternative options to directors at the discretion of the Board. Upon his
appointment to the Board of Directors in October 1998, Mr. Kosloff received a
discretionary option to purchase 1,000 shares of the Company's Common Stock. The
1999 Stock Plan submitted for shareholder approval at the Annual Meeting will,
if adopted, replace the 1991 Stock Plan and contain identical provisions for
option grants for non-employee directors.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for fiscal years 1998, 1997 and 1996, the cash
compensation paid by the Company, as well as certain other compensation paid or
accrued for those years, to Thomas D. Gleason, the Chief Executive Officer, and
to each of the other executive officers of the Company who received more than
$100,000 during the last fiscal year (together, the "Named Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------- ---------------------
AWARDS
--------------------- ALL OTHER
OTHER ANNUAL SECURITIES UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION OPTIONS(#) ($)(2)
- ------------------ ---- --------- ----------- ------------ --------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Thomas D. Gleason(3) 1998 180,000 7,501 -- 100,000 13,532
Chairman and Chief 1997 180,000 -- -- 40,000 30,389
Executive Officer 1996 66,462 -- -- -- 1,361
David E. Berg 1998 168,654 25,394 -- 50,000 7,529
President and 1997 158,077 41,250 -- 20,000 7,158
Chief Operating Officer 1996 150,000 -- -- 15,000 4,028
James S. Bury 1998 129,000 20,963 -- 30,000 8,585
Vice President of 1997 128,077 34,375 -- 12,000 8,101
Finance and Assistant 1996 125,000 -- -- 5,000 5,322
Secretary
Cynthia L. Boeddeker(4) 1998 109,615 31,517 -- 25,000 4,512
Vice President and 1997 90,000 24,750 -- 8,000 6,211
General Merchandise Manager
</TABLE>
- ------------------
(1) For fiscal 1998, includes $18,750, $15,625 and $11,250 paid pursuant to the
hold-in-place agreements to Messrs. Berg and Bury and Ms. Boeddeker,
respectively. For fiscal 1997, all bonus amounts represent payments
pursuant to the hold-in-place agreements. See "Compensation Committee
Report on Executive Compensation -- Annual Incentives" for a discussion of
the hold-in-place agreements.
(2) Includes Company contributions to the Company's retirement plan, premiums
paid for term life insurance and other payments as described below. For
fiscal 1998, the Company's contributions to the retirement plan for Messrs.
Gleason, Berg, Bury and Ms. Boeddeker totaled $3,600, $3,162, $2,562 and
$1,800, respectively. In 1998, the Company also paid profit sharing
contributions earned in 1997 of $4,015, $3,373, $3,225 and $2,192,
respectively. For fiscal 1997, the Company's contributions to the
retirement plan for Messrs. Gleason, Berg, Bury and Ms. Boeddeker totaled
$1,212, $3,162, $3,202 and $1,800, respectively. The amounts indicated for
Mr. Gleason and Ms. Boeddeker include $22,500 and $2,250, respectively, as
compensation to Mr. Gleason and Ms. Boeddeker due to stock option exercises
in 1997. In 1997, the Company also paid profit sharing contributions earned
in fiscal 1996 to Messrs. Gleason, Berg, Bury and Ms. Boeddeker totaling
$1,329, $3,000, $2,500 and $1,748, respectively. For fiscal 1996, the
Company's contributions to the retirement plan for Messrs. Berg and Bury
totaled $3,000 and $3,125, respectively. For fiscal 1996, the Company paid
director fees of $25,958 and granted stock options to purchase 15,000
shares to Mr. Gleason prior to his assumption of the position of Chief
Executive Officer. The balance, if any, for each year for all Named
Executives reflects term life insurance premiums.
(3) Mr. Gleason was elected Chief Executive Officer on September 9, 1996.
(4) Ms. Boeddeker's compensation for fiscal 1996 did not exceed $100,000.
4
<PAGE>
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mr. Bury effective
April 24, 1990. This agreement is for an indefinite term and may be terminated
by either party upon 30 days' prior written notice. The agreement provides,
among other things, for a lump sum cash severance payment to Mr. Bury in the
event of a voluntary or involuntary termination of employment in connection with
a change in control of the Company, as defined in the agreement, in an amount
equal to the number of months remaining in the two-year period commencing on the
first Event (as defined therein) in connection with the change in control,
multiplied by one calendar month's base salary, at the highest monthly base
salary rate paid at any time during the term of the agreement. The agreement
also specifies minimum base salaries to be paid during the term of the
agreement. If an Event had occurred at the end of fiscal 1998, Mr. Bury would
have received $258,000 pursuant to his employment agreement.
