<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
- --------------------------------------------------------------------------------
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
THE TIMBERLAND COMPANY
(Name of Registrant as Specified In Its Charter)
THE TIMBERLAND COMPANY
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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:
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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
THE TIMBERLAND COMPANY
11 MERRILL INDUSTRIAL DRIVE
HAMPTON, NEW HAMPSHIRE 03842-5050
April 20, 1994
TO THE STOCKHOLDERS:
The Board of Directors and Officers of The Timberland Company invite you to
attend the 1994 Annual Meeting of Stockholders to be held Thursday, May 19,
1994, at 9:30 a.m. at The First National Bank of Boston, 100 Federal Street,
Boston, Massachusetts.
A copy of the Proxy Statement and the proxy are enclosed.
IF YOU CANNOT BE PRESENT AT THE ANNUAL MEETING, PLEASE MARK, DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT AS SOON AS POSSIBLE IN THE ENCLOSED ENVELOPE.
Cordially,
/S/ SIDNEY W. SWARTZ
SIDNEY W. SWARTZ
Chairman, Chief Executive Officer
and President
<PAGE> 3
THE TIMBERLAND COMPANY
11 MERRILL INDUSTRIAL DRIVE
HAMPTON, NEW HAMPSHIRE 03842-5050
NOTICE OF 1994 ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1994
The 1994 Annual Meeting of Stockholders of The Timberland Company will be
held on Thursday, May 19, 1994, at 9:30 a.m. at The First National Bank of
Boston, 100 Federal Street, Boston, Massachusetts, for the following purposes:
1. To fix the number of directors for the coming year at six, subject
to further action by the Board of Directors as provided in the By-Laws, and
to elect six directors to hold office until their successors shall have
been duly elected and qualified; and
2. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Two of the directors will be elected by the holders of Class A Common Stock
voting separately as a class. The remaining four directors will be elected by
the holders of Class A Common Stock and the holders of Class B Common Stock
voting together as a single class.
The Board of Directors has fixed the close of business on Friday, April 15,
1994, as the record date for the determination of stockholders entitled to
notice of and to vote and act at the Annual Meeting. Only stockholders of record
at the close of business on that date are entitled to notice of and to vote and
act at the Annual Meeting.
By Order of the Board of Directors,
/S/ JOHN E. BEARD
JOHN E. BEARD
Secretary
April 20, 1994
<PAGE> 4
THE TIMBERLAND COMPANY
11 MERRILL INDUSTRIAL DRIVE
HAMPTON, NEW HAMPSHIRE 03842-5050
PROXY STATEMENT
APRIL 20, 1994
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited by the Board of Directors of The Timberland
Company, a Delaware corporation ("Timberland" or the "Company"), for use in
connection with the 1994 Annual Meeting of Stockholders of the Company to be
held on May 19, 1994, and any adjourned sessions thereof. The complete mailing
address of the executive offices of the Company is 11 Merrill Industrial Drive,
P.O. Box 5050, Hampton, New Hampshire 03842-5050, and the Company's telephone
number is (603) 926-1600. The matters to be acted upon at the Annual Meeting are
stated in the accompanying Notice of Annual Meeting.
VOTING RIGHTS AND OUTSTANDING SHARES
Only stockholders of record as of the close of business on April 15, 1994,
are entitled to vote at the Annual Meeting and any adjournments thereof. As of
April 15, 1994, Timberland had outstanding 7,619,766 shares of Class A Common
Stock and 3,237,121 shares of Class B Common Stock.
All costs of solicitation of proxies will be borne by Timberland. In
addition to solicitation of proxies by mail or telegram, proxies may be
solicited personally or by telephone by directors, officers and regular
employees of the Company, none of whom will be specially compensated for such
solicitation. The expected date of the first mailing of this Proxy Statement and
the enclosed proxy is April 20, 1994.
If the enclosed proxy is properly signed and returned and not revoked, the
shares represented thereby will be voted at the Annual Meeting. If the
stockholder specifies in the proxy how the shares are to be voted, they will be
voted accordingly. If the stockholder does not specify how the shares are to be
voted, then they will be voted to fix the number of directors at six and to
elect the six nominees. Should any person so named as nominee be unable to serve
as director, the persons appointed as proxy for the Annual Meeting may, in their
discretion, vote for such other person or vote to fix the number of directors at
such number less than six, as the Board of Directors may recommend. The Company
has no reason to believe that any of the nominees will not be available for
election. Any stockholder has the right to revoke his or her proxy at any time
before it is voted by attending the meeting and voting in person, by filing with
the Secretary of Timberland an instrument in writing revoking the proxy or by
delivering to the Secretary a newly executed proxy bearing a later date.
The Board of Directors knows of no other matters to be presented at the
Annual Meeting. If any additional matters should properly come before the Annual
Meeting, it is the intention of the persons appointed as proxy to vote on such
matters in accordance with their judgment.
QUORUM, REQUIRED VOTES AND METHOD OF TABULATION
Consistent with Delaware law and under the Company's By-Laws, a majority of
the voting power of shares entitled to be cast on a particular matter, present
in person or represented by proxy, constitutes a
<PAGE> 5
quorum as to such matter. Votes cast by proxy or in person at the Annual Meeting
will be counted by persons appointed by the Company to act as election
inspectors for the Meeting.
