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(3)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PLAYCORE, 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):
[X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-
11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form Schedule or Registration Statement No.:
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4) Date Filed:
<PAGE>
PLAYCORE, INC.
1212 Barberry Drive
Janesville, Wisconsin 53545
May 1, 1998
Dear Stockholder:
On behalf of PlayCore, Inc. ("PlayCore"), I cordially invite you
to attend the annual meeting of stockholders on Thursday, June 4, 1998, in
the Oak Room at the Metropolitan Club, 233 S. Wacker Drive, Sears Tower,
66th Floor, Chicago, Illinois 60606, at 10:00 a.m., local time. PlayCore
was formerly known as "Swing-N-Slide Corp." prior to its April 1998 name
change.
At the annual meeting, stockholders will vote on the election of
seven persons to the Board of Directors. 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 presentation and overview of PlayCore's businesses and our
plans for the future.
The directors and officers of PlayCore would like as many
stockholders as possible to be in attendance at the meeting. This meeting
will highlight the many exciting changes that are occurring at our
company.
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 continued support and interest in PlayCore.
Sincerely yours,
Frederic L. Contino
President and
Chief Executive Officer
<PAGE>
PLAYCORE, INC.
1212 Barberry Drive
Janesville, Wisconsin 53545
May 1, 1998
To the Holders of Common Stock of
PlayCore, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders of PlayCore, Inc.
("PlayCore") will be held on Thursday, June 4, 1998, at 10:00 a.m., local
time, in the Oak Room at the Metropolitan Club, 233 S. Wacker Drive, Sears
Tower, 66th Floor, Chicago, Illinois 60606 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; and
2. To transact such other business as may properly come before such
meeting or any adjournment or postponement thereof.
Stockholders of record at the close of business on April 22,
1998, will be entitled to vote at the meeting and any adjournment or
postponement thereof.
A copy of PlayCore's Annual Report to Stockholders for the year
ended December 31, 1997, is enclosed.
PlayCore was formerly known as "Swing-N-Slide Corp." prior to
its April 1998 name change.
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>
PLAYCORE, INC.
1212 Barberry Drive
Janesville, Wisconsin 53545
(608) 755-4768
May 1, 1998
PROXY STATEMENT
For
ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 4, 1998
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors of PlayCore, Inc. ("PlayCore") of
proxies to be used in voting at the annual meeting of stockholders to be
held in the Oak Room at the Metropolitan Club, 233 S. Wacker Drive, Sears
Tower, 66th Floor, Chicago, Illinois 60606, on Thursday, June 4, 1998, 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. PlayCore was formerly known as "Swing-N-Slide Corp."
prior to its April 1998 name change.
Stockholders whose names appear of record on the books of
PlayCore at the close of business on April 22, 1998, will be entitled to
vote at the meeting and at any adjournment or postponement thereof. On
the record date for the meeting, PlayCore had outstanding and entitled to
vote 7,908,964 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 1, 1998 to stockholders of
record as of the close of business on April 22, 1998.
ELECTION OF DIRECTORS
The Board of Directors currently consists of seven members.
Seven directors of PlayCore 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 PlayCore and are nominees for re-election. All
nominees are also directors of Newco, Inc., PlayCore's wholly-owned
operating subsidiary ("Newco", and together with PlayCore, the "Company").
Information as to the directors' 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 22, 1998,
about the nominees for re-election as directors:
Terence S. Malone, age 68, has served as a director of PlayCore
since September 1992 and Chairman since September 1997. Mr. Malone served
as Acting Chief Executive Officer of PlayCore from September 1997 to
January 1998. Mr. Malone was Chairman and Chief Executive Officer of
Johnson Worldwide Associates, Inc. (international manufacturer and
marketer of outdoor recreational products) from 1986 until his retirement
in January 1994.
Frederic L. Contino, age 47, has served as a director of
PlayCore and President and Chief Executive Officer of PlayCore since
January 1998. Mr. Contino was President of Anchor Hocking Plastics and
Plastics, Inc., divisions of Newell Companies (diversified manufacturers
of consumer home products), from January 1993 to January 1998. Mr.
Contino served as Vice President-Merchandising for Anchor Hocking's glass
division from May 1988 to January 1993.
David S. Evans, age 34, has served as a director of PlayCore
since February 1996. Mr. Evans has been President and Chief Executive
Officer of Glencoe Capital, L.L.C. (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 64, has served as a director of PlayCore
since February 1996. Mr. Herrera has been Director of International Sales
of Masco Corporation (diversified manufacturer of home products) since
1982.
