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
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
PREMIUMWEAR, INC.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which 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 17, 2000
To All Holders of Common Stock:
The Annual Meeting of Shareholders of PremiumWear, Inc. will be held at
the Company's Headquarters at 5500 Feltl Road, Minnetonka, Minnesota, on
Wednesday, May 17, 2000 at 3:30 p.m., Central Daylight Time, for the following
purposes:
1. To elect two directors to serve three-year terms.
2. 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 24, 2000 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/ Frank B. Bennett
Frank B. Bennett, SECRETARY
Minneapolis, Minnesota
April 14, 2000
================================================================================
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.
================================================================================
<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
Company's Headquarters at 5500 Feltl Road, Minnetonka, Minnesota, on Wednesday,
May 17, 2000 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 14, 2000.
There were outstanding at the close of business on March 24, 2000, the
record date for shareholders entitled to notice of and to vote at the meeting,
2,563,860 shares of Common Stock. Each share of Common Stock is entitled to one
vote at the meeting. Only shareholders of record at the close of business on
March 24, 2000 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. 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, 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
1
<PAGE>
in which case the later vote will be recorded and the earlier vote revoked.
Record holders desiring to vote by telephone or through the Internet should note
that they must do so before noon on Tuesday, May 16, 2000. After that time,
telephone and Internet voting will not be permitted and a shareholder desiring
to vote, or revoke an earlier proxy after such time must submit a signed proxy
card or vote in person.
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 two directors: Messrs. C. Derek Anderson and Mark B. Vittert. If
elected, their terms will expire in 2003.
The Company believes that each nominee will be able to serve; but if
either nominee is 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. Anderson and Vittert 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
- ------------ -------------------------------------------- -----
NOMINATED FOR A TERM ENDING IN 2003:
<S> <C> <C>
C. Derek Senior Managing Partner and director of Plantagenet 1991
Anderson (58) Capital Management LLC (investment partnership); Director,
Anderson Capital Management, Inc. (investment management
firm); Director of various private companies.
Mark B. Vittert Private Investor; Director of Lee Enterprises, Inc. (communications 1991
(52) company).
OTHER DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING AND
WHOSE TERMS EXPIRE IN 2001:
Gerald E. Of Counsel to Lindquist & Vennum PLLP (law firm); Partner 1982
Magnuson (69) of Lindquist & Vennum PLLP to December 1994; Director of
Research, Incorporated, Sheldahl, Inc. and WSI Industries, Inc.
Timothy C. Klouda Founder in 1986, director and Chief Executive Officer of 1999
(47) Klouda-Lenz, Inc., an independent sales representative
organization which was acquired by the Company in March 1999.
2
<PAGE>
David E. Berg (43) Chief Executive Officer of the Company since July 1999; 1999
President since August 1997; Chief Operating Officer
of the Company from December 1996 to July 1999;
Executive Vice President of Sales and Marketing from
May 1995 to August 1997; Vice President, National
Sales Manager, Retail Division, from January 1990 to
October 1993.
OTHER DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE ANNUAL MEETING AND
WHOSE TERMS EXPIRE IN 2002.
Keith A. Benson (56) Vice Chairman, Chief Financial Officer and Director of 1993
Musicland Stores Corporation and The Musicland Group,
Inc. (retail stores).
Thomas D. Chairman of the Company; from September of 1996 to 1995
Gleason (64) July of 1999, Mr. Gleason served as Chief Executive
Officer of the 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.
Alan W. Kosloff (59) 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.
</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 two nominees who receive the most votes will be elected as
directors.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS AND MEMBERSHIP
During the last fiscal year the Board of Directors met six 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 twice 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,
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<PAGE>
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 has established a Stock Grant
Subcommittee of the Compensation Committee, currently comprised of Messrs.
Benson and Vittert, which grants awards under the Company's stock plans.
