SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. ____)
Filed by the Registrant [X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Swing-N-Slide Corp.
(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):
[X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
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4) Date Filed:
<PAGE>
SWING-N-SLIDE CORP.
1212 Barberry Drive
Janesville, Wisconsin 53545
May 7, 1997
Dear Stockholder:
On behalf of Swing-N-Slide Corp. ("Swing-N-Slide"), I cordially
invite you to attend the annual meeting of stockholders on Wednesday,
May 21, 1997, at the offices of its new GameTime Division located at 150
GameTime Drive, Fort Payne, Alabama 35967, at 10:00 a.m., local time.
At the meeting, stockholders will vote on the election of seven
persons to the Board of Directors and the approval of the appointment of
Ernst & Young LLP as Swing-N-Slide's independent auditors for 1997.
Further information concerning the meeting and the nominees for election
as directors can be found in the accompanying Notice and Proxy Statement.
In addition, at the meeting there will be a report on the status of Swing-
N-Slide's business and an opportunity for you to express your views on
subjects related to Swing-N-Slide's operations.
The directors and officers of Swing-N-Slide hope that as many
stockholders as possible will be present at the meeting. We ask that you
sign and return the enclosed proxy card in the envelope provided, whether
or not you now plan to attend the meeting. If you attend the meeting, you
may vote in person even if you have previously mailed a proxy card.
We appreciate your cooperation and interest in Swing-N-Slide. To
assist us in preparation for the meeting, please return the proxy card at
your earliest convenience.
Sincerely yours,
/S/ RICHARD G. MUELLER
RICHARD G. MUELLER,
Chairman, President and
Chief Executive Officer
<PAGE>
SWING-N-SLIDE CORP.
1212 Barberry Drive
Janesville, Wisconsin 53545
May 7, 1997
To the Holders of Common Stock of
Swing-N-Slide Corp.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders of Swing-N-Slide Corp. ("Swing-N-
Slide") will be held on Wednesday, May 21, 1997, at 10:00 a.m., local
time, at the offices of its new GameTime Division located at 150 GameTime
Drive, Fort Payne, Alabama 35967, for the following purposes:
1. To elect seven directors to hold office until the next annual meeting
of stockholders and until their respective successors shall have been
elected and qualified;
2. To approve the appointment of Ernst & Young LLP as independent
auditors for 1997; and
3. To transact such other business as properly may come before such
meeting or any adjournment or postponement thereof.
Stockholders of record at the close of business on April 15, 1997,
will be entitled to vote at the meeting and any adjournment or
postponement thereof.
A copy of Swing-N-Slide's Annual Report to Stockholders for the year
ended December 31, 1996, is enclosed.
This notice and the accompanying proxy materials are sent to you by
order of the Board of Directors.
RICHARD E. RUEGGER,
Vice President-Finance,
Chief Financial Officer,
Treasurer and Secretary
You are requested to fill in, sign, date and return the proxy submitted
herewith in the return envelope provided for your use. Stockholders who
execute proxies retain the right to revoke them at any time before they
are actually voted. The giving of such proxy will not affect your right
to vote in person should you later decide to attend the meeting.
<PAGE>
SWING-N-SLIDE CORP.
1212 Barberry Drive
Janesville, Wisconsin 53545
(608) 755-4777 May 7, 1997
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 21, 1997
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Swing-N-Slide Corp. ("Swing-N-Slide") of
proxies to be used in voting at the annual meeting of stockholders to be
held at the offices of its new GameTime Division located at 150 GameTime
Drive, Fort Payne, Alabama 35967, on Wednesday, May 21, 1997, at 10:00
a.m., local time, and at any adjournment or postponement thereof. The
matters to be considered and acted upon at the annual meeting are referred
to in the preceding notice. If the enclosed proxy is properly executed
and returned, all shares represented thereby will be voted as indicated
thereon.
Stockholders whose names appeared of record on the books of Swing-N-
Slide at the close of business on April 15, 1997, will be entitled to vote
at the meeting and at any adjournment or postponement thereof. On the
record date for the meeting, Swing-N-Slide had outstanding and entitled to
vote 7,091,405 shares of common stock, par value $0.01 per share (the
"Common Stock"), each of which is entitled to one vote per share. Proxy
materials are being mailed on or about May 7, 1997 to stockholders of
record as of the close of business on April 15, 1997.
ELECTION OF DIRECTORS
The Board of Directors currently consists of seven members. Seven
directors of Swing-N-Slide are to be elected at the upcoming annual
meeting to serve until the next annual meeting of stockholders and until
their respective successors shall have been elected and qualified. Unless
authority to vote for one or more directors is withheld, it is intended
that shares represented by proxies in the accompanying form will be voted
for the election of the persons listed below or, if any such person shall
unexpectedly become unable or unwilling for good cause to accept
nomination or election, for the election of such other person as the Board
of Directors may recommend in his or her place. All of the persons listed
below are directors of Swing-N-Slide and are nominees for re-election.
All nominees are also directors of Newco, Inc., Swing-N-Slide's wholly-
owned operating subsidiary ("Newco", and together with Swing-N-Slide, the
"Company"). Information as to their ownership of shares of Common Stock
is provided under the caption "Security Ownership of Management and
Principal Stockholders."
The following sets forth information, as of April 15, 1997, about the
nominees for re-election as directors:
Richard G. Mueller, age 47, has served as a director of Swing-N-Slide
and President and Chief Executive Officer of Swing-N-Slide since January
1994, and Chairman since February 1996. From May 1993 through January
1994, Mr. Mueller was President and Chief Operating Officer of Swing-N-
Slide. From February 1992 through May 1993, Mr. Mueller was Vice
President-Marketing, Sales and Service for the Toro Company (diversified
manufacturing). From June 1991 through February 1992, Mr. Mueller was
Vice President-Consumer Equipment Division for the Toro Company.
David S. Evans, age 33, has served as a director of Swing-N-Slide
since February 1996. Mr. Evans has been President and Chief Executive
Officer of Glencoe Investment Corporation (private equity investing) since
March 1993. Prior to such date, Mr. Evans was a Merchant Banking/Mergers
and Acquisitions Specialist at Donaldson, Lufkin & Jenrette Securities
Corporation (full service investment banking) from 1988 to March 1993.
George N. Herrera, age 63, has served as a director of Swing-N-Slide
since February 1996. Mr. Herrera has been Director of International Sales
of Masco Corporation (diversified manufacturing of home products) since
1982.
Timothy R. Kelleher, age 34, has served as a director of Swing-N-
Slide since April 1996. Mr. Kelleher has been Vice President of Desai
Capital Management Incorporated (investment managing firm for
institutional clients) since May 1992. From 1989 to May 1992, he was an
associate at Entrecanales, Inc. (private investing). Mr. Kelleher is
currently a director of Eye Care Centers of America, Inc.
Terence S. Malone, age 67, has served as a director of Swing-N-Slide
since September 1992. Mr. Malone was Chairman and Chief Executive Officer
of Johnson Worldwide Associates, Inc. (international manufacturing and
marketer of outdoor recreational products) from 1986 until his retirement
in January 1994.
Gary A. Massel, age 57, has served as a director of Swing-N-Slide
since September 1996. Mr. Massel is currently an independent consultant.
Previously, Mr. Massel was a Senior Vice President of Ply-Gem Industries
(building products manufacturer) from February 1994 to August 1995. From
1989 to February 1994, Mr. Massel was Vice President-Operations Specialty
Packaging of Packaging Corp. of America (packaging manufacturer).
Caroline L. Williams, age 50, has served as a director of Swing-N-
Slide since February 1996. Ms. Williams has been an independent
consultant and director of various corporations since January 1992. Prior
to that date, Ms. Williams was Managing Director of Donaldson, Lufkin &
Jenrette Securities Corporation (full service investment banking) from
1988 to January 1992. Ms. Williams is currently a director of Argyle
Television, Inc. and DEVCAP Share Return Fund.
COMMITTEES OF THE BOARD
The Board of Directors currently has three standing committees: the
Audit Committee, the Compensation Committee and the Executive Committee.