Timothy R. Kelleher, age 35, has served as director of PlayCore
since April 1996. Mr. Kelleher has been Vice-President of Desai Capital
Management Incorporated (investment management 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.
Gary A. Massel, age 58, has served as a director of PlayCore
since September 1996. Mr. Massel has been Vice President-Logistics of
Boise Cascade Office Products since September 1997. From August 1995 to
September 1997, Mr. Massel was 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 51, has served as a director of
PlayCore since February 1996. Ms. Williams has been Chair of Glencoe
Capital, L.L.C. since January 1998. Ms. Williams was an independent
consultant and director of various corporations from January 1992 through
December 1997. 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 Hearst-Argyle Television, Inc.
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
and Massel (Chairman). 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 review such audit results. Ernst & Young LLP presently
serves as the independent auditors of the Company. The Audit Committee
met two times during 1997.
Compensation Committee
The Compensation Committee is currently comprised of Mr. Evans
and Ms. Williams (Chair). 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 the Company. The Compensation Committee met two times during
1997.
Executive Committee
The Executive Committee is currently comprised of Messrs.
Contino, Evans (Chairman), Kelleher and Malone. The Executive Committee
has the authority to exercise all of the powers of the Board during
intervals between meeting of the Board. The Executive Committee met six
times during 1997.
Directors' Attendance
The Board of Directors of Swing-N-Slide held four meetings in
1997. Each director attended not less that 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 PlayCore who is not an employee of
GreenGrass Capital LLC, a Delaware limited liability company ("GGC"), or
any of its affiliates ("Non-affiliated Directors"), receives an annual
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. In addition, beginning in 1998 any
Non-affiliated Director who serves as the Chairman of the Board receives
an annual retainer of $5,000, as chairman of a standing committee of the
Board receives an annual retainer of $3,000 and as a committee member of a
standing committee of the Board receives an annual retainer of $1,000.
All directors are reimbursed for out-of-pocket costs related to PlayCore's
business. No additional compensation is paid to directors for serving on
Newco's Board of Directors.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information with respect
to compensation earned in the last three completed fiscal years by Mr.
Malone, Chairman of the Board and Acting Chief Executive Officer at
December 31, 1997, Mr. Mueller, former Chairman, President and Chief
Executive Officer, Mr. Caldwell, President of the Swing-N-Slide Division
of Newco, Mr. Hammelman, Vice President-Human Resources and Administration
and Mr. Ruegger, Vice President-Finance and Chief Financial Officer, the
only executive officers whose salary and bonus exceeded $100,000 during
the most recently completed fiscal year (the "Named Executive Officers").
A list of all current executive officers of the Company is attached hereto
as Exhibit A.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Other Securities
Annual Underlying All Other
Salary Bonus Comp. Options Compensation
Name and Principal Position Year ($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
Terence S. Malone 1997 $80,000 - (1) 39,284 $-
Chairman and Acting Chief 1996 - - (1) 5,000 -
Executive Officer at 1995 - - (1) 1,550 -
December 31, 1997
Richard G. Mueller 1997 $170,786 - (1) 287,207 $58,510(2)
Former President and Chief 1996 207,906 $24,000 (1) 120,000 181,763
Executive Officer 1995 211,872 72,288 (1) 100,000 6,805
John E. Caldwell 1997 $159,423 $35,000 (1) 100,000 $63,728(3)
President of the Swing-N-Slide 1996 8,942 1,431 (1) - -
Division of Newco 1995 - - (1) - -
David H. Hammelman 1997 $93,961 $ 8,000 (1) 78,219 $3,947(4)
Vice President-Human Resources 1996 86,283 12,809 (1) 14,676 4,137
and Administration 1995 79,670 21,350 (1) 12,230 3,481
Richard E. Ruegger 1997 $104,077 $ 9,000 (1) 164,046 $4,695(4)
Vice President-Finance and Chief 1996 90,540 13,309 (1) 16,152 3,622
Financial Officer 1995 86,316 22,960 (1) 13,460 3,912
_______________
(1) The Company also provides its Named Executive Officers certain additional non-cash benefits that are not
described in this Proxy Statement because such compensation is below the Securities and Exchange
Commission's required disclosure thresholds.
(2) The Compensation reported is comprised of $6,010 of matching contributions made by the Company pursuant
to its 401(k) plan and a $52,500 severance payment made in connection with Mr. Mueller's resignation
from the Company.
(3) The compensation reported is comprised of $3,200 of matching contributions made by the Company pursuant
to its 401(k) plan and $60,528 of relocation expenses paid by the Company in connection with Mr.
Caldwell's December 1996 employment by the Company.
(4) The compensation reported is comprised of matching contributions made by the Company pursuant to its
401(k) plan.
