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)
_______________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
(____) $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: None due.
(____) 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>
ASHWORTH, INC.
2791 Loker Avenue West
Carlsbad, California 92008
(619) 438-6610
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 29, 1997
TO THE STOCKHOLDERS OF ASHWORTH, INC.
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Stockholders
of Ashworth, Inc., a Delaware corporation (the Company), will be held in
the Theatre at LaCosta Resort and Spa, Costa Del Mar Road, Carlsbad,
California, on April 29, 1997, 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 directors of the Company to serve until the Annual
Meeting of Stockholders to be held in the year 2000 and
until their successors have been duly elected and qualified.
2. 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 17, 1997, 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
/s/Monica M. McKenzie
MONICA M. MCKENZIE
SECRETARY
Carlsbad, California
March 21, 1997
<PAGE>
ASHWORTH, INC.
2791 Loker Avenue West
Carlsbad, California 92008
(619) 438-6610
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 29, 1997
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 in the Theatre
at LaCosta Resort and Spa, Costa Del Mar Road, Carlsbad, California, on
April 29, 1997, at 2:00 p.m., Pacific Time, and at any and all adjournments
thereof. It is anticipated that this proxy statement and the accompanying
proxy will be mailed to the Company's stockholders on or about March 21,
1997. 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 17,
1997 (the record date), are entitled to notice of and to vote at the
meeting or any adjournment thereof. On the record date, the Company had
12,185,626 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.
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. 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 for any purpose except for the purpose of establishing
a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of 12,179,626
issued and outstanding shares of the Company's $.001 par value Common Stock
owned beneficially, as of January 8, 1997 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.
<PAGE>
<TABLE>
<CAPTION>
Shares Beneficially Owned Percent
Name Shares Options(1)(2) Total Owned(3)
(#) (#) (#) (%)
<S> <C> <C> <C> <C>
Gerald W. Montiel 50,840 850,000 900,840 6.9
John L. Ashworth 98,109 520,000 618,109 4.9
A. John Newman -0- 85,000 85,000 *
Mary Montiel -0- 55,500 55,500 *
Monica M. McKenzie -0- 50,500 50,500 *
Andre P. Gambucci 67,500 37,500 105,000 *
John M. Hanson, Jr. -0- 27,500 27,500 *
All executive officers
and directors as a
group (8 persons) 216,449 1,626,000 1,842,449 13.4
Fred Couples 543,000 700,000 1,243,000 9.7
<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 8, 1997.
(2) Only the below indicated options have exercise prices which are less
than the market price of the Company's Common Stock on January 8,
1997 ($6.50):
Mr. Montiel 500,000
Mr. Ashworth 95,000
Mr. Newman 20,000
Ms. Montiel 3,000
Ms. McKenzie 8,000
Mr. Gambucci 2,500
Mr. Hanson 2,500
Mr. Couples 150,000
(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 8, 1997, 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 DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF JOHN M. HANSON, JR.
AND RANDALL L. HERREL, SR., AS DIRECTORS. If elected, Messrs. Hanson and
Herrel will hold office until the annual meeting of stockholders to be
held in the year 2000 and until their successors are elected and
qualified or their earlier death, resignation or removal. IT IS INTENDED
THAT SHARES REPRESENTED BY PROXIES IN THE ACCOMPANYING FORM WILL BE VOTED
"FOR" THE ELECTION OF MESSRS. HANSON AND HERREL UNLESS A CONTRARY
DIRECTION IS INDICATED. If at the time of the meeting either Mr. Hanson
or Mr. Herrel 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.
Neither Mr. Hanson nor Mr. Herrel 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 1996 fiscal year, the Board of Directors met in person
four 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 1996. This committee was formed to
oversee the accounting controls for the Company. Pursuant to the
requirements of the Company's NASDAQ
<PAGE>
National Market System agreement, the audit committee consists of a
majority of outside directors. During the 1996 fiscal year, the
compensation committee, composed of Messrs. Gambucci and Hanson, took
action five times by unanimous written consent in lieu of a meeting of
the committee. This committee recommends to the Board of Directors the
compensation for executive officers and, until November 1, 1996,
administered the Company's Stock Option Plans. At the present time, the
Board of Directors administers the Stock Option Plans.