STOCK OPTIONS
The following table contains information concerning individual grants of
stock options under the 1991 Stock Plan to each of the Named Executives during
the last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
INDIVIDUAL GRANTS RATES OF
----------------------------------------------------------------------- STOCK PRICE
PERCENT OF TOTAL MARKET APPRECIATION
OPTIONS OPTIONS GRANTED TO PRICE FOR OPTION TERM ($)
GRANTED EMPLOYEES IN EXERCISE ON GRANT EXPIRATION -------------------
NAME (#) FISCAL YEAR PRICE ($) DATE ($) DATE 5% 10%
- ---- -------------- ------------------ --------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas D. Gleason ........ 25,000(1) 9.7% 4.875 4.875 3/26/03 33,672 74,406
75,000(2) 29.2% 5.125 5.125 5/13/08 241,731 612,595
------- ---- ------- -------
100,000 38.9% 275,403 687,001
======= ==== ======= =======
David E. Berg ............ 13,000(1) 5.1% 4.875 4.875 3/26/03 17,509 38,691
37,000(2) 14.4% 5.125 5.125 5/13/08 119,254 302,213
------- ---- ------- -------
50,000 19.5% 136,763 340,904
======= ==== ======= =======
James S. Bury ............ 8,000(1) 3.1% 4.875 4.875 3/26/03 10,775 23,810
22,000(2) 8.6% 5.125 5.125 5/13/08 70,908 179,694
------- ---- ------- -------
30,000 11.7% 81,683 203,504
======= ==== ======= =======
Cynthia L. Boeddeker ..... 7,000(1) 2.7% 4.875 4.875 3/26/03 9,428 20,834
18,000(2) 7.0% 5.125 5.125 5/13/08 58,016 147,023
------- ---- ------- -------
25,000 9.7% 67,444 167,857
======= ==== ======= =======
</TABLE>
- ------------------
(1) Becomes exercisable with respect to 25% of the shares of Common Stock
subject to the option on March 26, 1998, 1999, 2000 and 2001.
(2) Becomes exercisable with respect to 20% of the shares of Common Stock
subject to the option on November 13, 2003, 2004, 2005, 2006 and 2007.
However, 40% of the shares subject to the option may be exercised earlier on
or after such time as the last bid price for the Company's Common Stock
equals or exceeds $8.00 on any sixty trading days before May 15, 2000. In
addition, 100% of the shares subject to the option may be exercised on or
after May 15, 2001 if the last bid price for the Company's Common Stock
equals or exceeds $10.00 on any 60 trading days before May 15, 2001.
The following table sets forth information with respect to the Named
Executives concerning the exercise of options during fiscal 1998 and unexercised
options held as of January 2, 1999:
5
<PAGE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND JANUARY 2, 1999 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT 1/2/99 (#) AT 1/2/99 ($)(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas D. Gleason ........ 20,000 $60,000 6,250 113,750 15,234 291,016
David E. Berg ............ -- -- 13,250 56,750 48,547 145,328
James S. Bury ............ -- -- 8,000 34,000 29,250 87,125
Cynthia L. Boeddeker ..... -- -- 5,750 27,250 20,516 68,422
</TABLE>
- ------------------
(1) Based on a market price of $7.3125 per share of Common Stock on January 2,
1999.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executives are generally made by
the Compensation Committee of the Board, currently consisting of Messrs.
Anderson (Chairman), Benson and Vittert. All decisions by the Compensation
Committee relating to the compensation of the Company's executive officers were
during fiscal 1998 and will in fiscal 1999, be reviewed by the full Board.
Pursuant to SEC rules designed to enhance disclosure of companies' policies with
regard to executive compensation, set forth below is a report submitted by the
Compensation Committee addressing the Company's compensation policies for fiscal
1998 as they affected Mr. Gleason, the Company's Chief Executive Officer, and
Messrs. Berg and Bury and Ms. Boeddeker, the executive officers other than the
Chief Executive Officer who, for fiscal 1998, were the Company's most highly
paid executive officers whose compensation exceeded $100,000 (collectively with
Mr. Gleason, the "Named Executives"). The following report shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 (the "1933
Act") or the Securities Exchange Act of 1934 (the "1934 Act"), except to the
extent that the Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under the 1933 Act or the 1934 Act.
COMPENSATION PHILOSOPHY. The Compensation Committee's executive
compensation policies are designed to provide competitive levels of compensation
that integrate pay with the Company's annual and long-term performance goals,
reward above-average corporate performance, recognize individual initiative and
achievement, and assist the Company in attracting and retaining qualified
executives. Furthermore, the Company's use of stock options and restricted stock
grants reflects the Compensation Committee's position that stock ownership by
management and stock-based performance compensation arrangements are beneficial
in aligning management's and shareholders' interest and the enhancement of
shareholder value. Compensation payments, to the extent possible, are designed
to qualify for deductibility under the Internal Revenue Code of 1986, as
amended.