</TABLE>
Stock Option Grants
<TABLE>
The following table shows option grants in 1997 to the Named Executive Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Individual Grants
Number of % of Total Potential Realizable Value
Securities Options at Assumed Annual Rate
Underlying Granted to of Stock Price
Options Employees Exercise or Appreciation for Option
Granted in Fiscal Base Price Expiration Term(1)
Name # Year ($/Sh) Date 5% 10%
<S> <C> <C> <C> <C>
Terence S. Malone 30,000(2) 3.0% $4.75 12/31/2002 $39,370 $86,998
5,000(3) 0.5% 4.00 04/25/2006 11,027 27,159
1,708(4) 0.2% 5.38 01/24/2003 3,125 7,090
1,708(4) 0.2% 5.38 04/27/2005 4,387 10,508
868(4) 0.1% 5.38 02/14/2005 2,230 5,340
Richard G. Mueller 67,207(4) 6.7% $3.70 02/26/2006 $137,097 $337,675
55,000(5) 5.5% 7.00 05/20/2007 242,124 613,591
55,000(6) 5.5% 8.00 05/20/2007 276,714 701,247
55,000(7) 5.5% 9.25 05/20/2007 319,950 810,816
55,000(8) 5.5% 10.63 05/20/2007 367,683 931,782
John E. Caldwell 20,000(9) 2.0% $4.67 02/28/2007 $58,739 $148,856
20,000(5) 2.0% 7.00 05/20/2007 88,045 223,124
20,000(6) 2.0% 8.00 05/20/2007 100,623 254,999
20,000(7) 2.0% 9.25 05/20/2007 116,346 294,842
20,000(8) 2.0% 10.63 05/20/2007 133,703 338,830
David H. Hammelman 17,500(5) 1.7% $7.00 05/20/2007 $67,538 $166,349
17,500(6) 1.7% 8.00 05/20/2007 88,045 223,124
17,500(7) 1.7% 9.25 05/20/2007 101,802 257,987
17,500(8) 1.7% 10.63 05/20/2007 116,990 296,476
8,219(4) 0.8% 3.70 02/26/2006 19,125 48,466
Richard E. Ruegger 38,750(5) 3.8% $7.00 05/20/2007 $149,548 $368,343
38,750(6) 3.8% 8.00 05/20/2007 194,957 494,060
38,750(7) 3.8% 9.25 05/20/2007 225,419 571,257
38,750(8) 3.8% 10.63 05/20/2007 259,050 656,482
9,046(4) 0.9% 3.70 02/26/2006 21,049 53,343
_______________
(1) This presentation is intended to disclose the potential value that would accrue to the optionee if the option were
exercised the day before it expires and if the per share value has appreciated at the compound 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 Common Stock.
(2) Options granted to Mr. Malone per his interim CEO consulting agreement dated September 2, 1997. These options are all
exercisable fully vested and non-terminable.
(3) Options granted to Mr. Malone as a director of the Company. These options are all exercisable, fully vested and
non-terminable.
(4) Options granted under the anti-dilution provisions of the 1992 Stock Program. These options are all exercisable, fully
vested and non-terminable.
(5) Options granted under the 1996 Incentive Stock Plan. These options vested on February 1, 1998 and will terminate ninety
days after the individual's employment with the Company is terminated.
(6) Options granted under the 1996 Incentive Stock Plan. These options will vest on February 1, 1999 and will terminate
ninety days after the individual's employment with the Company is terminated.
(7) Options granted under the 1996 Incentive Stock Plan. These options will vest on February 1, 2000 and will terminate
ninety days after the individual's employment with the Company is terminated.
(8) Options granted under the 1996 Incentive Stock Plan. These options will vest on February 1, 2001 and will terminate
ninety days after the individual's employment with the Company is terminated.
(9) Twenty-five percent of these options are exercisable 12 months after the March 1, 1997 grant date and an additional 25%
of the options become exercisable after each successive anniversary thereof, with full vesting occurring after the fourth
anniversary of such date.
</TABLE>
1997 Year-End Option Value
Set forth below is certain information regarding the number and
value of unexercised stock options held by the Named Executive Officers at
the end of 1997. No options were exercised by the Named Executive
Officers in 1997.
