<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.
The Sportsman's Guide, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
--------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[THE SPORTSMANS GUIDE LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 19, 2000
To Our Shareholders:
The Annual Meeting of Shareholders of The Sportsman's Guide, Inc., a
Minnesota corporation (the "Company"), will be held at the Company's executive
offices located at 411 Farwell Avenue, South St. Paul, Minnesota on Wednesday,
July 19, 2000, at 2:00 p.m., Minnesota time, for the following purposes:
1. Election of seven directors to serve until the next Annual Meeting and
until their respective successors have been elected and qualified;
2. Ratification of the engagement of Grant Thornton LLP as independent
certified public accountants for the Company for 2000; and
3. Transaction of such other business as may properly come before the
meeting or any adjournment thereof.
Only holders of record of the Company's Common Stock at the close of
business on June 2, 2000 will be entitled to notice of and to vote at the
meeting or any adjournment thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person.
By Order Of The Board Of Directors
/s/ CHARLES B. LINGEN
Charles B. Lingen, Secretary
South St. Paul, Minnesota
June 9, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, DATE, SIGN AND
PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
<PAGE> 3
THE SPORTSMAN'S GUIDE, INC.
411 FARWELL AVENUE
SOUTH ST. PAUL, MINNESOTA 55075
-------------------------
PROXY STATEMENT
MAILING DATE
JUNE 9, 2000
-------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of The Sportsman's Guide, Inc., a Minnesota
corporation (the "Company"), for use for the purposes set forth herein at its
Annual Meeting of Shareholders to be held on July 19, 2000 and any adjournments
thereof. All properly executed proxies will be voted as directed by the
shareholder on the proxy card. If no direction is given, proxies will be voted
in accordance with the Board of Directors' recommendations and, in the
discretion of the proxy holders, in the transaction of such other business as
may properly come before the Annual Meeting and any adjournments thereof. Any
proxy may be revoked by a shareholder by delivering written notice of revocation
to the Company or in person at the Annual Meeting at any time prior to the
voting thereof.
VOTING SECURITIES AND RECORD DATE
The Company has one class of voting securities outstanding, namely Common
Stock, par value $.01 per share. Only holders of record of the Company's Common
Stock at the close of business on June 2, 2000 are entitled to notice of and to
vote at the Annual Meeting. As of June 2, 2000, there were 4,748,810 shares of
Common Stock outstanding, and each share is entitled to one vote on all matters
to be voted upon at the Annual Meeting. Under the Company's Restated Articles of
Incorporation and Bylaws, each shareholder has the right to vote cumulatively
for the election of directors by giving written notice of his intent to cumulate
his votes to any officer of the Company before the Annual Meeting or to the
presiding officer of the Company at the Annual Meeting at any time before the
election of directors. Under cumulative voting, each shareholder has the right
to cast that number of votes per share equal to the number of directors to be
elected and may cast all of the shareholder's votes for a single candidate or
distribute those votes among any number of candidates. In the event that
directors are elected by cumulative voting and cumulated votes represented by
proxies solicited hereby are insufficient to elect all the nominees, then the
proxy holders will vote such proxies cumulatively for the election of as many of
such nominees as possible and in such order as the proxy holders may determine.
The presence in person or by proxy of holders of 40% of the shares of the
Company's Common Stock entitled to vote at the Annual Meeting will constitute a
quorum for the transaction of business.
Directors are elected by a plurality of the votes cast by the holders of
Common Stock at a meeting at which a quorum is present. Abstentions and broker
non-votes will not be counted toward a nominee's achievement of a plurality and
thus will have no effect. A broker non-vote occurs when a broker submits a proxy
that indicates the broker does not have discretionary authority to vote the
shares on a particular matter.
MATTERS TO BE ACTED UPON AT THE ANNUAL MEETING
1. ELECTION OF DIRECTORS
Seven directors are to be elected at the Annual Meeting to hold office
until the next Annual Meeting of Shareholders and until their successors have
been elected and qualified. Unless otherwise directed, it is the intention of
the persons named in the accompanying proxy to vote each proxy for the election
of the nominees listed below. Each nominee is presently a director of the
Company. If at the time of the Annual Meeting any nominee is unable or declines
to serve, the proxy holders will vote for the election of such substitute
nominee
2
<PAGE> 4
as the Board of Directors may recommend. The Company and the Board of Directors
have no reason to believe that any substitute nominee will be required.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION
OF EACH OF THE NOMINEES FOR DIRECTOR.