Each share of Class A Common Stock entitles the holder of record thereof to
one vote, and each share of Class B Common Stock entitles the holder of record
thereof to ten votes. The holders of Class A Common Stock will vote separately
as a class with respect to the election of two nominees, Messrs. Brennan and
Schwarz. The holders of Class A Common Stock and the holders of Class B Common
Stock will vote together as a single class with respect to the election of the
other four nominees. The holders of Class A Common Stock and the holders of
Class B Common Stock will vote together as a single class on any other matters
to be voted upon at the Annual Meeting.
The six nominees for election as directors who receive the greatest number
of votes properly cast for the election of directors at the Annual Meeting shall
be elected. Shares represented by proxies that withhold authority to vote for a
nominee for director or indicate an abstention or a "broker non-vote" (i.e.,
shares represented at the Annual Meeting held by brokers or shareholder nominees
as to which (i) instructions have not been received from the beneficial owners
thereof or persons entitled to vote such shares and (ii) the broker or nominee
does not have the discretionary voting power on a particular matter with respect
to such shares) will count as shares present and entitled to vote for purposes
of determining the presence of a quorum. Such shares, however, will not
constitute votes cast at the Annual Meeting and, thus, will have no effect on
the outcome.
INDEPENDENT ACCOUNTANTS
Deloitte & Touche has been selected as the Company's independent
accountants to audit the consolidated financial statements of the Company for
the year ended December 31, 1994, and to report the results of their audit to
the Audit Committee of the Board of Directors. A representative of Deloitte &
Touche is expected to be present at the Annual Meeting. Such representative will
have the opportunity to make a statement if he or she desires and is expected to
be available to respond to appropriate questions.
On August 11, 1992, the Audit Committee recommended to the Board of
Directors that the Company appoint Deloitte & Touche as the Company's
independent accountants. By Unanimous Consent dated August 12, 1992, the Board
of Directors appointed Deloitte & Touche as the Company's independent
accountants to replace Arthur Andersen & Co. for fiscal 1992. Management did not
consult with Deloitte & Touche on any accounting, auditing or reporting matter
prior to their appointment as independent accountants for the Company. During
the two fiscal years ended December 31, 1991 and the interim period subsequent
to December 31, 1991, there had been no disagreements with Arthur Andersen & Co.
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure or any reportable events. Arthur
Andersen's report on the Company's financial statements for such two years
contained no adverse opinion or disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope or accounting principles.
ELECTION OF DIRECTORS
The directors are elected at each Annual Meeting of Stockholders to serve
for the ensuing year and until their respective successors have been duly
elected and qualified. The By-Laws of the Company specify that the number of
directors of the Company may be determined by the Board of Directors or by the
stockholders. Proxies, unless marked to the contrary, will be voted at the 1994
Annual Meeting to fix the number of directors at six and to elect the six
nominees for the ensuing year and until their respective successors have been
duly elected and qualified. The number of directors fixed at the Annual Meeting
is subject to later
2
<PAGE> 6
increase by action of the stockholders or by a majority of the directors. Any
vacancy arising on the Board of Directors may be filled by the stockholders or
by a majority of the directors.
The present Board consists of six members, all of whom were elected
directors at the 1993 Annual Meeting of Stockholders held on May 20, 1993.
Messrs. Brennan and Schwarz were elected by the holders of Class A Common Stock
voting separately as a class and Messrs. Agate, Jeffrey Swartz, Sidney Swartz
and Zaleznik were elected by the holders of Class A Common Stock and the holders
of Class B Common Stock voting together as a single class. All of such directors
are nominees for election at the Annual Meeting.
<TABLE>
INFORMATION WITH RESPECT TO NOMINEES
The names, ages, principal occupations for at least the past five years and
certain other information with respect to the nominees for election are as
follows:
<CAPTION>
NAME AND YEAR BUSINESS EXPERIENCE AND
FIRST ELECTED DIRECTOR AGE DIRECTORSHIPS OF OTHER PUBLIC COMPANIES
- ---------------------------- ---- -------------------------------------------------------
<S> <C> <C>
Sidney W. Swartz (1978)..... 58 Since June 1986, Mr. Swartz has served the Company as
Chairman of the Board, Chief Executive Officer and
President; from 1978 until June 1986, he was Treasurer
of Timberland.
Jeffrey B. Swartz (1990).... 34 Since May 1991, Mr. Swartz has served the Company as
Chief Operating Officer; he has also served as
Executive Vice President since March 1990. From June
1986 to February 1990, Mr. Swartz served the Company in
a variety of positions, including: Senior Vice
President of International Operations, Vice
President--Operations/Manufacturing, Vice President--
International and General Manager of International
Business. Jeffrey Swartz is the son of Sidney Swartz.
John F. Brennan (1987)...... 61 Since August 1991, Mr. Brennan has served as Dean of
the School of Management of Suffolk University; from
1984 until July 1991, he was Professor of Management at
Skidmore College. Mr. Brennan is also a director of
Aerovox Incorporated.
Thomas R. Schwarz (1987).... 57 Since October 1990, Mr. Schwarz has served as Chairman
of the Board of Directors of Grossman's Inc. (a
building materials and supply company); from June 1990
to September 1990, he was President of Grossman's Inc.