<TABLE>
Aggregated Option Exercises in 1997 and
1997 Year-End Option/SAR Values
<CAPTION>
Shares Number of Securities Underlying Value of Unexercised
Acquired on Unexercised Options at In-The-Money Options at
Exercise in December 31, 1997 December 31, 1997(4)
Name 1997 Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C>
Terence S. Malone 0 51,934 0 $ 5,430 $0
Richard G. Mueller (1) 150,000(2) 220,000(3) 45,000 0
John E. Caldwell 0 5,000 95,000 0 0
David H. Hammelman 0 22,895 70,000 6,869 0
Richard E. Ruegger 0 25,198 155,000 7,559 0
_______________
(1) The Company repurchased 37,207 of Mr. Mueller's exercisable options for an aggregate price of $39,067 in November
1997 in connection with Mr. Mueller's resignation from the Company.
(2) The Company repurchased 50,000 of Mr. Mueller's exercisable options at an aggregate price of $52,500 in January
1998 pursuant to arrangements made at the time of Mr. Mueller's resignation from the Company.
(3) All of such options expired in accordance with their terms in February 1998 as a result of Mr. Mueller's
resignation from the Company.
(4) For valuation purposes the amounts shown are based upon the December 31, 1997 $4.00 closing sale price per share
of the Common Stock on the American Stock Exchange.
</TABLE>
Agreements With Executive Officers
PlayCore entered into an Employment Agreement in January 1998
with Mr. Contino that sets forth certain terms and conditions of his
employment with PlayCore. The Employment Agreement runs for three years
and automatically extends from year to year thereafter unless terminated
prior to any such extension. The Employment Agreement provides for an
annual base salary of $300,000, subject to increases each year at the
discretion of the Board of Directors, and for an annual bonus based
generally upon increases in PlayCore's earnings before interest, taxes,
depreciation and amortization ("EBITDA"). The Employment Agreement also
provides for the grant of options to purchase an aggregate of 375,000
shares of Common Stock, of which options to purchase approximately 200,000
shares do not vest unless or until the Company's Common Stock trades above
certain prices, and the remainder of such options vest in stages on each
anniversary of the date of the Employment Agreement through 2001. In the
event Mr. Contino is terminated without cause, in addition to certain
other benefits, (i) his annual base salary continues for a minimum of two
years if such termination occurs before July 1999, and a minimum of one
year, subject to extension to up to two years if certain financial goals
have been achieved by the Company, after July 1999, and (ii) he is
entitled to certain bonus replacement payments if certain levels of EBITDA
have been achieved prior to such termination. If such termination occurs
in connection with a change of control, in certain circumstances Mr.
Contino may be entitled to certain additional payments, the amount of
which is generally based upon the bonus paid to Mr. Contino in the
previous year. The Employment Agreement also provides for certain
perquisites and benefits commensurate with Mr. Contino's employment as
President and Chief Executive Officer of the Company. The Employment
Agreement contains provisions requiring Mr. Contino to keep certain
information with respect to the Company confidential during his employment
and for two years thereafter and provisions providing that Mr. Contino
will not compete with the Company's business for 18 months following any
termination of his employment.
In connection with Mr. Mueller's resignation in September 1997,
PlayCore entered into a letter agreement with Mr. Mueller to set forth
certain terms of his severance arrangements. Pursuant to this letter
agreement, the Company agreed to pay Mr. Mueller compensation of
approximately $46,000 immediately, and approximately $250,000 not later
than January 1998. The Company also agreed to pay $24,000, representing
Mr. Mueller's performance bonus for the year ended December 31, 1996, and
to provide Mr. Mueller and his dependents with coverage under the
Company's various group insurance plans through April 2000. The Company
also agreed to purchase 34,305 shares of Common Stock held by GreenGrass
Management LLC and GreenGrass Holdings LLC of which Mr. Mueller was
beneficial owner for an aggregate of approximately $163,000, and also
agreed to immediately redeem options held by Mr. Mueller with respect to
37,207 shares of Common Stock at an aggregate price of approximately
$39,000 and to redeem not later than January 1998 options held by Mr.
Mueller with respect to 50,000 shares of Common Stock for an aggregate
price of approximately $52,000. Finally, the Company agreed to provide
Mr. Mueller with certain individual executive outplacement services
through a third party vendor for one year. Mr. Mueller reaffirmed his
previously obligations under a covenant not to compete with the Company's
business for one year after his resignation, and a covenant to keep
certain information with respect to the Company confidential after his
employment.
The Company entered into Severance and Change of Control
Agreements with Messrs. Hammelman and Ruegger on February 15, 1996 and
with Mr. Caldwell on December 1, 1996. Under the terms of the Severance
and Change of Control Agreement, in the event that any such person's
employment is terminated by the Company without cause or by such employee
with "good reason," such employee shall be entitled to the continuation of
their salary and their benefits under the Company's group insurance plans
for twelve months after such termination (the "Severance Period"), and if
such termination occurs after a change of control, then the Severance
Period is 18 months. "Good reason" includes, among other things, any
reduction or material change in the employee's salary, a material
reduction in perquisites, relocation of the employee, and certain events
associated with a change of control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Compensation Committee are Mr. Evans
and Ms. Williams. 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
Compensation Committee.