Set forth below is certain information with respect to each nominee for
director.
GARY OLEN, 58, is a co-founder of the Company and served as its Executive
Vice President and Secretary from its incorporation in 1977 until December 31,
1993. Mr. Olen has been Chief Executive Officer since 1994, served as President
from 1994 to 1998 and has been Chairman of the Board since 1998. Mr. Olen has
been a director of the Company since its incorporation. From 1970 to 1977, Mr.
Olen was employed as the Merchandising/Marketing Director for Fidelity File Box,
Inc., which sells corrugated storage products, office and industrial equipment
and office industrial supplies through mail order catalogs. From 1967 to 1970,
Mr. Olen was a Merchandise Manager with C&H Distributors, a business-to-business
mail order catalog specializing in the sale of industrial and office equipment.
From 1960 to 1967, Mr. Olen was employed in the catalog division of J.C. Penney
Company. Mr. Olen was also the sole proprietor of the predecessor of the
Company, The Olen Company, founded in 1970.
GREGORY R. BINKLEY, 51, has been a director of the Company since 1995. Mr.
Binkley has been an employee since 1994 when he was elected Vice President. Mr.
Binkley became Senior Vice President of Operations and Chief Operating Officer
in 1995, Executive Vice President in 1996 and President in 1998. From 1993 to
1994, Mr. Binkley served as an independent operations consultant. From 1990 to
1993, Mr. Binkley was Director of Distribution of Fingerhut Companies, Inc., a
mail order catalog business. From 1988 to 1990, Mr. Binkley was Director of
Distribution with Cable Value Network, Inc., a cable television retailer. Mr.
Binkley worked for Donaldsons Department Stores, a division of Allied Stores
Corporation, from 1975 to 1988, serving as Vice President of Finance and
Operations from 1987 to 1988 and Vice President of Operations from 1981 to 1987.
In 1999, Mr. Binkley was elected President and Chief Executive Officer of
GuideOutdoors.com Inc.
CHARLES B. LINGEN, 55, has been a director of the Company since 1995. Mr.
Lingen has been Chief Financial Officer, Vice President of Finance and Treasurer
since 1994. In 1995 Mr. Lingen was elected Secretary and in 1996 was elected
Senior Vice President of Finance. From 1973 to 1994, Mr. Lingen worked at
Fingerhut Companies, Inc., serving as Vice President of Finance and Controller
from 1989 to 1994.
VINCENT W. SHIEL, Ph.D, 67, has been a director of the Company since 1990
and served as Chairman of the Board from 1994 to 1998. Dr. Shiel owns an
interest in and serves as a director of ABN Sports Supply, Inc., a wholesale
firearms distributor. Dr. Shiel is a principal shareholder and has served as
President and a director of Outdoor Consulting, Inc., a management consulting
firm, since 1988. From 1984 to 1988, Dr. Shiel served on the board of directors
and owned a controlling interest in Gander Mountain, Inc. Dr. Shiel resigned as
a director of and sold his controlling interest in Gander Mountain in 1989. Dr.
Shiel was the principal owner and President of Outdoor Sports Headquarters,
Inc., a hunting and sporting goods wholesaler, from its formation in the early
1960s until 1978.
MARK F. KROGER, 46, has been a director of the Company since 1990. He is
the former Chairman of the Board, President and Chief Executive Officer of ABN
Sports Supply, Inc. Mr. Kroger served as President and a director of ABN from
1986 to 1997. Mr. Kroger also served as the Chairman of the Board, President and
Chief Executive Officer of LMV, Inc. dba Ohio Powder Company, a wholesale
distributor of gun powder, from 1995 to 1997 and as the President and a director
of MKS Supply, Inc., a marketer and seller of firearms to distributors, from
1990 to 1997. Mr. Kroger worked for Outdoor Sports Headquarters, Inc. from 1973
to 1985 where he held various positions in sales and merchandising.