The Company has designed its executive compensation plans around these
policies and objectives. The Compensation Committee believes the Company's
compensation arrangements consistently meet these goals. The following is a
description of the Company's current plans and how each relates to the
objectives indicated above.
BASE SALARY. The Chief Executive Officer generally recommends to the
Compensation Committee the annual salary of each officer of the Company
(including the Named Executives) other than himself and the Compensation
Committee considers and generally approves the salary recommendations. In
determining or approving appropriate salary levels, the Compensation Committee
considers levels of responsibility, experience, individual performance and
internal equity, as well as external pay practices.
ANNUAL INCENTIVES. During fiscal 1998, the Company maintained a 1998 Bonus
Plan for payment of incentive compensation to key managers, including the Named
Executives. The Bonus Plan rewards participants for their contributions to the
attainment of certain Company goals established for profitability, sales volume
and inventory turns during the fiscal year, as well as, to a much lesser degree,
achievement of personal objectives for each participant. Incentive payments are
based on the level of achievement against those goals. For 1998, Messrs.
Gleason, Berg and Bury and Ms. Boeddeker earned
6
<PAGE>
$79,012, $73,104, $55,852 and $48,554, respectively, pursuant to the Bonus Plan,
which sums will be paid during fiscal 1999, except for $16,500 with respect to
Ms. Boeddeker which was paid in fiscal 1998. In addition, in connection with the
Company's 1996 sale of its retail and golf businesses, the Company entered into
hold-in-place agreements with certain employees, including the Named Executives
(except Mr. Gleason), which provided for payment in the event of termination of
employment of varying amounts depending on the employee's job responsibility.
The Named Executives were to receive six months base salary if the agreements
were triggered. Following the sale of the businesses, the Compensation Committee
recommended, and the Board approved, the payment of retention bonuses in
substitution for the hold-in-place agreements in amounts equal to 80% of the
hold-in-place obligations, payable in three installments during fiscal 1997 and
1998. In fiscal 1998, Messrs. Berg and Bury and Ms. Boeddeker were paid $18,750,
$15,625, and $11,250, respectively, as the final installment on these
agreements.
LONG-TERM INCENTIVES. The Company's overall long-term compensation
philosophy is that long-term incentives should be related to improvement in
long-term shareholder value. In furtherance of this objective, the Company
awards to its executive officers and other key personnel stock options and, on a
very selected basis, restricted stock. Stock options encourage and reward
effective management that results in long-term corporate financial success, as
measured by stock price appreciation. Stock options have value from the date the
stock options are granted. Shareholders also benefit from such stock price
appreciation. The 1991 Stock Plan allows the grant of incentive stock options
and non-qualified stock options. Stock options are awarded consistent with the
Company's objective to include in total compensation a long-term equity interest
for executive officers, with greater opportunity for reward if long-term
performance is sustained. To encourage a longer-term perspective, the options
are only exercisable over a multiple year period and grants are made at an
option price equal to the fair market value of the Common Stock on the date of
grant. In granting options, the Named Executive's individual role in
contributing to the development and achievement of the Company's strategic
planning process and goals are also considered.
OTHER COMPENSATION PROGRAMS. The Company maintains certain broad-based
employee benefit plans in which its executive officers, including the Named
Executives, have been permitted to participate, including retirement, life and
health insurance plans. The Company's retirement plan consists of a profit
sharing plan, pursuant to which the Board of Directors may make annual
discretionary contributions, and a 401(k) employee savings plan which allows
employees to make pre-tax contributions and in which the Company matches
employee contributions in an amount equal to one-half of the employee's
contribution up to 5% of the employee's base salary. In February 1999, the Board
of Directors approved a discretionary contribution to the profit sharing plan
with regard to fiscal 1998. Other non-cash compensation benefits are provided to
the Named Executives, none of which are directly or indirectly tied to Company
performance.
CEO FISCAL 1998 COMPENSATION. Regulations of the SEC require the Company to
disclose the Compensation Committee's basis for compensation reported for its
Chief Executive Officer in fiscal 1998 and to discuss the relationship between
the Company's performance during the last fiscal year and such Chief Executive
Officer's compensation. Mr. Gleason's base salary of $180,000 for fiscal 1998
was determined on the same basis as all other executive officers and, as
indicated above, Mr. Gleason earned $79,012 of incentive compensation with
respect to services rendered in fiscal 1998, determined on the same basis as for
the other Named Executives, which sum will be paid in 1999.
SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS
C. Derek Anderson Keith A. Benson Mark B. Vittert
7
<PAGE>
PERFORMANCE GRAPH
In accordance with the rules of the Securities and Exchange Commission, the
following performance graph compares performance of the Company's Common Stock
on the New York Stock Exchange to the Russell 3000 Textile Apparel Industry
Index and to the Russell 2000 Index. The graph compares the cumulative total
shareholder return as of the end of each of the Company's last five fiscal years
on $100 invested at the end of fiscal 1993 and assumes reinvestment of all
dividends. The performance graph is not necessarily indicative of future
investment performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
PremiumWear $ 100.00 $ 131.82 $ 118.18 $ 163.64 $ 226.75 $ 309.45
Russell 2000 100.00 98.18 126.10 146.90 179.75 175.17
Russell 3000 Textile Apparel 100.00 94.93 108.97 135.87 148.23 123.09
</TABLE>
The performance graph above shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the 1933 Act or under the 1934 Act, except to the extent that
the Company specifically incorporates this information by reference, and shall
not otherwise be deemed filed under the 1933 Act or the 1934 Act.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of March 25, 1999 (unless otherwise
specified), the beneficial ownership of Common Stock of the Company by each
shareholder who is known by the Company to own beneficially 5% or more of the
outstanding Common Stock of the Company, each director, each nominee for
director, each Named Executive and by all directors and executive officers as a
group. See "Reorganization" for a description of certain restrictions on
transfers of Common Stock by holders of 5% or more of the total fair market
value of all outstanding Common Stock. Except as otherwise indicated, the
shareholders listed in the table have full voting and investment powers with
respect to the shares indicated.
8
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
BENEFICIALLY OWNED OUTSTANDING SHARES
------------------ ------------------
<S> <C> <C>
Heartland Advisors, Inc ...................... 200,000(1) 7.7%
790 North Milwaukee Street
Milwaukee, WI 53202
The Clark Estates, Inc. ...................... 196,281(2) 7.6%
30 Wall Street
New York, NY 10005 ..........................
C. Derek Anderson ............................ 133,232(3)(4) 5.1%
220 Sansome Street, Suite 400
San Francisco, CA 94104 .....................
Keith A. Benson .............................. 10,800(4) *
Thomas D. Gleason ............................ 118,500(4) 4.5%
Gerald E. Magnuson ........................... 17,800(4) *
Mark B. Vittert .............................. 87,808(4) 3.4%
David E. Berg ................................ 83,720(4) 3.2%
James S. Bury ................................ 43,810(4) 1.7%
Cynthia L. Boeddeker ......................... 16,500(4) *
Alan W. Kosloff .............................. 1,000(4) *
Timothy C. Klouda ............................ 123,446 4.8%
All Directors, nominees and Executive Officers
as a Group (10 persons) ..................... 636,616(4) 23.7%
</TABLE>
- ------------------
*Less than 1%
(1) Based on a Schedule 13G filed with the Securities and Exchange Commission.
(2) The Clark Estates, Inc. provides administrative assistance to a number of
Clark family accounts which beneficially own an aggregate 196,281 shares of
the Company's Common Stock, including The Clark Foundation, which owns
95,390 shares. The Clark Estates, Inc. has, or in certain instances shares,
voting power and/or dispositive power with respect to such shares. The
Clark Estates, Inc. has no remainder or other economic interest in such
trust or fiduciary accounts.
(3) Mr. Anderson shares voting and dispositive power with respect to 67,732
shares acquired by Anderson Capital Management, Inc. ("ACM") as agent for
its investment advisory clients and, accordingly, Mr. Anderson may be
deemed to be the beneficial owner of such shares. Mr. Anderson disclaims
beneficial ownership of those shares and 6,500 of the shares represented as
beneficially owned by him which are owned by his wife.
(4) Includes 27,500 shares for Mr. Gleason, 7,000 shares for each of Messrs.
Anderson, Magnuson, Benson and Vittert, 9,500 shares for Ms. Boeddeker,
21,500 shares for Mr. Berg, 13,000 shares for Mr. Bury, 1,000 for Mr.
Kosloff and 100,500 shares for all directors and executive officers as a
group which may be acquired within sixty days of the date hereof upon the
exercise of outstanding stock options.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon its review of Forms 3, 4 and 5 and any amendments thereto
furnished to the Company pursuant to Section 16 of the 1934 Act, the Company
believes all of such forms were filed on a timely basis by the reporting persons
during the fiscal year ended January 2, 1999, except that late Forms 5 were
filed for the option grants to Messrs. Anderson, Benson, Gleason, Berg, Bury,
Magnuson, Vittert and Ms. Boeddeker.
REORGANIZATION
On July 3, 1991, the Company filed a Petition for Reorganization under
Chapter 11 of the United States Bankruptcy Code, together with a Plan of
Reorganization and a Disclosure Statement, with the United States Bankruptcy
Court for the District of Minnesota. The Plan of Reorganization was confirmed by
the Bankruptcy Court on October 1, 1991 and became effective as of October 29,
1991 (the "Reorganization"). Pursuant to the Reorganization, holders of the
Company's Common Stock received one new share of Common Stock for every 25
shares of their then existing Common Stock
9
<PAGE>
surrendered and the Company issued or committed to issue in excess of 1,773,000
new shares of Common Stock to creditors in satisfaction of indebtedness in
excess of $53,000,000.