From 1983 to May 1990, he was President, Chief
Operating Officer and a director of Dunkin' Donuts,
Incorporated.
Abraham Zaleznik (1987)..... 70 Since 1990, Mr. Zaleznik has served as Professor
Emeritus of Harvard University and a self-employed
consultant; from 1983 until 1990, he was Konosuke
Matsushita Professor of Leadership at the Harvard
Business School. Mr. Zaleznik is also a director of the
following companies: Grossman's, Inc., Ogden
Corporation (for which he serves as Vice Chairman), Le
Chateau Stores, American Greetings, Inc. and The TJX
Companies, Inc. (where he also serves on the
Compensation Committee).
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
NAME AND YEAR BUSINESS EXPERIENCE AND
FIRST ELECTED DIRECTOR AGE DIRECTORSHIPS OF OTHER PUBLIC COMPANIES
- ---------------------------- ---- -------------------------------------------------------
<S> <C> <C>
Robert M. Agate (1992)...... 58 Since January 1992, Mr. Agate has served as Senior
Executive Vice President and Chief Financial Officer of
Colgate-Palmolive Company (a consumer products
company); from October 1987 to January 1992, he was
Executive Vice President and Chief Financial Officer of
Colgate-Palmolive Company.
</TABLE>
COMMITTEES OF THE BOARD
Messrs. Agate, Brennan, Schwarz and Zaleznik are the members of the
Company's Compensation Committee, whose functions include setting the
compensation and benefits for the Company's directors, Chief Executive Officer,
and Chief Operating Officer and reviewing the compensation proposed by
management for all other executive officers of the Company. The Committee also
administers the Company's stock benefit plans, other than the Company's 1991
Stock Option Plan for Non-Employee Directors.
Messrs. Agate, Brennan, Schwarz and Zaleznik are also members of the
Company's Audit Committee, whose functions include recommending to the Board of
Directors the appointment of the Company's independent accountants, reviewing
the independence of the accountants, meeting with the accountants to review the
Company's financial statements and reviewing the Company's accounting procedures
and internal controls.
The Company does not have a nominating or similar committee.
During 1993, the Board of Directors held four meetings. In addition, the
Compensation Committee and the Audit Committee each held three meetings during
1993. Each of the directors attended at least 75% of the total number of
meetings of the Board and all committees on which he served.
DIRECTORS' COMPENSATION
The Company compensates each director who is not an employee of the Company
in cash as follows: (i) an annual retainer of $10,000; (ii) a fee of $1,000 for
each meeting of the Board attended; and (iii) a fee of $500 for each meeting of
a Committee of the Board attended. The Timberland Company 1991 Stock Option Plan
for Non-Employee Directors provides for an initial option grant to purchase up
to 5,000 shares of the Company's Class A Common Stock, at a price equal to the
fair market value on the date of grant, to each newly elected, eligible
director. Thereafter, for each additional full year of service, option grants
are made to each eligible director to purchase up to 1,250 shares of the
Company's Class A Common Stock, at a price equal to the fair market value on the
date of grant, on the anniversary of the initial grant. Rights to exercise these
options vest at a rate of 25% of the total underlying shares on each of the
first four anniversaries of the date of grant for so long as the holder remains
a director of the Company. Accordingly, on May 20, 1993, Messrs. Brennan,
Schwarz and Zaleznik, and on November 12, 1993, Mr. Agate, were each granted
options to purchase up to 1,250 shares of the Company's Class A Common Stock at
a price equal to the fair market value of such shares on the respective grant
dates.
Information as to ownership of Company securities by nominees for director
is included under the heading, "Security Ownership of Certain Beneficial Owners
and Management."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Timothy Schwarz, son of Thomas Schwarz, a member of the Compensation
Committee, was elected by the Company's Board of Directors as Vice
President--Brand Management on December 28, 1993. The 1994 base salary of
Timothy Schwarz is $200,000.
4
<PAGE> 8
<TABLE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to compensation
awarded to, earned by or paid to the Chief Executive Officer, the four other
most highly compensated executive officers of the Company who served as such at
December 31, 1993 and two other persons who were executive officers during 1993,
but not at December 31, 1993 (hereafter all the foregoing persons are together
referred to as the "Named Executive Officers"), for the fiscal years ended
December 31, 1993, 1992 and 1991.
