SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934.
Filed by the Registrant (__X__)
Filed by 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. 14a-12.
(___) Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
ASHWORTH, INC.
(Name of Registrant as Specified in Its Charter)
Not applicable
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
(_X_) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(I)(l), 14a-6(I)(2) or
Item 22(a)2) of Schedule 14A.
(___) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(I)(3).
1. Title of each class of securities to which transaction applies:
Not applicable.
2. Aggregate number of securities to which transaction applies:
Not applicable.
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:
Not applicable.
4. Proposed maximum aggregate value of transaction:
Not applicable.
5. Total fee paid: $125
(___) 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>
PROXY ASHWORTH, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John L. Ashworth and John M. Hanson, Jr., as
proxies with the power to appoint their substitutes and hereby authorizes them
to represent and vote, as designated below, all of the shares of Common Stock of
Ashworth, Inc., held by the undersigned on March 4, 1996, at the Annual Meeting
of Stockholders to be held on April 23, 1996, or any adjournment thereof, with
like effect as if the undersigned were personally present and voting upon the
following matters.
1. ELECT DIRECTOR to serve until the 1999 Annual Meeting of Stockholders and
until his successor has been duly elected and qualified.
/ / FOR Gerald W. Montiel
/ / WITHHOLD AUTHORITY to vote for Gerald W. Montiel
2. RATIFY the appointment of Arthur Andersen LLP as the independent public
accountants of the Company for the fiscal yearending October 31, 1996.
/ / FOR / / AGAINST / / ABSTAIN
3. TRANSACT such other business as may properly come before the
meeting or any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
THIS PROXY CONFERS DISCRETIONARY AUTHORITY WITH RESPECT TO MATTERS NOT
KNOWN OR DETERMINED AT THE TIME OF THE MAILING OF THE NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS TO THE UNDERSIGNED.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement furnished herewith.
Dated: , 1996
Signature(s) of Stockholder(s)
Signature(s) should agree with the name(s) printed hereon. Executors,
administrators, trustees, guardians and attorneys should indicate when signing.
Attorneys should submit powers of attorney.
PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED PREADDRESSED ENVELOPE. THE
GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING OR TO SUBMIT A LATER DATED REVOCATION OR AMENDMENT TO THIS PROXY ON ANY
OF THE ISSUES SET FORTH ABOVE.
<PAGE>
ASHWORTH, INC.
2791 Loker Avenue West
Carlsbad, California 92008
(619) 438-6610
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 23, 1996
TO THE STOCKHOLDERS OF ASHWORTH, INC.
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of
Ashworth, Inc., a Delaware corporation (the Company), will be held at the
Company's offices, 2791 Loker Avenue West, Carlsbad, California, on April 23,
1996, at 2:00 p.m., Pacific Time, and at any and all adjournments thereof, for
the purpose of considering and acting upon the
following matters:
1. To elect a director of the Company to serve until the 1999 Annual
Meeting of Stockholders and until his successor has been duly elected
and qualified.
2. To ratify the appointment of Arthur Andersen LLP as the
independent public accountants of the Company for the fiscal year
ending October 31, 1996.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
A proxy statement explaining the matters to be acted upon at the meeting
is enclosed. Please read it carefully.
Only holders of record of the $.001 par value Common Stock of the
Company at the close of business on March 4, 1996, will be entitled to notice of
and to vote at the meeting or at any adjournment or adjournments thereof. The
proxies are being solicited by the Board of Directors of the Company.
All stockholders, whether or not they expect to attend the annual
meeting of stockholders in person, are urged to sign and date the enclosed proxy
and return it promptly in the enclosed postage-paid envelope which requires no
additional postage if mailed in the United States. The giving of a proxy will
not affect your right to vote in person if you attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
MONICA M. MCKENZIE
SECRETARY
Carlsbad, California
March 8, 1996
<PAGE>
ASHWORTH, INC.