The Board of Directors also has a Governance Committee, currently
comprised of Messrs. Magnuson (Chairman), Vittert and Gleason, which reviews
Board governance and membership matters. The Governance Committee also fulfills
those duties typically performed by a Nominating Committee. 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 $8,000 plus $750 for each Board meeting attended in person, $300 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 1999 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 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 1999
Stock Plan also permits granting of additional or alternative options to
directors at the discretion of the Board.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for fiscal years 1999, 1998 and 1997, the
cash compensation paid by the Company, as well as certain other compensation
paid or accrued for those years, to David Berg, the President and Chief
Executive Officer, Thomas D. Gleason, the Chairman and former Chief Executive
Officer, and to each of the three other executive officers of the Company who
received more than $100,000 during the last fiscal year (together, the "Named
Executives").
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation ------------
------------------- Awards
Other ------
Annual Securities Underlying All Other
Principal Position Year Salary($) Bonus($)(1) Compensation Options (#) Compensation($)(2)
- ---------------------------- ---- --------- ----------- ------------ ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Thomas D. Gleason(3) 1999 165,577 79,012 - - 13,824
Chairman 1998 180,000 7,501 - 100,000 13,532
1997 180,000 - - 40,000 30,389
David E. Berg (4) 1999 184,615 73,104 - 15,000 10,749
President and 1998 168,654 25,394 - 50,000 7,529
Chief Executive Officer 1997 158,077 41,250 - 20,000 7,158
James S. Bury 1999 131,423 55,852 - - 8,825
Chief Financial Officer, Vice 1998 129,000 20,963 - 30,000 8,585
President of Finance and 1997 128,077 34,375 - 12,000 8,101
Assistant Secretary
Cynthia L. Boeddeker 1999 119,808 32,054 - - 5,986
Vice President of 1998 109,615 31,517 - 25,000 4,512
Operations 1997 90,000 24,750 - 8,000 6,211
Timothy C. Klouda (5) 1999 156,923 - - - 3,354
President of Klouda-Lenz, Inc.
</TABLE>
- ----------------
(1) For fiscal 1999, all bonus amounts represent payments pursuant to the 1998
Bonus Plan. 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 1999, the Company's contributions to the retirement plan for Messrs.
Gleason, Berg, Bury and Klouda and Ms. Boeddecker totaled $3,857, $3,584,
$3,265, $2,808 and $2,365, respectively. In 1999, the Company also paid
profit sharing contributions earned in 1998 of $5,400, $5,060, $3,870, 0,
and $3,288, respectively. 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.
The balance, if any, for each year for all Named Executives reflects term
life insurance premiums.
(3) Mr. Gleason was Chief Executive Officer through July 4, 1999.
(4) Mr. Berg was elected Chief Executive Officer on July 5, 1999.
(5) Mr. Klouda became President and Chief Executive Officer of Klouda-Lenz,
Inc., a subsidiary of the Company, on May 19, 1999.
EMPLOYMENT AND OTHER AGREEMENTS
The Company entered into Change in Control Severance Agreements with
the Chairman and all executive officers effective September, 1999. The
agreements provide, among other things, for a lump sum cash severance payment to
the executive officers in the event of an involuntary termination of employment
in connection with a change in control of the Company, as defined in the
agreement, in an amount equal to two times the executives annual compensation.
The Change in Control Severance Agreement with the Company's Chairman has
substantially the same terms and conditions, except that the severance payment
is triggered upon the change in control of the Company, irrespective of
termination of employment. If a
5
<PAGE>
change in control had occurred and the other conditions had been satisfied at
the end of fiscal year 1999, the following Named Executive Officers would have
received the payment indicated pursuant to the Change in Control Severance
Agreements: Mr. Gleason, $420,000; Mr. Berg, $546,000; Mr. Bury, $369,600; Ms.
Boeddeker, $336,000; and Mr. Klouda, $600,000.