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION ---------------------------
--------------------------------- AWARDS PAYOUTS
(E) ------------ -------------
OTHER (G) (I)
(A) ANNUAL SECURITIES (H) ALL OTHER
NAME AND (B) (C) (D) COMPEN- UNDERLYING LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY($) BONUS($) SATION($)(1) OPTIONS(#) PAYOUTS($)(2) SATION($)(3)
- ---------------------------- ---- --------- -------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
(CURRENT NAMED EXECUTIVE
OFFICERS)
Sidney W. Swartz(4)......... 1993 441,369 95,630 -- -- 132,734 5,037
President and Chief 1992 425,022 127,507 -- -- -- 4,804
Executive Officer 1991 425,022 50,153 -- -- -- --
---- ------- ------ ------ ------ ------ ------
Jeffrey B. Swartz........... 1993 274,922 59,629 -- 50,000 55,177 540
Chief Operating Officer and 1992 215,000 64,500 -- 25,000 -- 440
Executive Vice President 1991 200,000 30,000 -- 5,000 -- --
---- ------- ------ ------ ------ ------ ------
Kenneth A. Snyder........... 1993 207,692 46,500 -- 10,000 41,640 4,078
Sr. Vice President-- 1992 190,006 51,302 50,260 10,000 -- 2,318
Domestic Sales 1991 175,000 22,500 -- 5,000 -- --
---- ------- ------ ------ ------ ------ ------
Edmund J. Feeley(5)......... 1993 168,173 40,837 45,243 25,000 -- 396
Sr. Vice President-- 1992 -- -- -- -- -- --
Manufacturing and Operations 1991 -- -- -- -- -- --
---- ------- ------ ------ ------ ------ ------
Jane E. Owens(6)............ 1993 152,654 24,990 -- 6,500 -- 353
Vice President and 1992 42,539 1,000 -- 11,500 -- 112
General Counsel 1991 -- -- -- -- -- --
---- ------- ------ ------ ------ ------ ------
(FORMER NAMED EXECUTIVE
OFFICERS)
John R. Ranelli(7).......... 1993 164,302 32,130 49,958 10,000 42,473 60,428
Sr. Vice President--Finance 1992 190,003 54,151 -- 10,000 -- 3,327
and Administration 1991 172,923 22,500 -- -- -- --
---- ------- ------ ------ ------ ------ ------
Frederick A. Conti(8)....... 1993 174,462 10,000 -- 4,500 -- 2,212
Vice President--Finance 1992 143,616 18,333 -- 3,000 -- 352
1991 -- -- -- -- -- --
---- ------- ------ ------ ------ ------ ------
<FN>
- ---------------
(1) The amount indicated for Mr. Snyder reflects an auto allowance of $7,500 and
relocation expenses of $42,760 paid during 1992. The amount indicated for
Mr. Feeley includes an auto allowance of $6,115, relocation expenses of
$38,128 and $1,000 for tax and financial planning advice paid during 1993.
The amount indicated for Mr. Ranelli reflects an auto allowance of $8,100,
relocation expenses of $40,858 and $1,000 for tax and financial planning
advice paid during 1993.
(2) These amounts represent incentive payments for the three-year period ended
December 31, 1993. These amounts were paid during 1994.
</TABLE>
5
<PAGE> 9
(3) In 1993, the Company paid group term life insurance premiums and made
contributions to the Company's 401(k) Plan, respectively, as follows: Mr.
Sidney Swartz $540 and $4,497; Mr. Jeffrey Swartz $540 and $0; Mr. Snyder
$480 and $3,598; Mr. Feeley, $396 and $0; Ms. Owens, $353 and $0; Mr.
Ranelli $490 and $3,128; and Mr. Conti $403 and $1,809. In addition, $56,810
included in the column entitled "All Other Compensation" represents
severance payments paid to Mr. Ranelli in 1993.
(4) Reference is made to the information contained under the caption "Certain
Relationships and Related Transactions" in this report for certain benefits
payable upon the death of Sidney Swartz.
(5) Mr. Feeley joined the Company on January 1, 1993. He was elected Senior Vice
President-- Manufacturing and Operations of the Company by the Board of
Directors on February 19, 1993.
(6) Ms. Owens joined the Company on September 8, 1992. She was elected Vice
President and General Counsel of the Company by the Board of Directors on
September 11, 1992.
(7) Mr. Ranelli resigned from the Company on October 4, 1993.
(8) Mr. Conti joined the Company on February 3, 1992. He was elected Vice
President--Finance of the Company by the Board of Directors on May 22, 1992
and resigned from that position on November 15, 1993. Mr. Conti remains an
employee of the Company.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding grants of stock
options, if any, made to the Named Executive Officers during the fiscal year
ended December 31, 1993.
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
- ------------------------------------------------------------------------------ REALIZABLE VALUE AT
(B) ASSUMED ANNUAL
NUMBER (C) RATES OF STOCK
OF % OF TOTAL PRICE APPRECIATION
SECURITIES OPTIONS FOR OPTION TERM(1)
UNDERLYING GRANTED TO (D) -------------------
OPTIONS EMPLOYEES EXERCISE (E)
(A) GRANTED IN FISCAL OR BASE EXPIRATION (F) (G)
NAME (#) YEAR(2) PRICE($/SH) DATE 5%($) 10%($)
- ----------------------------- -------- ---------- --------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sidney W. Swartz............. -- -- -- -- -- --
Jeffrey B. Swartz............ 13,000 3.03% 26.00 02/18/03 212,493 538,456
37,000 8.61% 83.25 11/11/03 1,936,482 4,907,039
Kenneth A. Snyder............ 10,000 2.33% 26.00 02/18/03 163,456 414,197
Edmund J. Feeley............. 15,000 3.49% 26.00 02/18/03 245,184 621,295
5,000 1.16% 56.00 09/09/03 176,030 446,058
5,000 1.16% 83.25 11/11/03 261,687 663,113
Jane E. Owens................ 1,500 0.35% 26.00 02/18/03 24,518 62,130
5,000 1.16% 83.25 11/11/03 261,687 663,113
John R. Ranelli(3)........... 10,000 2.33% 26.00 10/04/93 -- --
Frederick A. Conti........... 4,500 1.05% 26.00 02/18/03 73,555 186,389
<FN>
- ---------------
(1) Based on the exercise price on the date of grant and annual appreciation of
such price through the expiration date of such options at the stated
annualized rate. The dollar amounts in these columns are not intended to
forecast possible future appreciation, if any, of the Company's Class A
Common Stock price.