2791 Loker Avenue West
Carlsbad, California 92008
(619) 438-6610
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 23, 1996
GENERAL INFORMATION
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Ashworth, Inc., a Delaware corporation (the Company), for use at
the Company's Annual Meeting of Stockholders to be held at the Company's
offices, 2791 Loker Avenue West, Carlsbad, California, on April 23, 1996, at
2:00 p.m., Pacific Time, and at any adjournment thereof. It is anticipated that
this proxy statement and the accompanying proxy will be mailed to the Company's
stockholders on or about March 8, 1996. All shares represented by valid proxies
will be voted in accordance therewith at the meeting.
THE BOARD OF DIRECTORS URGES EACH STOCKHOLDER TO MARK, SIGN AND MAIL THE
ENCLOSED PROXY CARD IN THE RETURN ENVELOPE AS PROMPTLY AS POSSIBLE.
Any person signing and returning the enclosed proxy may revoke it at any
time before it is voted by (i)giving a later dated written revocation of proxy
to the Company, or (ii) providing a later dated amended proxy to the Company, or
(iii) voting in person at the meeting. The expense of soliciting proxies,
including the cost of preparing, assembling and mailing this proxy material to
stockholders, will be borne by the Company. It is anticipated that solicitations
of proxies for the meeting will be made only by use of the mails; however, the
Company may use the services of its directors, officers and employees to solicit
proxies personally or by telephone, without additional salary or compensation to
them. Brokerage houses, custodians, nominees and fiduciaries will be requested
to forward the proxy soliciting materials to the beneficial owners of the
Company's shares held of record by such persons, and the Company will reimburse
such persons for the reasonable out-of-pocket expenses incurred by them in that
connection.
SHARES OUTSTANDING AND VOTING RIGHTS
All voting rights are vested exclusively in the holders of the Company's
$.001 par value Common Stock, with each share entitled to one vote. Only
stockholders of record at the close of business on March 4, 1996, are entitled
to notice of and to vote at the meeting or any adjournment thereof. On March 4,
1996, the Company had 12,038,626 shares of its $.001 par value Common Stock
outstanding, each share of which is entitled to one vote on all matters to be
voted upon at the meeting, including the election of the director.
<PAGE>
Under Delaware law, unless otherwise provided in the Company's
certificate of incorporation or bylaws, directors are elected by a plurality of
the votes of the shares present in person or represented by proxy at the meeting
and entitled to vote on the election of directors. The Company's certificate of
incorporation and bylaws do not require a greater or lesser vote. Abstentions
and broker non-votes will be counted for purposes of establishing a quorum. With
respect to the ratification of the selection of auditors for the current fiscal
year, only those votes cast FOR the proposal will be counted as an affirmative
vote. Abstentions and broker non-votes will be counted for purposes of
determining the number of votes required for an affirmative vote, i.e., the
number of votes representing the majority of the shares represented at the
meeting and entitled to vote. With respect to the election of directors, only
those votes cast FOR the election of a director or WITHHELD will be counted for
purposes of determining the number of votes required to elect the director.
Abstentions and broker non-votes will not be counted.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of 12,008,626
issued and outstanding shares of the Company's $.001 par value Common Stock
owned beneficially, as of January 15, 1996, by (1) any person who is known to
the Company to be, or to claim to be, the beneficial owner of more than 5% of
such Common Stock, (2) by each of the directors, (3) each of the executive
officers, and (4) all directors and officers as a group. Each person has sole
voting power and sole investment powers with respect to the shares. Information
as to beneficial ownership is based upon statements furnished to the Company by
such persons.
