<PAGE> 1
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 [ ] 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 Rule 14a-11(c) or Rule 14a-12
JOHNSON WORLDWIDE ASSOCIATES, 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):
[ ] 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 transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
JWA Logo
JOHNSON WORLDWIDE ASSOCIATES, INC.
1326 WILLOW ROAD
STURTEVANT, WISCONSIN 53177
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 28, 1998
To the Shareholders of
JOHNSON WORLDWIDE ASSOCIATES, INC.
The Annual Meeting of Shareholders of Johnson Worldwide Associates, Inc.
will be held on Wednesday, January 28, 1998 at 9:45 a.m., local time, at the
Company's Headquarters, located at 1326 Willow Road, Sturtevant, Wisconsin, for
the following purposes:
1. To elect 6 directors to serve for the ensuing year.
2. To consider and act upon two separate shareholder proposals.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on Thursday, December 18,
1997 will be entitled to notice of and to vote at the meeting and any
adjournment or postponement thereof. Holders of Class A Common Stock, voting as
a separate class, are entitled to elect two directors and holders of Class B
Common Stock, voting as a separate class, are entitled to elect the remaining
directors.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN, DATE AND RETURN PROMPTLY THE PROXY CARD FOR CLASS A COMMON STOCK AND/OR
THE PROXY CARD FOR CLASS B COMMON STOCK IN THE RETURN ENVELOPE PROVIDED IN ORDER
TO BE SURE THAT YOUR SHARES WILL BE VOTED AT THE ANNUAL MEETING.
By Order of the Board of Directors
CARL G. SCHMIDT
Senior Vice President and Chief
Financial Officer, Secretary and
Treasurer
Sturtevant, Wisconsin
December 19, 1997
<PAGE> 3
JOHNSON WORLDWIDE ASSOCIATES, INC.
1326 WILLOW ROAD
STURTEVANT, WISCONSIN 53177
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 28, 1998
This Proxy Statement, which is first being mailed to shareholders on or
about December 19, 1997, is furnished in connection with the solicitation of
proxies by the Board of Directors of Johnson Worldwide Associates, Inc. (the
"Company") to be used at the Annual Meeting of Shareholders of the Company to be
held on Wednesday, January 28, 1998 at 9:45 a.m., local time, at the Company's
Headquarters, located at 1326 Willow Road, Sturtevant, Wisconsin, and at any
adjournment or postponement thereof ("Annual Meeting").
Shareholders who execute proxies may revoke them at any time prior to the
voting thereof by written notice addressed to the Secretary at the Company's
address shown above, or by giving notice in open meeting. Unless so revoked, the
shares represented by proxies received by the Board of Directors will be voted
at the Annual Meeting. Where a shareholder specifies a choice by means of a
ballot provided in the proxy, the shares will be voted in accordance with such
specification.
The record date for shareholders entitled to notice of and to vote at the
Annual Meeting is December 18, 1997. On the record date, the Company had
outstanding and entitled to vote 6,881,923 shares of Class A Common Stock and
1,227,915 shares of Class B Common Stock. Holders of Class A Common Stock are
entitled to one vote per share for directors designated to be elected by holders
of Class A Common Stock and for other matters. Holders of Class B Common Stock
are entitled to one vote per share for directors designated to be elected by
holders of Class B Common Stock and ten votes per share for other matters.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the authorized number of directors
is eight. Six directors are to be elected at the Annual Meeting to serve until
the next annual meeting of shareholders or until their respective successors
have been duly elected. Raymond F. Farley, a director of the Company since 1970,
and Donald W. Brinckman, a director of the Company since 1988, will retire as
directors as of the Annual Meeting. In connection therewith, the Board of
Directors will adopt a resolution to reduce the authorized number of directors
to six. The Company's Articles of Incorporation provide that holders of Class A
Common Stock have the right to elect 25% of the authorized number of directors
and the holders of Class B Common Stock are entitled to elect the remaining
directors. At the Annual Meeting, holders of Class A Common Stock will elect two
directors and holders of Class B Common Stock will elect four directors. Gregory
E. Lawton and Glenn N. Rupp (the "Class A Directors") are the nominees
designated to be voted on by the holders of Class A Common Stock, and Samuel C.
Johnson, Thomas F. Pyle, Jr., R. C. Whitaker and Helen P. Johnson-Leipold (the
"Class B Directors") are the nominees designated to be voted on by the holders
of Class B Common Stock.
1
<PAGE> 4
Proxies received from holders of Class A Common Stock will, unless
otherwise directed, be voted for the election of the nominees designated to be
voted on by the holders of Class A Common Stock and proxies received from
holders of Class B Common Stock will, unless otherwise directed, be voted for
the election of the nominees designated to be voted on by the holders of Class B
Common Stock. Proxies of holders of Class A Common Stock cannot be voted for
more than two persons and proxies of holders of Class B Common Stock cannot be
voted for more than four persons. Class A Directors are elected by a plurality
of the votes cast by the holders of Class A Common Stock and Class B Directors
are elected by a plurality of the votes cast by the holders of Class B Common
Stock, in each case at a meeting at which a quorum is present. "Plurality" means
that the individuals who receive the largest number of votes cast by holders of
the class of Common Stock entitled to vote in the election of such directors are
elected as directors up to the maximum number of directors to be chosen at the
meeting by such class. Consequently, any shares not voted on this matter
(whether by abstention, broker non-vote or otherwise) will have no effect on the
election of directors, except to the extent the failure to vote for an
individual results in that individual not receiving a sufficient number of votes
to be elected.
Listed below are the nominees of the Board of Directors for election at the
Annual Meeting. Each of the nominees is presently a director of the Company. If
any of the nominees should be unable or unwilling to serve, the proxies,
pursuant to the authority granted to them by the Board of Directors, will have
discretionary authority to select and vote for substituted nominees. The Board
of Directors has no reason to believe that any of the nominees will be unable or
unwilling to serve.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING DIRECTOR
NAME AGE LAST FIVE YEARS SINCE
---- --- -------------------------- --------
<S> <C> <C> <C>
Samuel C. Johnson...................... 69 Chairman of the Board of the Company 1970
since January 1994. Chairman of the
Executive Committee of the Board of
Directors of the Company from October
1992 to January 1994. Chairman of the
Board of the Company prior to October
1992. Chairman and until 1988, Chief
Executive Officer of S. C. Johnson &
Son, Inc. (manufacturer of household
maintenance and industrial products).
Director of Mobil Corporation, H. J.
Heinz Company and Deere & Company.
Thomas F. Pyle, Jr. ................... 56 Vice Chairman of the Board of the 1987
Company since October 1997. Chairman
of The Pyle Group since September 1996
(financial services and investments).
Until September 1996, Chairman,
President and Chief Executive Officer
of Rayovac Corporation (manufacturer
of batteries and lighting products).
Director of Kewaunee Scientific
Corporation, Riverside Paper
Corporation and Sub Zero Corporation.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE DURING DIRECTOR
NAME AGE LAST FIVE YEARS SINCE
---- --- -------------------------- --------
<S> <C> <C> <C>
Helen P. Johnson-Leipold............... 40 Vice President, Personal and Home Care 1994
Products of S. C. Johnson & Son, Inc.
since October 1997. Executive Vice
President -- North American Businesses
of the Company from October 1995 to
July 1997. Vice President -- Consumer
Marketing Services -- Worldwide of S.