</TABLE>
6
<PAGE> 10
(2) All options granted to the Named Executive Officers during 1993 were
non-statutory options granted pursuant to the Company's 1987 Stock Option
Plan (the "Option Plan"). Under the terms of the Option Plan, options are
made exercisable at such time or times as the Compensation Committee may
prescribe. To date, all options granted under the Option Plan have been
granted at fair market value on the date of grant, vest in equal annual
installments of 25% over each of the four following years and are
exercisable for up to ten years. In the event of death of an optionee, all
options become immediately exercisable and may be exercised for one year
thereafter, but in no event longer than the stated term of the option. If an
optionee's employment terminates for any other reason, his or her options
may be exercised, to the extent then exercisable, for three months following
the date of termination. In the event the Company is acquired under certain
prescribed circumstances, all outstanding options shall become exercisable
immediately prior to the acquisition and shall terminate upon consummation
of the acquisition.
(3) The amounts in columns (f) and (g) have not been calculated with respect to
options granted to Mr. Ranelli during 1993 because he resigned from the
Company on October 4, 1993.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
The following table sets forth information for each of the Named Executive
Officers as to the total number of exercised and unexercised stock options, if
any, held at December 31, 1993 and the value of unexercised "in-the-money" stock
options, if any, held at December 31, 1993.
<CAPTION>
(D)
(E)
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-
(B) OPTIONS THE-MONEY OPTIONS AT
SHARES (C) AT FY-END(#) FY-END($)(1)
(A) ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE(#) REALIZED($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Sidney W. Swartz.... -- -- -- -- -- --
Jeffrey B. Swartz... -- -- 23,750 76,250 1,056,719 1,420,406
Kenneth A. Snyder... -- -- 20,000 25,000 913,625 909,000
Edmund J. Feeley.... -- -- -- 25,000 -- 410,625
Jane E. Owens....... 800 51,600 2,075 15,125 79,109 369,891
John R. Ranelli..... 21,250 1,515,969 -- -- -- --
Frederick A. Conti.. -- -- 750 6,750 28,781 209,531
<FN>
- ---------------
(1) Options are "in-the-money" at the fiscal year end if the fair market value
of the underlying securities on such date exceeds the exercise price of the
option. The amounts shown in column (e) represent the difference between the
closing price of the Company's Class A Common Stock on December 31, 1993
($53.375) and the exercise price of those options which are "in-the-money,"
multiplied by the applicable number of underlying shares.
(2) Represents the closing price of underlying securities at exercise date minus
the exercise price of "in-the-money" options.
</TABLE>
7
<PAGE> 11
<TABLE>
LONG TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The following table sets forth information with respect to long term
incentive awards made during 1993 to the Named Executive Officers under the
Company's Long Term Incentive Plan for Senior Management. The awards shown are
for the three-year period beginning January 1, 1993 and ending December 31, 1995
(the "1993-1995 Performance Period"):
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS(1)
------------------------------
(C)
PERFORMANCE OR OTHER (D) (E) (F)
(A) PERIOD UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME OR PAYOUT ($) ($) ($)
- ----------------------------------------- ------------------------- --------- -------- --------
<S> <C> <C> <C> <C>
Sidney W. Swartz ........................ Three-year period ending 0 132,411 198,617
December 31, 1995
Jeffrey B. Swartz........................ Three-year period ending 0 54,984 82,476
December 31, 1995
Kenneth A. Snyder ....................... Three-year period ending 0 41,538 62,308
December 31, 1995
Edmund J. Feeley ........................ Three-year period ending 0 33,635 50,453
December 31, 1995
Jane E. Owens............................ Three-year period ending 0 30,531 45,797
December 31, 1995
John R. Ranelli(2) ...................... -- -- -- --
Frederick A. Conti....................... Three-year period ending 0 17,446 26,169
December 31, 1995
<FN>
- ---------------
(1) The Company's Long Term Incentive Plan for Senior Management provides for
target awards under the Plan based solely on the Company's financial
performance over a three-year performance period. The financial target for
the Company may consist of an earnings per share component or a return on
net assets component, or both. Target awards for each participant are
calculated as a percentage of such participant's salary in the last year of
the three-year performance period. No award will be paid for a three-year
performance period if the financial target for that performance period has
not been met. If the Company meets its financial target for a three-year
performance period, the award for that period will be paid at 100% of the
target award. If the Company exceeds its financial target, the award will be
pro-rated to the extent that the Company exceeds its target, but in no event
will the award exceed 150% of the target award. The Compensation Committee
may, from time to time, change the components used to determine the target
for any year of a three-year performance period. The amounts shown under
column (e) and column (f) are for illustrative purposes only and are
computed based on each Named Executive Officer's salary for 1993 and
assuming that the Company meets its financial target for the 1993-1995
Performance Period. For the 1993-1995 Performance Period, percentages of
salary have been set as follows: Sidney Swartz--30%, Jeffrey Swartz--20%,
Kenneth Synder--20%, Edmund Feeley-- 20%, Jane Owens--20% and Frederick
Conti--10%.