STOCK OPTIONS
The following table contains information concerning individual grants
of stock options under the 1999 and the 1991 Stock Plan to each of the Named
Executives during the last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------
Percent of Total Market Potential Realizable Value
Options Options Granted to Price at Assumed Annual Rates of
Granted Employees in Exercise on Grant Expiration Stock Price Appreciation
Name (#) Fiscal Year Price ($) Date ($) Date for Option Term ($)
---- ----------- ----------- --------- -------- ---- ---------------------------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas D. Gleason - - - - - - -
David E. Berg 15,000(1) 37.5% 5.50 5.50 12/15/04 22,793 50,367
James S. Bury - - - - - - -
Cynthia L. Boeddeker - - - - - - -
Timothy C. Klouda - - - - - - -
</TABLE>
- ----------------------
(1) Becomes exercisable with respect to 25% of the shares of Common Stock
subject to the option on December 15, 1999, 2000, 2001 and 2002.
The following table sets forth information with respect to the Named
Executives concerning the exercise of options during fiscal 1999 and unexercised
options held as of January 1, 2000:
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND JANUARY 1, 2000 OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at 1/1/00 (#) at 1/1/00 ($)(1)
Acquired Value --------------------- ----------------
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas D. Gleason 10,000 $22,500 17,500 97,500 $7,813 $53,438
David E. Berg - - 25,250 59,750 37,813 $29,188
James S. Bury - - 13,000 29,000 22,750 17,500
Cynthia L. Boeddeker - - 9,500 23,500 15,688 13,438
Timothy C. Klouda - - 0 0 - -
</TABLE>
- -----------------------
(1) Based on a market price of $5.50 per share of Common Stock on
December 31, 1999.
6
<PAGE>
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 1999 and will, in fiscal 2000, 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
1999 as they affected the executive officers other than the Chief Executive
Officer who, for fiscal 1999, were the Company's four highest paid executive
officers whose compensation exceeded $100,000 (collectively 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 1999, the Company maintained a 1999
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. Consideration
is also given to progress towards other corporate objectives that may be
specified during the course of a given year, such as the successful transition
of the Company's manufacturing and distribution business in North Carolina to a
new distribution center in Tennessee. Incentive payments are based on the level
of achievement against those goals. For 1999, Messrs. Gleason, Berg, Bury,
Klouda, and Ms. Boeddeker earned $50,915, $56,769, $40,413, $36,000 and $36,841,
respectively, pursuant to the Bonus Plan. These payments will be made during
fiscal 2000.
7
<PAGE>
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 1991and 1999 Stock Plans allow 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 2000, the Board
of Directors approved a discretionary contribution to the profit sharing plan
with regard to 1999. Other non-cash compensation benefits are provided to the
Named Executives, none of which are directly or indirectly tied to Company
performance.
CEO FISCAL 1999 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 1999 and to discuss the relationship
between the Company's performance during the last fiscal year and such Chief
Executive Officer's compensation. In July, 1999, David Berg was elected Chief
Executive Officer of the Company, an office formerly held by the Company's
Chairman, Mr. Gleason. As a result, Mr. Gleason's base salary was reduced from
$180,000 to $150,000, reflecting his reduced role in the Company's day-to-day
operations. Mr. Berg's salary was increased from $175,000 to $195,000 at that
time. The Company's compensation philosophy for the Chief Executive Officer is
consistent with the philosophies described in this report for all of the Named
Executives.
SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS
C. Derek Anderson Keith A. Benson Mark B. Vittert
8
<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 1994 and assumes reinvestment of all
dividends. The performance graph is not necessarily indicative of future
investment performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
[GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
PremiumWear $100.00 $89.66 $124.14 $172.02 $234.75 $178.09
Russell 2000 $100.00 $128.44 $149.63 $183.08 $178.42 $216.35
Russell 3000 Textile Apparel $100.00 $114.80 $143.14 $156.16 $129.67 $105.82
</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.
9
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of March 24, 2000 (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.