Ms. Williams is Chair of, and Mr. Evans is a stockholder and
director and the President and Chief Executive Officer of, Glencoe
Capital, L.L.C. ("GCL"), 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
68% of the outstanding shares of Common Stock. Ms. Williams and Mr. Evans
are also members of the three person 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 Consulting Services
Under the terms of the Management Consulting Agreement dated
February 16, 1996, PlayCore pays to GCL and Desai Capital Management
Incorporated ("DCMI"), affiliates of two GGC institutional investors,
consulting fees 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 PlayCore.
Agreement with respect to Acquisition Advisory Services
Under the terms of an engagement letter dated September 6, 1996,
GCL and DCMI agreed to act as acquisition advisors to PlayCore with
respect to two potential acquisitions (the "Acquisitions"). In this
regard, GCL and DCMI agreed to provide advice to PlayCore 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, PlayCore agreed to pay to GCL 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 of value for either of
the Acquisitions consummated by PlayCore. Playcore also agreed to
reimburse GCL and DCMI for certain expenses incurred by them in performing
such services. The aggregate amount paid by PlayCore to GCL 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," PlayCore
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 PlayCore
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 PlayCore.
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 Growth Closely-Held Business Fund, L.P., 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 are Richard Ruegger (Vice President-Finance,
Chief Financial Officer, Secretary and Treasurer), Curtis Cole (Vice
President-Operations of the Swing-N-Slide division), David Hammelman (Vice
President-Human Resources and Administration), Kenneth Jonas (Director of
Engineering of the Swing-N-Slide division) and Joseph Beebe (formerly
Executive Vice President-Operations). Richard Mueller (the former
Chairman, President and Chief Executive Officer) withdrew as a member of
GGM in November 1997 in connection with the end of his employment at
PlayCore.
In addition, pursuant to the Transaction Agreement, GreenGrass
Holdings purchased on February 16, 1996, $4,300,000 principal amount of
PlayCore'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 PlayCore and are
subordinate to any guaranty by PlayCore of any indebtedness of Newco. The
Debentures mature eight years from their date of initial issuance, subject
to earlier redemption at the election of PlayCore 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 PlayCore
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, 1998,
GreenGrass Holdings held $858,005 in additional Debentures issued in lieu
of cash interest payments on the Debentures.
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 PlayCore (Mr. Contino 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.
Registration Rights
Under certain agreements, Code Hennessy & Simons Limited
Partnership, formerly a significant investor in PlayCore, 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
PlayCore 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 PlayCore, acquired all of the
outstanding shares of capital stock of Game Time, Inc., an Alabama
corporation ("GameTime"), on March 13, 1997, for $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,
and the assumption of GameTime indebtedness of approximately $13.2
million. GameTime is principally involved in the design, manufacture,
sale, and distribution of commercial outdoor park and playground
equipment, site amenities, and related products. 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, PlayCore 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 618,937 shares of Common Stock (which shares are subject to
adjustment under certain circumstances) at an exercise price of $.001 per
share.
PlayCore also entered into an Investment Agreement with
GreenGrass Holdings pursuant to which PlayCore sold to GreenGrass Holdings
1,245,331 shares of its Common Stock for an aggregate purchase price of
$5.0 million or a per share purchase price of $4.015, and sold its Junior
Subordinated Bridge Note (the "Bridge Note") in the principal amount of
$2.5 million due no later than December 31, 1997, bearing interest at a
rate of 13.5 percent per annum. On December 31, 1997, the Bridge Note of
$2.5 million was paid. PlayCore used the proceeds from the issuance of
$2.5 million of its Common Stock at a per share purchase price of $4.015
to pay-off the Bridge Note. Of the $2.5 million of Common Stock sold,
GreenGrass Holdings purchased approximately $2.0 million and the remainder
was purchased by non-GreenGrass Holdings stockholders of record on
August 25, 1997.
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 71% interest in GreenGrass Holdings,
GGCII has an approximately 28% interest in GreenGrass Holdings, and GGM
has an approximately 1% 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 Capital 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
PlayCore. The loan guarantee was approved by the Compensation Committee
at its meeting on March 19, 1996. Such loan was repaid and the related
guarantee extinguished in November 1997 in connection with Mr. Mueller's
resignation from the Company.