<TABLE>
<CAPTION>
Shares Beneficially Owned Percent
Name Shares Options(1)(2) Total Owned(3)
(#) (#) (#) (%)
<S> <C> <C> <C>
Gerald W. Montiel 50,840 540,000 590,840 4.71
John L. Ashworth 111,609 470,000 581,609 4.66
A. John Newman -0- 50,000 50,000 *
Mary Montiel -0- 20,500 20,500 *
Monica M. McKenzie -0- 25,500 25,500 *
Andre P. Gambucci 67,500 27,500 95,000 *
John M. Hanson, Jr. -0- 17,500 17,500 *
All executive officers
and directors as a
group (7 persons 229,949 1,151,000 1,380,949 10.49
Fred Couples 518,000 575,000 1,093,000 8.69
<FN>
* Less than one percent
(1) Represents shares of Common Stock which may be acquired pursuant to
presently exercisable stock options, including stock options exercisable within
60 days of January 15, 1996.
<PAGE>
(2) Only the below indicated options have exercise prices which are less than
the market price of the Company's Common Stock on January 15, 1996
($5.625):
Mr. Montiel 50,000
Mr. Ashworth 75,000
Mr. Couples 25,000
(3) For the purpose of computing the percentage of outstanding shares owned
by each of the above persons, the shares issuable pursuant to presently
exercisable stock options held by such person are deemed to be
outstanding and have been added to the shares actually issued and
outstanding, at January 15, 1996, pursuant to Rule 13d-3(d)(1) of the
Securities Exchange Act of 1934. Such options are not deemed to be
outstanding for the purpose of computing the percentage owned by any
other person, except for all officers and directors as a group.
</FN>
</TABLE>
ELECTION OF DIRECTOR
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF GERALD W. MONTIEL AS A
DIRECTOR. If elected, Mr. Montiel will hold office until the 1999 annual meeting
of stockholders and until his successor is elected and qualified or his earlier
death, resignation or removal. IT IS INTENDED THAT SHARES REPRESENTED BY PROXIES
IN THE ACCOMPANYING FORM WILL BE VOTED "FOR" THE ELECTION OF MR. MONTIEL, UNLESS
A CONTRARY DIRECTION IS INDICATED. If at the time of the meeting Mr. Montiel is
unable to serve, which event is not expected to occur, the discretionary
authority provided in the proxy will be exercised to vote for such substitute
nominee, if any, as shall be designated by the Board of Directors.
Mr. Montiel does not hold a directorship in any other company having a
class of securities registered under the Securities Exchange Act of 1934, as
amended, or in any company registered as an investment company under the
Investment Company Act of 1940, as amended.
MEETINGS AND COMMITTEES OF THE BOARD
During the 1995 fiscal year, the Board of Directors met in person six
times and took corporate action five times by unanimous written consent of the
directors in lieu of meetings of the directors.
The audit committee composed of Andre P. Gambucci, Chair, and John M.
Hanson, Jr., met in person one time in fiscal 1995. This committee was formed to
oversee the accounting controls for the Company. Pursuant to the requirements of
the Company's NASDAQ National Market System agreement, the audit committee
consists of a majority of outside directors.
During the 1995 fiscal year, the compensation committee, composed of
Messrs. Gambucci and Hanson, met in person one time and took action three times
by unanimous written consent in lieu of a meeting of the committee.
<PAGE>
This committee recommends to the Board of Directors the compensation for
executive officers and administers the Company's Stock Option Plans.
DIRECTORS AND EXECUTIVE OFFICERS
The Company's directors and executive officers are:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Gerald W. Montiel 49 Chairman of the Board, President and Chief
Executive Officer
John L. Ashworth 36 Senior Executive Vice President -
Creative Director
A. John Newman 59 Vice President - Finance, Treasurer, Chief
Financial Officer, and Chief Accounting
Officer
Mary Montiel 43 Vice President - Manufacturing & Design
Monica M. McKenzie 62 General Counsel and Secretary
Andre P. Gambucci 67 Director
John M. Hanson, Jr. 55 Director
</TABLE>
The directors are divided into three classes, each class as nearly equal
in number as possible, with an annual election of each class for a term of three
years. Mr. Montiel's term expires in 1996, and the stockholders are being asked
to elect Mr. Montiel for an additional three-year term to serve until the 1999
annual stockholders meeting and until his successor is duly elected and
qualified. Mr. Hanson's term expires in 1997, and the terms of Messrs. Ashworth
and Gambucci expire in 1998. The directors serve until their terms expire and
until their successors are duly elected and qualified or until their death,
resignation or removal. The executive officers of the Company are elected at the
annual meeting of the Board of Directors and serve at its discretion.