DIRECTORS AND EXECUTIVE OFFICERS
The Company's directors and executive officers are:
<TABLE>
<CAPTION>
Name (Age) Position
<S> <C>
Gerald W. Montiel (50) Chairman of the Board
Randall L. Herrel, Sr. (46) President and Chief Executive
Officer
John L. Ashworth (37) Senior Executive Vice President
- Creative Director
A. John Newman (60) Vice President - Finance,
Chief Financial Officer,
Chief Accounting Officer,
and Treasurer
Mary Montiel (44) Vice President - Manufacturing
& Design
Monica M. McKenzie (63) General Counsel and Secretary
Andre P. Gambucci (68) Director
John M. Hanson, Jr. (56) 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. The terms of Messrs. Hanson and Herrel expire in
1997, and the stockholders are being asked to elect each of them for an
additional three-year term to serve until the annual stockholders meeting
to be held in the year 2000 and until their successors are duly elected
and qualified. The terms of Messrs. Ashworth and Gambucci expire in
1998, and Mr. Montiel's term expires in 1999. 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 December 8, 1996. Mr. Montiel also served as
treasurer from October 1989 to December 1991 and chief financial officer
from January 1990 to December 1991.
Randall L. Herrel, Sr. has been a director, president, and chief
executive officer since December 9, 1996. Mr. Herrel served as president
and chief operating officer of Quiksilver, Inc., a sports apparel company
in Newport Beach, California for the past two years. Mr. Herrel joined
Quiksilver in June 1989 and also served at various times as chief
financial officer, treasurer and secretary.
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.
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 1996.
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.
<PAGE>
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.
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.
Section 16(a) Beneficial Ownership
Reporting Compliance
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 all Section 16(a) filing requirements applicable
to its executive officers and directors were complied with during fiscal
1996.
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.
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>
Gerald W. Montiel 1996 314,483 450,000 996 4,726
Chief Executive Officer 1995 315,065 300,000 1,062 4,011
(from January 16, 1996) 1994 312,693 0 1,283 3,538
Richard H. Werschkul (a) 1996 63,705 0 0 810
Chief Executive Officer 1995 242,740 200,000 0 3,088
(until January 15, 1996) 1994 220,462 150,000 0 2,740
John L. Ashworth 1996 264,668 125,000 0 2,795
Senior Exec. Vice 1995 264,741 260,000 0 3,385
President - 1994 263,514 40,000 0 3,367
Creative Director
A. John Newman 1996 161,230 45,000 0 2,551
Vice President - Finance 1995 160,385 0 0 2,430
CFO, CAO, Treasurer 1994 145,173 20,000 0 1,976
Mary Montiel 1996 146,904 60,000 0 1,043
Vice President - 1995 112,693 5,000 0 0
Manufacturing and Design 1994 65,077 12,500 0 0
Monica M. McKenzie 1996 127,324 25,000 0 2,010
General Counsel and 1995 125,480 0 0 1,832
Secretary 1994 112,001 12,500 0 1,185
<FN>
(a) Upon termination of employment on January 15, 1996, Mr. Werschkul
entered into a two-year non-compete and consulting agreement for which
the Company agreed to pay him $240,000 during the first year.
</FN>
</TABLE>
<PAGE>
Option Grants in Last Fiscal Year
<TABLE>
<CAPTIONS>
Potential Realizable
Value at Assumed
Annual Rate of Stock
Price Appreciation
Individual Grants For Option Term
% of
Total
Options
Number of Granted
Securities to Exercise
Underlying Employees or
Options in Fiscal Base Expiration
Name Granted Year Price Date (5%) (10%)
(#) ($/sh)
<S> <C> <C> <C> <C> <C> <C>
Gerald W. Montiel 150,000 5.50 01/21/04 335,858 782,692
150,000 6.00 12/31/04 429,710 1,029,230
150,000 35.6 6.50 12/31/05(a) 537,545 1,323,999
John L. Ashworth 125,000 9.9 6.50 12/31/00 175,099 377,081
John Newman 10,000 6.00 12/31/98(b) 6,150 12,600
10,000 6.50 12/31/00 14,008 30,167
10,000 6.50 12/31/01 17,958 39,683
15,000 3.6 6.50 09/17/01 26,937 59,525
Mary Montiel 10,000 6.50 12/31/00 14,008 30,167
25,000 6.50 09/17/01 44,896 99,208
25,000 4.7 6.50 12/31/02(a) 55,266 125,379
Monica M. McKenzie 10,000 6.50 12/31/00 14,008 30,167
15,000 2.0 6.50 09/17/01 26,937 59,525
<FN>
(a) These options are not exercisable until January 1, 1998.
(b) This option replaced an option to purchase 10,000 shares at $6.00
which expired on 12/31/95.