In connection with the Reorganization, in order to reduce the risk that any
change in the stock ownership of the Company may jeopardize certain Federal
income tax attributes of the Company, the Company's Certificate of Incorporation
was amended to limit the ability of persons beneficially owning, or who, upon
acquisition of any shares, would beneficially own, five percent (5%) or more of
the total fair market value of outstanding shares of Common Stock of the Company
(a "5% Holder"). Until October 29, 1993, no 5% Holder was permitted to sell,
transfer or dispose or contract to sell, transfer or dispose any shares of
Common Stock or options, warrants or other rights to acquire Common Stock,
except in accordance with the procedures described in Article V of the
Certificate of Incorporation. Until October 29, 2001, no 5% Holder may purchase
or acquire or contract to purchase shares of Common Stock, except in accordance
with the procedures described in Article V, and any such purchase, acquisition
or contract not in compliance with Article V shall be null and void.
PROPOSAL NO. 2
APPROVAL OF THE 1999 STOCK PLAN
GENERAL INFORMATION
On February 22, 1999, the Company's Board of Directors approved the
Company's 1999 Stock Plan (the "1999 Plan"), subject to approval by the
shareholders. The purpose of the 1999 Plan is to enable the Company and its
subsidiaries to retain and attract key employees, consultants and directors who
contribute to the Company's success by their ability, ingenuity and industry,
and to enable such key employees, consultants and directors to participate in
the long-term success and growth of the Company by giving them a proprietary
interest in the Company. The 1999 Plan authorizes the granting of awards in the
form of stock options and restricted stock and is substantially identical to the
1991 Stock Plan.
There are 120,000 shares of Common Stock available for issuance under the
1999 Plan. The Board of Directors has approved the 1999 Stock Plan in part
because as of March 20, 1999, the Company's existing 1991 Stock Plan had only
15,804 shares remaining for issuance.
SUMMARY OF THE 1999 PLAN
ELIGIBILITY AND ADMINISTRATION. Officers and other key employees of the
Company and its subsidiaries who are responsible for or contribute to the
management, growth and/or profitability of the business of the Company and its
subsidiaries, as well as selected consultants under contract to the Company and
directors are eligible to be granted awards under the 1999 Plan. The 1999 Plan
is administered by the Board, or in its discretion, by a committee of at least
two "non-employee directors" who are also "outside directors," as defined in the
1999 Plan (the "Committee"), who shall be appointed by the Board. The Board of
Directors has established a Stock Grant Subcommittee, currently comprised of
Messrs. Keith A. Benson and Mark B. Vittert, for the purpose of granting awards
under the 1999 Plan. The term "Board" as used in this section refers to the
Company's Board of Directors or the Committee. The Board has the power to make
awards, determine the number of shares covered by each award and other terms and
conditions of such awards, interpret the 1999 Plan, and adopt rules, regulations
and procedures with respect to the administration of the 1999 Plan. The Board
may delegate its authority to officers of the Company for the purpose of
selecting key employees who are not officers of the Company to be participants
in the 1999 Plan. The Board may also substitute new options under the 1999 Plan
for options previously granted under the 1999 Plan or any previous stock option
plan of the Company, provided, however, that the exercise price of any such
substitute option shall not be lower than the exercise price of the previously
granted option without shareholder approval.
AWARDS UNDER THE 1999 PLAN
EMPLOYEE STOCK OPTIONS. The Board may grant stock options that either
qualify as "incentive stock options" under the Code or are "non-qualified stock
options" in such form and upon such terms as the Board may approve from time to
time. Stock options granted under the 1999 Plan may be
10
<PAGE>
exercised during their respective terms as determined by the Board. The purchase
price may be paid by tendering cash or, in the Board's discretion, by tendering
promissory notes or common stock. The Committee may, in its sole discretion,
permit optionees to pay the option exercise price by having the Company withhold
upon exercise of the option a number of shares with a fair market value equal to
the aggregate option exercise price. No stock option shall be transferable by
the optionee or exercised by anyone else during the optionee's lifetime.
Stock options may be exercised during varying periods of time after a
participant's termination of employment, depending upon the reason for the
termination. Following a participant's death, the participant's stock options
may be exercised by the legal representative of the estate or the optionee's
legatee for a period of nine months or until the expiration of the stated term
of the option, whichever is less. The same time period applies if the
participant is terminated by reason of disability. Following retirement, a
participant's stock options may be exercised by the participant for a period of
three months or until the expiration of the stated term of the option whichever
is less. If the participant's employment is terminated for any reason other than
death, disability or retirement, the participant's stock options immediately
terminate. In the event of termination of employment by reason of disability or
retirement, if an incentive stock option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, the
option will thereafter be treated as a non-qualified stock option.