C. Johnson & Son, Inc. from 1992 to
September 1995. Director of Marketing
Services of S. C. Johnson & Son, Inc.
from 1988 to 1992. Ms. Johnson-Leipold
is the daughter of Samuel C. Johnson.
R. C. Whitaker......................... 50 President and Chief Executive Officer 1996
of the Company since October 1996.
President and Chief Executive Officer
of EWI, Inc. (a supplier to the
automotive industry) from December
1995 to October 1996(1). Chairman,
President and Chief Executive Officer
of Colt's Manufacturing Company, Inc.
(manufacturer of firearms) from 1992
to September 1995. President of
Wheelabrator Corporation from 1988 to
1992. Director of Weirton Steel
Corporation.
Gregory E. Lawton...................... 46 President and Chief Executive Officer 1997
of NuTone, Inc. (manufacturer of
ventilation fans, intercom systems and
other home products) since July 1994.
Vice President and General Manager at
Procter & Gamble from 1989 to 1994.
Glenn N. Rupp.......................... 53 Chairman and Chief Executive Officer 1997
of Converse Inc. (manufacturer and
marketer of athletic and leisure
footwear) since April 1996. Acting
Chairman of McKenzie Sports Products
Inc. from August 1994 to April 1996.
President and Chief Executive Officer
of Simmons Upholstered Furniture Inc.
from August 1991 until May 1994(2).
Prior to 1991, held various positions
with Wilson Sporting Goods Co.
including President and Chief
Executive Officer from 1987 to 1991.
Director of Consolidated Papers, Inc.
</TABLE>
- ---------------
(1) EWI, Inc. filed a voluntary petition for reorganization under Chapter 11 of
the Bankruptcy Code in April 1996. The matter is awaiting final creditor
approval.
(2) Simmons Upholstered Furniture Inc. filed a voluntary petition for
reorganization under Chapter 11 of the Bankruptcy Code in July 1994.
3
<PAGE> 6
COMMITTEES
The Board of Directors has standing Executive, Audit, Compensation and
Stock Committees and does not have a nominating committee.
The Executive Committee assists the Board of Directors in developing and
evaluating general corporate policies and objectives and, subject to certain
limitations, has the power to exercise fully the powers of the Board of
Directors. Present members of the Executive Committee are Messrs. Johnson
(Chairman), Whitaker, Pyle and Farley.
The Audit Committee presently consists of Messrs. Brinckman (Chairman),
Farley and Pyle. The Audit Committee annually recommends to the Board of
Directors independent public accountants to act as auditors for the Company,
reviews with the auditors in advance the scope of the annual audit, reviews with
the auditors and management, from time to time, the Company's accounting
principles, policies and practices and reviews with the auditors annually the
results of their audit.
The Compensation Committee presently consists of Messrs. Farley (Chairman),
Brinckman and Pyle. The Compensation Committee determines the salaries and other
nonequity-based compensation of the executive officers and key employees of the
Company.
The Stock Committee presently consists of Messrs. Pyle (Chairman) and
Brinckman. The Stock Committee determines all equity-based compensation for
executive officers and key employees of the Company. The Stock Committee
administers the Johnson Worldwide Associates, Inc. Amended and Restated 1986
Stock Option Plan, the Johnson Worldwide Associates, Inc. 1987 Employees' Stock
Purchase Plan and the Johnson Worldwide Associates, Inc. 1994 Long-Term Stock
Incentive Plan.
Committee assignments will be reviewed at the meeting of the Board of
Directors to be held January 28, 1998 due to the retirements from the Board of
Directors of Messrs. Farley and Brinckman.
MEETINGS AND ATTENDANCE
During the year ended October 3, 1997, there were five meetings of the
Board of Directors, two meetings of the Audit Committee, two meetings of the
Compensation Committee and no meetings of the Stock Committee (all actions were
taken by unanimous written consent). All directors attended at least 75% of the
meetings of the Board of Directors and at least 75% of the meetings of the
committees on which they served during the periods that they served, with the
exception of Mr. Pyle, who attended one of the two meetings of the Audit
Committee.
COMPENSATION OF DIRECTORS
Retainer and Fees. Each director who is not an employee of the Company
("non-employee director") is entitled to receive an annual retainer of $15,000
and $1,000 for each meeting of the Board of Directors and each committee meeting
attended. Non-employee directors are also entitled to receive an annual retainer
for serving on committees of the Board of Directors as follows: the Chairman of
each committee receives $3,500 and the other members each receive $1,000. The
Vice Chairman of the Board receives an additional annual retainer of $35,000.
Stock-Based Plans. The Company maintains the Johnson Worldwide Associates,
Inc. 1994 Non-Employee Director Stock Ownership Plan (the "1994 Director Plan"),
which was approved by shareholders
4
<PAGE> 7
on January 27, 1994. The 1994 Director Plan provides for up to 50,000 shares of
Class A Common Stock to be issued to non-employee directors in the following
forms:
Stock Options. Under the 1994 Director Plan, simultaneous with
shareholder approval, each non-employee director was granted an option to
purchase 5,000 shares of Class A Common Stock. Thereafter, on the date on
which a non-employee director, other than a director who was serving on the
date of shareholder approval of the 1994 Director Plan, is first elected or
appointed as a director of the Company during the existence of the 1994
Director Plan, such non-employee director will automatically be granted an
option to purchase 5,000 shares of Class A Common Stock. The exercise price
for such options will be the fair market value of a share of Class A Common
Stock on the date of grant. Options will have a term of ten years and
become fully exercisable one year after the date of grant.
Restricted Stock Awards. In addition, each non-employee director of
the Company will automatically be granted 500 shares of Class A Common
Stock on the date of the Company's annual meeting of shareholders in each
year during the existence of the 1994 Director Plan. Shares of Class A
Common Stock granted to non-employee directors will not be eligible to be
sold or otherwise transferred while the non-employee director remains a
director of the Company and thereafter the restrictions will lapse.
However, a non-employee director may transfer the shares to any trust or
other estate in which the director has a substantial interest or a trust of
which the director serves as trustee or to his or her spouse and certain
other related persons, provided the shares will continue to be subject to
the transfer restrictions described above.
On January 22, 1997, 500 shares of restricted stock were awarded to each of
the non-employee directors of the Company at that time (Messrs. Johnson, Farley,
Pyle and Brinckman). On May 29, 1997, options to purchase 5,000 shares of Class
A Common Stock were granted to Messrs. Lawton and Rupp under the 1994 Director
Plan in conjunction with their appointment to the Board of Directors. On October
7, 1997, options to purchase 10,000 shares of Class A common stock were granted
to Mr. Pyle in connection with his appointment as Vice Chairman of the Board.
5
<PAGE> 8
STOCK OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth certain information at November 1, 1997
regarding the beneficial ownership of each class of the Company's Common Stock
by each director, each person known by the Company to own beneficially more than
5% of either class of the Company's Common Stock, each executive officer named
in the Summary Compensation Table set forth below, and all directors and
executive officers as a group based upon information furnished by such persons.
Except as indicated in the footnotes, the persons listed have sole voting and
investment power over the shares beneficially owned.