<TABLE>
<CAPTION>
Number of Shares Percent of
Beneficially Owned Outstanding Shares
<S> <C> <C>
Heartland Advisors, Inc.............................. 209,000(1) 8.2%
790 North Milwaukee Street
Milwaukee, WI 53202
The Clark Estates, Inc............................... 196,282(1)(2) 7.7%
30 Wall Street
New York, NY 10005
C. Derek Anderson.................................... 66,500(3)(4) 2.6%
220 Sansome Street, Suite 400
San Francisco, CA 94104
Keith A. Benson...................................... 11,800(4) *
Thomas D. Gleason.................................... 144,750(4) 5.6%
Gerald E. Magnuson................................... 18,800(4) *
Mark B. Vittert...................................... 88,808(4) 3.5%
David E. Berg........................................ 95,720(4) 3.7%
James S. Bury........................................ 49,079(4) 1.9%
Cynthia L. Boeddeker................................. 20,250(4) *
Alan W. Kosloff ..................................... 7,000(4) *
Timothy C. Klouda.................................... 123,446 4.8%
All directors and executive officers
as a group (10 persons)............................ 626,153(4) 24.4%
</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 196,282
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
52,000 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 21,250 shares for Mr. Gleason, 8,000 shares for each of
Messrs. Anderson, Magnuson, Benson and Vittert, 13,250 shares for Ms.
Boeddeker, 33,500 shares for Mr. Berg, 18,000 shares for Mr. Bury,
2,000 for Mr. Kosloff and 120,000 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.
10
<PAGE>
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, except that Mr. Kosloff failed to file a Form 4 in
a timely manner.
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 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.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the independent public accountants for
the Company for fiscal 1999 and have been selected to act in such capacity for
fiscal 2000. 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.
11
<PAGE>
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.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
The rules of the Securities and Exchange Commission permit shareholders
of a company, after timely notice, 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 2001 Annual Meeting of Shareholders is expected to be held on or about
May 16, 2001 and proxy materials in connection with that meeting are expected to
be mailed on or about April 4, 2001. Shareholder proposals prepared in
accordance with the proxy rules must be received by the Company on or before
December 6, 2000. In addition, if the Company receives notice of a separate
shareholder after February 21, 2001, 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 2001 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 1, 2000 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/ Frank B. Bennett
Frank B. Bennett, SECRETARY
12
<PAGE>
PREMIUMWEAR, INC.
ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, MAY 17, 2000
3:30 P.M.
AT PREMIUMWEAR, INC.
5500 FELTL ROAD
MINNETONKA, MN 55343
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 17, 2000 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 Thomas D.
Gleason 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
o Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 p.m. on May 16, 2000.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
o Follow the simple instructions the Voice provides you.
VOTE BY INTERNET -- HTTP://WWW.EPROXY.COM/PWA/ -- QUICK --- EASY --- IMMEDIATE
o Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12:00 p.m. on May 16, 2000.
o 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(SM),
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 \/
<TABLE>
<CAPTION>
- ------ ------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE FOLLOWING PROPOSALS.
<S> <C> <C> <C> <C>
1. Election of directors: 01 C. Derek Anderson 02 Mark B. Vittert [ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
-------------------------------------------
(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. 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 [ ]
Indicate changes below:
Date ____________________________, 2000
------------------------------------------
------------------------------------------
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>
<PAGE>
PREMIUMWEAR, INC.
ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, MAY 17, 2000
3:30 P.M.
AT PREMIUMWEAR, INC.
5500 FELTL ROAD
MINNETONKA, MN 55343
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 17, 2000 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 Thomas D.
Gleason 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>
<TABLE>
<CAPTION>
- ------ ------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE FOLLOWING PROPOSALS.
<S> <C> <C> <C> <C>
1. Election of directors: 01 C. Derek Anderson 02 Mark B. Vittert [ ] Vote FOR [ ] Vote WITHHELD
all nominees from all nominees
------------------------------------------
(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. 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 [ ]
Indicate changes below:
Date _____________________________ , 2000
-----------------------------------------
-----------------------------------------
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>