The Board does not currently have a standing Nominating Committee. The
members and functions of the standing committees are described briefly
below.
Audit Committee
The Audit Committee is currently comprised of Messrs. Herrera, Malone
and Massel. The Audit Committee makes recommendations to the Board of
Directors regarding the independent auditors to be retained to audit the
Company's accounts and reviews the independence of such auditors, approves
the scope of the annual audit activities of the independent auditors,
approves the audit fee payable to the independent auditors and reviews
such audit results. Ernst & Young LLP presently serves as the independent
auditors of the Company and the stockholders are being asked to approve
the appointment of Ernst & Young LLP as the Company's independent auditors
for 1997. The Audit Committee met three times during 1996.
Compensation Committee
The Compensation Committee is currently comprised of Mr. Evans and
Ms. Williams. The Compensation Committee reviews and makes
recommendations as to compensation, bonuses, stock plans and other
benefits and policies respecting such matters for the officers and
employees of Swing-N-Slide. The Compensation Committee met three times
during 1996.
Executive Committee
The Executive Committee is currently comprised of Messrs. Evans,
Kelleher, Malone and Mueller. The Executive Committee has the authority
to exercise all of the powers of the Board during intervals between
meetings of the Board. The Executive Committee met three times during
1996.
Directors' Attendance
The Board of Directors of Swing-N-Slide held eight meetings in 1996.
Each director attended not less than 75% of the total number of meetings
of (1) the Board of Directors and (2) all committees of the Board on which
he or she served, during the period that he or she served.
Director Compensation
Each non-employee director of Swing-N-Slide who is not an employee of
GreenGrass Capital LLC, a Delaware limited liability company ("GGC"), or
any of its affiliates, is to receive each year a retainer of $15,000 paid
in quarterly installments of $3,750 and options to purchase 5,000 shares
of Common Stock with a per share exercise price equal to the fair market
value of a share of Common Stock on the day after the annual meeting of
stockholders. All non-employee directors are also to be reimbursed for
out-of-pocket costs related to Swing-N-Slide's business.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information with respect to
Company compensation earned in the last three completed fiscal years by
Mr. Mueller, Chairman, President and Chief Executive Officer, Mr. Cole,
Vice President-Operations, and Mr. Ruegger, Vice President-Finance and
Chief Financial Officer, the only executive officers whose total salary
and bonus exceeded $100,000 during the most recently completed fiscal year
(the "Named Executive Officers"). A list of all current executive
officers of the Company is attached hereto as Exhibit A.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Securities All Other
Salary Bonus Underlying Compensation
Name and Principal Position Year ($) ($) Options/SARs (#) ($)
<S> <C> <C> <C> <C> <C>
Richard G. Mueller, Chairman, 1996 $207,906 $24,000 120,000(1) $181,763(2)
President and Chief Executive Officer 1995 211,872 72,288 100,000(3) 6,805
1994 190,930 35,000 25,000 6,080
Curtis A. Cole, 1996 $ 96,414 $13,498 16,152(1) $ 4,674(4)
Vice President-Operations 1995 91,318 24,290 13,460(5) 3,959
1994 88,400 13,000 11,000 3,767
Richard E. Ruegger, 1996 $ 90,540 $13,309 16,152(1) $ 3,622(4)
Vice President-Finance and 1996 86,316 22,960 13,460(5) 3,912
Chief Financial Officer 1994 81,994 11,500 11,000 3,280
(1) The underlying shares of Common Stock relate to options issued effective February 27, 1996 upon the cancellation of
options then held by the Named Executive Officer. The new options have an exercise price of $3.70 per share, expire on
February 26, 2006, and are non-terminable, fully vested and exercisable. The new options allow for the purchase of a
number of shares of Common Stock equal to 120% of the number of such shares purchasable upon the exercise of the canceled
options. See also "Report on Repricing of Options" below.
(2) The compensation reported represents $172,414 paid pursuant to Mr. Mueller's Amended and Restated Transitional
Compensation and Severance Agreement, and $9,349 of 401(k) matching contributions made by the Company.
(3) Options to purchase 23,550 shares of Common Stock were granted to Mr. Mueller in 1995. The remaining underlying shares
of Common Stock relate to options which were repriced on February 15, 1995 in connection with Swing-N-Slide's 1995 self-
tender offer. As a result of the repricing, the exercise price decreased to $5.38 per share, and the number of shares of
Common Stock purchasable upon the exercise of the repriced options was reduced from 125,000 to 76,450. See also "Report
on Repricing of Options" below.
(4) The compensation reported represents the Company's matching contributions to its 401(k) plan.
(5) Options to purchase 6,730 shares of Common Stock were granted to the Named Executive Officer in 1995. The remaining
underlying shares of Common Stock relate to options which were repriced on February 15, 1995 in connection with Swing-N-
Slide's 1995 self-tender offer. As a result of the repricing, the exercise price decreased to $5.38 per share, and the
number of shares of Common Stock purchasable upon the exercise of the repriced options was reduced from 11,000 to 6,730.
See also "Report on Repricing of Options" below.
</TABLE>
Stock Option Grants
The following table shows option grants in 1996 to the Named
Executive Officers. In 1996, the only options granted to the Named
Executive Officers consisted of repriced replacement options issued
effective February 27, 1996 upon the cancellation of options then held by
such officers. See also "Report on Repricing of Options" below.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term (1)
Number of
Securities % of Total
Underlying Options Exercise
Options Granted to or Base
Granted Employees in Price Expiration
Name (#) Fiscal Year ($/Sh) Date(2) 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C>
Richard G. Mueller 120,000 60% $3.70 02/26/2006 $279,229 $707,622
Curtis A. Cole 16,152 13% 3.70 02/26/2006 37,584 95,246
Richard E. Ruegger 16,152 13% 3.70 02/26/2006 37,584 95,246
(1) This presentation is intended to disclose the potential value that would accrue to the optionee if the option were
exercised the date before it expires and if the per share value had appreciated at the compounded annual rate indicated
in each column. The assumed rates of appreciation of 5% and 10% are prescribed by the rules of the Securities and
Exchange Commission regarding disclosure of executive compensation. The assumed annual rates of appreciation are not
intended to forecast possible future appreciation, if any, with respect to the price of the Common Stock.
(2) The new options are all exercisable, fully vested and non-terminable.
</TABLE>
1996 Year-End Option Value
Set forth below is certain information regarding the value of
unexercised in-the-money stock options held by the Named Executive
Officers at the end of 1996. No options were exercised by the Named
Executive Officers in 1996.
FISCAL YEAR-END OPTION/SAR VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY-End (#) at FY-End ($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
Richard G. Mueller 120,000/0 (1)
Curtis A. Cole 16,152/0 (1)
Richard E. Ruegger 16,152/0 (1)
(1) The fair market value of the underlying Common Stock at fiscal year-
end was less than the exercise price of the options.
Report on Repricing of Options
Set forth below is certain information regarding the repricing of
options held by the executive officers of Swing-N-Slide since August 28,
1992, the date on which Swing-N-Slide's Common Stock first began trading
on the NASDAQ National Market System. For more information on options to
purchase shares of Common Stock held by Named Executive Officers, see
"Summary Compensation Table," "Stock Option Grants," and "1996 Year-End
Option Value" above.