<TABLE>
<CAPTION>
CLASS A COMMON STOCK(1) CLASS B COMMON STOCK(1)
---------------------------------- ----------------------------------
PERCENTAGE OF PERCENTAGE OF
NUMBER OF CLASS NUMBER OF CLASS
NAME AND ADDRESS SHARES OUTSTANDING SHARES OUTSTANDING
---------------- --------- ------------- --------- -------------
<S> <C> <C> <C> <C>
Samuel C. Johnson................. 1,909,636(2)(3) 27.6% 1,062,330(2)(4) 86.5%
4041 North Main Street
Racine, Wisconsin 53402
Imogene P. Johnson................ 33,943(4) * 1,037,330(4) 84.5
4041 North Main Street
Racine, Wisconsin 53402
JWA Consolidated, Inc............. 114,464(5) 1.7 1,037,330(4) 84.5
4041 North Main Street
Racine, Wisconsin 53402
Johnson Heritage Trust Co......... 350,796(6) 5.1 142,616(6) 11.6
4041 North Main Street
Racine, Wisconsin 53402
Helen P. Johnson-Leipold.......... 265,488(5)(7)(8) 3.8 1,056,722(4)(6)(8) 86.1
4041 North Main Street
Racine, Wisconsin 53402
Quest Advisory Corp............... 707,470(9) 10.3 -- --
1414 Avenue of the Americas
New York, NY 10019
Sanford C. Bernstein & Co.,
Inc............................. 534,300(10) 6.6 -- --
767 Fifth Avenue
New York, NY 10153
R. C. Whitaker.................... 39,500(11) * -- --
Carl G. Schmidt................... 45,333(12) * -- --
Raymond F. Farley(13)............. 26,490(3) * -- --
Thomas F. Pyle, Jr................ 20,738(14) * -- --
Donald W. Brinckman(13)........... 10,557(15) * -- --
Gregory E. Lawton................. 5,000(16) * -- --
Glenn N. Rupp..................... 5,000(16) * -- --
Philippe Blime(17)................ -- -- -- --
Michael E. Klockenga(18).......... -- -- -- --
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
CLASS A COMMON STOCK(1) CLASS B COMMON STOCK(1)
---------------------------------- ----------------------------------
PERCENTAGE OF PERCENTAGE OF
NUMBER OF CLASS NUMBER OF CLASS
NAME AND ADDRESS SHARES OUTSTANDING SHARES OUTSTANDING
---------------- --------- ------------- --------- -------------
<S> <C> <C> <C> <C>
All directors and executive
officers as a group (11)
persons)........................ 2,317,742(2)(4)(5) 33.0 1,081,722(2)(4) 88.1
(6)(8)(19) (6)(8)
</TABLE>
- ---------------
* The amount shown is less than 1% of the outstanding shares of such class.
(1) Shares of Class B Common Stock ("Class B Shares") are convertible on a
share-for-share basis into shares of Class A Common Stock ("Class A
Shares") at any time at the discretion of the holder thereof. As a result,
a holder of Class B Shares is deemed to beneficially own an equal number of
Class A Shares. However, in order to avoid overstatement of the aggregate
beneficial ownership of Class A Shares and Class B Shares, the Class A
Shares reported in the table do not include Class A Shares which may be
acquired upon the conversion of Class B Shares.
(2) Shares reported by Mr. Johnson include 98,000 Class A Shares and 1,037,330
Class B Shares over which Mr. Johnson may be deemed to share voting power
and investment power. The 98,000 Class A Shares are held of record by a
corporation controlled by Mr. Johnson through various trusts. The 1,037,330
Class B Shares are held of record by the Johnson Worldwide Associates, Inc.
Class B Common Stock Voting Trust ("Voting Trust") of which certain trusts
of which Mr. Johnson serves as sole trustee are Voting Trust unit holders.
Mr. Johnson owns 1,552,606 Class A Shares and 103,846 Class B Shares as
sole trustee of a trust for his benefit and reports beneficial ownership of
the remaining Class A Shares and Class B Shares indirectly as the sole
trustee of a trust for the benefit of Mr. Johnson, members of his family or
related entities (the "Johnson Family"), as the sole trustee of a
shareholder of certain corporations, or pursuant to options to acquire
Class A Shares. Not included in the number of Class A Shares or Class B
Shares beneficially owned by Mr. Johnson are Class A Shares or Class B
Shares held by Mr. Johnson's wife, Imogene P. Johnson, by family
partnerships of which Mr. Johnson is not a general partner, or does not
directly or indirectly control a general partner, by corporations in which
all of the common stock is beneficially owned by Mr. Johnson's adult
children or by Johnson Heritage Trust Company, Inc. ("JHT"), except as
otherwise noted.
(3) Includes options to acquire 7,738 Class A Shares, which options are
exercisable within 60 days.
(4) Shares reported by Mrs. Johnson include 1,037,330 Class B Shares directly
held by the Voting Trust and over which Mrs. Johnson has shared voting
power and shared investment power as sole trustee of the Voting Trust, and
all of which are also reported as beneficially owned by Mr. Johnson, Ms.
Johnson-Leipold and JWA Consolidated, Inc. as Voting Trust unit holders.
Mrs. Johnson reports the remaining shares as personally owned.
(5) The 114,464 Class A Shares are also reported as beneficially owned by Ms.
Johnson-Leipold as sole trustee of the Samuel C. Johnson Family Trust,
which controls JWA Consolidated, Inc.
(6) Includes 301,280 Class A Shares and 75,992 Class B Shares over which JHT
has shared voting power and shared investment power, of which 19,392 Class
B Shares are also reported as beneficially owned by Ms. Johnson-Leipold.
JHT reports beneficial ownership of the Class A Shares and Class B Shares
reflected in the table as sole trustee of various trusts principally for
the benefit of members of the Johnson Family. Mr. Johnson is directly or
indirectly the controlling shareholder of JHT.
(7) Includes options to acquire 5,000 Class A Shares, which options are
exercisable within 60 days.
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<PAGE> 10
(8) Includes 111,024 Class A Shares and 19,392 Class B Shares over which Ms.
Johnson-Leipold has shared voting power and shared investment power, all of
which are reported as beneficially owned by JHT. Ms. Johnson-Leipold
beneficially owns such Class A Shares and Class B Shares indirectly as the
settlor and beneficiary of a trust and through such trust as a general
partner of certain limited partnerships controlled by the Johnson Family
and as a controlling shareholder, with trusts for the benefit of Mr.
Johnson and his adult children, of certain corporations.
(9) The information is based on a report on Schedule 13G, dated March 10, 1997,
filed by Quest Advisory Corp. ("Quest") and Charles M. Royce with the
Securities and Exchange Commission. Mr. Royce may be deemed to be a
controlling person of Quest and as such may be deemed to beneficially own
the shares held by Quest. Quest reported sole voting and sole dispositive
power with respect to all of the reported shares.
(10) The formation is based on a report on Schedule 13G, dated January 30, 1997,
filed by Sanford C. Bernstein & Co., Inc. ("Sanford Bernstein") with the
Securities and Exchange Commission. Sanford Bernstein reported sole voting
power with respect to 470,900 of the shares, shared voting power with
respect to 2,300 of the shares and sole dispositive power with respect to
all of the reported shares.
(11) Includes options to acquire 25,000 Class A Shares, which options are
exercisable within 60 days.
(12) Includes options to acquire 41,333 Class A Shares, which options are
exercisable within 60 days.
(13) Messrs. Farley and Brinckman will retire from the Board effective as of the
Annual Meeting.
(14) Includes options to acquire 17,738 Class A Shares, which options are
exercisable within 60 days.
(15) Includes options to acquire 7,057 Class A Shares, which options are
exercisable within 60 days.
(16) Includes options to acquire 5,000 Class A Shares, which options are
exercisable beginning May 29, 1998.
(17) Mr. Blime resigned as Vice President of the Company and President of JWA
Europe in October 1997.