Business Experience
Gerald W. Montiel is a founder of the Company and has been its Chairman
of the Board of Directors since the inception of the Company in March 1987. He
served as chief executive officer from 1988 to April 1995 and president from the
Company's inception to October 1993 and again from January 15, 1996, to the
present. Mr. Montiel also served as treasurer from October 1989 to December 1991
and chief financial officer from January 1990 to December 1991.
John L. Ashworth is a founder of the Company and has been a director
since its inception. Mr. Ashworth has served as a vice president since October
1989 and currently serves as senior executive vice president - creative
director. He served as secretary from March 1987 to January 1990.
<PAGE>
Andre P. Gambucci has been a director of the Company since June 1991. Mr.
Gambucci was a senior vice president and director of marketing of Acordia of
Colorado, a general insurance agency and insurance brokerage firm in Colorado
Springs, Colorado, from 1982 until December 31, 1995, when he retired. He is now
a consultant for Acordia National and special assistant to the president of
American Specialty Services, an insurance company.
John M. Hanson, Jr. has been a director of the Company since
April 1994. Mr. Hanson has been a shareholder and officer of John M.
Hanson & Company, a professional corporation practicing accounting,
from 1968 to the present. The firm has been retained to prepare the
Company's tax returns for fiscal 1995.
A. John Newman has served as chief accounting officer since January 1990
and vice president-finance, treasurer, and chief financial officer since
December 1991. He also served as the company's controller from 1988 to January
1990 and secretary from January 1990 until May 1993.
Mary Montiel was elected vice president - manufacturing and design in
December 1994. She served as production manager from April 1991 until December
1994. She was president and chief financial officer of Mondav Corporation, an
auto parts supplier, from 1988 to April 1991. Ms. Montiel is the sister of
Gerald Montiel, the Company's chairman of the board, chief executive officer and
president.
Monica M. McKenzie has served as general counsel since April 1993 and was
elected to the position of secretary in May 1993. She was formerly a partner of
the Denver, Colorado, law firm of Gorsuch Kirgis L.L.C., the Company's outside
legal counsel.
Compliance with Section 16(a) of the
Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers, directors, and persons who beneficially own more than ten percent
(10%) of the Company's Common Stock to file initial reports of ownership and
reports of changes in ownership of the Company's securities with the Securities
and Exchange Commission. To the best of the Company's information and belief, no
person beneficially owns more than ten percent of the Company's securities. The
executive officers and directors are required to furnish the Company with
information concerning their ownership of the securities and with copies of such
filings.
Based solely on a review of such information and the copies of the
filings furnished by executive officers and directors to the Company, the
Company believes that with the exception of the late filing by two months of the
initial Form 3 of Mary Montiel upon her appointment as an executive vice
president, all Section 16(a) filing requirements
<PAGE>
applicable to its executive officers and directors were complied with during
fiscal 1995.
EXECUTIVE COMPENSATION
The following information sets forth the executive compensation of the
Company's chief executive officer and each of the four most highly compensated
executive officers other than the CEO who were serving as executive officers at
the end of the last fiscal year. Since the end of the fiscal year, Mr.