<TABLE>
Ten-Year Option/SAR Repricings
<CAPTION>
Market Length of
Number of Price of Exercise Original
Securities Stock at Price at Option Term
Underlying Time of Time of Remaining
Options/SARs Repricing Repricing at Date of
Repriced or or New Repricing
or Amendment Amendment Exercise or
Name Date Amended(#) ($) ($) Price ($) Amendment
<S> <C> <C> <C> <C> <C> <C>
Richard G. Mueller, 02/27/96(1) 100,000(2) $3.50 $ 5.38 $3.70 (3)
Chairman, President 02/15/95(4) 50,000(5) $5.375 $14.75 $5.38 Approximately 8.2 years
and Chief Executive 02/15/95(4) 50,000(5) $5.375 $ 9.88 $5.38 Approximately 8.6 years
Officer 02/15/95(4) 25,000(6) $5.375 $10.88 $5.38 Approximately 9.2 years
Curtis A. Cole, 02/27/96(1) 13,460(7) $3.50 $ 5.38 $3.70 (8)
Vice President - 02/15/95(4) 11,000(9) $5.375 $13.00 $5.38 Approximately 8.9 years
Operations
Richard E. Ruegger, 02/27/96(1) 13,460(7) $3.50 $ 5.38 $3.70 (8)
Vice President - 02/15/95(4) 11,000(9) $5.375 $13.00 $5.38 Approximately 8.9 years
Finance Chief
Financial Officer
David H. Hammelman, 02/27/96(1) 12,230(10) $3.50 $ 5.38 $3.70 (11)
Vice President - 02/15/95(4) 9,000(12) $5.375 $13.00 $5.38 Approximately 8.9 years
Human Resources and
Administration
James A. 02/27/96(1) 13,460(7) $3.50 $ 5.38 $3.70 (8)
Rastetter(13) 02/15/95(4) 11,000(9) $5.375 $13.00 $5.38 Approximately 8.9 years
Brian K. 02/27/96(1) 13,460(7) $3.50 $ 5.38 $3.70 (8)
Zeilinger(14) 02/15/95(4) 11,000(9) $5.375 $13.00 $5.38 Approximately 8.9 years
Bert M. Thompson(15) 02/15/95(4) 11,000(9) $5.375 $13.00 $5.38 Approximately 8.9 years
(1) Effective February 27, 1996, all options then held by executive officers of Swing-N-Slide were canceled and new repriced
options were granted. The new options expire on February 26, 2006 and are exercisable, fully vested and non-terminable.
The new options allow for the purchase of the number of shares of Common Stock equal to 120% of the number of shares
originally purchasable under the canceled options.
(2) The number of shares of Common Stock underlying the options granted in connection with the repricing is 120,000.
(3) Options for 30,580 shares had a remaining term of approximately 7.2 years. Options for 30,580 shares had a remaining
term of approximately 7.6 years. Options for 15,290 shares had a remaining term of approximately 8.2 years. Options for
23,550 shares had a remaining term of approximately 9 years.
(4) On February 15, 1995, these options were repriced in connection with Swing-N-Slide's self-tender offer. As a result of
the repricing, the number of shares purchasable upon exercise of the options was reduced to approximately 61% of the
number of shares originally purchasable. This decrease reflected the reduction in the number of outstanding shares after
the tender offer.
(5) The number of shares of Common Stock underlying the repriced options was 30,580. These options were subsequently
canceled and new repriced options were granted effective February 27, 1996. See Note 1 above.
(6) The number of shares of Common Stock underlying the options granted in connection with the repricing was 15,290. These
options were subsequently canceled and new repriced options were granted effective February 27, 1996. See Note 1 above.
(7) The number of shares of Common Stock underlying the options granted in connection with the repricing is 16,152.
(8) Options for 6,730 shares had a remaining term of approximately 7.9 years. Options for the other 6,730 shares had a
remaining term of approximately 9 years.
(9) The number of shares of Common Stock underlying the options granted in connection with the repricing was 6,730. These
options were subsequently canceled and new repriced options were granted effective February 27, 1996 (except for Mr.
Thompson's options, which were canceled after his employment ended). See Note 1 above and Note 15 below.
(10) The number of shares of Common Stock underlying the options granted in connection with the repricing is 14,676.
(11) Options for 5,500 shares had a remaining term of approximately 7.9 years. Options for the other 6,730 shares had a
remaining term of approximately 9 years.
(12) The number of shares of Common Stock underlying the options granted in connection with the repricing was 5,500. These
options were subsequently canceled and new repriced options were granted effective February 27, 1996. See Note 1 above.
(13) Mr. Rastetter was formerly the Vice President - Sales. His employment with the Company ended on August 16, 1996. Mr.
Rastetter's options expire on February 26, 2006.
(14) Mr. Zeilinger was formerly the Vice President - Manufacturing. His employment with the Company ended on August 13, 1996.
Mr. Zeilinger's options expire on February 26, 2006.
(15) Mr. Thompson was formerly the Vice President - Marketing. His employment with the Company ended on February 16, 1995.
Mr. Thompson's options were terminated unexercised after his employment ended.
</TABLE>
Effective February 27, 1996, options held by Swing-N-Slide's
executive officers were repriced in connection with the change of control
transaction described below (the "Change of Control Transaction"). See
"Certain Relationships and Related Party Transactions - Change of Control
Transaction." As part of the transaction, in order to encourage
management to retain options as incentive compensation, each member of
Swing-N-Slide's then senior management (Messrs. Mueller, Beebe, Rastetter,
Cole, Ruegger, Hammelman, Zeilinger and Jonas) was given the option of (a)
retaining his then outstanding options, in which case the exercise price
of the options would be reduced to the lower of (i) $4.80 per share ($4.25
for Mr. Beebe) or (ii) the average trading price of Common Stock during
March 1996 (which was $3.70), or (b) terminating his then outstanding
options and receiving a cash payment equal to (i) the number of options
held multiplied by (ii) $6.50 less the exercise price. All of the senior
managers elected option (a). In addition, in lieu of granting options in
1996 for performance during the fiscal year ended December 31, 1995, the
number of shares purchasable upon the exercise of options held by the
senior managers as of February 27, 1996 was increased by 20%.
The February 1996 repricing was authorized by the Board of Directors
and is being reported upon herein under the authority of the current
Compensation Committee (Caroline L. Williams and David S. Evans).
Agreements With Executive Officers
Newco entered into an Amended and Restated Transitional Compensation
and Severance Agreement in February of 1995 with Mr. Mueller to provide
for the payment of certain benefits to him if his employment with the
Company terminated for any reason, including in connection with certain
changes in control of the Company. In the event of termination of
employment, Mr. Mueller would receive 150% of his base salary for 1995,
and upon change of control of the Company a payment of $100,000. Mr.
Mueller would also continue to be covered by all benefit plans of the
Company for a period of up to 18 months from the date on which his
employment terminated. Following the change of control of Swing-N-Slide
on February 16, 1996, described below, an after-tax payment of $100,000
was made to Mr. Mueller.
On February 15, 1996, the Company entered into Severance and Change
of Control Agreements with Messrs. Cole, Hammelman, Jonas, and Ruegger.
Under the terms of such Severance and Change of Control Agreements, in the
event that any such employee is terminated without cause within one year
after a change of control of the Company, such employee shall be entitled
to receive an amount equal to the sum of one year's base salary plus the
bonus amount for the year prior to the year of termination. Each such
employee shall also be entitled to such payment if the employee remains
employed during the one-year period after such change of control and the
employee elects to terminate employment within 30 days of the end of such
one-year period.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Mr. Evans and
Ms. Williams. Prior to the Change of Control Transaction on February 16,
1996 (discussed below), the members were Andrew W. Code, Henry B. Pearsall
and Brian P. Simmons. No present or former executive officer of the
Company serves as a member of the Compensation Committee. Furthermore,
there are no interlocking relationships between any executive officer of
the Company and any entity whose directors or executive officers serve on
the Company's Board or Compensation Committee.
Mr. Evans is a stockholder and director and the President and Chief
Executive Officer of Glencoe Investment Corporation ("GIC"), which is an
affiliate of an institutional investor in GGC and an institutional
investor in GreenGrass Capital II LLC, a Delaware limited liability
company ("GGCII"). GGC and GGCII are two of the three partners of
GreenGrass Holdings, a Delaware general partnership ("GreenGrass
Holdings"), which beneficially owns approximately 70% of the outstanding
shares of the Common Stock. Mr. Evans is also one of the three persons
appointed to the Members Operating Board of GGC, which entity controls
voting and investment making decisions of GreenGrass Holdings, and one of
the three persons appointed to the Members Operating Board of GGCII.