(18) Mr. Klockenga resigned as Vice President of Operations of JWA North America
in February 1997.
(19) Includes options to acquire 111,604 Class A Shares for all officers and
directors as a group, which options are exercisable within 60 days.
At November 1, 1997, the Johnson Family beneficially owned 2,490,213 Class
A Shares, or approximately 36% of the outstanding Class A Shares, and 1,168,366
Class B Shares, or approximately 95.2% of the outstanding Class B Shares.
8
<PAGE> 11
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for all
compensation and benefits provided to the Company's Chief Executive Officer,
other executive officers and key employees, excluding equity-based compensation.
All equity-based compensation decisions are made by the Stock Committee of the
Board of Directors, which is comprised of two members of the Compensation
Committee. Set forth below are tables and a report explaining the rationale
underlying fundamental executive compensation decisions affecting the Company's
executive officers, including the executive officers named in the Summary
Compensation Table (the "Named Executive Officers").
OVERALL COMPENSATION PHILOSOPHY
The Company's program is designed to align compensation with Company
performance, business strategy, Company values and management initiatives. The
Company's overall compensation objectives are to:
- attract and retain highly qualified executives to manage the Company;
- provide strong financial incentives, at reasonable cost to the Company's
shareholders, for senior management to maximize the Company's
shareholder value.
The Company has developed an overall compensation strategy and specific
compensation plans that tie a significant portion of executive compensation to
the Company's success in meeting specified financial goals and the executive's
success in meeting specific performance goals. As an executive's level of
responsibility increases, a greater portion of total compensation is based on
performance-based incentive compensation and less on salary and employee
benefits, creating the potential for greater variability in the individual's
compensation level from year to year. The mix, level and structure of
performance-based incentive elements reflect market industry practices as well
as the executive's role and relative impact on business results.
The Compensation Committee continually monitors the operation of the
Company's executive compensation program. This monitoring includes a bi-annual
report from independent compensation consultants assessing the effectiveness of
the Company's compensation program by comparing the Company's executive
compensation to a group of public corporations in the recreation and sporting
goods industry and certain leading manufacturing companies located in Wisconsin
(the "Comparator Group"). The Comparator Group used for compensation analysis
includes, but is not limited to, companies in the peer group established to
compare shareholder returns. The Compensation Committee reviews the selection of
companies used for this analysis and believes that these companies represent the
Company's most direct competitors for executive talent.
The Compensation Committee determines the compensation of the Chief
Executive Officer and sets policies for, reviews and approves the
recommendations of management (subject to such adjustments as may be deemed
appropriate by the Committee) with respect to the compensation awarded to other
executive officers and other key employees (including the other Named Executive
Officers).
The key elements of the Company's executive compensation program consist of
base salary, annual bonus and long-term stock incentives. Senior executive
compensation packages are increasingly weighted toward programs contingent upon
the Company's performance. As a result, actual compensation levels of senior
executives in any particular year may vary within the range of compensation
levels of the competitive marketplace based on the Company's actual performance
and its prior year's financial results. Although the Compensation Committee
believes strongly in offering compensation opportunities competitive with those
of
9
<PAGE> 12
comparable members in the Company's industry, the most important considerations
in setting annual compensation are Company performance and individual
contributions. A general description of the elements of the Company's
compensation package, including the basis for the compensation awarded to the
Company's Chief Executive Officer for 1997, follows.
BASE SALARY
Base salaries are initially determined by evaluating the responsibilities
of the position, the experience of the individual and the salaries for
comparable positions in the competitive marketplace. Base salary levels for the
Company's executive officers are generally positioned to be competitive with
comparable positions in the Comparator Group. The Compensation Committee
annually reviews each executive officer's base salary. In determining salary
adjustments for executive officers, the Committee considers various factors,
including the individual's performance and contribution, the average percentage
pay level for similar positions and the Company's performance. In the case of
executive officers with responsibility for a particular business unit, such
unit's financial results are also considered. The Compensation Committee, where
appropriate, also considers nonfinancial performance measures such as
improvements in product quality, manufacturing efficiency gains and the
enhancement of relations with Company customers and employees. The Compensation
Committee exercises discretion in setting base salaries within the guidelines
discussed above.
Mr. Whitaker joined the Company as President and Chief Executive Officer in
October 1996. With respect to the base salary paid to Mr. Whitaker in 1997, the
Compensation Committee set his annualized base salary at $340,000 to reflect the
Compensation Committee's assessment of the factors listed above. Prior to Mr.
Whitaker's appointment, duties of such office were executed by an Office of the
Chairman. Chairman Samuel C. Johnson and other members of the Office of the
Chairman performed these duties without any additional compensation.
BONUS PROGRAM
The Compensation Committee recognizes the importance of aligning executive
compensation with the interests of the shareholders and believes that
improvement in economic value provides the best measure of shareholder returns.
Accordingly, effective for 1997, the Board of Directors adopted the Johnson
Worldwide Associates Economic Value Added Bonus Plan ("EVA Plan"). The EVA Plan
provides for bonus awards based solely on improvements in the Economic Value
Added ("EVA") of the Company. EVA(R)(1) is a measure of after tax operating
profit after the deduction of all costs, including the cost of the Company's
capital. The EVA Plan is based on three key concepts: (1) a target bonus, (2)
expected improvement in EVA, and (3) a bonus bank. The EVA bonus eligible to be
earned is equal to the sum of the target bonus plus (or minus) the improvement
(or deterioration) from the targeted amount of EVA.
The Company's executive officers are included in the EVA Plan. Target
bonuses ranging from 20% to 70% of an executive's base salary are established by
the Compensation Committee for each executive officer at the beginning of the
year. Target award opportunities are competitive with industry practices. The
EVA Plan includes approximately 90 participants.
The expected improvement in EVA is used to determine the targeted level of
EVA and is determined by an objective review of the past performance of the
Company, taking into account the goal of achievement of a substantial
improvement in EVA over a multiple year period. Such review is conducted by
independent compensation consultants expert in the concepts of EVA. The annual
amount of expected improvement in
- ---------------
(1) EVA is a registered trademark of Stern Stewart & Co.
10
<PAGE> 13
EVA is fixed. This approach results in the need to achieve increasingly higher
EVA levels each year to maintain the same level of incentive compensation. To
ensure that the EVA Plan provides strong incentives for management to annually
increase shareholder value and does not reward poor performance by reducing
performance standards or penalize superior performance by raising performance
standards, it is the intention of the Compensation Committee that there will be
no recalibration of the expected EVA improvement for a period of at least three
years, beginning with 1997.
The bonus eligible to be earned is credited to a bonus bank ("Bank"). The
maximum amount that may be withdrawn from the Bank in any year is equal to the
amount of the target bonus for that year plus one third of the balance of the
Bank in excess of the target bonus. Accordingly, the balance in the Bank is "at
risk." No bonus is paid when the balance in the Bank is negative. Negative Bank
balances are carried forward and are offset against future bonuses earned. There
is no cap on the amount of bonus that can be earned for achievement of superior
levels of EVA improvement, nor is there a floor on the amount of negative bonus
credited to the Bank if EVA declines. Bank balances vest only in the event of
death, retirement or involuntary termination. The concept of a Bank is utilized
to encourage long-term thinking with regard to the operation of the Company.
The Compensation Committee retains the final authority to approve
individual bonuses and may, at its sole discretion, reduce or eliminate bonuses
determined under the EVA Plan formula.