LEONARD M. PALETZ, 65, is a co-founder of the Company and served as
Chairman of the Board, President, Chief Executive Officer, Treasurer and a
director from its incorporation in 1977. Mr. Paletz retired as an employee
effective December 31, 1994. From 1962 through 1977, Mr. Paletz worked for
Fidelity File Box, Inc. in various positions including Vice President and
General Manager and was also a director and shareholder of Fidelity File Box,
Inc.
3
<PAGE> 5
WILLIAM T. SENA, 63, has been a director of the Company since 1990. He is
an investment advisor with Sena Weller Rohs Williams, Inc., an investment
advisory firm. Mr. Sena has been associated with the investment advisory firm
and its predecessor since 1965. Mr. Sena is also a director of Phoenix Medical
Technology, Inc.
MEETINGS OF THE BOARD AND COMMITTEES
During 1999, the Board of Directors held five meetings. Each director
attended over 75% of the Board meetings and meetings of Board committees on
which he served held during 1999.
The Board of Directors has three standing committees: the Audit Committee,
the Compensation Committee and the Executive Committee. The Board has no
nominating committee.
The Audit Committee consists of Mark F. Kroger, Leonard M. Paletz and
William T. Sena and has the responsibility to meet with Company personnel and
representatives of the Company's independent auditors to review internal
auditing procedures and matters related to the Company's annual external audit.
The Audit Committee recommends to the Board of Directors the appointment of
independent public accountants. The Audit Committee met once during 1999.
The Compensation Committee consists of Vincent W. Shiel, Leonard M. Paletz
and William T. Sena. The Compensation Committee has the responsibility to review
the salaries, bonuses and stock options for, as well as any other compensation
of, the officers of the Company. The Committee recommends any changes or updates
to officer compensation to the Board of Directors for its approval. The
Compensation Committee met once and took action by unanimous written consent
once during 1999.
The Executive Committee consists of Gary Olen, Vincent W. Shiel and William
T. Sena. The Executive Committee is empowered to exercise all of the powers and
authority of the Board of Directors between meetings of the Board. The Executive
Committee took action by unanimous written consent five times during 1999.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive $5,000 annually for
services as a director plus expenses incurred in attending board meetings.
2. RATIFICATION OF ENGAGEMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has engaged Grant Thornton LLP to audit the books,
records and accounts of the Company for the fiscal year ending December 31,
2000. The Board has determined that it is desirable to request that the
shareholders ratify the selection. Grant Thornton LLP has served as the
Company's independent certified public accountants since 1989. The Board of
Directors will reconsider the engagement of Grant Thornton LLP if its selection
is not ratified by the shareholders (although it is not obligated to select
other independent public accountants).
It is anticipated that a representative of Grant Thornton LLP will be
present at the Annual Meeting with the opportunity to make a statement if he or
she desires to do so and to respond to appropriate questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION
OF THE APPOINTMENT OF GRANT THORNTON LLP.
3. OTHER BUSINESS
The Board of Directors does not know of any matters to be presented at the
Annual Meeting other than those mentioned above. However, if other matters
should properly come before the Annual Meeting or any adjournments thereof, the
proxy holders will vote the proxies thereon in their discretion.