No incentive stock options shall be granted under the 1999 Plan after
February 22, 2009. The term of an incentive stock option may not exceed 10 years
(or 5 years if issued to a participant who owns or is deemed to own more than
10% of the combined voting power of all classes of stock of the Company, any
subsidiary or affiliate). The aggregate fair market value of the Common Stock
with respect to which an incentive stock option is exercisable for the first
time by an optionee during any calendar year shall not exceed $100,000. There is
an annual cap of 50,000 on the number of shares granted to an optionee. The
exercise price under an incentive stock option may not be less than the fair
market value of the Common Stock on the date the option is granted (or, in the
event the participant owns more than 10% of the combined voting power of all
classes of stock of the Company, any subsidiary or affiliate, the option price
shall be not less than 110% of the fair market value of the stock on the date
the option is granted). The exercise price for non-qualified options granted
under the 1999 Plan may be less than 100% of the fair market value of the Common
Stock on the date of grant.
RESTRICTED STOCK. The Board may grant restricted stock awards that result
in shares of Common Stock being issued to a participant subject to restrictions
against disposition during a restricted period established by the Board. The
Board may condition the grant of restricted stock upon the attainment of
specified performance goals or service requirements. The provisions of
restricted stock awards need not be the same with respect to each recipient.
The restricted stock granted under the 1999 Plan will be held in custody by
the Company until the restrictions thereon have lapsed. During the period of the
restrictions, a participant has the right to vote the shares of restricted stock
and to receive dividends. Unless and until any restrictions on the shares shall
have lapsed, participants shall have no right to sell, transfer, pledge or
assign the restricted stock awarded under the 1999 Plan. Notwithstanding the
foregoing, all restrictions with respect to restricted stock lapse ten (10)
business days prior to the occurrence of a dissolution, merger or other
significant corporate change in the Company, as provided in the 1999 Plan.
Except as otherwise provided in the award agreement, upon termination of
employment of a participant voluntarily by the employee or for Cause (as defined
therein), all such shares with respect to which restrictions have not lapsed
will be forfeited by the participant, subject to the right of the Committee to
waive such restrictions in the event of a participant's death, total disability,
retirement or under special circumstances approved by the Committee. If
employment is terminated for any other reason, all remaining restrictions on the
shares shall immediately lapse and complete beneficial ownership of the shares
shall vest in the employee or, if applicable, his or her estate.
If a participant terminates employment during the period of the
restrictions, all shares still subject to restrictions will be forfeited and
returned to the Company, subject to the right of the Board to waive such
restrictions in the event of a participant's death, total disability, retirement
or under special circumstances approved by the Board.
11
<PAGE>
STOCK OPTIONS OF DIRECTORS WHO ARE NOT EMPLOYEES. The 1999 Plan provides
for the annual, automatic granting of a defined number of options to directors
who are not employees of the Company. Such options are granted to each director
who is not an employee of the Company and who (i) is elected or re-elected as a
director by the shareholders at any annual or special meeting of the
shareholders or (ii) is serving an unexpired term as director on the date of an
annual meeting at which any other director is elected. Each such person shall,
as of the date of such annual meeting, automatically receive a non-qualified
option to purchase 1,000 shares of Common Stock with the option price equal to
the fair market value of the Company's Common Stock on such date. These options
will have five-year terms and will be exercisable at any time from the date of
grant. The purchase price, payment terms, transfer restrictions and other
similar provisions of employee stock options apply to these stock options.
Directors who are not employees may also be granted discretionary stock options
and restricted stock awards under the 1999 Plan. In the event that discretionary
stock options or restricted stock awards are granted to members of the
Committee, such awards must be granted by the Board of Directors.
GENERAL PROVISIONS. The Board may, at the time of any grant under the 1999
Plan, provide that the shares received under the 1999 Plan shall be subject to
repurchase by the Company in the event of termination of employment of the
participant. The repurchase price will be the fair market value of the stock or,
in the case of a termination for Cause (as defined in the 1999 Plan), the amount
of consideration paid for the stock. The Board may also, at the time of grant,
provide the Company with similar repurchase rights, upon terms and conditions
specified by the Board, with respect to any participant who, at any time within
two years after termination of employment with the Company, directly or
indirectly competes with, or is employed by a competitor of, the Company.
FEDERAL INCOME TAX CONSEQUENCES
STOCK OPTIONS. An optionee will not realize taxable compensation income
upon the grant of an incentive stock option. In addition, an optionee generally
will not realize taxable compensation income upon the exercise of an incentive
stock option if he or she exercises it as an employee or within three months
after termination of employment (or within one year after termination if the
termination results from a permanent and total disability). The amount by which
the fair market value of the shares purchased exceeds the aggregate option price
at the time of exercise is treated as alternative minimum taxable income for
purposes of the alternative minimum tax.