The Company's performance improved in 1997. The Company's EVA improvement
was $5.0 million, versus an expected improvement of $6.1 million, resulting in a
bonus multiple of 56% of base salary, or $181,559 for the Chief Executive
Officer. This performance is reflected in the Company's operating profit, which
improved to $12.3 million (excluding nonrecurring charges) from $5.3 million in
the prior year. The Company also improved its utilization of working capital,
which is reflected in the reduction of inventories from $102 million in 1996 to
$79 million in 1997. At the same time, the market capitalization of the Company
improved approximately $22 million in 1997.
LONG-TERM STOCK INCENTIVES
Long-term stock incentives are designed to encourage and create significant
ownership of Company stock by key executives, thereby promoting a close identity
of interests between the Company's management and its shareholders. Another
objective of long-term stock incentives is to encourage and reward executives
for long-term strategic management and the enhancement of shareholder value. The
Company's equity-based award practices are designed to be competitive with those
offered by other recreation and sporting goods companies and other leading
manufacturing companies in Wisconsin. To this end, the Stock Committee considers
recommendations from the Company's independent compensation consultants in
determining the level of equity-based awards. The Company currently grants two
forms of long-term stock incentives: stock options and, on a more selective
basis, restricted stock.
Stock Options. Under the Company's 1986 Stock Option Plan and the 1994
Long-Term Stock Incentive Plan, nonqualified stock options have been the primary
form of long-term incentive compensation. Options typically are granted
annually, with the size of grants varying based on several factors, including
the executive's level of responsibility and past contributions to the Company as
well as the practices of peer companies. Consideration is also given to a
person's potential for future responsibility and promotion. The number of shares
covered by grants generally reflects competitive industry practices. Stock
options are granted with an exercise price equal to the market price of the
Common Stock on the date of grant. Stock options granted in 1997 vest ratably
over a three year period. Vesting schedules are designed to encourage the
creation
11
<PAGE> 14
of shareholder value over the long-term since the full benefit of the
compensation package cannot be realized unless stock price appreciation occurs
over a number of years.
Stock option grants in 1997 reflect the considerations discussed above. In
1997, Mr. Whitaker received options to purchase 75,000 shares at an exercise
price of $13.125 per share in connection with his employment by the Company.
Restricted Stock. The Company has a Restricted Stock Plan, which was
adopted in 1986. The 1994 Long-Term Stock Incentive Plan also allows for the
issuance of restricted stock. Under these plans, grants are made on a highly
selective basis to executive officers. From time to time, current executives may
receive grants of restricted stock to recognize corporate successes and
individual contributions. The Stock Committee decides appropriate award amounts
based on the circumstances of the situation (for example, in the case of a new
hire, the level of the position to be filled and the qualifications of the
executive sought to fill that role).
In 1997, Mr. Whitaker received 2,500 shares of restricted stock in
connection with his employment by the Company.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
It is anticipated that all 1997 compensation to executives will be fully
deductible under Section 162(m) of the Internal Revenue Code and therefore the
Compensation Committee determined that a policy with respect to qualifying
compensation paid to executive officers for deductibility is not necessary.
COMPENSATION COMMITTEE
Raymond F. Farley (Chairman)
Donald W. Brinckman
Thomas F. Pyle, Jr.
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<PAGE> 15
SUMMARY COMPENSATION INFORMATION
The following table sets forth certain information concerning compensation
paid for the last three fiscal years to the Chief Executive Officer and each of
its four other most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------
ANNUAL COMPENSATION SECURITIES
------------------------------------------------ RESTRICTED UNDERLYING
OTHER ANNUAL STOCK STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(7) COMPENSATION($) AWARDS($)(8) OPTIONS(#) COMPENSATION($)(1)
- --------------------------- ---- --------- ----------- --------------- ------------ ---------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Samuel C. Johnson............ 1997 $ -- $ -- $ -- $ --(9) -- $ --(9)
Chairman of the Board(1) 1996 -- -- -- --(9) -- --(9)
1995 -- -- -- --(9) -- --(9)
R. C. Whitaker............... 1997 323,436 206,559 -- 32,688 75,000 160,928
President and Chief 1996 -- -- -- -- -- --
Executive Officer(2) 1995 -- -- -- -- -- --
Carl G. Schmidt.............. 1997 190,250 108,911 -- -- 25,000 16,938
Senior Vice President and 1996 181,750 -- -- -- 12,000 16,923
Chief Financial Officer, 1995 167,917 -- -- 66,600 15,000 15,838
Secretary and Treasurer(1)(3)
Helen P. Johnson-Leipold..... 1997 142,692 57,773 -- 13,075 30,000(10) 3,781(9)
Executive Vice President -- 1996 173,750 -- -- 22,450 10,000(10) 15,938
North American Businesses(1)(4) 1995 -- -- -- --(9) -- --(9)
Philippe Blime............... 1997 121,677 25,000 -- -- 50,000(10) 250,000
Vice President, 1996 129,479 -- -- -- 45,000(10) --
President of JWA Europe(1)(5) 1995 178,110 25,000 -- -- 15,000(10) --
Michael E. Klockenga......... 1997 65,863 -- -- -- 15,000 1,259
Vice President of Operations of 1996 141,275 -- -- -- 6,000 14,952
JWA North America(1)(6) 1995 133,900 -- -- -- 3,000 14,781
</TABLE>
FOOTNOTES TO SUMMARY COMPENSATION TABLE
(1) From June 1996 until October 1996, the duties of the President and Chief
Executive Officer were executed by the Office of the Chairman, consisting
of Chairman Johnson, Messrs. Schmidt, Blime and Klockenga and Ms.
Johnson-Leipold. Mr. Johnson does not receive any additional compensation
for serving as Chairman of the Board and no member of the Office of the
Chairman received any compensation or additional compensation, as the case
may be, for serving in such capacity.
(2) Mr. Whitaker has been President and Chief Executive Officer since October
1996.
(3) Mr. Schmidt has been Senior Vice President and Chief Financial Officer,
Secretary and Treasurer since May 1995. From July 1994 to May 1995 he
served as Vice President, Chief Financial Officer, Secretary and Treasurer.
(4) Ms. Johnson-Leipold was Executive Vice President -- North American
Businesses from October 1995 until her resignation in July 1997.
(5) Mr. Blime was Vice President of the Company and President of JWA Europe
from July 1993 until his resignation in October 1997. Prior to that, he
served as President and Director General -- Mitchell Sports, S.A., a
subsidiary of the Company. Mr. Blime is paid in French francs.
13
<PAGE> 16
(6) Mr. Klockenga was Vice President of Operations of JWA North America from
July 1994 until his resignation in February 1997.
(7) The amounts presented in this column for the year ended October 3, 1997
consist of the following:
(a) Amounts accrued under the EVA Plan are $181,559 for Mr. Whitaker,
$83,911 for Mr. Schmidt and $57,773 for Ms. Johnson-Leipold.
(b) $25,000 paid to Mr. Whitaker in conjunction with his employment by the
Company.
(c) $25,000 paid to Messrs. Schmidt and Blime in conjunction with certain
acquisition and divestiture activities of the Company.
(8) The amounts in the table reflect the market value on the date of grant (net
of any consideration paid by the named executive officer) of restricted
shares of Class A Common Stock awarded under the 1994 Long-Term Stock
Incentive Plan. The number of restricted (unvested) shares held by the
named executive officers and the market value of such shares (net of any
consideration paid by the named executive officers) as of October 3, 1997
were as follows: Mr. Whitaker 2,500 shares ($42,375) and Mr. Schmidt 1,000
shares ($16,950). Mr. Whitaker received an award of 2,500 shares of
restricted stock on January 1, 1997. Ms. Johnson-Leipold received awards of
1,000 shares of restricted stock on January 1, 1997 and 1996. Mr. Schmidt
received an award of 3,000 shares of restricted stock on May 1, 1995.