4
<PAGE> 6
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid to the Chief
Executive Officer and to each of the other four most highly compensated
executive officers of the Company (the "Named Executive Officers") for services
rendered in all capacities for each of the years indicated.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- ------------
SALARY BONUS OPTIONS
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#)
--------------------------- ---- ------ ----- -------
<S> <C> <C> <C> <C>
Gary Olen........................................... 1999 270,931 -- 40,000
Chairman and 1998 259,605 -- 80,000
Chief Executive Officer 1997 207,782 110,000 33,790
Gregory R. Binkley.................................. 1999 185,947 -- 10,000
President and 1998 178,939 -- 75,000
Chief Operating Officer 1997 129,985 60,000 20,740
Charles B. Lingen................................... 1999 141,795 -- 7,500
Senior Vice President of Finance, 1998 136,166 -- 41,000
Chief Financial Officer, 1997 119,165 50,000 15,420
Secretary/Treasurer
John M. Casler...................................... 1999 138,114 -- 7,500
Senior Vice President 1998 127,110 -- 41,500
of Merchandising 1997 100,235 45,000 10,000
Barry W. Benecke.................................... 1999 131,726 -- 7,000
Senior Vice President 1998 123,151 -- 7,500
of Creative Services 1997 93,484 15,000 5,000
</TABLE>
The following table sets forth information with respect to the Named
Executive Officers concerning the grant of options during 1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS EXERCISE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM (1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------
NAME GRANTED(#)(2) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ------------- ------------ -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Gary Olen...................... 40,000 33.4 6.59 2/11/09 165,777 420,111
Gregory R. Binkley............. 10,000 8.4 6.59 2/11/09 41,444 105,028
Charles B. Lingen.............. 7,500 6.3 6.59 2/11/09 31,083 78,771
John M. Casler................. 7,500 6.3 6.59 2/11/09 31,083 78,771
Barry W. Benecke............... 7,000 5.9 6.59 2/11/09 29,011 73,519
</TABLE>
-------------------------
(1) The compounding assumes a ten-year exercise period for all option grants.
The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of the Company's future
Common Stock prices. These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Common Stock and overall stock
market conditions. The amounts reflected in this table may not necessarily
be achieved.
5
<PAGE> 7
(2) Incentive stock options granted pursuant to the Company's 1996 Stock Option
Plan. These options become exercisable in four cumulative installments of
25% on the date of grant and each anniversary date. The date of grant was
February 11, 1999.
The following table sets forth information with respect to the Named
Executive Officers concerning options held at year end 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
SHARES OPTIONS AT FISCAL YEAR-END THE-MONEY OPTIONS AT
ACQUIRED VALUE (#) FISCAL YEAR-END($)(1)
ON EXERCISE REALIZED ---------------------------- ----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gary Olen.................... -- -- 136,168 78,447 -- --
Gregory R. Binkley........... -- -- 82,078 50,185 -- --
Charles B. Lingen............ -- -- 53,485 29,980 -- --
John M. Casler............... -- -- 35,625 28,875 -- --
Barry W. Benecke............. -- -- 10,750 10,250 -- --
</TABLE>
-------------------------
(1) Unexercised options were in-the-money if the fair market value of the
underlying shares exceeded the exercise price of the option at December 31,
1999.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Gary Olen, Gregory
R. Binkley, Charles B. Lingen and John M. Casler. Mr. Olen's agreement continues
until December 31, 2001, and Messrs. Binkley's, Lingen's and Casler's agreements
continue until December 31, 2000. Such agreements contain certain nondisclosure,
nonsolicitation and option forfeiture provisions. Each agreement is
automatically renewed for additional one year terms unless either party gives
two months' notice of nonrenewal, and terminates upon the employee's death,
disability or retirement at age 65. Upon termination of the agreement by reason
of death or disability, each of the employees or his estate is entitled to a
payment equal to 12 months of his monthly base salary, plus a pro rata portion
of the bonus that would otherwise have been payable to the employee under the
Company's bonus plan then in effect. Upon termination of the agreement (i) by
the employee for good reason (as defined in the agreement) or (ii) by the
Company without good cause or upon the Company's failure to renew the agreement,
the employee is entitled to a payment equal to 24 months of his monthly base
salary, plus a pro rata portion of the bonus that would otherwise have been
payable to the employee under the Company's bonus plan then in effect. Each
agreement also provides that if the employee is terminated, or resigns for good
reason or if the Company fails to renew the agreement within two years following
a substantial event (defined as a sale of substantially all of the Company's
assets, a merger or other reorganization resulting in the incumbent directors
constituting less than a majority of the board, or a tender offer for 50% or
more of the Company's outstanding voting stock), such employee is entitled to a
payment equal to three times his annual base salary, plus a pro rata portion of
the bonus otherwise payable to the employee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is comprised of
Vincent W. Shiel, Leonard M. Paletz and William T. Sena. Mr. Paletz is a former
Chief Executive Officer of the Company.