REPORT OF THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee (the "Committee") of the Board of
Directors of PlayCore is responsible for all aspects of the compensation
package offered to the executive officers of PlayCore, 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 longer-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 1997 was generally comprised of base
salary, variable cash incentive awards based on current corporate and
individual performance, and stock options granted under the PlayCore 1996
Incentive Stock Plan.
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 obtained through a third-party consultant. Base
compensation is scaled in accordance with the relative job content of a
position. Base salaries for 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 1997 base salary granted to the former 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 1996. Mr. Mueller was granted a base salary of $210,000, compared to a
base salary of $207,906 for 1996. This base salary of $210,000 was below
the median of the peer group.
Management Incentive Compensation Program
Managers whom the Committee determines have a significant impact
on the Company's financial results through their positions and
performance, including the Named Executive Officers, are eligible to
participate in the Company's Management Incentive Compensation ("MIC")
Program. Awards under the MIC Program are based upon achievement of
corporate earnings targets for the fiscal year, as well as individually
assigned objectives. Approximately 80% of the incentive compensation
award of each executive officer is tied to the achievement of the
corporate financial objectives while the remaining 20% is awarded based on
meeting individual objectives. For 1997, the program utilized a threshold
percentage of the actual budgeted earnings before interest, taxes,
depreciation and amortization ("EBITDA") 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 150% of base salary for the former Chief Executive
Officer, Mr. Mueller, 0% to a maximum of 106% of base salary for Mr.
Caldwell, and 0% to a maximum of 93% of base salary for the other Named
Executive Officers. For 1997, the Company failed to meet its budgeted
EBITDA thereby eliminating any of the approximately 80% of incentive
compensation that is based on the achievement of corporate financial
objectives. Based on meeting certain individual objectives, aggregate
incentive compensation of $52,000 was granted to the Named Executive
Officers in 1997 out of a potential maximum management incentive
compensation pool of $666,168. Mr. Mueller, the former Chief Executive
Officer, was not awarded a bonus under the MIC Program for 1997.
Stock Program
Long-term incentives are provided through the grant of stock
options or the award of restricted stock under the PlayCore 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
PlayCore's stockholders. Stock options are to be granted at no less than
the prevailing market price and, therefore, will have value only if
PlayCore'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 PlayCore'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.
An aggregate of 868,000 options were granted under the 1996
Stock Plan in 1997, including 545,000 options granted to Named Executive
Officers. See "Executive Compensation - Stock Option Grants."
Additionally, in connection with the GameTime acquisition, 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 1998
For 1998, the Committee intends to continue to focus on linking
executive compensation with corporate performance. Financial performance
will continue to be measured using EBITDA instead of operating income in
order to align bonuses with investors' focus.
Conclusion
Through the programs described above, a significant portion of
PlayCore'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 December 31, 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 December 31, 1992 in: (1) Common Stock; (2) the Wilshire
5000; and (3) the Leisure Products Index.
See Performance Graph
(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.
<TABLE>
<CAPTION>
December December December December December December
31, 1992 31, 1993 31, 1994 31, 1995 31, 1996 31, 1997
<S> <C> <C> <C> <C> <C> <C>
PlayCore $100.00 $108.33 $ 70.83 $ 33.33 $ 27.08 $ 33.33
Leisure Products Index 100.00 121.57 123.34 132.01 178.92 187.33
Wilshire 5000 Index 100.00 108.58 105.85 141.20 167.80 216.75
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information known to the
Company with respect to beneficial ownership of the PlayCore's Common
Stock as of April 14, 1998, except as otherwise noted, by (i) each
stockholder known by the Company to be the beneficial owner of more than
5% of the Common Stock, (ii) each director of the Company, (iii) the Named
Executive Officers, 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.
5% Stockholders, Directors, Named
Executive Officers,
Shares Beneficially Owned
and Directors and Executive Officers
as a Group (1) Number Percent
John E. Caldwell (2) 31,128 *
Frederic L. Contino (3) 25,000 *
David S. Evans (4) 6,603,765 72.0%
GreenGrass Holdings and Related 6,603,765 72.0%
Parties (5) 6,603,76572.0%
GGC (4,685,455 shares - 51.1%)
(6)(8)(9) GGCII (1,852,361
shares -20.2%)(7)(8)(9)
GGM (65,950 shares - 0.7%) (10)
David H. Hammelman (11) 40,395 *
George N. Herrera (12) 10,000 *
Timothy R. Kelleher (13) 6,603,765 72.0%
Terence S. Malone (14) 52,181 *
Massachusetts Mutual Life Ins. Co. (15) 772,427 9.4%
Gary A. Massel (16) 5,000 *
Richard E. Ruegger (17) 63,948 *
Caroline L. Williams (18) 6,613,765 72.0%
All executive officers and directors as a 6,841,417 72.8%
group (10 persons) (19)
____________________
* Less than 1%
(1) Except as otherwise indicated, the address of each stockholder is c/o
PlayCore, Inc., 1212 Barberry Drive, Janesville, Wisconsin 53545.