One-third of the shares awarded to Mr. Whitaker and Mr. Schmidt vest on
each successive anniversary of the date of award. Ms. Johnson-Leipold's
remaining 1,667 restricted shares were vested upon her resignation in July
1997. Holders of restricted shares are entitled to receive dividends, if
any, on such shares.
(9) Does not include restricted stock awards, stock option grants or amounts
paid for services as a director of the Company during the applicable year.
See "Election of Directors -- Compensation of Directors."
(10) Canceled effective thirty days after respective dates of resignation.
(11) The amounts presented in this column for the year ended October 3, 1997
consist of the following:
(a) Amounts to be credited for retirement contributions are $12,000 for
Messrs. Whitaker and Schmidt and Ms. Johnson-Leipold and $1,259 for Mr.
Klockenga.
(b) Company matching contributions to the executives' 401(k) plan accounts
during the year ended October 3, 1997 are $2,550 for Mr. Whitaker,
$4,938 for Mr. Schmidt, $3,781 for Ms. Johnson-Leipold and $1,259 for
Mr. Klockenga.
(c) $146,378 paid to, or accrued on behalf of, Mr. Whitaker for his
relocation.
(d) $250,000 accrued on behalf of Mr. Blime under his separation agreement.
See "Agreements with Named Executive Officers."
STOCK-BASED COMPENSATION
The following table provides details regarding stock options granted to the
Named Executive Officers in fiscal 1997 under the Johnson Worldwide Associates,
Inc. 1994 Long-Term Stock Incentive Plan. In addition, this table shows
hypothetical gains that would exist for the respective options granted to the
Named Executive Officers. These gains are based on assumed rates of annual
compound stock price appreciation of 5% and 10% from the date the options were
granted over the full option term.
14
<PAGE> 17
OPTION GRANTS IN FISCAL 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUES
NUMBER OF AT ASSUMED ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE OR FOR OPTION TERM
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION ----------------------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5% 10%
- ---- ---------- --------------- ----------- ---------- -- ---
<S> <C> <C> <C> <C> <C> <C>
R. C. Whitaker............. 75,000(1) 30% $13.125 10/31/06 $619,068 $1,568,840
Carl G. Schmidt............ 25,000(2) 10 11.500 12/22/06 180,807 458,201
Helen P. Johnson-Leipold... 30,000(3) 12 11.500 8/3/97(3) --(3) --(3)
Philippe Blime............. 50,000(3) 20 11.500 11/1/97(3) --(3) --(3)
Michael E. Klockenga....... 15,000(3) 6 11.500 3/14/97(3) --(3) --(3)
</TABLE>
- ---------------
(1) One-third of the options vest and become exercisable each successive year
after grant, commencing October 21, 1997.
(2) One-third of the options vest and become exercisable each successive year
after grant, commencing December 12, 1997.
(3) Canceled effective thirty days after respective dates of resignation.
The following table shows stock option exercises by the Named Executive
Officers during fiscal 1997. In addition, this table includes the number of
shares remaining covered by both "exercisable" (i.e., vested) and
"unexercisable" (i.e., unvested) stock options as of October 3, 1997. Also
reported are the values for "in-the-money" options which represent the positive
spread between the exercise price of any such existing stock options and the
October 3, 1997 closing price of the Class A Common Stock of $17.00.
AGGREGATE OPTION EXERCISES IN FISCAL 1997 AND
FISCAL 1997 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT 10/3/97 OPTIONS AT 10/3/97
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
R. C. Whitaker........... -- -- -- 75,000 $-- $290,625
Carl G. Schmidt.......... -- -- 24,000 38,000 -- 137,500
Helen P.
Johnson-Leipold........ -- -- 5,000(1) -- -- --
Philippe Blime........... -- -- 118,000(2) 75,000(2) -- 275,000(2)
Michael E. Klockenga..... -- -- -- -- -- --
</TABLE>
- ---------------
(1) Represents options related to compensation of Directors.
(2) Canceled effective thirty days after date of resignation.
15
<PAGE> 18
TOTAL SHAREHOLDER RETURN
The graph below compares on a cumulative basis the yearly percentage change
since October 2, 1992 in (a) the total return to shareholders on the Class A
Common Stock with (b) the total return on the Nasdaq Stock Market-U.S. Index and
(c) the total return on a self-constructed peer group index. The peer group
consists of the Company, K2, Inc., Brunswick Corporation, The Coleman Company,
Inc. and Huffy Corporation. The graph assumes $100 was invested on October 2,
1992 in Class A Common Stock, the Nasdaq Stock Market-U.S. Index and the peer
group index. Outboard Marine Corporation, which was included in the peer group
in the previous year, no longer has a class of stock that is traded publicly.
<TABLE>
<CAPTION>
10/02/92 10/01/93 09/30/94 09/29/95 09/27/96 10/03/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Johnson Worldwide Associates, Inc..... $100.00 $115.40 $142.30 $128.90 $ 76.50 $ 91.30
Peer Group............................ 100.00 122.10 156.80 160.90 175.30 236.00
Nasdaq Stock Market-U.S............... 100.00 133.60 134.80 186.10 221.60 308.90
</TABLE>
AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
In October 1997, the Company entered into a separation agreement with Mr.
Blime. Pursuant to the terms of the agreement, Mr. Blime resigned from all
positions with the Company and its subsidiaries as of October 1, 1997. The
Company agreed to pay Mr. Blime $250,000 over a six month period.
16
<PAGE> 19
CERTAIN TRANSACTIONS
The Company purchases certain services from S. C. Johnson & Son, Inc. and
other organizations controlled by Samuel C. Johnson, a director of the Company,
and the Johnson Family (including Helen P. Johnson-Leipold, a director of the
Company) including consulting and administrative services. The Company believes
that the amounts paid to these companies are no greater than the fair market
value of the services. The total amounts incurred by the Company for the
foregoing services during the year ended October 3, 1997 were approximately
$489,000.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP ("KPMG") served as the independent auditors for the
purpose of auditing the consolidated financial statements of the Company for the
year ended October 3, 1997. Representatives of KPMG will be present at the
Annual Meeting and will have an opportunity to make a statement if they so
desire and to respond to appropriate questions. The Board of Directors will not
choose independent public accountants for the purpose of auditing the
consolidated financial statements of the Company for the year ending October 2,
1998 until after the 1998 Annual Meeting of Shareholders.
SHAREHOLDER PROPOSALS
All shareholder proposals for presentation at the 1999 Annual Meeting of
Shareholders must be received at the offices of the Company, 1326 Willow Road,
Sturtevant, Wisconsin 53177 by August 22, 1998 for inclusion in the proxy
statement and form of proxy relating to the meeting.
The following proposals have been submitted for inclusion in the 1998 proxy
statement.
PROPOSAL NO. 1
Mr. William Steiner, 4 Radcliff Drive, Great Neck, New York 11024, who
states that he is the beneficial owner of 1,950 shares of Company stock, has
notified the Company that he intends to present a resolution for action by
shareholders at the Annual Meeting. The text of the resolution and supporting
statement, as presented to the Company, is as follows:
SALE OR MERGER OF COMPANY
Resolved: that the shareholders of the Company recommend and deem it
desirable and in their best interest that the board of directors
immediately engage the services of a nationally recognized investment
banker to explore all alternatives to enhance the value of the
Company. These alternatives should include, but not be limited to, the
possible sale, merger or other transaction involving the Company. A
specific view should be taken towards determining whether a sale to
the highest bidder would be appropriate. The Company should issue a
report to shareholders within 1 year.