Agreement with respect to Fees and Expenses
Under the terms of the Transaction Agreement described below, on
February 16, 1996, Swing-N-Slide paid GIC and Desai Capital Management
Incorporated ("DCMI"), affiliates of two GGC institutional investors, fees
in the amounts of $900,000 and $350,000, respectively, in consideration of
services rendered in connection with the transactions contemplated by the
Transaction Agreement. In addition, under the terms of the Transaction
Agreement, Swing-N-Slide agreed to be responsible for paying (i) the
amount of $19,000 as reimbursement for certain expenses incurred by
GreenGrass Holdings, Glencoe Growth Closely-Held Business Fund L.P.
("Glencoe Growth") or GIC; and (ii) the amount of $476,000 for certain
fees and expenses of GreenGrass Holdings' financial advisors, attorneys,
accountants and other professionals.
Agreement with respect to Consulting Services
Under the terms of the Management Consulting Agreement dated February
16, 1996, Swing-N-Slide has agreed to pay to GIC and DCMI a consulting fee
in the aggregate amount of $300,000 per year, payable in quarterly
installments of $75,000, plus reimbursement of reasonable expenses
incident to their consulting services. The Management Consulting Agreement
is automatically renewed for successive one year terms unless either party
gives notice to the other of its intention not to renew the agreement.
The consulting fee is to be reviewed annually by the Board of Directors of
Swing-N-Slide.
Agreement with respect to Acquisition Advisory Services
Under the terms of an engagement letter dated September 6, 1996, GIC
and DCMI agreed to act as acquisition advisors to Swing-N-Slide with
respect to two potential acquisitions (the "Acquisitions"). In this
regard, GIC and DCMI agreed to provide advice to Swing-N-Slide with
respect to valuation, due diligence, negotiation, financing techniques and
alternatives, and related matters involving the Acquisitions. The initial
term of the engagement is for one year with automatic renewal for
successive one-year periods unless either party provides notice of its
desire not to renew at least 30 days before the renewal date. As
compensation for such services, Swing-N-Slide agreed to pay to GIC and
DCMI a fee equal to 4.0% of the gross proceeds from any new equity raised,
plus 1.125% of any senior loan financing related to the Acquisitions (less
fees paid to other parties) plus 1.0% of the transaction value for either
of the Acquisitions consummated by Swing-N-Slide. Swing-N-Slide also
agreed to reimburse GIC and DCMI for certain expenses incurred by them in
performing such services. The aggregate amount paid by Swing-N-Slide to
GIC and DCMI under this agreement is $790,398 (relating to the GameTime
acquisition detailed below).
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In addition to the matters described under the heading "Compensation
Committee Interlocks and Insider Participation," Swing-N-Slide has been
party to certain other related party transactions which are described
below.
Change of Control Transaction
Under the terms of a Transaction Agreement dated January 4, 1996, as
amended February 12, 1996 (the "Transaction Agreement"), GreenGrass
Holdings purchased 3,510,000 shares of Common Stock of Swing-N-Slide
tendered under GreenGrass Holdings' $6.50 per share cash tender offer
which expired on February 14, 1996. Upon purchase of the 3,510,000
shares, together with shares of Common Stock owned by persons related to
GreenGrass Holdings and contributed to the initial two general partners of
GreenGrass Holdings in connection with the consummation of the cash tender
offer, GreenGrass Holdings owned approximately 60% of the shares of Common
Stock of Swing-N-Slide.
This Common Stock purchase was funded by cash contributions from
GreenGrass Holdings' initial two general partners, GGC and GreenGrass
Management LLC, a Delaware limited liability company ("GGM"). Prior to
the GameTime acquisition described below and the investment by GGCII, the
new general partner of GreenGrass Holdings, GGC had an approximately 97%
interest in GreenGrass Holdings and GGM had an approximately 3% interest
in GreenGrass Holdings.
The members of GGC are the following institutional investors: Glencoe
Fund; Equity-Linked Investors--II, a New York limited partnership ("ELI-
II"); the State Treasurer of the State of Michigan, as Custodian for the
Michigan Public School Employees' Retirement System, State Employees'
Retirement System, Michigan State Police Retirement System and Michigan
Judges Retirement System, each a trust organized by the State of Michigan
to provide pension benefits to eligible retirees (collectively, the
"Michigan Trusts"); Crescent/MACH I Partners, L.P., a Delaware limited
partnership ("Crescent"); Sahara Enterprises, Inc., a Delaware corporation
("Sahara"); and Baldwin & Lyons Insurance Company, an Indiana corporation
("Baldwin").
The members of GGM were Richard Mueller (Chairman, President and
Chief Executive Officer), Richard Ruegger (Vice President-Finance, Chief
Financial Officer, Secretary and Treasurer), Curtis Cole (Vice President-
Operations), David Hammelman (Vice President-Corporate and Human
Resources), Kenneth Jonas (Director of Engineering), James Rastetter
(formerly Vice President-Sales), Brian Zeilinger (formerly Vice President-
Manufacturing), and Joseph Beebe (formerly Executive Vice President-
Operations). Messrs. Rastetter and Zeilinger have since withdrawn as
members of GGM.
In addition, pursuant to the Transaction Agreement, GreenGrass
Holdings purchased on February 16, 1996, $4,300,000 principal amount of
Swing-N-Slide's 10% Convertible Debentures Due 2004 (the "Debentures"),
and on April 25, 1996, purchased an additional $700,000 of Debentures.
The Debentures are general, unsecured obligations of Swing-N-Slide and are
subordinate to any guaranty by Swing-N-Slide of any indebtedness of Newco.
The Debentures mature eight years from their date of initial issuance,
subject to earlier redemption at the election of Swing-N-Slide and
mandatory redemption upon a change of control, in both cases at par. The
Debentures bear interest at a rate of 10% per annum, paid semi-annually,
with Swing-N-Slide having the option to pay interest in additional
Debentures for the first seven semi-annual interest payment dates. The
Debentures are convertible into shares of Common Stock at a conversion
price of $4.80 per share, subject to customary antidilution adjustments.
As of April 1, 1997, GreenGrass Holdings held $308,253 in additional
Debentures as interest payments on the Debentures. Of the securities held
by GreenGrass Holdings, 9,534 shares of Common Stock and $14,144 of
Debentures were distributed in October 1996 to Messrs. Rastetter and
Zeilinger following their withdrawal as members of GGM.
Agreement with respect to Election of Directors
Under the terms of the Transaction Agreement, GreenGrass Holdings is
entitled to designate five members of the Board of Directors of Swing-N-
Slide (Mr. Mueller is not counted as one of such five directors). To
date, GreenGrass Holdings has designated four current directors, Ms.
Williams and Messrs. Evans, Herrera and Kelleher. In addition, under the
terms of the Transaction Agreement, until February 14, 1998, the Board of
Directors of Swing-N-Slide must always have at least two Independent
Directors, who were outside directors on January 4, 1996 and certain
successors to such persons. Currently, the two Independent Directors are
Messrs. Malone and Massel.
Registration Rights
Under certain agreements, Code Hennessy & Simmons Limited
Partnership, formerly a significant investor in Swing-N-Slide, GreenGrass
Holdings and certain of their associates, and various officers and
directors and, in some cases, their spouses or trusts for their benefit or
the benefit of their children, were granted certain rights to have shares
of Common Stock registered and/or included in registrations initiated by
Swing-N-Slide or its stockholders (the "registration rights"). Expenses
incurred in connection with the exercise of such registration rights shall
be, subject to limited exceptions, borne by the Company.
GameTime Acquisition
Pursuant to an Amended and Restated Stock Purchase Agreement, Newco,
the wholly-owned subsidiary of Swing-N-Slide, acquired all of the
outstanding shares of capital stock of Game Time, Inc., an Alabama
corporation ("GameTime"), on March 13, 1997. GameTime is principally
involved in the design, manufacture, sale, and distribution of commercial
outdoor park and playground equipment, site amenities, and related
products. The aggregate purchase price paid by Newco for the GameTime
stock was $27 million, of which $25 million was paid in cash at the
closing and $2 million was paid by delivery at closing of Newco's
unsecured 10% Subordinated Notes due 2005. Immediately following the
acquisition, GameTime was merged with and into Newco, with Newco as the
survivor.