(2) Includes 30,000 shares issuable upon the exercise of stock options
which are currently exercisable.
(3) Consists of 25,000 shares issuable upon the exercise of stock options
which are currently exercisable.
(4) As one of the three persons appointed to the Members Operating Board
of GreenGrass Capital LLC, a Delaware limited liability company
("GGC"), Mr. Evans has shared control of the voting and investment
making decisions of GreenGrass Holdings, which owns 5,346,056 shares
of Common Stock, Debentures convertible into 1,207,709 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 7,078 shares of Common Stock, Debentures
convertible into 1,356 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 interest in Glencoe
Fund and Glencoe Growth Partners, L.P., and his ownership of stock in
GCL. The address of Mr. Evans is c/o Glencoe Investment Corporation,
190 South LaSalle St., Suite 2830, Chicago, Illinois 60603.
(5) The address of GreenGrass Holdings, a Delaware general partnership
("GreenGrass Holdings"), is c/o Glencoe Investment Corporation, 190
South LaSalle St., Suite 2830, Chicago, Illinois 60603. Includes
5,346,056 shares of Common Stock, Debentures convertible into
1,207,709 shares of Common Stock, and a warrant to purchase 50,000
shares of Common Stock. The general partners of GreenGrass Holdings
consist of GGC, GreenGrass Capital II LLC, a Delaware limited
liability company ("GGCII"), and Green Grass Management LLC, a
Delaware limited liability company ("GGM"). Of the 5,346,056 shares
of Common Stock owned by GreenGrass Holdings, 3,494,509 shares are
beneficially owned by GGC, 1,802,361 shares are beneficially owned by
GGCII, and 49,187 shares are beneficially owned by GGM. Of the
1,207,709 shares which GreenGrass Holdings would receive upon
conversion of Debentures, 1,190,946 shares would be beneficially
owned by GGC and 16,763 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.
(6) 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 Employee's Retirement
System, the State Employees' Retirement System, the Michigan State
Police Retirement System and the 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").
(7) The members of GGCII are the following institutional investors:
Glencoe Growth Closely-Held Business Fund, L.P. ("Glencoe Growth"),
ELI-II, Baldwin, the Michigan Trusts, and Massachusetts Mutual Life
Insurance Co. ("MassMutual").
(8) 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 Desai Capital
Management Incorporated ("DCMI"). ELI-II may be deemed to
beneficially own 2,394,695 shares of Common Stock held by Green Grass
Holdings (which represents approximately 26.2% of the outstanding
Common Stock and which includes 1,926,290 shares of Common Stock held
by GreenGrass Holdings, 451,738 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.
(9) The Michigan Trusts are members of both GGC and GGCII. As a result,
the Michigan Trusts may be deemed to beneficially own 2,394,695
shares of Common Stock held by GreenGrass Holdings (which represents
approximately 26.2% of the outstanding shares of Common Stock and
includes 1,926,290 shares of Common Stock held by GreenGrass
Holdings, 451,738 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.
(10) The members of GGM are the following former and current officers of
PlayCore: Messrs. Ruegger, Cole, Hammelman, Beebe and Jonas.
(11) Consists of 40,395 shares of Common Stock issuable upon the exercise
of stock options which are currently exercisable. Excludes 4,304
shares of Common Stock and Debentures convertible into 1,467 shares
of Common Stock held by GreenGrass Holdings which securities, as a
member of GGM may be deemed to beneficially own because Mr. Hammelman
would receive such securities under certain circumstances (including
upon termination of his employment). Mr. Hammelman expressly
disclaims beneficial ownership of any other securities of PlayCore
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.
(12) Consists of 10,000 shares of Common Stock issuable upon exercise of
stock options which are currently exercisable.
(13) 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 5,346,056 shares
of Common Stock, Debentures convertible into 1,207,709 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.
(14) Includes 51,934 shares issuable upon the exercise of stock options
which are currently exercisable.
(15) The address of MassMutual is 1295 State Street, Springfield, MA
01111-0001. Includes 290,127 shares of Common Stock issuable upon
the exercise of warrants which are currently exercisable, and 40,203
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
430,163 shares of Common Stock and 11,933 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
PlayCore 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 288,607 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.
(16) Consists of 5,000 shares issuable upon the exercise of stock options
which are currently exercisable.