If stock acquired pursuant to an incentive stock option is not disposed of
prior to the date two years from the option grant date or prior to one year from
the option exercise date, any gain or loss realized upon the sale of such shares
will be characterized as capital gain or loss. If the applicable holding periods
are not satisfied, then any gain realized in connection with the disposition of
such stock will generally be taxable as compensation income in the year in which
the disposition occurred, to the extent of the difference between the fair
market value of such stock on the date of exercise and the option exercise
price. The Company is entitled to a tax deduction to the extent, and at the
time, that the participant realizes compensation income. Capital gains resulting
from property held for more than 12 months will be taxed at a maximum rate of
20%. Capital gains resulting from property held for less than one year will be
taxed at the individual's applicable ordinary income tax rate.
An optionee will not realize taxable compensation income upon the grant of
a non-qualified stock option, which includes options granted to non-employee
directors. When an optionee exercises a non-qualified stock option, he or she
will realize taxable compensation income at that time equal to the difference
between the aggregate option price and the fair market value of the stock on the
date of exercise. If, however, an optionee is subject to Section 16(b) of the
1934 Act (i.e., is an executive officer, director or 10% shareholder of the
Company) and the optionee exercises the option within six months after the date
the option was granted, he or she will not realize taxable compensation income
until six months after the grant of the non-qualified stock option. In such
event, the amount of the optionee's compensation income will equal the
difference between the aggregate option price and the fair market value of the
stock on the date immediately preceding the sixth month anniversary of the date
of grant. An optionee who is subject to Section 16(b) may, however, elect under
Section 83(b) of the Code to be taxed at the time of exercise of a non-qualified
stock option in the same manner as an optionee who is not subject to Section
16(b). In any event, the Company is entitled to a tax deduction to the extent,
and at the time, that the optionee realizes compensation income.
12
<PAGE>
Upon the exercise of a non-qualified stock option, the 1999 Plan requires
the optionee to pay to the Company any amount necessary to satisfy applicable
federal, state or local withholding tax requirements. Under the 1999 Plan, the
Board may grant options that permit the optionee to elect to satisfy withholding
tax requirements associated with the exercise of an option by authorizing the
Company to retain from the number of shares that would otherwise be deliverable
to the optionee that number of shares having an aggregate fair market value
equal to the tax required to be withheld. The Company then would pay the tax
liability from its own funds.
RESTRICTED STOCK. The grant of restricted stock should not result in
immediate income for the participant or in a deduction for the Company for
federal income tax purposes, assuming the shares are nontransferable and subject
to restrictions which would result in a "substantial risk of forfeiture" as
intended by the Company. If the shares are transferable or there are no such
restrictions, the participant would recognize compensation income when any such
restrictions lapse. The amount of such income will be the value of the Common
Stock on that date less any amount paid for the shares. Dividends paid on the
Common Stock and received by the participant during the restricted period would
also be taxable compensation income to the participant. In any event, the
Company will be entitled to a tax deduction to the extent, and at the time, the
participant realizes compensation income. A participant may elect, under Section
83(b) of the Code, to be taxed on the value of the stock at the time of award.
If this election is made, the fair market value of the stock at the time of the
election is taxable to the participant as compensation income, and the Company
is entitled to a corresponding deduction. Dividends on the stock are then
taxable to the participant and are no longer deductible by the Company.
Participants may be required to pay in cash to the Company any taxes
required to be withheld at the date restrictions lapse with respect to
restricted stock. The participant may elect to satisfy withholding, in whole or
in part, by having the Company withhold shares of Common Stock having an
aggregate fair market value equal to the amount required to be withheld. The
Company would pay the tax liability from its own funds.
VOTE REQUIRED
Shareholder approval of the 1999 Plan requires the affirmative vote of the
holders of a majority of the shares of Common Stock represented at the meeting
in person or by proxy and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" APPROVAL OF THE 1999 STOCK PLAN.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the independent public accountants for the
Company for fiscal 1998 and have been selected to act in such capacity for
fiscal 1999. A representative of Arthur Andersen LLP is expected to be present
at the Annual Meeting of Shareholders. Such representative will have an
opportunity to make a statement if such representative desires to do so and will
be available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of no business other than that described
herein that will be presented for consideration at the Annual Meeting. If,
however, other business shall properly come before the meeting, the persons in
the enclosed form of proxy intend to vote the shares represented by said proxies
on such matters in accordance with their judgment in the best interest of the
Company.