During 1999, the Company purchased merchandise inventory in the amount of
$2.8 million from ABN Sports Supply, Inc. Dr. Shiel is a shareholder and
director of ABN. The Company believes that the terms of such purchases were as
favorable as could have been obtained from an unrelated party.
6
<PAGE> 8
Outdoor Consulting, Inc., a corporation owned by Dr. Shiel, provides
certain consulting services to the Company. Mr. Sena also provides certain
consulting services to the Company. See "Certain Relationships and Related
Transactions."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors establishes policies
relating to compensation of executive officers of the Company. The Committee is
also responsible for the review and determination of salaries, bonuses and stock
options for executive officers.
Executive Compensation Policies
The Company's compensation policy seeks to provide an appropriate
relationship between executive pay and the creation of shareholder value, while
motivating and retaining key employees. To achieve this goal, the Company's
executive compensation policies integrate annual base compensation with bonuses
based upon corporate performance and stock options. Measurement of corporate
performance is primarily based on the pre-tax earnings of the Company.
Performance goals are revised annually to create an incentive for senior
management to increase sales, profit margin and earnings. The Committee feels
that stock options are an effective incentive for executives to create value for
shareholders since their value bears a direct relationship to the Company's
stock price. Annual cash compensation, together with equity-based compensation,
is designed to attract and retain qualified executives and to ensure that
executives have a continuing stake in the long-term success of the Company.
1999 Compensation
For 1999, the Company's executive compensation program consisted of base
salary, a cash bonus program and a stock option plan.
Base Salary. Base salaries for executive officers, as well as changes in
base salaries, are determined by the Committee based upon recommendations by the
Chief Executive Officer, comparable salaries for companies of similar size and
profitability, and an evaluation of subjective factors such as the individual's
position, contribution, experience and length of service.
Annual Bonus. The Company's annual bonus program provides for the payment
of cash bonuses based upon the achievement of pre-determined corporate
performance goals. For 1999, the Committee established specific levels of
Company pre-tax earnings as the performance measure for determining cash
bonuses. Bonuses payable could range from zero to $150,000 plus 16% of pre-tax
earnings over specified levels. No cash bonuses were earned in 1999 because
pre-tax earnings did not reach the threshold payout level.
Stock Options. Stock option awards to executive officers consist of annual
grants plus possible additional grants based on corporate performance. The total
number of annual stock option grants is determined by the Committee taking into
consideration the incentive potential of the award as well as aggregate employee
stock option ownership and overall corporate performance. Individual awards are
based upon recommendations by the Chief Executive Officer. For 1999, options to
purchase 119,600 shares of Common Stock were awarded to 35 employees, including
seven executive officers. No performance-based option grants were made because
pre-tax earnings fell below the award threshold level.
CEO Compensation
Gary Olen, the Company's Chief Executive Officer, was paid a base salary of
$262,500 for 1999. Mr. Olen was also awarded options to purchase 40,000 shares
under the annual stock option plan. Mr. Olen, like the other executive officers,
did not earn a cash bonus for 1999.
7
<PAGE> 9
Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code of 1986 limits the
deductibility of certain compensation in excess of $1 million per year paid by a
publicly traded corporation to the chief executive officer and the other named
executive officers in the company's proxy statement. Compensation which is
performance-based is exempt from the $1 million deductibility limitation. The
Committee has reviewed the application of Section 162(m) to its executive
compensation policies and does not believe that such policies are affected by
the Section 162(m) limitation at this time.
Vincent W. Shiel
Leonard M. Paletz
William T. Sena
8
<PAGE> 10
PERFORMANCE GRAPH
The following graph shows a five-year comparison of the cumulative total
returns for the Company's Common Stock (*), the CRSP (**) Index for NASDAQ Stock
Market and the CRSP Index for NASDAQ Retail Trade Stocks. The graph assumes $100
invested on December 31, 1994 in the Company's Common Stock and each index with
all dividends reinvested.