(17) Consists of 63,948 shares of Common Stock issuable upon the exercise
of stock options which are currently exercisable. Excludes 49,187
shares of Common Stock and Debentures convertible into 16,763 shares
of Common Stock which Mr. Ruegger may be deemed to beneficially own
as sole manager and the controlling member of GCM, which indirectly
beneficially owns such securities as a general partner of GreenGrass
Holdings, including 32,773 shares of Common Stock and Debentures
convertible into 11,169 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 disclaims beneficial ownership of these
securities except to the extent of his pecuniary interest therein.
(18) Includes 10,000 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 5,346,056 shares of
Common Stock, Debentures convertible into 1,207,709 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 13,416
shares of Common Stock, Debentures convertible into 2,707 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.
(19) This group is comprised of the following executive officers: Messrs.
Caldwell, Contino, Hammelman and Ruegger; and the following non-
employee directors: Ms. Williams and Messrs. Evans, Herrera,
Kelleher, Malone, and Massel. Includes Debentures convertible into
1,207,709 shares of Common Stock and a warrant to purchase 50,000
shares of Common Stock, all of which are held by GreenGrass Holdings,
and 236,277 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 reappointed by the Board of Directors
as the independent auditors for PlayCore for the fiscal year ending
December 31, 1998 upon the recommendation of the Audit Committee. Ernst &
Young LLP has served as PlayCore's independent auditors since inception in
January 1992, and served as the predecessor company's independent auditors
since June 1990.
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
PlayCore'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 PlayCore. PlayCore believes
that during and with respect to the fiscal year ended December 31, 1997,
all reports required by Section 16(a) to be filed by PlayCore's officers,
directors and more than 10 percent stockholders were filed on a timely
basis.
Information About the Solicitation
The Board of Directors of PlayCore 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 PlayCore. In addition to the use of the mail, 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 of the execution
of proxies; and, if they in turn so request, PlayCore 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. PlayCore'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 PlayCore, 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. 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 PlayCore.
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 for proxies and other
individual stockholder voting records is limited to the inspectors of
election appointed by PlayCore and certain of PlayCore'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) 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 required 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
approximately 68% of the voting Common Stock, has indicated that it
intends to vote "For" the seven nominees for directors.
Stockholder Proposals
Proposals of stockholders intended to be included in PlayCore's
proxy statement for the 1999 annual meeting of stockholders must be
received by PlayCore no later than January 1, 1999.
<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
Frederic L. Contino 47 President and Chief Executive Officer, and
a director. See "Election of Directors" on
page 2 of the Proxy Statement.
John E. Caldwell 55 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 38 Vice President-Finance, Secretary and
Treasurer since January 1992 and Chief
Financial Officer since June 1992.
David H. Hammelman 43 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 Resources 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>
PLAYCORE, INC.
JANESVILLE, WISCONSIN PROXY/VOTING INSTRUCTION CARD
__________________________________________________________________________
This proxy is solicited on behalf of the Board of Directors
for the Annual Meeting to be held on June 4, 1998
The undersigned hereby constitutes and appoints Frederic L. Contino,
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 a majority of those present and voting, or if only one is
present and voting, then that one, to vote the Common Stock of PlayCore,
Inc. which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of PlayCore, Inc. to be held in the Oak Room at the
Metropolitan Club, 233 South Wacker Drive, Sears Tower 66th Floor,
Chicago, Illinois 60606, on Thursday, June 4, 1998 at 10:00 a.m., local
time, and at any adjournment thereof, in the manner indicated on the
reverse side of ths proxy, and upon such other business as may lawfully
come before the meeting. IF NO DIRECTION AS TO THE MANNER OF VOTING THE
PROXY IS MADE, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AS
INDICATED ON THE REVERSE SIDE HEREOF.
Election of Directors:
Nominees: Terence S. Malone, Frederic L. Contino, David S. Evans,
George N. Herrera, Timothy R. Kelleher, Gary A. Massel and Caroline L.
Williams
You are encouraged to specify your choices by marking the appropriate
boxes. SEE REVERSE SIDE. The proxies cannot vote your shares unless you
sign and return this card.
SEE REVERSE
SIDE
FOLD AND DETACH HERE
<PAGE>
Please mark your
[ X ] votes as in this
example
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR Election of
Directors.
1. Election of Directors (See Reverse) FOR AGAINST ABSTAIN
For, except vote withheld from the following
nominee(s):
____________________________________________
2. In their discretion, the proxies are
authorized to vote upon such other business
as may properly come before the meeting.
Change of
Address
Shown at left
Please sign exactly as name appears hereon.
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 in full corporate name by duly
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
____________________________________________
____________________________________________
SIGNATURE(s) DATE
FOLD AND DETACH HERE