13
<PAGE>
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
The rules of the Securities and Exchange Commission permit shareholders of
a company, after timely notice to the Company, to present proposals for
shareholder action in the Company's proxy statement where such proposals are
consistent with applicable law, pertain to matters appropriate for shareholder
action and are not properly omitted by Company action in accordance with the
proxy rules. The Company's 2000 Annual Meeting of Shareholders is expected to be
held on or about May 17, 2000 and proxy materials in connection with that
meeting are expected to be mailed on or about April 3, 2000. Shareholder
proposals prepared in accordance with the proxy rules must be received by the
Company on or before December 6, 1999. In addition, if the Company receives
notice of a separate shareholder after February 23, 2000, such proposal will be
considered untimely pursuant to Rules 14a-4 and 14a-5(e) and the persons named
as proxies solicited by the Board of Directors of the Company for its 2000
Annual Meeting of Shareholders may exercise discretionary voting power with
respect to such proposal.
METHOD OF PROXY SOLICITATION
The entire cost of preparing, assembling, printing and mailing the Notice
of Annual Meeting of Shareholders, this Proxy Statement, the proxy itself, and
the cost of soliciting proxies relating to the meeting will be borne by the
Company. In addition to use of the mails, proxies may be solicited by officers,
directors and other regular employees of the Company by telephone, telegraph or
personal solicitation, and no additional compensation will be paid to such
individuals. The Company will, if requested, reimburse banks, brokerage houses
and other custodians, nominees and certain fiduciaries for their reasonable
expenses incurred in mailing proxy material to their principals.
GENERAL
The Company's Annual Report to Shareholders for the fiscal year ended
January 2, 1999 is being mailed to shareholders with this Proxy Statement.
Shareholders may receive without charge a copy of the Company's Annual Report on
Form 10-K, including financial statements and schedules thereto, as filed with
the Securities and Exchange Commission by writing to: PremiumWear, Inc., 5500
Feltl Road, Minnetonka, MN 55343.
By Order of the Board of Directors,
/s/ John R. Houston
John R. Houston, SECRETARY
14
<PAGE>
PREMIUMWEAR, INC.
ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, MAY 19, 1999
3:30 P.M.
AT RADISSON HOTEL SOUTH
7800 NORMANDALE BOULEVARD
BLOOMINGTON, MN 55439
PREMIUMWEAR, INC.
5500 FELTL ROAD
MINNETONKA, MN 55343 PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON MAY 19, 1999 OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
The shares of stock of PremiumWear, Inc. you hold will be voted as you specify
below.
By signing the proxy, you revoke all prior proxies and appoint C. Derek Anderson
and Gerald E. Magnuson as proxies (each with the power to act alone and with the
power of substitution and revocation) to vote your shares as you designate on
the matters shown on the reverse side and any other matters which may come
before the Annual Meeting and all adjournments.
SEE REVERSE FOR VOTING INSTRUCTIONS.
<PAGE>
----------------------
COMPANY #
CONTROL #
----------------------
THERE ARE THREE WAYS TO VOTE YOUR PROXY
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
TELEPHONE AND INTERNET VOTING ARE PERMITTED UNDER DELAWARE LAW.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK *** EASY *** IMMEDIATE
* Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week.
* You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
* Follow the simple instructions the Voice provides you.
VOTE BY INTERNET -- http://www.eproxy.com/pwa/ -- QUICK *** EASY *** IMMEDIATE
* Use the Internet to vote your proxy 24 hours a day, 7 days a week.
* You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above to obtain your records and create an
electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to PremiumWear, Inc., c/o Shareowner Services-, P.O.
Box 64873, St. Paul, MN 55164-0873.
IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD
PLEASE DETACH HERE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE FOLLOWING PROPOSALS.
<TABLE>
<S> <C>
1. Election of directors: 01 Keith A. Benson [ ] Vote FOR [ ] Vote WITHHELD
02 Thomas D. Gleason all nominees from all nominees
03 Alan W. Kosloff
04 David E. Berg
05 Timothy C. Klouda
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY ________________________________________________
INDICATED NOMINEE, WRITE THE NUMBER(S) OF THE | |
NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) |________________________________________________|
2. Adoption of the PremiumWear, Inc. 1999 Stock Plan. [ ] For [ ] Against [ ] Abstain
3. The proxies are authorized to vote in their discretion
upon such other business as may properly come before
the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL AND, IN THE DISCRETION OF THE PROXIES,
ON ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING.
Address Change? Mark Box [ ] Dated: _________________________, 1999.
Indicate changes below:
________________________________________________
| |
|________________________________________________|
Signature(s) in Box
Please sign exactly as your name(s) appear on Proxy.
If held in joint tenancy, all persons must sign.
Trustees, administrators, etc., should include title
and authority. Corporations should provide full name
of corporation and title of authorized officer
signing the proxy.
</TABLE>