To provide financing for the GameTime acquisition, to payoff and
refinance certain indebtedness of the Company, and to provide additional
funds for working capital purposes, Swing-N-Slide and Newco obtained a
variety of debt and equity financing. Pursuant to a Credit Agreement,
Newco obtained debt financing in the aggregate amount of $69.5 million
from certain lenders represented by Fleet National Bank, of which $20
million comprised a senior secured revolving credit facility maturing
March 13, 2003, $45 million comprised a senior secured term loan maturing
March 13, 2003, and $4.5 million comprised a senior secured term loan
maturing June 30, 2003. Pursuant to separate Securities Purchase
Agreements, Newco also obtained $12.5 million of debt financing from
Massachusetts Mutual Life Insurance Company ("MassMutual") and its
affiliates by issuing its 12% Senior Subordinated Notes due 2005. As part
of such debt financing, MassMutual and its affiliates received warrants to
purchase up to an aggregate of 592,177 shares of Common Stock (which
shares are subject to adjustment under certain circumstances) at an
exercise price of $.001 per share.
Swing-N-Slide also entered into an Investment Agreement, pursuant to
which Swing-N-Slide: (i) issued to GreenGrass Holdings 1,087,405 shares of
Common Stock for an aggregate purchase price of $5 million, or $4.5981 per
share (the "Estimated Share Price"); (ii) sold its Junior Subordinated
Bridge Note (the "Bridge Note") to GreenGrass Holdings in the principal
amount of $2.5 million, which Bridge Note shall be due not later than
December 31, 1997 (subject to prepayment in connection with the rights
offering described below) and shall bear interest at the rate of 13.5% per
annum (to be paid by the issuance of additional shares of Common Stock at
the Final Calculated Price described below); (iii) issued to GreenGrass
Holdings a warrant to purchase 50,000 shares of Common Stock at an
exercise price to be determined based upon the weighted average bid price
per share of the Common Stock for the 150 days following the filing of
Swing-N-Slide's Form 8-K relative to the GameTime acquisition, but in no
event less than $4.00 per share nor greater than $4.5981 per share (the
"Final Calculated Price"); (iv) agreed that, in the event that the Final
Calculated Price is less than the Estimated Share Price, Swing-N-Slide
will issue to GreenGrass Holdings a number of additional shares of Common
Stock equal to the difference between the quotient of 5,000,000 divided by
the Final Calculated Price, and 1,087,405; and (v) agreed to use its best
efforts to undertake a rights offering pursuant to which Swing-N-Slide
will offer to each of its stockholders other than GreenGrass Holdings the
right to purchase at the Final Calculated Price such stockholder's pro
rata share of a number of shares of Common Stock determined by dividing
2,500,000 by the Final Calculated Price. The rights offering will be made
only through a prospectus complying with federal and applicable state
securities laws, and the timing of such rights offering will depend upon
regulatory clearance and other factors. The proceeds from the rights
offering will be used to prepay the Bridge Note. Under the Investment
Agreement, GreenGrass Holdings is obligated to purchase any of the rights
shares not purchased by the other stockholders under the rights offering.
The funds necessary for GreenGrass Holdings to purchase the
additional shares of Common Stock and the Bridge Note under the Investment
Agreement were contributed by GGCII, upon its admission as a general
partner of GreenGrass Holdings on March 13, 1997. Following the admission
of GGCII, GGC has an approximately 77% interest in GreenGrass Holdings,
GGCII has an approximately 21% interest in GreenGrass Holdings, and GGM
has an approximately 2% interest in GreenGrass Holdings. Information as
to the ownership of GreenGrass Holdings, GGC, GGCII, and GGM is provided
under the caption "Security Ownership of Management and Principal
Stockholders."
Loan Guarantee
Mr. Mueller borrowed $150,000 from Capitol Bank in Madison,
Wisconsin, the proceeds from which were used to purchase units of
membership interests in GGM. The loan bears interest at the prime rate
floating from time to time. Repayment of the loan is secured by a third
mortgage on the personal residence of Mr. Mueller and is guaranteed by
Swing-N-Slide. The loan guarantee was approved by the Compensation
Committee at its meeting on March 19, 1996.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee (the "Committee") of the Board of
Directors of Swing-N-Slide is responsible for all aspects of the
compensation package offered to the executive officers of Swing-N-Slide,
including the Named Executive Officers. The following report was
authorized by the members of the Committee.
Executive Compensation Policies
The Committee bases its review and recommendations regarding the
Company's executive compensation with the goal of attaining the following
objectives: (1) to attract, motivate and retain the highest quality
executives, (2) to align both the short-term and the long-term interests
of executives with those of the Company's stockholders, and (3) to
encourage executives to achieve their assigned tactical and strategic
business objectives as well as overall corporate financial results. The
executive compensation program for 1996 was initially developed by Messrs.
Code, Pearsall and Simmons, the members of the Committee in 1996 prior to
the Change of Control Transaction. The executive compensation program for
1996 was generally comprised of base salary, variable cash incentive
awards based on current corporate and individual performance, and an
increase in the number of shares of Common Stock purchasable under stock
options granted under the 1992 Stock Program.
Base Salaries
All executive base salaries are within established salary ranges that
are generally based on similar positions in companies of comparable size
and complexity. The Committee determines those companies which are
comparable to the Company from the information contained in various
national surveys, including the National Executive Compensation Survey and
a survey by the Hay Consultants. Base compensation is scaled in
accordance with the relative job content of a position. The Committee
utilizes the Hay system of job evaluation. Key factors in establishing
relative job content under the Hay system include the particular
knowledge, the problem solving abilities and the accountability required
for each position. Pay grades are also established based on relative job
content of a position. Salary ranges are set for each pay grade based on
the levels of compensation in the Hay report. The actual base salary
within the range of the applicable pay grade of each executive is based
upon a variety of factors, the most important of which are experience and
performance. The reasonableness of actual salaries is verified by
comparison to similar companies as discussed above.
With respect to the 1996 base salary granted to the Chief Executive
Officer, Mr. Mueller, the Committee took into account a comparison of base
salaries of chief executive officers of peer companies of similar size and
the Company's success in meeting its financial goals in 1995. Mr. Mueller
was granted a base salary of $207,906, compared to a base salary of
$211,872 for 1995. This base salary of $207,906 was below the median of
the peer group.
Management Incentive Compensation Program
Executives whom the Committee determines have a significant impact on
the Company's financial results through their positions and performance
are eligible to participate in the Company's Management Incentive
Compensation ("MIC") Program. Awards under the MIC Program are based upon
achievement of corporate operating income targets for the fiscal year, as
well as individually assigned objectives. Approximately 60% of the
incentive compensation award of each executive is tied to the achievement
of the corporate financial objectives while the remaining 40% is awarded
based on meeting individual objectives. For 1996, the program utilized a
threshold percentage of the actual budgeted operating income which had to
be achieved before the portion of the incentive compensation based on
corporate financial objectives would begin to accrue. The incentive
compensation awards ranges were 0% to 75% of base salary for the Chief
Executive Officer, Mr. Mueller, and 0% to a maximum of 53% of base salary
for the other executives. For 1996, the Company failed to meet its
budgeted operating income thereby eliminating any of the approximately 60%
of incentive compensation that is based on the achievement of corporate
financial objectives. Based on meeting certain individual objectives,
aggregate management incentive compensation of $134,400 was granted in
1996 for all 26 participants out of a potential maximum management
incentive compensation pool of $499,000.
With respect to the MIC Program compensation granted to the Chief
Executive Officer, Mr. Mueller, in 1996 the Committee set the award at
11.5% of base salary, which was based solely on personal performance
criteria in 1996. Based on these factors, Mr. Mueller was awarded a bonus
of $24,000 for 1996 under the MIC Program.
On February 27, 1996, the MIC Program was amended to permit non-
officer managers of the Company to make a five year election to receive on
an individual basis 25% of their respective annual management incentive
bonuses in the form of shares of Swing-N-Slide's Common Stock at a price
of $6.00 per share (regardless of the then current per share trading price
of such stock), and to also receive a tax gross-up bonus on that portion
of their bonus. Eleven of such managers exercised this election.