PROPONENT'S SUPPORTING STATEMENT
In support of the above resolution, the proponent believes that in view of
the unacceptable performance of the Company's stock price and poor financial
performance over the past five years, the board of directors should take
immediate action to engage the services of an investment banker to explore all
alternatives to enhance the value of the Company which should include actively
exploring an outright sale.
17
<PAGE> 20
Nell Minow, a highly acclaimed corporate governance specialist, and
principal of the LENS Fund, which specializes in increasing the value of
under-performing companies, has stated:
"Companies can only justify asking investors to take the risk of
investing in equities by delivering a competitive rate of return on
the invested capital. When a company's management and board cannot
meet that goal, they owe it to their investors to submit themselves to
an independent evaluation by an outside firm, to insure that all
options are objectively evaluated."
I am a member of the Investors Rights Association of America and it is my
opinion that the value of the Company can be enhanced if the above resolution is
carried out and the shareholders would at long last be able to salvage
meaningful monetary rewards for their patience and long-term investment.
I urge your support. Vote for this resolution.
STATEMENT OF THE BOARD OF DIRECTORS AGAINST PROPOSAL NO. 1
The Board of Directors believes that this proposal to engage an investment
banker would not be in the best interests of the Company or its shareholders and
recommends a vote AGAINST the proposal.
The Board of Directors reviews on a regular basis strategic alternatives
and opportunities available to it and remains committed to growing and improving
shareholder value. Over the last several years, the Board and the Company's
management have worked to reposition the Company's product lines and reorganize
its management structure to best equip the Company for consistent long-term
growth in shareholder value. The Company continues to target opportunities to
enhance Company performance. Although the Company has had disappointing
financial results in recent years, the Company and the Board believe that the
continued focus on improvement in the Company's performance and strategic
direction will maximize shareholder value.
The Board of Directors regularly seeks to enhance shareholder value through
internal growth, restructuring, acquisitions and other strategic business plans.
During the past year, the Company completed transactions designed to achieve
corporate growth and increased profitability. In July 1997, the Company acquired
Uwatec AG, which manufactures and markets premium electronic diving computers
and other instruments worldwide. Also, in July 1997, the Company acquired the
assets of Ocean Kayak, Inc., a fast growing manufacturer of kayaks. In January
1997, the Company sold Plastimo, S.A., a manufacturer and distributor of
navigation and safety equipment primarily in Europe. The Board believes that all
of these transactions provide the Company with opportunities for growth and
enhanced profitability.
In October 1996, the Board of Directors selected R. C. Whitaker as
President and Chief Executive Officer of the Company. Mr. Whitaker, along with
the senior management team, have reduced working capital and operating expenses
and returned the Company to a modest level of profitability. Finally, the
Company adopted EVA in October 1996, a comprehensive financial measurement and
employee incentive compensation system highly correlated to shareholder value.
The Board of Directors and the Company's management believe that the
Company is now in position to move forward and realize success. The Board
believes that it would be imprudent and not in the best interests of the Company
and its shareholders if the Company's strategic business plans are abandoned
before such plans are given the proper time to achieve results.
For the foregoing reasons, the Board of Directors recommends a vote AGAINST
this proposal.
18
<PAGE> 21
PROPOSAL NO. 2
Charles Miller, Ph.D., 23 Park Circle, Great Neck, New York, 11024, who
states that he is the beneficial owner of 225 shares of Company stock, has
notified the Company that he intends to present a resolution for action by
shareholders at the Annual Meeting. The text of the resolution and supporting
statement, as presented to the Company, is as follows:
STOCK COMPENSATION PROPOSAL
RESOLVED, that the shareholders recommend that the Board of Directors
take the necessary steps to ensure that from here forward all
non-employee directors should receive a minimum of fifty percent (50%)
of their total compensation in the form of Company stock which cannot
be sold for three years.
PROPONENT'S SUPPORTING STATEMENT
A significant equity ownership by non-employee directors is probably the
best motivator for enhancing shareholder value and facilitating identification
with shareholders.
Traditionally, non-employee directors were routinely compensated with a
fixed fee, regardless of corporate performance. In today's competitive global
economy, outside directors must exercise critical oversight of management's
performance in fostering corporate profitability and shareholder value. In my
opinion, all too often, outside directors' oversight has been too lax, and their
actions were too late to effect any meaningful change.
In my view, the history of public corporations in America has too many
examples of directors passively allowing strategic management errors to occur.
This results in eroding corporate and shareholder value.
When compensation takes the form of company stock, I believe there is a
greater likelihood that outside directors will exercise greater diligence in
protecting their own, as well as corporate, and shareholder interests.
What is being recommended in this proposal is neither novel or untried. A
number of corporations have already established versions of such practices,
namely, Alexander & Alexander, Baxter International, Hartford Steam Boiler,
James River, McGraw Hill, NYNEX, RJR Nabisco, The Travelers, Westinghouse,
Woolworth and Zurn Industries.
In June, 1995, the National Association of Corporate Directors (NACD) Blue
Ribbon Commission on Director Compensation issued a report urging that public
company directors be paid their annual fees primarily in company stock to more
closely align their interests with those of shareholders. Several
widely-reported empirical studies have confirmed the potential efficacy of this
approach. According to Albert J. Dunlap, a Commission member and Chairman and
Chief Executive Officer of Sunbeam Corporation has stated:
"What kind of contribution will the directors ever make if they don't
have a vested interest in the company's financial success? They've got
to show that they believe in the company, that they're willing to
stand behind their choices...Any director who isn't willing to be paid
[one hundred] percent in stock doesn't believe in the company."
It can be argued that awarding stock options to outside directors
accomplishes the same purpose of insuring director's allegiance to a company's
profitability as paying them in stock. However, it is my contention that stock
options entail no downside risk., i.e., while stock options offer rewards should
the stock increase, if the stock price decreases, no penalties ensue. I am a
member of the Investors Rights Association of America, and I firmly believe that
there few strategies that are more likely to align the interests of outside
directors with those of shareholder than one which results in the sharing of the
same bottom line.
I urge your support. Vote for this resolution.
19
<PAGE> 22
STATEMENT OF THE BOARD OF DIRECTORS AGAINST PROPOSAL NO. 2
The Board of Directors and management of the Company support the view that
non-employee directors should have an economic interest in the Company.
Nevertheless, the Board of Directors believes that implementation of the
proposal is not necessary and, consequently, that shareholders should vote
AGAINST the proposal.
The Company's compensation package for non-employee directors already
involves two elements of Company stock. At the 1994 Annual Meeting, the
shareholders approved the Johnson Worldwide Associates, Inc. 1994 Non-Employee
Director Stock Ownership Plan, which provides for the automatic grant of stock
options and restricted stock to non-employee directors. Each non-employee
director received a one-time grant of an option to purchase 5,000 shares of
Class A Common Stock upon adoption of the plan, with similar grants to new
non-employee directors when first elected or appointed to the Board. In
addition, at each annual meeting, each non-employee director receives 500 shares
of Class A Common Stock, which shares generally are not transferable while the
individual remains a director of the Company. One of the purposes of this plan
is to promote a greater identity of interest between the Company's non-employee
directors and its shareholders.