(2) John Ranelli resigned from the Company on October 4, 1993 and is therefore
not eligible to receive any payment for the 1993-1995 Performance Period.
</TABLE>
8
<PAGE> 12
PERFORMANCE GRAPH
Set forth below is a graph showing the five-year cumulative total return of
Timberland's Class A Common Stock as compared with Standard & Poor's 500 Stock
Index and the weighted average of the Standard & Poor's Shoe Index and the
Standard & Poor's Textile Apparel Manufacturers Index, weighted in proportion to
the percent of the Company's business in each industry group.
<TABLE>
<CAPTION>
S&P Average
Measurement Period of 2 Industry
(Fiscal Year Covered) Timberland S&P 500 Groups
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 75.41 131.69 153.15
1990 38.52 127.60 150.37
1991 59.84 166.47 302.31
1992 127.87 179.15 325.73
1993 350.00 197.21 230.94
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors consists of Abraham
Zaleznik, Chairman, and Robert M. Agate, John F. Brennan and Thomas R. Schwarz.
The Committee's responsibilities include setting the compensation of the Chief
Executive Officer and the Chief Operating Officer and reviewing the compensation
proposed by management for all other executive officers of the Company. The
Committee also administers the Company's stock benefit plans, including the 1987
Stock Option Plan (the "Option Plan") and, in that capacity, grants all stock
options which are awarded by the Company to its employees.
In establishing the amounts of compensation in all forms for the Chief
Executive Officer and the Chief Operating Officer, and in reviewing the
compensation proposed by management for all other executive officers of the
Company, the Committee attempts to award amounts which are comparable with the
mid-point of the range of compensation amounts set for the equivalent officers
in similar companies and in other companies in the Company's geographic region.
It is the Company's objective to set annual salary levels for its senior
executives somewhat below the competitive mid-point of the comparables and to
set annual bonuses and long-term incentives ahead of the competitive mid-point.
9
<PAGE> 13
Annual salaries are based on survey data provided to the Company by
independent compensation specialists. Annual bonuses are payable under the
Company's Annual Bonus Plan for Exempt Employees (the "Annual Bonus Plan") and
are granted based upon the performance of both the Company and the individual
plan participant. Each year the Committee sets performance goals for the
Company, which consist of an earnings per share target or a return on net assets
target, or a combination of both. In addition, the Committee annually sets a
target bonus for each plan participant, expressed as a percentage of such
participant's salary. Annual bonuses are awarded based upon the achievement, in
whole or in part, of these Company and individual performance goals and are
calculated as a percentage of the respective participants' salaries. The annual
bonuses for higher-level executives are more heavily influenced by Company
performance than are those for lower-level executives. The annual bonuses for
the Chief Executive Officer and Chief Operating Officer depend entirely on
Company performance. For 1993, annual bonus awards were based on the Company's
achievement of an earnings per share target. The 1993 target bonus for each of
the Chief Executive Officer and the Chief Operating Officer was set at 30% of
such officer's annual salary. However, the 1993 bonuses actually paid to such
officers were only 22.5% of their respective base salaries, because the Company
only partially met its 1993 performance goals.
The Annual Bonus Plan also provides for stock option grants pursuant to the
Company's 1987 Stock Option Plan (the "Option Plan") at the discretion of the
Committee. Under the Option Plan, the Company makes initial option grants to
employees at the time of hire, based on the employees' respective levels of
responsibility. In addition, under the Option Plan, the Company makes annual
option grants to its employees, based on their individual performance and
potential. The stock option awards are granted on the basis of comparable and
competitive levels of stock options awarded to comparable employees of other
companies in the same industry and in the same geographic region, except that
the Company's Chief Executive Officer has never been granted a stock option
because he has a sizeable equity position in the Company. Stock options become
exercisable at such time or times as the Committee prescribes. To date, all
stock options granted under the Option Plan have been granted at fair market
value as of the date of grant, vest in equal annual installments of 25% over
each of the four following years and are exercisable for up to ten years, unless
earlier terminated by death or separation from employment by the option holder.
In 1993, the Chief Operating Officer was awarded stock options to purchase up to
50,000 shares of the Company's Class A Common Stock.
The Company also has a target award program which provides for awards
payable in cash. The payment of these awards for the program's 1991-1993
performance period was dependent upon the Company's achievement of a targeted
earnings per share goal over such period. At the beginning of each three-year
performance period included in the program, targeted cash award amounts are
established as a percentage of each participant's annual salary for the last
year of such period. The targeted cash award amounts established for the
1991-1993 performance period for the Chief Executive Officer and the Chief
Operating Officer were 30% and 20% of their respective 1993 salaries. However,
the awards actually paid to such officers for such period were 31% and 21% of
their respective 1993 salaries, because the Company exceeded its targeted
earnings per share goal.
In 1993, the Company incorporated its target award program into The
Timberland Company Long Term Incentive Plan for Senior Management (the "LTIP").
Under the LTIP, cash awards are payable based on the Company's achievement of a
targeted earnings per share goal or a return on net assets goal, or a
combination of both, as established by the Committee at the beginning of each
three-year performance period.