Coykendall resigned effective November 1, 1995, and Mr. Werschkul resigned
effective January 15, 1996. Mr. Montiel was appointed chief executive officer
and president to fill the vacancy created by Mr. Werschkul's resignation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term All Other
Compensation Compensation
Annual Awards Split 401(k)
Name and Compensation Stock Dollar Savings
Principal Position Year Salary Options Policy Plan
($) (#) ($) ($)
<S> <C> <C> <C> <C> <C>
Richard H. Werschkul 1995 242,740 200,000 0 3,088
President and Chief 1994 220,462 150,000 0 2,740
Executive Officer 1993 168,269 40,000 0 2,019
Gerald W. Montiel 1995 315,065 300,000 1,062 4,011
Chairman of the 1994 312,693 0 1,283 3,538
Board of Director 1993 260,000 350,000 1,196 3,264
John L. Ashworth 1995 264,741 260,000 9 3,385
Sr. Exec. Vice Pres 1994 263,514 40,000 0 3,367
Creative Director 1993 175,910 295,000 0 2,287
A. John Newman 1995 160,385 0 0 2,430
Vice President- 1994 145,173 20,000 0 1,976
Finance 1993 125,000 20,000 0 1,571
Kent R. Coykendall, 1995 160,385 0 0 2,430
Vice President - 1994 145,173 20,000 0 1,976
Operations 1993 125,000 20,000 0 1,571
</TABLE>
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual
Rate of Stock
Price
Appreciation
Individual Grants For Option Term
Number of % of
<PAGE>
Securities Total
Underlying Options/
Options/ SARS
SARS Granted
To Exercise
Employees or Base
in Fiscal Price Exercise
Name Year ($/sh) Period (5%) (10%)
<S> <C> <C> <C> <C> <C> <C>
Gerald W. Montiel 100,000 10.50 7/01/95-6/30/00 290,096 641,036
100,000 10.50 7/01/96-6/30/01 357,100 810,139
100,000 39.5 10.50 7/01/97-6/30/02 427,455 996,153
John L. Ashworth 60,000 10.50 7/01/95-6/30/00 174,057 384,621
100,000 10.50 7/01/96-6/30/01 357,100 810,139
100,000 34.2 10.50 7/01/97-6/30/02 427,455 996,153
Richard H. Werschkul(1) 40,000 10.50 7/01/95-6/30/00 116,038 256,414
40,000 10.50 7/01/96-6/30/01 142,840 324,056
40,000 10.50 7/01/97-6/30/02 170,982 398,461
40,000 10.50 7/01/98-6/30/03 200,531 480,307
40,000 26.3 10.50 7/01/99-6/30/04 231,558 570,338
<FN>
(1) On January 15, 1996, following Mr. Werschkul's resignation, the exercise
period for the option to purchase the 40,000 shares exercisable on
7/02/95 was extended to December 31, 1999, the exercise period for the
option to purchase 60,000 of the remaining shares was changed to commence
on January 15, 1996, and expire on December 31, 1999; the remaining
option for 100,000 shares was canceled.
</FN>
</TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Shares FY-End FY-End
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
(#) ($) (#) ($)
<S> <C> <C> <C> <C>
Gerald W. Montiel 125,000 512,875 540,000/200,000 239,500/0
John L. Ashworth 105,000 417,750 470,000/200,000 193,850/0
Richard H. Werschkul -0- -0- 290,000/160,000 60,000/0
John Newman -0- -0- 50,000/0 15,000/0
Kent R. Coykendall -0- -0- 50,000/0 15,000/0
</TABLE>
Compensation of Directors
Directors who are not employees of the Company each receive annual
compensation of $10,000 plus $1,000 and expenses for attendance at each board
meeting. Such directors also receive stock options to purchase 2,000 shares of
the Company's $.001 par value Common Stock for each quarter during which they
serve as directors and 250 shares for each committee on which they serve during
each quarter. All directors receive an annual $1,000 apparel allowance. No other
<PAGE>
arrangement exists pursuant to which any director of the Company was compensated
during the Company's last fiscal year for any service provided as a director.
Employment Contracts and Termination of Employment and
Change of Control Arrangements
The Company has executive employment agreements with Gerald W. Montiel
and John L. Ashworth. The agreements provide that base salary is to be
determined periodically at the discretion of the Board of Directors on the basis
of merit and the Company's financial success and progress. The Company agreed to
pay the executive an annual bonus equal to the premium due on life insurance
policies with a face value of $1,000,000 for Mr. Montiel and $2,000,000 for Mr.