It is essential that the Company be able to attract and retain directors of
outstanding ability. Based upon a study conducted by an independent compensation
consultant engaged by the Company, it was determined that existing director
compensation was not competitive. Accordingly, adjustments to director
compensation were implemented in July 1997. The Company believes that its
current director compensation package is now more competitive with industry
standards, and that implementation of this proposal would not benefit the
Company. Moreover, the Company's directors understand their responsibilities and
are dedicated to fulfilling them. The form of their remuneration does not affect
the quality of their performance for the Company.
For the foregoing reasons, the Board of Directors recommends a vote AGAINST
this proposal.
* * * *
The affirmative vote of a majority of the votes cast on each shareholder
proposal is required for approval of each proposal, provided that a majority of
the outstanding shares of Common Stock are voted on the proposal. For purposes
of determining the vote required for each proposal, abstentions and broker
nonvoters will have no impact on the vote. The votes requested by the proxies
received will be voted against approval of each shareholder proposal, unless a
vote for such approval is specifically indicated on the proxy.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors, and more than 10% shareholders to file with the
Securities and Exchange Commission reports on prescribed forms of their
ownership and changes in ownership of Company stock and furnish copies of such
forms to the Company. Based solely on a review of the copies of such forms
furnished to the Company, or written representations that no Form 5 was required
to be filed, the Company believes that during the year ended October 3, 1997,
all reports required by Section 16(a) to be filed by the Company's officers,
directors and more than 10% shareholders were filed on a timely basis, except
that the Company inadvertently filed late a Form 4 for Mr. Whitaker covering two
transactions.
20
<PAGE> 23
OTHER MATTERS
The Company has filed an Annual Report on Form 10-K with the Securities and
Exchange Commission for the year ended October 3, 1997. The Company will provide
a copy of this Form 10-K without charge to each person who is a record or
beneficial holder of shares of Class A Common Stock or Class B Common Stock on
the record date for the Annual Meeting and who submits a written request.
Requests for copies of the Form 10-K should be addressed to the Secretary,
Johnson Worldwide Associates, Inc., 1326 Willow Road, Sturtevant, Wisconsin
53177 or via the internet to: [email protected].
The cost of soliciting proxies will be borne by the Company. The Company
expects to solicit proxies primarily by mail. Proxies may also be solicited in
person or by telephone by certain officers and employees of the Company. It is
not anticipated that anyone will be specially engaged to solicit proxies or that
special compensation will be paid for that purpose. The Company will reimburse
brokers and other nominees for their reasonable expenses in communicating with
the persons for whom they hold stock of the Company.
Neither the Board of Directors nor management intends to bring before the
Annual Meeting any matters other than those referred to in the Notice of Annual
Meeting and this Proxy Statement. In the event that any other matters shall
properly come before the Annual Meeting, it is the intention of the persons
named in the proxy forms to vote the shares represented by each such proxy in
accordance with their judgment on such matters.
By Order of the Board of Directors
CARL G. SCHMIDT
Senior Vice President and Chief
Financial Officer, Secretary and
Treasurer
21
<PAGE> 24
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS A COMMON STOCK PROXY
JOHNSON WORLDWIDE ASSOCIATES, INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 28, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
JOHNSON WORLDWIDE ASSOCIATES, INC.
The undersigned constitutes and appoints R. C. Whitaker and Carl G. Schmidt, and each of them, each with full power to act without
the other, and each with full power of substitution, the true and lawful proxies of the undersigned, to represent and vote, as
designated below, all shares of Class A Common Stock of Johnson Worldwide Associates, Inc. which the undersigned is entitled to vote
at the Annual Meeting of Shareholders of such corporation to be held at the Company's Headquarters, located at 1326 Willow Road,
Sturtevant, Wisconsin, on Wednesday, January 28, 1998, 9:45 a.m. local time, and at any adjournment or postponement thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1 AND AGAINST ITEMS 2 AND 3.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES SPECIFIED IN ITEM 1 AND AGAINST THE SHAREHOLDER PROPOSALS SPECIFIED
IN ITEMS 2 AND 3.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF SAID ANNUAL MEETING AND THE ACCOMPANYING PROXY STATEMENT AND ANNUAL REPORT.
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
- ------------------------------------------------------------------------------------------------------------------------------------
JOHNSON WORLDWIDE ASSOCIATES, INC. 1998 ANNUAL MEETING
1. ELECTION OF DIRECTORS: 1 - GREGORY E. LAWTON 2 - GLENN N. RUPP [ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
By Holders of Class A Common to the left (except as to vote for all
Stock specified below). nominees listed
to the left.
(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. Approval of shareholder proposal no. 1
regarding sale or merger of Company [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of shareholder proposal no. 2
regarding director compensation [ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting.
Check appropriate box
Indicate changes below:
Date________________________
Address Change? [ ] Name Change? [ ] NO. OF SHARES
-----------------------------------------------------
-----------------------------------------------------
SIGNATURE(S) IN BOX
Note: Please sign exactly as your name
appears on your stock certificate. Joint
owners should each sign personally. A
corporation should sign full corporate
name by duly authorized officers and
affix corporate seal, if any. When
signing as attorney, executor,
administrator trustee or guardian, give
full title as such.
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS B COMMON STOCK PROXY
JOHNSON WORLDWIDE ASSOCIATES, INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY 28, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
JOHNSON WORLDWIDE ASSOCIATES, INC.
The undersigned constitutes and appoints R. C. Whitaker and Carl G. Schmidt, and each of them, each with full power to act without
the other, and each with full power of substitution, the true and lawful proxies of the undersigned, to represent and vote, as
designated below, all shares of Class A Common Stock of Johnson Worldwide Associates, Inc. which the undersigned is entitled to vote
at the Annual Meeting of Shareholders of such corporation to be held at the Company's Headquarters, located at 1326 Willow Road,
Sturtevant, Wisconsin, on Wednesday, January 28, 1998, 9:45 a.m. local time, and at any adjournment or postponement thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1 AND AGAINST ITEMS 2 AND 3.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES SPECIFIED IN ITEM 1 AND AGAINST THE SHAREHOLDER PROPOSALS SPECIFIED
IN ITEMS 2 AND 3.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF SAID ANNUAL MEETING AND THE ACCOMPANYING PROXY STATEMENT AND ANNUAL REPORT.
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
- ------------------------------------------------------------------------------------------------------------------------------------
JOHNSON WORLDWIDE ASSOCIATES, INC. 1998 ANNUAL MEETING
1. ELECTION OF DIRECTORS: 1 - SAMUEL C. JOHNSON 2 - R.C. WHITAKER [ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
By Holders of Class B Common 3 - HELEN P. JOHNSON-LEIPELD to the left (except as to vote for all
Stock 4 - THOMAS F. PYLE, JR. specified below). nominees listed
to the left.
(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. Approval of shareholder proposal no. 1
regarding sale or merger of Company [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of shareholder proposal no. 2
regarding director compensation [ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting.
Check appropriate box
Indicate changes below:
Date________________________
Address Change? [ ] Name Change? [ ] NO. OF SHARES
-----------------------------------------------------
-----------------------------------------------------
SIGNATURE(S) IN BOX
Note: Please sign exactly as your name
appears on your stock certificate. Joint
owners should each sign personally. A
corporation should sign full corporate
name by duly authorized officers and
affix corporate seal, if any. When
signing as attorney, executor,
administrator trustee or guardian, give
full title as such.
</TABLE>