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
AMONG THE SPORTSMAN'S GUIDE, INC., NASDAQ STOCKS AND NASDAQ RETAIL TRADE STOCKS
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
NASDAQ RETAIL
SPORTSMAN'S GUIDE NASDAQ STOCKS TRADE
----------------- ------------- ---------
<S> <C> <C> <C> <C>
Dec-94 100.00 100.00 100.00
Mar-95 86.21 108.95 98.91
Jun-95 51.72 124.62 108.95
Sep-95 41.38 139.63 116.63
Dec-95 22.41 141.34 110.15
Mar-96 6.90 147.95 123.86
Jun-96 12.07 160.01 132.39
Sep-96 20.69 165.70 139.77
Dec-96 22.07 173.89 131.31
Mar-97 39.66 164.46 124.91
Jun-97 52.41 194.59 141.12
Sep-97 68.28 227.52 159.98
Dec-97 69.66 213.07 154.27
Mar-98 68.97 249.37 185.15
Jun-98 76.55 256.21 189.00
Sep-98 42.76 231.35 137.04
Dec-98 60.00 300.18 187.59
Mar-99 68.28 336.02 191.32
Jun-99 61.38 367.46 184.32
Sep-99 53.10 375.97 166.00
Dec-99 34.83 545.67 168.55
</TABLE>
Assumes $100 invested on December 31, 1994 in The Sportsman's Guide, Inc.
common stock, the NASDAQ stock index and the NASDAQ Retail Trade stock index,
with all dividends reinvested. The indices for NASDAQ stocks and NASDAQ Retail
Trade stocks were prepared by the Center For Research in Security Prices,
University of Chicago GSB.
-------------------------
* The Company's Common Stock has traded on the NASDAQ National Market since
February 5, 1998. Prior to that date the Company's Common Stock was traded in
the local over-the-counter market.
** Center for Research in Security Prices, Graduate School of Business,
University of Chicago, Chicago, Illinois.
9
<PAGE> 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of June 2, 2000 (the
record date for the Annual Meeting) by each director and nominee for director of
the Company, each Named Executive Officer and all directors and executive
officers as a group, and those persons or groups known by the Company to own
more than 5% of the Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
------------------------
NAME NUMBER PERCENT(1)
---- ------ ----------
<S> <C> <C>
Directors and Executive Officers(2):
Vincent W. Shiel(3)......................................... 522,000 11.0%
Gary Olen(4)................................................ 264,798 5.4%
Gregory R. Binkley(5)....................................... 118,513 2.4%
Charles B. Lingen(6)........................................ 69,465 1.4%
John M. Casler(7)........................................... 50,375 1.0%
Barry W. Benecke(8)......................................... 16,625 *
Bernard S. Bauhof(9)........................................ 13,750 *
Mark F. Kroger.............................................. 78,370 1.7%
Leonard M. Paletz........................................... 204,816 4.3%
William T. Sena, as trustee of various trusts for the
benefit of Dr. and Mrs. Shiel and their children (10)..... 106,819 2.2%
All directors and executive officers as a group
(10 persons)(11).......................................... 1,445,531 27.9%
Other Shareholders Owning More Than 5% of Common Stock:
Ralph E. Heyman, Individually and as trustee of various
trusts for the benefit of Dr. and Mrs. Shiel and their
children and grandchildren(12)............................ 383,725 8.1%
Dimensional Fund Advisors Inc.(13).......................... 328,000 6.9%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Kalmar Investments Inc.(14)................................. 300,000 6.3%
3701 Kennett Pike
Greenville, DE 19807
E Com Ventures, Inc. and Ilia Lekach(15).................... 298,900 6.3%
11701 N.W. 101 Road
Miami, FL 33178
</TABLE>
-------------------------
* Less than 1% of outstanding shares.
(1) Percentages are calculated on the basis of the number of shares outstanding
on June 2, 2000 plus the number of shares issuable pursuant to options held
by the individual which are exercisable within 60 days after June 2, 2000.
(2) The address of each director and executive officer of the Company is 411
Farwell Avenue, South St. Paul, Minnesota 55075.