Stock Program
Long-term incentives are provided through the grant of stock options
or the award of restricted stock under the Swing-N-Slide 1996 Incentive
Stock Plan (the "1996 Stock Plan"), which was approved by stockholders at
the 1996 annual meeting. The Committee believes that stock ownership
provides significant motivation to executives to maximize value for Swing-
N-Slide's stockholders. Stock options are to be granted at no less than
the prevailing market price and, therefore, will have value only if Swing-
N-Slide's stock price increases after the grant. The Committee believes
that stock options and stock awards provide a direct link between
compensation and stockholder return, measured by the same index used by
stockholders to measure Swing-N-Slide's performance. The terms of options
granted as well as the terms of any restrictions on stock awarded are
determined at the time of the grant or award by the Employee Committee
established under the 1996 Stock Plan. The Employee Committee under the
1996 Stock Plan is comprised of the same directors who comprise the
Committee.
No options were issued to management under the 1996 Stock Plan for
the fiscal year ended December 31, 1996 because Swing-N-Slide's financial
objectives were not achieved. In connection with the GameTime
acquisition, however, the number of shares of Common Stock underlying
options currently held by certain of the Company's former and current
officers, directors and employees granted pursuant to the 1992 Stock
Program was increased by 160,980 additional shares of Common Stock to
prevent the dilution of such options resulting from the GameTime
acquisition.
Compensation for 1997
For 1997, the Committee intends to continue to focus on linking
executive compensation with corporate performance. The Committee has
decided to increase the percentage of bonus tied to corporate financial
performance. In addition, financial performance will be measured using
EBITDA (earnings before interest, taxes, depreciation and amortization)
instead of operating income to align bonuses with investors' focus.
The Committee also intends to modify its compensation policies to
account for the GameTime acquisition (discussed above). The acquisition
approximately doubled Swing-N-Slide's size. Each of Swing-N-Slide's two
divisions will now be about the size of the pre-acquisition company. As a
result, financial performance at both the corporate and divisional levels
will be considered.
Conclusion
Through the programs described above, a significant portion of Swing-
N-Slide's executive compensation is linked directly to individual and
corporate performance and stock price appreciation. The Committee intends
to continue the policy of linking executive compensation to corporate
performance and returns to stockholders, recognizing that the ups and
downs of the business cycle from time to time may result in an imbalance
for a particular period.
COMPENSATION COMMITTEE
Caroline L. Williams
David S. Evans
STOCK PERFORMANCE
The following graph compares the percentage change in the cumulative
total stockholder return, including dividend reinvestment, on the Common
Stock, with that of the cumulative total return of the Wilshire 5000 Index
(the "Wilshire 5000") and the Investor's Business Daily Leisure Products
Index (the "Leisure Products Index") for the measurement period beginning
August 28, 1992, the date on which the Common Stock first began to trade
publicly. The graph is based on the assumption that $100 was invested on
August 28, 1992 in: (1) Common Stock; (2) the Wilshire 5000; and (3) the
Leisure Products Index.
[STOCK PERFORMANCE GRAPH.]
Investor's
Business
Swing-N-Slide Wilshire 5000 Daily Leisure
Corp. (1) Index Products Index
8/28/92 100.00 100.00 100.00
12/31/92 114.29 107.46 127.42
12/31/93 123.81 116.68 154.91
12/31/94 80.95 113.75 157.16
12/31/95 38.09 151.74 168.21
12/31/96 30.95 180.33 227.98
(1) Does not reflect the purchase of 3.6 million outstanding shares
of Common Stock pursuant to a self tender offer at $11.00 per share
completed on January 19, 1995.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information known to Swing-N-
Slide with respect to beneficial ownership of Common Stock as of April 1,
1997, except as otherwise noted, by (i) each stockholder known by Swing-N-
Slide to be the beneficial owner of more than 5% of the Common Stock, (ii)
each director or nominee for director of Swing-N-Slide, (iii) each Named
Executive Officer, and (iv) all executive officers and directors as a
group. Except as otherwise noted, the persons named in this table have
sole voting and investment power with respect to all shares of Common
Stock beneficially owned by them.
5% Stockholders, Directors, Named Shares Beneficially Owned
Executive Officers, and Directors
and Executive Officers as a Group(1) Number Percent of Class
Curtis A. Cole (2) 16,152 *
David S. Evans (3) 5,821,221 70.6%
GreenGrass Holdings and Related
Parties (4) 5,821,221 70.6%
GGC (4,574,193 shares - 55.5%) (5)(7)(8)
GGCII (1,137,405 shares - 13.8%) (6)(7)(8)
GGM ( 109,623 shares - 1.3%) (9)
George N. Herrera (10) 5,000 *
Timothy R. Kelleher (11) 5,821,221 70.6%
Terence S. Malone (12) 12,897 *
Massachusetts Mutual Life Ins. Co. (13) 587,513 7.9%
Gary A. Massel 0 0
Richard G. Mueller (14) 121,836 1.7%
Richard E. Ruegger (15) 16,152 *
Caroline L. Williams (16) 5,826,221 70.6%
All executive officers and directors as a 6,018,024 71.3%
group (11 persons) (17)
_______________________________
*Less than 1%
(1) Except as otherwise indicated, the address of each stockholder is c/o
Swing-N-Slide Corp., 1212 Barberry Drive, Janesville, Wisconsin
53545.
(2) Consists of 16,152 shares issuable upon the exercise of stock options
which are currently exercisable. Excludes 4,016 shares of Common
Stock and Debentures convertible into 1,241 shares of Common Stock
held by GreenGrass Holdings which securities, as a member of GGM, Mr.
Cole may be deemed to beneficially own because Mr. Cole would receive
such securities under certain circumstances (including upon
termination of his employment). Mr. Cole expressly disclaims
beneficial ownership of any other securities of Swing-N-Slide held by
GreenGrass Holdings because he neither is a controlling member of GGM
nor has investment control of the portfolio securities of either GGM
or GreenGrass Holdings.
(3) As one of the three persons appointed to the Members Operating Board
of GGC, Mr. Evans has shared control of the voting and investment
making decisions of GreenGrass Holdings, which owns 4,665,335 shares
of Common Stock, Debentures convertible into 1,105,886 shares of
Common Stock, and a warrant to purchase 50,000 shares of Common
Stock. Of such securities, Mr. Evans would be entitled to receive
from GreenGrass Holdings 12,707 shares of Common Stock, Debentures
convertible into 3,684 shares of Common Stock, and a warrant to
purchase 86 shares of Common Stock under certain circumstances as
a result of his ownership of limited partnership interests in
Glencoe Fund and Glencoe Growth Partners, L.P., and his ownership of
stock in GIC. The address of Mr. Evans is c/o Glencoe Investment
Corporation, 311 South Wacker Drive, Suite 4990, Chicago, Illinois
60606.
(4) The address of GreenGrass Holdings is c/o Glencoe Investment
Corporation, 311 South Wacker Drive, Suite 4990, Chicago, Illinois
60606. Includes 4,665,335 shares of Common Stock, Debentures
convertible into 1,105,886 shares of Common Stock, and a warrant to
purchase 50,000 shares of Common Stock. Excludes shares of Common
Stock that GreenGrass Holdings will receive as interest on the Bridge
Note. The general partners of GreenGrass Holdings consist of GGC,
GGCII, and GGM. Of the 4,665,335 shares of Common Stock owned by
GreenGrass Holdings, 3,494,190 shares are beneficially owned by GGC,
1,087,405 shares are beneficially owned by GGCII, and 83,740 shares
are beneficially owned by GGM. Of the 1,105,886 shares which
GreenGrass Holdings would receive upon conversion of Debentures,
1,080,003 shares would be beneficially owned by GGC and 25,883 shares
would be beneficially owned by GGM. The 50,000 shares which
GreenGrass Holdings would receive upon exercise of the warrant would
be beneficially owned by GGCII.
(5) The members of GGC are the following institutional investors:
Glencoe Fund, ELI-II, the Michigan Trusts, Crescent, Sahara, and
Baldwin.
(6) The members of GGCII are the following institutional investors:
Glencoe Growth, ELI-II, Baldwin, the Michigan Trusts, and MassMutual.