The amount of annual bonus awards under the Annual Bonus Plan and target
awards under the LTIP which are actually paid may not exceed 150% of the
respective bonus award goals and target award goals established for the relevant
performance period. Amounts are paid in excess of 100% (but not above 150%) of
these established goals when actual Company performance exceeds targeted
results.
10
<PAGE> 14
The Company engaged a compensation consulting firm in 1993 to review the
Company's executive compensation program. The consulting firm assisted the
Committee in identifying market rates for overall compensation and for the
short-and long-term portions of such compensation. The firm also helped to
identify which combination of factors the Company should use to determine
compensation appropriate to supporting the Company's short-and long-term goals.
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1,000,000
paid to any of the company's chief executive officer and four other highest paid
executive officers. Qualifying performance-based compensation will not be
subject to the deduction limit if certain requirements are satisfied. Because it
is anticipated that in 1994 all compensation to executive officers will be fully
deductible under Section 162(m), the Compensation Committee has not yet found it
necessary to take steps to qualify for deductibility any cash, incentive or
other compensation, paid to executive officers.
COMPENSATION COMMITTEE
Abraham Zaleznik, Chairman
Robert M. Agate
John F. Brennan
Thomas R. Schwarz
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of the close of
business on March 28, 1994, regarding the Class A Common Stock and Class B
Common Stock beneficially owned by (i) each person known to the Company to be a
beneficial owner of more than 5% of the outstanding shares of either Class A
Common Stock or Class B Common Stock, (ii) each director, nominee for director
and Named Executive Officer and (iii) by all directors and executive officers as
a group:
<CAPTION>
SHARES OWNED BENEFICIALLY
---------------------------------------------
CLASS A CLASS B
---------------------- --------------------
NAME OF BENEFICIAL OWNER NUMBER(1)(2) PERCENT(3) NUMBER(2) PERCENT
- ------------------------------------------------- -------- ------- --------- -------
<S> <C> <C> <C> <C>
Sidney W. Swartz (4)............................. 100 (5) 3,206,636(6) 99.06%
Judith H. Swartz and John E. Beard as Trustees of
The Sidney W. Swartz 1982 Family Trust (4)..... 3,442,654(7) 45.18% -- --
Jeffrey B. Swartz................................ 38,814 (5) 18,717 (5)
Robert M. Agate.................................. 2,640 (5) -- --
John F. Brennan.................................. 21,686 (5) -- --
Thomas R. Schwarz................................ 21,366 (5) -- --
Abraham Zaleznik................................. 19,686 (5) -- --
Kenneth A. Snyder................................ 32,509 (5) -- --
Edmund J. Feeley................................. 4,750 (5) -- --
Jane E. Owens.................................... 2,750 (5) -- --
Edward J. Suleski, Jr............................ 2,058 (5) -- --
John R. Ranelli.................................. 100 (5) -- --
Frederick A. Conti............................... 4,976 (5) -- --
All current executive officers and directors as a
group (11 persons)............................. 147,359 1.90% 3,225,353(6) 99.64%
</TABLE>
11
<PAGE> 15
[FN]
- ---------------
(1) Includes shares issuable upon the exercise of stock options which are either
currently exercisable or will become exercisable within 60 days of March 28,
1994, as follows: Jeffrey B. Swartz, 30,750; Robert M. Agate, 1,250; John F.
Brennan, 19,686; Thomas R. Schwarz, 19,686; Abraham Zaleznik, 19,686;
Kenneth A. Snyder, 25,750; Frederick A. Conti, 2,625: Jane E. Owens, 2,450;
Edmund J. Feeley, 3,750; and Edward J. Suleski, Jr., 1,875.
(2) Unless otherwise noted, represents shares with respect to which each
beneficial owner listed has or will have, upon acquisition of such shares,
sole voting power and sole investment power.
(3) Percentages are calculated on the basis of the amount of outstanding shares
of common stock of such class plus, for each person or group, any securities
that such person or group has the right to acquire within 60 days of March
28, 1994 pursuant to options, warrants, conversion privileges or other
rights.
(4) Address: c/o The Timberland Company, 11 Merrill Industrial Drive, Hampton,
NH 03842-5050.
(5) Does not exceed 1% of the class.
(6) Includes 10,500 shares of the Class B Common Stock held by The Swartz Family
Charitable Trust, as to which Sidney Swartz, a trustee of such trust,
disclaims beneficial ownership.
(7) The Trustees of The Sidney W. Swartz 1982 Family Trust share voting and
investment power.