Ashworth. The Company also pays the premium on a split dollar insurance policy
with a face value of $1,000,000 on the life of Mr. Montiel. The agreements
include noncompete provisions for a period of ten years following termination of
employment, for which the Company has agreed to pay consideration in an amount
equal to 100% of the executive's then current salary for the first year and 40%
of such salary for the next nine years. In the event of the executive's death
during employment with the Company, his beneficiary or estate will receive an
amount equal to the then present value of the noncompete consideration. The
Company has purchased term life insurance to provide the funds in such event.
Under the terms of the agreement, the Company may terminate the executive's
employment upon 30 days notice, and the executive may terminate his employment
upon 90 days notice to the Company. The Company has key person life insurance
payable to the Company on the lives of Messrs. Montiel and Ashworth in the
amount of $1,000,000 and $300,000, respectively.
Board Compensation Committee Report
The members of the Compensation Committee of the Board of Directors
during fiscal 1995 included Andre Gambucci and John M. Hanson, Jr. Under the
supervision of the Compensation Committee of the Board of Directors, the Company
has developed and implemented compensation policies intended to attract, retain,
and stimulate the performance of the Company's executive officers, provide such
officers the opportunity to acquire a proprietary interest in the Company and an
increased personal interest in the profitability of the Company, and thus
stockholders' value, and provide competitive levels of long-term compensation
for such officers. The criteria for determining a specific officer's
compensation includes length of employment, level of responsibility,
contribution to the overall success of the Company, and individual performance
with respect to achievement of the Company's goals. The goals, which include
individual, department, and Company goals, are set at the beginning of each
fiscal year and reviewed quarterly. The goals include sales, market share,
quality control, production, inventory, and earnings per share. In reviewing
management performance and compensation, the Committee also considers
<PAGE>
management's commitment to the long-term success of the Company through
expansion of its international as well as domestic market, development of new
products, and operational improvements. Compensation of the executive officers
includes a base salary and annual and long-term incentive compensation
consisting primarily of stock options.
The compensation for the Company's chief executive officer is primarily
based upon the rate of the Company's growth from year to year in terms of sales,
expenses, and earnings per share.
This report was furnished by Mr. Gambucci and Mr. Hanson.
Performance Graph
Set forth below is a line graph comparing the yearly percentage change in
the Company's cumulative total shareholder returns on the Company's Common Stock
with the cumulative total return of the Nasdaq Stock Market (U. S. Companies)
and Nasdaq Stocks in the same Standard Industrial Classification as the Company
(SIC 2300-2399), as published by the Center for Research in Security Prices,
University of Chicago, Chicago, Illinois.
<TABLE>
<CAPTION>
10/31/90 10/31/91 10/31/92 10/31/93 10/31/94 10/31/95
<S> <C> <C> <C> <C> <C> <C>
Ashworth, Inc. 100.0 255.5 185.8 432.1 390.3 250.9
Nasdaq Stock Market
(U.S. Companies) 100.0 169.2 190.8 245.9 247.2 332.6
NASDAQ Stocks
(SIC 2300-2399
Companies) Apparel
& other finished
products - fabrics
& like materials 100.0 178.3 107.7 126.0 126.1 85.3
</TABLE>
Notes:
A. The lines represent monthly index levels derived from compound daily returns
that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day,
the preceding trading day is used.
D. The index level for all series was set to $100.0 on 10/31/90.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
John L. Ashworth, the Company's senior executive vice president- creative
director, was extended a loan by the Company on May 1, 1995 in connection with
the exercise of an option expiring May 1, 1995. The full recourse loan is in the
principal amount of $306,000 and bears interest at a variable annual rate based
upon the Bank of America prime rate on the 1st day of each month. Interest is
payable in quarterly installments, and the principal is due and payable on April
30, 1996.