(7) ELI-II is a member of both GGC and GGCII. The general partner of
ELI-II is Rohit M. Desai Associates-II ("RMDA-II"). RMDA-II is a New
York general partnership and Rohit M. Desai is the managing partner
of RMDA-II. The investment advisor of ELI-II is DCMI. ELI-II may be
deemed to beneficially own 2,114,169 shares of Common Stock held by
GreenGrass Holdings (which represents approximately 25.6% of the
outstanding shares of Common Stock and includes 1,687,846 shares of
Common Stock held by GreenGrass Holdings, 409,656 shares of Common
Stock issuable upon conversion of Debentures held by GreenGrass
Holdings, and 16,667 shares of Common Stock issuable upon the
exercise of the warrant held by GreenGrass Holdings which it may be
entitled to receive under certain circumstances as a member of GGC
and GGCII). RMDA-II (as the general partner of ELI-II), DCMI (as the
investment advisor to ELI-II), and Rohit M. Desai each may be deemed
to be the beneficial owner of securities beneficially owned by ELI-
II. The address of ELI-II and its affiliates identified above is 540
Madison Avenue, 36th Floor, New York, New York 10022.
(8) The Michigan Trusts are members of both GGC and GGCII. As a result,
the Michigan Trusts may be deemed to beneficially own 2,114,169
shares of Common Stock held by GreenGrass Holdings (which represents
approximately 25.6% of the outstanding shares of Common Stock and
includes 1,687,846 shares of Common Stock held by GreenGrass
Holdings, 409,656 shares of Common Stock issuable upon conversion of
Debentures held by GreenGrass Holdings, and 16,667 shares of Common
Stock issuable upon the exercise of the warrant held by GreenGrass
Holdings which they may be entitled to receive under certain
circumstances as members of GGC and GGCII). The address of the
Michigan Trusts is 430 West Allegan Street, Lansing, Michigan 48901.
(9) The members of GGM are the following former and current officers of
Swing-N-Slide: Messrs. Mueller, Ruegger, Cole, Hammelman, Beebe and
Jonas.
(10) Consists of 5,000 shares of Common Stock issuable upon exercise of
stock options which are currently exercisable.
(11) As one of the three persons appointed to the Members Operating Board
of GGC, Mr. Kelleher has shared control of the voting and investment
making decisions of GreenGrass Holdings, which owns 4,665,335 shares
of Common Stock, Debentures convertible into 1,105,886 shares of
Common Stock, and a warrant to purchase 50,000 shares of Common
Stock. The address of Mr. Kelleher is c/o Desai Capital Management
Incorporated, 540 Madison Avenue, 36th Floor, New York, New York
10022.
(12) Consists of 247 shares of Common Stock and 12,650 shares issuable
upon the exercise of stock options which are currently exercisable.
(13) The address of MassMutual is 1295 State Street, Springfield, MA
01111-0001. Includes 277,583 shares of Common Stock issuable upon
the exercise of warrants which are currently exercisable, and 38,465
shares issuable upon the exercise of a warrant held by MassMutual
Corporate Value Partners Limited (of which an affiliate of MassMutual
is a partner), which warrant is currently exercisable. Also includes
259,531 shares of Common Stock and 11,934 shares issuable upon the
exercise of a warrant held by GreenGrass Holdings which securities,
as a member of GGCII, MassMutual may be deemed to beneficially own
because it would receive such securities under certain circumstances.
MassMutual disclaims beneficial ownership of any other securities of
Swing-N-Slide held by GreenGrass Holdings because it neither is a
controlling member of GGCII nor has investment control of the
portfolio securities of either GGCII or GreenGrass Holdings. Also
excludes 276,129 shares issuable upon the exercise of warrants held
by certain of its affiliates, including MassMutual Corporate
Investors, MassMutual Participating Investors, and MassMutual
Corporate Value Partners Limited, because the investments of such
affiliates are held for the benefit of unrelated third parties.
(14) Consists of 120,000 shares of Common Stock issuable upon the exercise
of stock options which are currently exercisable and 1,836 shares
held through an IRA. Excludes 83,740 shares of Common Stock and
Debentures convertible into 25,883 shares of Common Stock which Mr.
Mueller may be deemed to beneficially own as sole manager and the
controlling member of GGM, which indirectly beneficially owns the
securities as a general partner of GreenGrass Holdings, including up
to 34,385 shares of Common Stock and Debentures convertible into
10,628 shares of Common Stock held by GreenGrass Holdings which
securities, as a member of GGM, Mr. Mueller would receive under
certain circumstances (including upon termination of his employment).
Mr. Mueller disclaims beneficial ownership of these securities except
to the extent of his pecuniary interest therein.
(15) Consists of 16,152 shares of Common Stock issuable upon the exercise
of stock options which are currently exercisable. Excludes 32,885
shares of Common Stock and Debentures convertible into 10,165 shares
of Common Stock held by GreenGrass Holdings which securities, as a
member of GGM, Mr. Ruegger may be deemed to beneficially own because
Mr. Ruegger would receive such securities under certain circumstances
(including upon termination of his employment). Mr. Ruegger
expressly disclaims beneficial ownership of any other securities of
Swing-N-Slide held by GreenGrass Holdings because he is not the
controlling member of GGM with investment control of the portfolio
securities of either GGM or GreenGrass Holdings.
(16) Includes 5,000 shares of Common Stock issuable upon exercise of stock
options which are currently exercisable. In addition, as one of the
three persons appointed to the Members Operating Board of GGC, Ms.
Williams has shared control of the voting and investment making
decisions of GreenGrass Holdings, which owns 4,665,335 shares of
Common Stock, Debentures convertible into 1,105,886 shares of Common
Stock, and a warrant to purchase 50,000 shares of Common Stock. Of
such securities, Ms. Williams would be entitled to receive 11,244
shares of Common Stock, Debentures convertible into 2,454 shares
of Common Stock, and a warrant to purchase 152 shares of Common
Stock under certain circumstances as a result of her ownership of
limited partnership interests in Glencoe Fund and Glencoe Growth.
The address of Ms. Williams is 417 Park Avenue, New York, New York
10022.
(17) This group is comprised of the following executive officers: Messrs.
Caldwell, Cole, Hammelman, Mueller, and Ruegger; and the following
non-employee directors: Ms. Williams and Messrs. Evans, Herrera,
Kelleher, Malone and Massel. Includes Debentures convertible into
1,105,886 shares of Common Stock and a warrant to purchase 50,000
shares of Common Stock, all of which are held by GreenGrass Holdings,
and 194,630 shares issuable to certain executive officers and
directors upon the exercise of stock options which are currently
exercisable.
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP has been recommended by the Audit Committee of the
Board of Directors for reappointment as the independent auditors for
Swing-N-Slide for the fiscal year ending December 31, 1997. Ernst & Young
LLP has served as Swing-N-Slide's independent auditors since inception in
January 1992, and served as the predecessor company's independent auditors
since June 1990. Subject to stockholder approval, the Board of Directors
has appointed this firm as Swing-N-Slide's independent auditors for the
year 1997.
Representatives of Ernst & Young LLP are expected to be present at
the annual meeting with an opportunity to make a statement if they so
desire and are expected to be available to respond to appropriate
questions.
OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Swing-
N-Slide's executive officers, directors, and more than 10 percent
stockholders to file with the Securities and Exchange Commission reports
on prescribed forms of their ownership and changes in ownership of Common
Stock and furnish copies of such forms to Swing-N-Slide. Swing-N-Slide
believes that during and with respect to the fiscal year ended December
31, 1996, all reports required by Section 16(a) to be filed by Swing-N-
Slide's officers, directors and more than 10 percent stockholders were
filed on a timely basis, except as set forth below. Thomas R. Baer, who
resigned as a director of Swing-N-Slide in August 1996, inadvertently
filed one report late with respect to nine separate transactions involving
the sale of Common Stock held by a trust for the benefit of his children.
Joseph E. Beebe, who resigned as an officer of Swing-N-Slide in March
1996, inadvertently filed one late report involving his indirect interest
in the Common Stock and Debentures acquired by GreenGrass Holdings. Mr.