(3) Includes 420,051 shares held by the Vincent W. Shiel Family Limited
Partnership of which the Vincent W. Shiel Revocable Trust, of which Dr.
Shiel is trustee, owns a 99.9% limited partnership interest and a 99.8%
interest in the general partner, and 101,949 shares held by the Helen M.
Shiel Family Limited Partnership of which the Helen M. Shiel Revocable
Trust, of which Mrs. Shiel is trustee, owns a 99.9% limited partnership
interest and a 99.8% interest in the general partner. Helen M. Shiel is the
wife of Dr. Shiel. Does not include 633,848 shares held by Dr. and Mrs.
Shiel's children or in trusts for the benefit of Dr. and Mrs. Shiel and
their children and grandchildren of which Dr. Shiel expressly disclaims
beneficial ownership.
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<PAGE> 12
(4) Includes 174,615 shares issuable upon the exercise of options. Does not
include 48,000 shares held in trusts for the benefit of Mr. Olen's children
and grandchildren of which Mr. Olen expressly disclaims beneficial
ownership.
(5) Includes 2,000 shares held in the name of Mr. Binkley's wife and 108,513
shares issuable upon the exercise of options.
(6) Includes 69,465 shares issuable upon the exercise of options.
(7) Includes 50,375 shares issuable upon the exercise of options.
(8) Includes 15,625 shares issuable upon the exercise of options.
(9) Includes 13,750 shares issuable upon the exercise of options.
(10) Includes 106,819 shares held as trustee of various trusts for the benefit
of Dr. and Mrs. Shiel and their children, of which Mr. Sena has no
pecuniary interest. Does not include 522,000 shares held by the Vincent W.
Shiel Family Limited Partnership and the Helen M. Shiel Family Limited
Partnership over which Mr. Sena shares voting and dispositive power and of
which Mr. Sena expressly disclaims beneficial ownership.
(11) Includes 432,343 shares issuable upon the exercise of options.
(12) Includes 382,725 shares held as trustee of various trusts for the benefit
of Dr. and Mrs. Shiel and their children and grandchildren, of which Mr.
Heyman has no pecuniary interest. Does not include 522,000 shares held by
the Vincent W. Shiel Family Limited Partnership and the Helen M. Shiel
Family Limited Partnership over which Mr. Heyman shares voting and
dispositive power and of which Mr. Heyman expressly disclaims beneficial
ownership. Mr. Heyman's address is 1100 Courthouse Plaza S.W., Dayton, Ohio
45402.
(13) Based on a Schedule 13G filing dated February 4, 2000. Dimensional Fund
Advisors Inc., a registered investment advisor, furnishes investment advice
to four registered investment companies and serves as investment manager to
certain other commingled group trusts and separate accounts. In its role as
investment manager, Dimensional Fund Advisors Inc. has sole power to vote
and dispose of 328,000 shares owned by these funds. To the knowledge of
Dimensional Fund Advisors Inc., no one advisory client owns more than 5% of
the class. Dimensional Fund Advisors Inc. disclaims beneficial ownership of
the 328,000 shares.
(14) Based on a Schedule 13G filing dated January 8, 1999. Kalmar Investments
Inc., a registered investment advisor, has sole power to dispose of 300,000
shares but does not have the power to vote the 300,000 shares.
(15) Based on a Schedule 13D filing dated April 10, 2000. Ilia Lekach, the Chief
Executive Officer of E Com Ventures, Inc., has sole power to vote and
dispose of 40,000 shares and shared power to vote and dispose of 258,900
shares owned by E Com Ventures, Inc.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and ten percent beneficial owners of Common Stock
to file reports of ownership and changes of ownership of the Company's Common
Stock with the Securities and Exchange Commission. The Company believes that
during 1999 all Section 16 filing requirements applicable to its directors,
executive officers and ten percent beneficial owners were met.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1990, the Company entered into a consulting agreement with
Outdoor Consulting, Inc. pursuant to which Outdoor Consulting, Inc. provides
consulting services to the Company. The initial term of the agreement expired on
December 31, 1990 and continues on a year-to-year basis until terminated by
either party upon 60 days prior written notice. The compensation payable under
the agreement is $5,000 per month. Vincent W. Shiel is the sole shareholder and
employee of Outdoor Consulting, Inc.