<PAGE>
Mary Montiel, sister of Mr. Montiel, is an executive officer and employee
of the Company. In the year ended October 31, 1995, she had earned a salary of
$111,193 and was granted an option to purchase 5,000 shares of the Company's
Common Stock at $8.50, the then fair market value of such stock. She is
currently receiving an annual salary of $120,000.
Carol Kettela, sister of Mr. Montiel, is an employee of the Company. In
the year ended October 31, 1995, she had earned a salary of $59,269 and is
currently receiving an annual salary of $60,000.
David Kettela, brother-in-law of Mr. Montiel and husband of Carol
Kettela, is an employee of the Company. In the year ended October 31, 1995, he
had earned a salary of $54,287 and is currently receiving an annual salary of
$60,000.
Michelle Zafiropoulos, daughter of Gerald W. Montiel, is an employee of
the Company. On April 6, 1995, Ms. Montiel exercised an option for 4,000 shares
held by her and received a benefit of $15,365. In the year ended October 31,
1995, she had earned a salary of $38,068 and is currently receiving an annual
salary of $72,500.
Hank Ashworth, brother of John L. Ashworth, is a sales representative of
the Company . From April 17, 1994, through October 31, 1995, he was national
sales manager for the Ashworth core business. On December 20, 1994, Mr. Ashworth
exercised an option for 3,000 shares held by him and received a benefit of
$10,500. During the fiscal year ended October 31, 1995, he earned a salary of
$76,461 and is currently being paid commissions for sales generated by him.
Laura Gambucci, daughter of Andre Gambucci, a director, is an employee of
the Company. In the year ended October 31, 1995, she earned a salary of $73,062
and is currently receiving an annual salary of $84,000.
The Company has also entered into a promotion agreement with Fred
Couples, who owns of record or beneficially more than 5% of the Company's Common
Stock. The agreement requires Mr. Couples' exclusive endorsement and promotion
of Ashworth products during his lifetime. The Company has agreed to compensate
Mr. Couples for such services, the present value of which compensation is
approximately $4.6 million. In addition, the Company has granted to Mr. Couples
the right to receive options to purchase the Company's Common Stock upon his
performance of specified services, including his participation in PGA
tournaments. The exercise price of the options will be the fair market value of
the Company's Common Stock at the time the options are granted, and the options
will be exercisable for a period of seven years. The Company has also made
certain price guaranties with respect to the options.
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RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The independent public accounting firm of Arthur Andersen LLP audited the
financial statements of the Company for the period ended October 31, 1995. At
the direction of the Board of Directors, the appointment of Arthur Andersen LLP
as the Company's independent public accountants for the fiscal year ending
October 31, 1996, is being presented to the stockholders for ratification. A
representative of Arthur Andersen LLP is expected to be present at the
stockholders meeting and available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
FISCAL YEAR ENDING OCTOBER 31, 1996.
OTHER BUSINESS
As of the date of this proxy statement, management of the Company was not
aware of any other matter to be presented at the meeting other than as set forth
herein. However, if any other matters are properly brought before the meeting,
the shares represented by valid proxies will be voted with respect to such
matters in accordance with the judgment of the persons voting them. An
affirmative vote of a majority of shares present in person or represented by
proxy at the meeting is necessary to approve any such matters.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended October 31, 1995,
accompanies this proxy statement. The audited financial statements of the
Company are included in such Annual Report. Copies of the Form 10-K for the
fiscal year ended October 31, 1995 and the exhibits thereto are available from
the Company upon written request of a stockholder and payment of the Company's
out-of-pocket expenses.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
FOR THE ANNUAL MEETING TO BE HELD IN APRIL 1997
Any proposal from a stockholder intended to be presented at the Company's
Annual Meeting of Stockholders to be held in April 1997, must be received at the
offices of the Company, 2791 Loker Avenue West, Carlsbad, California 92008, no
later than November 1, 1996, in order to be included in the Company's proxy
statement and proxy relating to that meeting.
BY ORDER OF THE BOARD OF DIRECTORS
MONICA M. MCKENZIE
SECRETARY
Carlsbad, California
March 8, 1996
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