</FN>
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and FY-End Option
Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares Options at FY-End Options at FY-End
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
(#) ($) (#) ($)
<S> <C> <C> <C> <C>
Gerald W. Montiel 50,000 159,500 700,000/400,000 250,000/125,000
Richard H. Werschkul 0 0 275,000/0 87,500/0
John L. Ashworth 75,000 267,375 520,000/200,000 47,500/100,000
John Newman 0 0 85,000/0 10,000/0
Mary Montiel 0 0 55,500/25,000 1,500/0
Monica M. McKenzie 0 0 50,500/0 4,000/0
</TABLE>
Report of Repricing Options
On January 22, 1996, the Compensation Committee authorized the
repricing and extension of the expiration dates of certain options held
by the executive officers in lieu of an increase of annual compensation.
The exercise price was set at the market price of the Company's common
stock. The following schedule sets forth the repriced and extended
options.
This Report was furnished by Messrs. Hanson and Gambucci.
<PAGE>
Ten-Year Option Repricing
<TABLE>
<CAPTIONS>
Length of
Original
Option
Number of Term
Securities Market Price Exercise Remaining
Underlying of Stock Price at at Date of
Options at Time of Time of New Repricing
Repriced or Repricing or Repricing Exercise or
Name Date Amended Amendment or Amendment Price Amendment
(#) ($) ($) ($) (Months)
<S> <C> <C> <C> <C> <C> <C>
Gerald W. Montiel 1/22/96 100,000 $5.75 $10.50 $6.00 53
Chief Executive 1/22/96 100,000 $5.75 $10.50 $6.00 65
Officer 1/22/96 100,000 $5.75 $10.50 $6.00 77
John L. Ashworth 1/22/96 60,000 $5.75 $10.50 $6.00 53
Sr. Executive 1/22/96 100,000 $5.75 $10.50 $6.00 65
Vice President 1/22/96 100,000 $5.75 $10.50 $6.00 77
John Newman 1/22/96 10,000 $5.75 $6.00 $6.00 0
Vice President -
Finance
Mary Montiel 1/22/96 3,000 $5.75 $8.00 $6.00 3
Vice President -
Production & Design
Monica M. McKenzie 1/22/96 8,000 $5.75 $7.25 $6.00 3
General Counsel
and Secretary
</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 quarterly stock options to
purchase shares of the Company's $.001 par value Common Stock for each
quarter during which they serve as directors and for each committee on
which they serve during each quarter. All directors receive an annual
$1,000 apparel allowance. No other 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, Randall L. Herrel, Sr., and John L. Ashworth. Under the terms
of the agreements with Messrs. Montiel and Ashworth, 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 agreement with Mr. Herrel provides for employment for an initial term
of three years through November 30, 1999, with automatic renewal each year
unless either party gives to the other six-month written notice of non-renewal.
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. A bonus is to be
paid to Mr. Herrel on January 15, 1998, based on the Company's earnings
per share and Mr. Herrel's then base salary. If the earnings per share
are from $.46 to $.54, the bonus will be from 15% to 85% of his then base
salary. The Company agreed to pay the executives an annual bonus equal
to the premium due on life insurance policies with a face value of
$1,000,000 for Messrs. Montiel and Herrel 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
with Messrs. Montiel and Ashworth include noncompete provisions following
termination of employment for which the Company has agreed to pay each
executive compensation based upon a percentage of his then current salary
as consideration for the noncompete agreement. The noncompete period is
ten years with the noncompete consideration to be 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 noncompete consideration. The Company has
purchased term life insurance to provide the funds in such event. The
agreement with Mr. Herrel includes severance payments upon termination of
employment under specific circumstances, such payments ranging from one-half
to two times his then annual base salary.
<PAGE>
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 1996 included Andre Gambucci and John M. Hanson, Jr. Under
the supervision of the Compensation Committee, 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 or
previous experience, 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 management's commitment and expected contribution 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.
The rest of this page was intentionally left blank.
<PAGE>
Performance Graph
Set forth below is a line graph prepared by the Center for
Research in Security Prices, University of Chicago, Chicago, Illinois,
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).
<TABLE>
<CAPTIONS>
10/31/91 10/30/92 10/29/93 10/31/94 10/31/95 10/31/96
<S> <C> <C> <C> <C> <C> <C>
Ashworth, Inc. 100.0 72.7 169.1 152.7 98.2 94.5
Nasdaq Stock Market 100.0 112.8 145.3 146.1 196.7 232.2
(US Companies)
NASDAQ Stocks 100.0 60.4 70.7 70.7 47.7 41.0
(SIC 2300-2399 US Companies)
Apparel & other finished
products - fabrics &
like materials
<FN>
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 10/31/91.
</FN>
</TABLE>
<PAGE>
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 was in the principal amount of $306,000 and bore interest
at a variable annual rate based upon the Bank of America prime rate on the
1st day of each month. Interest was payable in quarterly installments.