Sidney Swartz, his sons and daughter, and The Swartz Family Charitable
Trust (the "Charitable Trust"), of which Sidney Swartz and his wife are the two
trustees, beneficially own all of the Company's outstanding Class B Common
Stock. Additionally, The Sidney W. Swartz 1982 Family Trust (the "Family
Trust"), a trust for the benefit of his family, owns 3,442,654 shares of the
Company's Class A Common Stock. Sidney Swartz, the Charitable Trust and the
Family Trust hold approximately 89% of the combined voting power of the
Company's capital stock in the aggregate, enabling Sidney Swartz to control the
Company's affairs, and enabling the Family Trust, which holds approximately 45%
of the Class A Common Stock, to influence the election of the two directors
entitled to be elected by the holders of the Class A Common Stock voting
separately as a class. Jeffrey Swartz, Executive Vice President and Chief
Operating Officer of the Company, is the son of Sidney Swartz and is one of the
beneficiaries of the Family Trust. Sidney Swartz, by virtue of his ownership of
shares of Class B Common Stock and by virtue of his position of influence
(direct and indirect) over the Company, may be deemed to be a "control person"
of the Company within the meaning of the rules and regulations under the
Securities Act of 1933.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to an agreement between the Company and Sidney Swartz, the Company
will pay to his wife for the three years following his death (or, if earlier,
until her death) a monthly amount equal to Mr. Swartz's monthly salary at the
time of his death, if Mr. Swartz should die while he is an employee of the
Company. David Swartz serves as a member of the Company's Product Development
Department and is the son of Sidney Swartz. The 1993 compensation of David
Swartz was $73,356.
FINANCIAL INFORMATION
The Company's 1993 Annual Report to Stockholders which includes audited
financial statements and other business information was mailed to the
stockholders of the Company on or about March 29, 1994.
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1993, filed by the Company with the Securities and Exchange Commission, may
be obtained without charge by contacting the
12
<PAGE> 16
Director of Investor Relations of The Timberland Company, 11 Merrill Industrial
Drive, P.O. Box 5050, Hampton, New Hampshire 03842-5050 (Telephone:
603/926-1600).
COMPLIANCE WITH SECTION 16(A) EXCHANGE ACT OF 1934
Under the securities laws of the United States, the Company's directors,
its executive officers, and any persons holding more than ten percent of the
Company's Class A Common Stock are required to report their ownership of the
Company's Class A Common Stock and any changes in that ownership to the
Securities and Exchange Commission. Specific due dates for these reports have
been established and the Company is required to report in this proxy statement
any failure to file by these dates. All of these filing requirements were
satisfied by such persons during and with respect to fiscal year 1993, except
that Kenneth A. Snyder, failed to file with the Securities and Exchange
Commission on a timely basis one report relating to two transactions. In making
these disclosures, the Company has relied solely on written representations of
its directors, its executive officers and persons holding more than ten percent
of the Company's Class A Common Stock and copies of the reports that these
persons have filed with the Securities and Exchange Commission and furnished to
the Company.
STOCKHOLDER PROPOSALS
Stockholders may present proposals for inclusion in the 1995 Proxy
Statement and proxy relating to that meeting, provided they are received by the
Secretary of the Company no later than December 20, 1994 and are otherwise in
compliance with applicable Securities and Exchange Commission regulations.
13
<PAGE> 17
PROXY
THE TIMBERLAND COMPANY
ANNUAL MEETING OF STOCKHOLDERS -- MAY 19, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Sidney W. Swartz and Jeffrey B. Swartz,
and each of them, as attorneys and proxies, with the power of substitution, to
represent and vote, as designated on the reverse side hereof, all shares of the
Class A Common Stock of The Timberland Company at the Annual Meeting of
Stockholders of The Timberland Company to be held at The First National Bank of
Boston, 100 Federal Street, Boston, Massachusetts 02110 on Thursday, May 19,
1994, at 9:30 a.m. and at any adjournments or postponements thereof, which the
undersigned could vote if present, in such manner as they, or either of them,
may determine on any matters which may properly come before the meeting or any
adjournments or postponements thereof and to vote on the matters set forth on
the reverse side thereof as hereinafter specified.
Each share of Class A Common Stock entitles the holder of record
thereof at the close of business on April 15, 1994 to one vote per share, and
each share of Class B Common Stock entitles the holder of record thereof at the
close of business on April 15, 1994 to ten votes per share. The holders of
Class A Common Stock will vote separately as a class with respect to the
election of two nominees for director, Messrs. Brennan and Schwarz, and the
holders of Class A Common Stock and the holders of Class B Common Stock will
vote together as a single class with respect to the election of the other four
nominees for director, Messrs. Agate, Jeffrey Swartz, Sidney Swartz
and Zaleznik.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED TO FIX THE NUMBER OF DIRECTORS AT SIX AND TO ELECT THE SIX
NOMINEES. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS NOT NOW KNOWN AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENTS OR POSTPONEMENTS THEREOF.
(Continued and to be dated and signed on the reverse side)
/SEE REVERSE SIDE/
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES.
To fix the number of directors at six for the coming year,
subject to further action by the Board of Directors as
provided in the By-Laws, and to elect the following nominees:
Sidney W. Swartz, Jeffrey B. Swartz, Robert M. Agate,
John F. Brennan, Thomas R. Schwarz and Abraham Zaleznik.
/ / FOR ALL NOMINEES / / AGAINST ALL NOMINEES
MARK HERE FOR
/ /______________________________________ ADDRESS CHANGE
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE AND NOTE BELOW / /
If an individual:
Please sign your name below exactly as it appears hereon
(if held jointly, all individuals must sign).
If a corporation, partnership, trust or guardian:
Please print name of entity, indicate your capacity and
sign your name below. Only authorized individuals should
sign on behalf of the entity.
Entity: _______________________________________________
Title: ________________________________________________
Print Name: ___________________________________________
Signature:________________________________ Date _______
Signature:________________________________ Date _______