Malone filed one late report with respect to one transaction, which
involved the sale of Common Stock as part of the GreenGrass Holdings
tender offer. Messrs. Bear, Herrera and Malone and Ms. Williams filed one
late report each with respect to the automatic grant of options to them as
non-employee directors under the 1996 Stock Plan. Finally, each of
GreenGrass Holdings, GGC, GGM, and certain of the former and current
members of GGM (namely, Messrs. Mueller, Ruegger, Cole, Hammelman,
Rastetter, and Zeilinger) filed one late report with respect to the
issuance by Swing-N-Slide of Debentures to GreenGrass Holdings as the
payment of interest on Debentures previously acquired by GreenGrass
Holdings.
Information About the Solicitation
The Board of Directors of Swing-N-Slide does not know of any matters
which may be presented at the meeting other than those specifically set
forth in the Notice of Annual Meeting. If any other matters come before
the meeting or any adjournments or postponements thereof, the persons
named in the accompanying form of proxy will vote in accordance with their
best judgment with respect to such matters.
The expense of the Board of Directors' proxy solicitation will be
borne by Swing-N-Slide. In addition to the use of the mails, proxies may
be solicited by personal interview or by telephone. Banks, brokerage
houses and other institutions will be requested to forward the soliciting
material to beneficial owners and to obtain authorization for the
execution of proxies; and, if they in turn so request, Swing-N-Slide will
reimburse such banks, brokerage houses and other institutions, nominees
and fiduciaries for their expenses in forwarding such material.
Directors, officers and regular employees of the Company may also solicit
proxies without additional remuneration therefor. Swing-N-Slide's
transfer agent, First Chicago Trust Company of New York, will aid in the
solicitation of proxies and, in addition to its annual retainer of
$20,000, will be reimbursed for out-of-pocket expenses.
Stockholders are urged to sign the accompanying form of proxy,
solicited on behalf of the Board of Directors of Swing-N-Slide, and return
it at once in the envelope provided for that purpose. Proxies will be
voted in accordance with the stockholders' directions. If no directions
are given, proxies will be voted "For" the election of the nominees for
directors set forth in this Proxy Statement and "For" the appointment of
Ernst & Young LLP as independent auditors. The proxy does not affect the
right to vote in person at the meeting and may be revoked at any time
before it is voted by written notice of revocation given to the Secretary
of Swing-N-Slide.
Proxies, ballots and voting tabulations identifying stockholders are
kept private and will not be available to anyone except as actually
necessary to meet legal requirements. Access to proxies and other
individual stockholder voting records is limited to the inspectors of
election appointed by Swing-N-Slide and certain of Swing-N-Slide's
employees who must acknowledge in writing their responsibility to comply
with this policy of confidentiality.
Vote Required for Approval
The presence at the annual meeting, in person or by proxy, by holders
of a majority of the shares of Common Stock entitled to vote shall
constitute a quorum. Shares will be voted as instructed in the
accompanying proxy on every matter submitted to the stockholders.
Pursuant to applicable Delaware law, only votes cast "For" a matter
constitute affirmative votes. Shares represented by proxies indicating
"Withhold Authority" to vote for one or more nominees will be counted as
present for purposes of determining a quorum but as not entitled to vote,
and not voted, for the nominee(s) for which voting authority is withheld.
Shares represented by proxies indicating "Abstain" as to a matter will be
counted as present for purposes of determining a quorum and as entitled to
vote with respect to that matter. Abstentions will have the effect of a
vote "Against" the item. Shares voted by a broker on a routine matter or
matters (such as election of directors or approval of auditors) but as to
which the broker indicates it lacks authority to vote on non-routine
matters will be counted as present for purposes of determining a quorum
and as entitled to vote, and voted, with respect to the routine matter(s),
but not entitled to vote, and not voted, with respect to the non-routine
matter(s). Shares as to which a broker indicates it lacks authority to
vote, or shares which the broker does not vote, will not be counted as
present for purposes of determining a quorum.
The seven nominees for director receiving a plurality of the votes
cast at the meeting in person or by proxy shall be elected. All other
matters require for approval the affirmative vote of a majority of the
shares of Common Stock represented and voted at the meeting in person or
by proxy. GreenGrass Holdings, as the holder of record of 66% of the
voting Common Stock, has indicated that it intends to vote "For" the seven
nominees for directors and "For" the appointment of Ernst & Young LLP as
independent auditors for 1997.
Stockholder Proposals
Proposals of stockholders intended to be included in Swing-N-Slide's
proxy statement for the 1998 annual meeting of stockholders must be
received by Swing-N-Slide no later than Wednesday, January 7, 1998. In
addition, pursuant to Swing-N-Slide's Bylaws, a stockholder must notify
Swing-N-Slide of proposals the stockholder wishes to bring before an
annual meeting no less than 60 nor more than 90 days prior to the first
anniversary of the preceding year's annual meeting (subject to certain
exceptions).
<PAGE>
EXHIBIT A
EXECUTIVE OFFICERS OF THE COMPANY
The following individuals are the current executive officers of the
Company, who are elected annually by the Board of Directors to serve until
the next annual election of officers and until their respective successors
have been elected and have qualified unless removed by the Board of
Directors.
Name Age Position
Richard G. Mueller 47 Chairman of the Board of
Directors and President and
Chief Executive Officer. See
"Election of Directors" on
page 1 of the Proxy Statement.
John E. Caldwell 54 President of the Swing-N-Slide
Division of Newco since
December 1996. From 1990 to
November 1996, Mr. Caldwell
was the President of the
Retail Division of Curtis
Industries Inc. (manufacturer
of nuts, bolts and keys).
Richard E. Ruegger 37 Vice President-Finance,
Secretary and Treasurer since
January 1992 and Chief
Financial Officer since June
1992.
Curtis A. Cole 52 Vice President-Operations
since August 1996, and prior
to such date was Vice
President Distribution/General
Manager Fabrication Division
since September 1993. Vice
President-Manufacturing of
Newco Fabricating, a division
of Newco, from April 1991 to
September 1993.
David H. Hammelman 42 Vice President Human Resources
and Administration since July
1995 and prior to such date
was Director of Human
Resources and Administration
since October 1993. Director
of Human Services of Brach Van
Houten, Andes Candies Division
(candy manufacturing) from
October 1992 through October
1993 and Employee Relations
Manager of Pepsico, Frito-Lay
division (snack food
manufacturing) from 1984
through September 1992.
<PAGE>
SWING-N-SLIDE CORP.
1212 Barberry Drive
Janesville, Wisconsin 53545
PROXY
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 21, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby constitutes and appoints Richard G. Mueller,
Richard E. Ruegger and David S. Evans, and each of them, his or her true
and lawful agents and proxies with full power of substitution in each,
acting by the majority of those present and voting, or if only one is
present and voting, then that one, to vote the Common Stock of Swing-N-
Slide Corp. which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of Swing-N-Slide Corp. to be held at the offices
of its GameTime Division located at 150 GameTime Drive, Fort Payne,
Alabama 35967 on Wednesday, May 21, 1997 at 10:00 a.m., local time, and at
any adjournment or postponement thereof, on the following matters:
1. ELECTION OF DIRECTORS:
[_] FOR all nominees listed below (except as marked for any nominee
listed to the contrary below).
[_] WITHHOLD AUTHORITY to vote for all nominees.
Nominees: Richard G. Mueller, David S. Evans, George N.
Herrera, Timothy R. Kelleher, Terence S. Malone, Gary A. Massel
and Caroline L. Williams.
(INSTRUCTION: to withhold authority to vote for any nominee,
write that nominee's name in the space provided below.)
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2. PROPOSAL TO APPROVE ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT
AUDITORS:
[_] FOR
[_] AGAINST
[_] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
This proxy when properly executed will be voted in the manner
directed hereon. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2.
NOTE: Please date and sign exactly as name appears herein. Joint
owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If
the signer is a corporation, please sign full corporate name by duly
authorized officer. If a partnership, please sign in partnership name by
authorized person.
-------------------------------------------------------------
1997
-------------------------------------------------------------
Signature(s) Date