In February 1998, the Company loaned Gary Olen $238,700 to pay the exercise
price of an option to purchase 55,000 shares of Common Stock held by Mr. Olen
(which became exercisable upon completion of the Company's public offering and
would have expired six months later) and to pay the income taxes payable by him
upon exercise of the option. The loan, approved by the Board of Directors, is
for a term of five years, bears interest at the mid-term applicable federal rate
as of the date of the loan (5.69%) and is collateralized by a pledge of the
shares acquired upon exercise. In February 2000, the Board of Directors deferred
for one year payment of the first installment due on the loan.
In April 1998, the Company entered into a consulting agreement with William
T. Sena pursuant to which Mr. Sena provides certain investor relation and
investment advisory services as requested by the Company for a minimum of 15
hours per quarter. The initial term of the agreement expired on December 31,
1998 and continues on a quarter-to-quarter basis until terminated by either
party. Mr. Sena is paid $3,000 per quarter for services under the agreement.
SHAREHOLDER PROPOSALS
Proposals by shareholders intended to be presented at the 2001 Annual
Meeting must be received by the Secretary of the Company on or before February
9, 2001 to be considered for inclusion in the proxy statement for that meeting.
Proposals should be directed to the Company's executive offices at 411 Farwell
Avenue, South St. Paul, Minnesota 55075, Attention: Mr. Charles B. Lingen,
Secretary/Treasurer. Shareholder proposals intended to be submitted at the 2001
Annual Meeting outside the processes of Rule 14a-8 will be considered untimely
under Rule 14a-4(c)(1) if not received by the Company at its executive offices
on or before April 25, 2001.
ADDITIONAL INFORMATION
The Company's Annual Report to Shareholders for the year ended December 31,
1999 accompanies this Notice of Annual Meeting of Shareholders and Proxy
Statement.
SOLICITATION OF PROXIES
The Company will bear the entire expense of this proxy solicitation.
Arrangements will be made with brokers and other custodians, nominees and
fiduciaries to send proxy solicitation materials to their principals and the
Company will, upon request, reimburse them for their reasonable expenses in so
doing. Officers and other regular employees of the Company may solicit proxies
by mail, in person or by telephone.
THE SPORTSMAN'S GUIDE, INC.
/s/ CHARLES B. LINGEN
Charles B. Lingen, Secretary
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PROXY THE SPORTSMAN'S GUIDE, INC.
ANNUAL MEETING OF SHAREHOLDERS
JULY 19, 2000
The undersigned hereby appoints Gary Olen, Gregory R. Binkley and
Charles B. Lingen and each of them, as proxies, with full power of
substitution, to vote all shares of Common Stock of The Sportsman's
Guide, Inc. (the "Company") which the undersigned is entitled to vote
at the Annual Meeting of Shareholders of the Company to be held on
Wednesday, July 19, 2000 at 2:00 p.m. and any adjournments thereof as
follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed
contrary below). [ ] below. [ ]
</TABLE>
INSTRUCTION: To withhold authority to vote for any individual nominee
strike a line through the nominee's name below.
Gary Olen, Gregory R. Binkley, Charles B. Lingen, Vincent W. Shiel,
Mark F. Kroger, Leonard M. Paletz, William T. Sena
2. Ratification of the engagement of Grant Thornton LLP as
independent certified public accountants for the Company for 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion to vote upon such other business as may
properly come before the meeting.
(Continued on reverse side)
<PAGE> 15
(continued from other side)
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF THE DIRECTOR NOMINEES NAMED HEREIN AND FOR THE RATIFICATION OF THE
ENGAGEMENT OF GRANT THORNTON LLP.
Please sign and date this Proxy below and return in the enclosed
envelope.
Dated: , 2000
----------------------------
(Signature)
----------------------------
(Signature)
Please date and sign your
name as it appears hereon.
When signing as an attorney,
executor, administrator,
guardian or in some other
representative capacity,
please give full title. All
joint owners must sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