The principal was paid in full on April 12, 1996.
Mary Montiel, sister of Mr. Montiel, is an executive officer and
employee of the Company. Her compensation is set forth above under
Executive Compensation. She is currently receiving an annual salary of
$144,000. Ms. Montiel has been an employee of the Company serving in
various positions since April 16, 1992. She served as production manager
from April 1992 until December 1994 and vice president of manufacturing
and design since that date.
Carol Kettela, sister of Jerry Montiel and Mary Montiel, is an
employee of the Company, presently serving as human resources manager.
In the year ended October 31, 1996, she had earned a salary of $61,143 and
is currently receiving an annual salary of $56,700. Ms. Kettela has been
an employee of the Company since April 7, 1992, initially in the position
of administrative assistant to the chief executive officer and investor
relations manager. She was appointed to the position of human resources
manager in January 1996.
David Kettela, brother-in-law of Mr. Montiel and husband of Carol
Kettela, is an employee of the Company, presently serving as operations
manager of the Ashworth Stores. In the year ended October 31, 1996, he
had earned a salary of $68,106 and is currently receiving an annual salary
of $65,250. Mr. Kettela has been an employee of the Company serving in
various positions since January 25, 1993. He was appointed the operations
manager of the Ashworth Stores Division in March 28, 1994.
Michelle Zafiropoulos, daughter of Gerald W. Montiel, is an employee
in the Company's Design and Product Development Department as a design
manager. In the year ended October 31, 1996, she had earned a salary of
$61,067 and is currently receiving an annual salary of $65,250. Ms.
Zafiropoulos has been an employee of the Company since March 18, 1991,
except for a brief period from April 28, 1995 to January 1, 1996
Hank Ashworth, brother of Mr. Ashworth, is a sales representative of
the Company. During the fiscal year ended October 31, 1996, he was paid
sales commissions in the amount of $69,764. Mr. Ashworth also received
severance pay of $32,533 for September 18, 1995 through January 31, 1996.
He was national sales manager for the Ashworth core business from April
1994 through October 1996.
Laura Gambucci, daughter of Mr. Gambucci, is an employee in the
Company's Design and Product Development Department as a Design Manager.
In the year ended October 31, 1996, she earned a salary of $84,646 and is
currently receiving an annual salary of $75,600. Ms. Gambucci has been
an employee of the Company since November 6, 1989.
Eric Montiel, son of Gerald W. Montiel, is an employee of the Company,
presently serving as Excess Resource Materials Manager. In the year ended
October 31, 1996, he had earned a salary of $44,183 and is currently
receiving an annual salary of $56,250. Eric Montiel has been an employee
or sales representative of the Company from time to time since May 1991,
his most recent employment period commencing January 1996.
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 $5,600,000. 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.
<PAGE>
SELECTION OF INDEPENDENT AUDITORS
The Company has not yet selected its independent public auditors for
the year ending October 31, 1997. The Audit Committee is expected to make
a decision in the near future. The independent public accounting firm of
Arthur Andersen LLP audited the financial statements of the Company for
the period ended October 31, 1996. A representative of Arthur Andersen
LLP is expected to be present at the stockholders meeting and available
to respond to appropriate questions.
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,
1996, 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, 1996 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 1998
Any proposal from a stockholder intended to be presented at the
Company's Annual Meeting of Stockholders to be held in April 1998, must
be received at the offices of the Company, 2791 Loker Avenue West,
Carlsbad, California 92008, no later than December 1, 1997, in order to
be included in the Company's proxy statement and proxy relating to that
meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Monica M. McKenzie
MONICA M. MCKENZIE
SECRETARY
Carlsbad, California
March 21, 1997
<PAGE>
PROXY ASHWORTH, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gerald W. Montiel and A. John Newman 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 17, 1997,
at the Annual Meeting of Stockholders to be held on April 29, 1997, or any
adjournment thereof, with like effect as if the undersigned were
personally present and voting upon the following matters.
1. ELECT DIRECTORS to serve until the Annual Meeting of Stockholders to
be held in the year 2000 and until their successors have been duly
elected and qualified.
/ / FOR JOHN M. HANSON, JR. / / WITHHOLD AUTHORITY
TO VOTE FOR JOHN M. HANSON, JR.
/ /FOR RANDALL L. HERREL, SR. / / WITHHOLD AUTHORITY
TO VOTE FOR RANDALL L. HERREL, SR.
2. 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 THE ELECTION OF JOHN M. HANSON, JR., AND RANDALL
L. HERREL, SR., AS DIRECTORS.
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: , 1997
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.